Launching the New Ship of State

The “Republican Court”

• Dispute over the dignity to attach to office of the president• John Adams pushed for

flowery, puffed up title• George Washington insisted

on the simple title “Mr. President”

• Washington administration would set precedents for the future

• Determined to convey dignity and power

• Aristocratic tendencies prevailed in new administration

The New Congress

• Led by James Madison• Consistently strengthened new national

government• Agreed to Bill of Rights

• Reflected fear of centralized power• Focused on civil liberties• Preserved essential thrust of Constitution and power

of government• Created departments of war, state, and

treasury, all under executive control• Judiciary Act (1789) established Supreme

Court, along with district and circuit courts

Establishing the nation’s financial plan

• Responsibility fell to Secretary of the Treasury Alexander Hamilton• Most single-minded

nationalist in new government

• More than any one else directed the making of a national government

1789 report on the national debt • $11 million owed to foreigners,

mostly war debts to France• $24 million owed by national

government to citizens• $24 million owed by state

governments to citizens• Domestic debt concentrated

mostly in hands of speculators

Report on Public Credit, 1790 • Urged Congress to assume state debts• Combine all debts into a consolidated

national debt• Foreign debt should be paid

immediately• Domestic debt would be permanent,

tax-supported fixture of government

The National Debt

• Interest-bearing securities would attract creditors and ensure their loyalty to the government

• National debt at heart of Hamilton’s plan for a powerful national state

The Bank of the United States • Component of Hamilton’s financial

plan• Federal government would store

money there, but it would be privately controlled

• Carbon copy of the Bank of England

• Established in 1791

Instituting an excise tax

• Funding of national debt would come from excise tax on wines, coffee, tea, and spirits

• Raise money and confirm federal government’s right to tax

• Imposed in 1791

The rise of a political opposition • National debt

became first issue to tear Federalist coalition apart• James Madison and

Thomas Jefferson led charge

• Deplored benefits that would accrue to northeastern speculators

The rise of a political opposition

• Compromise on debt and capital• Hamilton’s debt plan accepted• In exchange, national capital would

be located on the Potomac River• Ensured that nation’s capital would

be only a center of government power

Thomas Jefferson vs. Alexander Hamilton • Jefferson was strict constructionist:

government only had powers specified in Constitution

• Hamilton was broad constructionist: government could make all laws it deemed “necessary and just” to deal with the nation’s needs

• Both sides brought their cases to the public after 1792