A conflict took shape in the 1790s between America's first political parties—the Federalists, led by Alexander Hamilton, and the Republicans (Democratic-Republicans), led by Thomas Jefferson.

The Federalists represented the interests of trade and manufacturing, which they saw as forces of progress in the world. They believed these could be advanced only by a strong central government capable of establishing sound public credit and a stable currency. They appealed to workers and artisans, and their political stronghold was the New England states. They favored good relations with England.

Although Alexander Hamilton was never able to gain the popular appeal to stand successfully for elective office, he was the Federalists' main developer of public policy. He brought to public life efficiency, order, and organization. He supported principles of both public economy and effective government. Hamilton pointed out that the United States must have credit for industrial development, commercial activity, and the operations of government, and that its obligations must have the complete faith and support of the people.

Some wished to abandon the Confederation's national debt or pay only part of it. Hamilton insisted upon full payment. He secured congressional legislation for a Bank of the United States, which acted as the nation's central financial institution and operated branches in different parts of the country. Hamilton sponsored a national mint and argued in favor of tariffs, saying that temporary protection of new firms could help foster the development of competitive national industries. These measures—placing the credit of the federal government on a firm foundation and giving it all the revenues it needed—encouraged commerce and industry.

The Republicans, led by Thomas Jefferson, spoke primarily for agricultural interests and values. They distrusted bankers, cared little for commerce and manufacturing, and believed that freedom and democracy flourished best in a rural society composed of self-sufficient farmers. They felt little need for a strong central government; they tended to see it as a potential source of oppression. They favored states' rights and were strongest in the South.

Hamilton's great aim was more efficient organization, whereas Jefferson once said, "I am not a friend to a very energetic government." Hamilton feared anarchy and thought in terms of order; Jefferson feared tyranny and thought in terms of freedom. Where Hamilton saw England as an example, Jefferson, who had been minister to France in the early stages of the French Revolution, looked to the overthrow of the French monarchy as vindication of the liberal ideals of the Enlightenment. Against Hamilton's instinctive conservatism, Jefferson projected an eloquent democratic radicalism.

Source: Hamilton vs. Jefferson
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