The Washington Administration

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By — McGraw-Hill Professional
Updated on Feb 4, 2012

The Washington Administration

George Washington doubted his own ability to lead the new nation he had helped to create. He was not a profound political thinker like Adams, Jefferson, or Madison, and he knew it. However, he had a characteristic unique among all presidents who followed him—he was the universal choice of all the political leaders of the day. Washington commanded profound personal respect and affection from everyone who knew him and had worked with him. His popularity was an important unifying factor in the success of the new nation for its first eight years.

Washington’s first action was to decide on the title by which the nation’s chief executive should be addressed. His choice, “President of the United States,” reassured everyone that the United States would never turn into a monarchy. The title was a simple one and reinforced the notion that the president was no more exalted than any other American citizen.

John Adams served as Washington’s vice president. The first Supreme Court had a chief justice, John Jay, and five associate justices. The first presidential cabinet contained only five members, as follows:

  • Secretary of State Thomas Jefferson
  • Secretary of the Treasury Alexander Hamilton
  • Secretary of War Henry Knox
  • Attorney General Edmund Randolph
  • Postmaster General Samuel Osgood

The Nation’s Economy

Alexander Hamilton quickly achieved a prominent position in the administration. Hamilton believed in capitalism—the economic system preached by Scotsman Adam Smith, in which free-market competition determines wages and prices, and ownership of industries and businesses is in private hands. Hamilton’s agreement with Smith’s philosophy is largely responsible for the way the American economy took shape.

Hamilton’s first challenge was to pay off the national debt, which had soared to $77 million because of the war. He felt that it was important to pay the debt rather than allowing it to mount, so that the nation would have good credit with the rest of the world. Hamilton’s plan involved selling new bonds to pay off old ones. He also declared that the federal government should be responsible for debts the states currently owed. Since the southern states had already paid their debts, they protested, arguing that the northern states should be forced to pay too. Hamilton compromised with southern leaders by agreeing that the government would move the nation’s capital to the South. They would build a new city, the District of Columbia, on a small parcel of land carved from the Maryland-Virginia border. For security reasons, and to prevent jealousy among the states, the capital would be a free city outside state borders. The new capital was renamed Washington, in honor of the first president. George Washington himself never lived in Washington, DC; when the district was marked off for the capital, it was nothing but farms and woodlands. The city, with the required government buildings, had yet to be planned and built.

Congress created the Bank of the United States in 1791. Its charter stated that it was to be jointly owned by the government and private investors, and that it would operate for 20 years. Congress also created a mint, which began to produce the first U.S. coins in 1792. Before this date, each state had printed its own currency.

Hamilton continued to cast about for ways to settle the government’s debts. As many political leaders throughout history had done when in debt, he established new taxes. A new tax on whiskey provoked an uprising among farmers in western Pennsylvania; it would take away the handsome profits they had been making by turning their surplus grain crop into whiskey and trading it for supplies. When marshals tried to collect the tax from the Pennsylvania farmers, the farmers resisted. They attacked the officials and planned a march of about 6,000 men on Philadelphia, the nation’s temporary capital. Washington called out the militia to put down the Whiskey Rebellion.

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