Rise and Fall of the Federalists (1789-1800) Textbook Outline (Chapter 9)

In 1789, the U.S. Constitution was launched, and the population was doubling every 20 years.

America’s population was still 90% rural, with 5% living west of the Appalachians.

Vermont became the 14th state in 1791, and Kentucky, Tennessee, and Ohio (states where trans-Appalachian overflow was concentrated) became states soon after.

In the twelve years after American independence, laws had been broken and a constitution had been completely scrapped and replaced with a new one. America was also heavily in debt, and paper money was worthless, but meanwhile, restless monarchs watched to see if the U.S. could succeed in setting up a republic while facing such overwhelming odds.

Washington for President

George Washington was an imposing figure, which helped in his getting unanimously elected as president by the Electoral College in 1789.

His long journey from Mt. Vernon to New York (capital at the time) was a triumphant procession filled with cheering crowds and roaring festivities, and he took his oath of office on April 30, 1789, on a balcony overlooking Wall Street.

Washington established a diverse cabinet (which was not necessary Constitutionally).

a. Secretary of State: Thomas Jefferson b. Secretary of the Treasury: Alexander Hamilton c. Secretary of War: Henry Knox

Hamilton and the Public Debt

Hamilton urged the federal government to pay its debts of $54 million and try to pay them off at face value (“Funding at Par”), plus interest, as well as assume the debts of the states of $21.5 million (this was known as “assumption).

Massachusetts had a huge debt, but Virginia didn’t, so there needed to be some haggling. This was because Virginia felt it unfair that all debts were to be assumed by the entire nation. Essentially, its rival states would be at the same level as Virginia, even though they had obtained larger debts.

Dinner Deal-The bargain Virginia would have the District of Columbia built on its land (therefore gaining prestige) in return for letting the government assume all the states’ debts.

Customs Duties and Excise Taxes.

Hamilton used the debt as an asset: the more people the government owed money to, the more people would care about what would happen to the U.S. as a whole nation. To pay off some of the debt, Hamilton first proposed custom duties, and the first one, imposing a low tariff of about 8% of the value of dutiable imports, was passed in 1789.

Hamilton also wanted to protect America’s infant industries, though the U.S. was still dominated by agricultural programs. Little was done regarding this. In 1791, Hamilton secured an excise tax on a few domestic items, notably whiskey (at 7 cents per gallon).

Hamilton Battles Jefferson for a Bank

Hamilton proposed a national treasury, to be a private institution modeled after the Bank of England, to have the federal government as a major stockholder, to circulate cash to stimulate businesses, to store excess money, and to print money that was worth something. This was opposed by Jefferson as being unconstitutional

Hamilton’s Views:

What was not forbidden in the Constitution was permitted.

A bank was “necessary and proper” (from Constitution).

He evolved the Elastic Clause, AKA the “necessary and proper” clause, which would greatly expand federal power.

This is a “loose interpretation” of the Constitution.

Jefferson’s Views:

What was not permitted was forbidden.

A bank should be a state-controlled item (since the 10th Amendment says powers not delegated in the Constitution are left to the states).

The Constitution should be interpreted literally and through a “strict interpretation.”

End result: Hamilton won the dispute, and Washington signed the bank measure into law. The Bank of the United States was created by Congress in 1791, and was chartered for 20 years.

It was located in Philadelphia and was to have a capital of $10 million.

Stock was thrown open to public sale, and surprisingly, a milling crowd oversubscribed in two hours.

America’s first political parties

The Emergence of Political Parties

Some believed Hamilton’s policies (national bank, suppression of Whiskey Rebellion by force, excise tax) seemed to encroach on states’ rights. As resentment grew, what was once a personal rivalry between Hamilton and Jefferson gradually evolved into two political parties: the Federalists and the Democratic-Republicans.

The Founding Fathers had not envisioned various political parties (Whigs and Federalists and Tories, etc… had existed, but they had been groups, not parties).

Since 1825, the two-party system has helped strengthen the U.S. government, helping balance power and ensuring there was always a second choice to the ruling party

Impact of the French Revolution

At first, people were overjoyed, since the first stages of the revolution were not unlike America’s dethroning of Britain.

After the revolution turned radical and bloody, the Federalists rapidly changed opinions and looked nervously at the Jeffersonians, who felt that no revolution could be carried out without a little bloodshed. Still, neither group completely approved of the French Revolution.

Proclamation of Neutrality

With war between Great Britain and France, the Democratic-Republicans called on the US to enter on the side of France

Hamilton leaned toward siding with the British, as doing so would be economically advantageous. Washington knew that war could mean disaster and disintegration, since the nation in 1793 was militarily and economically weak and politically disunited.

