Explain Alexander Hamiltons financial programs as secretary of the treasury? 2. Describe the vision of the Democratic-Republicans and how it differed from the Federalists? 3. Expla
1. Explain Alexander Hamilton’s financial programs as secretary of the treasury
2. Describe the vision of the Democratic-Republicans and how it differed from the Federalists
3. Explain the Haitian Revolution and its relation to slavery and rebellion in the United States
- Describe the significance of the Election of 1800
- Explain the significance of the court case, Marbury v. Madison
6. Explain the significance of the Louisiana Purchase and Lewis and Clark’s expedition
7. Explain Tenskwatawa and Tecumseh’s goals for a pan-Indian Confederacy and the impact of their efforts
8. Identify the causes of the War of 1812
9. Describe key events and turning points during the War of 1812
Discuss the political and social consequences of the War of 1812
Module 7
Introduction to American Finances and Early Political Parties
While they did not yet constitute distinct political parties, Federalists and Anti-Federalists, shortly after the Revolution, found themselves at odds over the Constitution and the power that it concentrated in the federal government. While many of the Anti-Federalists’ fears were assuaged by the adoption of the Bill of Rights in 1791, the early 1790s nevertheless witnessed the rise of two political parties: the Federalists and the Democratic-Republicans. These rival political factions began by defining themselves in relationship to Hamilton’s financial program, a debate that exposed contrasting views of the proper role of the federal government. By championing Hamilton’s bold financial program, Federalists, including President Washington, made clear their intent to use the federal government to stabilize the national economy and overcome the financial problems that had plagued it since the 1780s. Members of the Democratic-Republican opposition, however, deplored the expanded role of the new national government. They argued that the Constitution did not permit the treasury secretary’s expansive program and worried that the new national government had assumed powers it did not rightfully possess. Only on the question of citizenship was their broad agreement: only free, White males who met taxpayer or property qualifications could cast ballots as full citizens of the republic.
Hamilton’s Financial Programs
GUIDED READING QUESTION:
• 1. Explain Alexander Hamilton’s financial programs as secretary of the treasury
Alexander Hamilton’s Program
President George Washington’s cabinet choices reflected continuing political tensions over the size and power of the federal government. John Adams served as vice president, and Washington chose Alexander Hamilton to be his secretary of the treasury. Both men wanted an active government that
would promote prosperity by supporting American industry. However, Washington selected Thomas Jefferson as his secretary of state, and Jefferson was committed to restricting federal power and preserving an economy based on agriculture. Almost from the beginning, Washington struggled to reconcile the Federalist and Republican (or Democratic-Republican) factions within his own administration.
Alexander Hamilton was an ardent nationalist who believed a strong federal government could solve many of the new country’s financial ills. Born in the West Indies, Hamilton had worked on a St. Croix plantation as a teenager and was in charge of the accounts at a young age. He knew the Atlantic trade system very well and used that knowledge in setting policy for the United States. In the early 1790s, he created the foundation for the U.S. financial system. He understood that a robust federal government would provide a solid financial foundation for the country.
The United States began mired in debt. In 1789, when Hamilton took up his post, the federal debt was over $53 million. The states had a combined debt of around $25 million, and the United States had been unable to pay its debts in the 1780s and was therefore considered a credit risk by European countries. Hamilton wrote three reports offering solutions to the economic crisis brought on by these problems. The first addressed public credit, the second addressed banking, and the third addressed raising revenue.
The Report on Public Credit
For the national government to be effective, Hamilton deemed it essential to have the support of those to whom it owed money: the wealthy, domestic creditor class as well as foreign creditors. In January 1790, he delivered his “Report on Public Credit”, addressing the pressing need of the new republic to become creditworthy. He recommended that the new federal government honor all its debts, including all paper money issued by the Confederation and the states during the war, at face value. Hamilton especially wanted wealthy American creditors who held large amounts of paper money to be invested, literally, in the future and welfare of the new national government. He also understood the importance of making the new United States financially stable for creditors abroad.
