Chapter 7 Democracy In Distress: The Violence of Party Politics, 1788–1800 summary

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CHAPTER 7 Democracy In Distress: The Violence of Party Politics,


This chapter describes the conflict between Hamiltonians and Jeffersonians and explains why the Jeffersonians won.

George Washington was unanimously elected president in 1789 and gave the new government all the weight of his great reputation. It was assumed that everyone would work together for the common good and that the average voter would trust his "betters" to manage political affairs.
The development of political parties began with the policies endorsed by Alexander Hamilton, the Secretary of the Treasury, and opposed by Thomas Jefferson, the Secretary of State. Hamilton wanted a strong central government, much like the English. Jefferson believed that a new age of liberty was beginning that would make government less necessary. Hamilton hoped to make the United States a strong commercial and industrial power, while Jefferson hoped the United States would remain a nation of small, independent farmers. Hamilton worried that democracy would lead to anarchy;

Jefferson trusted the common people. These differences, clear in retrospect, became obvious to the two men most involved only over time, as events forced the federal government to make important decisions.

The greatest problem inherited by the new government was the federal debt. As

secretary of the treasury, Hamilton had to make provision for repayment. The central government owed $54 million and the states an additional $25 million. Hamilton put together a financial program that contained two proposals, "funding" and "assumption." He also asked Congress for a national bank and government aid to manufacturing. This section treats these proposals in detail and explains why they attracted opposition. Hamilton's Report on the Public Credit (1790) recommended that Congress redeem its debts at face value, even though most of the people holding the certificates of debt had bought them at discount. James Madison broke with Hamilton on this issue. Madison

tried unsuccessfully to have Congress pay less to the present holders of the certificates in order to pay something to the individuals who had been forced by poverty to sell the certificates to speculators. Assumption meant that the federal government would become liable for the states' debts. Some states, such as Virginia, had already paid off their debts and would gain

nothing from assumption. Some speculators opposed assumption because they used depreciated state debt certificates for their own profit. Madison organized the anti-Hamilton forces and defeated assumption in the House of Representatives. Hamilton salvaged the program by giving Virginia some money and by agreeing to locate the new U.S. capital on the Potomac River.

A. Interpreting the Constitution: The Bank Controversy

Hamilton also proposed that Congress charter a national bank. The bank, though privately owned, would work closely with the government. Madison believed that the bank would benefit only the rich. Jefferson did not think that the Constitution gave Congress power to charter a private business. When Congress did charter the bank, Washington asked his cabinet to advise him on the constitutional question. Hamilton's response was to interpret the Constitution broadly, as giving Congress implied powers. Washington accepted this argument, but public opinion began to turn against Hamilton.

B. Setback for Hamilton

Hamilton next asked Congress to enact a program favorable to manufacturing,

but opposition had now grown organized. Madison raised the prospect of

having the central government become more powerful than the individual state

governments. Jefferson warned that the rise of cities would destroy agriculture

and the civic virtue that farming instilled. Hamilton's recommendations were

Foreign affairs engendered a different set of problems. The United States had to respond to the wars set off in Europe by the French Revolution, but Hamilton and Jefferson disagreed on the proper course of action. This section describes how foreign affairs divided Americans into two parties: Republicans stood for states' rights, strict interpretation of the Constitution and friendship with France; Federalists stood for a strong national government, central economic planning, social order and friendship with England.
A. The Peril of Neutrality

Americans wanted to remain neutral when France and England went to war in

1793, but both sides made that difficult. The French sent to America diplomat

Edmond Genet, who insulted the Washington administration. The English

created more serious problems. England still occupied American soil in the

Northwest and violated maritime rights. Jefferson wanted to punish England by

cutting off trade, but Hamilton felt that the United States must appease England because the mother country was so strong.
B. Jay's Treaty Sparks Domestic Unrest

England's provocations called for strong action. Washington sent John Jay to

England to demand removal of the English from American soil, payment for

ships illegally seized, better commercial relations, and acceptance of the United

States as a neutral nation. Jay, however, had no chance to secure a favorable

treaty because Hamilton had secretly informed the English government that the United States would compromise. Jay agreed to a treaty that gave the United States virtually nothing. Washington disliked the proposed treaty, but sent it to the Senate where it was ratified by the smallest possible margin. When newspapers learned the contents of the treaty, they viciously attacked it and even criticized Washington. In attacking Washington, the opposition had gone too far. The nation rallied behind its greatest man, and the Federalists used the opportunity to portray the Republicans as traitors. The rift between the parties deepened.

