Alexander Hamilton and Thomas Jefferson had different ideas about the proper role of government. Their differences lead to many debates and conflicts between them while they were both serving in President Washington's Cabinet.
Jefferson & Hamilton became the leaders of different political parties that were competing with each other for power.
While both Hamilton and Jefferson were working for President Washington in his cabinet, the continuing disagreements with Alexander Hamilton annoyed Thomas Jefferson. Jefferson often felt like Hamilton had successfully convinced President Washington to side with him on most issues. Jefferson strongly disagreed with Hamilton's support for Great Britain, and he was against Jay's Treaty.
In 1793, a frustrated Thomas Jefferson resigned as George Washington's Secretary of State. Jefferson was planning on running for President himself in 1796.
Alexander Hamilton and Thomas Jefferson‘s disagreements made it clear that two different views on how to run the country existed. Eventually, their disagreements would lead to the formation of the first two major political parties, the Federalists and the Democratic Republicans (Anti Federalists).
WHAT'S THE DIFFERENCE?
Federalists believed in a stronger central government, while Democratic Republicans believed in stronger state governments.
The Federalists believed in a loose interpretation of the Constitution. They believed that they could do things that were not actually stated in the Constitution, as long as the Constitution did not state that they could not do it. The Democratic Republicans believed the opposite. They believed that they could only do things that were actually listed in the Constitution.
The birth of these two political parties started the party political system we have today. Many people from each party ran as candidates in the Presidential Election of 1796. John Adams, the Federalist candidate for President, won the election by three Electoral College votes.
Because of the rules at that time, the candidate with the second most votes became Vice President. Thomas Jefferson, a Democratic Republican, won second place. Having a President and a Vice President from different political parties created conflict for the next four years.
In the 1790's the United States had to make a decision about whether or not there would be a national bank.
Alexander Hamilton believed the United States needed to create a national bank to stabilize the economy. Thomas Jefferson thought such a bank would expand the power and the influence of the federal government beyond the limits outlined in the Constitution. Nevertheless, Congress passed a bill to create the First National Bank, and President Washington signed it in 1791.
The First National Bank gave the federal government a place to deposit tax dollars. It helped stabilize US currency. It made loans to the federal government so they pay for items necessary to carry out the duties of government.
While Washington was president, the United States signed Jay's Treaty with Great Britain. This treaty smoothed relations between the United States and Great Britain. Great Britain made the United States its preferred trading partner. Jay's Treaty made the French people angry because they had helped the United States defeat the British, and now they believe the United States had made an alliance with its former enemy at France’s expense.