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The Federalist Era. 1789-1800. Hamilton’s Financial Program. Goal To strengthen national finances and promote economic growth. To give the propertied and financial classes a stake in the success of the new government.

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The Federalist Era

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hamilton s financial program
Hamilton’s Financial Program
  • Goal
    • To strengthen national finances and promote economic growth.
    • To give the propertied and financial classes a stake in the success of the new government.
    • To move the country away from its reliance on agriculture and toward an economy based on commerce and manufacturing.
hamilton s financial program1
Hamilton’s Financial Program
  • Components
    • To fund the federal debt at face value with current holders of government bonds.
    • To assume state debts incurred during the Revolution.
    • To adopt an excise tax on liquor to aid in raising revenue to fund the nation’s debts.
    • To impose tariffs on imported goods to raise revenue and to protect America’s new industries.
    • To charter a national bank that would provide a stable currency and source of capital for loans to fund the development of business and commerce.
the national bank debate
The National Bank Debate
  • Is a national bank constitutional?
    • Congress passed the bank bill over Madison’s objections. Before signing the bill into law, Washington asked Jefferson and Hamilton to compose written opinions on the constitutionality of the bank bill.
    • Washington’s request sparked America’s first debate on constitutional interpretation. Should there be a strict or a broad interpretation of the Constitution?
the national bank debate1
The National Bank Debate
  • Jefferson’s arguments
    • Jefferson admitted that a bank would be a convenient aid to Congress in regulating the currency and collecting taxes.
    • However, Jefferson forcefully argued that a national bank was not absolutely necessary. The Constitution did not specifically authorize Congress to create a national bank. Jefferson argued that what the Constitution does not permit, it forbids. He concluded that the states, not Congress, had the power to charter banks. “To take a single step beyond the boundaries thus specially drawn around the powers of Congress,” Jefferson wrote, “is to take possession of a boundless field of power, no longer susceptible of any definition.”
the national bank debate2
The National Bank Debate
  • Hamilton’s arguments
    • Hamilton argued that the Constitution specifically empowered Congress to collect taxes and regulate trade. A national bank would be more than a convenience; it would be a necessary institution for carrying out these powers.
    • Hamilton believed that the necessary and proper clause gave Congress the implied power to charter a national bank. He argued that what the Constitution does not forbid, it permits. “If the end,” Hamilton emphasized, “be clearly comprehended within any of the specified powers, colleting taxes and regulating currency, and if the measures have an obvious relation to that end, and is not forbidden by any particular provision of the Constitution, it may safely be deemed to come within the compass of the mutual authority.”
the national bank debate3
The National Bank Debate
  • Washington’s decision
    • Hamilton’s arguments prevailed and Washington signed the bank bill into law thus chartering the First National Bank of the United States.
    • Hamilton’s “loose construction” theory of the Constitution set an important precedent for the expansion of federal power.
the whiskey rebellion 1794
The Whiskey Rebellion, 1794
  • Hamilton’s excise tax on liquor provoked resistance and evasion among frontier farmers.
  • Outraged farmers in western Pennsylvania tarred and feathered federal tax collectors, stopped court proceedings, and blew up the stills of those who paid the tax.
  • Encouraged by Hamilton, Washington called out 12,900 militia-men to suppress the Whiskey Rebellion.
the whiskey rebellion 17941
The Whiskey Rebellion, 1794
  • It is interesting to compare Shays’s Rebellion and the Whiskey Rebellion. Both involved backcountry farmers whose protests tested the strength of new governments. Shays’s Rebellion demonstrated the weakness of the Articles of Confederation and the need for a stronger national government. Washington’s prompt use of force showed that it was no longer acceptable to challenge unpopular laws with the type of revolutionary tactics used during the Stamp Act crisis.
foreign affairs under washington
Foreign Affairs Under Washington
  • Washington’s Neutrality Proclamation, 1793
    • The French Revolution soon led to a prolonged war between Great Britain and France that did not end until Napoleon’s final defeat at Waterloo in 1815.
    • Under the terms of the Franco-American alliance of 1778, the United States was a French ally, bound to defend her possessions in the West Indies. Washington resisted pressure from supporters of both France and Great Britain. On April 22, 1793 he issued a Neutrality Proclamation declaring the United States “friendly and impartial toward the belligerent powers.” As America’s chief diplomat, Washington did not require the consent of either Congress or his cabinet to issue the Neutrality Proclamation.
foreign affairs under washington1
Foreign Affairs Under Washington
  • Jay’s Treaty, 1794
    • A number of issues strained relations between the United States and Great Britain. The British still refused to evacuate forts in the Northwest Territory. In addition, British naval commanders seized neutral ships trading with the French West Indies. This policy led to the seizure of some 250 American merchants ships.
