Two Party System LO II: Jefferson vs Hamilton

Learning Objective II:

Discuss the first two party system (between Federalists and [Democratic] Republicans) in the United States began around 1791 during George Washington's presidency and lasted until the 1816 presidential election following the War of 1812.   Be sure to discuss the factors that led to the breakup of the Federalist Party.  

The two-party system is such a familiar feature of American national government that it is difficult to realize that the men who formed the Constitution did not plan for it. See Federalist Paper Number 10

In fact, almost all the framers despised the idea of “factions”. In the Constitution they tried create a government that would discourage the formation of political parties.

The framers knew that conflict between organized groups was bound to occur as it had occurred during the drafting of the document itself. Planters would be pitted against merchants, slave holders against non-slave holders, the rich against the poor. Such divisions in society were bound to lead to factions, which would struggle to gain control and federal governments. These struggles would bring out people’s worst failings: ambition, selfishness, and deceit. In order to gain the advantage, political parties would stop at nothing. They might mobilize their supporters by appeals to fear and greed. People’s loyalties would not be to their country but to their party.

The framers of the Constitution tried to create a government that would be beyond the reach of factions and the different interests groups. They believed that the system of checks and balances would make it impossible for any group to gain control of the whole federal structure. For example, the president would not be the tool of a political party because he was elected by the Electoral College, not the people. Since federal judges were to be appointed for life, they would not depend on party support for their offices. The selection and structure of Congress was divided to make it more difficult for a party to control. The House of Representatives was and still is popularly elected and they must run for re-election every two years. Senators are elected for terms of six years and are thus more independent than members of the House. Senators were at first chosen by the State Legislature until the passage of the 17th amendment to the Constitution in 1913 which made them popularly elected.

However, the very fears the Founding Fathers had about political factions developed in the very beginning over the forming and ratification of the Constitution. These factions were called Federalists and Anti-federalists.

The first national parties developed out of contests in Congress in the early 1790's over Hamilton's financial program. Madison and Jefferson first organized their opposition to Hamilton's program only in Congress and did not anticipate creating a permanent, popular party.

This clip highlights perfectly the foundations of the first political parties:

Alexander Hamilton was the best-known member of the Federalist party, now that Washington had bowed out. But his financial policies, some of which had fattened speculators, and his suggestions that the president and senators be elected for life had made him so unpopular that he could not hope to be elected president 

The Federalists were forced to tum to the experienced but ungracious John Adams who had no appeal to the masses and had no desire to cultivate any Adams suffered from several handicaps, one of which was following in the footsteps of Washington. Another problem Adams faced was that Hamilton hated him and secretly plotted with some of Adams' cabinet members against him

TWO EVENTS RUINED ADAMS POLITICAL CAREER

First was in foreign policy and involved the X, Y, Z Affair. Foreign affairs immediately occupied Adams' full attention. The French government regarded the Jay Treaty signed by the United States during Washington's administration with the British an affront, particularly after the French effort during the American War for independence.

 Relations between the two countries steadily deteriorated and in 1797 French privateers began seizing American ships; and within a year they had captured more than 300 vessels. In order to avoid further conflict Adams sent a three man commission to negotiate with the French. At the start of negotiations the American commissioners were insulted by demands for bribes by the three French commissioners. The American opted to come home.

The diplomatic humiliation suffered by the three commissioners set off a domestic political explosion when Adams presented the commissioners report to Congress. The three Frenchmen were dubbed Mr. X, Y, and Z in the report that spelled out the demand for bribes and lead to the Federalists in Congress to cry for war

The X, Y, Z Affair did lead to an undeclared war (Quasi-War) from 1798-1800. But Adams brought an end to the war against the desires of many of his own party members (Hamilton's supports) in a treaty called the Convention of 1800. He also threatened to resign if his party did not support his efforts. As a result the Federalists party split beyond repair and this helped make it possible for the Republicans to win the election of 1800.

Alien and Sedition Acts

The second event which impacted Adams' presidency involved domestic policy and centered around the Alien and Sedition Acts. Because of the results of the X, Y, Z Affair with France, and the undeclared war that followed, the passions of domestic politics became really heated during Adams' (1797-1801) administration. The Federalists had meanwhile capitalized on the anti-French frenzy to drive through Congress a series of laws in 1798 designed to silence their Jeffersonian foes of political criticism.

These laws were called the Alien and Sedition Acts. The acts gave the president the power to deport foreigners who were critical of the President , Congress or the country in general.

The Acts were aimed at the political activity of the pro-French immigrants or anti-British Irish . Besides threatening to deport the immigrants one of the acts (Naturalization) raised the residence requirement for American citizenship from 5 to 14 years. The act was aimed at keeping the aliens from voting Republican .

The last of the Alien Acts and the one that caused Adams and the Federalists the most terrible was the Sedition Act. The act was intended to silence Republican newspapermen and provided for a fine and or imprisonment for anyone who tried to "impede the operation of any law" or who uttered any "false, scandalous and malicious" criticism of high government officials.

