Hamilton, Jefferson and the Emergence of Political Parties Birth of a Nation 1.6

1.6 Notes can be found on Coach Quinn’s webpage

H AMILTON ’ S E CONOMIC P LAN ● President Washington’s Secretary of Treasury. ● Hamilton absorbed all the states war debts into the federal government.

State’s Debts (Bonds) - The bonds were sold to raise money for the Revolutionary War effort. - Many were opposed to this because speculators had bought many of the bonds from the original owners. - Hamilton wanted this because these rich individuals would have a ‘stake’ in the government.

State’s Debts (cont) - Hamilton also wanted the national government to absorb all state debts. - Many southern states (except SC) opposed because they had already paid their debts. - A compromise was reached that the capital would be moved further south…….and that’s how Washington D.C. became the capital.

H AMILTON ’ S P LAN ● He wanted to: ● implement an excise tax (tax per unit produced) on whiskey. ● Impose a tariff (taxes on import), which would strengthen US business. ● Start a national bank.

R EACTIONS TO P LAN ● Washington was onboard with Hamilton, but not everyone was. ● Jefferson had a strict interpretation of the Constitution. ● He argued the government couldn’t create a bank because the Constitution didn’t say they could.

H AMILTON ’ S REACTION ● Hamilton had a loose interpretation. ● He believed the necessary and proper clause of the Constitution gave permission to charter a bank for economic reasons. ● Basically to be able to coin money.

R EGIONAL R EACTIONS ● Southerners opposed Hamilton’s plan because they opposed tariffs. ● They thought US tariffs would cause other nations to impose tariffs, which would hurt the South’s economy. ● Westerners disliked the whiskey tax.

W HISKEY R EBELLION ● Pennsylvanian farmers refused to pay the tax and resorted to violence. ● President Washington ended the revolt by organizing a military force that squelched them.

The Rise of Political Parties

P ARTIES F ORM ● Hamilton was a key factor in the creation of the Federalist party. ● The Democratic-Republicans were led by Thomas Jefferson. ● They had serious differences about how things should be done.

F EDERALISTS ● Favored a strong national government. ● Power should be in the hands of the well- educated, wealthy upper class (not hands of everyone).

F EDERALISTS ( CONT ) ● Believed the nation’s economy should be based on manufacturing, shipping and commerce and not agriculture. ● Interpreted the constitution loosely as giving powers not specifically stated.

D EMOCRATIC -R EPUBLICANS ● Favored states retaining authority. ● Wanted power in the hands of the people because that was the safest store of power.

D EMOCRATIC -R EPUBLICANS ( CONT ) ● Thought the nation’s economy should be agrarian based (based on agriculture). ● Interpreted the Constitution strictly as giving powers only as stated.

C ONFLICT BETWEEN P ARTIES ● Global politics became another major concern. ● France and Britain were at war. ● US wanted to remain neutral and have good relations with both. ● This proved impossible.

C ONFLICT BETWEEN P ARTIES ( CONT ) ● Democratic-Republicans favored the French (because of the Revolution). ● Federalists supported neutrality (fearful of France become too democratic). ● Congress passed some laws to help encourage neutrality.

A LIEN AND S EDITION A CTS ( CONT ) ● The Sedition Act severely limited free speech and expression. ● Federalists often used the Sedition Act to silence critics (usually Democratic-Republicans).

F EDERALISTS ( LONG TERM ) ● Their power faded after the War of ● The long-term effects of political parties continues today.