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Notes Creating New Institutions, 1776-1786 I. In the Articles of Confederation of 1781 and the Constitution of 1787, the Patriots addressed the question of division of labor between the states and the central government. The State Constitutions: How Much Democracy? I. Virginia, Maryland, North Carolina, New Jersey, Delaware, and Pennsylvania wrote new constitutions in order to remove the power of the crown from their legislatures. Connecticut and Rhode Island transformed their colonial charters into republican constitutions by deleting references to the king. The Dilemma of Popular Sovereignty I. In devising these constitutions, delegates heeded the principle of popular sovereignty stated in the Declaration of Independence that governments derive “their just powers from the consent of the governed.” II. During the colonial period, propertyless white men, blacks, women, and native Americans were excluded from public life, and although men who owned small amounts of property could vote, those of wealth held most political offices. A. In the heat of revolution, many patriots moved towards a less elitist definition of politics—one based on citizen, not property. B. The populist impulse received its fullest expression in Pennsylvania, where a coalition of Scots-Irish farmers, Philadelphia artisans, and Enlightenment-influenced intellectuals created the most democratic government in America or Europe. Pennsylvania’s constitution of 1776 abolished property owning as a requirement for political participation, granting all men who paid taxes the right to vote and hold office, and reapportioned the legislature to give more power to poorer backcountry regions. It also created a unicameral (one-house) assembly with complete legislative power. No council or upper house was reserved for the wealthy, and no governor exercised veto power. Other constitutional provisions mandated an extensive system of public elementary education, protected citizens from imprisonment for debt, and called for a society of economically independent freemen. C. Pennsylvania’s non-elitist constitution alarmed many leading Patriots, who continued to believe that voting and officeholding should be restricted to the upper classes. Conservative Patriots feared that popular rule would lead to the tyranny of legislative majorities, allowing ordinary citizens to use their numerical advantage to tax the rich. D. By 1778 prosperous Anglican merchants in Philadelphia had founded a Republican Society to lobby for repeal of their state’s constitution. III. For these merchants and many other Americans in the late 18th century, republicanism meant representative government run by men of wealth and civic virtue. It did not mean democracy, which they feared would lead to mob rule. A. They denounced the broad suffrage prescribed by the Pennsylvania constitution of 1776 and assailed its unicameral legislature as little better than direct popular rule. B. Adam’s response was to promote the Whig theory of a mixed government. Rather than concentrating authority in a single-house assembly, Adams wanted to disperse power by created a bicameral legislature in which men of property in the upper house would check the excesses of popularly elected majorities in the lower house. He also proposed an elected governor with the power to veto laws and an appointed judiciary to review them. By assigning the different the different functions—lawmaking, administering, and judging—to separate branches of the government, Adams argued, his plan would preserve property. IV. Leading Patriots endorsed Adams’s plan both because they favored a democratic system in which ordinary men would determine public property and because his proposal called for governments that resembled those of the colonial period while remedying their deficiencies. A. Most states adopted constitutions that provided for bicameral legislatures in which membership in both houses was

elective. B. Recalling the arbitrary conduct of royal governors, most state constitutions also reduced the powers of the executive. Toward a Democratic Political System I. Post-Revolutionary politics received a democratic tinge. As in Pennsylvania, most state constitutions apportioned seats in the lowest house of the legislature on the basis of population, giving small holding farmers in the western areas the representation they had long demanded. A. Backcountry delegates showed their power by transferring capitals of various states from merchant-dominated seaports to inland cities. II. Most of the state legislatures were filled by new sorts of political leaders. During the war Patriot militia men had asserted a right to elect their officers on a regular basis. Subsequently, many veterans, whether or not they had property, demanded the right to vote in regular elections and no longer automatically elected their social betters. A. By the mid-1780s, smallholding farmers and urban artisans controlled the lower houses in most northern states and formed a sizable minority in southern assemblies. They then took the lead in opposing the collection of back taxes and other measures that they said would oppress people. III. The political legacy of the Revolution was complex. Conservative Patriots such as John Adams blunted the edge of the democratic movement in that the structure of most political institutions remained conservative. A. Only in Pennsylvania and Vermont were radical Patriots able to take power and create democratic governmental institutions. B. Everywhere, the day-to-day politics of electioneering and interest-group bargaining became much more responsive to the demands of ordinary property-holding white men. The Political Status of Women I. The excitement of the years between 1776 and 1800 tested the dictum that only men could engage in politics. While men continued to dominate all public institutions—legislatures, juries, government offices—upper-class women entered into political debate A. American women did not demand complete political or social equality with men, but many women did want to end discriminatory customs and legal rules. B. Men generally treated the Rights of Women by Mary Wollstonecraft with disdain born of lack of understanding, for they were unwilling to reassess their own dominant social position. Most men remained patriarchs, even those who embraced the republican ideal of companionate marriage. C. One exception to this rule was New Jersey, which granted suffrage to all free adult inhabitants worth a certain amount of money. This ambiguous phrasing was apparently intentional—chosen perhaps by men who felt the vote should be extended to propertied widows. But when a significant numbers of widows and never-married propertied women began to exercise this option, the NJ legislature redefined the franchise, bestowing voting rights in 1807 on all white men who paid taxes and excluded women. II. Ultimately, the republican belief in the need for an educated citizenry provided an avenue for the most important advances made by women during the Revolutionary era. A. Arguments on behalf of women such as those of Judith Sargent yielded both short and long-term effects. In the 1790s the attorney general of Massachusetts persuaded a jury that girls had an equal right to schooling under the state constitution. B. With greater access to public elementary schools and new private female academies, many young women became literate and prepared for a role in public life. The Articles of Confederation I. As the Patriots moved toward independence in 1776, they envisioned a central government with limited powers. Many thought that the Continental Congress should have authority over foreign affairs.

