Chapter 7 - Hammering Out a Federal Republic, 1787-1820

President Washington

• Unanimously elected in 1789

• Extraordinary responsibility and daunting task

• He must build a government, solve problems, and establish precedents

• A living symbol of the new republic

• Advocated a strong federal government; he alone set policy

Building the Federal Government

• A new government starting with huge problems:

  • $54 million in national debt

  • $25 million in state debt

  • No navy and a small army

  • Spain closes the Mississippi in New Orleans to American trade

  • Britain has forts along the Great Lakes

  • No respect from abroad

  • Untested Constitution

• Very small federal government at first: 

  • Executive Branch =  President Washington, Vice President  John Adams and several clerks from the Confederation

  • Congress of Representatives and Senators from 10 states

• Few rules and no precedents

• Washington builds a Cabinet  (executive branch)

Washington Nominates (and the Senate confirms) a Cabinet (a very important precedent)

• Alexander Hamilton as Secretary of the Treasury

• Thomas Jefferson as Secretary of State

• Edmund Randolph as P/T Attorney General

• General Henry Knox as Secretary of War

Judiciary Act of 1789

• Congress organizes the federal court system (judicial branch)

•  6 Supreme Court Justices; one Chief Justice (John Jay) and five Associates

• 13 Federal District Courts  (one per state), 3 Circuit Courts of Appeal and 1 Attorney General

Import Tariff of 1789

Opposed by southern planters; claimed the tariff favored northern merchants

Hamilton’s Plan for Prosperity and Security

• Main Problem:  US and states owed $79 million to foreign nations and individuals for war costs 

• Proposed Solution:  A Three-Point Plan

  1. Pay debt and interest in full;  replace old low-value bonds  with new full-value, interest-bearing  bonds.  

  2. Raise money to pay the debt;  Pass the Tariff of 1789 and a new excise tax

  3. Standardize the banking system;  create a national bank and a national mint

Point 1: Pay the national and states’ debt in full, with Interest (Assumption of state debt), Report on the Public Credit

• Arguments For:

  • Build confidence in the new nation

  • Financial stability

  • Free up state money for commercial and industrial activities – stimulate the economy

• Arguments Against:

  • Reward rich speculators and punish ordinary citizens who sold low

  • Southern states already paid debts and resented being  taxed to pay Northern debts

• Lasting Legacy:

  • Established the United States as trustworthy

  • Established precedent of nation paying its debts

Point 2: Create national bank and national currency

• Arguments For:

  • Help government regulate economy and commerce; generate income (raise money) through loans; help manufacturers

• Arguments Against:

  • The Constitution did not specifically say the federal government could create a national bank

• Lasting Legacy:

  • Created a model on which today’s Federal Reserve System is based

Point 3: Impose excise taxes, tariffs, and special industrial bounties to stimulate manufacturing, Report on Manufactures

• Arguments For:

  • Pay debts and raise money for the new nation and help manufacturers

• Arguments Against:

  • Some people resented these new taxes and tariffs

• Lasting Legacy:

  • Recommendations in the Report on Manufactures defeated by House of Representatives; some tariffs and taxes imposed.

Hamilton saw three great benefits to his three-point plan

1. Reduce the power of individual states in shaping   

       national economic policy

2. Establish financial credibility, making future 

      borrowings easier; boost commercial and   

      industrial investment

3. Enrich investors and gain political support from the  

       wealthiest Americans

• Plan would redistribute wealth from South to North and from farmers to merchants

Loose Construction of Constitution

• Hamilton

• broad interpretation of Constitution

• implied powers and Congress’ elastic clause (Article I, Section 8)

• Enact laws for the general welfare.

Strict Construction of Constitution

• Jefferson & Madison

• strict interpretation

• limit federal government to powers explicitly stated in Constitution

Compromise for Hamilton’s Three-Point Plan

• Congress agrees to Hamilton’s plan to pay national debt, establish an excise tax, and create a national bank;  BUT…

• Southern states only agree to assumption/payment of state debt if national capitol is moved to the South…Washington D.C.  

The Whiskey Rebellion

• 1794 – rural farmers in western Pennsylvania violently rebelled against the excise tax on WHISKEY.  Attacked tax collectors, burned barns.

• 2,000 farmers threatened Pittsburgh

• Washington, Hamilton and a force of 12,000 militiamen SUPPRESSED the rebellion – NO bloodshed but plenty of bitter feelings and political divisions regarding the role of federal government.

