His financial program was intended to allow the new nation state to develop and unite by removing the economic obstacles, mainly the debts it had incurred throughout the war of independence, and to unite the states politically by establishing federal economic success. However some historians see the move as trying to reward wealthy merchants by the clever usage of tariffs and taxes.
His first proposal was to pay off the war debt; he planned to do this by taking on the debt of the states collectively and paying them off, i.e. consolidating the existing debt and taking the liability to the government. This however caused controversy as Jefferson, a Virginian, had commented that, like his state, many states had almost paid off their debt and these states would be taxed in order to pay other states debt. The measure was eventually passed by Congress attached to another piece of legislation after being sent back by the House of Representatives for it to be adjusted; mainly through the persistence of James Madison, another republican.
It is important to discuss Thomas Jefferson at this point as he will become extremely important in the development of the early Republican Party. He was one of the founding fathers and was concerned primarily with the individual freedoms and liberties which the War of Independence had been fought for. He was instrumental in the framing of the Constitution and the drafting of the Declaration of Independence. He was a Liberal politician in the pre-modern sense in the sense that he did not believe in authoritarian government, i.e. an authority which would, in return for national security would take away personal freedoms. I believe this is best displayed in his quote:
“Those who desire to give up Freedom in order to gain Security, will not have, nor do they deserve either one”
It is noted by some historians that he was so adamantly against authoritarian government, that he would have ‘been prepared to endorse an extreme doctrine of state sovereignty in order to protect liberty’. Naturally therefore Hamilton’s financial program, with its aristocratic authoritarian foundation, when compared to Jefferson’s ferocious Liberalism, would cause a certain degree of friction and tension within the Cabinet and we begin see the ideological split that would provide the political basis for partisan politics.
Hamilton’s second proposal was to create a Federal National Bank. A further attempt to unite the Americas through Economic unity, just as it can be compared to the current European Union and its monetary union. He modelled this on the British system of banking and believed national unity would be forged through a common currency. However, Jefferson saw different motives; giving the rich a hand in the nation’s finances; although it was James Madison who called the legislation unconstitutional based on the Constitutions’ clause that Congress could not issue corporate charters. What this episode shows us, was that Jefferson, as well as Madison were ‘strict constructionists’. The term refers to how specifically they follow the letter of the Constitution in order to reflect their understanding of Liberal freedoms.
Further to this policy was Hamilton’s Report of Manufacturers. This caused major controversy as at this time manufacturing was an infant industry and many Congressmen could not see the benefit of attempting to invest this industry. Hamilton claimed that it was to make the America less dependant on imports, especially from Britain, of tertiary goods. Jefferson and Madison however saw Jefferson’s other aims; to take Federal money away from agriculture and from the pockets of their main support base, and to transfer it to the pockets of the already wealthy; Hamilton’s support base.
It was not until further into the same year, (1791), that general ideological opposition turned into rebellion. Whisky was an important part of the western states economy and when a tax was levied on Whisky, dissatisfaction swept the states in which republicanism was growing in popularity. Hamilton claimed the tax was to cut down the excessive drinking of the Western Americas, but Jefferson saw it as a more sinister tax, specifically targeting his supporters. More people now started to support Jefferson in protest to the government, and the movement became more organised, and thus it is this piece of legislation, which I believe was the spark to the blue paper of unrest that had been growing throughout the Americas towards Federal Government.
Unrest turned to rebellion and what is significant I believe, in contradiction to Professor Norton*, is that the true importance was not necessarily the show of strength by Federal Government (although this clearly showed the capability of the state to act to suppress extra-constitutional actions), but the effect it had of creating an issue war. By creating an issue war, it allowed one group to mobilise against the other, in this case those who believed that government had overstepped its comfortable mark, (Jefferson Republicans) and those who saw a strong central government as strong and unfailing towards ‘rebels’ (Hamilton’s Federalists).
It was around this time Madison and Jefferson began to refer to themselves as Democrat-Republicans. Although this does not seem particularly significant, I believe it shows that, in 1792, an semi-organised opposition to Hamilton and his followers, was emerging and was not single issue, but rather broadly ideological in its opposition. Hamilton responded by naming his followers ‘the Federalists’ in order to create the psychological link between them and the Constitution.