This outlook informed the Articles of Confederation, which was passed by Congress in 1777 and essentially made permanent the ad hoc authority exercised by the various Continental Congresses. A. The Articles provided for a loose association in which each state retained its own freedom and independence as well as their powers and rights nor expressly delegated to the central government. B. Most delegated powers pertained to diplomacy and defense: the Articles gave the Confederation the authority to declare war and peace, make treaties with foreign nations, adjudicate disputes between the states, borrow and print money, and requisition money from the states for the common defense. These powers were to be exercised by a central legislature, the Congress, in which each state had one vote regardless of wealth or population. C. There was no separate executive branch or judiciary. Important laws needed approval by at least nine of the 13 states, and changes in the Articles required unanimous consent. III. Because of disputes over western lands, the Articles were not ratified by all states until 1781. States with no claim in the west refused to approve the Articles until Virginia and other states that did have such claims agreed to relinquish them to Congress to create a common national domain in the West. The Ongoing Fiscal Crisis I. Formal ratification of the Articles was anticlimactic because the Congress had been exercising de facto constitutional authority for 4 years, and with considerable success. It raised the Continental army, negotiated the Franco-American alliance of 1778, and directed the war effort. A. The Confederation’s weakness stemmed primarily from its limited fiscal powers. Lacking the authority to impose taxes, the Congress had to requisition funds for the state legislatures and hope they would pay. Most states failed to do so because they had their own wartime debts to pay and were unwilling to impose heavier taxes on their citizens. B. Worried in 1780 that the Confederation would go bankrupt, General Washington called urgently for a national system of taxation. In response, nationalist-minded members of Congress campaigned to expand the Confederation’s authority. C. Robert Morris, who became superintendent of finance in 1781, persuaded Congress to charter the Bank of North America, a private institution in Philadelphia, hoping to use its notes to stabilize the inflated Continental currency. He also developed a comprehensive financial plan that apportioned some war expenses among the states while centralizing control of the army expenditures and foreign debt. Morris hoped that the existence of national debt would draw attention to the Confederation’s need for the authority to impose an import duty. II. Morris and other nationalists faced resistance to their plans to increase the Confederation’s powers which required the unanimous consent of the states. A. In 1781 the Rhode Island legislature rejected Morris’s proposal for a national tariff. 2 years later the NY legislature refused to accept a similar plan, pointing out that in the 1760s it had opposed British import duties and would not accept them now from Congress. B. Each state began to assume its share of the national debt by paying interest on it directly to its own citizens rather than by sending funds to Congress. Western Lands and the Northwest Ordinance I. Despite its limited powers, Congress successfully planned the settlement of the trans-Appalachian west, which it had acquired from the Treaty of Paris and the cessions of the states. A. Congress wanted to assert the Confederation’s clear title to this great treasure in order to sell it and raise revenue for the government. B. In 1783 Congress began to negotiate with resident Indian tribes, hoping to persuade them that the Treaty of Paris had


