Hamilton’s Reports and the U.S. Political Development

At the end of the eighteenth century the U.S. history was characterized by a number of changes related to the political sphere of life. They were explicitly given in the reports written by Alexander Hamilton, one of the Founding Fathers and the first secretary of the Treasury. In these documents, he particularly considered such areas as manufacturing, the public credit, and the central bank’s policy, thereby highlighting the century’s political concerns. However, this period was significant not only by the government’s internal affairs, including the first elections and the formation of parties, but also by signing international treaties and regulating acts. Hence, in order to demonstrate the specificities of this time, it is essential to analyze all these processes in terms of their economic, political, and constitutional impact.

Hamilton’s Reports on the Public Credit

The first subject reflected on by Alexander Hamilton’s reports was public finance and debt. However, this area was considered not as purely economic but a prerequisite to justice and freedom from Great Britain. To achieve this objective, he proposed to pay off all the debts incurred during the War of Independence and other types of national debt to other countries and gain full financial autonomy. Nevertheless, the development of such a good initiative in terms of promoting the country’s growth was accompanied by numerous difficulties.

The principal economic issues resulting from this idea were related to the uneven allocation of opportunities and the financial status of the citizens. Thus, the quality of lives of people from less prosperous states was worsened by the need to pay off their personal debts. From this perspective, the initiative intended to distribute the national debt among them would indicate the neglect for equal rights. Moreover, as follows from the text of his reports, he did not accept the possibility of a partial repudiation of debts insisting on their full and unconditional relief. This intention implied the favor of industrial and commercial areas over people’s interests. Hence, such actions could be viewed as entirely unconstitutional, and this fact presented the principal obstacle to this project’s practical implementation.

As for political issues related to the reports on the public credit presented by Alexander Hamilton, they derived from the previously specified inequality and were connected to his personal views. They reflected his perspective on the need for the complete authority of the national government in contrast to the restricted rights of states. This position led to numerous debates since it contradicted the very nature of the country, consisting of separate entities. In this case, the attempts to devalue states’ powers seemed to be politically inadequate.

Hamilton’s Reports on the National Bank

Another topic of Alexander Hamilton’s reports was the attempt to demonstrate the national bank’s alleged role in the processes mentioned above. In this way, he added practical actions, which were missing in his first writings and, therefore, criticized them. According to his views on funds allocation, one-fourth of the shares will belong to the national government, and the others should be distributed among public entities. These documents also contained recommendations concerning the amounts that should be present at the financial institution, the methods of purchase, and governing. Nevertheless, they also imply particular issues that seem to be controversial.

First, these reports are similar to the ones demonstrating the ways to address the public credit and relieve the national debt. They also expressed a favorable attitude to specific categories of citizens instead of serving for the nation’s benefit. Hence, the same problem of an economic nature was transferred from Hamilton’s earlier works to his thoughts regarding the establishment of the national bank. In this way, it did not propose a solution but extended the already existing controversy.

Second, the reports contained the intertwined political and constitutional issues related to the national government’s authority and the Constitution’s contradicting provisions. Thus, the views of Alexander Hamilton regarding the alleged need to ensure the government’s full control were opposed by the existing regulations. They prescribed only limited powers, and the establishment of a national bank was not one of them. From this perspective, the proposal of this political leader was entirely unconstitutional, as in the case with the public credit. However, this bill was finally adopted, and the ideas presented by Hamilton consequently formed the basis of the Federalist Party’s ideology.

Hamilton’s Reports on Manufacturing

The third type of reports written by Alexander Hamilton was oriented on manufacturing and its development in the United States. In these documents, he presented research and the consequent thorough analysis of the field’s current situation. It was focused on the clarification of manufacturers’ needs and their timely processing and addressing. As in the situation with the public credit and the establishment of the national banks, these reports evoked debates primarily regarding the initiative’s economic impact.

The United States at the time were significantly dependent on the states’ agricultural progress. Hamilton also recognized the importance of this field but believed it would be more productive to re-orientate the country’s economy since manufacturing seemed to be more beneficial for gaining wealth and stability. The primary reasons for such a stance were the capability of manufacturers to efficiently complement agriculture, the prospective diversification of resources, and international trade promotion. However, in this situation, his main opposition was formed by farmers who disapproved of this position.

The political aspect of the matter was contained in the confrontation of the Democratic-Republican Party founded by Thomas Jefferson and James Madison and the Federalist Party supported by Alexander Hamilton. It was also connected to the economic considerations presented above since the former promoted agriculture, and the latter was oriented on a global transition to manufacturing. As for the constitutional problems, they were similar to the ones stemmed from the reports on the national bank. Thus, the government’s powers in terms of establishing tariffs on foreign goods and the prohibition of import of manufacturing products were unclear and, therefore, controversial.

The Jay and Pinckney Treaties

One of the most contradictory events in the history of the United States was the signing of the Jay Treaty named after its American negotiator. It involved economic and political issues regarding the country’s relations with Great Britain and France. The former was their principal partner in a shipping trade while being in a state of war with the latter. This circumstance defined the necessity for the national leaders to balance between France, with which they had a treaty, and Great Britain, which was the main importer of various goods in the country.