To pay these debts, Hamilton proposed that the federal government sell bonds—federal interest- bearing notes—to the public. A bond is a loan from an individual to a government. Essentially, the individual provides money to the government and receives a bond in exchange. The bond may be thought of as an IOU issued by the government –the government promises to pay the bondholder back at some agreed-upon future date and pays the bondholder interest in the meantime. These bonds would be issued by the federal government and guaranteed by it. Significantly, in Hamilton’s view, bondholders now have a vested interest in the nation’s success–they want to be paid back. Creditors could exchange their old notes for the new government bonds. Hamilton wanted to give the paper money that states had issued during the war the same status as government bonds; these federal notes would begin to yield interest payments in 1792.
Figure 2. As the first secretary of the treasury, Alexander Hamilton (a), shown here in a 1792 portrait by John Trumbull, released
the “Report on Public Credit” (b) in January 1790.
Hamilton designed his “Report on Public Credit” (later called “First Report on Public Credit”) to ensure the survival of the new and shaky American republic. He knew the importance of making the United States financially reliable, secure, and strong, and his plan provided a blueprint to achieve that goal. He argued that his plan would satisfy creditors, citing the goal of “doing justice to the creditors of the nation.” At the same time, the plan would work “to promote the increasing respectability of the American name; to answer the calls for justice; to restore landed property to its due value; to furnish new resources both to agriculture and commerce; to cement more closely the union of the states; to add to their security against foreign attack; to establish public order on the basis of upright and liberal policy.”
Hamilton’s program ignited a heated debate in Congress. A great many of both Confederation and state notes had found their way into the hands of speculators, who had bought them from hard- pressed veterans in the 1780s and paid a fraction of their face value in anticipation of redeeming them at full value at a later date. Because these speculators held so many notes, many in Congress objected that Hamilton’s plan would benefit them at the expense of the original note-holders. One of those who opposed Hamilton’s 1790 report was James Madison, who questioned the fairness of a plan that seemed to cheat poor soldiers.
Not surprisingly, states with a large debt, like South Carolina, supported Hamilton’s plan, while states with less debt, like North Carolina, did not. To gain acceptance of his plan, Hamilton worked out a compromise with Virginians Madison and Jefferson, whereby in return for their support he would give up New York City as the nation’s capital and agree on a more southern location, which they preferred. In July 1790, a site along the Potomac River was selected as the new “federal city,” which became the District of Columbia.
Hamilton’s plan to convert notes to bonds worked extremely well to restore European confidence in the U.S. economy. It also proved a windfall for creditors, especially those who had bought upstate
and Confederation notes far below face value. But it immediately generated controversy about the size and scope of the government. Some saw the plan as an unjust use of federal power, while Hamilton argued that Article 1, Section 8 of the Constitution granted the government “implied powers” that gave the green light to his program.
The Report on a National Bank
As secretary of the treasury, Hamilton hoped to stabilize the American economy further by establishing a national bank. The United States operated with a flurry of different notes from multiple state banks and no coherent regulation. By proposing that the new national bank buy up large volumes of state bank notes and demanding their conversion into gold, Hamilton especially wanted to discipline those state banks that issued paper money irresponsibly. To that end, he delivered his “Report on a National Bank” in December 1790, proposing a Bank of the United States, an institution modeled on the Bank of England. The bank would issue loans to American merchants and bills of credit (federal bank notes that would circulate as money) while serving as a repository of government revenue from the sale of land. Stockholders would own the bank, along with the federal government.
Like the recommendations in his “Report on Public Credit,” Hamilton’s bank proposal generated opposition. Jefferson, in particular, argued that the Constitution did not permit the creation of a national bank. In response, Hamilton again invoked the Constitution’s implied powers. President Washington backed Hamilton’s position and signed legislation creating the bank in 1791.
The Report on Manufactures
The third report Hamilton delivered to Congress, known as the “Report on Manufactures,” addressed the need to raise revenue to pay the interest on the national debt. Using the power to tax as provided under the Constitution, Hamilton put forth a proposal to tax American-made whiskey. He also knew the importance of promoting domestic manufacturing so the new United States would no longer have to rely on imported manufactured goods. To break from the old colonial system, Hamilton, therefore, advocated tariffs (a tax) on all foreign imports to stimulate the production of American-made goods. To promote domestic industry further, he proposed federal subsidies to American industries. Like all of Hamilton’s programs, the idea of government involvement in the development of American industries was new.