extinguished their land rights. The Congress also bargained with white squatters who had set up farms, allowing them to stay only if they paid. II. Congress was also determined to bind these western settlements firmly to the US by providing for their eventual admission to the Union. Given the natural barrier of the Appalachians, many members of Congress feared that westerners might establish separate republics or link with Spanish Louisiana. A. Congress directed the states of Virginia, North Carolina, and Georgia to supervise the sale of lands and the creation of new states south of the Ohio River—a process that resulted in the transmission of slavery and other institutions of those southern states to the newly settled region. B. To the north of the Ohio River, Congress established a national domain, the Northwest Territory, and issued 3 ordinances for its settlement and administration. The Ordinance of 1784 called for the administration of states carved out of the territory as soon as their populations equaled that of the smallest existing state. Te deter squatters, the Land Ordinance of 1785 established a grid surveying system and specified that the lands be surveyed before settlement. C. Land was to be sold in fee simple and mostly in large blocs, a provision that favored large-scale investors and speculators. The ordinance also earmarked funds from the sale of some land for the support of public schools. D. The Northwest Ordinance, which Congress devised in 1787, provided for the creation of 3 to 5 territories, which would eventually become the states of Ohio, Indiana, Illinois, Michigan, and Wisconsin. The new ordinance prohibited slavery in those territories. It specified that each new territory by ruled by a governor and judges appointed by Congress. Once the number of free adult men reached 5,000 settlers could elect their own legislature. When the population reached 60,000 the residents could write a republican constitution and apply to join the Confederation. III. In many respects the Land Ordinances of the 1780s were a great achievement, because they provided for the orderly settlement of the area to the north of the Ohio River and reduced the prospect of secessionist movements throughout the west. The Northwest Ordinance also acknowledged for the first time the validity of native American property rights. By turning the attention of white Americans to the West, the ordinances added a new dimension to the national identity. The US was no longer confined to 13 governments on the eastern seaboard; it had space to expand. The Postwar Crisis I. The war had destroyed many American merchant ships and cut the export of tobacco and other farm goods. Deprived of a subsidy from the British government, South Carolina’s indigo industry vanished. The British Navigation Acts, which had once nurtured colonial commerce, now banned Americans from trading with the British West Indies. Low-priced British manufactures flooded American markets, driving many artisans and wartime textile firms out of business. Economic Conflict I. As postwar recession lowered the American standard of living, the financial legacy of the war threatened to undermine the new state governments. A. Most states emerged from the conflict with worthless currencies and big debts. Wealthy speculators had purchased many state debt certificates for less than their face value, and now advocated high taxes so that the states could redeem the bonds quickly and at full value. II. As economic recession and high taxes pressed hard on debtors, they sought political relief. A. In SC farmers won the passage of a law that prevented sheriffs from selling seized farms to repay debts; instead, creditors had to accept installment payments over a 3-year period. B. To avert similar prodebtor legislation and preserve elite rule in Maryland, Charles Carroll persuaded the landlorddominated Maryland legislature to replace the customary poll tax, which bore hard on yeomen farmers and pore tenants, with a graduated property tax. But when the Maryland House of Delegates enacted additional profarmer and prodebtor measures in 1785 and 1786, they were rejected by the more conservative state senate.

These political struggles were not primarily between the class with property and the class without. The real battle was between wealthy merchants and landowners on the one and hand and a larger coalition of middling farm owners, small-scale traders, and artisans on the other. A. Creditors might be angered by legislation favoring farmers and artisans, but prodebtor laws eased the financial strain and probably prevented a major social upheaval. Shay’s Rebellion I. In MA, the lack of prodebtor legislation provoked the first armed uprising in the new nation. When the war ended, merchants and creditors in eastern MA lobbied successfully for high taxes and against paper money. These procreditor policies facilitated rapid repayment of the state’s war debt but undermined the fragile finances of farmers in new settled areas. A. Creditors and sheriffs hauled delinquent farmers into court, saddled them with high legal fees, and threatened to imprison them for debt or repossess their property. B. In 1786 residents of western counties called public meetings to protest against high taxes and aggressive eastern creditors. Meanwhile, bands of angry farmers closed the courts by force and freed debtors and fellow protestors from jail. C. Resistance gradually grew into open defiance of the state government and then became armed revolt. When their protests were ignored by the state legislature, hundreds of farmers in western and central organized an army under the leadership of Daniel Shays a prepared to resist state authority. II. As a struggle against taxes imposed by a nonlocal government, Shays’s Rebellion resembled colonial resistance to the Stamp Act. But even the radical Patriots of 1776 condemned the Shaysites’ actions as anti-republican. III. To preserve its authority, the MA legislature passed a Riot Act outlawing illegal assemblies. The governor equipped a strong fighting force to put down the rebellion and called for additional troops from the Continental Congress. A. The collapse of the rebellion graphic proof that the costs of war and the fruits of victory were not being shared evenly. Many of those who had fought for independence from Britain felt they had exchanged one tyranny for another. B. These events shocked many leading Patriots. State governments were in disarray, the Confederation government was nearly bankrupt, and political conflicts over taxes and debts had erupted in almost every state. Politicians with a nationalist outlook redoubled their efforts to create a stronger central government. The Constitution of 1787 I. From the moment of its creation, the Constitution was a controversial document. Written in a time of crisis, it embodied the values and interests of men with a personal stake in its outcome. It addressed in a creative fashion the specifically American issue of federalism: the distribution of power between the states and the central government. The Rise of a Nationalist Faction I. The prime loyalty of the Patriots who led the fight against Great Britain was to particular states, so in forming the Confederation they tried to maximize the status of the states as independent republics. A. Like pre-1763 British imperial rule, the Confederation government had minimal authority over the states and their internal affairs. Having restored power to the local legislatures, Patriots such as Patrick Henry and Sam Adams were content. New state-based leaders, such as George Clinton shared their localist perspective and opposed a stronger central authority. II. Other American Patriots favored a stronger national government. Prominent among these leaders were the military officers, diplomats, and officials who had served in the Continental Congress and acquired a national outlook. A. The nationalists thought continentally, and they advocated government that would safeguard the nation’s credit by imposing tariffs. They worried that Shays’s Rebellion would undermine the promise of republicanism. III. During the 1780s the nationalists had struggled hard to enhance the authority and scope of the Confederation government but


