Chapter 9: Launching the New Nation – Washington & Hamilton

The nascent United States government was launched in 1789 under President George Washington, facing immediate challenges in establishing institutions and precedents to put the principles of the Constitution into practice. A critical early accomplishment was the adoption of the Bill of Rights in 1791, drafted largely by James Madison, which enumerated individual liberties while using the Ninth and Tenth Amendments to reassure states' rights advocates that powers not specifically delegated to the federal government were reserved to the states or the people. Alexander Hamilton, as Secretary of the Treasury, designed a comprehensive, centralizing financial system intended to bolster national credit and favor wealthy creditors, securing their allegiance to the federal regime. Key elements included funding the national debt at par and the controversial assumption of state war debts. To generate revenue, Congress passed a low tariff and an excise tax on domestic items like whiskey, the latter provoking the Whiskey Rebellion in 1794, which Washington swiftly suppressed, demonstrating the strength of the new federal authority. The plan culminated in the establishment of the Bank of the United States, sparking the fundamental constitutional debate over the extent of federal power, pitting Hamilton's argument for loose construction (implied powers via the "necessary and proper" clause) against Thomas Jefferson's defense of strict construction. This ideological rift, amplified by disagreements over economic and foreign policy, solidified the emergence of the first two national political parties: the Hamiltonian Federalists and the Jeffersonian Democratic-Republicans. Foreign entanglements quickly dominated, particularly following the radical phase of the French Revolution. Washington issued the Neutrality Proclamation in 1793, establishing America's policy of noninvolvement and avoiding a potentially catastrophic war with Europe while the country was militarily weak. Despite Republican opposition, the administration sought to address British seizures of American ships and continued presence in the western forts through Jay’s Treaty with Britain, which, though unpopular, paved the way for the highly favorable Pinckney’s Treaty with Spain, granting navigation rights on the Mississippi. As he retired, Washington delivered his influential Farewell Address, urging the nation toward unity and cautioning against permanent foreign alliances. President John Adams inherited escalating tensions with France, which viewed Jay's Treaty as a violation of the Franco-American alliance. The infamous XYZ Affair, where French agents demanded bribes and loans, ignited war hysteria and led to the undeclared Quasi-War at sea. Capitalizing on the anti-French fervor, the Federalist Congress passed the restrictive Alien and Sedition Acts to silence political opposition. In response, Jefferson and Madison secretly drafted the Virginia and Kentucky Resolutions, promoting the compact theory and asserting that states could judge and potentially "nullify" unconstitutional federal laws, setting a key precedent for future states' rights debates. Adams ultimately prioritized peace, negotiating the Convention of 1800 with Napoleon, which formally ended the alliance with France and smoothed the path for future expansion.