American Studies Name:_____________ Per:____

Unit 3- the Early Republic

Hamilton’s Financial Plan Causes Controversy

Goals of Hamilton’s Plan

Set the nation’s finances in order Put economy on firm footing Increase role/ power of the federal government in the economy

I. “ASSUMPTION”: Managing the nation’s debt

a. What was the problem? Millions owed by states AND federal government from revolutionary war money owed to foreign nations and veterans of the Revolutionary War wealthy (northern) Americans had bought many of the veterans’ bonds

b. Hamilton’s solution: ________________________- the national government will assume (take over) the states’ debt Pay off old debt by selling bonds to wealthy Americans

Why Controversial?

Democrat- Republicans- Assumption increases power of federal government

Southern States- Assumption is unfair

THE COMPROMISE- Jefferson and Madison agree to assumption in return for the new national capital

being in the south. Washington DC is located in what had been part of ________________________.

Wealthy creditors would now be loyal to the ____________________________

Unhealthy alliance between the government and _______________________

Most Southern states had paid off their debt. It seemed unfair that they now had to share in

paying off the __________________________ debt

II. Create a National Bank

Would be funded by the government and private wealthy investors Print paper money Handle tax receipts and other government funds Make loans to encourage business

Why Controversial- IS IT CONSTITUTIONAL?

Democrat Republicans:

Federalists:

III. Taxes- needed to pay debt

A. Protective Tariff- taxes in IMPORTED goods meant to encourage American industry

B. Excise Tax - tax on a specific product

Whiskey Rebellion:

___________construction of the Constitution: If the power is not given to the National government in the Constitution, it is UNConstitutional

__________ construction of the Constitution : If the power is not denied in the Constitution, it is Constitutional

Use of the ___________________: a bank is “necessary and proper” to print money, fund the debt, collect taxes….

Tariffs benefit industry in the ________________ because they raise the cost producers can charge for manufactured goods.

Tariffs hurt the __________________ and ________________ because they have to buy these goods.

Tax placed on __________________________. Seen as unfair because only one region of the country

(_________________) has to pay to benefit all.

Year:_____________; farmers in western Pennsylvania harass __________________________

________________________________ leads out the militia, quells the “rebellion”

Significance: The Government can, and will, ________________________

George Washington: Federalist or Democrat Republican?

George Washington sides with Hamilton and is considered a ___________________________________.

Strengthens federal government during his term in office

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HOW WOULD THEY VIEW THE ISSUES OF TODAY?

Circle your party: FEDERALISTS DEMOCRAT-REPUBLICAN

For each modern issue, how do you think would your party feel? Why?

(THERE IS NOT NECESSARILY A RIGHT OR WRONG ANSWER…. YOUR EXPLANATION IS WHAT IS IMPORTANT)

Health care- Should the government guarantee health care to all citizens in the United States, or should this be left up to the states or private industry?

Government role in the economy: Should the government do more (spend more) to stimulate the economy and create jobs, EVEN IF this means higher taxes and increased debt?

Agriculture: Should the government assist farmers by “subsidizing” crops (giving money to farmers to help them make a profit)?

National Defense- Should the government be given increased powers to better defend the nation against terrorist attacks?

Campaign Finance- Should there be stricter laws about how much money businesses can give to fund politicians’ campaigns to run for office?

Use text, pgs. 184-6 (“Hamilton & Jefferson”, chart, and “Federalists and Dem- Republicans”)

II. The Rise of the first Political Parties (Unwritten Constitution): National organization of people who hold similar political views Choose candidates to run for office and try to get them elected

ISSUE HAMILTON (FEDERALISTS) JEFFERSON (DEMOCRAT-REPUBLICANS)

Strong central (federal) government OR state governments?Power should rest with what kind of people? (rich, educated elite OR “virtuous” farmers, tradesmen, etc.)Economy: Commerce and industry OR farming?

Support by rich and powerful OR “plain people”

Assumption of state debt by the federal government? YES OR NO(the federal gov’t takes over all states’ debt)Creation of a National Bank? YES OR NO- why?

Following the Constitution-Strict construction OR loose construction (interpretation)?

What is one issue you least understand in the above list? _________________________________________________

(Below): What issue do you most agree with from each party? Why?

Federalist: Democrat- Republican:

Use text, pgs. 184-6 (“Hamilton & Jefferson”, chart, and “Federalists and Dem- Republicans”)

Government shouldsupport farming & small businesses

Believed in strictinterpretation of theConstitution

STRONG STATES; weak national gov't

-Rich, educated People should have the power

Feared democracy Many should have right to vote

Limits on freedom of speech & press

Common Peopleshould have power

Loved "democracy"Full freedom of speech & press

STRONG NATIONAL GOV'T; weak states

Only property owners should have the right to vote

supports close ties with England

Believed in strictinterpretation of theConstitution

Government should support industry & trade

Government shouldsupport farming & small businesses

"Loose construction" of Constitution- implied powers can be used (elastic clause)

supports France