Thomas Jefferson and Alexander Hamilton had significantly different views on how they wanted the United States to develop after the Revolution. Their competing political and economic philosophies led to America’s first political parties, the Federalists and the Republicans (also called the Democratic-Republicans). The Federalists, led by Hamilton, advocated for the elite to govern, a strong federal government, and a balanced economy with a national bank system. The Republicans, led by Jefferson, on the other hand favored the common people to govern, a weak federal government, and an agriculturally based society without a national bank. By the 1820s, it can be seen that Alexander Hamilton’s vision was much closer to becoming the reality of the time because of the establishment of a national banking system, the loose interpretation of the Constitution, an increase in foreign trade, and the strong federal government. However, looking at the United States today, it is evident that both leaders have played an important role in shaping our country.
Alexander Hamilton founded the Federalist Party in 1789. Hamilton’s party was made up of wealthy and educated merchants, bankers, and manufacturers who were mostly from New England and along the coast. The Federalists believed that only the rich, wellborn elite should be allowed to rule because they considered the common people to be foolish, ignorant and incapable of a self-government; therefore, they advocated for higher voting qualifications. Hamilton’s opinion on human nature was mostly influenced by his wartime experiences. He saw that people put their own interests and personal profit before the needs of others and the country. He believed that people were generally selfish so he did not want a government that gave too much power to the common people. Because of this, Federalists valued a strong central government and a large republic who could control and govern factions. They believed that a small elite group governing, would be the best people to rule because they had the background, time, and education to run the country efficiently. Hamilton and his followers also stressed manufacturing, overseas trade, finance, and commerce because they wanted to use the power of a strong central government to help the economy grow and increase the nation’s wealth. Hamilton also wanted Congress to establish a national bank that was modeled after the Bank of England. This national bank would act as a safe place for the government to store money, circulate cash and make loans to businesses, and issue paper money. He said that it was authorized by the Constitution because it could be deemed “necessary and proper”. This would also increase the power of the central government because it allowed the government to create a strong banking system and maintain control over interstate issues. In contrast, the Republicans had many opposing views.
Thomas Jefferson and James Madison founded the Democratic-Republican Party in 1799. Jefferson’s party was made up of uneducated, often illiterate, common farmers and laborers who were mostly settled on the frontier and in the South. Jefferson was highly confident in the common people so he advocated to lower voting qualifications in order to let them govern. Unlike Hamilton, he believed that informed citizens could make good and responsible decisions for themselves and their nation as a whole. He especially had great faith in the wisdom and overall good nature of farmers and planters like himself. The Republicans favored states’ rights, a weak central government, and democratic principles where the common people were capable of a self-government. They did not want an elite few to rule because it would create a monarchy, the very system of government they fought so hard to gain independence from. They believed that a limited powered government would allow people to enjoy their liberty. The Republicans also wanted a simple, agrarian (agricultural) economy that supported small farmers and the common man. Jefferson was a country man so he opposed the encouragement of business and manufacturing and instead, wanted the nation’s future to be in the hands of the common farmers. Jefferson also said that Hamilton’s plan for a national bank was unnecessary and should not be justified using the Constitution. He understood that this type of bank would not benefit the farmers but only commercial classes so he pushed for state-controlled banks instead. Unlike the Federalists, the Republicans called for a strict interpretation of the Constitution. They argued to keep a small central government because the Constitution meant exactly what it said and granting additional powers to the government, such as establishing a national bank, would be unconstitutional.
Both the Republicans and the Federalists may have had significantly opposing views but ultimately, it was in their best interest to lead the nation towards a bright future of success. The Federalist Party, however, was much more influential and effective in doing so. Hamilton was successful in the establishment of the national bank with a loose interpretation of the Constitution in effect, a strong federal government, and overseas trade. In 1791, the national bank was established by Congress and served as a safe place to store federal funds and a fiscal agent for the government. The charter was not renewed in 1811, however, so the First Bank did not continue to operate until the War of 1812. There were issues financing the war which sparked interest in the revival of the national bank so the Second Bank of the United States was established in 1816. This of course, strengthened the central government just as Hamilton planned. The establishment of the national banks allowed for more power and federal control to be given to the central government. This also meant that there was a loose interpretation of the Constitution in effect, which was against Jefferson’s and the Republicans’ beliefs. Foreign trade also came into play by the 1820s, again just as the Federalists advocated for. The demand for Chinese and other Asian products such as tea, silk, and porcelain had only increased after the Revolution, which eventually led to direct trade with China. Later, American traders began to also buy and sell goods in Europe, Africa, and Turkey as well. By the early 1830s, trade routes between the U.S. and China became well established, well known, and significant to the American economy.
After the Revolution, Alexander Hamilton and Thomas Jefferson had conflicting opinions over the future of the United States. Thomas Jefferson and the Republicans believed in an agrarian economy without a national bank, a weak central government, and for the general public to govern. Meanwhile, Alexander Hamilton and the Federalists pushed for a balanced economy with a national banking system, a strong central government, and for a small elite group to govern. By the 1820s, Hamilton’s vision was becoming the reality for America. This can be see through the increase in overseas trade, the strong federal government, the loose interpretation of the Constitution, and the establishment of a national banking system. However, both Thomas Jefferson’s and Alexander Hamilton’s political philosophies have played a significant role in influencing the scope and power of the federal government and the economic development of the United States today.