Unit 3 Topics
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Jefferson, Hamilton – political parties
Adams Admin
Contribution of Washington, Jefferson,
Hamilton, Adams, Madison, Marshall,
Monroe…
Jefferson’s Presidency – “Revolution of 1800”
or not?
“Era of Good Feelings” or not?
Chapters 10, 11, 12
Federalist Period
1790s
Hamilton, Jefferson, Washington
Interpretation of the Constitution
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Acceptance and ratification of a new Constitution / new
Federal Govt., did not resolve the disagreements about
the nature of government, in particular issues such as
the powers, strength, control of the Central Govt. vs
States
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On the contrary, for the next 12 yrs, American politics
were characterized by a level of political acrimony
about these issues seldom matched in any period
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The framers had “papered over many disagreements,
not solved them”…..disagreements survived to plague
the new government
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Everyone agreed that the Federal Govt. should be
strong – but how strong? how strong or weak should the
states be?.........the balance would continue to be an issue
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The debate centered on
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The Expressed (Specific) or Enumerated Powers of
Congress
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and its Implied Powers of the Necessary and Proper or
Elastic Clause
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Article 1, Section 8, Clauses 1-17, lists the enumerated
(delegated, specific, fixed) powers of Congress (taxation,
currency, interstate and international commerce…..)
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Article 1, Section 8, Clause 18. (1.8.18) deals with the
Implied Powers of Congress (elastic clause)
“ It may make laws necessary for carrying out the
enumerated powers. To make all laws which shall be
necessary and proper for carrying into execution the
foregoing powers, and all other powers vested by this
Constitution in the government of the US, or in any
department or officer thereof.”
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But the Constitution, while allowing Congress additional
powers in 1.8.18, in ……..also specifies in the Bill of
Rights, Amendment 10, that
“Powers not delegated to the Federal Govt. are
reserved to the states and the people. The powers not
delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the
States, or to the people.”
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This is a “seeming contradiction,” a “grey area”
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Supporters of a very strong Federal Govt. / Centralized
Govt. emphasized the Implied Powers / Elastic Clause /
Necessary and Proper Clause, (as well as its Enumerated
and Expressed Powers)…argued for this Clause to
override the 10th Amendment….they would become
known as the Federalists
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Supporters of stronger States Powers / de-Centralized
Govt. emphasized that the Federal Govt. should only have
its Enumerated or Expressed Powers… argued for the 10th
Amendment over the Elastic Clause – they would become
known as “States-Righters” or Republicans
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From this disagreement emerged the first great political
battles of the new generation.
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Supporting the Elastic Clause is also known as Broad or
Loose Construction (interpretation)
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Supporting the 10th Amendment over the Elastic Clause
is know as Strict Construction
Alexander Hamilton: his Politics
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Hamilton dominated the Federal Govt.
for the first 12 yrs after the new
Constitution: he favored using the
Elastic Clause.
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Washington – President – supported
Hamilton and his views the vast
majority of the time – Washington
favored a stronger Fed. Gov.
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Washington’s role in Government was
a passive one – he viewed the
Presidency as an office where the
holder should not be directly involved
in political controversies – didn’t have
an agenda: didn’t want to be branded
as a European type King.
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He believed that the President should be almost an
Olympian figure, aloof, above the fray - a unifying symbol
of nationhood. He thus avoided any personal involvement in
the deliberations of Congress…remained on the sidelines..
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Constitution does not specifically state that there should be
a Cabinet. But one did evolve through the need for
meetings and cooperation and contact between the different
heads of each department.
