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Chapter 10
Launching the New Ship of State
Pgs. 190-195
Growing Pains
In 1789, the new U.S. Constitution
was launched, and the population
was doubling every 20 years.
America’s population was still
90% rural, with 5% living west of
the Appalachians.
Vermont became the 14th state
in 1791, and Kentucky,
Tennessee, and Ohio (states
where trans-Appalachian
overflow was concentrated)
became states soon after.
Visitors looked down upon the
crude, rough pioneers, and these
western people were restive and
dubiously loyal at best.
SO! Tis time for……CINCINNATUS!!!
In the twelve years after American independence,
laws had been broken and a constitution had
been completely scrapped and replaced with a
new one. So far, it was a government that left
much to be desired.
America was also heavily in debt, and paper
money was worthless.
Meanwhile, restless monarchs watched to see if
the U.S. could succeed in setting up a republic
while facing such overwhelming odds……..
Washington for President
•At 6’2”, 175 pounds, with broad and sloping shoulders, a strongly pointed chin
and pockmarks from smallpox, George Washington was an imposing figure, and
he was unanimously elected as president by the Electoral College in 1789.
•His long journey from Mt. Vernon to New York (the capital at the time) was a
triumphant procession filled with cheering crowds and roaring festivities.
•He took the oath of office on April 30, 1789, on a balcony overlooking Wall
Street.
•Washington established a diverse cabinet (which was not necessarily
constitutional, but he took the liberty to do it anyway).
•Secretary of State: Thomas Jefferson
•Secretary of the Treasury: Alexander Hamilton
•Secretary of War: Henry Knox
The Bill of Rights
Many states had ratified the
Constitution on the condition that
there would be a Bill of Rights,
and many Anti-Federalists had
criticized the Constitution for its
lack of a Bill.
The Bill of Rights was intended
to protect individual liberties
against the political tyranny of a
strong central government.
The necessary number of states
adopted the Bill of Rights in 1791.
Bill of Rights
Amendment I: Freedom of religion, speech, press, assembly, and petition.
Amendment II: Right to bear arms (for militia).
Amendment III: Soldiers can’t be housed in civilian homes during
peacetime.
Amendment IV: No unreasonable searches; all searches require warrants.
Amendment V: Right to refuse to speak during a civil trial; No Double
Jeopardy.
Amendment VI: Right to a speedy and public trial.
Amendment VII: Right to trial by jury when the sum exceeds $20.
Amendment VIII: No excessive bails and/or fines.
Amendment IX: Other rights not enumerated are also in effect. (“People’s
Rights” Amendment)
Amendment X: Unlisted powers belong to the state. (“States’ Rights”
Amendment)
•The Judiciary Act of 1789 created effective federal courts.
•John Jay became the first Chief Justice of the United States
Hamilton Revives the Corpse of Public Credit
•
Born in the British West Indies, Alexander Hamilton’s
loyalties to the United States was often questioned, though
he proclaimed undivided devotion to his adopted country.
•
A close confidante of President Washington and an
economic genius, Hamilton urged the federal
government to:
–
Fund the national debt.
–
Assume state debts.
–
Establish a national bank.
–
Enact a low protective wall around our infant
industries (though he didn’t get as much as he wanted
as he had foreseen that the industrial revolution was
soon on its way to the U.S.)
Some states had large debts (ie. Massachusetts), while
others (ie. Virginia) did not, so some haggling had to be
done. In the end, a sop was given to Virginia to have
the prestige of the new national capitol, the District of
Columbia, built on its land.
Hamilton believed that a limited national debt was
beneficial because people to whom the government
owed money would work hard to make the nation a
success, and this “funding at par” would gain the
support of the rich to the federal government instead of
to the states.
Customs Duties and Excise Taxes
– Hamilton expected that the revenue to pay
the interest on the national debt would come
from customs duties and an excise tax.
– These duties would be for a tariff on foreign
goods (done also to protect our infant
industries) and an excise tax on a few
domestic items, notably whiskey – a
measure that was detested by backwoods
farmers since they needed to distill their
corn to compete economically.
– Hamilton’s major programs did seriously
infringe upon states’ rights, but only
because he firmly believed that the British
system was the best form of government in
existence at the time, and he simply wanted
the U.S. government to emulate it as closely
as possible.
Foreigners
$11,710,000
Federal Domestic Debt
$42,414,000
State Debt
$21,500,000
How to pay it off????
Miscellaneous
Revenue
Excise Revenue
(on Whiskey,
etc.)
Customs Duties (Tariffs)
Hamilton (Federalist) vs. Jefferson
(Democratic Republicans)
Hamilton Battles Jefferson for a Bank
•
Hamilton proposed a national treasury, to be a
private institution modeled after the Bank of
England, to have the federal government as a major
stockholder, to circulate cash to stimulate
businesses, to store excess money, and to print
money that was worth something.
•
This was opposed by Jefferson as being
unconstitutional (as well as a tool for the rich to
better themselves).
Hamilton’s Views:
1.
2.
3.
4.
5.
Privileges for the upper classes
Pro-British
Potent central government
Government support for business
What was not forbidden in the Constitution was
permitted. He evolved the Elastic Clause, AKA the
“necessary and proper” clause, which would greatly
expand federal power. This is a “loose
interpretation” of the Constitution.
Jefferson’s Views:
1. Sympathy for the
common people
2. Pay off the national debt
3. Pro-French
4. Universal education
5. A bank should be a statecontrolled item (since the
10th Amendment says
powers not delegated in
the Constitution are left
to the states).
6. The Constitution should
be interpreted literally
and through a “strict
interpretation.” What was
not permitted was
forbidden.
•
End result: Hamilton won
the dispute, and Washington
reluctantly signed the bank
measure into law. The Bank
of the United States was
created by Congress in
1791, and was chartered for
20 years.
•
It was located in
Philadelphia and was to
have a capital of $10 million.
•
Stock was thrown open to
public sale, and surprisingly
(even to an overjoyed
Hamilton himself), a milling
crowd oversubscribed in
two hours! The country was
off and running…