Chapter 9.1

Describe the steps Washington took to make the new government work.

Explain the Hamilton’s plan to reduce the national debt and build the economy.

List the causes and results of the Whiskey Rebellion.

Washington set a precedence for Presidents. (No description existed for day to day job).

First Cabinet, consists of five positions (State, Treasury, War and the Offices of Attorney General and Postmaster General)

Jefferson (Secretary of State) Alexander Hamilton (Secretary

of Treasury)

Congress passes in 1789, Judiciary Act

Creates Supreme Court Consists of Chief Justice and

Five Associate Judges John Jay, first Chief Justice Creates also district and circuit

courts Decision based on appeal from

lower courts to Supreme Court

National debt created by Revolutionary War Government borrows money by creating bonds, a

certificate to pay on a certain date with interest. Hamilton’s Plan: Repay both national and state debt

Buy back bonds issued before 1789, then issue new bonds

As economy improved, government would pay off bonds Debate: James Madison (opposed) plan because it

would reward speculators who would invest in the bonds to make huge profit

During war, bondholders sold speculators a 1$ bond would go for 15 cents. The government would pay off the bond in full, meaning speculators would earn 85cents per $1 bond. Risk losing investors if not paid.

Hamilton compromised; offered capital be located in the south, south would support plan.

July 1790, Congress voted to pay debt, capital selected along the Potomac River, the area called the District of Columbia

Created Bank of the United States. Government would place money from taxes in bank

Help manufactures created tariff, tax on all foreign goods, meant to protect local products.

North had more factories, supported by north, Southerners detested tariff because they bought imported goods.

Congress passed it, but very low tariff.

To raise money for Treasury, Congress passed tax on all liquor

Backcountry farmer upset because corn was bulky and hard to transport, they converted it into whiskey

1794, official collect tax in Pennsylvania, farmers rebelled

Washington responds with militia to put down rebellion. First direct challenge to new government.