“We The People”

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Lesson 13

Schedule

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• Sept. 28 & 29 – Finish the Founding of The Nation, Chapters 9

• Oct. 1 - Chapter 10 Launching the New Nation

• Oct. 7 Check notebooks

• Oct. 8 Test Chapter 7-10

• Oct. 19 Research #2

Revised 9-29-15

NOTE

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1775 1800

Building a New Nation

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XYZ Affair

Terms

No Bill of Rights Was Included?1. Since most states’ bill of

rights often began with "all men are by nature born free", Southerners believed it would hypocritical to include such a statement when slavery was provided for in the Constitution.

2. States already had their own bills of rights and states’ rights advocates believed that these should remain binding.

3. Virginia’s would become the Model

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3. Some delegates feared a new gov’t might feel free to do anything that was not expressly prohibited in a new bill of rights.

4. Most important practical reason: delegates believed they had reached a fragile consensus that could collapse if new revisions were to be considered

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Ratification of the Constitution would require 9 states 1. Provision adopted over

concerns that support was not unanimous (this was currently required by the Articles of Confederation)

2. If ratified, the Constitution would be the supreme law of the land in those states that ratified it.

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3. Congress submitted the Constitution to the states (without recommendations)a. People were shocked that

the Articles of Confederation were to be scrapped; secrecy of the Constitutional Convention had left the country in the dark regarding its intentions

b. Many feared that states’ sovereignty would end.

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Ratification Debate in the States: Federalists vs. Anti-Federalists

A.Special elections were held in the various states for members of the ratifying conventions.

B.Four small states quickly ratified: DE, NJ, GA, CT • The Constitution ("Great

Compromise") favored small states in the Senate.

C. Pennsylvania was the first large state to ratify.

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Massachusetts was the critical test1. Failure to ratify could have

effectively killed the Constitution2. Main issue became the lack of a

bill of rights in the Constitution • Federalists promised that the

first Congress under the new Constitution would add a Bill of Rights.

3. Ratification passed 187-168E. Three more states ratified: MD, SC,

NH F. The Constitution was officially

adopted on June 21, 1788. 10

Newspapers followed the progress of the ratification debate.

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Federalist & Anti-

Federalist Strongholds

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The last four states ratified because they did not want to be isolated.1. Virginia, the largest and

most populous state, was strongly anti-federalist.

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a. Federalist Papers (85 in all) newspaper editorials• Alexander Hamilton, John

Jay and James Madison wrote an influential series of articles for the New York newspapers.

• Most important commentary ever written on the Constitution

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• Federalist X - by Madison is the most famous • Refuted the conventional

belief that it was impossible to extend a republican form of government over a large territory.

• NY ratified realizing it could not prosper alone.

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3. North Carolina and Rhode Islanda. Ratified only after the

Constitution had been in effect for several months.

b. Rhode Island was the only state not to attend the Constitutional Convention

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• George Washington was known as "the indispensable man" for his role in the war of independence.

• One of the last acts under the Articles of Confederation was to arrange for the first presidential election, setting March 4, 1789, as the start date for the new government.

• George Washington was unanimously chosen president by the Electoral College on April 30, 1789.

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• Washington's Cabinet was made up of the best minds of the time

• John Adams Vice President

• Thomas Jefferson Secretary of State

• Edmund Randolph Attorney General

• Alexander Hamilton Secretary of the Treasury

• Henry Knox Secretary of War Left to right: President Washington, Secretary

of War Henry Knox, Secretary of the Treasury Alexander Hamilton, Secretary of State Thomas

Jefferson, and Attorney General Edmund Randolph

The First Cabinet

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The new nation faced serious economic problems

• Debt from the Revolutionary War

• Unstable currency

• No national bank

• No tax system in place

• No income for the government

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• Federal government would repay both the national and state debts from the Revolution

• A national bank would be created to issue money and make loans

• A high tariff (tax on imports) would be enacted to protect American manufacturers

• A federal tax would be placed on liquor to raise money for the Treasury

Secretary of the Treasury Alexander Hamilton’s plan for economic recovery

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Government Finances: 1789-1791

Budget Receipts

BudgetExpenditures

Public Debt

Hamilton needed to pay off the large public debt. Chart indicates the receipts (income)

could not cover the amount of the debt.

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Secretary of the Treasury Alexander Hamilton made debt repayment a high

priority. He believed that if the U.S. did not pay back the debts it would be impossible to

borrow money in the future.

Hamilton’s plan had support, but was controversial.

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• Speculators, investors who take risks, bought bonds from their original owners for a fraction of the face value.

• Hamilton’s plan would pay the full value of the bonds to speculators, while the original owners, who patriotically risked their savings in the country's time of need, would get nothing.

• Congress agreed with Hamilton and assumed all debts.

$0

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Bonds

Original bond price

Speculators boughtbonds for this price

Price Hamilton'splan would buybonds fromspeculators

Madison

James Madison pointed out that Hamilton’s plan would reward speculators.

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Assuming state debts

1803 map of Washington D.C.

To win Southern support for his plan of assuming all state debts, Hamilton proposed that the new nation’s capital city be located in the South. In July 1790, Congress voted to repay state debts and move the capital to a strip of land along the Potomac River between Virginia and Maryland. This became the District of Columbia, the city of Washington D.C.

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This political cartoon from 1790 criticizes the move from Philadelphia to Washington D.C.

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• In February 1791, the First Bank of the U.S. received a national charter for 20 years.

• The Bank had the right to issue notes or currency up to $10 million.

• Its major functions were to supply loans, be a depository for federal monies to be transferred between cities, and be a clearing agent for payments on the national debt.

• The government, as the largest stockholder, shared the profits, but had no direct participation in the management.

Hamilton proposed a national bank to stabilize the new economy

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A tariff is a tax on imports.

Price of steel

made in USA: $110

Price of steel

imported from Great

Britain: $100

Tariff of $20 placed on imported steel from

Great Britain,

making the price $120

Which steel

would you buy?

Who does a tariff

benefit?

Hamilton proposed a tariff to help fix the economy

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• Protective tariff: its purpose is to protect American industry by making foreign imported goods much more expensive then domestic (produced in the U.S.) goods. Hamilton favored this type and wanted a tariff with very high rates.

• Revenue tariff: its purpose is to raise money from imports to run the government, not to protect American industry.

Two kinds of tariffs

Congress refused to pass the high protective tariff Hamilton asked for, but did

pass a smaller revenue-producing tariff.

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• Hamilton, to raise money for the government, had Congress pass a tax on the manufacture (distilling) of whiskey.

• On the western frontier of Pennsylvania whiskey distilling was an important industry. The distillers believed the Easterners had created the tax for their own benefit. They refused to pay and organized to stop the tax collectors.

• Washington was forced to raise an army of 15,000 from the militias of surrounding states. The revolt collapsed when the army approached.

• Washington’s quick response showed Americans that their government could deal with any challenge to its authority.