had been stymied at almost every turn. First Rhode Island and then NY legislatures vetoed proposed national tariffs on imports. Then Congress’s attempt to negotiate commercial treaties ran afoul of regional interests: southern planters insisted on free trade agreements while northern merchants, artisans, and manufacturers insisted that the agreements protect their economic interests. They persuaded state governments in NY, MA, and PA to provide shipping subsidies and impose tariffs on imported goods. IV. By 1786 the nationalists were increasingly worried about the creditworthiness of the state governments and the private debts owed by their citizens. A. Legislatures in Virginia and other southern states had granted tax relief to various groups, diminishing public revenue and delaying the redemption of state debts. B. Public creditors feared that their public-issued bonds would become worthless. State governments had also jeopardized the repayment of private debts by providing relief to hard-pressed debtors—delaying the collection of private debts or exempting personal property from legal seizure. Some states forced merchants to accept depreciated paper currency in payment for debts. V. To address trade issues, James Madison and other nationalists persuaded the Virginia legislature to issue a call for a special convention to discuss tariff and taxation policies. Only 5 states attended. A. Undaunted, the commissioners called for another meeting in Philadelphia to undertake a broad review of the problems facing the Confederation. B. Frightened by Shays’s Rebellion, nationalist-minded politicians in Congress secured a resolution approving the Philadelphia convention and calling for a revision of the Articles of Confederation. Drafting a New National Constitution I. By May 1787, 55 delegates had arrived in Philadelphia; they represented every state except RI, whose legislature opposed any increase in central authority. A. Most delegates to the Philadelphia convention came from the highest social ranks; they were merchants, slaveowners, and “monied men.” There were no artisans, backcountry settlers, or tenants in attendance, and only 1 yeoman farmer. Consequently, most delegates supported creditors’ property rights and favored a central government that would protect the republic from democracy. B. The delegates elected Washington as the presiding officer. To forestall popular opposition, they decided to deliberate behind closed doors. They agreed that each state would have 1 vote and that the majority of the states would decide on a given issue. The Virginia and New Jersey Plans I. Madison had arrived in Philadelphia determined to fashion a new political order that would ensure government by men of high character. He wanted to design a national government that would inhibit petty factional disputes. II. Madison’s Virginia Plan differed from the Articles of Confederation in 3 crucial respects. First, it rejected state sovereignty in favor of the supremacy of national authority. The central government would have the power to overturn state laws and “legislate in all cases to which the separate States are incompetent.” A. Second, the plan called for a national republic that drew its authority directly from all people and had direct power over them. The new government would bypass all states, operating directly “on the individuals composing them.” B. Third, the plan created a 3-tier national government with a lower house elected by members of the lower house, and an executive and judiciary chosen by the entire legislature. III. From a political perspective, Madison’s plan contained a fatal flaw. By assigning great power to the lower house, whose composition was based on population, it would have greatly increased the influence of the larger states. Consequently, delegates from the smaller states rejected the plan, for their states had enjoyed equal representation in the Confederation

Congress. To protect their interests, delegates from the small states rallied behind the New Jersey plan devised by William Paterson. This plan had many nationalist aspects, for it gave the Confederation government the power to raise revenue, control commerce, and make binding requisitions on the states. A. The New Jersey plan preserved the equality of the states by limiting each state to one vote in a unicameral legislature, as in the Confederation. B. Delegates from the larger states refused to accept this provision, and after a month of debate a bare majority of the states voted to accept the Virginia Plan as the basis for further discussion. V. This decision raised the prospect of a dramatically new constitutional system. The Great Compromise I. Representation remained the central problem. To satisfy both large and small states, the Connecticut delegates suggested amending the Virginia Plan so that the upper house, the Senate, would always seat 2 members from each state, whereas seats in the lower chamber, the House of Representatives, would be appointed on the basis of population. A. This Great Compromise over representation was accepted, but only after bitter debate. II. Other state-related matters were soon settled by restricting the extent of central authority. A. Some delegates opposed establishing national courts within the states. The convention therefore defined the judicial power of the United States in broad terms and leaving the new national legislature to decide whether or not to establish lower courts within the states. B. The convention also decided against imposing a uniform freehold property qualification for voting. C. They placed the selection of the relatively powerful chief executive of the national government in the hands of an electoral college that would be chosen on a state by state basis. D. They specified that the legislatures, not the voters at large, would elect members of the Senate. E. By giving state governments an important role in the new constitutional system, the delegates hoped to encourage them to accept a reduction in their sovereignty. Compromise Over Slavery I. At the insistence of southern rice-growing states, the new constitution did not denied Congress the power to regulate slave imports for 20 years, thereafter the slave trade could be abolished by legislative action. II. For the sake of national unity, the delegates had decided to treat slavery as a political rather than a moral issue. A. To protect the property of southern slave-owners, they agreed to a “fugitive” clause that would enable masters to reclaim enslaved blacks or indentured servants who had taken refuge in other states. B. To mollify northern antislavery sentiment, they declined to mention slavery explicitly in the Constitution, thus denying the institution national legal status. III. Another compromise resolved the slavery-related issues of taxation and representation. Southern delegates wanted to count slaves when determining a state’s representation in Congress, for this would increase southern power in the national legislature. In defense of this demand, they pointed out that slaves were property and would be taxed as wealth if Congress enacted a direct tax, as the Constitution permitted. A. Northerners objected to calculating representation on the basis of total population. They argued that propertyless slaves, lacking the vote, were not full or active members of the republic and should not be counted at all. B. To resolve the issue, the delegates reached a compromise: they agreed that for the purposes of both representation and taxation, a slave would be counted as 3/5 of a free person. White southerners would get more representation, but also have to pay higher taxes. National Power


