*With the ratification of the Constitution by eleven of the thirteen states in 1788, it was time to elect a new president.  Of course, only one man was truly thinkable for the position:  George Washington.  Widely respected, known for his honesty and integrity, and, perhaps the only American aside from Benjamin Franklin to have the international prestige to lead the nation effectively, George Washington was the only president to ever be elected unanimously, despite his repeated protests that he did not want the job, but only wanted to stay home at Mount Vernon.

*Washington was inaugurated on 30 April, 1789, in New York City, on Wall Street.  Congress had met in New York since 1785, and would do so until 1791, when they would remove to Philadelphia until the selection of a permanent national capital.

*There was some debate over what to call Washington.  After all, there had never been a single executive over a republic of such size in the history of the world.  People wondered if they ought to call the President ‘Your Majesty,’ ‘Your Excellency,’ or ‘Your Highness’ like a European ruler or if ‘Mr. President’ would do.  This was not decided until well after the Civil War.  Washington apparently preferred to be called ‘Your Majesty’ or ‘Your Excellency,’ feeling that such formality was necessary to make people respect the office of the president.

*Although Washington was elected president unanimously, in those days before the passage of the XII Amendment, each elector got two votes, so that they could also vote for vice presidents, and John Adams won that office by a large, but hardly unanimous, margin.

*Adams also needed a title, but unfortunately, his were not so grand as Washington’s.  He was sometimes called ‘His Superfluous Excellency’ or even ‘His Rotundity.’  His office was a fairly meaningless one, with its principal duty to be available in case Washington should die.  Although he was also required to preside over the Senate, he was early forbidden by that body to take part in the debate, largely because, although forceful and effective in debate, his forcefulness made him obnoxious and disliked.  In fact, his first breach of etiquette was the suggestion that Washington be styled "His Highness, the President of the United States and Protector of their Liberties."  For making this suggestion, Adams was called a monarchist and a traitor, and was forced to stew silently during Senatorial dbates.

*One reason we call Washington the Indispensable Man was that perhaps only he had the prestige to set the precedents that he did.  Among these was the creation of the cabinet.  Although the Constitution contains provisions for the Executive to receive written reports from the heads of the various departments of government, it does not say how else he may receive advice from them, and never specifically mentions a cabinet.  However, to streamline communication within the executive branch, Washington almost immediately created a cabinet for himself.  His first cabinet comprised Thomas Jefferson (State), Alexander Hamilton (Treasury), Henry Knox (War), and Edmund Randolph (Attorney General). 

*In 1789 Congress passed the Judiciary Act.  The created the Supreme Court as a five-member body.  The Chief Justice was the experienced (if at times unpopular) diplomat and co-author of the Federalist, John Jay.  It also established federal district and circuit courts, and the office of the attorney general.

*Although almost all the founding fathers claimed to despite factions and party politics, the unfortunate fact remains that they split into factions almost immediately after Washington’s inauguration.  One of these parties retained the name of Federalists, but there are not exactly the same as the federalists who supported the Constitution, for some of their prominent members, including James Madison, father of the Constitution and co-author of the Federalist papers, soon aligned himself with the opponents of the Federalists.  These men are known by a variety of names, in part because they were never as organized as a modern political party.  They are sometimes called Democrats (because they claimed to sympathise with the common man), and sometimes Republicans (because they ostensibly based their philosophies on republican virtue), and sometimes as Democratic-Republicans, and sometimes, after their leader, as Jeffersonian Republicans.  The textbook prefers Democratic-Republicans, so I will try to call them that, but if I call them by other names, know to whom I refer.

*Introduce the two parties, what they stand for, and whom they represen

*One of the great early debates was over Secretary of the Treasury Alexander Hamilton’s financial plans for the new nation.  Broadly, he proposed paying off the national debt at face value, as well as the assumption of the state debts by the federal government, in order to improve the United States’ credit at home and abroad, a tariff on imports and subsidies for exports to protect and promote American manufactures, excise taxes on certain American products to raise money for the government, and the creation of a national bank.  Almost every part of this created friction with the Democratic-Republicans.

*Some opposition to Hamilton’s plan arose when he proposed paying off devalued national debts at face value.  From Hamilton’s point of view, this would make the United States trustworthy, so that domestic and foreign loans could be had again, and people would be willing to trade and do business with American and Americans.  Furthermore, a moderate national debt would be a good thing, because it would ensure that the wealthy and influential people to whom the federal government owed money would support the government in order to make sure they were paid back with interst.  Others disagreed, however.  Not only did full repayment pose an incredible financial burden for the United States, but it also benefited, on the whole, the wealthy.  Because government bonds had depreciate so much, most had been sold at ten or fifteen cents on the dollar to wealthy speculators.  Now that the bonds would be repaid in full, it would not be veterans or farmers who benefited, but the rich men, mostly Federalists, who had bought their notes cheap—some even rushing west to buy them up at the last minute, taking advantage of their knowledge of the upcoming law.

