Alexander Hamilton vs. Thomas Jefferson

George Washington was sworn in as the first U. S. President at an inauguration ceremony on April 30, 1789, held on the steps of Federal Hall, 26 Wall Street, a block east of what is now the New York Stock Exchange. Vice-President John Adams had been sworn in on April 21.

Also, in April, both houses of Congress held a quorum and began to legislate.

In New York City, in April 1789, a new government, a republic, took its first small steps.

For his cabinet, Washington selected Thomas Jefferson, Secretary of State; Alexander Hamilton, Secretary of Treasury; Henry Knox, Secretary of War; and Edmund Randolph, Attorney General. At the onset, Jefferson clashed with Hamilton. Soon, they hated each other.

Hamilton, then 34, was from New York City, was an urban and brash financial risk-taker.

Jefferson, then 46, was from Virginia, was an agrarian, cerebral, bookish, a slave-owner.

From a high school text, I read, “American political parties date their birth from the bitter clashes between Hamilton and Jefferson over fiscal policy and foreign affairs.”

Those who agreed with Hamilton coalesced into a Federalist party. They included Washington and Adams, plus the Chief Justice of the Supreme Court John Jay, who said at the time, “Those who own the country ought to govern it.”

The Federalists demanded “rule by the best people,” an exclusion of the masses, a powerful central government, weakened state governments, a loose interpretation of the Constitution, policies to foster business, a protective tariff, a national debt, an expanding bureaucracy.”

Those who agreed with Jefferson coalesced into a Democratic-Republican party, and they included James Madison, Southern slave owners, farmers, small shop owners, and artisans.

The Democratic-Republicans demanded “rule by the informed masses,” an extension of democracy, a weak central government, strict interpretation of the Constitution, no national debt, a reduction of federal officeholders, policies that favored farmers, free speech, a free press.

Hamilton vs. Jefferson; Federalist vs. Democratic-Republican. “Political parties won control of the machinery of the Electoral College for presidential elections, and the Electoral College became henceforth a rubber stamp.” The two-party system continues today.

Hamilton wanted the new federal government to assume the thirteen states’ debts incurred during the Revolutionary War. His view prevailed. In 1802, Jefferson wrote, “We can pay off his [Hamilton’s] debt in fifteen years, but we can never get rid of his financial system.”

Next, Hamilton wanted a national bank. Congress hotly debated it, but it passed, and was sent to Washington for his signature. The President asked Jefferson and Hamilton for their thoughts.

Jefferson argued against a bank. He cited the Tenth Amendment. “All powers not delegated to the U.S. by the Constitution are reserved to the states, or to the people.” The states have the right.

Hamilton argued for a bank in a document he submitted to Washington on February 23, 1791, entitled, “Opinion on the Constitutionality of the Bank.”

In it, Hamilton rejected Jefferson’s strict interpretation of the Constitution, and wrote that “the powers ought to be construed liberally in advancement of the public good.”

He underscored Article 1, Section 8, Line 18, that reads, Congress holds the power, “To make all laws which shall be ‘necessary and proper’ for carrying into execution the foregoing powers.”

The words “necessary and proper,” now called the “elastic clause,” have “set a precedent for enormous federal powers,” that have unfolded since.

Washington agreed with Hamilton’s argument and two days later, on February 25, 1791, he signed into law the first national bank. Jefferson resigned as Secretary of State on December 13, 1793, fed up with Hamilton, who resigned as Secretary of State a year later on January 31, 1795.