Under the act, about 25 persons were arrested and 10 convicted, most of them Republican editors who were conveniently got out of the way by heavy fines or jail sentences. A tavern loiterer in Newark, New Jersey, was jailed for expressing the wish that the wadding of the cannon shot fired in the President's honor might ledge in Adams' backside. The Sedition Act made martyrs for the Republican Party an made the Federalists and John Adams very unpopular which helped the Republicans and Jefferson win the election of 1800.

The Virginia and Kentucky Resolutions were the Republican reaction to the Sedition Act. The resolutions appealed to the first amendment of the Constitution which forbids Congress to pass any law abridging the freedom of speech or of the press . The Federalist layers adopted Blackstone's definition that freedom of the press meant merely freedom from censorship prior to publication. The Republicans' protest was led by Jefferson and Madison , who proposed the resolutions. The resolutions attacked the Federalist broad interpretation of the Constitution and supported the Republican's weak interpretation, which gave justification for states' rights.

The resolutions claimed that the states composing the United States had entered into a compact (the Constitution) to which the states were equal parties and thus had equal rights to judge for themselves when the compact had been violated. The resolutions were sent to the other state legislatures with hope that they might receive favorable action, but nothing happened as the resolutions just faded away when the Federalists stopped enforcing the Sedition Act. The net effect of the resolutions was that they made clear to the public the policies of each party as to how the government should be run. The influence of the resolutions did not die as almost every politician between 1798 and 1860 appealed to the doctrine of states rights when his section seemed oppressed. The Civil War was supposed to have killed the resolutions, but their theme has been quoted from the civil rights movement in the 1960's to the present.

It's important to distinguish Jefferson's Republican Party from the Republican Party that exists in the United States today. The present-day Republican Party was founded in the 1850s after the breakup of the Second Party System. In order to avoid confusion, historians have traditionally referred to Jefferson's party as the Jeffersonian Republican Party, although the "Democratic-Republican" terminology used by political scientists has lately become more common (in spite of its historical inaccuracy).

​Strong Central Government vs. States' Rights

The difference between the Federalists and the Republicans concerned the role of the central government. Although the Constitution was drafted and ratified in order to create a stronger central government than had existed under the Articles of Confederation, the Constitution still retained many features of federalism, which limited the power of the central government. In The Federalist Papers, Madison specifically reassured states' rights advocates that the Constitution would not destroy the power of state governments.

"The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite."  -- Federalist No. 45 (Madison) 

While Federalists feared anarchy, Jefferson and Madison were much more fearful of tyranny. During Shays' Rebellion, Jefferson wrote to Madison, "a little rebellion now and then is a good thing." Rationally, Jefferson did not see how one rebellion in a single state threatened the existence of the United States, but he feared that a strong central government could place the states at risk of having their rights stripped away as they had been at the outset of the American Revolution. "I am not a friend to a very energetic government," Jefferson wrote, "It is always oppressive." This view of government was behind all of Jefferson's efforts to keep the power of the central government as limited as possible, fearing oppression (which he had experienced) more than anarchy (which he had not experienced).

​Strict vs. Loose Construction of the Constitution

In order to limit the power of the central government, Jefferson interpreted the Constitution as a strict constructionist. To Jefferson, the government only had the powers that were enumerated (specifically listed or numbered) in the Constitution. Hamilton, a loose constructionist, advocated for the doctrine of implied powers, claiming that by granting some powers to the central government in the Constitution, the Framers had implied a grant of other powers that will assist the government in executing the enumerated powers.

Hamilton's doctrine of implied powers was based on the Elastic ("Necessary and Proper") Clause of the Constitution, which states that, "The Congress shall have Power... to make all Laws which shall be necessary and proper for carrying into Execution... all other Powers vested by this Constitution in the Government of the United States." Jefferson and Hamilton disagreed on the extent to which the Elastic Clause conferred powers to the central government beyond the enumerated powers.

Constituents: The Support Bases of the Federalists and Republicans

Every political movement in a society with representative government depends highly upon the constituencies being represented by each political faction. Hamilton and the Federalists drew their support largely from Northeastern coastal areas that were highly dependent on commerce. These were the same people who had advocated most strongly for a stronger central government that would have the power to control trade. The Northeast was also cultivating a manufacturing sector, which Hamilton sought to use the power of the central government to promote.

The Jeffersonians, on the other hand, represented traditional agricultural interests in the South and the West. These interests were doing just fine during the 1790s and only needed the government to stay out of the way in order to thrive. "Those who labour in the earth are the chosen people of God," Jefferson wrote in his Notes on the State of Virginia. Jefferson envisioned the United States as an agrarian republic inhabited by virtuous farmers who were spared the many vices of the unwashed masses in the cities of Europe. He believed that an agricultural economy was essential​ to the maintenance of a republican form of government.