C. Pushing the Native Americans Aside

Ironically, the unpopular Jay Treaty brought advantages to the United States in the West. English posts in the Northwest Territory had supplied and encouraged Indian raids on American settlements. The U.S. Army failed to defeat the Indians until the battle of Fallen Timbers (1794), which led to the Treaty of Greenville and Indian removal from what is now Ohio. While the Indians were in this desperate condition, the English deserted them and pulled back into Canada. In the Southwest, news of Jay's Treaty was interpreted by the Spanish as an Anglo-American alliance against Spain. To prevent this, the Spanish suddenly offered to open the Mississippi, to settle the disputed border between Spanish Florida and the United States, and to cease supplying the Indians. These offers resulted in the Treaty of San Lorenzo (Pinckney's Treaty).

This section explains the vehemence of early political conflict, especially when

newspapers brought politics into everyday conversation.

A. Informing the Public: News and Politics

Newspapers were the most influential medium of political controversy.

Newspapers, usually shrill in tone and totally partisan, sprung up everywhere.

Political clubs also became popular, especially "Democratic" clubs that

supported the Republican party.
B. Whiskey Rebellion: Charges of Republican Conspiracy

In 1794, a local tax protest in western Pennsylvania was interpreted by the

Federalists as a major insurrection instigated by the Republicans. Jefferson, on

the other hand, believed that the crisis had been invented by the Federalists as a pretext to create a strong army to intimidate Republicans.

C. Washington's Farewell

In 1796, Washington announced his decision to retire from public life, warning

Americans in his "Farewell Address" to avoid forging permanent foreign alliances and to avoid forming political parties. But the timing of Washington's statement was itself a partisan act because it gave the Republicans no time to organize a presidential campaign in 1796.

During the John Adams administration, the Federalist party controlled the government and tried to suppress the Republican party. The Federalists failed because they could not remain united. This section deals with the oppressive acts passed by the Federalists and emphasizes the role John Adams played in frustrating Hamilton's plans.

A. The XYZ Affair and Domestic Politics

Because of the Jay Treaty, France began to treat the United States as an

unfriendly nation. French vessels even fired on American ships in the Atlantic

(the Quasi-War). When Adams sent ambassadors to France, the French

government demanded a bribe before negotiations could even begin (the XYZ

Affair). Americans were outraged, and Federalists attempted to use anti-French

sentiment to crush the Republicans.
B. Crushing Political Dissent

The extreme Federalists began to build up the army, even though there was no

prospect of a French invasion. The Federalists intended to use the army to stifle international opposition. Hamilton took day-to-day command of the army and filled it with officers loyal to him. All Hamilton needed was a declaration of war against France, but Adams refused to ask for one.
C. Silencing Political Opposition: The Alien and Sedition Acts

Congress could not declare war, but it did pass a series of acts designed to

persecute the Republicans. The Alien Enemies Act and the Alien Act gave the

president power to expel any foreigner. The Naturalization Act required

immigrants to reside in the United States for fourteen years before becoming

eligible for citizenship. The last act, the Sedition Act, made it a crime to criticize the government. Federal courts became politicized and often enforced this law in absurd ways. Republicans were convinced that free government was on the brink of extinction.

D. Kentucky and Virginia Resolutions

Jefferson and Madison responded to the Alien and Sedition Acts with the

Virginia and Kentucky resolutions (1798). The Kentucky Resolutions, written

by Jefferson and passed by the state of Kentucky, claimed that each state had

the power to decide whether acts of Congress were constitutional, and if not, to

nullify them. Madison's Virginia Resolutions urged the states to protect their

citizens, but did not assert a state's right to nullify federal law. Jefferson and

Madison were less interested at this time in formulating accurate constitutional

theory than they were in clarifying the differences between Republicans and


E. Adams's Finest Hour

In 1799 Adams openly broke with Hamilton. The president sent another

delegation to negotiate with France, and this delegation worked out an amicable settlement. The war hysteria against France vanished, and the American people began to regard Hamilton's army as a useless expense. In avoiding war with France, Adams saved the nation from the schemes of the High Federalists. In return, they made sure he lost the election of 1800.


The Federalists lost the election of 1800 because they were internally divided and generally unpopular. The Republicans won easily and the new President, Thomas Jefferson, tried to unite the nation by stressing in his inaugural address the republican values shared by members of each party.


The election of 1800 is one of the most important in our history because the transfer of power from Federalists to Republicans was achieved peacefully, but the nation had come dangerously close to suffering the chaos of an ideological civil war.

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