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In the Cabinet, Hamilton, Sec. of the Treasury, dominated;
he was able to use his influence / persuasive powers with
regard to the Elastic Clause
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Also, of all the leading figures of the time he was the most
aristocratic in personal taste and political philosophy
(irony - from British West Indies, not from a well off
background)
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he believed that a stable and effective govt. required an elite
ruling class; authority should be in the hands of the
"enlightened few, ” the “best people”; distrusted the “people”
or “masses”
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he hoped to adopt the British system of rule by the king, and
a strong executive and the Aristocracy as closely as
possible – lent itself to efficiency
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the alternative he was certain would be continuing disorder
as evidenced by Shays Rebellion
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Ironic – the man most influential in the new govt. was the
most aristocratic / conservative / reactionary of the founding
fathers and biggest supporter of the English system of
government that they had rebelled against
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What about Republican ideals – is this was Beard was
talking about in his Thesis – the Beard Thesis (counterrevolution)? Was the talking about Hamilton and his
opinions
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The new govt. could be strengthened, Hamilton believed,
by attracting the support of the wealthy / Aristocracy – the
most reliable group, the group Gov. should be “founded
on”. The best way to do that was to give them a stake in its
success.
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He proposed that this could be done, while at the same
time solving the economic problems (enormous debts) of
the Fed and State governments
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He would combine Political and Economic Goals – get the
wealthy behind the Govt. and pay off the debts – and bring
credibility to the new nation at home and abroad
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President Hamilton – was he the real President? – he
drove Domestic and Foreign (supposed to be the
domain of the President) Policy for the first 8 yrs after
the Constitution
Hamilton’s
Economic
Policies
Hamilton’s Economic Policies
1. Funding at Par
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Federal govt. debts amounted to $54m approx.
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Hamilton wanted to “Fully Fund" Federal Govt. debts –
not pay them off right away, but to take in the old bonds
(mostly owned by US merchants and landowners, and
foreign countries: Br, Sp, Fr) and exchange them for new
ones, which would be Fully guaranteed by the new Govt.
at full face value: Funding at Par would Create
Stakeholders (bondholders), esp. at home, who would
want the new Govt. to succeed, and fully support it
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Fed. Govt. would have support, credibility,
respect….
2. Assumption
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He also wanted the States debts to be totally Assumed by
the Federal govt. - states Debts amounted to $22m approx
(also in bonds, held by wealthy people)…(Fed and States =
$76m approx..)
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Felt this was fair - they had accumulated these debts during
the Revolutionary War: and the states would now be
grateful, and would want the Federal Govt. to succeed too –
Assumption would also Create Stakeholders.
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The Wealthy and the States would be happy – would
support the new Govt. – his Political goal…
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He said that “the national debt was a blessing” –
providing opportunities to create stakeholders – bound
people / creditors to his cause (creating a strong Fed
Gov)…benefits would “trickle down” to the masses
Disagreements
Funding the national debt was generally accepted but
there was disagreement over funding the national debt at
Par / Fully
Farmers / soldiers who had sold their bonds off to
speculators at a fraction of their original cost, during
difficult times, objected
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They wanted the original owners too to benefit from the
new proposal, or failing this, to only allow Partial
Funding to the present holder of the bond.
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There were complaints that Hamilton’s policy was elitist,
benefitting the wealthy classes who had bought up the
bonds below face value and now stood to gain a lot
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But after discussion and debate, the Funding at Par Bill
passed – Hamilton was persuasive – he got the votes in
Congress
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There were even stronger arguments against "Assumption"
of states debts – led by Madison.
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the Northern states owed more than the Southern states many of the Southern states had paid off their debts, and
would now under Assumption, be contributing to paying off
the Northern States debts too (from their taxes).
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Hamilton eventually got Assumption approved in return for
a compromise: Jefferson mediated between Madison and
Hamilton to broker the Compromise
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the Govt. / Capital would move South (from Philadelphia /
New York), to the banks of Potomac river (Washington
D.C.)
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The South felt this would help make the Fed. Govt. more
sensitive to Southern needs.
3. Bank of the US (BUS)
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Hamilton’s next Economic proposal was to establish a
National Bank. At this time there were State banks and
private banks only. .
