Chapter 6 Section 1 Notes

Chapter 6 Section 1
Government & Party Politics
Focus Question: How did debate over the role of government lead to the formation of political
parties?
In 1789, the leaders of the new government gathered in New York City. The newly ratified
Constitution was entirely untested.
The Framers and President Washington knew that a good start was essential to the future of the
republic.
Washington Takes Charge
When George Washington took office, he quickly established precedents for running the
government.
The new President faced many challenges:
o The nation was $52 million in debt.
o There was no navy and the army had only 400 men.
o Spain closed the Mississippi River in New Orleans to American trade.
o British troops occupied American land along the Great Lakes.
Washington Picks a Cabinet
Washington picked a Cabinet to head each of four executive departments in his administration.
o Secretary of State Thomas Jefferson
o Secretary of War Henry Knox
o Secretary of Treasury Alexander Hamilton
o Attorney General Edmund Randolph
The Judicial Branch
The first task was to set up a court system.
o The Judiciary Act of 1789 created district and circuit courts and a six-member Supreme
Court.
o The office of Attorney General was created to prosecute legal cases for the government.
o John Jay was appointed as first Chief Justice of the Supreme Court.
Hamilton & The National Bank
The huge debt was the biggest problem facing the administration. Treasury Secretary Hamilton
suggested a controversial plan.
o Rather than just pay off the federal debt, state debts would also be assumed. Bonds for the
total would be sold to wealthy investors.
o The investors would receive annual dividends and have a stake in helping the government
succeed.
o Hamilton also proposed chartering a Bank of the United States to regulate state banks and
insure business support.
o He hoped to replace the nation’s agriculturally based economy with commerce and
manufacturing.
o He proposed a high tariff or tax on imported goods to earn revenue and encourage
domestic industry.

Arguments For The National Bank
Hamilton saw 3 advantages to his financial plan
o The plan would establish the nation’s financial credibility.
o The plan would gain political support from the wealthiest Americans.
o The plan would enrich investors who would reinvest and thus create more wealth.
Arguments Against The National Bank
Antifederalists objected to Hamilton’s plan. They had 3 main complaints:
o Wealth would be redistributed from farmers to merchants, and from the South to the North.
o Investors who purchased the bonds would make huge profits at everyone else’s expense.
o The costs would fall on farmers who would have to pay excise taxes and higher tariffs.
Jefferson & The National Bank
Secretary of State Jefferson opposed Hamilton’s plan.
o Most southern states had already paid off their war debts. He asked why they should bail
out northern states that still had debts.
o Jefferson believed the plan gave more power to the government than the Constitution
permits.
Strict vs Loose Construction
Jefferson favored a strict construction of the Constitution.
o Congress should be limited to the powers specifically granted by the Constitution.
o The Constitution does not give Congress power to charter a national bank, so it could not
establish one
Hamilton favored a loose construction of the Constitution.
o Congress has implied powers, and can take any actions not specifically forbidden.
o The Constitution allows Congress to act for the “general welfare” so it could charter a
bank.
A National Bank & A New Capital
In 1791, Congress accepted Hamilton’s plan.
o The national debt was funded, outstanding state debts were assumed, excise taxes and
tariffs were levied, and the bank was authorized.
o In return, a new national capital was created. Washington D.C. would be placed in the
South, on the banks of the Potomac River.
Whiskey Tax Causes Problems
An excise tax on whiskey led to divisions between the Federalists and the Antifederalists.
o To increase their profits, western Pennsylvania farmers made whiskey from their grain.
o The whiskey tax reminded farmers of British taxes.
o In 1794, some farmers resisted payment. They harassed and intimidated tax collectors.
The Whiskey Rebellion
Hamilton persuaded Washington to suppress the Whiskey Rebellion.
o Twelve thousand militiamen were sent to deal with the rebellion, but they found no
organized insurrection.
o Then Jefferson criticized Hamilton for the use of federal force to repress legitimate
criticism.

Political Parties Emerge
Despite Washington’s disapproval, two political parties emerged.
o Democratic Republicans
Favored Jefferson and Madison.
This party was strongest among Southerners and farmers.
o Federalists
Favored Hamilton and was strongest among Northerners, merchants, and the
wealthy.