The Two Parties that Developed (not Anti-Federalists anymore)

• Federalists:

  • Led by Hamilton

  • Strong  Central Government

  • Wanted economy based on industry and trade

  • Pro-British

  • Loose Construction

• Republicans:

  • Led by Thomas Jefferson

  • States should have more power

  • Based economy on farming

  • Pro-French

  • Strict Construction

Major Challenges of Washington’s Presidency

• Build a government

• Make peace with Native Americans

• Establish foreign policy during volatile times (France and Britain at war, again)

Early US Foreign Policy with France

• 1789 French Revolution  - Americans initially welcomed spread of republicanism

• By 1793 Britain and France at war.

• Eventually Americans divided on the French Revolution, its extreme violence and its declaration of war on monarchy (in France and elsewhere in Europe  - Britain).

• By 1794 Republicans support French Republic;  Federalists denounce violence of French Republic and support Britain.  

Washington’s Proclamation of Neutrality, 1793

• to “pursue a conduct friendly and impartial towards the belligerent powers”

• America is too weak to get involved in war between France and Britain

• America is dependent on British imports and tariff revenue

• The prevailing American policy toward Europe until the 20^th century

• Results: commercial earnings rose, shipping up to 1.1 million tons in 1808

• NOT always respected: GB & France seizing American ships

Jay Treaty of 1794

• between US and Britain

• controversial

• no more British forts BUT they continue providing guns to Natives

• BUT Americans forced to pay prewar debts and accept GB stopping neutral American ships

Pinckney’s Treaty of 1795 (aka Treaty of San Lorenzo)

• between US and Spain

• America gains access (free shipping rights) to Mississippi River and New Orleans

• because think US & Britain are in kahoots

Conflict in the Ohio Valley

• British forts/troops still located in America’s Northwest Territory – providing arms to Native Americans

• Americans lose battles with Native American confederacy (led by war chief, Little Turtle) but tide turns in 1794.

• General Wayne defeats Western Confederacy at Battle of Fallen Timbers and they sign Treaty of Greenville. America gets Ohio. 

• Northwest Territory is open to settlement. 

Washington’s Farewell

• Washington refuses third term (precedent)

and retires to Mount Vernon.  

• Many great accomplishments (defeat of Indians, western settlement, neutrality, increased foreign trade), some political turmoil.

• Advice to successors: temper political strife for national unity and avoid messy foreign affairs.

John Adams and the XYZ Affair

• John Adams (Federalist) elected President in 1796 over Thomas Jefferson (Republican).  Narrow victory along regional/sectional lines.

• Problems with France: France seized American merchant ships;  minor diplomats (“X, Y, & Z”) insulted Americans and demanded bribes and loans. “Millions for defense but not one cent for tribute!”  Adams and Congress expanded the military (father of the Navy) and narrowly avoided war with France.  The public was outraged at France.

• Adams doesn’t agree to pay bribes & avoids war even when own party is pushing for it

• Adams peacefully leaves office in 1801 after 1 term, losing to Jefferson = precedent others must follow

Alien and Sedition Acts

• Anger over XYZ affair and France brought support for Federalists and suspicion toward Republicans and foreigners.  Federalists took advantage and…

• Congress passed four (highly controversial) laws in 1798 to protect the country from foreign enemies and domestic dissent.

• Three Alien acts aimed mainly at French and Irish refugees (likely to support Republicans):

  • 1.  increased period of required residency for citizenship from 5 to 14 years

  • 2. required foreigners to register with the government

  • 3.  allowed the president to jail or expel any foreigner thought to be “dangerous to the peace and safety” of the country.

• One Sedition act making it a crime to speak or write against the government and its public officials…targeting Republicans and contradicting the First Amendment protecting free speech and free press.  Nine newspaper editors and one Congressman (all Republicans) tried and convicted. 

Opposition to Alien & Sedition Acts

• Many believed acts to be unconstitutional

• some states sought to nullify laws (Virginia and Kentucky Resolutions – anonymously written by Madison and Jefferson).

• Deeper, more bitter political divide.

Election of 1800

• Sedition Act and increased federal taxes unpopular and controversial—Adams on the hot seat!

• Federalist Adams lost heated election; Republicans Jefferson and Aaron Burr tied; Hamilton supported—and Federalist congressmen eventually chose—Jefferson as President.

• A bit of a mess–but the first peaceful transfer of power from one party to another.

