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"Seldom in the nation's history has there been a period so extraordinary in accomplishment as the first decade under the Constitution...."
This paper is going to be a step by step evaluation of arguably the most important decade in American History. The time period covered in this paper is 1789-1801. These are the years in which the Federalists had the most influence in the new government. They accomplished an amazing amount in these 12 years.
The Federalist Party was one of the first political organizations in the United States. The members of this party supported a strong central government, a large peacetime army and navy, and a stable financial system.
Although the first president, George Washington, was not a Federalist, his Secretary of the Treasury, Alexander Hamilton, was the developer and leader of the Federalist party. Hamilton believed in a loose interpretation of the Constitution so that the central government could become more powerful. Also Hamilton, along with the other party members, believed that commerce and manufacturing were more important than agriculture.
Financial Dilemma During the first two years of the new federal government the biggest problem was that of raising money. At first the Congress adopted a small tariff on imports. This was a start but not nearly enough. The government needed this money to maintain its own existence and to be able to pay of the debt. The existence of the government was a necessity, but there was a lot of discussion as to whether the debt should be payed off.
The mare magnitude of the debt seemed to compel some measure of avoidance. In 1789, the national debt totaled more than $50 million, $11,700,000 of which was owed to France and Spain and the private bankers of Netherlands, while $40 million was in the form of securities held by citizens of the United States. The interests owed to the bankers were being payed off by loans from the bankers themselves. The government didn't even have enough money to pay the Barbary corsairs for release of captive sailors!
When Congress couldn't come up with a solution that was satisfactory, they turned to Alexander Hamilton with the dilemma. He soon proceeded to draw up a full report entitled "Report on Public Credit." In this paper Hamilton proceeded to show that the only way for a new government to establish credit was to deal honestly with its creditors -for in many cases they would be the people to whom the government must look to for future loans.
This policy received strong opposition from Madison and other soon to become Republicans (second political party in America). The federalists held strongly, but only with the passing of the Assumption Bill (movement of capital more toward the South) where they able to pass the bill.
This achievement was significant, but lacked two things which would be necessary to carry it out. For one it lacked a circulating medium, and two it lacked a central bank. Hamilton then proposed a remedy. He wanted to establish a corporation that was to be called the Bank of the United States. This bank was to serve as the principle depository for government funds. It was also to serve as the issuer of bank notes.
This was a loose interpretation of the constitution. Again Madison led the opposition to no avail. But Hamilton held strongly to his belief that even the most uncompromising opponent of the bank "would, in one month's experience as head of that department of the treasury, be compelled to acknowledge that it is an absolutely indispensable engine in the management of the finances, and would quickly become a convert to its perfect constitutionality." This plan favored the central government.
The bank made little banks, who couldn't compete, go out of business. The rich ended up being able to buy a part in the bank and so got richer, and the poor and middle class didn't get the benefits. The central government was becoming self sufficient, and less dependent on the states.
What Hamilton did is make the nation stronger in the eyes of other nations. This is a great accomplishment. If the Federalists (they didn't call themselves that until 1792) weren't in power the nation would have been weaker and more decentralized.
Foreign Difficulties There were three views on the French Revolution and the French-British war in 1793. Jefferson's followers favored France. They wanted to abide by the treaty America signed with France in 1788. They thought it was the right thing to do.
Hamilton's followers favored Great Britain. They wanted to develop better relations with great Britain for economic reasons. They sought to break all the relations with the new French government and to ally America with England.
The third view was the one taken by George Washington. He realized that a war with England on the side of the French would be suicidal, but at the same time he didn't want America to be known as the nation that breaks treaties. George Washington proclaimed that America will be neutral. He forbade any American citizen from helping any warring nation.
Without the Federalists there to oppose a war with England America might have been wiped out. The Federalists were looking out for the best interest of the country at the expense of another nation. George Washington who didn't belong to any party decided not to follow either view.
Downfall of the Federalists During John Adams' tenure as president the Federalists passed several laws which made them unpopular in the eyes of the American public. These laws made the people upset enough not to reelect most of the Federalists that were in Congress. This was the last term in which the federalists were influential. It is important to state these laws and why they passed them.
The Federalists had become more favorable toward France and the Republicans started despising France, especially after the insulting X Y Z affair. Adams was favoring France as he tried to keep the nation out of war with France. He secured peace once Napoleon came into power in 1799.
The resentment of the population toward France jeopardized this treaty. The Federalist majority in Congress decided to pass the Alien and sedition acts in order to weaken the supporters of war with France (mainly the Republicans). Adams himself was against these laws. These measures were hated. Some of the extreme measures taken to combat them were the Kentucky and Virginia resolutions. These measures tried to say that the laws were unconstitutional.
When the time of the next election came the people of the nation had a choice of either maintaining the ways of the Federalists or vote for Jefferson and the republicans. The people, who were mostly farmers at the time, saw the threat to the common man's rights and so they voted Jefferson and other Republicans into office.
This was probably the only thing that the federalist ever really messed up. They made the country strong but then went too far and people took them out of the national picture. The federalist party would never see such strong days again. Its power dwindled down slowly until the party vanished from the national picture in 1816.
Federalists after 1801 Although no longer influential in Congress the federalist remained in control in several states. Some states had federalists in office as far down as 1820. This wasn't though what kept the federalist ideals in America.
John Marshall, chief justice of supreme court, began his tenure in 1801. Justice Marshall was a steadfast Federalist. He maintained the Federalist ways long after the party seized to exist. Decision after decision chief Marshall declared the central government supreme to the state. He stretched the constitution far in seeing that the states yield rights to the federal government. He maintained this for 34 years, shaping the loose collection of states into a solid National Union.
Another way that the Federalist ideals were maintained comes from their opponents. Upon gaining control of the Congress and Presidency the Democratic-Republicans maintained most of the programs set up by the Federalists. The alien and sedition laws were repealed and everyone arrested under them was let go, but other than that the central government maintained the control gained under the federalists, relinquishing little. The Republicans even strengthened the federal government on occasion. By buying Louisiana Jefferson extended the abilities of the central government.
The years under George Washington and John Adams constitute a record of accomplishments not met since. The Federalists followed Hamilton's counsel to 'think continentally." A federal judiciary was established, the taxing power was used, the national debt was handled, American credit was fixed, and territory was cleared of the British and Spanish populations.
In foreign affairs America gained respect. Neutrality was maintained, at the price of the French alliance and concessions with Britain. The objective of the foreign policy was survival. The objective was met.
The Federalist did a great job starting up the country. After all, many of the leaders including John Adams and George Washington thought that the Union would not last past their lifetimes. The "experiment entrusted to the hands of the American people", as said President Washington, turned out very well. Just look at the power America has today.