With Washington’s backing, the entire Hamiltonian economic program received the necessary support in Congress to be implemented. In the long run, Hamilton’s financial program helped to rescue the United States from its state of near bankruptcy in the late 1780s. His initiatives marked the beginning of an American capitalism, making the republic creditworthy, promoting commerce, and establishing a solid financial foundation for the nation. His policies also facilitated the growth of the stock market, as U.S. citizens bought and sold the federal government’s interest-bearing certificates.
The Federalists and the Democratic-Republicans
GUIDED READING QUESTION:
• 2. Describe the vision of the Democratic-Republicans and how it differed from the Federalists
The Democratic-Republican Party and the First Party System
James Madison and Thomas Jefferson felt the federal government had overstepped its authority by adopting the treasury secretary’s plan. Madison found Hamilton’s scheme immoral and offensive. He argued that it turned the reins of government over to the class of speculators who profited at the expense of hardworking citizens.
Jefferson, who had returned to the United States in 1790 after serving as a diplomat in France, tried unsuccessfully to convince Washington to block the creation of a national bank. He also took issue with what he perceived as favoritism given to commercial classes in the principal American cities. He thought urban life widened the gap between the wealthy few and an underclass of landless poor workers who, because of their oppressed condition, could never be good republican property owners. Rural areas, in contrast, offered far more opportunities for property ownership and virtue. In 1783 Jefferson wrote, “Those who labor in the earth are the chosen people of God, if ever he had a chosen people.” Jefferson believed that self-sufficient, property-owning republican citizens or yeoman farmers held the key to the success and longevity of the American republic. (As a creature of his times, he did not envision a similar role for either women or nonwhite men.) To him, Hamilton’s program seemed to encourage economic inequalities and work against the ordinary American yeoman farmer.
Opposition to Hamilton, who had significant power in the new federal government, including the ear of President Washington, began in earnest in the early 1790s. Jefferson turned to his friend Philip Freneau to help organize the effort through the publication of the National Gazette as a counter to the Federalist press, especially the Gazette of the United States. From 1791 until 1793, when it ceased publication, Freneau’s partisan paper attacked Hamilton’s program and Washington’s administration. “Rules for Changing a Republic into a Monarchy,” written by Freneau, is an example of the type of attack aimed at the national government, and especially at the elitism of the Federalist Party. Newspapers in the 1790s became enormously important in American culture as partisans like Freneau attempted to sway public opinion. These newspapers did not aim to be objective; instead, they served to broadcast the views of a particular party.
Figure 1. Here, the front page of the Federalist Gazette of the United States from September 9, 1789 (a), is shown beside that of
the oppositional National Gazette from November 14, 1791 (b). The Gazette of the United States featured articles, sometimes
written pseudonymously or anonymously, from leading Federalists like Alexander Hamilton and John Adams. The National
Gazette was founded two years later to counter their political influence.
Federalists and Democratic-Republicans
Opposition to the Federalists led to the formation of Democratic-Republican societies, composed of men who felt the domestic policies of the Washington administration were designed to enrich the few while ignoring everyone else. Democratic-Republicans championed limited government. Their fear of centralized power originated in the experience of the 1760s and 1770s when the distant, overbearing, and seemingly corrupt British Parliament attempted to impose its will on the colonies. To opponents, the Federalists promoted aristocracy and a monarchical government—a betrayal of what many believed to be the goal of the American Revolution.
While wealthy merchants and planters formed the core of the Federalist leadership, members of the Democratic-Republican societies in cities like Philadelphia and New York came from the ranks of artisans. These citizens saw themselves as acting in the spirit of 1776, this time not against the haughty British but by what they believed to have replaced them—a commercial class with no interest in the public good. Their political efforts against the Federalists were a battle to preserve republicanism, to promote the public good against private self-interest. They published their views, held meetings to voice their opposition, and sponsored festivals and parades. In their strident newspapers attacks, they also worked to undermine the traditional forms of deference and subordination to aristocrats, as they viewed in this case the Federalist elites. Some members of northern Democratic-Republican clubs denounced slavery as well.