  • Twelfth Amendment in 1804 separated voting for President and Vice President;  Burr killed Hamilton in 1804 duel

Age of Jefferson

• Election of 1800:

  • SCANDAL!! Kids with a slave!

  • Republicans won presidency (Jefferson) and control of Congress

  • Federalists never reclaim national power

  • First peaceful transfer of power from one party to another and end to Federalist era

• Presidency:

  • Encouraged Congress to drop Alien & Sedition Acts and unpopular taxes

  • Major cuts to army, navy & bureaucracy

  • Increased revenue from trade and land sales

  • Reduced national debt from $80 million to $57 million

Judicial Review

• The US Supreme Court, under Chief Justice John Marshall, established the power of judicial review.

• Judicial Review:  the power to review laws to determine if they are constitutional. 

Marbury v. Madison (1803)

• Madison refused to accept appointment of Marbury as Justice, asserted right to judge constitutionality of congressional acts

• set the precedent of judicial review for federal statutes

• the Supreme Court ruled that part of the Judiciary Act of 1801 was unconstitutional.  

Fletcher v. Peck (1810)

• set precedent of judicial review of the Supreme Court for state laws

• limited state power

• bolstered property rights

• developed capitalist & national economy

• prohibited states from passing laws imparing contracts

John Marshall, Chief Justice

• applied four of Hamilton’s principles to interpret the Constitution:

1. Established Judicial Review

2. Insisted federal laws were superior to state laws

3. Practiced broad or loose interpretation ~ found implied powers for the national government

4. Insisted on the sanctity of contracts

Louisiana Purchase

• In 1801 France’s military dictator, Napoleon, forced Spain to return New Orleans and Louisiana Territory to him.

• Jefferson wanted Territory for farming, trade, (especially the Mississippi) and westward expansion for  an increasing population.

• After troubles in Haiti, Napoleon agreed to sell Territory to America for $15 million – a HUGE bargain. ($298 million today)

• Jefferson avoided war with France/Napoleon over land with purchase of Louisiana Territory

Louisiana Purchase’s Constitutional Problem

• Jefferson strongly believed in strict construction of the Constitution…

• Yet the Constitution does not specify that presidents have the authority to purchase new territory…

• Jefferson used implied powers to buy the Territory…neither he nor Congress could say no to such a great deal.

Jefferson’s Foreign Troubles: The Barbary War

• Jefferson refused to pay increased protection money to Barbary pirates (Barbary States of North Africa)

• Jefferson sent the small U.S. navy to blockade the port of Tripoli

• US won a favorable peace in 1805 

    and showed military and diplomatic 

strength.

Jefferson’s Foreign Troubles: Re-Export Trade

• From 1793-1807 war in Europe meant opportunity for US ships to re-export goods bound for France from Indies (US to France)

• Re-export trade soared from $300,000 in 1790 to $59 million in 1807, tripling the size of the US merchant marine and boosting US economy

• Trade caused hostility with Britain –the US helped its enemy, France, and became Britain’s greatest commercial competitor

• British warships began to seize more US merchant ships and impressed US sailors (6,000 by 1812) to serve in British navy.

Jefferson’s Foreign Troubles: Embargo of 1807

• “peaceable coercion” of Britain and France to respect the rights of neutral carriers

• In retaliation for British attack on U.S. warship Chesapeake and impressment of its sailors, Jefferson imposed embargo of all American commerce against Britain (and France)

• Embargo backfired and bankrupted U.S. merchants & hurt farmers, sailors, and economy

• Riots, anger and shift in support for Federalists.   Jefferson lifted failed embargo before retirement as President.  (Republican Madison still won 1808)

Gearing Up For War of 1812

• 1809: Congress replaced failed embargo with Non-Intercourse Act aimed at France and Britain–US would resume trade with all countries EXCEPT France and Britain unless they lifted restrictions on US shipping (neither did).

• 1810:  Macon’s Bill No. 2 restored trade with Britain and France but if either country recognized US neutrality, US would resume trading sanctions against the other country. 

• France agreed to lift restrictions so President Madison ordered sanctions against British BUT France continued to seize US ships.

Battling Native Americans (Tecumseh, Tenskatawa)

• Tecumseh and brother Tenskatawa wanted to preserve Native American culture and unite Indian nations in armed resistance against US expansion (“spiritual and military resistance movement”)

• Gov. William Henry Harrison of Indiana Territory and troops destroyed Tecumseh’s village on the Tippecanoe River.  