*Hamilton also wanted to assume the state debts, and this created the first real crisis.  According to Hamilton, this would also place both the states and the people in a position where they had to support the federal government, and it would improve the states’ credit.  The problem was that while some states, mostly in the north, such as Massachusetts had large debts remaining, other states, particularly in the south, and including influential Virginia, had paid off most of their debts, and did not see why their taxes would shortly have to go to pay off Massachusetts’ debts as well when they were assumed by the Federal government.

*The assumption debate was finally solved by the Compromise of 1790.  This permitted the federal government to assume the state debts through the Assumption Act of 1790, but also including certain financial manipulation—at which Hamilton was an expert—that ensured that Virginia’s taxes for the next year were exactly the same amount as her small debt which the government assumed, so that Virginia had to pay no federal taxes that year.  As a side note, a deal was made so that slavery, still a controversial topic with the occasional Quaker calling for its end, would not be discussed at all in Congress until at least 1808.  Finally, a deal was made so that the capital of the United States could be in the South, although this was also not officially stated.  Rather, the selection of the new capital, which New York City, several cities and towns in Pennsylvania, and the South in general all sought for themselves, was put in the hands of the only man everyone in America felt they could trust, George Washington. 

*Washington selected a site ten miles on a side near his home at Mount Vernon, Virginia.  The area was called the District of Columbia, after Christopher Columbus.  Only after Washington’s death in 1799 was the city named Washington.  Washington never got to live in the District of Columbia.  Although he visited the site often, the Executive Mansion, not yet called the White House, was not ready for anyone to occupy until late in the presidency of John Adams.  Until then, the government mostly met in Philadelphia.

*With the debt safely under control, or perhaps unsafely—with the assumption of the state debts, the federal government now owed over $75,000,000.00 to various creditors—Hamilton could turn to the promotion of industry and to the collection of revenue.  To this end, he presented in 1791 his ‘Report on Manufactures.’  This report proposed a system of bounties or subsidies for American manufacturers to help them financially as they created industry for America—until now largely dependent on British manufactures—and a tariff on imports both to make money for the United States and to make foreign imports a more expensive so that American manufacturers could more easily compete with them.  Southerners, who depended on imports and who did not want to anger trading partners who bought Southern tobacco and rice, and would soon start buying cotton in great quantities after Eli Whitney’s invention of the cotton gin in 1793, were opposed to this scheme.  In the end, the subsidies were dropped, and a mild tariff of 8% was imposed on imports.

*Hamilton also proposed to fund the vast national debt he had acquired and pay federal salaries through excise taxes (internal taxes imposed on the production, sale, or consumption of a commodity or the use of a service within a country).  One of these excise taxes was laid upon whiskey, and called the whiskey tax.  This laid a tax of seven cents a gallon on distillers, and badly hurt the backcountry farmers who depended on whiskey as an easy way to transport and sell their otherwise bulky corn and grain at a profit.

*Finally, Hamilton wanted to create a national Bank of the United States, modeled on the Bank of England.  The Bank of the United States would be a private institution with the federal government as the primary stockholder and depositor.  By putting surplus monies in the bank, the government would keep its cash safe and stimulate the economy by making that money available for loans to entrepreneurs.  Furthermore, the Bank of the United States would be able to issue money secured by these federal deposits, thus creating a stable currency for the United States, whose merchants badly needed such.

*The Bank of the United States was also controversial.  A national bank is not mentioned in the Constitution.  Strict constructionists like Jefferson argued that this meant that the government had no power to create one.  Not only was it illegal to do so, but it might infringe upon the rights of the states, who Jefferson believed were the highest level of government with the power to charter banks.  Loose constructionists like Hamilton, however, pointed to government’s explicit right to collect taxes and regulate commerce and trade.  Hamilton then pulled out the ‘elastic clause,’ also known as the ‘necessary and proper clause.’  This is the clause that states that Congress may pass any laws ‘necessary and proper’ to carry out the powers vested in the government.  A loose constructionist could stretch this elastic clause very far indeed.  Although the nation again split along largely North-South lines on the issue of the bank, with the commercial North favouring it and the agrarian South opposing it, the Bank was chartered in 1791 for a duration of twenty years.  It was located in Philadelphia and had shares worth $10,000,000.00, one fifth of which were owned by the government, and the rest of which sold out to the public in less than two hours, proving that, at least in some areas, Hamilton’s programme was very popular.

*All of Hamilton’s plans, of course, were meant to create a powerful, stable government that could manage the nation, keep it out of trouble and in good financial health, and prevent civil disorder.  However, some people did not approve of Hamilton’s plans, and chose civil disorder as a means of opposing them.

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