Defining Citizenship
While questions regarding the proper size and scope of the new national government created a divide among Americans and gave rise to political parties, a consensus existed among men on the issue of who qualified and who did not qualify as a citizen. The 1790 Naturalization Act defined citizenship in stark racial terms. To be a citizen of the American republic, an immigrant had to be a “free white person” of “good character.” By excluding enslaved persons, free Blacks, Native Americans, and Asians from citizenship, the act laid the foundation for the United States as a republic of White men.
Full citizenship that included the right to vote was restricted as well. Many state constitutions directed that only male property owners or taxpayers could vote. For women, the right to vote remained out of reach except in the state of New Jersey. In 1776, the fervor of the Revolution led New Jersey revolutionaries to write a constitution extending the right to vote to unmarried women who owned property worth £50. Federalists and Democratic-Republicans competed for the votes of New Jersey women who met the requirements to cast ballots. This radical innovation continued until 1807, when New Jersey restricted voting to free White males.
Free and Enslaved Black Americans and the Challenge to Slavery
GUIDED READING QUESTION:
• 3. Explain the Haitian Revolution and its relation to slavery and rebellion in the United States
Revolution in France, and even more so, revolution in Haiti, left southern White people terrified at the possibility of a slave revolt. Soon enough, they feared their worst nightmare was coming true.
Gabriel’s Rebellion
Led by an enslaved man named Gabriel, close to one thousand enslaved Black people planned to attack Richmond in late August 1800 to end slavery in Virginia. According to the plan, some of the conspirators would set diversionary fires in the city’s warehouse district. Others would attack Richmond’s White residents, seize weapons, and capture Virginia Governor James Monroe. On August 30th, two enslaved men revealed the plot to their master who notified authorities. Faced with bad weather, Gabriel and other leaders postponed the attack until the next night, giving Governor Monroe and the militia time to capture the conspirators. After briefly escaping, Gabriel was seized, tried, and hanged along with twenty-five others. Their executions sent the message that others would be punished if they challenged slavery. Subsequently, the Virginia government increased restrictions on free people of color.
Gabriel’s rebellion, as the plot came to be known, sent several messages to Virginia’s White residents. It suggested that enslaved Black people were capable of preparing and carrying out a sophisticated and violent revolution—undermining White supremacist assumptions about the inherent intellectual inferiority of Black people. Furthermore, it demonstrated that White efforts to suppress news of other slave revolts—especially the 1791 slave rebellion in Haiti—had failed. Not only did some literate enslaved persons read accounts of the successful attack in Virginia’s newspapers, others heard about the rebellion firsthand after July 1793 when slaveholding refugees from Haiti arrived in Virginia with their enslaved laborers.
Independence in Haiti
The complicated situation in Haiti, which remained a French colony in the late 1790s, also came to the attention of President Adams. The president, with the support of Congress, had created a U.S. Navy that now included scores of vessels. Most of the American ships cruised the Caribbean, giving the United States the edge over France in the region. In Haiti, the rebellion leader Toussaint, who had to contend with various domestic rivals seeking to displace him, looked to end a U.S. embargo on France and its colonies, put in place in 1798. Toussaint needed help in order to deal with civil unrest. In early 1799, in order to capitalize upon trade in the lucrative West Indies and undermine France’s hold on the island, Congress ended the ban on trade with Haiti—a move that acknowledged Toussaint’s leadership, to the horror of American slaveholders. Toussaint was able to secure an independent Black republic in Haiti by 1804.
The Haitian Revolution (1791-1804) inspired free and enslaved Black people and terrified White people throughout the United States. Port cities in the United States were flooded with news and refugees. Free people of color embraced the revolution, understanding it as call for full abolition and
the rights of citizenship denied in the United States. Over the next several decades, Black Americans continually looked to Haiti for inspiration in their struggle for freedom.