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Hamilton felt a National Bank would provide the following
services for the new Govt.
1. Control the currency supply
2. Provide loans to businesses.
3. Provide the govt. with a safe place for depositing
federal funds
4. Facilitate the collection of taxes and tariffs
5. Facilitate the sale of govt. bonds when it needed to
borrow from the public.
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Hamilton’s proposal sparked intense debate about the
power and function of the Federal govt (Centralized v deCentralized Govt.) – the first intense debate about the
Elastic Clause vs. the 10th Amendment
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According to Jefferson it was unconstitutional for the
Federal Gov. to established a National Bank. The Govt.'s
enumerated powers did not give it the right to set up such
an institution. The States could enact Banks under
Amend 10 of Bill of Rights. This was a right reserved for
the States.
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Hamilton argued that what the Constitution ‘did not
forbid it allowed”.
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Argued that the National Bank was compatible with the
intention of the Constitution, even though it does not
explicitly authorize it.
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The Govt. had the power to set up the Bank under the
Necessary and Proper or the Elastic Clause to enable it
to better fulfill its other functions - to enable it to
collect taxes and control the economy. It gave the
government the means to fulfill an enumerated power.
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Jefferson replied that “what the Constitution did not
allow (specifically) was forbidden”; to Hamilton, what’s
not forbidden is allowed
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Strict (Jefferson) v Loose / Broad (Hamilton)
Construction (interpretation) of the Constitution….both
viewpoint are valid, both men are right…. a matter of
interpretation / emphasis
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In the end Hamilton had the support of Washington and
the votes in Congress, and the Bank Bill was passed.
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Jefferson offered to resign but Washington refused to
accept his resignation….respected him, welcomed his
opinions…. Felt he offered a balance / a foil to Hamilton
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The Bank of the United States (BUS) was established in
1791 with a capital deposit of $10m, a 20 year charter,
one fifth of its stock ($2m) held by the Federal Govt.:
the other four fifths were bought up by the public in less
than 2 hrs
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Where would the money come from to pay off the
bonds / other debts?
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Fed. Govt. had the power to tax the states but it
would need more money than that…so Hamilton
introduced an Excise Tax and Tariffs (Congress now
had the power to control Commerce)
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4. Excise Tax
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In 1791. Hamilton introduced a tax on internal
production of a variety of goods, inc. a large tax on
whiskey of 7 cents a gallon
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Led to the Whiskey Rebellion of 1794
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Struggling small-farmers, esp. in the backcountry regions
of Va, Penn, S.C., distilled whiskey to supplement their
meager incomes during difficult times (bartered whiskey
for goods with the local store owners).
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To them it was another blow: they were
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owed back pay for their war services
in debt
heavily taxed
had sold their bonds off for a fraction of the cost, only to
see the speculators get Full Funding
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And now they were hit with a tax on Whiskey, which
would be used to pay off these same bonds
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Accused the Govt. of elitism, favoring Manufactures /
North East through the tariffs, the Wealthy through
Funding at Par
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In Pennsylvania, the “whiskey farmers” refused to pay the
Excise Tax, terrorized the tax collectors, tarring and
feathering them (reminder of Revolution / treatment of
stamp collectors)
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The Federal Govt. responded decisively: not relying on the
States as it had done during Shays Rebellion - now had its
own army – was determined to prevent a recurrence of that
type of Rebellion / maintain law and order / assert authority
of new Govt.
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Washington supervised expansion of Fed. army to 15, 000;
personally came out of retirement to supervise the campaign
in Pennsylvania : the Whiskey farmers were overwhelmed
and dispersed – and forced to accept the tax
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Jefferson criticized the excessive force used by the Fed
govt. against the struggling farmers: felt the govt. overreacted……felt that the excise tax was severe on
them…..took their side
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But its prompt response to the Whiskey Rebellion won
for the new govt. a deep sense of respect at home and
abroad
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5. Import Tariff of 1789
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The Tariff Bill of 1789 introduced an 8% tariff on a
variety of imported goods………no serious objections as
of yet from the South, though it was felt that Northern
manufacturers benefited the most
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Tariffs have two goals:
1. raising revenue for the Fed Govt.
