Workshop slides for December 1

1. Solving History’s Economic Mysteries 3:
Early Republic
Deborah Kozdras, Ph.D.
University of South Florida
Stavros.coedu.usf.edu
dkozdras@usf.edu
http://tinyurl.com/historymystery3
3

2. After the Revolutionary War
• American colonies defeated the British army
• Great leaders emerged from the conflict
• https://www.richmondfed.org/publications/education/historical_figure_bookmarks
• SS.8.E.2.1 - Analyze contributions of entrepreneurs, inventors, and other key individuals from various
gender, social, and ethnic backgrounds in the development of the United States economy.
George Washington John Adams Thomas Jefferson

3. Great Figures Bookmarks
https://www.richmondfed.org/publications/education/historical_figure_bookmarks

4. ReadWriteThink Activity
Using images from FCIT
Clip Art Galleries, create
trading cards for
influential people.

5. Lesson 8
Problems under the Articles of Confederation
• No protection of the
Navigation Acts
• No British navy
• Huge debts
• No power to tax
• Tariff fights between
the states
http://www.loc.gov/rr/program/bib/ourdocs/articles.html
SS.8.A.3.9 - Evaluate the structure,
strengths, and weaknesses of the
Articles of Confederation and its
aspects that led to the Constitutional
Convention.

6. Visual 8.1 The Problems Following
Independence
• “There is scarcely anything that can wound the pride or
degrade the character of an independent nation which we do
not experience . . . we owe debts to foreigners and to our own
citizens. . .these remain without any proper or satisfactory
provision for their discharge . . . .We have neither troops, nor
treasury, nor government. . . . Are we entitled by nature and
compact to a free participation in the navigation of the
Mississippi? Spain excludes us from it. Is public credit an
indispensable resource. . .? We seem to have abandoned its
cause. . . . Is commerce of importance to national wealth?
Ours is at the lowest point. . . . Is respectability in the eyes of
foreign powers a safeguard against foreign encroachments?
The imbecility of our government [under the Articles of
Confederation] even forbids them to treat with us.”
“The Federalist, No. 15” (December 1, 1787)

7. Visual 8.2 What Would You Do?
1. People choose
2. All choices involve costs
3. People respond to
incentives
4. Economic systems
influence choice
5. Voluntary trade
increases wealth
6. The consequences of
choices lie in the future
What were the consequences
of the war?

8. Activity 8.1
A New Beginning in 1781: One nation of Thirteen?
1. Debt
• You are a member of the Congress of Confederation in
1781, considering the issue of war debts.
• Predict the consequences likely to follow if war debts are
not repaid.
• Explain your prediction briefly, making use of the
economic principle that people respond to incentives.

9. Activity 8.1
A New Beginning in 1781: One nation of Thirteen?
2. The Power to Tax
• You are a member of the Congress of Confederation in
1781, considering whether the federal government should
be granted new powers to tax.
• Predict the consequences likely to follow if the Congress
gains no new power to tax.
• Explain your prediction by reference to the economic
principle that people respond to incentives.

10. Activity 8.1
A New Beginning in 1781: One nation of Thirteen?
3. Tariff Wars
• You are a member of the Congress of Confederation,
considering whether Congress, rather than the several
states, should be authorized to regulate interstate
commerce.
• Predict the consequences likely to follow if the several
states retain exclusive authority to govern interstate
commerce.
• Explain your prediction by reference to the economic
principle that people gain when they trade voluntarily.

11. Activity 8.1
A New Beginning in 1781: One nation of Thirteen?
4. Military Strength
• You are a member of the Congress of Confederation,
considering whether the federal government should be
authorized to develop a strong military force to provide for
Americans’ defense and security.
• Predict the consequences likely to follow if no such
authority is granted.
• Explain your prediction by reference to the economic
principle that people gain when they trade voluntarily.

12. Who Made the Constitution?
http://ed.ted.com/lessons/who-made-the-american-constitution-judy-walton
https://www.youtube.com/watch?v=uihNc_tdGbk
SS.8.A.3.10 - Examine the course and consequences of the Constitutional Convention

13. Document Analysis from LOC
http://www.loc.gov/teachers/classroommaterials/primarysourcesets/constitution/

14. Student Discovery Sets
http://www.loc.gov/teachers/classroommaterials/primarysourcesets/constitution/

15. Document Analysis Political Cartoon
Title: The looking glass for 1787. A
house divided against itself cannot
stand. Mat. chap. 13th verse 26
Creator(s): Doolittle, Amos, 1754-1832,
engraver
Date Created/Published: [New Haven]
: 1787.
Medium: 1 print : engraving and rocker
work, with watercolor on laid paper ;
28.7 x 36.7 cm. (image)
Summary: A satire touching on some of
the major issues in Connecticut politics
on the eve of the ratification of the U.S.
Constitution. The two rival factions
shown are the "Federals," who
represented the trading interests and
were for taxes on imports, and the
"Antifederals," who represented
agrarian interests and were more
receptive to paper money issues. The
two groups were also divided on the
issue of commutation of military
pensions.
http://www.loc.gov/pictures/item/2008661778/
Shay’s Rebellion: Shays' Rebellion is the name given to a
series of protests in 1786 and 1787 by American farmers
against state and local enforcement of tax collections and
judgments for debt.