For example, in 1829 David Walker, a Black abolitionist in Boston, wrote an Appeal that called for resistance to slavery and racism. Walker called Haiti the “glory of the Blacks and terror of the tyrants” and said that Haitians, “according to their word, are bound to protect and comfort us.” Haiti also proved that, given equal opportunities, people of color could achieve as much as White people. In 1826 the third college graduate of color in the United States, John Russwurm, gave a commencement address at Bowdoin College, noting that, “Haytiens have adopted the republican form of government…[and] in no country are the rights and privileges of citizens and foreigners more respected, and crimes less frequent.” In 1838 the Colored American, an early Black newspaper, professed that, “No one who reads, with an unprejudiced mind, the history of Hayti…can doubt the capacity of colored men, nor the propriety of removing all their disabilities.” Haiti, and the activism it inspired, sent the message that enslaved and free Black people could not be omitted from conversations about the meaning of liberty and equality. Their words and actions—on plantations, streets, and the printed page—left an indelible mark on early national political culture.
The Black activism inspired by Haiti’s revolution was so powerful that anxious White people scrambled to use the violence of the Haitian revolt to reinforce pro-slavery, White supremacy by limiting the social and political lives of people of color. White publications mocked Black Americans as buffoons, ridiculing calls for abolition and equal rights. The most (in)famous of these, the “Bobalition” broadsides, published in Boston in the 1810s, crudely caricatured African-Americans. Widely distributed materials like these became the basis for racist ideas that thrived in the nineteenth century and beyond. These tropes divided White citizens and Black non-citizens. But such ridicule also implied that Black Americans’ presence in the political conversation was significant enough to require it. The need to reinforce such an obvious difference between Whiteness and Blackness suggests that the differences might not be so obvious after all.
Figure 1. The idea and image of Black Haitian revolutionaries sent shockwaves throughout white America. That enslaved Black
and freed people might turn violent against White people, so obvious in this image where a Black soldier holds up the head of a
White soldier, remained a serious fear in the hearts and minds of White southerners throughout the antebellum period.
Henry Moss, a enslaved individual in Virginia, became arguably the most famous Black man of the day when white spots appeared on his body in 1792, turning him visibly white within three years. As his skin changed, Moss marketed himself as “a great curiosity” in Philadelphia and soon earned enough money to buy his freedom. He met the great scientists of the era—including Samuel Stanhope Smith and Dr. Benjamin Rush—who joyously deemed Moss to be living proof of their theory that “the Black Color (as it is called) of the Negroes is derived from the leprosy.” Something, somehow, was “curing” Moss of his Blackness. And in that whitening body of slave-turned-patriot- turned-curiosity, many Americans fostered ideas of race that would cause major problems in the years ahead.
Thoughts on Race
The first decades of the new American republic coincided with a radical shift in understandings of race. Politically and culturally, Enlightenment thinking fostered beliefs in common humanity, the possibility of societal progress, the remaking of oneself, and the importance of one’s social and ecological environment—a four-pronged revolt against the hierarchies of the Old World. Yet a tension arose due to Enlightenment thinkers’ desire to classify and order the natural world. Carolus Linnaeus, Comte de Buffon, Johann Friedrich Blumenbach and others created connections between race and place as they divided the racial “types” of the world according to skin color, cranial measurements, and hair. They claimed that years under the hot sun and tropical climate of Africa darkened the skin and reconfigured the skulls of the African race, whereas the cold northern latitudes of Europe molded and sustained the “Caucasian” race. The environments endowed both races with respective characteristics, which accounted for differences in humankind tracing back to a common ancestry. A universal human nature, therefore, housed not fundamental differences, but rather the “civilized” and the “primitive”—two poles on a scale of social progress.
