The Federalist Era Chapter 9 Early Changes. During Washington’s presidency, he focused mostly on...
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Transcript of The Federalist Era Chapter 9 Early Changes. During Washington’s presidency, he focused mostly on...
![Page 1: The Federalist Era Chapter 9 Early Changes. During Washington’s presidency, he focused mostly on foreign affairs and military matters – he left the financial.](https://reader035.fdocuments.in/reader035/viewer/2022072016/56649eea5503460f94bfb487/html5/thumbnails/1.jpg)
The Federalist EraChapter 9
Early Changes
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During Washington’s presidency, he focused mostly on foreign affairs and military matters – he left the financial issues to his secretary of the treasury-Alexander Hamilton
The national debt (amount of money owed) was growing. He needed to find a way to pay it off
• 1790 U.S. debt was $54,000,000 (million dollars) • In 2009 dollars this is $4,100,000,000,000 (Trillion dollars)• Debt (2012) was $15,260,000,000,000 (Trillion dollars)
what is it now????• debtclock
– Hamilton's plan» He wanted to the federal government to pay back loans
made from foreign countries, individual citizens, as well as state governments
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Opposition to the plan• Congress agreed to pay the states• Paying back the citizens caused an issue
– The government had issued bonds to citizens. Many of the citizens who bought these had resold them for less than face value to speculators
» Hamilton proposed that these bonds be bought back at their original value
» Opponents believed that this would make the speculators rich
» Original bond holders felt betrayed» *Southern states objected because they had
accumulated less debt than the northern states and felt the would pay than their fair share
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Compromise– If the capital was moved south, than the
southern states would agree to Hamilton’s plan
• A special district was created between Maryland and Virginia along the banks of the Potomac River
– Washington D.C.– Hamilton and Jefferson’s views on the direction of the
country differed as well» Hamilton wanted a manufacturing economy with
protective tariffs to protect business (people would depend upon each other)
» Jefferson wanted an agrarian economy (people would depend upon themselves)
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Reminder For Mrs. Ballantyne:
• Talk about bonds, speculators and Hamilton vs. Jefferson
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The National Bank– This was another proposal that brought to light the
separate views of Jefferson and Hamilton• Hamilton’s idea for a national bank would enable a source of
loans for business and people (only 8 banks existed in the nation in 1792)
• Jefferson and Madison opposed this idea– They claimed it was unconstitutional
» He believed in a strict constitution
– Hamilton believed in a loose constitution
» Government could take reasonable action not forbidden by the constitution
» In the end Washington and Congress agreed with Hamilton and in February 1791 charted the Bank of the United States (this did provide stability for the U.S. economy.)
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• The debt reduction plan and formation of the national bank were ideas to help bring economic stability to the United States.
• Challenge– Brainstorm and list at least 3 ideas that would
help to reduce the current US debt (16.3+ trillion dollars). Be able to intelligently discuss these in class tomorrow!