8-3.

4
Creation of the Two Party System

8-3.4 Analyze the position of South Carolina on the issues that divided the nation in the early
1800s, including the assumption of state debts, the creation of a national bank, the protective
tariff and the role of the United States in the European conflict between France and England in
the War of 1812.
The New Federal Government was established in 1789. George Washington was elected 1st
president and Alexander Hamilton elected Secretary of Treasury.
They proposed to:
1. strengthen the national government through the economy
2. have the national government pay the debt, including those of the states, caused by the
American Revolution
3. create national bank to issue money and collect taxes
4. issue a high protective tariff
Two political parties developed over disagreements over the proposals. The Federalists led by
Alexander Hamilton believed in a strong central government that would promote trade and
industry. Most Federalists were from New England. The Democratic-Republicans, who were led
by Thomas Jefferson and James Madison, opposed Hamilton's proposals. South Carolinas
Lowcountry elite supported the Federalists. Those in the Upcountry supported the DemocraticRepublicans. Most South Carolinians supported the assumption of state debts because so much
of the war had been fought in South Carolina and therefore the state had more debt. However,
most Democratic-Republicans opposed assumption, but they finally agreed to assume state
debts because Federalists agreed to move the capital of the nation to Washington D.C.
The biggest controversy was over the establishment of a national bank. DemocraticRepublicans argued that Constitution should be interpreted strictly and the document did not

specifically grant Congress the right to create a national bank. Federalists supported a loose
interpretation of the Constitution and argued that Congress had been granted the authority to
make all laws that were necessary and proper to the execution of its powers. Federalists also
argued a national bank was needed to tax and control commerce which was granted to
Congress by Constitution. Washington sided with the Federalists and signed into law a bill
creating the first National Bank. The Democratic-Republicans disliked this because they
believed it gave the federal government too much power; they were also against the protective
tariff because they believed in helping farmers and shopkeepers not manufacturers.
When the French Revolution began in 1789, the Democratic- Republicans supported the French
in the overthrow of their King. Federalists were upset by bloodshed and when France declared
war on Britain, they sided with Britain hoping to continue trading. George Washington issued a
Proclamation of Neutrality and the United States attempted to remain neutral in the
Napoleonic Wars. President John Adams sent Charles Pinckney of South Carolina to negotiate
peace with France. Pinckney and 2 other Americans met with 3 representations from the
French government (X, Y, and Z) who asked for a bribe.
Pinckney replied no, no, not a sixpence. The incident became known as X,Y,Z Affair and
brought emerging political parties into conflict. Federalists prepared for war and the
Democratic-Republicans showed anger with John Adams in their party newspapers. In
response, Federalists passed the Alien and Sedition Acts designed to limit the growth of the
Democratic-Republicans Party and to silence its newspapers. Several newspaper publishers
were jailed and the Democratic-Republicans stated the Alien and Sedition Acts are an attack on
freedom of the press.
Jefferson and Madison wrote the Virginia and Kentucky Resolutions which stated states had the
right to nullify (ignore) an act of Congress that they found to be unconstitutional such as the
Alien and Sedition Acts. These resolutions became a foundation of the states rights doctrine.
Controversy over
the Alien and
Sedition Acts
contributed to the
election of
1. How would you react if
Thomas Jefferson
you were forced to join
in 1800.
another countrys
Napoleonic wars
military?
continued and Americans traded with both French and
British. However, The British practice of impressment which meant pressing into service
American sailors that British claimed were British citizens. This became a major problem.
Image found:
http://public.gettysburg.edu/~t
shannon/hist106web/site13/Ne
w%20Folder/impressment.htm

The Embargo Act was passed in 1807 to stop American trade with the French and British which
hurt the American shipping industry based in New England. Federalists opposed the Embargo
Act and the War of 1812. During the War of 1812 Democratic-Republicans living in the West
accused the British of urging Natives to attack American settlers. When British fired on an
American ship, protest meetings were held all over South Carolina.
In 1810 War Hawk John C. Calhoun was elected to Congress from South Carolina and urged
congress to declare war on Britain. In 1812, the United States declared war on Britain and
invaded Canada where American Army was defeated. In 1814, a British army attacked
Washington, D.C. and set fire to the capital and the presidents house. The treaty did not bring
an exchange of land but brought new surge of nationalism. The Federalist Party died as a result
of their opposition to war and Democratic-Republicans, including John C. Calhoun, began to
support Federalist policies including the protective tariff and national bank.

Picture Found:
http://www.posterenvy.com/servlet/the-1646/2Poster-Set--dsh-/Detail

2 .What problems would the two

parties create within the United
States?