Many federalist were rich businessmen who wanted to secure trade and pay off debts.

CHAPTER 7 SUMMARY � DEMOCRACY IN DISTRESS:  THE VIOLENCE OF

                                               PARTY POLITICS, 1788-1800

• CONSTITUTION TRANSFERRED SOVEREIGNTY FROM THE STATES TO THE PEOPLE � HOW TO PUT CONSTITUTIONAL ABSTRACTIONS INTO PRACTICAL LEGISLATION
• GEORGE WASHINGTON FIRST PRESIDENT � HE WAS SEEN AS A HERO AND AS A SYMBOL OF THE NEW GOVERNMENT AND REPUBLIC
• WASHINGTON APPOINTED A CABINET OF �EXTRAORDINARY  PERSONALITIES� BUT WASHINGTON ALWAYS MADE HIS OWN DECISIONS AND POLICIES
• 1789 � CONGRESS CREATED DEPARTMENTS OF WAR, STATE AND TREASURY
• JUDICIARY ACT OF 1789 SET UP A FEDERAL COURT SYSTEM � FIRST CHIEF JUSTICE, JOHN JAY

• ALEXANDER HAMILTON � SECRETARY OF THE TREASURY AND THOMAS JEFFERSON � SECRETARY OF STATE CAME TO SYMBOLIZE THE DIVISION WITHIN THE COUNTRY

• ALEXANDER HAMILTON
• LEADER OF FEDERALISTS
• STRONG CENTRAL GOVERNMENT
• NATIONAL ECONOMY BASED IN COMMERCIAL AND INDUSTRIAL POWER
• LIKED THE ENGLISH BECAUSE HE RESPECTED THEIR STRONG FINANCIAL INSTITUTIONS � HAMILTON SAW THE ENGLISH AS OUR MOST IMPORTANT ALLY
• TRUST IN THE ELITE � FEDERALISTS WERE ENTHUSIASTIC ABOUT CAPITALISM BUT THEY JUST DIDN�T TRUST LOCAL PEOPLE OR GOVERNMENTS TO MAKE GOOD FINANCIAL DECISIONS

• THOMAS JEFFERSON
• EVENUALLY BECAME LEADER OF REPUBLICANS
• SMALL GOVERNMENT/STATES RIGHTS
• ECONOMY BASED IN AGRICULTURE � DIDN�T LIKE CITIES AND FACTORIES � WANTED US TO SELL OUR RAW MATERIALS ON  INTERNATIONAL MARKET BUT  LET ANOTHER COUNTRY DO THE MANUFACTURING
• LIKED THE FRENCH � SUPPORTED THEIR REVOLUTION AND THOUGHT WE SHOULD SUPPORT FRANCE AGAINST ENGLAND BECAUSE HE SAW BRITAIN�S FINANCIAL INSTITUTIONS AS THE ROOT OF CORRUPTION
• TRUST IN THE PEOPLE � HE FEARED FEDERALISTS WHO PLACED THE PROTECTION OF PROPERTY AND CIVIL ORDER ABOVE THE PRESERVATION OF LIBERTY

• MOST IMPORTANT ISSUE FOR NEW GOVERNMENT WAS ITS FINANCES

• HAMILTON CAME UP WITH PLAN TO SOLVE FINANCIAL PROBLEMS
• REPORT ON THE PUBLIC CREDIT � REPORT HAD TWO PARTS CALLED FUNDIING AND ASSUMPTION � GOVT WOULD PAY OFF ITS DEBT AT FULL FACE VALUE AND ASSUME ALL STATE DEBTS
• MADISON AND FRIENDS FELT THAT ONLY A FEW RICH WOULD BENEFIT FROM THE GOVT PAYING OFF ITS DEBT
• MANY STATES OBJECTED TO THE GOVT PAYING OFF STATE DEBTS BECAUSE IT REWARDED STATES THAT HAD NOT PAID THEIR BILLS
• HAMILTON�S FIRST REPORT PASSED CONGRESS