• Native American movement lost some momentum but most escaped to fight again

War Hawks

• 1811: Strongly nationalistic “War Hawks” pushed for war against Britain due to impressments and support for Native Americans (GB supplied Natives with arms & ammunition ➔ sovereignty violation; GB violated US commercial rights as neutral nation & Jay’s Treaty by seizing ships & impressing sailors)

• Insisted on invasion of British-held Canada to cut arms supply and drive Britain from North America. 

War of 1812 Breaks Out

• June 1812 Madison urged Congress to declare war against Britain due to interference with trade, impressments and support for Indian attacks  - declaration caused deep divisions in nation

• US was weak and unprepared

• Invasion of Canada failed due to poor performance of untrained state militias and of regular army;   embarrassing loss of Detroit

• Small US navy won battles (!), including a battle on Lake Erie enabling the re-taking of Detroit

Native Americans and British in War of 1812

• US unable to conquer British Canada but defeated Native Americans in the US 

  • In 1813 Harrison killed Tecumseh

  • In 1814 Andrew Jackson crushed Creek Indians of Alabama, then invaded Spanish Florida and defeated Seminoles

• In 1814 more British troops arrived after defeat of Napoleon in Europe - invaded several US cities/locations  and blockaded coast BUT most attacks ended in British defeat thanks to improved US soldiers 

• British invaded Washington D.C., burned the White House and Capitol but were defeated en route to Baltimore.

War of 1812 Key Points

1. Battle of New Orleans takes place after treaty (tragic)

2. News of peace and Federalists’ demands reach D.C at the same time (humiliating)

3. Timing of news regarding treaty and New Orleans victory gives Americans impression of victory in War of 1812 – even though no gains are made (prewar boundaries restored, issues of neutrality and impressments not addressed).

4. Illusion of victory leads to surge in American pride and nationalism.

Hartford Convention (1814)

• proposed constitutional amendments limiting office of President to single 4 year term (to end VA domination)

• suggest amendments restricting commercial embargoes & actions of Congress

• seemed treacherous with rumors of making separate peace with Great Britain

War of 1812 Aftermath & Effects

• Federalists mocked as defeatists and traitors – by 1820 the party was dead.

• Surge in American nationalism (Jackson’s a hero)

• War shattered Native American resistance

•  Land in the West and South is opened for settlement.  New states, bigger, stronger union.

• Way was paved for acquisition of Florida (Adams-Onis Treaty of 1819)

Nationalism Shaped Domestic Policies After War of 1812

• Nationalism 

  • a dominant political force following War of 1812

  • affected economics and foreign policy, supported by court rulings

• The “Era of Good Feelings” – political harmony under President  Monroe (or so it seemed) 

• A spirit of nationalism swept the country

The Marshall Court Boosts Federal Power

Under John Marshall, Chief Justice from 1801 to 1835, the Supreme Court favored a strong central government and a national economy.  Due in part to the Marshall Court, U.S. became one large integrated market. Created broad definition of commerce and asserted the supremacy of federal over state law.

Landmark Cases

•   Marbury v. Madison (1803):  judicial review 

•   Dartmouth College v. Woodward (1819): limited state government’s power to interfere in business contracts 

•    McCulloch v. Maryland (1819): Congress had the power to charter a national bank, and no state could tax such a bank 

•   Gibbons v. Ogden (1824): the power to regulate commerce involving more than one state – interstate commerce – belonged to the federal government. 

Nationalist Economic Policies After War of 1812

• Tariff of 1816 – protected U.S manufacturers (and betrayed Republican’s former principles regarding federal power and industry)

• Henry Clay’s American System – a proposed national (federal) economic plan to protect  American farmers and manufacturers  from foreign competition;

  • Impose tariffs

  • Improve roads and canals

  • Reestablish a national bank

Nationalism Influenced Foreign Affairs After War of 1812

• John Quincy Adams – highly influential  Secretary of State under President Monroe ➔ American National Expansion via foreign diplomacy

• Adams-Onis Treaty (ratified in 1821)  – Spain cedes Florida to U.S. and gives up claims to Pacific Coast territory of Oregon.

• Monroe Doctrine (issued in 1823) – Responding to European threats to colonize Latin America, President Monroe declares that all European countries must stay out of Latin America, and in exchange the U.S. will stay out of Europe.  The western hemisphere is America’s business.   While not enforced until the 1890s, the MD did reflect U.S desire for power.