October 15 2008

There was a growing debt in America to France, unpaid soldiers, and the states all accumulated after the American Revolution. The states in the south with the exception of South Carolina already payed off their debt entirely while the states while the others did not. The new head of the Department of Treasury during the time, Alexander Hamilton was determined to handle the debt. Under his plan, Hamilton called to make the debts in the states a national debt. He proposed that an excise tax be placed on on wines, coffee, tea, and whiskey (spirits). Hamilton also asked Congress to charter a Bank of the United States. Lastly under his plan, the government would issue securities to its creditors and pay an annual interest of about 4%. Congress willing for change passed Hamilton's proposals.

When Hamilton proposed the his idea of a Bank of the United States, oppositionists especially Thomas Jefferson stated that Congress did not have the constitutional right to create such a bank. Hamilton responded to the opposition by stating a clause in the constitution empowering Congress "to make all laws which shall be necessary and proper" to the performance of its duties. George Washington then steps in and ultimately sided with Hamilton.

When France went to war with Britain in 1793, President Washington declared America to be neutral, therefore breaking the terms that were made in the treaties between America and France in 1778. So in April 1793 the French sent Citizen Edmond Genet to negotiate with the Americans for some assistance. When he was turned down Genet payed off American privateers to harass British shipping. Also France opened trade routes between the French Caribbean islands and America. Britain who was well informed about this seized 250 American ships and impressed American sailors into joining them. They also took a step farther as to use the Indians to spur up trouble in America while they were in their garrisoned forts in the U.S. During all of this, Pittsburgh farmers angry with the excise tax on whiskey formed a mob and who tarred and feathered excise officers and burned the property of farmers who paid the tax. Face with serious problems the people of Pennsylvania call for the government's assistance to form an army to stop the farmers. George Washington rallied 12000 militiamen who put an end to the Whiskey Rebellion. This gave the people of America a feeling of trust that was not there during the Wilkes Rebellion.

Eager to relieve tensions, Washington sends John Jay to go to Britain to negotiate. A treaty was made known as the Jay Treaty that was passed by the Senate in June 1795, extracted the promise that the British would remove their forts in the Northwest but that was it. Ultimately, the treaty was not very successful in meeting American demands.