1. Federalists vs. Democratic Republicans

2. Early Formation of Parties Parties first formed to deal with the ratification of the Constitution 1787-1789 Federalists supported the new Constitution and felt its increased powers would be good for the country Anti-Federalists were against the new Constitution and worked against ratification – Anti-federalists eventually agreed to support ratification if a Bill of Rights was added to protect the peoples’ rights

3. Federalists After ratification, the Federalists stayed organized and became the first political party Strong Central Govt Loose Constructionists – Article I, sect 8 Elastic or Necessary and Proper Clause Support comes mainly from the NE Pro-business/manufacturing/Large Farmers High taxes Large Army (and want to create a navy) Support Hamilton’s Plan and the Alien and Sedition Acts Hamilton, Adams… Washington???

4. Democratic Republicans Developed mainly from the Anti-Federalists Weak or Limited Govt. Strict Constructionists (10 th Amendment) Support the French and want to help them in their revolution as pay back for their help in ours Support comes from the South and West Low taxes Small army Support small farmers Against Hamilton’s Plan and the Alien and Sedition Acts Jefferson, Burr, Madison

5. Hamilton’s Plan Hamilton had been Washington’s assistant during the Rev War and became the first Secretary of the Treasury under Washington 4 part plan to deal with huge debt from Rev War and to improve the economy #1 Assume and pay in full the Rev War Debt (both federal and state) at full value plus interest owed – Controversial many wanted to claim that the debt was owed by the old govt. under the Articles and therefore shouldn’t be paid by the new govt. Also, many who had owned the debt (soldiers) had sold it for pennies on the dollar and so you really were only protecting the interest of speculators and gamblers – Many states had worked hard to pay off their debt – Makes powerful and rich people want the govt. to succeed so that they will get paid back money they are owed.

6. Hamilton’s Plan (cont.) #2 – Excise Tax on Whiskey – Raise $ to pay off all the debt assumed from the Rev War in part 1 – Prove the government can pass internal taxes #3 – Boost manufacturing – Protective tariffs (benefit NE and manufacturers) Hurts farmers and the South – Subsidies to some industries (iron, steel, shoemakers) #4 National Bank

7. National Bank Hamilton uses the Elastic Clause to justify its creation. Nowhere in the Constitution does it say the Federal Govt. has the power to create a bank. DR’s claim this is unconstitutional (10 th Amend) Semi Private – 80% privately owned Foreign ownership of such an important and powerful institution created fear that English investors would control the govt. Ensure Credit is Available (for manufacturing or large businesses or even the Govt. to borrow) Stable Currency – paper $

8. Jay’s Treaty - 1794 Preview to the War of 1812 Shows how weak the U.S. was British get: – WE give up the right to Neutral shipping – MFN status for British imports into USA – Guarantee repayment of the Rev War debts we owe England USA gets – Payment for ships and cargo seized by British – British promise to give up fort in West that they still occupied – Limited trading rights with India and Caribbean

9. Citizen Genet - 1793 Sent to US by France to support French in wars against British Arrived in SC and began to raise a private militia to help fight British and Spanish interests. 4 ships and a militia! US had declared its neutrality, but this was threatened by Genet. Govt. was overthrown in France and the new Govt. recalled him. He knew he would be executed by the new govt. and begged for asylum in the US. Granted.

10. XYZ Affair - 1797 US sends secret ambassadors to France to stop French seizure of our trade ships. Defend our right to trade as a neutral country not involved in the European wars of the time. French refuse to see our ambassadors (X, Y & Z) Demand bribes to even entertain the idea of listening to our complaints Show us no respect as a country Leads to a huge rise in Anti-french sentiment

11. Alien And Sedition Acts - 1798 Federalists respond to increasing support for the DR’s and anti-French sentiment Seek to stop DR criticism and stop immigration of DR supporters Alien Enemies Act – deports immigrants from countries at war with USA Alien Friends Act – Immigrants must be in USA for 14 years (an increase from the existing 5) before they can apply for citizenship Sedition Act – Limits Anti-government speech – But the only people in power were the Federalists, so it only punished speech against Federalists – All the judges in the USA had been appointed by Federalists so it was only enforced against DR’s – UNCONSTITUTIONAL – 1 st Amendment ?? Free Speech?? – Leads to landslide victory in election of 1800 for DR’s