The final document declared that the Constitution and all national legislation and treaties made under its authority would be the supreme law of the land. It gave the central government broad powers over taxation, military defense, and external commerce as well as the authority to make laws. A. To establish the fiscal reputation of the central government and protect creditors, the Constitution mandated that the US honor the existing national debt. II. While enhancing national authority, the Constitution restricted the range of state powers, particularly in economic matters. The new charter prohibited state governments from issuing money, preventing them from using currency inflation to assist debtors. The Debate Over Ratification I. The procedures for ratifying the new Constitution were as controversial as the political issues raised by the document itself. The delegates hesitated to submit the Constitution to the state legislatures for their consent, as was required by the Articles of Confederation, because they knew that RI and possibly a few other states would reject it. A. Instead, they specified that that the Constitution would go into effect upon ratification by special conventions in at least 9 states. The Confederation Congress, because of its nationalist sympathies, winked at this extralegal procedure. II. As the debate over the Constitution began, the nationalists seized the initiative with 2 bold moves. First, they called themselves Federalists, a term that suggested a loose, decentralized system of government and partially obscured their quest for a strong central authority. Second, they launched a coordinated campaign to ratify the proposed Constitution. The Antifederalists I. The opponents of the Constitution, who became known as Antifederalists, came from diverse backgrounds and were less organized than the Federalists. Some enjoyed power in their state and did not want to lose it. Others were rural democrats who feared that the proposed national government would be powerful and controlled by merchants and creditors. II. Well-educated Americans with a traditional republican outlook also opposed the new system. To keep government close to the people, they wanted the nation to remain a collection of small sovereign republics tied together only for trade and defense. A. They argued that republican institutions were best suited to cities or small states. III. Many worried that a strong national administration and a powerful president would restore the worst features of the British rule—high taxes, an oppressive bureaucracy, and a standing army controlled by a tyrannical chief executive—thereby ending the state-based republican experiment. IV. To bolster their claim that the Constitution was antirepublican, Antifederalists focused on specific deficiencies, such as the system of voting and immense taxing authority of the central government and powers enjoyed by the chief executive. A. Antifederalists pointed out that the Constitution, unlike most state constitutions, lacked a bill of rights that protected liberty of conscience in religious matters, the right to trial by jury, and other basic liberties. The Federalist I. In NY, James Madison, John Jay, and Alexander Hamilton countered these arguments in a series of newspaper arguments collectively called The Federalist. They stressed the need for a strong government to conduct foreign affairs and insisted that central authority would not foster domestic tyranny. A. They pointed out that the power of the national government would be divided among a president, a bicameral legislature, and a judiciary. Each branch of government would check and balance the others, thereby preserving liberty. II. James Madison went further, making a significant contribution to the theory of representative government by denying that republicanism was suited only to small states. He maintained that the sheer size of the American national republic would be its greatest protection against tyranny. A. He believed that men would seek power and form factions to advance their interests. The task of government in a free


society should not be to suppress those groups but to prevent any one of them from becoming dominant. The Ratification Conventions I. Madison’s hopes were tested in the ratifying conventions, which met in 11 states between December 1787 and July 1788.

A. B. II.

Unlike the men at the Philadelphia convention, the delegates elected to the state caucuses came from many social groups. Generally, delegates from the backcountry were Antifederalists, whereas those from the seacoast were Federalists.

