This chapter covers the tumultuous 1790s, the first decade of the Republic's existence under the new Constitution. The chapter opens by describing the celebrations over ratification of the Constitution, celebrations that could not hide basic divisions in society and the great uncertainty many Americans felt over their republican experiment. Two of the central purposes of the chapter are to describe the basic division in the United States between the commercial and semi-subsistence economies and to explain how this division was central to the development of two competing political parties.

1789: A Social Portrait
As the new government began operation in 1789, the Republic divided roughly between commercial and semi-subsistence areas of the country. Hector St. John de Crvecoeur celebrated the life of semi-subsistence farm families, where wealth remained fairly evenly distributed and where people tried to provide as much of their own food and wants as they could. They had only limited contact with regions beyond their local community, seldom saw cash, and functioned in a largely barter economy. Benjamin Franklin, by contrast, came to symbolize the world of commerce. In his writings, he praised the marketplace and upheld the commercial side of America; he showed how urban economies and commercial farm families had become tied to larger markets that sold specialized goods or services were sold and created increased social distance between the rich and the poor.

Americans who participated in the commercial economy held different attitudes about wealth and opportunity than did those who lived in semi-subsistence areas. Urban merchants and workers--as well as commercial farmers--generally supported the Constitution during the debate over ratification, while semi-subsistence farmers tended to oppose it, fearing too much concentration of power in the hands of aristocrats and urban merchants. Content with their lives and harboring the traditional fear of taxes, debt, and intrusive government, they wanted to preserve their society and avoid any outside interference in their lives.

The New Government
Americans put their faith in George Washington, who more than any individual personified the Republic. Washington organized the executive branch into Departments and created a cabinet of advisors. The most important positions in the cabinet went to Alexander Hamilton, as Secretary of the Treasury, and Thomas Jefferson, as Secretary of State. To mollify opponents of the Constitution, Congress approved and the states ratified a series of amendments to safeguard certain basic liberties. These first 10 amendments became known as the Bill of Rights.

A strong nationalist, Hamilton emerged as the dominant figure in the cabinet. He worked to strengthen the power of the federal government by assuming the states' remaining Revolutionary war debts and funding, or paying, the outstanding federal debt. This process became known as funding and assumption. Congress finally approved these policies once Hamilton agreed to the compromise of locating the permanent capital on the Potomac River. Eager to tie the wealthy to the new government, Hamilton also proposed that Congress charter a national bank to aid the Treasury in its transactions, a protective tariff to stimulate manufacturing, and a series of internal or excise taxes (the one on whiskey was most controversial). Congress eventually approved most of Hamilton's recommendations. His argument that the Constitution gave the national government implied as well as explicit powers and that legislators and executive should interpret the document loosely persuaded Washington to sign the bill creating the national bank.

While these ideas appealed to citizens active in the commercial life of the nation, they stimulated fears among other Americans. Eventually the Republican Party, organized by James Madison and headed by Thomas Jefferson, opposed the policies of the Federalists. Republicans feared that a corrupt aristocracy would come to dominate American society, that financial speculators, wealthy bankers, and unprincipled politicians would gain power, as had happened in Great Britain with the powerful Bank of England. They endorsed a strict construction of the Constitution, and wanted a less active federal government.

Expansion and Turmoil in the West
Washington tried to remain above the hostility developing between Jefferson and Hamilton, but Hamilton succeeded in gaining the president's support to send an army against citizens in western Pennsylvania. There, a whiskey rebellion had arisen against Hamilton's excise tax, an effort to raise money for the federal government and assert its power. Hamilton strategy proved an overreaction, for the army encountered little resistance and easily restored order.

The Washington administration also sought to tie the West more firmly to the Union by defeating the Miami Confederacy and opening new tracts of land in the Ohio valley to white settlement. Thomas Pinckney also negotiated a favorable treaty with Spain that allowed western farmers to use the Mississippi River to ship their produce.

The Emergence of Political Parties
Political parties emerged slowly because the ideology of republicanism taught Americans to fear parties. But the sharp controversy over Hamilton's domestic policies led to the formation of the first national parties in American history. The Federalists, led by Hamilton and Washington, took shape first. In general, Federalists believed in order and hierarchy and supported a loose construction of the Constitution (in order to allow the federal government to actively encourage commerce and manufacturing). Eventually the Republican Party, organized by Madison and headed by Jefferson, opposed the policies of the Federalists.

Differences over foreign policy also sparked the formation of parties. The French Revolution became a focus of controversy in the United States. When monarchical England and republican France went to war, Washington pursued a neutral course. The Federalists, however, favored Britain, while the Jeffersonians backed France. Efforts to settle the differences between the U.S. and Britain failed, particularly on issues of trade, neutral rights, and impressment. The U.S. gained little from Jay's Treaty (1795), which tied the nation economically to Britain. Bitter debates over the treaty further stimulated the creation of rival parties. In 1796, Washington announced that he would not seek another term. In the first contested presidential election in American history, John Adams, the Federalist candidate, defeated Jefferson, who was elected Vice President.

The Presidency of John Adams
Differences of opinion over America's role in European affairs continued to fester during the administration of Federalist John Adams. The major events of these years--the XYZ Affair, the Quasi-War with France, the Federalist-sponsored Alien and Sedition Acts, and the Republican response in the Virginia and Kentucky resolutions--all became part of the debate over America's diplomatic course. They also demonstrated the violence and bitterness in politics during the 1790s.

The Federalists increasingly lost support because of their suppression of civil liberties and their aristocratic disdain for the masses. An increasingly fierce personal feud between Adams and Hamilton also hurt the party. Thus in 1800, Jefferson defeated Adams (although the House had to break the tie between him and his vice-presidential running mate, Aaron Burr). Despite the threat of violent tumult and even civil war, power passed peacefully from one administration and party to another. Under Washington's firm leadership, the Federalists had made the Constitution a workable instrument of government and established economic policies and principles of foreign affairs (particularly of neutrality) that even Jefferson's Republicans would continue.