The Tariff of 1789 placed a tariff of between 5 and 10 percent on certain imported goods (depending on the value of the item) with the goal of raising revenue (income) for the new government of the U.S. while also providing some protection for new American industries. This is the beginning of the tariff policy for the U.S. The income from tariffs would be the leading source of revenue for the U.S. government until the income tax was passed in the early 20th century. The amount of the tariff and the imported goods that were subject to the tariff changed as the economy of the U.S. dictated. When it became necessary to protect American industries from foreign competition, Congress often would raise the tariff. Tariffs later became a source of conflict between the North and South since the Southerners who relied on agriculture felt the Northerners who were more industrialized were benefitting because the Southerner often paid the tariff for imported goods they needed.

This act by Congress created the lower court system of the judicial branch of the government as authorized by Article III of the Constitution. It created the courts below the Supreme Court which was the only court authorized in the Constitution. The act also set the number of the members of the Supreme Court as well as clarified the appellate jurisdiction the highest court (Supreme Court) would have over cases they could hear.

This act provided for full funding of the national debt and for the U.S. government to assume responsibility for the states’ American Revolution unpaid war debts. This act along with the Residence Act of 1790 were part of what is known as the Compromise of 1790. At a dinner at Thomas Jefferson’s house, Secretary of the Treasury Alexander Hamilton and Representative James Madison worked out the compromise. Hamilton had been unsuccessful in getting the Congress to assume and pay off the states’ debts from the Revolutionary War with opposition mainly coming from the Southern states who had been more successful than the Northern states in paying off their debts. Madison agreed to support Hamilton’s proposal in return for his support to build the new capital on the Potomac River in Virginia.

This act designated Philadelphia as the temporary capital of the U.S. for a period of ten years. At the end of the ten years, a site on the Potomac River was designated to be the permanent capital. This site became known as Washington D.C. This act was part of a compromise between Alexander Hamilton and James Madison. Hamilton agreed to the capital being built in Virginia in return for Madison’s support for his plan for the new government to assume the states’ revolutionary war debts.

This law supported Article IV, Section 2, Clause 3 of the U.S. Constitution by creating a legal way for slave owners to recover runaway slaves in any state or territory even if that state abolished slavery. It also made it a crime to assist a runaway slave. Over the years as opposition to slavery grew in the Northern states, enforcement of the Fugitive Slave Act was lax. The Southern states then insisted in the Compromise of 1850 that governments and residents were required to capture and return fugitive slaves.

Foreign policy is the way that one country chooses to deal with other countries. George Washington had to deal with many foreign policy issues during his presidency, including increasing conflicts in Europe. He issued the Neutrality Proclamation in 1793 which made it clear that America would not take sides in the war between Britain and France. In 1796 Washington left office after two terms and issued a Farewell Address with two warnings for Americans. First, he strongly advised the country to stay out of foreign conflicts and remain neutral. Second, he warned of the dangers of political parties and the division they would create within the country.

In 1798, the Federalist Congress passed several laws during John Adams’ presidency which made it more difficult for immigrants to participate in the political process and were aimed at the growing support for Jefferson’s Democratic-Republicans. The Alien Act allowed the President to deport any alien (foreigner) who was deemed to be a threat to the country and increased the waiting period for an immigrant to become a citizen from five years to fourteen years. The Sedition Act provided that a person could be fined or imprisoned for criticizing the government, Congress, or the President. Several members of the Democratic-Republican Party were convicted under this law. Jefferson and others felt the Sedition Act was a clear violation of the First Amendment. Both laws were seen by the opposition as an attempt to silence the Democratic-Republicans.

As a result of the Alien and Sedition Acts passed by the Federalist Congress in 1798 and 1799, Jefferson and Madison wrote the Kentucky and Virginia Resolutions, criticizing the Federalists and John Adams for these policies. Thomas Jefferson and others argued that these Acts were a clear violation of the First Amendment and that states could nullify (declare invalid) a federal law they believed was unconstitutional because it violated the Constitution.

William Marbury was appointed Justice of the Peace by John Adams in his final days in office as President, but his appointment papers were not delivered before Jefferson took office. President Jefferson forbade his Secretary of State James Madison to deliver Marbury’s appointment papers. Marbury then hired a lawyer and sued Madison. Using a part of the Judiciary Act of 1789, the U.S. Supreme Court, headed by Chief Justice John Marshall, heard the case under its original jurisdiction (first and only court to hear a case) in 1803. The Court dismissed the case saying the Supreme Court did not have the original jurisdiction to hear this case. Thus the Court did not rule for or against Marbury. Of more importance, the Court struck down part of the Judiciary Act of 1789 as unconstitutional because the Court decided it was in conflict with Article III of the Constitution. This was the first time the Supreme Court overturned part of an act of Congress and claimed that it had the power of judicial review. Judicial review is the power to decide if laws are constitutional. By exerting this power, the Supreme Court established itself as a equal partner with the legislative and executive branches of the government.

As authorized by Article I, Section 9, Clause 1 of the Constitution, Congress passed the Slave Trade Prohibition outlawing the importation of more slaves after January 1, 1808. This portion of the Constitution was agreed on during the Constitutional Convention as part of the compromises between the Northern and Southern states. This did not end slavery in the United States, nor did it prohibit the trading of slaves within the United States. It merely stopped slaves being imported from other countries.

In 1819, the Supreme Court ruled in favor of the federal government in the case of McCulloch v. Maryland. Using Alexander Hamilton’s financial plan, the U.S. Congress chartered the Second Bank of the United States in 1816. Its largest branch was located in Baltimore, Maryland. The state of Maryland did not agree that the federal government had the power under the U.S. Constitution to charter a bank. In an effort to put the bank out of business, the state passed a law placing a heavy tax on all transactions conducted at the Baltimore branch of the Bank. James McCulloch, the bank manager, refused to pay the tax and was prosecuted and convicted in a Maryland court. McCulloch then appealed to the Supreme Court. The case went to the Supreme Court to answer the questions of whether the federal government had the power to create a national bank and whether a state government had the power to tax it. The Supreme Court, led by John Marshall, ruled in favor of the federal government saying “the power to tax involves the power to destroy.” The decision strengthened the power of the federal government.

To protect trade with the newly freed Latin American countries and prevent European interference in this hemisphere, President James Monroe established an American foreign policy known as the Monroe Doctrine in 1823. It stated that the Western Hemisphere was closed to European countries and that no further European colonization would be permitted. Even though the United States could not enforce its policy militarily, Great Britain supported the U.S. policy in order to secure trade with the Latin American countries.

The New York Legislature granted a 20-year monopoly to Aaron Ogden to operate steamboats in New York waters, but the U.S. Congress granted a license to Thomas Gibbons to engage in the coastal trade and operate steamboats between New York and New Jersey. Ogden sued Gibbons in a New York court, and the court ruled in Ogden’s favor. Gibbons appealed the decision to the U.S. Supreme Court. In 1824, the U.S. Supreme Court, presided over by Chief Justice John Marshall, heard arguments between the two competing steamboat operators in the case of Gibbons v. Ogden. In its decision, the Court explained that Congress had the power under the interstate commerce clause of Article I, Section 8 to grant Gibbons a license to operate steamboats between New York and New Jersey. Since Article VI of the Constitution makes laws of the U.S. that do not conflict with the Constitution part of the supreme law of the land, New York’s action had to give way. Along with cases like Marbury v. Madison and McCulloch v. Maryland, this case further strengthened the power of the federal government.