!"# I. Problems facing the United States 1790-1800

! A. National Debt: Alexander Hamilton proposed a plan to absorb all of the state’s debt into the national debt. #  1. Southern states opposed this because they had less

state debt than northern states #  2. Hamilton hoped his plan would create a financial

interest by all parties in the success of the national government.

Section 1

!"!  3. To pay off the debt, Congress passed a tariff and a

tax on distilled liquors (whiskey tax). The taxes made many Americans unhappy.

!  4. Also, the plan was not to pay off the debt all at once. Instead pay a little at a time, and pay interest on the remaining debt.

!"# B. Foreign Policy and the French Revolution

!  1. Throughout the 1790s, France was engaged in a violent revolution that went through many stages. Eventually France and Britain went to war again

!  2. Americans were divided on the issue. !  3. A French diplomat, Edmond Genet, visited the US

trying to get support for the French. He tried recruiting Americans to help the French against the British.

!"# 4. Genet’s actions upset President Washington and

Washington tried to send him home. # 5. Washington tried to keep the nation neutral

despite British attacks on American ships and the British arming the Indians in the Northwest Territory.

!"# 6. Jay Treaty

!  a. John Jay was sent to London to work out a deal. Jay convinced the British to leave the Northwest Territory in exchange for more trade between the nations. This did nothing to stop the British piracy or help France.

!"# C. Whiskey Rebellion

!  1. Farmers in western Pennsylvania were upset with the Whiskey Tax. Whiskey was the key export of Pennsylvania.

!  2. An army of 12,000 led by Hamilton was sent to Pittsburgh and the rebellion ended.

!"# II. Washington retires

! A. After two terms, Washington did not run again for President.

! B. In his farewell address, Washington warned against competing political parties because he feared their divisiveness would lead to violence. He also warned about being involved with the problems of Europe. Trade is OK, but don’t get involved in their political or military struggles.

!"# III. Political parties form anyway

! A. Jefferson vs. Hamilton #  1. Supporters of Thomas Jefferson became known as

Democratic Republicans, or Jeffersonian Republicans. #  a. Jefferson believed in a smaller, weaker national

government, paying off the national debt quickly, pro-farmer trade policies, smaller standing armies and was pro-France in European conflicts.

!"# 2. Supporters of Alexander Hamilton were known as

Federalists !  1. They were for a bigger, more active and powerful

national government. They favored long-term payoff of the national debt, were pro-business (early industrialization), were pro-British in European issues.

!"# B. Election of 1796: the first presidential election

featuring organized political parties. John Adams ran as a Federalist. Thomas Jefferson ran as a Democratic-Republican. Adams won and Jefferson became the Vice President.