In 1793, he issued the Neutrality Proclamation, proclaiming the U.S.’s official neutrality and warning Americans to stay out of the issue and be impartial. The Democratic-Republicans were furious, and this statement of neutrality irked both sides, France and England.

Citizen Genet and Tensions with France

Soon afterwards, Citizen Edmond Genêt, landed at Charleston, South Carolina, as representative to the U.S.

On his trip to Philadelphia, he had been cheered by Jeffersonian Democratic-Republicans, who supported France, and he came to wrongly believe that Washington’s Neutrality Proclamation didn’t truly reflect the feelings of Americans.

Also, Genet equipped privateers to plunder British ships and to invade Spanish Florida and British Canada.

He even went as far as to threaten to appeal over the head of Washington to the sovereign voters.

Tensions with Great Britain

Britain still had many posts in the frontier, and supplied the Native Americans with weapons.

The Treaty of Greenville, in 1795, had the Native Americans cede their vast tract in the Ohio country to the Americans after General “Mad Anthony” Wayne crushed them at the Battle of Fallen Timbers on August 20, 1794.

Ignoring America’s neutrality, British commanders of the Royal Navy seized about 300 American merchant ships and impressed scores of sailors into their navy. Many cried out for war with Britain, or at least an embargo, but Washington refused, knowing that such drastic action would destroy the Hamilton financial system.

Jay’s Treaty and Pinckney’s Treaty

In a last-ditch attempt to avert war, Washington sent John Jay to England to work something out.

The results of the Jay Treaty with Great Britain:

Britain would repay the lost money from recent merchant ship seizures called impressment, but said nothing about future seizures or supplying Native Americans with weapons.

America would have to pay off its pre-Revolutionary War debts to Britain.

Democratic-Republicans were furious, as the southern farmers would have to pay while the northern merchants would be paid. Jay’s effigy was burnt in the streets. However, war was avoided.

At this time, the Pinckney Treaty of 1795 with Spain gave Americans free navigation of the Mississippi and the large disputed territory north of Florida.

It was the pro-British Jay Treaty that prompted Spain to be so lenient in the Pinckney Treaty

Washington’s Farewell

After his second term, Washington stepped down, creating a strong two-term precedent that wasn’t broken until FDR was president.

His Farewell Address warned against political parties and building permanent alliances with foreign nations.

John Adams Becomes President

John Adams, the ablest statesmen of his day, won, 71 to 68, against Thomas Jefferson, who became vice president.

Adams had a hated rival and opponent in Hamilton, who plotted with Adams’ cabinet against the president, and a political rival in his vice president.

He also had a volatile situation with France that could explode into war.

Quasi-War with France

France was furious about the Jay’s Treaty, calling it a flagrant violation of the 1778 Franco-American treaty, and so began seizing defenseless American merchant ships.

In the XYZ Affair, John Adams sent three envoys (including John Marshall) to France, where they were approached by three agents, “X,” “Y,” and “Z,” who demanded a load of 32 million florins and a $250,000 bribe just for talking to Talleyrand.

Even though bribes were routine in diplomacy, such a large sum for simply talking weren’t worth it, and there was no guarantee of an agreement.

The envoys returned to America, cheered by angry Americans as having done the right thing for America.

Irate Americans called for war with France, but Adams, knowing just as Washington did that war could spell disaster, remained neutral.

Thus, an undeclared war mostly confined to the seas raged for two and a half years, where

American ships captured over 80 armed French ships.

Talleyrand, knowing that war with the U.S. would add another enemy to France, declared that if another envoy was sent to France, that it would be received with respect.

in 1800, the three American envoys were met by Napoleon, who was eager to work with the U.S.

The treaty in 1800, signed in Paris, ended the 1778 alliance in return for the Americans paying the claims of its shippers’ as alimony.

In keeping the U.S. at peace, John Adams plunged his popularity contributing to his lost in the election of 1800, but he did the right thing, keeping the U.S. neutral while it was still weak.

Alien and Sedition Acts

With the Alien Laws, Federalists therefore raised the residence requirements for aliens who wanted to become citizens from five to fourteen years, a law that violated the traditional American policy of open-door hospitality and speedy assimilation.

Sedition Act-Another law let the president deport people during peacetime and jail them during times of war.

The Sedition Act provided that anyone who impeded the policies of the government or falsely defamed its officials, including the president, would be liable to a heavy fine and imprisonment;

Law was aimed at Jeffersonian newspaper editors and the Democratic-Republicans

While obviously unconstitutional, this act was passed by the Federalist majority in Congress and upheld in the court because of the majority of Federalists there too.

It was conveniently written to expire in 1801 to prevent the use of it against themselves.

This extremely unpopular law helped Jefferson defeat Adams in the election of 1800.