2. protecting US manufacturing from competition from
imports – helps create jobs, also helps increase selfsufficiency
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A later Tariffs, in 1792, increased the tariff rate by another
by 1% to 2%
Emergence of Political Parties
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Hamilton’s Political and Economic policies / ideas
seemed to support Gov. for and by
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the upper class over the lower
the North East over the South and West
the Federal govt. over the States
the urban areas over the rural areas
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Though often criticized for his elitism, his policies
created Stability – Pol, Ec, Soc
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He won the support of the Wealthy, gave the Govt.
credibility, respect, at home and abroad – he more than
anyone in the new Govt. was responsible for this – (Pres.
Hamilton?)
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But his policies also led to the formation of the first Two
Party System – his critics / opponents, who favored
stronger State Govt., more concern for the interest of the
small farmers, of the South and West, felt that the
Federalist program did not protect their interests – rallied
behind Jefferson
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The Constitution makes no reference to political parties
- on purpose - framers, esp. Washington, believed that
organized parties were destructive of national harmony
and unity
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Madison, in Federalist Paper # 10 said that “the public
good is disregarded in the conflicts of rival parties”….
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Framers envisaged a system of Factions forming around
issues, based on the merits of the issue, which would
then break up, with new Factions forming on the next
issue – not permanent Political Parties disagreeing with
each other for the sake of it
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Jefferson and Madison complained that Hamilton (and
later John Adams) was appointing people who shared his
views to important positions in the Admin / Govt., that he
was engineering “a national network of influence that
embodied all the worst features of a party”…with local
and regional associations (patronage)
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Since Hamilton was forming a party, they felt the need to
form one also, to represent and promote their views –
formed the Republican Party or Democratic - Republican
Party; formed committees in every state, societies,
caucuses - influencing state and local elections
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Hamilton blamed Jefferson for forming the first Political
Party, Jefferson blamed Hamilton
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Party System has its advantages - competition for power
among parties is considered good for democracy,
opposition ensures balance, acts as a kind of watchdog on
the party in power, another check/balance in Govt.
Jefferson’s Political Philosophy
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Jefferson believed that the Yeoman Farmers were God's
chosen people, that the ideal Republic would consist of
“sturdy farming citizens”, “decentralized society,
dominated by small property owners engaged largely in
agrarian activities”
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Was an aristocrat by birth, but he had faith in the good
intentions of the ordinary farmer-citizens and believed that
they could, if properly educated, be trusted to govern
themselves through the election of able and qualified men
(usually from a higher class)
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Over-Simplification (maybe useful)
Hamilton – Govt. by the elite for the elite (Oligarchy)
Jefferson – Govt. by the elite for the Yeoman Farmer
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Urban life, by contrast, he believed, posed a danger to
the Republic; he feared city mobs as "sores upon the
body politic". Thus he opposed the development of
extensive manufacturing because this would lead to the
growth of cities packed with property-less workers
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He did not scorn commercial activity, nor did he oppose
industrial activity – there would have to be a certain
amount of it – but the nation should avoid a highly
urbanized, industrialized economy - the abundance of
land was America’s greatest economic resource
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Meanwhile, in the elections of 1792, Washington was
re-elected unopposed, and the Federalists increased
their majority in Congress:
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In this first Congressional elections involving the two
Parties, the Federalists got most support from the
commercial centers of the Northeast and in the major
seaport towns of the Southeast, such as Charleston.
The Republicans were most numerous in the rural
areas of the South and the West.
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After the election, Jefferson again, because his views
contrasted so much with Hamilton’s, offered to resign
from the Cabinet, but Washington again refused to
accept