16. http://www.loc.gov/pictures/item/2008661778/

17. Document Analysis Political Cartoon
http://www.loc.gov/pictures/item/2008661778/

18. Movie: Crash Course Constitution
http://econwriting.weebly.com/constitution-day.html

19. How has the Constitution shaped the economy of the United States?
Market Economy Constitution
http://ecedweb.unomaha.edu/lessons/fecg1.htm

21. Bill of Rights: James Madison
SS.8.A.3.11 - Analyze support and opposition (Federalists, Federalist Papers,
Anti Federalists, Bill of Rights) to ratification of the U.S. Constitution.

22. Rights in the Classroom
• What specific protections for
individuals apply to students?
• What specific protections for
individuals apply to teachers?
• Are these sets of protections
distinct from one another or shared
to some degree?
• What limits are placed on the
authority of teachers?
• What limits are placed on the
authority of students?
• What limits on authority do they
share? (For instance, school rules
and class policies limit student's
authority to decide certain issues,
while contracts and school policies
limit certain actions by teachers.)
SS.8.C.1.5 - Apply the rights and principles contained in the Constitution and Bill of Rights to the lives of citizens today

23. https://www.archives.gov/legislative/resources/education/bill-of-rights

24. http://www.loc.gov/teachers/classroommaterials/lessons/bill-of-rights/

25. Amendment Movies
http://www.annenbergclassroom.org/page/all-videos for more

26. Economics of the Constitution
Lesson 9
The U.S. Constitution: Rules of the Game
SS.8.C.1.5 - Apply the rights and principles contained in the Constitution
and Bill of Rights to the lives of citizens today

27. A Constitutional Mystery
• Many nations have adopted
written constitutions but
have failed nonetheless to
grow economically.
• How is it that the U.S.
Constitution became an
effective force in promoting
economic growth within a
market system?

28. Wealth of Nations, 1776
• Smith attacked
mercantilism.
– Government subsidies,
bounties, monopolies
– Such practices fostered
inefficiency
• Smith proposed:
– Competition
– Free markets to provide
incentives
– Specialization and
division of labor

29. Jefferson
• Thomas Jefferson, the
principal author of the
Declaration of Independence
(1776), and the third President
of the United States (1801–
1809).
• On May 30, 1790, in a letter to
Thomas Mann Randolph
recommending books for the
study of law, Jefferson wrote:
... in political economy I think
Smith’s Wealth of Nations the
best book extant ...

30. Interest Groups
• James Madison argued that
the aim of the founders
should be to prevent one
interest (faction) from
controlling the political
system.
• Madison’s idea was to make
it more costly to redistribute
resources from rich to poor
or from poor to rich.

31. Well-Defined Property Rights
• The Constitution provided a system of well defined
property rights that allowed for a market economy to
develop.
– Checks and balances
– Enforcement of contracts
– Regulation of interstate commerce
– Enforcement of due process of law
– Congressional power to tax
– Congressional power to coin money
– Enforcement of copyrights

32. Activity 9.1 The Constitution: Rules for the Economy
A. Contract Clause
• Use economic reasoning
to predict what would
happen if apartment
renters today did not
have to hold to the
provisions of the lease
agreements they signed.
B. Commerce Clause
• The Illinois state
legislature, grown weary
of the unearned and
boastful pride of
Wisconsin
“cheeseheads,” approves
a 10 percent tax on all
cheese “imported” from
Wisconsin.
• Use economic reasoning
to predict what would
happen if Illinois could
impose such a tax.

33. Activity 9.1 The Constitution: Rules for the Economy
C. Fifth Amendment
• The Soviet Union took
possession of the land of
millions of peasant’s forcing
them into collective farms by
1934. Soviet agriculture
declined.
• Use economic reasoning to
explain how the decline in
agriculture might be related
to the power of the
government to take property
by force.
D. Taxation Clause
• The United States has
often run budget
deficits.
• What would happen to
confidence in U.S.
bonds if the federal
government did not
have the power to tax?

34. Activity 9.1 The Constitution: Rules for the Economy
E. Coinage Clause
• The 25 nations of the
European Union established
a common currency, the
euro, in 2002.
• Explain how the
establishment of a common
currency might help to
stimulate economic growth
in Europe.
F. Copyright Clause
• Imagine that the work
of musicians could be
acquired electronically
without compensation
to the artists.
• Explain how the
prospect of not being
able to copyright songs,
and enforce copyrights,
would influence the
production of
musicians.

