History 103: US History I

Although President Washington warned against the nation falling into political factions, the different views of the Constitution held by Alexander Hamilton and the Federalists and Thomas Jefferson and the Democratic-Republicans set the path for the two-party system that the U.S. has today.

Hamilton vs. Jefferson

This lesson really shows us the origins of the two-party political system. It all begins with Alexander Hamilton at the lead of the Federalists and Thomas Jefferson leading the Democratic-Republicans - from here out, we'll say 'Republicans' for short.

The Federalists

Hamilton's group was made up of merchants, bankers and manufacturers, with some wealthy farmers and Southern plantation owners. They were mostly well-educated and owned property. Most of them were in New England and along the coast.

The Republicans

Jefferson's cohorts were mostly artisans, shopkeepers, frontier settlers, backcountry farmers and poor farmers. They were mostly ill-educated and illiterate. The majority of them were settled in the interior regions. Obviously, Jefferson himself was a plantation owner who was well-educated, but in time you will learn that Jefferson was sort of a paradox.

Can you imagine what it must have been like for President Washington at cabinet meetings? With his Secretary of State, Jefferson, and Hamilton, his Secretary of the Treasury - talk about getting polar advice! Let's look at the basics of these groups' beliefs on a few topics: The central government, the direction of the U.S. economy, the French Revolution, the national bank and paying the war debt from the revolution.

Positions on the Issues

Central Government

Hamilton favored a strong central government - a large republic that would control factions. He considered 'common people' to be ignorant and incapable of self-government. He believed that the elite should rule, so there should be high voting qualifications.

Jefferson favored states' rights. He believed democratic principles were right. He believed the 'common man' is capable of self-government, and he believed in lowering voting qualifications.

Direction of the U.S. Economy

Hamilton and the Federalists stressed manufacturing, commerce, finance and overseas trade. They wanted tariffs and business protections.

Jefferson and the Republicans wanted a simple agrarian economy. (That basically means a farming economy.) They favored the yeoman farmer - that means the small farmers of the South, not the big plantation owners. They wanted the government to support the interests of the 'common man.'

The French Revolution

Hamilton despised the violence and the social disruption of the French Revolution. Jefferson admired France's republican revolution, saying, 'We are not to expect to be translated from despotism to liberty in a featherbed.' (That means you're gonna have to bump a couple of skulls if you want to get freedom.)

The National Bank

Hamilton wanted Congress to establish a national bank, and sell some of its stock to individual citizens; this would be good for investors in the bank. He said that it was authorized by the Constitution because it was 'necessary and proper.'

Jefferson said a national bank was not 'necessary,' so it was not authorized under the Constitution. Such a bank would benefit commercial classes, not the farmers.

Hamilton called for the creation of the national bank to have a safe place for the government to keep money, make loans to businesses and government and issue bank notes (that's paper money).

Initially, Jefferson opposed the creation of the bank. Citizens had loaned the government money, and he wanted these people at least partially repaid. He accepted Hamilton's plan in exchange for the move of the capital.

Washington's Warnings

As you can see, these men and their factions saw a very different plan for the U.S.

President Washington saw what was happening, and in his farewell address, he actually warned about devolving into separate political parties. He advised the nation to strive for unity. Obviously, the path towards our two-party system was well under way, and it is still going strong today!

Lesson Summary

So let's recap - the Federalists vs. the Democratic-Republicans. Hamilton and the Federalists wanted a strong central government, run by well-educated property owners. Jefferson and the Democratic-Republicans wanted most power to stay with the states and wanted the farmers and the 'common man' to run the nation.