• HAMILTON�S SECOND REPORT PROPOSED A NATIONAL BANK
• MADISON AND JEFFERSON OBJECTED � THEY SAW THIS AS A WAY FOR THE MONIED CLASS TO GET RICHER
• GEORGE WASHINGTON ASKED EACH SIDE TO WRITE A PAPER
• JEFFERSON/MADISON�S PAPER WANTED A STRICT INTERPRETATION OF THE CONSITUTION
• HAMILTON WANTED LOOSE INTERPRETATION AND JUSTIFIED THE BANK ON THE DOCTRINE OF �IMPLIED POWER�
• HAMILTON�S SECOND REPORT WAS PASSED

• HAMILTON�S THIRD REPORT WAS THE REPORT ON MANUFACTURES � WANTED PROTECTIVE TARIFFS AND INDUSTRIAL SUBSIDIES
• JEFFERSON AGAINST BECAUSE HE DIDN�T WANT TO PROMOTE CITIES AND VICE � MOST PEOPLE LIVED IN RURAL AREAS
• MADISON SAW CENTRAL GOVT AS GAINING TOO MUCH POWER
• THE REPORT WAS DEFEATED IN CONGRESS

• BY END OF WASHINGTON�S FIRST TERM, POLITICAL PARTIES WERE STARTING TO FORM AND POLITICAL ARGUMENTS DIVIDED THE COUNTRY
• FEDERALISTS � HAMILTON
• REPUBLICANS - JEFFERSON

• WASHINGTON�S SECOND TERM  - FOREIGN AFFAIRS WAS MAJOR  CHALLENGE
• GREAT BRITAIN DID NOT TREAT AMERICA WITH RESPECT � THEY SHOWED A DISTAIN FOR AMERICAN RIGHTS
• WHEN FRANCE DECLARED WAR ON GREAT BRITAIN, WASHINGTON ISSUED A PROCLAMATION OF NEUTRALITY
• GENET CRISIS � HE AUTHORIZED PRIVATELY OWNED AMERICAN SHIPS TO SEIZE BRITISH SHIPS FOR FRANCE � THIS WAS VIOLATION OF AMERICAN NEUTRALITY
• WASHINGTON SENT JOHN JAY TO ENGLAND WITH A LIST OF OUR GRIEVANCES/DEMANDS
• HAMILTON LET THE BRITISH KNOW AHEAD OF TIME THAT THE US WOULD COMPROMISE ON CERTAIN ISSUES
• JOHN JAY ENDED UP WITH ONLY ONE CONCESSION FROM ENGLAND

• BATTLE OF FALLEN TIMBERS � IT WAS AT THIS BATTLE UNDER GENERAL ANTHONY WAYNE THAT THE US ASSERTED ITS AUTHORITY OVER THE WESTERN FRONTIER
• PUSHED OUT NATIVE AMERICANS  AND FINALLY GOT RID OF THE BRITISH

• JAY�S UNPOPULAR TREATY WITH GREAT BRITAIN ENDED UP HELPING US WITH SPAIN � THE SPANISH ERRONEOUSLY ASSUMED THAT THE US AND GREAT BRITAIN HAD FORMED AN ALLIANCE AGAINST SPAIN TO TAKE ITS NORTH AMERICAN POSSESSIONS
• TO AVOID THIS, SPAIN OFFERED CONCESSIONS TO OUR ENVOY, THOMAS PINCKNEY � CALLED PINCKNEY�S TREATY OR TREATY OF SAN LORENZO:
• OPENED THE MISSISSIPPI AND NEW ORLEANS FOR TRADE BY US CIITIZENS � NO DUTIES
• A SECURE SOUTHERN BOUNDARY ON THE 31ST PARALLEL
• STAY OUT OF INDIAN AFFAIRS

• WHISKEY REBELLION � GROUP OF FARMERS IN PA PROTEST FEDERAL EXCISE TAX ON WHISKEY
• FEDERALISTS BELIEVED THIS REBELLION WAS INSTIGATED BY REPUBLICANS AND ASSUMED INSURRECTION REPRESENTED A DIRECT POLITICAL CHALLENGE OR THREAT TO THE NATION
• REPUBLICANS BLAME FEDERALISTS FOR USING THIS AS AN EXCUSE TO BRING OUT THE MILITARY
• BOTH REPUBLICANS AND FEDERALISTS FEAR THAT THE OTHER ONE IS OUT TO DESTROY THE REPUBLIC

