Federalist Party
Uploaded by Admin on Jan 22, 1999
"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...