Transcript money problems in the new republic

MONEY PROBLEMS IN THE
NEW REPUBLIC
The NATIONAL DEBT as of
3/29/09:
National debt in
1792 - est $80
million
• The estimated population
of the United States is
305,904,250 so each
citizen's share of this debt
is $36,143.96.
• The National Debt has
continued to increase an
average of
$3.74 billion per day since
September 28, 2007!
BACKGROUND
• US in debt from the American Revolution
• During the war Americans sold bonds
– Document which promises to repay the money
loaned plus interest
• EXAMPLE:
– You buy a $100.00 bond for $50.00.
– Years later you sell it back to the government and get $100.00
• These bonds now need to be repaid
HAMILTON TO THE RESCUE
• Secretary of the
Treasury, Alexander
Hamilton comes up
with a plan to get the
US out of debt and
boost our Economy
HAMILTON’S PLAN
• 1) Sell new bonds to pay for old bonds
• 2) National government will pay up old state
debts
• 3) Create First Bank of the United States
• 4) Use a Protective Tariff
UPROAR OVER THE PLAN
• James Madison leads
opposition to
Alexander Hamilton’s
plan
• Believes northerners
have too much power
and influence over
federal government
MADISON’S COMPLAINTS
• 1) Plan would benefit speculators
people who make risky investments to
gain a profit.
• 2) Southern states already paid off
their debt
COMPROMISE
• 1) U.S. Capital is moved
from New York to District
of Columbia (to be built
near Maryland/Virginia
border)
• 2) Government will repay
all state debts with bonds
HAMILTON’S PLAN TO BOOST THE
ECONOMY
• 1) Create National Bank of the United States to
help organize money
• 2) Create protective tariff to encourage
Americans to buy American goods
PROTECTIVE TARIFF
MORE OUTRAGE
• Thomas Jefferson and Madison argue that:
1) National Bank is unconstitutional
2) Protective Tariff is unfair to southerners
Is the National Bank Constitutional? If so how?
Yes, look at Article 1, section 8, point 18
ALEXANDER HAMILTON’S PLAN
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2. _________________________
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3. _________________________
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JAMES MADISON’S COMPLAINTS
1. _________________________
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2. _________________________
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4. _________________________
COMPROMISE
1. _________________________
_________________________
_________________________
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2. _________________________
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Name: ________________________
ALEXANDER HAMILTON’S PLAN
JAMES MADISON’SCOMPLAINTS
1) Sell new bonds to pay for
old bonds
2) National government will
pay up old state debts
3) Create First Bank of the
United States
4) Use a Protective Tariff
1) Plan would benefit
speculators people who
make risky investments
to gain a profit.
2) Southern states already
paid off their debt
COMPROMISE
1) U.S. Capital is moved
from New York to District of
Columbia (to be built near
Maryland/Virginia border)
2) Government will repay all
state debts with bonds