The “Federal” Government

Our first federal government

Members of Congress Arrive

The Eleven Pillars

New York, not Washington

Government on Wall Street

The Imperial Presidency

Electoral College

The First Executive Branch

What’s in a name?

• The President of the United States

• Huh?

Creation of the Executive

The Cabinet

• Madison called for the creation of an executive branch consisting of four cabinet positions.

• Trouble? It wasn’t in the Constitution—a common problem we will see.

• State. War. Treasury. Attorney General.

The Cabinet

Alexander Hamilton and the Treasury

• "digest and prepare plans for the improvement and management of the revenue, and for the support of the public credit"

The Judiciary

Judiciary Act of 1789

• "The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish."

Creation of Courts and Outlining Crime

• Punishment of Crimes Act: outlined “Federal Crimes”

Amending the Constitution

Madison and Jefferson

• Had to consider 200 plus amendments to the Constitution from State ratification conventions.

• "the legal check which it puts into the hands of the judiciary."

Not All Pleased?

• Robert Grayson on the Bill of Rights:

• "good for nothing & I believe as many others do, that they will do more harm than benefit."

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A Revenue System

The Second Bill

• Regionalism and sectionalism emerge…who can tax?

The First Lobby?

• Individuals engaged in manufacturing, especially those in the major ports of Boston, New York, Philadelphia, Baltimore, and Charleston, sought duties high enough to discourage the importation of foreign goods that might compete with those made in America.

Regionalism

• Southerners in general opposed using imposts to protect American manufactures. In this letter Baldwin is critical of the Senate's changes in the Impost Bill, saying: "These protections and commercial regulations will surely lead us a wild dance."

The Capital

• No issue so threatened the fragile American Union as the question of where to locate its capital city. In 1783, in recognition of the sectional division of the Union, Congress decided to have two capitals, one on the Delaware River near Trenton and the other on the Potomac. A year later Congress voted to establish a single federal town near Trenton and to meet in New York City until buildings at the capital were completed. Southerners blocked appropriations for the construction. Consequently, Congress remained at New York City despite repeated efforts by the Pennsylvanians and Southerners to bring them back to Philadelphia, the seat of Congress from 1774 to 1783.

• Late in August 1789 the First Congress took up the question of locating the federal capital. After a bitter debate between representatives from north and south of the Mason-Dixon Line, the House agreed to a bill retaining New York City as the temporary residence and locating the permanent capital on the Susquehanna River in Pennsylvania. Most representatives expected Wright's Ferry, renamed Columbia in 1788, to be the specific site. Instead the Senate named Germantown, seven miles north of Philadelphia. At the last minute, Madison managed to have the bill postponed until the second session.

The Spot and the “Deal”

Funding the Debt

Debt

• "All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation."

• The Confederation Congress had lacked sufficient revenue to pay the foreign and domestic debts that had accumulated to more than 54 million dollars by 1790. Some Americans, especially those to whom the federal government was indebted, believed that provision for the public credit should be one of the first issues to be dealt with during the first session of the First Federal Congress.

Hamilton

• Alexander Hamilton had long been an advocate of a stronger federal government with sufficient powers to establish public credit and he believed the government should fund the debt, instead of immediately paying it off. Although several of his contemporaries had more experience in financial matters, Hamilton's appointment was widely acclaimed and great things

Report on Manufactures and Credit

• Congress assigned Hamilton a complex task, but for almost a decade both he and the Confederation Congress had given considerable thought to the issues involved. In this report he proposed to fund the debt rather than pay off the principal as rapidly as possible. This meant creating from federal revenues a fund set aside to make regular and long term payments of the interest on the debt. To make the bookkeeping more manageable, new debt certificates would be printed to consolidate the various types of certificates issued during the Revolutionary War. In addition, he supported the assumption of the state debts, the creation of an excise to pay the costs of the assumption, and the establishment of a national bank.

Hamilton

• Hamilton's masterful report met with quick endorsement from most members, but James Madison led the opposition to two of his proposals. Madison favored discriminating between the original holders of the debt (for example, soldiers and those who had loaned Congress money) and holders who had purchased the certificates at less than face value.

Assumption and Wealth

Hamilton’s Economic Plan

• Report I: Report on the Pubic Credit• Dealt with funding and assumption of

debts from the Revolution.• Bond sales• Total debt: 11.7 million to foreign

governments. 44.4 million domestic debts.• Holders of debt certificates (many had

been sold by the poor/revolutionary soldiers) could turn them in for a bond valued at 4% annually.

Debt assumption

• Domestic program, very controversial…members of congress even swooped in and bought up the debt certificates!

• War debts were a difficult subject as some state governments had little or no debt (south) where as some had large debt (north)

• The ‘deal’.

First BUS

• Part of Report 2• Outlined the need

for a bank, taxes and regultion of trade.

Report on the Mint

• Dealt with the weight and value of American coinage.

Report on Manufactures

• Called for a diverse, mixed economy with manufacturing, commercial, and farming sectors.

• Advocated high tariffs, highly unpopular.

• The least successful of his initiatives.