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2. 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
3.
4. 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
5. 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
6. 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
7.
8. Damn John Jay!
Damn everyone that won't damn John
Jay!
Damn every one that won't 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
9. 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
12. 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
15. 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.
17. 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)
21. 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
22.
23. 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
24. 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
25. 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
26.
27. John Randolph and the Old Republicans
The Burr conspiracy
Editor's Notes
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.
