1. Formation of Political Parties in the United States Alexander Hamilton Vs Thomas Jefferson

2. Hamilton and Jefferson disagreed on most issues facing the new government. They realized that someday Washington would leave the presidency. Who would take control of the government when this happened, the Hamiltonians or the Jeffersonians? In order to position themselves for this time, these 2 groups formed factions which became the first two political parties.

3. One faction was led by Alexander Hamilton. It was called the Federalists. This faction believed that the federal government could do more than what is written in the Constitution. This is called “Loose Construction” of the Constitution. A second faction was led by Thomas Jefferson and James Madison. It was called the Democratic-Republicans. This faction believed that the federal government could do only what was written in the Constitution. This is called “Strict Construction” of the Constitution.

4. 5 Major Disagreements between the Factions 1. Funding the Foreign, State, and National Debt FederalistsRepublicans -Must pay off the foreign debt -US must assume the state debts -Opposed Assumption; not fair to called “assumption” force states to pay off other states’ debts; Southern states tended to have already paid off their debts. -US must pay off the bonds at full -Opposed “funding at par”; should face value, called “funding at par” only pay off bonds at a fraction of their face value because it will reward speculators (who bought the bonds at a reduced price) at the expense of poor farmers

5. 2.Creation of the Bank of the United States (National Bank) Federalists Republicans Supported it Opposed it -It will issue federal currency -It is unconstitutional. This and strengthen the economy power is not mentioned in the Constitution -It will make all other banks in the US stronger. -Hamilton thinks it is in the -Government will be Government’s best interests benefitting wealthy citizens To make the rich people at the expense of poorer richer, so the more powerful citizens (Northeast vs. citizens will support the govt. Southern farmers)

6. 3. Whiskey Excise Tax Federalists Republicans Supported it Opposed it -It will generate revenue -It penalizes small farmers. -It places a tax burden on -It may provoke a rebellion the less wealthy. -Hamilton feels it may lead -It will make the westerners to a rebellion which will give anti-government and the government a chance to anti-Washington. prove its power.

7. 4. Protective Tariff Federalists Republicans Supported it Opposed it -It will generate revenue -It is bad for farmers -It will protect the new -Industrialization is dangerous industries in the US because it leads to large (most in the North) cities, poverty, pollution,etc. -It will allow the US to be -Farmers make the best self-sufficient. citizens in a republic, because they are used to making important decisions

8. 5. Response to the French Revolution Federalists Republicans Ignore the French. We must help the French, Get to be better friends because they helped us with England. defeat England in the Revolutionary War.

9. Party NameFederalistsDemocratic-Republicans LeadersAlexander Hamilton and John Adams Thomas Jefferson and James Madison SupportersManufacturers Business People Wealthy Northern cities Common People Farmers Poor Rural and Southerners Ideas of GovernmentStrong Central GovernmentStrong State Governments Constitutional Powers Loose Construction of the Constitution Use Elastic Clause Strict Construction of the Constitution Only do what is written in the Constitution Domestic IssuesSupported a National Bank, High Tariffs and Industrialization Distrusted foreigners Opposed National Bank Supported Low Tariffs, remaining rural with many farms, and allowing immigrants to become citizens easily Foreign PolicyBecome friends with England Stay friends with France