The Constitution’s first test came in January 1788 in MA, one of the most populous states and a hotbed of Antifederalist sentiment. Influential local-minded Patriots, including Samuel Adams and Governor John Hancock, opposed the new constitution, as did Shaysite sympathizers in the west. A. Boston artisans, who wanted tariff protection from British imports, supported ratification, and astute Federalist politicians won over wavering delegates by promising a national bill of rights. III. Giving their defeats in 1780s, few Federalists had expected a more resounding victory. Working against great odds, they had created a national republic, a triumph that had profound political and social implications. A. The US Constitution of 1787 re-created a strong central authority, partially reversing the autonomy won by the states during the war of independence. It also restored creditors and merchants to positions of power, undermining the political gains made by yeomen, artisans, and other ordinary citizens. The Constitution Implemented I. The Constitution expanded the dimensions of American political life, allowing voters to fill national as well as local and state offices. Within a decade a single political system tied together the interests and concerns of Georgia planters, Pennsylvania artisans, MA merchants, and many other groups. Devising the New Government I. The Federalists swept the election of 1788. Most of those selected (by voters in the states) as members of the electoral college were also Federalists. They chose George Washington and gave John Adams the second highest number of votes, making him the vice-president. II. Washington, the military savior of the country, became its political father as well, establishing many enduring institutions and practices. He generally followed the practices of the Confederation, asking Congress to reestablish the existing executive departments: Foreign Affairs (state), Finance (treasury), and war. A. The president had the power, with the consent of the senate, to appoint major officials. Washington also insisted that he had sole authority to remove those officials, thus ensuring that he and the future presidents would have exclusive control over the bureaucracy. III. The first Congress also played a crucially important role in determining the character of the natural government, especially with respect to legal questions. A. Because the issue was so controversial, the Philadelphia convention had left it to Congress to establish the number, structure, and jurisdiction of the lower federal courts. B. The dominance of the Federalists in the first legislature ensured that this court system would be extensive and powerful.


The Judiciary Act, passed by Congress in 1789, created 13 district courts, one for each state, with 3 circuit courts to hear appeals from the district tribunals; further appeals would go to the Supreme Court, which had the final say. The Judiciary Act permitted appeals from the various state courts to the Supreme Court, provided that the case involved constitutional principles. This provision ensured that national judges would decide the meaning of the Constitution.

The Bill of Rights

The first Congress also acted to provide legal standards for the liberties of citizens, fulfilling the Federalists’ promise to enact a national charter of rights. A. Drawing on the rights guaranteed by various state constitutions and proposals from the states’ ratifying conventions, James Madison submitted 19 constitutional amendments to the first Congress. Congress approved 12 of them, and 10 of these were ratified by the states. B. These 10 amendments, which became known as the Bill of Rights, protected citizens in the federal courts by mandating certain legal procedures and gave constitutional status to certain fundamental individual rights. In addition, the 10th amendment prohibited the national government from claiming powers that were not delegated by the Constitution by explicitly reserving those powers to the states or the people. II. As a political maneuver, the Bill of Rights yielded immediate results by quieting the fears of the Antifederalists and thus enhancing the legitimacy of the Constitution. III. The ratification of the Bill of Rights completed the implementation of the Constitution. The president and the Congress had given definite form to the executive, legislative, and judicial branches of the national government, creating a balanced government envisioned by the Philadelphia convention. The Political Divisions of the 1700s I. The Federalists split into 2 irreconcilable factions over the financial policy, and the French Revolution caused rifts over political ideology to widen, dividing American public opinion between pro-British Federalists and pro-French republicans. Hamilton’s Program I. As Treasury secretary, Hamilton devised bold policies that addressed the fiscal problems that had bedeviled the Confederation. His ambitious program favored his immediate acquaintances, many of them financiers and seaport merchants. A. He outlined his plan in 3 interrelated reports to Congress: on public credit, a national bank, and tariffs and manufactures. Public Credit I. The financial and social implications of Hamilton’s “Report on the Public Credit” made it intensely controversial. The report asked congress to redeem at face value the millions of dollars in securities issued by the Confederation, a redemption plan that would bolster the governments’ credit but also provide windfall profits to speculators. A. His plan involved a controversial funding system, for he proposed to pay off noteholders with newly issued government securities, which would become a permanent national debt. B. Hamilton hoped that investors, attracted by the relatively high interest rate, would hold the new securities, keeping their value high and enhancing the government’s credit. C. The Treasury expected that these bonds would tie the financial interests of the wealthy Americans who invested in them to the new national government, thereby enhancing its authority. II. Hamilton’s plan for a permanent national debt funded by monied men reawakened Radical Whig and republican fears of scheming British financiers and governmental favoritism. III. James Madison opposed Hamilton’s proposal on moral grounds. Madison wanted to do justice to the shopkeepers, farmers, and soldiers who had accepted government securities during the war and then sold them to speculators. He proposed giving the present bondholders only the highest price that prevailed in the market then distributing the remaining funds to the original owners. A. Indentifying the original owners would have been difficult and nearly half the members of the House of Representatives were owners of Continental or Confederation securities and stood to profit from Hamilton’s plan. IV. Hamilton then advanced a 2nd proposal that favored wealthy creditors, an assumption plan by which the national government


