Thomas Jefferson vs. Alexander Hamilton

The United States was founded without political parties, but differences in the ideologies between the Federalists and the Anti-Federalists formed a basis for two new parties, formed around two very important men. Alexander Hamilton, the leader of the Federalist Party, and Thomas Jefferson, the leader of the new Democratic Republicans, shared many different visions for the future of America, stemming back from their days on George Washington's cabinet. As the country flourished, and these two became leaders of America's political parties, their views on foreign policy, the federal government versus state governments, and economic policies contrasted even more.

The national government was just beginning to work well, and after the ratification of the Constitution, the state and local governments still very strong. Hamilton, a lax Constitutionalist, wanted an organized strong central government, fearing anarchy without a central power. He felt one strong government would be able to deal with national problems much more efficiently than many state and local governments, in which strong divisions might arise. Jefferson wanted things to stay the way they were with the state and local governments in charge, fearing another monarchy. This caused him to become a strict Constitutionalist. By doing carefully analyzing the Constitution, Jefferson would be able to see any loopholes in it, allowing the state laws to override the federal laws.

Jefferson and Hamilton also did not agree on foreign policy. During the beginnings of the French Revolution both were glad the French were using America's independence as an example to improve their country. When things got bloody, Jefferson still supported the French cause, stating the violence was necessary. Hamilton, along with the other Federalists were frightened and opposed to the situation. Afterwards, when Britain and France went to war, Jefferson and his party strongly stayed on the side of the French while Hamilton supported the British. When Washington declared the Neutrality Proclamation of 1793, Jefferson greatly disagreed. Because Citizen Genet gave off false optimism for the French cause, the British retaliated and attacked American ships which deeply harmed the southern economy. Britain agreed to repay for the raided ships, but wanted all their war reparations upfront. This upset Jefferson and the southern Democratic Republicans even more because not only they were already poor, but since the country needed money, they were forced to pay higher taxes, taking the little they had.

Along with their disputes over the US laws and foreign policy, Jefferson and Hamilton greatly disagreed on the economic policies of the United States. The one of most noted disputes between the two was over The Bank of the United States and the national debt after the Revolution. Hamilton wanted to assume the national debt and believed it would increase trade with countries the United States owed. He also wanted to create a national bank with branches in different parts of the country. Jefferson wanted to pay all the debt back as soon as possible and argued the Constitution didn't specify the federal government was allowed to set up a bank. Congress, however, was authorized to levy and collect taxes, pay debts and borrow money and a national bank would help perform these functions well. Hamilton wanted to transform America into a powerful, industrious mercantilist nation, where trade would flourish. He proposed tariffs that could help promote the development of competitive national industries, which Jefferson opposed. Jefferson preferred that the nation kept its agricultural economy and society.

The differences in the ideologies between the two men created the political party system we use today.