35. Economic Consequences of Embargo Act
Problem: In 1805 France controlled much of Europe. Britain mastered the seas.
Decision: Napoleon stopped British goods from being imported into Europe.
What are the costs/benefits? What are future consequences of the decision?

36. Events Leading to Embargo Act
• As a result of Napoleonic
wars, by 1805, France
controlled land in Europe.
• England controlled the sea.
Napoleon decided to close
ports to stop British goods
from export to Europe.
• 1806, Britain passed Orders in
Council: U.S. ships must stop at
British port before landing in
other European port. They also
seized US merchants and cargo
and forced impressment.
Napoleon demanded seizure
of any ship that landed in
Britain before Europe • This hurt U.S. economy so
1807 Jefferson passed
Embargo Act that stopped
imports and exports from
U.S. ports
. Embargo shut down New
England trade and left
South and West with unsold
goods
A

37. Economic Consequences of Embargo Act
What do you see?
(consider
ograbme as an
anagram or
reversgram)
What do you
think? Who does
the man with the
barrel represent?
What is he trying
to do? What
country does the
ship belong to?
What is the ship
waiting for?
What do you
wonder?
Is this cartoon for
or against the act?
Decision: Embargo Act passed in 1807
Consequences: Embargo shut down New England trade and left South
and West with unsold goods so by 1808 illegal trade across U.S./Canada
(not yet a country) border was rampant.

38. Want were the impacts of the Embargo Act on trade?
More War of 1812 documents http://neh.niagara.edu/assets/docs/DBQ-Documents.pdf

39. Florida: East and West
• FCIT Passage at grade
level:http://fcit.usf.edu/florida/docs/f/florterr.htm
• FCIT Floripedia Secondary Source from
1905:http://fcit.usf.edu/florida/lessons/cur.htm#trans
fer
• St. Augustine under three flags timeline
http://fcit.usf.edu/florida/docs/s/satimeln.htm )

40. Jefferson’s Covert Negotiations for Purchase of West Florida
from Spain in 1804
• http://cdn.loc.gov/service/pnp/pga/04200
/04246r.jpg
http://www.loc.gov/pictures/item/2002708977/

41. Castillo de San Marcos FCIT
http://etc.usf.edu/nps/ibooks/ Castillo de San Marcos
Read ibooks on pc http://www.startribune.com/how-to-read-itunes-books-on-your-pc/160428925/
https://chrome.google.com/webstore/detail/readium/fepbnnnkkadjhjahcafoaglimekefifl?hl=en-US
Pg. 7 Interactive timeline, Pg. 99 Manifest Destiny

42. Adams Onis Treaty 1821
https://www.polk-fl.net/staff/teachers/tah/documents/floridaflavor/lessons/B-9.pdf
Treaty http://www.tamu.edu/faculty/ccbn/dewitt/adp/archives/documents/adams_oniz_treaty.html
https://www.floridamemory.com/blog/2012/07/17/9-the-united-states-formally-takes-control-of-florida/

43. Problem Position:
The United States of America, founded under the
Articles of Confederation, was beset with problems
• 1780’s widespread
economic troubles
• War had disrupted
commerce
• Citizens heavily in debt
• Many people bankrupt
• Paper money issued by
Continental Congress to
finance war was
worthless because too
much was printed
(saying: not worth a
Continental).

44. Watch Federal Reserve First Bank
Video
First bank video up to 2:49
https://www.youtube.com/watch?v=1Nvxpj4vBDU&feature=player_embedded?d=1&s=fre

45. New america

46. From Problem Position to Decision Direction
“Most commercial nations have
found it necessary to institute
banks; and they have proved to be
the happiest engines that ever were
invented for advancing trade.
-Alexander Hamilton, 1781
• Based on Alexander
Hamilton’s quote, what did
he propose?
• Alexander Hamilton argued
that a national bank could:
– Issue paper currency –
banknotes as money
– Provide a safe place for public
funds
– Offer banking for business
– Collect taxes
We always want more than we can get and productive resources (natural, human,
and capital) are limited. In order to deal with the scarcity problem, we must make choices.
We choose the alternative that provides the most benefits with the least costs.

47. Arguments Against Hamilton
Thomas Jefferson
• Thought a national bank would
hurt smaller state banks
• Believed a national bank was
unconstitutional
• Felt it clashed with vision of
the United States as mostly
agricultural society, not based
on banking, business, and
profit
James Madison and others
• Opposed the national bank for
similar reasons.
• Madison felt a 20-year charter
was too long for something
that was untried in a new
country
• Others felt it was against state
rights
All choices involve costs: When we choose one thing, we refuse another.
Opportunity cost is the next best alternative you give up when you choose.

