Personal Budget What would the United States budget look like after the war? Expenses: 1.)...
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Transcript of Personal Budget What would the United States budget look like after the war? Expenses: 1.)...
Personal Budget
What would the United States budget look like after the war?
Expenses:
1.) ______________________________
2.)_______________________________
3.) _______________________________
4.) _______________________________
5.) _______________________________
Income: How would the US get money?
1.) _______________________________
2.) _______________________________
3.) _______________________________
Alexander Hamilton:Secretary of State
“Getting money from the states is
like preaching to the dead.”
1.) Tariffs 2.) Excise Tax 3.) Establish national bank
“How would these 3 lower (or eliminate) the national debt?”
Additional “tax”
placed on
Imported goods
Additional “tax” placed ondomestic goods, most notably whiskey
Makes foreign
goods more
expensive,
homemade
goods cheaper
China sells plastic cups in America. They planned to sell each cup for $3 in the US. Now, they must pay an additional $1 tariff on each cup. Therefore, they must now charge $4 per cup. The $1
tariff goes to the government as revenue.
Meanwhile, cups made in Ohio do not pay an additional tariff since tariffs are only for foreign goods.
Same concept as a tariff but applies to only domestic goods.
Gives government a place to store money. Allows government to print money. Can issue loans make money on interest. Can raise money by selling bonds.
Why?
But, not all people were supportive of the national banking system?
Is it clearly stated in the Constitution that the United States government can create a national bank?
There is only ONE way to read…
but there are TWO ways to read the Constitution!
How to read the Constitution?
Strict Interpretation Loose Interpretation
- Government can only do what is clearly outlined in
the Constitution
- Government powers are defined and limited
- Thomas Jefferson
- Constitution has many “implied” powers
- There are powers that exist that aren’t mentioned
- Uses the Elastic Clause (Article 1, Sect 8) to justify ideas
- Alexander Hamilton
The Elastic Clause:
“Congress can make all laws necessary for the success of the country.”
The issue is simple:
No where in the Constitution does it clearly give Congress the power to create
a national bank.
How do you think Hamilton reads the Constitution?
Why do you think this part was included in the Constitution?
Besides the constitutionality of the national bank, the plan still drew criticism…
The plan proposed consolidating all state debt from the Revolutionary War into one national debt.
Southern states had already paid back their debts – they scoffed at the idea of giving northern states a free ride.
It sounds like it’s time
for a compromise!
Hamilton’s Financial
Plan is accepted …
in exchange for…
The nation’s capital
being moved to the
south
True / False
• 1.) _____ Alexander Hamilton was the first Secretary of Defense.
• 2.) _____ Hamilton's plan to eliminate the national debt focused on using tariffs and creating a banking system.
• 3.) _____ A tariff is a tax placed on an export.
• 4.) _____ Some people opposed the banking system because they believed it violated the Constitution.
• 5.) _____ The Elastic Clause did not allow the government to make new laws.
• 6.) _____ If you have a strict interpretation of the Constitution you believe there are strict limits to what the government can or cannot do.
The first major crisis of Washington’s Presidency is known as the Whiskey Rebellion.
This is also
the first major
test of the
new
Constitution.
Will the new
government
have enough
power?
Farmer’s in Pennsylvania
are having trouble
getting their corn to
market in time before it
spoils. They turn corn into
whiskey
so it will not spoil, plus it
brings more profit!
This whiskey
is now
subjected to
tax under
Hamilton’s
Financial Plan.
Farmer’s rise up in
protest
“Unfair taxation
of a
demographic.”
They turn
violent – tarring
and feathering
and burning of
tax collectors
homes were
common!
Washington
sends 13,000
troops to stop
the riotsHe even
personally leads
the army!Arrests 20 men,
but all are
pardoned . . .
why?Shows the power of the
new government and
constitution
