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

French Revolution and America

• 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

Reasons for Supporting

• 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

Reasons for Opposing

• 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

Financial Problems

• 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

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