48. Hamilton vs Jefferson: From 1781 Letters
Who wrote it? What does it say about banks?
EXCERPT 1: Jefferson
Jefferson explains that the Constitutional Convention rejected the argument of implied powers of the
federal government. He recalls that a proposition to authorize Congress to create corporations, such as
those formed to build and run canals, was rejected by the convention. One of the reasons for rejecting
the proposition was that it would allow Congress to start a bank.

49. Hamilton vs Jefferson: From 1781 Letters
Who wrote it? What does it say about banks?
EXCERPT 2: Hamilton
Hamilton contends that all of the arguments made against the new bank that are derived from the
fact that there were a few state‐chartered banks at the time were poorly founded because those
banks could easily be gone quickly.

50. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 4: Jefferson
Jefferson agrees that it would be more convenient to have a national bank whose banknotes could
serve as a currency throughout the whole country. But, he also recognizes that a single global
currency would make things even easier. He argues that just because a single national currency
would make things easier, it does not mean that the federal government has the power to create the
bank nor that the economy wouldn’t function just fine without it.

51. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 5: Hamilton
Hamilton explains that the bank would make it easier to collect taxes by
increasing the number of banknotes in circulation and the speed at which
transactions take place.

52. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 6: Hamilton
Hamilton argues that the bank bill does not prohibit states from chartering as
many banks as they want and for individuals to incorporate to create state‐
chartered banks. Therefore, the bank bill would not create a monopoly since it
does not impede others’ ability to operate banks in the country.

53. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 7: Hamilton
Hamilton explains that the bank would help in national defense. The
bank could be useful in raising funds to be used to protect the country’s
western frontier.

54. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 8: Jefferson
Jefferson points out that those who support the bank bill have argued that a national bank would make
it easier to collect taxes. He explains that the Constitution expressly allows the means that are
necessary and not convenient.

55. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 9: Hamilton
Hamilton argues that the bank would have a natural place in the regulation of trade between the states by providing a currency, in the
form of banknotes, that could be used to carry on that trade. The use of the bank’s notes would reduce the number of coins that had to be
used to engage in interstate trade. Money is the most important thing in making commerce happen. Lots of things have been used as
money, including paper banknotes. Hamilton refutes Attorney General Randolph’s argument that interstate trade should be carried out
exclusively with coin.
“The institution of a bank has also a natural relation to the regulation of trade
between the states. . . Money is the very hinge on which commerce turns. And
this does not merely mean gold and silver; many other things have served the
purpose . . .paper has been extensively employed. It cannot, therefore, be
admitted with the attorney general that the regulation of trade between the
states, as concerns the medium of circulation and exchange, ought to be
considered as confined to coin . . .”

56. Hamilton vs Jefferson: From 1781 Letters
Who wrote it?
What does it say about national banks?
EXCERPT 10: Jefferson
Jefferson argues that the powers assumed in the bank bill have not, in his opinion,
been delegated to the federal government by the Constitution.

57. Who Said It?
Costs Benefits
Jefferson: Against a National Bank
1, 4, 8, 10
Costs Benefits
Hamilton: For a National Bank
2, 3, 5, 6, 7, 9
Do you agree with Hamilton or Jefferson?
Using evidence, debate for or against a national bank.

58. Building an Argument
Here are my reasons!
1. _________________
_________________
_________________
2. _________________
_________________
_________________
3. _________________
_________________
_________________
You could argue that…
_____________________
_____________________
_____________________
_____________________
_____________________
. . .but here is the
weakness . . .
_____________________
_____________________
_____________________
Here is what I think . . .
Evidence to back up my reasons
Strong Ending: So this is what I think again!
______________________________________________
______________________________________________
______________________________________________

59. Answers
Jefferson: 1, 4, 8, 10
Hamilton: 2, 3, 5, 6, 7, 9
See handout for explanations
http://www.instituteofplay.org/work/projects/print-play-games-2/socratic-smackdown/

60. Hamilton vs. Jefferson Links
• First bank video up to
2:49https://www.youtube.com/watch?v=1Nvxpj4vBDU&featur
e=player_embedded?d=1&s=fre
• Lesson Plan Federal
Reservehttp://www.federalreservehistory.org/Events/DetailVie
w/94
• Timeline history of the Federal Reserve
https://www.federalreserveeducation.org/about-the-
fed/history
• https://www.minneapolisfed.org/publications/the-region/the-
bank-that-hamilton-built
• http://www.palomar.edu/ehp/history/sgrenz/Study%20Guides
/JEFFERSON-HAMILTON%20VIEWPOINTS.pdf
• http://teachinghistory.org/history-content/ask-a-
historian/24094