• WASHINGTON�S FINAL ADDRESS
• WARN AGAINST POLITICAL PARTIES
• WAR TO STEER CLEAR OF FOREIGN ENTANGLEMENTS
• 1796 ELECTION � HAMILTON INTERFERRED WITH THE ELECTION AND ENDED UP COMPLICATING THINGS
• JOHN ADAMS A FEDERALIST WON AND THOMAS JEFFERSON A REPUBLICAN WAS VICE PRESIDENT

• ADAMS DID NOT HAVE A GOOD PRESIDENCY
• INHERITED WASHINGTON�S OLD CABINET
• HAMILTON CONTINUED TO TRY AND LEAD THE FEDERALIST PARTY
•  ADAMS HAD A REPUBLICAN VICE PRESIDENT � THOMAS JEFFERSON
• ELECTION OF ADAMS AND EVENTS AFTERWARDS WERE START OF DEMISE OF THE FEDERALIST PARTY � HAMILTON�S GROUP BECAME KNOWN AS THE �HIIGH FEDERALISTS�

• XYZ AFFAIR � FRANCE REGARDED JAY�S TREATY AS AN AFFRONT AND FRANCE REACTED NEGATIVELY TO THE TREATY
• FRENCH PRIVATEERS BEGAN SEIZING AMERICAN SHIPS AND HOSTILITIES BECAME KNOW AS THE QUASI-WAR
• ADAMS SENT REPS TO FRANCE TO DISCUSS TREATY WITH TALLEYRAND AND THEY RECEIVED TERRIBLE TREATMENT
• REPS DIDN�T GET TO SEE TALLEYRAND AND THEY SAW HIS LACKEYS WHO GOT LABELED X, Y, AND Z. 
• HIGH FEDERALISTS WANTED WAR WITH FRANCE BUT ADAMS WAS SKEPTICAL � USE XYZ AFFAIR AS AN EXCUSE FOR MILITARY EXPANSION
• MILITANT FEDERALISTS WANTED MILITARY TO STIFLE INTERNAL OPPOSITION (REPUBLICANS) NOT TO STOP FRENCH AGGRESSION

• 1798 � CONGRESS PASS THE ALIEN AND SEDITION ACTS � FIRST MAJOR CRISIS OVER CIVIL LIBERTIES
• THREE ALIEN ACTS:
•       ALIEN ENEMIES LAW
•       ALIEN LAW TO EXPEL FOREIGNERS
•       NATURALIZATION LAW
• SEDITION LAW � REBUPLICANS SAID THAT LAW UNDERMINED RIGHTS GUARANTEED BY THE FIRST AMENDMENT � FREE SPEECH � AND THREATENED THEIR POLITICAL RIGHTS
• JEFFERSON AND MADISON THINK THAT FEDERALISTS WANT A POLICE STATE
• VIRGINIA AND KENTUCKY RESOLUTIONS � THESE DOCUMENTS CALLED FOR THE RETURN TO STATES� RIGHTS
• CARRIED OUT TO THE EXTREME THE KENTUCKY RESOLUTION WOULD HAVE MEANT THAT A STATE COULD NULLIFY A FEDERAL LAW UNDER CERTAIN CONDITIONS BUT NEED TO VIEW THIS DOCUMENT IN HISTORICAL CONTEXT

• ADAM�S FINEST HOUR
• NEGOTIATED PEACE WITH FRANCE TO END THE QUASI WAR
• FIRED TROUBLE MAKERS ( HIGH FEDERALISTS) IN CABINET
• DISMANTLED HAMILTON�S LARGE ARMY

• SPLIT IN FERALIST PARTY COST ADAMS ELECTION OF 1800
• JEFFERSON ENDED UP RUNNING AGAINST AARON BURR
• CONGRESS FINALLY SELECTED JEFFERSON WITH BURR AS VP
• 1804 � 12TH AMENDMENT TO CONSITUTION TO CHANGE THE PROCESS SO THAT PRESIDENT AND VP ARE ELECTED SEPARATELY

Why did rich people support Federalists?

What was Hamilton's main reason for paying off the national debt?

Which founding father worked to pay off the country's debt?

Did Federalists believe the wealthy should rule?