01:512:104 Lecture Notes - Lecture 10: Henry Knox, Whiskey Rebellion, Proclamation Of Neutrality
16 May 2018
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Chapter 10 - Launching the New Ship of State
Growing Pains
• when the constitution was launched in 1789, the republic was continuing to grow at an alarming rate
• America's population was still about 90 percent rural, despite the flourishing cities
• People of the western waters in the stump studded clearings of Kentucky, Tennessee, and Ohio were
loyal
Washington for President
• 1789 Washington was drafted as president by the electoral college
• Washington commanded his followers by strength of character rather than by the arts of the politician.
• April 30th, 1789 Washington took office on a crowded balcony overlooking Wall Street.
• Washington established a cabinet, at first only having three department heads serving under him:
Thomas Jefferson (Secretary of State), Alexander Hamilton (Secretary of the Treasury), and Henry Knox
(Secretary of War).
The Bill of Rights
• Many anti-federalists criticized the Constitution written in Philadelphia because of it's failure to guarantee
individual rights such as freedom of religion and trial by jury though many states had ratified the
Constitution under the understanding that those guarantees would soon be included in the Constitution.
• Amendments to the Constitution would be proposed in either of two ways-by a new constitutional
convention requested by two thirds of the states or by a two-thirds vote of both houses of Congress.
James Madison determined to draft the amendments himself due to the fear that a new convention might
unravel the narrow federalist victory in the ratification struggle.
• 1791, the first eten amendments to the Constitution (Bill of Rights) safeguard some of the most precious
American principles. Protected freedom of religion, speech, press, the right to bear arms, right to be tried
by jury, and the right to assemble and petition the government for redress of grievances. It also prohibits
cruel and unusual punishment and the arbitrary government seizure of private property.
• Madison inserted a crucial ninth amendment, declaring that specifying certain rights shall not be
construed to deny or disparage others retained by the people
• The first congress also created effective federal courts under the judiciary act of 1789. The act organized
the supreme court with a chife justice and five associates as well as federal district and circuit courts and
established an office for an attorney general.
Hamilton Revives the Corpse of Public Credit
• Alexander Hamilton: a native of the British West Indies whose genius was unquestioned, loved his
adopted country more than his countrymen. He regarded himself as a kind of prime minister in
Washington's cabinet and on occasion, became involved into other affairs of different departments,
including his arch-rival Thomas Jefferson.
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• Hamilton set out immediately to correct the economic vexations that had crippled the Articles of
Confederation. His plan was to shape the fiscal policies of the administration to favor wealthier groups in
order to receive support from them.
• His first objective was to bolster the national credit. he urged congress to fund the entire national debt at
par and to assume completely the debts incurred by the states during the recent war
• Funding par meant that the federal government would pay off its debts at face value plus accumulated
interest.
• 1790, congress passed Hamilton's measure, causing buying of paper holdings of farmers, war veterans,
and widows.
• 21.5 million assumed debt of the states
• States burdened with heavy debts, like Massachusetts, were for Hamilton's plan unlike states with small
debts such as Virginia, were more against. Virginia did not want the state debts assumed. The District of
Columbia would gain commerce and prestige.
Customs Duties and Excise Taxes
• The national debt had swelled to $75 million owing to Hamilton's insistence on honoring the outstanding
federal and state obligations alike.
• Hamilton's objectives were as much political as economic. He believed that national debt was positive in a
way, the more creditors to whom the government owed money, the more people there would be with a
personal state in the success of his ambitious enterprise. He wanted to make debt an asset for vitalizing
the financial system as well as the government itself.
• Hamilton used tariffs to pay interest on debt. Tariffs revenues depended on a vigorous foreign trade.
• The first tariff law, imposing a low tariff of about 8 percent on the value of dutiable imports, was speedily
passed by the first Congress in 1789 even before Hamilton was sworn in. Revenue was by far the main
goal, but the measure was also designed to erect a low protective wall around infant industries which
wanted more. Hamilton had the vision that the industrial revolution would soon reach America and argued
for protection of well to do manufacturing groups, vital to his economic program.
• Congress dominated by the agricultural and commercial interests
• 1791, Hamilton secured from congress an excise tax on a few domestic items, notability whiskey. It was 7
cents a gallon.
Hamilton Battles Jefferson for a Bank
• Hamilton proposed a Bank of the United States: powerful private institution--->gov't=major stockholder,
federal Treasury-deposit is surplus monies; print urgently needed paper money, provide stable national
currency
• Jefferson insisted no authorization existed in Constitution for such a bank; powers not specifically granted
to central gov't belong to states; states not Congress had power to charter banks
• Hamilton argued national bank was proper and necessary; "implied power" by Constitution; evolved
"loose construction" by invoking the "elastic clause" of Constitution
• Washington agreed with Hamilton and signed bank measure into law;
• Bank of U.S. created in 1791; stock open to public sale; lots of supporters
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find more resources at oneclass.com
Document Summary
Chapter 10 - launching the new ship of state. Thomas jefferson (secretary of state), alexander hamilton (secretary of the treasury), and henry knox (secretary of war). The bill of rights: many anti-federalists criticized the constitution written in philadelphia because of it"s failure to guarantee individual rights such as freedom of religion and trial by jury though many states had ratified the. Protected freedom of religion, speech, press, the right to bear arms, right to be tried by jury, and the right to assemble and petition the government for redress of grievances. The act organized the supreme court with a chife justice and five associates as well as federal district and circuit courts and established an office for an attorney general. Hamilton revives the corpse of public credit: alexander hamilton: a native of the british west indies whose genius was unquestioned, loved his adopted country more than his countrymen. He regarded himself as a kind of prime minister in.
