Originally, the only method Congress had of raising money was by placing taxes on imports. This is known as a tariff. Taxing of an individual’s income was extended in the twentieth Century in the form of the Sixteenth Amendment. Alexander Hamilton, a man who had “pulled himself up by the bootstraps,” was a firm believer in a national economic policy that would strengthen the role of the central government, while enriching the national economy. As secretary of the treasury, Hamilton won approval to absorb all of the states’ individual wartime debt, along with that of the national government, paying them all off as one debt. The establishment of a national bank, along the lines of the Bank of England, bolstered the economy of the United States and provided an excellent credit rating for the new nation.
Although successful, the heavy-handed manner and what some viewed as unconstitutional actions of Hamilton to secure the national bank and to pay off the war debts led to the creation of the first political parties. Hamilton and his followers formed the Federalist Party, which promoted a strong central government. Jefferson and Madison, on the other hand, formed the Republicans, or Democratic Republicans Party. They stood for the rights of the states and a strict reading of the Constitution. Being involved in an agrarian economy, Jefferson feared that Hamilton’s policies would lead to a strong central government.
The French diplomat to the United States during the early days of the French Revolution was citizen Edmund Genet. Genet had begun hiring privateers to attack Spanish Florida and harass British ships. Washington worried that Genet’s actions would lead to America’s entrance into the war against England, which he did not want and demanded Genet’s recall. By the time the demand reached France, another revolution had swept out Genet’s supporters, and he was ordered to be arrested. Genet begged for asylum to prevent being returned. In an effort to soothe relations with Great Britain while also securing promises to pull British forts out of the Ohio River Valley, John Jay was sent to England. His negotiations secured very few of Congress’s demands, and his treaty, though offensive to many, was ratified to avoid embarrassment abroad.
With the Land Act of 1796, Congress extended the rectangular surveys of land that had been accepted in 1785 and agreed to sell the land at $2 per acre, with 640 acres being the minimum sold. This was well beyond the means of most farmers; in 1800 the act was revised to a 320-acre minimum and down payments were allowed. Daniel Boone, in 1795, expanded a Native American trail through the Cumberland Gap and opened what became known as the Wilderness Road. This allowed easier access to the back country, increasing the flow of goods and settlers into the area west of the Appalachians.
After serving two terms in office, Washington was ready to retire. In his farewell address to the nation, he called for American citizens to forego political parties and to avoid entangling alliances with foreign nations. In all three presidential elections before 1804, the candidate with the second highest number of votes became the vice-president. After the 1800 election, this was no longer done. In the 1796 election, John Adams won the presidency, and Thomas Jefferson was his vice-president, even though they were of different parties.
As the Federalist Party began to die a slow death, the Democrat Republicans turned on themselves. John Randolph led the opposition to the Jefferson’s second administration. After fleeing prosecution for the death of Hamilton, Burr concocted a scheme to separate Louisiana from the United States and establish it as his own empire. He was apprehended before he got too far along with his plan and was tried for treason. He was found not guilty.
His 121 chapter 8 the federalist era 1789 1800
Raising revenue ◦ Exchange war bonds for interest bearing bonds ◦ Bonds accepted at face value Rewarded speculators Economic policy: Tariffs ◦ Encouraging manufactures ◦ The emergence of sectional differences Establishing the public credit ◦ A national bank 10 million in capital 4/5ths supplied by private investors 1/5th supplied by government 5 directors named by private investors 5 directors named by government National currency back by government bonds Source of capital loans Safe Place to keep government funds
Birth of the first political parties ◦ Federalists ◦ Republicans or Democratic Republicans Opposed to monarchy Strict construction of Constitution If it’s not spelled-out in the Constitution, the Federal government can’t do it. No National Bank Jefferson’s agrarian view ◦ Nation of small farmers ◦ Wage laborers were dependent on others for their livelihood. Subject to political manipulation Economic exploitation
