Conflict in the Gov't

Party Time

The ratification of the Constitution did not put to rest the debates between those who wanted a more active federal government and those who favored states' rights. Within George Washington's cabinet, Alexander Hamilton and Thomas Jefferson battled each other over many issues, including the national bank and government subsidies for manufacturing. The lines drawn between Jefferson and Hamilton formed the basis for the First Two Party System in the United States, which put the Federalists against the Jeffersonian Republicans. This system began around 1791 during George Washington's presidency and lasted until the 1816 presidential election following the War of 1812. The differences between Jefferson and Hamilton regarding the powers of the central government, the proper interpretation of the Constitution, the economy, and foreign policy quickly degenerated into partisanship as other political leaders rallied around Jefferson and Hamilton. Hamilton favored a strong, active, and energetic central government, while Jefferson advocated for a limited federal government that would respect the rights of the states. John Adams sided with the Federalists in spite of some personal and political disagreements with Hamilton, while Jefferson was joined by his close friend, James Madison. Madison's alignment with Jefferson is significant because it represented an end to the political alliance between Madison and Hamilton that produced The Federalist Papers.

Butting Heads

Hamilton's party, which became known as the Federalist Party, retained the branding that Hamilton had used in his campaign to ratify the Constitution. The Jeffersonians began to refer to themselves as Republicans - a lowkey snub at the Hamiltonian Federalists. In calling themselves Republicans, members of Jefferson's faction claimed that theirs was the only party that favored a republican form of government. Jeffersonians frequently referred to their opponents as "monarchists" and "monocrats" who sought to overthrow the republican society that sprang from the American Revolution. To Jefferson, Hamilton was a counter-revolutionary who sought to mold the young United States in the image of Europe.

Strong Central Gov’t vs. States’ Rights

The difference between the Federalists and the Republicans concerned the role of the central government. Although the Constitution was drafted and ratified in order to create a much stronger central government than had existed under the Articles of Confederation, the Constitution still retained many features of federalism, which limited the power of the central government. In The Federalist Papers, Madison specifically reassured states' rights advocates that the Constitution would not destroy the power of state governments. In order to get the Constitution ratified, Federalists had agreed to adopt a Bill of Rights that would protect the rights of the people and the states - the rights of the latter being specifically protected by the Tenth Amendment. While Madison appears to have been acting in good faith with every intention of respecting the spirit of the Bill of Rights, Alexander Hamilton - who presented a plan at the Constitutional Convention to completely do away with state sovereignty and argued in Federalist No. 84 that a Bill of Rights was unnecessary - was determined to make sure that the central government had as much power as possible. This difference in approach was the source of the split between Hamilton and Madison in the 1790s.

Shays’ Rebellion

Shays’ Rebellion was a series of violent attacks on courthouses and other government properties in Massachusetts that began in 1786 and led to a full-blown military confrontation in 1787. The rebels were mostly ex-Revolutionary War soldiers-turned farmers who opposed state economic policies causing poverty and property foreclosures. After the Revolutionary War, most soldiers got little compensation and soon after, they were struggling to make end meet. With no means to move their crops and make money to pay off debts and taxes, Boston authorities began to arrest the farmers and foreclose on their farms. The rebellion was named after Daniel Shays, a farmer and former soldier who fought at Bunker Hill and was one of several leaders of the insurrection.

Why did they start?

The Federalists feared anarchy - complete chaos in the absence of organized central government. Shays' Rebellion alarmed many elites, who saw in it the future of the United States without a strong central government. This is reflected in the Constitution's empowerment of the federal government to "suppress insurrections" - a power not delegated to Congress under the Articles of Confederation. For Federalists, a strong central government was the best guarantee against mob rule. While Federalists feared anarchy, Jefferson and Madison were much more fearful of tyranny. During Shays' Rebellion, Jefferson wrote to Madison, "a little rebellion now and then is a good thing." Rationally, Jefferson did not see how one rebellion in a single state threatened the existence of the United States, but he feared that a strong central government could place the states at risk of having their rights stripped away as they had been at the outset of the American Revolution.