Economic Development vs. Laissez-Faire

Alexander Hamilton believed that the future of the United States as a powerful nation depended on the development of a manufacturing sector on par with that of Britain. He believed that government would be an essential support for building a manufacturing sector that would make the United States an economic and military power. Jefferson, who saw no need for domestic manufacturing when the United States could trade for European manufactured goods, resisted Hamilton's plans to develop a manufacturing sector.

Jefferson advocated for a laissez-faire (let it be) approach by government toward economic involvement. His ideas were influenced not only by his devotion to agriculture, but also by the influence of Adam Smith's recently published book, Wealth of Nations, which advocated laissez-faire and free trade as the best paths to economic growth. Jefferson's "hands off" approach contrasted with Hamilton's "hands on" approach to government's role in the economy.

The National Bank

By far, the most famous disagreement between Jefferson and Hamilton was on the issue of the national bank. Hamilton believed that the establishment of a national bank was "necessary and proper" for helping the government to execute its enumerated powers in the financial sector, such as collecting taxes, borrowing money, and coining money. 

Jefferson saw Hamilton's plan for a national bank as an unconstitutional seizure of power by the federal government. At no point does the Constitution ever explicitly authorize Congress to charter a bank. Jefferson also opposed the bank on economic grounds, as he believed that it would increase the central government's role in the economy and work for the benefit of commercial and manufacturing interests. He advised President George Washington to veto the bill that created the First Bank of the United States, but Washington ultimately went with Hamilton's advice on the matter.

To download the primary sources from which I've drawn these quotes, click here.  

Protective Tariff vs. Free Trade

​In order to help with the establishment of a domestic manufacturing industry, Hamilton advocated for a tariff that was higher than what was necessary to fund the government, known as a protective tariff. A protective tariff would artificially increase the price of foreign manufactured goods in order to encourage Americans to buy more expensive products manufactured domestically, which would help with the growth of domestic manufacturing. 

Jefferson opposed protective tariffs for both constitutional and economic reasons. Southern farmers who depended on foreign trade would find themselves paying more for the manufactured goods that they bought from Europe, so Jefferson's laissez-faire approach benefited them most. In addition, the Constitution empowers the government to levy taxes in order to "pay the Debts and provide for the common Defense and general Welfare of the United States." Since the objective of a protective tariff meets none of these criteria, Jeffersonians believed that such a tariff was unconstitutional and that only revenue tariffs should be imposed by the central government. The constitutionality of protective tariffs would continue to be a divisive issue in the United States for decades, culminating in the Nullification Crisis following the Tariff of 1828.

Federal Assumption of State War Debts

One of Alexander Hamilton's goals was to build public credit. At the time the Constitution was ratified, the United States government had a massive debt that it was making little progress in repaying. Some states, such as Massachusetts, had similar debt problems as a result of the Revolutionary War. In order to effectively build public credit, Hamilton proposed that the federal government assume the war debts of the states.

Jefferson opposed Hamilton's plan to assume state debts because it would bind the states more closely together and strengthen the central government. Also, as a Virginian, he came from a state that had paid its war debts in full and would have to pay the war debts of other states under Hamilton's plan.

In what is known as the "Dinner Table Compromise" (or the Compromise of 1790), Hamilton got Jefferson and Madison to go along with his plan for the federal government to assume state war debts in return for a promise that the federal capital would be moved from New York (the financial center of the United States) to a site on the Potomac River that separated Virginia from Maryland. Jefferson and Madison believed that this would remove the government from the influence of the financial sector and that this would outweigh the impact of Hamilton's debt assumption plan, but today, the federal government can hardly be considered outside of the influence of New York's powerful financial sector.

Foreign Policy: France vs. Britain

Disagreements between Jefferson and Hamilton were not limited to domestic policy. When the French Revolution plunged Europe into a series of continental wars, Jefferson advocated that the United States should support the French Republic as a sister republican government. Jefferson believed that the very existence of the United States depended on European nations adopting republican governments. While Jefferson may not have condoned the excesses of the French Revolution, he found a violent revolution preferable to a continued state of absolute monarchy in France.

Hamilton and the Federalists did not share Jefferson's enthusiasm for the French Revolution, believing it to be a threat to the stability of Europe. Hamilton was an admirer of the British system of government and saw the French Republic as going far beyond that form of balanced government into something that could degenerate into mob rule.

Jefferson was disappointed when Washington issued his Neutrality Proclamation in response to the war between France and Britain. In spite of this disappointment, Jefferson would later come to appreciate what would become one of George Washington's most enduring presidential legacies and the centerpiece of his famous Farewell Address.

The End of the First Two Party System

The first two party system in the United States lasted through the War of 1812, after which Federalist leaders were branded in the popular mind as un-American due to their role in the ill-fated Hartford Convention. James Monroe's election as president ushered in a brief period of non-partisanship known as the "Era of Good Feelings."