    • Determined to avoid war with Great Britain, Washington sent Chief Justice John Jay to London with orders to negotiate a treaty resolving the issues dividing the two countries. Jay brought back a treaty in which the British promised to evacuate the Northwest forts and pay damages for seized American ships. However, they refused to renounce their right to make future seizures. Jay also agreed that the United States would pay the debts owed to British merchants on pre-Revolution accounts.
foreign affairs under washington2
Foreign Affairs Under Washington
  • Jay’s Treaty had a number of important diplomatic consequences. It kept the peace with Great Britain, strained relations with France and induced Spain to agree to a surprisingly favorable treaty. The Spanish feared that Jay’s Treaty foreshadowed an Anglo-American alliance. They therefore signed Pinckney’s Treaty of 1795 granting the United States free navigation of the Mississippi River and the right to deposit goods at New Orleans.
  • Jay’s Treaty also had significant domestic consequences. Led by Jefferson, southern planters vehemently opposed the treaty. They protested that it forced them to pay the lion’s share of pre-Revolutionary debts while New England merchants collected damages from their seized ships. The ratification fight over Jay’s Treaty disputes between Hamilton’s Federalist supporters and Jefferson’s Democratic-Republican supporters.
foreign affairs under washington3
Foreign Affairs Under Washington
  • Washington’s Farewell Address, 1796
    • In his famous Farewell Address to the nation in 1796, Washington urged future American leaders to avoid forming permanent alliances with foreign nations.
    • Washington’s Farewell Address had a significant impact upon American foreign policy. For example, following World War I Republican congressmen used Washington’s views to justify their refusal to support the League of Nations. During the 1930s, many congressional leaders used Washington’s Farewell Address to justify a policy of isolationism to avoid becoming entangled in European conflicts.
the emergence of political parties
The Emergence of Political Parties
  • Origins
    • Political parties are not mentioned in the Constitution. Led by James Madison, the Framers opposed political parties as sources of corruption and vehicles for self-interest and personal ambition.
    • During the Washington administration political parties began to coalesce (form, unite) around the economic policies and political philosophies of Alexander Hamilton and Thomas Jefferson.
    • The Federalist Party supported Hamilton’s programs while opponents led by Jefferson formed the Democratic –Republican Party.
    • The question of how America should respond to the French Revolution further deepened the division between Federalists who supported Great Britain and Democratic-Republicans who sympathized with France.
the emergence of political parties1
The Emergence of Political Parties
  • Federalists
    • Led by Alexander Hamilton and John Adams
    • Drew support from New England and eastern port cities
    • Favored a strong central government and a loose interpretation of the Constitution
    • Supported the national bank and protective tariffs
    • Favored commercial interests
    • Favored the British over the French
the emergence of political parties2
The Emergence of Political Parties
  • Democratic-Republicans
    • Led by Thomas Jefferson and James Madison
    • Drew support from the South and frontier farmers
    • Favored a weak central government and a strict interpretation of the Constitution
    • Opposed the national bank and protective tariffs
    • Favored agricultural interests
    • Favored the French over the British
the alien and sedition acts
The Alien and Sedition Acts
  • Adams inherited an undeclared Quasi-War with France. By mid-1797, French corsairs had plundered some 300 American merchant ships. Congress responded by suspending commerce with France, creating the Navy Department, enlarging the army, and renouncing the Franco-American alliance of 1778.
the alien and sedition acts1
The Alien and Sedition Acts
  • Adams resisted enormous pressure to declare war on France. He defied Hamilton and other war hawks by sending new envoys to France. Now led by Napoleon Bonaparte, the French preferred to avoid war with the United States and concentrate on their conflict with Great Britain.
  • The Federalists took advantage of the anti-French furor to pass a series of laws known as the Alien and Sedition Acts. These acts were intended to punish the Democratic-Republicans.
      • The Naturalization Act raised the residency requirement for U.S. citizenship from 5 to 14 years. Outraged Democratic-Republicans insisted that the act’s reap purpose was to prevent immigrants from voting for their party.
      • The Alien Acts authorized the president to deport dangerous aliens.
      • The Sedition Act made it illegal to speak, write, or print any statements about the president that would bring him “into contempt or disrepute.”
the kentucky and virginia resolutions
The Kentucky and Virginia Resolutions
  • The Federalists controlled all three branches of the federal government in 1798. Jefferson and Madison believed that the Alien and Sedition Acts embodied a threat to individual liberties caused by unchecked Federalist power.
  • Jefferson and Madison anonymously wrote a series of resolutions that were approved by the Kentucky and Virginia legislatures. They denounced the Alien and Sedition Acts as “alarming infractions” of constitutional rights. The resolutions formulated a states’ rights doctrine asserting that the Constitution arose as a compact among sovereign states. The states therefore retained power to challenge and, if necessary, nullify federal laws.
  • The immediate dispute over the Alien and Sedition Acts faded when the laws expired on 1801. However, the Kentucky and Virginia Resolutions advanced arguments that John C. Calhoun adopted during the nullification crisis of the 1830s.
aligning parties of yesterday with parties of today
Aligning Parties of Yesterday with Parties of Today
  • Compare and contrast the Federalists with the Democratic Republicans (Make sure to look at all important categories: military, interpretation of Constitution, national bank, deficit spending, etc.)
  • Compare and contrast the Republicans and Democrats of today.
  • Which party today reflects Federalists principles? Defend your response.
  • Which party today reflects Democratic Republican principles? Defend your response.
  • Which party do you believe is more correct – then and now? Defend your response.