Elasticity

In order to limit the power of the central government, Jefferson interpreted the Constitution as a strict constructionist. To Jefferson, the government only had the powers that were enumerated (specifically listed or numbered) in the Constitution. Hamilton, a loose constructionist, advocated for the doctrine of implied powers, claiming that by granting some powers to the central government in the Constitution, the Framers had implied a grant of other powers that will assist the government in executing the enumerated powers. Hamilton's doctrine of implied powers was based on the Elastic ("Necessary and Proper") Clause of the Constitution, which states that, "The Congress shall have Power... to make all Laws which shall be necessary and proper for carrying into Execution... all other Powers vested by this Constitution in the Government of the United States." Jefferson and Hamilton disagreed on the extent to which the Elastic Clause conferred powers to the central government beyond the enumerated powers.

Hamilton believed in implication while Jefferson believed in enumeration.

Economic Development

Alexander Hamilton believed that the future of the United States as a powerful nation depended on the development of a manufacturing sector on par with that of Britain. He believed that government would be an essential support for building a manufacturing sector that would make the United States an economic and military power. Jefferson, who saw no need for domestic manufacturing when the United States could trade for European manufactured goods, resisted Hamilton's plans to develop a manufacturing sector. Jefferson advocated for a laissez-faire (let it be) approach by government toward economic involvement. His ideas were influenced not only by his devotion to agriculture, but also by the influence of Adam Smith's recently published book, Wealth of Nations, which advocated laissez-faire and free trade as the best paths to economic growth. Jefferson's "hands off" approach contrasted with Hamilton's "hands on" approach to government's role in the economy.

The National Bank

By far, the most famous disagreement between Jefferson and Hamilton was on the issue of the national bank. Hamilton believed that the establishment of a national bank was "necessary and proper" for helping the government to execute its enumerated powers in the financial sector, such as collecting taxes, borrowing money, and coining money.  Jefferson saw Hamilton's plan for a national bank as an unconstitutional seizure of power by the federal government. At no point does the Constitution ever explicitly authorize Congress to charter a bank. Jefferson also opposed the bank on economic grounds, as he believed that it would increase the central government's role in the economy and work for the benefit of commercial and manufacturing interests. He advised President George Washington to veto the bill that created the First Bank of the United States, but Washington ultimately went with Hamilton's advice on the matter.

Assumption of State War Debts

One of Alexander Hamilton's goals was to build public credit. At the time the Constitution was ratified, the United States government had a massive debt that it was making little progress in repaying. Some states, such as Massachusetts, had similar debt problems as a result of the Revolutionary War. In order to effectively build public credit, Hamilton proposed that the federal government assume the war debts of the states. Jefferson opposed Hamilton's plan to assume state debts because it would bind the states more closely together and strengthen the central government. Also, as a Virginian, he came from a state that had paid its war debts in full and would have to pay the war debts of other states under Hamilton's plan. In what is known as the "Dinner Table Compromise" (or the Compromise of 1790), Hamilton got Jefferson and Madison to go along with his plan for the federal government to assume state war debts in return for a promise that the federal capital would be moved from New York (the financial center of the United States) to a site on the Potomac River that separated Virginia from Maryland. Jefferson and Madison believed that this would remove the government from the influence of the financial sector and that this would outweigh the impact of Hamilton's debt assumption plan, but today, the federal government can hardly be considered outside of the influence of New York's powerful financial sector.

Whiskey Rebellion

In January 1791, President George Washington's Secretary of the Treasury Alexander Hamilton proposed a seemingly innocuous excise tax "upon spirits distilled within the United States, and for appropriating the same."1 What Congress failed to predict was the vehement rejection of this tax by Americans living on the frontier of Western Pennsylvania. By 1794, the Whiskey Rebellion threatened the stability of the brand new United States and forced President Washington to personally lead the United States militia westward to stop the rebels. Washington tried to negotiate the tax peacefully. However, by 1794 the protests became violent. In July, nearly 400 whiskey rebels near Pittsburgh set fire to the home of John Neville, the regional tax collection supervisor.

End of the First 2-party system

The first two party system in the United States lasted through the War of 1812, after which Federalist leaders were branded in the popular mind as un-American due to their role in the ill-fated Hartford Convention. James Monroe's election as president ushered in a brief period of non-partisanship known as the "Era of Good Feelings."