Alexander Hamilton vs Thomas Jefferson Hamilton wanted a

Alexander Hamilton vs. Thomas Jefferson Hamilton wanted a government strong enough to fix America’s problems… Thomas Jefferson trusted the people to fix their own problems…

Now that President Washington is in office… • It’s time to fix the economy • What’s the problem? – Our government had a national debt of $81. 5 million dollars! • Amount of $ owed by our country to other people – Foreign countries – Citizens we borrowed money from – What happens if we don’t pay these people back?

Debate over settling the debt Alexander Hamilton Thomas Jefferson • Wanted to pay back all bonds • Ok with Hamilton’s ideas, but there is a problem: sold to citizens over time! – Bonds = certificates purchased that can be turned in for more money in the future – Why did Hamilton want to do this? • Government gains credibility with the people – Speculators have bought bonds from citizens for less than they are worth! • Now the government is going to buy them from the speculators for full price? – That cheats the original owner out of money! • Who wins? – Hamilton! • 1790 Government starts buying bonds back!

Debate over Paying off debt owed by States from the American Revolution Alexander Hamilton Thomas Jefferson • Argued that government should pay states debt off • Felt each state should pay back their part of the bill • Why? – We all fought for freedom. • So, our federal government should pay the bill. – Some states owed a lot! • Massachusetts • New York – Some did not owe much at all • So who wins? – Both…. sort of. • Virginia • North Carolina

They both get something in the end. Hamilton Jefferson • Federal government pays off the states debt. • The nation’s capital moves from the North to a more Central location…. • In exchange for…. – The birth of Washington, D. C. • Will be built as the new nation’s capital!

New York to Washington DC

Washington, D. C. 1800

Washington 1850

Washington DC today

Debate over Role of Government Hamilton • Had little faith in the average citizen – Said they could not be trusted to do the right thing. Jefferson • Had a lot of faith in the average citizen – Said they should govern themselves – Why? • Because the average American does not take education seriously – Said they would educate themselves and do what is right – They take politics even less seriously • So, you need a large government – Job = protect the liberties of all citizens equally • So, government needs to be small – Job = stay out of the way

Debate over how the Economy should grow Hamilton • Government should give “stimulus” money to American entrepreneurs Jefferson • Government should stay out of the economies way – Why? • America is made up of farmers! – Why? – They know how to do it themselves! » Don’t need any help! • So they could start their own factories and businesses – Hire people – Make products here in USA • Government should pass protective tariffs – Tax on goods from other countries • Tariffs should remain low – Why? • Keep price of goods lower. – Helps citizens be able to afford them

Yoeman Farmer • Yoeman Farmers – small farm owners who work their farms mostly with just family • Jefferson believed yeoman farmers to be the model American. • Hard working, honest, and independent • Jefferson wanted these to be the backbone of the country • Yoeman farmers were his examples against a strong federal government – Everybody should manage their own affairs

Debate over a national bank Hamilton • Wanted to start a national bank. – Why? • So that the government can make their own money – No more state money • What is the big deal? – Federal government would own all of the money in America! – Not each individual state Jefferson • Hated the idea of a national bank – Why? • Some states are richer than others – They would lose this power if the federal government owned all of the money • What is the big deal? – The Constitution does not give the government the right to make a bank anyways…. • Or does it?

What does the Constitution say? • Article I, Section 8 – Congress has the right to “make all laws that are necessary and proper” • Hamilton (loose) – Says a bank is necessary for future growth as a nation • Jefferson (strict) – Says a bank is convenient • Not necessary

Who wins? • Washington agrees with Hamilton. • Bank of the United States – Created in 1791 • For 20 years – If it works we will keep it longer » If not, we get rid of it.

What Eventually Happens to Hamilton • 1804 • Jefferson VP – Aaron Burr will run for NY Governor during Jefferson’s presidency • Hamilton will write a scathing article about Burr – Burr and Hamilton had hated each other for years • Burr challenges Hamilton to a duel • Burr shoots and kills Hamilton

Review Questions • What is the national debt? • What are bonds? • What was Hamilton’s idea to fix the economy? • What was Jefferson’s idea for the role of government?