What was the most important issue dividing the Federalists and the Democratic-Republicans?

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The Jeffersonian Republican party, better known as the Democratic-Republican Party, is an ancestor of the modern DEMOCRATIC PARTY. It evolved in the 1790s during the early days of GEORGE WASHINGTON's presidency. Washington had been unanimously chosen president in 1789 and had a broad base of support. THOMAS JEFFERSON served as Washington's SECRETARY OF STATE, while ALEXANDER HAMILTON served as secretary of the treasury. Jefferson and his followers favored states' rights and a strict interpretation of the Constitution. They believed that a powerful central government posed a threat to individual liberties. They viewed the United States more as a confederation of sovereign entities woven together by a common interest. Hamilton and his followers argued that a strong central government was essential to the unity of the new nation. They favored a broad interpretation of the Constitution, which they saw as a document that should evolve with the country as it grew.

Virtually all the leading political figures of the new country, starting with Washington, believed that political parties would polarize citizens and paralyze government. Hamilton and Jefferson agreed with this notion, but by 1793 the two groups that they represented had broken off into separate factions. Hamilton's group became the Federalists, while Jefferson's faction adopted the name "Democratic Republicans."

One early and divisive difference between the Federalists and the Democratic-Republicans was how they approached Britain and France. The Federalists believed that American foreign policy should favor British interests, while the Democratic-Republicans wanted to strengthen ties with the French. The Democratic-Republicans supported the government that had taken over France after the revolution of 1789.

On economic matters, the Jeffersonians differed strongly with the Federalists. The Democratic-Republicans believed in protecting the interests of the working classes—merchants, farmers, and laborers. They believed that an agrarian economy would best serve these citizens. They saw the establishment of a national BANK OF THE UNITED STATES (which Hamilton strongly favored) as a means of usurping power that belonged to individual states, and they also believed that it would be tied too closely to the rich. The Federalists saw industry and manufacturing as the best means of domestic growth and economic self-sufficiency. They favored the existence of protective tariffs on imports (which had Congress had adopted in 1789) both as a means of protecting domestic production and as a source of revenue.

The ratification in 1795 of Jay's Treaty (named after JOHN JAY) sparked anger at the Federalists from a wide array of citizens. The British were still in control of fur-trading posts in the Northwest Territories, and they were accused of encouraging Indians to rise up against the Americans. British ships were seizing American ships and impressing American sailors; they were also prohibiting American ships from engaging in trade with the West Indies. Jay, the chief justice of the U.S. Supreme Court, was sent to England as an envoy and returned with a treaty that gave the British a deadline for leaving the fur posts. Almost none of the other issues was addressed. A particularly unpopular provision of the treaty called for the U.S. to settle pre-Revolution debts to the British, totaling $2.6 million.

Jeffersonians, and even many Federalists, felt that the treaty had been too generous to the British, although Hamilton saw it as a necessary action because Britain generated tariff revenues through its exports. In 1796, JOHN ADAMS (a Federalist) was elected the nation's second president with 71 electoral votes, defeating Jefferson by three votes. Jefferson became vice president.

Meanwhile, relations with France were deteriorating rapidly. The notorious "XYZ Affair" in 1796 was typical of what Jeffersonians saw as the weakness of FEDERALISM. The XYZ AFFAIR involved an unsuccessful attempt by a French agent to exact bribes in exchange for France's cooperation in negotiating an international trade treaty. France, angered by the pro-British Jay's Treaty, began to interfere with American ships. An American delegation was sent to France, and the French demanded a loan to the French government as well as a $240,000 bribe.

Although American public opinion hardened against the French, President Adams tried to repair the situation diplomatically, which angered many Federalists who thought that declaring war on France was the best course of action. This split within the FEDERALIST PARTY helped to ensure Jefferson's victory in the 1800 presidential election. Democratic-Republicans also won a majority of the seats in Congress.

Jefferson's party dominated American politics for the next two decades. One reason was that the Jeffersonians proved themselves to be willing to adapt to change. An example was the LOUISIANA PURCHASE of 1803. As a Republican, Jefferson initially felt that the president did not have the power to make such a large purchase (828,000 square miles). He recognized, however, that the price of $15 million (about three cents per acre) was a significant bargain, and that the purchase would double the size of the U.S. and also eliminate the danger of having an imperialist French colony on its border. He went against his partisan instinct and made what he believed was the right decision for the country.

