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National Debt
The United States was in major debt. Forty million dollars at this point. There was so much debt from the war. A lot of people are buying things at low prices expecting them to go up and then make a big profit. Sometimes it doesn't work. These people are called speculators. There were also bonds which were kind of like loans for us. Hamilton wanted to pay back foreign debt first. Jefferson disagreed. They came to a compromise, they would get new bonds that were better and more reliable. -
State's debts
The states owed a little over half of what the whole Nation owed. Hamilton wanted the federal government to pay for most of it. He thought it would help the federal government. He thought that when they didn't have to pay their debt they would have more money to start trade and business. He also thought that increased numbers of trade would make more money for the government. Some states didn't like the idea because they didn't really fight in the war. -
Moving the Capital
The south didn't like the fact that the countries capital was in new York. They thought it gave the north too much influence over national policy. James Madison, Alexander Hamilton, and Thomas Jefferson met in June of 1790. They came to a conclusion. Because everyone was complaining, they ended up moving the countries capital from New York to Virginia. -
Differing veiws
Hamilton thought that stronger government that "balanced the power between the mass of the people and the wealthier citizens. He thought it would protect their liberties and keep them from having too much power. Thomas Jefferson thought the opposite. He thought that the people had the right to run the country how they would like to. -
Economic Differences
They fought over how the countries economics should grow. Hamilton wanted to promote manufacturing and business. He even thought the government should award a prize to a company that made excellent products. He also wanted to raise tariffs for foreign countries, forcing people to buy things from the U.S. Thomas didn't want this, because he thought the farmers were doing a good thing not having to rely on each other for their jobs. He wanted to keep the prices low by lowering tariffs instead. -
Hamilton's Plan for a National Bank
Hamilton wanted to start a national bank where the government could store their money and it would be safe. The bank would have a mint to make coins, and bills. He suggested that the states made a state bank also so that the national bank wouldn't have a monopoly. He knew people may disagree so he gave it a twenty year charter. After that amount of time they could choose to extend it or leave it away. -
Jefferson Opposes the Bank
Jefferson and hamilton both knew this was giving the economics future away to the federal government. They didn't think the constitution would allow this because it said "make all laws necessary and proper." they didn't think it was very necessary. Hamilton decided to take the path of loose construction, this means that the federal government can do things if the constitution doesnt strictly forbid them.