In the 1790’s, two political parties including the Federalists and the Democratic Republicans began to emerge. The Federalists were led by Alexander Hamilton and the Democratic Republicans (Jeffersonians) were led by Thomas Jefferson. There were several key differences that created the distinction between these two parties. First, the Federalists loosely followed the Constitution while the Jeffersonians strictly followed it. In addition to these contrasting views on the Constitution, there was a growing opposition to Hamilton’s economic plan. Finally, the Jeffersonians believed in a limited central government where people had more liberty and the Federalists believed in a strong central government, while fearing excessive liberty.
During this time period, Alexander Hamilton proposed a charter for a National Bank which Thomas Jefferson opposed because he viewed it as unconstitutional. Jefferson argued that the Constitution did not explicitly state that Congress had the power to create a National Bank and therefore it must be unconstitutional. In contrast, Hamilton thought that the necessary and proper clause would allow Congress to create a National bank, believing that it was needed and appropriate. Jefferson’s view that the Bank was unconstitutional since it did not specifically grant the power to create one is a view of a strict constructionist whereas Hamilton’s view that it was implied made him a loose constructionist. These differing views were a major factor in the separation of the two political parties.
Alexander Hamilton also proposed a financial plan to George Washington designed to raise money and stabilize the nation’s financial affairs; however this sparked controversy and generated some opposition. In this plan, the national government would pay off states debts, a National Bank would be created, and it would levy tariffs on foreign trade and create a Whiskey tax. However, the imposition of the Whiskey tax...