would take over the war debts of the states. This proposal unleashed the flurry of speculation and governmental corruption that critics of redemption had feared. A. Before Hamilton announced it, Assistant Secretary of the Treasury William Duer and other speculators used insider knowledge to buy up over ½ of the depreciated war bonds in various southern states; they sold these notes after the announcement of Hamilton’s assumption plan caused bonds to rise in value. V. Concerned members of Congress protested that some state legislatures had already levied high taxes to pay off their states’ war debts. Responding to that argument, Hamilton modified his plan to reimburse those states. A. Other representatives, especially those from Maryland and VA, argued that assumption would further enhance the already excessive powers of the national government. To quiet the fears of those representatives about a runaway central government, the Treasury chief backed their bid to locate the national capital along the banks of the Potomac where they could easily watch its operations. The Bank of the United States I. His confidence bolstered by this success, in December 1790 Hamilton asked Congress to charter a national financial institution, the Bank of the United States. A. The bank, to be jointly owned by private stockholders and the national government, would make loans to merchants, handle government funds, and issue financial notes. B. Persuaded by Hamilton’s arguments that the bank would provide a sound currency for the American economy and make the new national debt easier to fund, a majority in Congress approved Hamilton’s bill. C. At this critical juncture, Secretary of State Thomas Jefferson joined ranks with Madison and Hamilton. Jefferson had condemned the shady dealings in southern war bonds, now he charged that Hamilton’s scheme for a national bank was unconstitutional. D. Giving a strict interpretation of the national charter, Jefferson maintained that the central government had only the limited powers explicitly assigned to it in the document. In response, Hamilton articulated a loose interpretation. In his view, the Bank would assist the government to collect taxes and pay its debts and therefore was constitutional. E. Washington agreed with Hamilton and signed the legislation creating the bank, a decision that prompted Jefferson to resign his position. Tariffs and Manufactures I. Hamilton now turned to the final element of his financial system: a national revenue that would be used to pay the interest of the permanent national debt. At his insistence, in 1792 Congress imposed a variety of internal taxes, including a duty on whiskey distilled in the US. A. To raise money, Hamilton asked Congress for modest increases in the schedule of tariffs on foreign goods enacted in 1789. At that time Congress had imposed a tax of 50 cents a ton on foreign ships entering American ports and a customs duty of 5-15% on the value of imported goods. B. By continuing to tax at a relatively low rate, Hamilton wanted to encourage the expansion of foreign trade. This would not only please his merchant allies but also increase the government’s income from custom’s duties, which were needed to pay interest on the national debt. II. However, by using tariffs to raise revenue rather than protect American industries, Hamilton undercut the arguments made in 1791 in his “Report on Manufactures,” in which he had equated national power with self-sufficiency in manufactures and had advocated government assistance to enable American producers to compete with European firms. A. Because of the need for customs revenue, he now refused to assist manufactures by imposing high tariffs that would cut foreign imports. As these European manufactures poured into the US, customs revenue steadily increased, allowing him

to fund his redemption and assumption programs. Jefferson’s Vision I. By 1793, Hamilton’s financial measures had split the Federalists into 2 factions. Most northern Federalists, in Congress and the states, adhered to the political alliance led by the Treasury chief, and most southerners joined a rival group headed by Madison and Jefferson. Hamilton’s supporters retained their original name: Federalists; Madison and Jefferson’s supporters called themselves Republicans. II. Jefferson deplored both the speculative practices of merchants and financiers and the emerging social divisions of an urban industrial economy. He had concluded that workers who depended on wages lacked the economic independence to sustain a republic. A. Jefferson’s vision of the American future was agrarian and democratic. He understood the needs and aspirations of yeomen farmers and other ordinary white Americans. He hoped that westward expansion and foreign commerce would remedy 2 of the worst features of 18th century agriculture—widespread tenancy in the south and subdivided farms in New England. B. When drafting the Ordinance of 1784, he pictured a national domain settled by productive yeomen farm families. During the 1790s, Jefferson’s vision moved closer to reality as turmoil in Europe created new opportunities for American farmers. Chesapeake and Middle Atlantic farmers increased their grain exports, reaping substantial profits. Simultaneously, a boom in cotton exports, fueled by the mechanization of cloth production in Britain and the invention of the cotton gin in the US, boosted the economy of the Lower South. War and Party Politics I. American merchants profited from the European war. Washington issued a Proclamation of Neutrality, the first important decision on foreign policy by an American president. A. The Proclamation allowed US citizens to trade with both sides, arguing those Americans who favored France, but American merchants were delighted. As neutral carriers, American ships could pass through the British naval blockade along the French coastline, so American merchants soon took over the lucrative trade between France and the West Indian sugar islands. B. This commerce brought prosperity to American port cities, which had languished for 2 decades. Shipowners invested part of their profits in new vessels, providing work for thousands of shipwrights, sailmakers, laborers, and seamen. New buildings went up. Real-estate values soared, reflecting the growth in population and wealth. The French Revolution and America I. The passions of the European struggle convulsed the new republic. Many Americans had welcomed the French Revolution of 1789 because it attacked aristocratic privileges and established a constitutional monarchy. But the creation of the more democratic French republic of 1792 and the execution of King Louis XVI divided public opinion in American and widened the existing split between the partied led by Hamilton and Jefferson. II. Many Americans praised the egalitarian principles of the French republicans. Urban artisans founded Democratic-Republican clubs modeled on the radical democratic societies in Paris. They condemned Hamilton’s economic principles as aristocratic. III. On the other side were men and women of wealth conservative Christian beliefs, and Federalist sympathies. They denounced the Terror and condemned the new French regime for abandoning Christianity. IV. These conflicts sharpened the debate over Hamilton’s economic policies and helped to foment a domestic insurrection.



