Two milestones of

Washington’s Presidency

Hamilton’s Financial Plan and the Whiskey Rebellion

#1: Pay off all war debt#1: Pay off all war debtHamilton presented a 3 step program to improve financesHamilton presented a 3 step program to improve finances

Year Output (GDP)

Total Population

National Debt Debt/Output (Percentage)

Debt/Population ($ per person)

1790 $240,000,000 3,930,000 $75,463,476.52 31.44 $19.20

1791 S250,000,000 4,050,000 $77,227,924.66 30.89 $19.07

1792 $270,000,000 4,170,000 $80,358,634.04 29.76 $19.27

1793 $300,000,000 4,300,000 $ 78,427,404.77 26.14 $18.24

1794 $350,000,000 4,430,000 $80,747,587.39 23.07 $18.23

1795 $420,000,000 4,560,000 $83,762,172.07 19.94 $18.37

1796 $470,000,000 4,700,000 $82,064,479.33 17.46 $17.46

The national debt of the United States, according to the Treasury Dept. Report, The national debt of the United States, according to the Treasury Dept. Report, included $40 million in domestic debt as well as $12 million in foreign debt, each included $40 million in domestic debt as well as $12 million in foreign debt, each

inherited from the Continental Congress. In addition, the thirteen states inherited from the Continental Congress. In addition, the thirteen states altogether owed $25 million from debts accrued during the American Revolution. altogether owed $25 million from debts accrued during the American Revolution.

The combined US debt, as calculated, stood at $77 millionThe combined US debt, as calculated, stood at $77 million  

#2: Raise government revenue#2: Raise government revenue

Bank would give Bank would give government a government a

safe place to keep safe place to keep moneymoney

Businesses would be helped through loans

Bank would issue bank notes (paper money used as currency)

#3: National bank that would serve many purposes

How should the How should the constitution be constitution be

interpreted?interpreted?

How much power How much power should the federal should the federal government have?government have?

• HamiltonHamilton believed in a believed in a loose interpretation loose interpretation of of the constitutionthe constitution• A very broad and flexible

view of power• Doing what is “necessary

and proper”

• Thomas Jefferson Thomas Jefferson and and James Madison James Madison Argued Argued for a for a strict strict interpretation interpretation of the of the ConstitutionConstitution• Constitution does not

mention a bank so government cannot create one

Compromise creates a Capital

Whiskey Whiskey ProductionProduction

Large scale Large scale businessbusiness

• Paid tax annuallyPaid tax annually– 66¢ per gallon¢ per gallon

• Passed cost on to Passed cost on to consumerconsumer

Small scale Small scale personalpersonal

• Couldn’t pay Couldn’t pay annuallyannually– 99¢ per gallon¢ per gallon

• Didn’t sell it, Didn’t sell it, couldn’t pass cost couldn’t pass cost on to consumeron to consumer

Washington reviews the Washington reviews the troops Carlisle, troops Carlisle,

Pennsylvania September Pennsylvania September 17941794

Governor Henry Lee Governor Henry Lee (VA)(VA)

commander of the commander of the federalized militiafederalized militia

End of Rebellion