Federalist Challenges in the 1790's

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  • Topic: Alexander Hamilton, United States, Money
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  • Published : October 24, 2008
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From the years 1789 through 1800, Federalist went through many harsh conditions. There were many disputes between the Federalist Party, led by Hamilton, and the Republicans, led by Jefferson. The events that created the most trouble for the Federalists and were most significant in the development of the Federalist Party were creating a national bank, how to pay the national debt, and establishing the public credit. Overall, the Federalists faced more of an economic challenge than anything else.

Since raising revenue in the United States was one of the first economic issues the Federalists were up against, a solution to national debt had to be found and agreed upon. During the Federalist’s struggle, James Madison was a federalist who was also known for being Hamilton’s close ally. He imposed taxes to control the government and to simultaneously raise revenues. At first, the taxing started off rather small, but then quickly grew into more expensive taxes. Madison believed that raising revenues would be better for the economy. The amount of taxes developed depended on the basis of a ship. If the Americans built the ship then they would pay a small amount; if foreign companies built the ship, then they would pay a greater tax than the Americans. The federalists also believed that the idea of a national bank could be plausible because of a line in the Constitution stating that anything that would benefit the country could be formed by the central government. However, since the national bank was still up for debate, the Federalists saw the Constitution as guidelines as a way of enforcing their idea. Although the Republicans only saw a national bank as a way of giving too much power to the central government, the idea of a national bank was to make the states less dependent on imported manufactured goods.

Another thing that the federalists did was challenge the statement that the government shouldn’t to pass taxation on imported goods. The idea that Hamilton had...
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