Chapter 7Democracy in Distress

Problems of a New Nation Spain and Britain wanted the new United

States to fail With backing from the British, there were

Indian attacks on American settlers who were moving into what the Indians felt was their territory

The British continued to occupy 7 forts on American soil even after the Treaty of Paris

The British said they’d retain the forts until loyalists were compensated for their confiscated property

The would retain the forts until Americans paid off their pre-war debts to British merchants

Spain had closed off the Mississippi to American trade.

Spain did offer Americans export privileges in New Orleans in return for American help in taking Tennessee Andrew Jackson considered helping the Spanish

because the American government was weak and had many problems

1789 The government’s credit was essentially no

good Indians and frontiersmen fought constantly The West considered breaking away There were foreign restrictions on U.S. trade There was factionalism among citizensAll these problems faced George Washington

when he took office as president in 1789

President Washington He took the oath of office on 30 April 1789 He helped to interpret the Constitution

honestly where it wasn’t specific: Cabinet? Structure of the court system? Should he send legislation to Congress? Amendments?

Washington brought dignity and bearing to the office

He won the respect of foreign leaders He was an able head of government He was used to using authority He knew his own limitations He deferred to Congress whenever possible;

he tried not to interfere

He used the veto only 2 times in 8 years He knew he needed advisors so he formed a cabinet

From Virginia: Edmund Randolph as Attorney General & Thomas Jefferson as Secretary of State

From Massachusetts: Henry Knox as Secretary of War & Samuel Osgood as Postmaster General

From New York: Alexander Hamilton as Secretary of the Treasury

Revenue Raising revenue was the most important

problem facing the new government Capital was needed to pay the day-to-day

expenses Capital was needed to pay off debts To pay for the running of the government,

Hamilton asked Congress to place a 5% tax on imports

The next problem was to pay off our debts U.S. owed $12 million to foreign nations U.S. owed $44 million to Americans

Hamilton wanted to pay off all debts in full, both to foreigners and to Americans to establish credibility

Congress agreed to pay off foreigners in full Congress had a problem with paying

Americans in full Americans had bought bonds during the war as a

contribution to the war effort Immediately after the war Congress failed to pay

up and people lost hope To get some money back on their investments,

they sold their bonds to speculators

They sold them for less than they were worth Many who bought the bonds were

Congressmen Madison was against paying off the holders of

the bonds at full value because in many cases, the government would be paying a profiteer rather than the original investor

Madison proposed paying profiteers half the value of the bond and paying the original investors the full value plus 4% interest

He felt this was the moral answer Hamilton said morality was beside the point;

we had to show the government as credible, so the wealthy would re-invest

Many congressmen stood to profit from paying the bonds off in full

Hamilton’s proposal passed Madison lost

Hamilton’s Next Proposal: How to Handle States’ Debts Said federal government should assume all

the states’ debts By paying back loans ignored for 10 years,

the viability of the U.S. would be strengthened

James Madison was opposed Said southern states had paid off their debts or

most of them If government assumed debts, then the southern

states would be paying twice Not fair

The Assumption Bill, as it was called, was defeated in the House of Representatives 31 – 29

But it lived to see another day; a deal was struck

It concerned the placement of the new federal capital city

Virginians wanted the capital in the south

So Hamilton made a deal with Jefferson In return for letting the Assumption Bill pass, Hamilton promised enough northern votes to get

the capital moved to the banks of the Potomac

On the second go-round, the Assumption Bill passed 34 - 28

Bank of the United States Part III of Hamilton’s fiscal plan He wanted a central institution where all government

money would be deposited However, the Bank of the United States would not

be a government agency The President would appoint 5 of the 25 bank

directors 20 would be elected by shareholders, the wealthy

The bank bill passed in Congress Jefferson urged Washington to veto it

He thought Congress had overstepped its powers as stated in the Constitution

The Constitution didn’t say, Congress create a bank

Hamilton stated that nothing in the Constitution said it couldn’t

The Constitution did say “to make all laws which shall be necessary and Proper for carrying them into execution

The Bank of the U.S. would regulate commerce and provide for the general welfare

2 Interpretations of the Constitution Jefferson was a “Strict Constructionist”; if the

Constitution didn’t spell something out in black and while, it didn’t exist

Hamilton was a “Broad Constructionist”; he said Article 1, Section 8 allowed Congress to do what was not prohibited by another section of the Constitution