Informed by European anthropology and republican optimism, Americans confronted their own uniquely problematic racial landscape. In 1787, Samuel Stanhope Smith published his treatise Essay on the Causes of the Variety of Complexion and Figure in the Human Species, which further articulated the theory of racial change and suggested that improving the social environment would tap into the innate equality of humankind and dramatically uplift the nonwhite races. The proper society, he and others believed, could gradually “whiten” men the way nature spontaneously chose to whiten Henry Moss. Thomas Jefferson disagreed. While Jefferson thought Native Americans could improve and become “civilized,” he declared in his Notes on the State of Virginia (1784) that Black people were incapable of mental improvement and that they might even have a separate ancestry—a theory known as polygenesis, or multiple creations. His belief in polygenesis was less to justify slavery— slaveholders universally rejected the theory as antibiblical and thus a threat to their primary instrument of justification, the Bible—and more to justify schemes for a white America, such as the plan to gradually send freed enslaved people to Africa. Many Americans believed nature had made the White and Black races too different to peacefully coexist, and they viewed African colonization as the solution to America’s racial problem.
Jefferson’s Notes on the State of Virginia sparked considerable backlash from antislavery and Black communities. The celebrated Black surveyor Benjamin Banneker, for example, immediately wrote to Jefferson and demanded he “eradicate that train of absurd and false ideas” and instead embrace the belief that we are “all of one flesh” and with “all the same sensations and endowed…with the same faculties.” Many years later, in his Appeal to the Colored Citizens of the World (1829), David Walker channeled decades of Black protest, simultaneously denouncing the moral rot of slavery and racism while praising the inner strength of the race.
Jefferson had his defenders. Men such as Charles Caldwell and Samuel George Morton hardened Jefferson’s skepticism with the “biological” case for Black and White people not only having separate creations, but actually being different species—a position increasingly articulated throughout the antebellum period. Few Americans subscribed wholesale to such theories, but many shared beliefs in White supremacy. As the decades passed, White Americans were forced to acknowledge that if the Black population was indeed “whitening”, it was a result of interracial sex and not the environment. The sense of inspiration and wonder that followed Henry Moss in the 1790s would have been impossible just a generation later.
Early Partisan Politics
GUIDED READING QUESTIONS:
• 4. Describe the significance of the Election of 1800
• 5. Explain the significance of the court case, Marbury v. Madison
The Revolution of 1800
The election of 1800 is often referred to as the Revolution of 1800 because it marked the first transfer of power from one political party to another in American history, when the presidency passed from John Adams and the Federalists to Democratic-Republican Thomas Jefferson. The peaceful transition calmed contemporary fears about possible violent reactions to a new party’s taking the reins of government. The passing of political power from one political party to another without bloodshed also set an important precedent.
By 1800, President Adams had lost the confidence of many Americans. They had let him know it. In 1798, for instance, he had issued a national thanksgiving proclamation. Instead of enjoying a day of celebration and thankfulness, Adams and his family had been forced by rioters to flee the capital city of Philadelphia until the day was over. Conversely, his prickly independence had also put him at odds with Alexander Hamilton, the leader of his own party, who offered him little support. After four years in office, Adams found himself widely reviled.
In the election of 1800, therefore, the Republicans defeated Adams in a bitter and complicated presidential race. During the election, one Federalist newspaper article predicted that a Republican victory would fill America with “murder, robbery, rape, adultery, and incest.” A Republican newspaper, on the other hand, flung sexual slurs against President Adams, saying he had “neither the force and firmness of a man, nor the gentleness and sensibility of a woman.” Both sides predicted disaster and possibly war if the other should win.
In the end, the contest came down to a tie between two Republicans, Thomas Jefferson of Virginia and Aaron Burr of New York, who each had seventy-three electoral votes. (Adams had sixty-five.) Burr was supposed to be a candidate for vice president, not president, but under the Constitution’s original rules, a tie-breaking vote had to take place in the House of Representatives. It was controlled by Federalists bitter at Jefferson. House members voted dozens of times without breaking the tie. On the thirty-sixth ballot, Thomas Jefferson emerged victorious.
Figure 1. Thomas Jefferson’s victory in 1800 signaled the ascendency of the Democratic-Republicans and the decline of Federalist
power.
The Presidency of Thomas Jefferson
Jefferson viewed participatory democ
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