The Federalist Party

Today I listened to another teaching by Rev. Rushdoony regarding the federalist administrations. These were the Washington and Adams administrations, taking place over the first twelve years of our government's existence. Washington was not a federalist in one sense. He did not want the country to fall into partisan politics. For this reason he included in his cabinet both federalists and democratic-republicans. At that time, the federalists were led by John Adams and Alexander Hamilton, while the democratic republicans were led by Thomas Jefferson. The federalists had a very loose interpretati0n of the constitution, and they wanted to make a strong central government. They came up with the idea of implied powers in the constitution (which caused no end of trouble). What's more, unlike most Americans, they liked the British, because they wanted good trade relations with them. American foreign policy under the federalists was a position of neutrality towards all countries, a position that avoided war with Britain by all means, and a position that was unfavorable towards alien immigration (naturalization took 14 years back then). The American government started under a cloud, almost bankrupt and therefore with little credit. Alexander Hamilton, the treasurer under George Washington, saw to this problem. First, Hamilton insisted that the United States had to pay all the debts, including the state's debts. This was unnecessary, since it was not the job of the government to pay state debts, yet it gave the U.S.A. some degree of foreign respect. How were these debts to be paid? By customs and duties on imports, excise taxes on several American goods(liquour was one of these things, the tax on it led to the whiskey rebellion, as farmers hated this excessive tax), and sale of federal lands in the west. The second thing Hamilton did was to create the Second Bank of the United States. It was a very powerful bank. The constitution forbade the government and states from using anything but gold and silver (they couldn't print money). But it didn't forbid banks, so the banks began to print millions in paper. However, they couldn't make it legal tender. It could be refused. As the money circulated it depreciated in value. Hamilton knew this would happen, but he wanted to get businesses rolling, so he created the bank to provide capital for new industry. And there was an industry boom. However, because printing money was an inflationary measure, the boom didn't last long. Eventually, the Second Bank of the United States would be wiped out by Andrew Jackson. The Democratic Republicans, who were for keeping the U.S. an agricultural community, were more supported by farmers and the like that were the Federalists, and the Federalist party died soon after the election of James Monroe.