Government Vocabulary Chapter 8 Lesson 1

Key Terms

• Inauguration: Ceremony marking the official start of the President's term with the administration of the oath of office.

• Precedent: Sets an example for future actions or decisions to be followed.

• Bond: A government-issued certificate that promises repayment of a specified sum with interest.

• Speculator: An investor who engages in high-risk ventures with the anticipation of substantial profits.

• Unconstitutional: Actions or laws that violate the U.S. Constitution.

• Tariff: A tax imposed on imported goods entering a country.

Government Structure

• New Executive Departments: Established departments include Treasury, State, and War, essential for managing government affairs and operations.

Financial Challenges

• Public Debt: Significant debt arose because bondholders could not collect payments, leading to defaults and secondary payments by others.

Hamilton's Financial Plan

• Key Elements:
  • Assumption of all federal and state debts by the U.S. government.
  • Establishment of a national bank for secure government funds.
  • Proposal for high tariffs on imported goods to raise revenue.

Congressional Response

• Debate on Financial Plan: Congress engaged in intense discussions regarding Hamilton's proposals, reflecting differing views on fiscal policy.

• Tariff Proposal Rejection: The proposed tax on imports was not approved by Congress, showcasing the limitations of Hamilton's financial strategies.

Social Unrest

• Whiskey Rebellion: A revolt by farmers protesting against the tax on whiskey, highlighting the tensions between rural citizens and federal authority. The rebellion included violent actions such as the burning of a tax collector's house.

• Taxation: The only product taxed under this plan was whiskey, emphasizing the government's focus on liquor taxation as a revenue source.