APUSH 3.10 Shaping a New Republic

George Washington’s cabinet included… * Thomas Jefferson, the secretary of state * Alexander Hamilton, the secretary of the treasury * Henry Knox, secretary of war * Edmund Randolph, attorney general

In the French Revolution, the initial idea was to overthrow King Louis XVI, the people having resonated with American Revolution ideals
However the Reign of Terror and France’s declaration of war on other European nations raised questions regarding US support
Americans and Washington’s cabinet were divided over supporting the French Revolution

France had supported the US in its revolution
French ideas of democratic reform were opposed to the monarchy * They had similar reasons
Thomas Jefferson led the support of the French Revolution * He had spent a significant amount of time in France asking for aid during their revolution * As the secretary of state his job was foreign affairs

The Reign of Terror was too radical
France had declared war on Britain, which would affect American trade
Alexander opposed the French Revolution * This also makes sense for his position, managing financial affairs
Similarly, merchants feared economic trouble

The national economy was in trouble
There was debt from the war, creditors wanted payment, and trade was limited
State and federal debt combined added up to around $76 million
The government began to sell national bonds * This invested money in the US * Eventually the government has to pay this back + interest
A controversial tax on luxury items was instated nationally * Most upsettingly, whiskey was taxed
There were also taxes on all imported goods * This promote the manufacturing of goods domestically * The taxes went straight towards alleviating national debt
The bank of the United States had a number of responsibilities * Printing paper money * Collecting tax revenue * Paying off interest on the debt * Offering commercial loans for new businesses/industry
There was controversy regarding whether the bank was constitutional or not * There was no specific permission for the national government to create a bank… nor was there explicit denial * Thomas Jefferson, who interpreted the constitution strictly, said a national bank was NOT permitted by the constitution
Alexander Hamilton took a different perspective… * He interpreted the constitution more loosely, and also employed the ‘necessary and proper cause’ * Congress has the power to “make all laws which shall be necessary and proper for carrying into execution the foregoing powers, all other powers vested by this constitution” * Hamilton argued that a bank was necessary and therefore allowed