Shortly after this, revolution occurred in France and I believe that it was this that served to reinforce these divisions. Although both Jefferson and Hamilton would have agreed that staying detached from either side would have been preferable for trade reasons. However the revolution had become big news in America and most Americans welcomed it as similar to their own battle of independence, thus the issue became political. The Republicans backed the French in what they perceived to be the liberating of the French peoples, just as they had against the British. Conversely the Federalists supported the aristocracy and showed the particularly bloody revolution as a demonstration of the dangers of republicanism. There was a division in public opinion over which side America should take. What it did was really to discredit the Federalists as a party of the people, and showed I believe, that the Republicans were truly the party of the people. This had ripple effects throughout the country and Democrat-Republican societies began to form outside Washington. There were party-political organisations which I feel shows the active nature of partisanship by 1793.
The Jay treaty showed in my opinion that a party system had developed in Congress and thus had become significant in American Politics. It was clear that when Chief Justice Jay returned to America there was opposition from the House of Representatives, (the Senate unanimously agreed to appropriate funds, which is significant as they generally represent the aristocracy and thus vote in line with the Federalist), along what looks to be partisan lines. I.e. those Congressman whom we would associate as being Federalist, voted as such and vice-versa. This doesn’t show that there was a party machine like today, but it does show that organised voting could now be playing a significant role in Congress.
1796 saw Washington leave office after his second term and an election for President held. Not surprisingly, the two serious candidates were put forward by the Democrat-Republicans and the Federalists. These were Thomas Jefferson and John Adams, (whom was Vice President at the time). At this time the system would provide two elected positions, i.e. the man with the most votes would become President and the second place candidate would become his vice. Although John Adams won the presidency, Jefferson became Vice-President and the ideological split in the executive became decisive.
There then followed two events which would not contribute in anyway really to the development of partisanship within America, but would prove its existence by 1798. The ‘Quasi-war’ with France would provide the first example of underhand partisan tactics against the Republicans, as they were accused of becoming a subversive element within American society. The victimisation of the group I believe meant that it had established itself as a political force and as such I believe would have proved the existence of partisan politics. Further, the Alien and Sedition Acts, which Professor Norton believes ‘intended to suppress dissent and prevent further growth of the Democratic-Republican Movement’; I believe demonstrated partisan victimisation.
Although this is not conclusive, as it can be argued that by suppressing a group of people for political reasons does not necessarily constitute partisan politics, I believe the evidence of partisanship within Congress and the clear motives behind Hamilton’s financial plan, as well of course as the 1796 election, shows us that by 1796, American politics was divided between the Federalists, and the Democrat-Republicans.
In terms of how much this is due to Jefferson and Hamilton, it is my belief that the two ‘parties’ origins lie very heavily in the philosophies of both individuals. I have shown that Jefferson clearly did believe in the individual rights of citizens which would become the basis of the Democrat-Republicans and that Hamilton, was clearly worried about democracy and especially the rule of the country falling away from the aristocracy, which would form the basis of the Federalist movement. However, other events, such as the French Revolution and the Whisky rebellion clearly had the effect of developing the party’s from small scattered ‘interest groups’ into organised political opposition. Hamilton’s financial plan I believe is especially crucial. I believe that because it was deliberately controversial, and in a time when the people were adjusting to a new Federal government, it may have been this antagonism which mobilised organised political opposition.
http://www.whitehouse.gov/history/presidents/gw1.html
P 197 Norton ….. A People and a nation 7th Edition
P.29 Bowers – Jefferson and Hamilton
P.28 Bowers – Jefferson and Hamilton
P.29 Bowers – Jefferson and Hamilton
P.198 Norton …. A people and a Nation 7th Edition
http://www.jimpoz.com/quotes/category.asp?categoryid=31
P.120 James Read – Power Versus Liberty
P. 199 Norton …. A People and a Nation 7th Edition
P.199 Norton …. A People and a Nation 7th Edition
P.199 Norton …. A People and a Nation 7th Edition
P.200 Norton …. A people and a Nation 7th Edition
*I will refer to the Authors of A People and a Nation collectively under the name Professor Norton
P201 Norton …. A People and a Nation 7th Edition
P202 Norton …. A People and a Nation 7th Edition
P.207 Norton …. A People and a Nation 7th Edition