In 1794 farmers in western PA mounted the Whiskey Rebellion to protest Hamilton’s excise tax on distilled spirits, which had cut the demand for corn whiskey sold locally. The Whiskey rebels attacked local tax collectors and challenged the authority of a distant government.

Jay’s Treaty

Washington repressed the rebels.

Britain’s maritime strategy also widened the growing political divisions in the US. To avoid war with Britain, Washington sent John Jay as a special envoy to Britain to seek compensation for seizures of goods and settle financial and territorial disputes dating back to the War of Independence. II. Jay returned with a treaty that was both comprehensive and controversial. It required the US government to make compensation to British merchants for all pre-Revolutionary War debts owed by American citizens. It also acknowledged Britain’s right to remove French property for American-owned ships. In return, the agreement allowed American merchants to submit claims to the British government for compensation for illegal seizures. It also required the British to end their aid to the western Indians and remove all military garrisons from American territory. Parties and the Election of 1796 I. The appearance of rival political parties marked a new stage in American politics. The new state and national constitutions made no provisions for political parties. Most of the framers of the various constitutions considered parties unnecessary and dangerous; following classical republican principles, they wanted voters and legislators to act independently and in public interest. II. But the revolutionary ideology of popular sovereignty had drawn ordinary citizens into politics, and the emergence of economic and ideological interest groups sparked the appearance of a competitive party system. A. Northern merchants, commercial-minded farmers, and wheat-growing Chesapeake slaveowners generally favored Federalist policies. The emerging Republican party was more diverse in its social makeup, it included not only southern tobacco and rice planters but artisans in the seaport cities and Scots-Irish in the southern backcountry, and subsistenceoriented eastern farmers. III. Party identity crystallized during the election campaign of 1796. As president, Washington had tried to stand above the emerging parties, but his continuing support for Hamilton’s policies exposed him to partisan attack. A. To prepare for the election, Federalist and Republican leaders called legislative caucuses in Congress and conventions in the states to discuss politics, nominate candidates, and mobilize supporters. IV. Many Federalist candidates triumphed in the election of 1796, giving their party a majority in Congress and the electoral college, which chose John Adams as president. Thomas Jefferson became vice president, resulting in a divided nation. A. President Adams continued Hamilton’s pro-British policy, angering the French, who began to seize American merchant ships B. Outraged by what came to be called the XYZ Affair, the Federalist-controlled Congress cut off trade with France and authorized American privateers to seize French ships. C. Party conflict, which had begun over Hamilton’s domestic policies, now extended to foreign affairs as well. The Crisis of 1798-1800 I. For the first time in the history of the republic, a controversial foreign policy prompted domestic protest and governmental repression. With the US fighting an undeclared war against France, pro-republican emigrants from France and Ireland attacked Adam’s foreign policy. The Alien and Sedition Acts I. To silence its critics, in 1798 the administration pushed a series of coercive measures through Congress.



The Naturalization Act increased the residency requirement for citizenship from 5 to 14 years; the Alien Act authorized the president to deport any foreigner or immigrant he judged dangerous; and the Sedition Act prohibited the publication

of underground or malicious attacks on the president or Congress. Using the legal powers granted by the new act, Federalist prosecutors arrested more than 20 Republican newspaper editors and politicians, accused them of sedition, and imprisoned some of them. C. Republicans assailed these repressive prosecutions, charging that the Sedition Act contradicted the First Amendment. Although the Sedition Act was probably unconstitutional, Republicans did not turn to the federal courts for redress. The authority of federal courts to review congressional legislation had not been established, and the entire judiciary was packed with Federalists. II. Madison and Jefferson took the fight to the state legislature of Virginia and Kentucky. Acts passed in these states claimed that states had the right to refuse to enforce federal laws that exceeded the powers granted by the Constitution. They laid the basis for the states’ rights interpretation of the Constitution. The Election of 1800 I. The debate of the Sedition Act set the stage for the election of 1800. Jefferson now saw political parties as a valuable way to regulate the activities of the government. II. Adams responded to the Republican attacks by reevaluating his foreign policy. He put the country ahead of party and entered into diplomatic negotiations that brought an end to the war with France. III. Federalists attempted to win the election by labeling Jefferson as an irresponsible and pro-French radical, but their strategy failed. Republicans won as voters protested against the undeclared foreign war with France—and the special national tax on land and houses that Congress had imposed to pay for it. A. They gave Republicans a majority in both houses of Congress and a narrow edge in Electoral College. But the electors gave Aaron Burr the same number of votes as they gave to Jefferson; this tie threw the presidential election into the House of Representatives. Hamilton persuaded key Federalists to permit the selection of Jefferson for VP.