chapter-7 notes - Chapter 7 Study Guide Democracy in...

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Chapter 7 Study Guide: Democracy in Distress: The Violence of Party Politics 1788-1800 Curtiss I. Background on Alexander Hamilton (1757? – 1804) a. Birth in the sugar islands – the “unrespectable” beginning b. Move to America in 1772 – Kings College – Washington’s aide-de-camp c. Fear of “total democracy” leading to anarchy – stood for strong central gov’t d. Reports to Congress as our Sec’y of the Treasury under G. Washington e. On Public Credit – January 1790 i. National Debt is about $54 million 1. Foreign debt $11.7 million 2. Loan Certs to Americans 42.4 million 3. State Debts 25.0 million ii. Who holds the paper? Original certificate holders or speculators? iii. Hamilton’s Plan: 1. US to fund foreign & domestic obligations at full face value 2. Holders of loan certs can exchange for new gov’t bonds with a modest rate of interest, thereby setting up: a. Ties upper economic levels to federal gov’t b. Sets up idea of permanent gov’t debt w/interest payments c. Announces that the US is a good investment d. Federal gov’t to assume state debt i. James Madison objects! What about the “common folk” who had sold to speculators at a fraction of face value? e. The political wheeling and dealing for assumption f. The Bank of the United States – proposed December 1790 i. To make loans to further trade and manufacturing ii. Handle gov’t monies – issue notes – handle interest payments iii. Stabilization of currency 1. Thomas Jefferson objects – not in constitution! 2. Loose vs. tight interpretations of constitution g. Tariffs and Manufacturers – 1792 i. Enactment of taxes (whiskey distilling tax) to fund interest on permanent national debt ii. Raises tonnage tax on foreign ships iii. Raises tax on import values – still, US has low import taxes to encourage foreign imports – angers local manufacturers II. War, Foreign Policy and Party Politics a. First “foreign policy decision” of any import: George Washington’s Proclamation of Neutrality – states Americans can trade with both sides b. Actions of French minister to the US (Edmond Genêt) pushes this decision III. John Jay’s Treaty [Why are we sending him to England to negotiate?] a. US to make full reimbursement to British merchants for pre-Revolutionary War debts (didn’t we say we’d do that in Treaty of Paris in 1783?)
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b. Britain can take French goods (like sugar) off our ships . . . but we can
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This note was uploaded on 12/12/2010 for the course HIS History 13 taught by Professor Grids during the Spring '10 term at Highland CC.

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chapter-7 notes - Chapter 7 Study Guide Democracy in...

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