A conflict took shape in the 1790s between America’s first political parties . Indeed, the Federalists, led by Alexander Hamilton, and the Republicans (also called Demo- cratic-Republicans), led by Thomas Jefferson, were the first political parties in the Western world . Un- like loose political groupings in the British House of Commons or in the American colonies before the Revolution, both had reasonably consistent and principled platforms, relatively stable popular followings, and continuing organizations .

The Federalists in the main rep- resented the interests of trade and manufacturing, which they saw as forces of progress in the world . They believed these could be advanced only by a strong central government capable of establishing sound public




credit and a stable currency . Openly distrustful of the latent radicalism of the masses, they could nonetheless credibly appeal to workers and arti- sans . Their political stronghold was in the New England states . Seeing England as in many respects an ex- ample the United States should try to emulate, they favored good relations with their mother country .

Although Alexander Hamilton was never able to muster the popular appeal to stand successfully for elec- tive office, he was far and away the Federalists’ main generator of ideol- ogy and public policy . He brought to public life a love of efficiency, order, and organization . In response to the call of the House of Representatives for a plan for the “adequate support of public credit,” he laid down and supported principles not only of the public economy, but of effective gov- ernment . Hamilton pointed out that the United States must have credit for industrial development, com- mercial activity, and the operations of government, and that its obliga- tions must have the complete faith and support of the people .

There were many who wished to repudiate the Confederation’s na- tional debt or pay only part of it . Hamilton insisted upon full pay- ment and also upon a plan by which the federal government took over the unpaid debts of the states in- curred during the Revolution . He also secured congressional legisla- tion for a Bank of the United States . Modeled after the Bank of England, it acted as the nation’s central fi-

nancial institution and operated branches in different parts of the country . Hamilton sponsored a na- tional mint, and argued in favor of tariffs, saying that temporary pro- tection of new firms could help fos- ter the development of competitive national industries . These measures — placing the credit of the feder- al government on a firm founda- tion and giving it all the revenues it needed — encouraged commerce and industry, and created a solid phalanx of interests firmly behind the national government .

The Republicans, led by Thomas Jefferson, spoke primarily for agri- cultural interests and values . They distrusted bankers, cared little for commerce and manufacturing, and believed that freedom and democra- cy flourished best in a rural society composed of self-sufficient farm- ers . They felt little need for a strong central government; in fact, they tended to see it as a potential source of oppression . Thus they favored states’ rights . They were strongest in the South .

Hamilton’s great aim was more efficient organization, whereas Jef- ferson once said, “I am not a friend to a very energetic government .” Hamilton feared anarchy and thought in terms of order; Jefferson feared tyranny and thought in terms of freedom . Where Hamilton saw England as an example, Jefferson, who had been minister to France in the early stages of the French Rev- olution, looked to the overthrow of the French monarchy as vindication


of the liberal ideals of the Enlighten- ment . Against Hamilton’s instinctive conservatism, he projected an elo- quent democratic radicalism .

An early clash between them, which occurred shortly after Jeffer- son took office as secretary of state, led to a new and profoundly impor- tant interpretation of the Constitu- tion . When Hamilton introduced his bill to establish a national bank, Jef- ferson, speaking for those who be- lieved in states’ rights, argued that the Constitution expressly enumer- ated all the powers belonging to the federal government and reserved all other powers to the states . Nowhere was the federal government empow- ered to set up a bank .

Hamilton responded that because of the mass of necessary detail, a vast body of powers had to be implied by general clauses, and one of these authorized Congress to “make all laws which shall be nec- essary and proper” for carrying out other powers specifically granted . The Constitution authorized the national government to levy and collect taxes, pay debts, and bor- row money . A national bank would materially help in performing these functions efficiently . Congress, therefore, was entitled, under its im- plied powers, to create such a bank . Washington and the Congress ac- cepted Hamilton’s view — and set an important precedent for an ex- pansive interpretation of the federal government’s authority .

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