Citizen Genet ◦ French Revolution 1789 King Louis XVI executed in 1793 Britain, Spain, Austria, Prussia allied against France ◦ US treaty with France following Revolutionary War (perpetual allies) Citizen Genet hired Spanish privateers to harass British shipping off Florida coast Washington revoked his Diplomatic privilege and was sending him back to France when Jacobins seized power from the National Assembly Genet requested and was granted asylum
John Jay: US Supreme Court Chief Justice Crisis with Britain during French Revolution ◦ 1793 Britain began confiscating any ship carrying French goods or sailing for French Port in the Caribbean Impressment of American seamen ◦ 1794 British arming Indians on frontier along Ohio River valley ◦ British seized forts along Great Lakes ◦ Democratic Republicans support for embargo on British goods Jay’s Treaty (1794) ◦ Accepted British definition of neutral rights Tar, pitch and products for warships could not be shipped to enemy ports by neutral ships Trade prohibited in peacetime could not be opened in wartime Britain: most favored nation trading status French privateers cannot be outfitted in American Ports Forgive reparations for African slaves who escaped during Revolutionary War ◦ British concessions Evacuation of British forts in Great Lakes by 1796 Reparations for seized American ships and cargo Trade with British West Indies
Damn John Jay! Damn everyone that wont damn John Jay! Damn every one that wont put lights in his window and sit up all night damning John Jay! Jay Treaty may have been a bad bargain but historians agree that it was a success in 2 respects: Postponed war with Britain Chose dominant power of 19th Century as commercial ally
Federal Tax on Liquor (1791) Western Territories: Cheaper to ship liquor than grain or corn ◦ Bushel of corn worth $.25= 2.5 gallons of liquor worth $2.50 ◦ Farmers saw tax as a scheme by Hamilton to enrich urban speculators by “picking the pockets of farmers.” 1794 in PA “Whiskey Boys” ◦ burned stills of farmers who paid the tax ◦ Threatened federal revenue officers ◦ Robbed the mails ◦ Interrupted court proceedings ◦ Threatened to assault Pittsburgh
Called out 12,000 men in militias from Virginia, Maryland, Pennsylvania and New Jersey General Henry Lee commanded 13,000 men Whiskey Boys vanished 20 men captured 2 convicted of treason Both pardoned by Washington ◦ Simpleton ◦ Insane
Land policy ◦ Cost of land Parcels Land Act of 1796: Townships-- 640 acre sections @ $2/acre Land Act of 1804: Minimum unit 160 acre sections @ $1.64/acre Daniel Boone and the Wilderness Road ◦ 1769 discovery of “Warrior’s Path” foot path through the Cumberland Gap (over the Appalacian Mountains) ◦ 1771 Boone and 30 woodsmen cut a larger road called “Wilderness Road” 300,000 settlers used the Wilderness Road over the next 25 years.
Chester Harding, Unfinished Portrait of Daniel Boone,” 1820
Washington’s farewell ◦ Avoid political parties ◦ Avoid the entanglements of Europe The election of 1796 ◦ Federalist Candidates John Adams (President) Thomas Pinckney (Vice President) ◦ Democratic Republicans Thomas Jefferson (President) Aaron Burr (Vice President)
Democratic Republicans called John Adams “his rotundity” Federalists called Jefferson “a French loving atheist” French ambassador public appeal for Jefferson ◦ Foreign interference in US election ◦ Adam’s elected: 70 electoral votes to 68 electoral votes
Europe: Napoleonic War Caribbean: Jay Treaty required US to intercept ships bound for French ports ◦ French intercepted American shipping 300 times and broke diplomatic relations with Americans by 1797 American delegation to Paris: ◦ Thomas Pinckney; John Marshall, Eldridge Gerry ◦ X,Y,Z (French Diplomats) negotiations could only begin if Americans paid $250,000. “Millions for defense, not one cent for tribute!” Logan Act (1799) private citizens may not negotiate with foreign governments without authorization
American Navy 1797: The Constitution, The United States, The Constellation 1797 Congress authorized an army of 10,000 men to serve 3 years each George Washington called from retirement to command ◦ Washington demanded that Hamilton be 2nd in command Convention of 1800 ◦ Suspension of quasi-naval war with France ◦ Suspension of Perpetual Alliance of 1778
Federalists vs. Democratic Republicans Adams vs. Jefferson ◦ James Callender: Muckraker & sex scandals Maria Reynolds & Alexander Hamilton The Prospect Before Us Jailed for Sedition under Alien and Sedition Acts Pardoned by Jefferson but refused position as Postmaster General Published letters between Callender and Jefferson that proved Jefferson funded Callender’s pamphlets against Federalists Jefferson supporters accused Callender of abandoning his wife to die of a venereal disease Callender broke story of Thomas Jefferson & Sally Hemings
John Randolph and the Old Republicans The Burr conspiracy