This controversy later helped in the formation of political parties

Part IV of Hamilton’s fiscal plan was discussed in “The Report on Manufactures” written in December of 1791

It was rejected by Congress

In that report Hamilton stated that Congress should promote industry to add to the country’s agricultural and commercial base

To do this, he proposed a “Protective Tariff” Place a high duty on imported goods Encourage investors to build mills and factories

in U.S. rather than depend on Europe It would create new American jobs

Farmers were opposed because they bought cheap foreign goods for their servants and slaves

Americans, in general, bought cheap foreign goods American merchants sold these goods Change would be too fast and too great It wasn’t voted in; tariffs remained low – enough to

pay government expenses

Re-election 1792 – Washington was re-elected without

opposition He been relatively successful in office He’d established precedents for other

presidents to follow He successfully established a stable

government for 4 million people Washington remained in office until 1797

Farewell Address Written by Alexander Hamilton, influenced

by Madison He warned Americans of 4 problems:

Don’t form political parties Voice opposition to government policies

peacefully, through legal channels Avoid sectionalism; give allegiance to the nation Honor alliances already in effect; avoid new ones

Revolution in France Began in 1789, influenced by American

Revolution But went to a further extreme Rebelled against the excesses of the

monarchy, ex: Versailles Tried to redesign society from top to bottom Many Americans initially supported French French went beyond basic freedoms

January, 1793 – King Louis XVI was guillotined

Within a year Marie Antoinette, his wife, met the same fate

This was followed by the Reign of Terror launched by Maximilien de Robespierre Thousands were drowned or guillotined,

especially nobles

The French also tried to wipe out religion; there was heavy Catholic influence

All this scared some Americans, especially the Federalists (the elite of American society)

Other European nations were afraid this revolution would spread to their countries and so fought back, ex: Britain in 1793

Under the terms of the French Alliance of 1778, the U.S. was supposed to help France

Washington and others did not want to get involved in this fight

We were a new, unstable nation ourselves Hamilton found a legal loophole

Said the Alliance of 1778 was invalid because we had made that agreement with the king

We did not make an agreement with this new revolutionary government

The U.S. remained neutral Enter Citizen Genet:

French Minister who arrived in Charleston in April, 1793

Tried to commission American ships to act as privateers (armed raiders, paid by French, to seize British ships)

Many complied: 80 ships were brought into U.S. ports

Genet gave prizes to the privateers Genet’s actions were dangerous because they

could drag the U.S. into the war When Washington finally met with Genet, he told

Genet to STOP He later told Genet to go back to France

Genet hesitated because his political party had been ousted and the Reign of Terror was in full swing

He was scared to return and asked Washington for political asylum

It was granted Genet remained in the U.S., got married, and

lived a quiet life as a gentleman farmer in N.Y.

British Threat Before Britain and France began fighting,

U.S. had been excluded from French ports in the West Indies – trade restrictions

After the war began, France wanted the American trade for supplies

Britain invoked an old law concerning war at sea - Rule of 1756 – which said ships of neutral nations couldn’t trade in ports where they had been excluded before the war

Many Americans were doing this and making lots of money

Britain didn’t want America in the war; they didn’t want to lose trade with the U.S.

So Britain began to seize American ships and impress its sailors 1793-1794 , Britain seized 600 American ships Removed seamen who had British accents

Many Americans began to pressure Washington to declare war on Britain

Instead, Washington sent John Jay to England to work out a peace

The Jay Treaty Britain agreed to evacuate western forts Britain agreed to compensate American ship

owners for vessels seized in West Indies and allow some trade with British possessions

Americans were not to discriminate against British shipping and to pay back all debts incurred before the revolution

Nothing was said about impressment.

The Jay Treaty only seemed to benefit the wealthy

The country protested!

