US History and GovernmentName:_____________ Per:____

Unit 3- the Early Republic

Hamiltons Financial Plan Causes Controversy

Goals of Hamiltons Plan

Set the nations finances in order

Put economy on firm footing

Increase role/ power of the federal government in the economy

I. ASSUMPTION: Managing the nations 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. Hamiltons 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

Wealthy creditors would now be loyal to the ____________________________

Unhealthy alliance between the government and _______________________

Southern States- Assumption is unfair

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

paying off the __________________________ debt

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 ________________________.

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:

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

Federalists:

__________ 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.

III. Taxes- needed to pay debt

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

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.

B. Excise Tax- tax on a specific product

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

(_________________) has to pay to benefit all.

Whiskey Rebellion:

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: FEDERALISTSDEMOCRAT-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?

Government should

support farming & small businesses

Believed in strict

interpretation of the

Constitution

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 People

should 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 strict

interpretation of the

Constitution

Government should support industry & trade

Government should

support farming & small businesses

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

supports France