History 1100 Notes for FinalOctober 9, 2012Competing Visions for the Future of the United States, 1789-1797fRecap: Ratification of the constitution and the bill of rights did not end rights of who should rule and benefit from the new American political order. Supporters of the federal Constitution believed the new federal system would make it possible for society to organize. The constitution met many things to many people. Merchants, shippers, and well to do were a necessary under pinning for the working class. For urban artisans, and skilled craftsman, the new powers could encourage the commerce and manufacturing for their crafts to flourish. Southern planters the constitution wasn’t good because of slavery. Most ordinary citizens believed the constitution was somewhat conservative. - I. Ratification of the New Constitution and Boll of Rights: Key Issues Unsettledo Article 1- the people’s part of the government and the house of congress and the house of representatives- II. Political Party Formation: Conflicting Views of Republicanism and Economic Progresso George Washington was nominated and elected president March 1789-April1797 Washington was president and Americans opposed the parties During the early years, him and his circle of supporters hoped the ratification of the constitution would translate into national unity and there would be no political parties. However, most people realized that the new US would not be free of political parties. Division within Washington’s own cabinet provided quick and an easy way to grasp the fundamental differences between the years that made the 2 party systemo Hamilton’s Vision and the Federalist Party Nationalist who favored a stronger central government and, thus, had supported the new constitution Federalist partied leaders argued for republican party governmentbut Ruled by “the best men”- meaning those with superior wealth, education, and experienceo Hamilton’s Vision and the Federalist Party continued A vigorous international trade in agriculture commodities But, above all else, the use of government power to promote commercial development and the growth of industry Industry, commerce, and vibrant cities were the key to future prosperity An urban-based commercial and industrial economy would be linked to the developing capitalism economies of western Europe- The new united states was no longer set into the mercantileframework, but it now has a broad open field to it for development and international trade.- Capitalism was on the horizon- capital means the money that is made from trade and services and commerceo Capitalism was about the pulling of large sums of money made from profit and using the fund to spur development and products- The idea was that every body could benefit in every field- The wealth to be produced by this kind of economy, they maintained, would benefit all- Even urban artisans could look forward to success, upward mobility, and a fair share of political powero Jefferson’s Vision and the Democratic Republican Party Suspicious of strong central power- similarly to the anti-federalistsduring the ratification debates Favored representative government through which ordinary free people would have a strong- if not decisive – voice Aimed to establish an agrarian republic peopled by free-holding farmers Ordinary people, as citizen farmers, would be: Economically independent Self-reliant Politically independent Ordinary people would be well represented in the local state governments – which would retain the great bulk of government power The federal government would be weak – just strong enough to coordinate the states and bolster trade in agricultural commodities Agriculture would be the backbone of the nation’s economy In the democratic republican vision, here would be no large cities, no swelling ranks of property – less urban laborers to be exploited and politically manipulatedo Manchester, England, 1790- well under way to industrial revolution- III. New Federalist Party Fiscal and Financial Arrangements: Hamilton’s Programo Hamilton proposed many ideas “Assumption”: The federal government would assume the debts of the states “Funding”: The federal government would pay its debt at the full face value of the bonds that Congress had issued to raise cash during and shortly after the Revolutionary War Funding would include paying off old interest bearing bonds, after that came due, with new bonds In this way, the federal government would, in theory, responsibly manage a perpetual bonded federal government debt The federal government would use its tax revenues – including exercise taxes on ordinary citizens – to pay the interest on outstanding bonds Funding would wed the wealthy classes to the new federal governmento The First Bank of the United States, aka the “BUS” The capital stock of the BUS would be owned by private investors Hamilton invoked the “necessary and proper” clause of Article I of the new Constitution to justify the congressional charter of the Bus The BUS would pool the capital of the wealthy and make loans to spur new commerce and industry The BUS would be a powerful tool with which the federal government could influence the money supply and the value of money itself The BUS would have the power to loan the federal government money These loans would come in the form of promissory notes issued bythe bank BUS notes would be given to the US government in exchange for federal The notes issued by the Bank of the United States could be spent by the federal government in the private sector and serve as paper money By borrowing paper money from the BUS in this way, the federal government could enlarge or shrink the money supply By enlarging or shrinking the money supply, the federal government could increase or decrease the value of the notes, or paper currency, issued by the BUS- IV. Democratic Republican Party Opposition to Hamilton’s Program    the BUS would make loans mostly or exclusively to the wealthy andthe powerful The wealthy private owners of the BUS would combine with the federal government to over-enlarge or over-shrink the money supply – and thereby drive down or up the value of the dollar to suit their own investment purposeso The Complaints of the Revolutionary War Veterans Paid with US Bonds  Many of the