Washington set a precedent by carefully choosing well known leaders to serve in his cabinet. His cabinet consisted of three members: Alexander Hamilton, Thomas Jefferson, and Henry Knox. Alexander was the Secretary of Treasury, Thomas was the Secretary of State, and Henry was Secretary of State. John Adams was Washington's vice president.
In 1789, Congress passed the Judiciary Act. This act called for the Supreme Court to have one Chief Justice and five Associate Justices. This act also set up a system of district courts and circuit courts across the nation.
Hamilton faced many problems trying to build a strong economy. One of them was the national debt. During the Revolution, the national government and states needed money to buy supplies and pay soldiers. They borrowed money from citizens and foreign countries. Governments borrowed money with bonds. Some states and federal governments has not paid off their debts from the revolution. Hamilton insisted that all those debts be repaid.
Tariffs and the Whiskey Rebellion
Foreign Goods Ship
Oh come on! Really??
Hamilton wanted to first by up all the bonds equipped by the national and state governments before 1789. He planned to sell bonds to pay off those debts.When the economy enhanced, the gov. would pay off the new bonds. Second, he wanted the gov. to pay off the debts owed by the states.
Now, I need to make a plan...
Congress passed a bill in 1791 creating the first Bank of the United States. When the Bank collected money in taxes, the national government deposited it. In return the bank released paper money. When the government used the paper money to make loans to citizens, the Bank helped the growth of the economy.
Wow! Nice bank...
Ahh, the bank is a sucess!
Hamilton planned to make imported goods more expensive to buy than goods in the USA. It was called a protective tariff. Congress passed a bill that taxed all liquor sold and made in the USA. Hamilton wanted this tax to raise money for the Treasury. However, the whiskey tax led to a rebellion that tested the strength of the new gov. Washington sent the militia to Pennsylvania. The rebels scattered when they heard 15,000 were marching towards them.