The furor showed the growing factionalism in the U.S. that led to the formation of political parties

Pinckney’s Treaty Spain had territory to the west and south of

the U.S. They were afraid the newly reconciled U.S.

and Britain would invade their Louisiana So Spain met with Thomas Pinckney and

gave into every demand made by Americans since 1783

It honored the American version of boundary between U.S. and Louisiana

It opened the Mississippi to American navigation

It granted Americans the “right of deposit” in New Orleans Store exports there Carry on commerce there

Western Problems Hard life in the West – labor, disease,

malnutrition, isolation, Indian problems Washington was eager to remove Indians

from western lands, especially from the Ohio Valley

1790 – Washington sent Josiah Harmer to find and defeat the Miami and Shawnee under Chief Little Turtle

They were poorly supplied They were fighting dysentery and malaria They were decimated 1791 – Arthur St. Clair and 600 soldiers were

also killed in this same endeavor The Miami and Shawnee remained supreme

in the Northwest Territories until 1794

1794 – General Anthony Wayne defeated them in August at the Battle of Fallen Timbers near present-day Toledo

It was all settled with the Treaty of Greenville

Pioneers and Whiskey Settlers were heavy drinkers – for recreational

and medicinal purposes It eased the isolation; it was a companion It was also a cash crop and much easier to

transport than grain A problem arose with Hamilton’s tax of 1791,

making the whiskey to expensive to sell

1786 – Pennsylvania farmers attacked tax collectors and rioted

Washington wanted to show that the new government was stronger than it had been under the Articles of Confederation

So he led 15,000 troops to put down the rebellion

A few men were arrested, tried, convicted of treason, and sentenced to death

Washington then pardoned them Political significance:

It showed that the federal government had the right and the force to crush rebellion

Troops could cross state linesPeople of the West remained staunchly Anti-

Federalist

Federalists vs. Republicans Party lines were becoming clearer Federalists

Supported Hamilton’s fiscal policies Feared the French Revolution Friendly towards England Accepted the Jay Treaty Believed the national government should act

decisively and powerfully to maintain internal order

John Adams and Alexander Hamilton were its spokespersons

John Jay, the Pinckneys, Washington, and other wealthy Americans were also Federalist

Jeffersonian-Republicans Opposed Hamilton’s fiscal policies that enriched

speculators and paid off the debts of other states with their tax money

Friendly towards the French Revolution minus the Reign of Terror

Suspicious of England Despised the Jay Treaty Supported Democratic values Worried about an overly-powerful national government

Election of 1796 Thomas Jefferson (Jeffersonian –Republican)

and Vice President John Adams (Federalist) were running for President

In the election, the candidate with the most votes would be president; the runner-up would be Vice President

They could be from different parties

Hamilton wanted Thomas Pinckney to be president, so he tried to manipulate the election results

Adams supporters heard of this and refused to vote for Pinckney

Result: Adams became President and Thomas Jefferson became Vice President

John Adams Seen as vain, intolerant, and stern with an

impossible temper He was pre-occupied with another threat of

war, this time with France French were angered by the Jay Treaty and seized

300 American ships French threatened to hang American sailors,

captured from British ships, as pirates

French Minister in the U.S. spoke out against Adams Adams was determined to keep the peace He sent John Marshall, and Elbridge Gerry to join

American Minister in Paris, Pinckney French Foreign Minister Talleyrand sent word to

them through 3 agents, X,Y, & Z, that he would talk to them if Americans would loan France $12 million and give Talleyrand a gift of $250,000

Bribes were routine, but this was excessive

The Americans walked out Adams authorized the construction of 40

frigates in case of war Jeffersonian-Republicans were against any

preparation for war Federalists responded to the protest with the

Alien and Sedition Acts of 1798

Alien Acts were not enforced, but extended the period of residence required for American citizenship from 5 to 14 years because most newcomers supported the Jeffersonian-Republicans

Under the Alien Act the President could deport any foreigner he wanted that he deemed dangerous to U.S.

The Sedition Act was enforced There were still fines and prison sentences for

those who made public statements against U.S. government or Adams; that went against freedom of speech

25 cases were brought to trial and 10 people were convicted

Republicans believed this was an attempt to crush political opposition

Jeffersonian-Republicans found these acts to be unconstitutional – violated the Bill of Rights

In reaction, the Virginia & Kentucky Resolutions resulted Said when Congress enacts a law that a state

deems unconstitutional, the state has the right to nullify the law within its borders

They said the Alien and Sedition Acts were not in effect in those states

That challenged the supremacy of the federal government

BUT the death of George Washington in 1799 and the election of 1800 calmed fears and nothing happened

Election of 1800 Jefferson won over Adams in 1800 Close vote between Aaron Burr and Thomas

Jefferson; they got the same number of electoral votes

It was decided by the House of Representatives on the 36th ballot

Again politicians had tried to manipulate the outcome, but it didn’t work