When the United States stood up to Britain as a sovereign nation in 1776 with the Declaration of Independence, there was a significant unity among the leaders of the country. President George Washington’s unanimous election showed this. The goal was to construct a new nation from scratch, pioneering representative democracy as a new form of government, while at the same time pioneering the uncharted American continent. Without foreign control, it was that initial unity that drove the United States forward. As the country developed, inner tensions began to come forth, culminating in the formation of the two-party system towards the end of the 18th century. It was domestic affairs such as Hamilton’s financial plan, the Whiskey Rebellion, and the Alien and Sedition acts that most greatly impacted politics in the 1790’s. The French Revolution, and other foreign affairs triggered by it, also had an influence on American politics, but this influence was somewhat less than that of domestic affairs at the time.
In 1789, tremors of revolution occurred in France. This revolution started without bloodshed, when the people of France imposed a constitution on King Louis XVI. Maybe this was because the French people longed to be freer, like their American cousins overseas. America was generally excited that the French were rising up against an unfair king, and America was flattered by the notion that the French Revolution was set off by the US’s own revolution.
Even with this excitement, America had some issues of its own to work out. These domestic affairs were even more important than foreign relations to the American politics of the 1790’s. On the agenda was the nearly-nonexistent American credit. Treasury Secretary Alexander Hamilton was still the key figure in the new government, and used his position to try to fix America’s problems. To establish national credit, Hamilton felt it was direly necessary for the federal government to acknowledge and pay for all national debts at face value, plus interest, and to assume the debt of all of the states. These drastic measures brought the total amount owed to foreign nations by the United States government to a staggering $75 million. This created more creditors who were owed money by the United States government, which meant more people had a stake in the success of that government. Hamilton made this into a convincing argument, calling debt a “national blessing,” which allowed him to persuade his archrival Thomas Jefferson to aide the financial plan’s passage through Congress. Jefferson agreed to this only after it was agreed that the forthcoming federal district would be located on the Potomac River, which would greatly help the state of Virginia gain commerce and reputation. After much debate, and a bit of old-fashioned give-and-take bargaining, Hamilton’s plan was carried out in 1790.
In order to pay for the immense debt created by Hamilton’s plan, Congress passed several customs duties and excise taxes. In 1789, Congress quickly enacted a low tariff of about eight percent on dutiable imports. This tariff was partially for protection of the baby industries in the North, but it was more a tariff designed to bring in much-need revenue. Then in 1791, an additional revenue stream was ensured when Congress set an excise tax on a number of domestic items, most significantly of which was whiskey. This ended up hurting many western farmers who depended on distilled liquor as a monetary unit, and also to make a living. These affected people were largely Jefferson-supporters, which brought Jeffersonians and Hamiltonians further at-odds.
Another issue caused much tension between the two rivals, and this was the proposed Bank of the United States. As a native of the British West Indies, Hamilton tended to favor things of England. This tendency surfaced when he decided to model a national bank after the Bank of England. The bank would be used by the federal government to conveniently deposit surplus monies, allowing federal funds to remain in circulation. This would boost the economy, especially in the industrial north. The bank would lend money out, and also print paper currency – alleviating a problem that plagued every state since the country’s inception. The big problem was not so much that Jefferson felt the bank would hurt the economy, but more that it was blatantly unconstitutional. Since Jefferson believed in a strict constitution, he felt that anything not explicitly permitted in the governing document was thereby forbidden. Hamilton, on the other hand, felt that anything not forbade by the Constitution was allowed – in other words, Hamilton favored a “loose” interpretation of the Constitution. It was this difference between the two that eventually led to the formation of the two-party system around 1792.
Meanwhile, the revolutionary tremors in France shuddered the conflict into an earthquake of fighting, when France declared war on Austria. French citizen armies drove back the Austrian invaders, and then France was self-declared a republic. Many Americans rejoiced, until violence in France started the so-called Reign of Terror. Hamilton’s federalists, who reluctantly approved of the early French Revolution, now spoke of its evil. They pointed at the Democratic-Republicans for supporting the bloodshed in France. Jefferson and his people felt, however, that the price of a few thousand “aristocratic heads” was a cheap one to pay for freedom. This perhaps was the main way in which foreign affairs helped to shape American politics – that is to say that the French Revolution drove the wedge between the Federalists and the Democratic-Republicans even further.
To the praise of the Federalists, the American federal government was greatly strengthened in 1794, as a result of Washington’s handling of the Whiskey Rebellion. A miniscule event, the Whiskey Rebellion of western Pennsylvania had profound consequences. For the first time, Washington’s administration used federal troops to crush a revolt. Anti-Federalists condemned the act as an unnecessary display of force. States-rightists were angered, which meant Jeffersonians were angered. Jeffersonians, or the Democratic-Republicans, tended to be agrarian, based more in the South and somewhat in the West. The group was for the common man, unlike the aristocratic Hamiltonian Federalists of the north. That division put aside, the suppression of the revolt raised the respect for the new federal government substantially.
Later in the 1790’s, the still-largely-Federalist Congress passed the Alien and Sedition Acts. The Alien laws attacked immigrants, who tended to join the Democratic-Republics, the party of the common man. The Sedition Act blatantly infringed on First Amendment rights, making it a crime to speak out against the government. This effectively silenced the opposition – the Jeffersonians. In the long run, though, the Alien and Sedition Acts surely caused many people to side with Jefferson. This was a huge contribution of the Alien and Sedition Acts to the shaping of American politics in the 1790’s.