During the WAR OF 1812, Jefferson's successor, JAMES MADISON, battled the British overseas and the Federalists at home. Many Federalists, especially in the New England states, felt that the war would irreparably damage their ability to trade by sea with Europe. This anti-war stance proved unpopular, however, since the war ended in what most Americans perceived as a victory over Great Britain. Thus the Federalists were soundly defeated in the 1816 presidential election. The new president, JAMES MONROE, presided over a time of relative political calm during which many Federalists came to support the Republicans. This period was known as the "Era of Good Feeling," and although Monroe enjoyed wide support during his two terms in office, various factions were developing within his own party.

In the election of 1824, JOHN QUINCY ADAMS was elected president, narrowly defeating War of 1812 military hero ANDREW JACKSON. Although both were Democratic-Republicans, Adams's political philosophy was closer to that of the Federalists, and during his term in office the party split into two main factions. When Jackson ran for president in 1828, he ran as a Democrat—and won handily. Adams's wing of the party became known as the National Republicans, many of whom later formed the WHIG PARTY.

Bell, Rudolph M., 1973. Party and Faction in American Politics: The House of Representatives 1789–1801. Westport, Conn.: Greenwood Press.

Cunningham, Noble E., 1963. The Jeffersonian Republicans in Power: Party Operations, 1801–1809. Chapel Hill, N.C.: Univ. of North Carolina Press.

The Duel | Article

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The Federalist Party:

By the time Alexander Hamilton died on the dueling grounds of Weehawken, New Jersey, the power of the Federalist Party was in terminal decline. Federalism was born in 1787, when Alexander Hamilton, John Jay, and James Madison wrote 85 essays collectively known as the Federalist papers. These eloquent political documents encouraged Americans to adopt the newly-written Constitution and its stronger central government.  Largely influenced by the ideas of Alexander Hamilton, the Federalists succeeded in convincing the Washington administration to assume national and state debts, pass tax laws, and create a central bank. These moves undoubtedly saved the fledgling democracy from poverty and even destruction. In foreign policy, Federalists generally favored England over France. Anti-Federalists such as Thomas Jefferson feared that a concentration of central authority might lead to a loss of individual and states rights. They resented Federalist monetary policies, which they believed gave advantages to the upper class. In foreign policy, the Republicans leaned toward France, which had supported the American cause during the Revolution.  Jefferson and his colleagues formed the Republican Party in the early 1790s. By 1795, the Federalists had become a party in name as well. After John Adams, their candidate, was elected president in 1796, the Federalists began to decline. The Federalists' suppression of free speech under the Alien and Sedition Acts, and the assumption of closer relations with Britain instead of France, inflamed Jeffersonian Republicans. In 1801 Jefferson, with Vice President Aaron Burr at his side, assumed the presidency. 

The Federalists feared and hated Jefferson, but partly due to infighting, they were never able to organize successful opposition. A last great hope -- that the New England states would secede and form a Federalist nation -- collapsed when Jefferson won a landslide reelection in 1804, thanks to the Louisiana Purchase. Alexander Hamilton was left with little power -- and with no choice but to meet Aaron Burr on the dueling ground in hope of reviving his political career. But Hamilton was doomed, and so was his party. The Federalists would never again rise to power.

The Republican Party:

Known informally as the Jeffersonian Republicans, this group of politicians organized in opposition to the policies of Federalists such as Alexander Hamilton, who favored a strong central government.  Led by Thomas Jefferson, whom they helped elect to the presidency for two terms (1801-1809), the Republicans believed in individual freedoms and the rights of states. They feared that the concentration of federal power under George Washington and John Adams represented a dangerous threat to liberty. In foreign policy, the Republicans favored France, which had supported the Colonies during the Revolution, over Great Britain. These ideas represented a departure from the policies of the Federalists under the administrations of Washington and Adams. The Federalists had established monetary policies that gave more power to the federal government and had rejected ties with France in favor of closer links to Britain.  During the undeclared war with France at the end of the 1790s, the Federalists clamped down on those who spoke in favor of the France under the Alien and Sedition Acts. The Republicans vigorously opposed this action, regarding it as a dangerous intrusion on the rights of free speech. 

Using these issues, as well as the power swung his way by his vice president, Aaron Burr, Republican leader Thomas Jefferson won election to the presidency in 1800. This Republican party, which would hold power until 1825, is the direct ancestor of today's Democratic Party.