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Unformatted text preview: tonian Financial Program Hamiltonian Financial Program • Opposition to program will be led by James Madison and Thomas Jefferson • Many of original bondholders during the 1780s due to hard times sold them to speculators for fraction of face value • Example – 50 cents on a dollar Hamiltonian Financial Program Hamiltonian Financial Program • Agreement to pay – But to who? • Many believed original bond holders should • • • • receive some money Going to be difficult to prove who were the original holders Larger portion who sold were from the South Most speculators were from the North Will Pass Congress Hamiltonian Financial Program Hamiltonian Financial Program • If federal government took over state debt • People from one state would be paying taxes to service debt from another state • Also felt government debt would be too large • Hamilton, Jefferson and Madison worked out a deal over dinner to get the bill through Congress Assumption Dinner Deal Assumption Dinner Deal • Capitol would stay in Philadelphia for 10 years • While a new city was constructed • Site chosen by the President Washington • Chose southern site along the Potomac River • Assumption passed Bank of the United States Bank of the United States • Madison and Jefferson oppose the Bank of the United States • Argument based on the Constitution • Document does not authorize Congress to create this type of institution • Strict Interpretation • Bill passes the House and Senate Bank of the United States Bank of the United States • Washington either has to sign into law or • • • • veto Sought cabinet’s advice Hamilton – Broad Interpretation Article 1 Section 8 “Necessary and Proper Clause” • Washington signs into law Federalists Federalists • Hamilton’s financial program led to the • • • • creation of political parties Federalists – borrowed form those who supported the Constitution Speculators, Merchants, Manufacturers Draw from the more privileged segments of society Concentrated in the North Democratic­Republicans Democratic­Republicans • Madison and Jefferson – leaders • Identified with individual liberties and the heritage of the Revolution • Accuse Federalists of attempting to impose a system of economic privilege and social exploitation • Southern planters, Yeoman farmers • Distrusted the market economy French Revolution French Revolution • Began 1789 – American supportive • 1792 – Things turned bloody – many Americans uneasy – “Reign of Terror” • 1793 – England and France at War • US will be stuck in the middle • Do not want to dragged into war against England – Still a weak nation England and France at War England and France at War • • • • Awkward for the US Our English heritage 60% of our foreign trade with Great Britain Revenue from Tariff of 1789 providing majority of federal revenue • Treaties signed with France 1778 • Mutual support – Perpetual allies England and France at War England and France at War...
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