The opinions on the matter were split due to the U.S. leaders’ inability to convince the citizens of their actions’ constitutionality. However, the importance of such a measure was explained by the prevailing need to establish the economy of the United States and thereby promote their prosperity. As a result, it was finally signed on November 19, 1794, and this document solved a number of issues between the parties. The USA received compensations for economic discrimination from Great Britain, which, in turn, gained access to the Mississippi River and safety at the U.S. ports. These actions led to an undeclared naval war with France. Nevertheless, they allowed promoting their economy and successfully dealing with emerging threats.

Another treaty demonstrating the directions of American politics at the time was the Pinckney Treaty named after its negotiator from the United States. It was signed on October 27, 1795, and represented efficient solutions to economic problems by the government. The two countries involved in the matter, Spain and the USA, had a territorial dispute hindering the latter’s commercial development due to the restriction of navigation. As a result, they agreed on the U.S. rights for further expansion and managed to establish the border between their territories on the continent. Therefore, this document can be considered as one more successful attempt of the U.S. government to foster the country’s economic progress.

The Federalist and Republican Parties

The creation of the Federalist and Republican Parties was mostly conditional upon the confrontation between Alexander Hamilton and Thomas Jefferson, whose views on every aspect of the American government’s functioning were opposed. As can be seen from the former’s reports, he supported a strong national government, the development of the Constitution, and the promotion of the economy through the national bank’s foundation and assistance for manufacturers. In contrast to him, the latter favored the idea of the states’ rights over the centralized power and highlighted the dominant role of farmers for the national economy. In this way, Hamilton’s views constituted the basis for the Federalist Party’s ideology, whereas Jefferson and his associates combined under the Republican Party.

The opposition of the parties was founded on a variety of issues representing the general disagreement between them. However, the first stumbling block, which led to an open confrontation, was the ratification of the Constitution and the dubious effectiveness of the Articles of Confederation. It was clear that the existing regulations hindered the economic development of the United States by an ambiguous taxation mechanism and their inability to regulate interstate trade. Nevertheless, no apparent solution could be found to this problem, and this fact defined the need for politicians to split into two parties.

The Elections of 1796

The elections of 1796 were one of the most significant events during the period under consideration. They were complicated by the unwillingness of George Washington to run for a third term of presidency and the consequent rivalry between the emerged parties. In fact, it was the first contest between the Federalists and the Republicans that resulted in specific complications. Due to the absence of precedents, this procedure was not regulated by any documents and, therefore, addressed by the newly created Article Two of the Constitution and the Electoral College. The latter consisted of a number of electors equal to the total of states’ congressmen. In this way, the elections of 1796 contributed to the establishment of this practice in the country.

The candidate from Republicans, Thomas Jefferson, and the representative of the Federalist Party, John Adams, competed with other candidates. The following events demonstrated the clash of various strategies developed by the involved persons and entities. Thus, Alexander Hamilton thought Thomas Pinckney to be a better president due to his stronger Federalist position than the one of Adams. The Federalist Party, in turn, believed the former would be a vice-president and adjusted their strategy considering this intention. As a result, the opposition of their plots led to an unprecedented occasion in history, which was the victory of Adams followed by Jefferson, thereby making the candidates from different parties a president and a vice-president accordingly. Thus, the elections of 1796 were unique in terms of their outcome as well as the impact on other elections.

The Alien and Sedition Acts

The foreign policy of the United States at the time was defined by the threats conditioned by the previously tense relations with France after signing the Jay Treaty. Hence, the principal actions of John Adams in this direction were focused on eliminating the risks by introducing the so-called Alien and Sedition Acts. These laws granted the power to deport foreigners to the Federalist government and restrict voting rights for new immigrants as well as some principal freedoms of people. In this way, the political leader confirmed his perspective on the source of the threat to the country’s security. However, this circumstance negatively affected the president’s popularity and support from the citizens.

The attempts of John Adams to re-establish order at the expense of immigrants were the defining factor in the emergence of Democratic-Republican preferences in the latter. Moreover, the attention of other public activists to the matter damaged his image, especially after a series of imprisonments under the Sedition Act. In this way, the president’s actions happened to be unconstitutional since they violated the First Amendment, according to which every person has freedom of speech, and the press should be free as well. Thus, Adams’s initiatives regarding the political means of maintaining security turned into actions contradicting the Constitution.

Virginia and Kentucky Resolutions

The passage of the Alien and Sedition Acts influenced not only the general public attitudes but also evoked the response of the Democratic-Republican Party’s representatives. It was presented in the form of Virginia and Kentucky Resolutions in 1798, the next year after the bills’ adoption, and intended to prove the unconstitutional nature of the Federalist-dominated Congress’s actions. From their perspective, these decisions contradicted the principles of protection of civil liberties provided by the Constitution. Moreover, they violated the states’ rights by limiting their powers, as stated by Thomas Jefferson and James Madison, the Resolutions’ authors. In this way, the Alien and Sedition Acts and the opposition of the Democratic-Republican Party to it can be considered as one of the principal constitutional conflicts in American history.


To summarize, the eighteenth century was a period in the development of the United States characterized by political, economic, and constitutional disputes. They were first documented in the reports of Alexander Hamilton covering the issues of the public credit, the establishment of the national bank, and manufacturing. The presented ideas resulted in the division of opinions, which, in turn, led to the emergence of the Federalist and the Democratic-Republican Parties. However, their opposition was connected not only to internal affairs but also to the relationships with other countries. As can be seen from the signing of the Jay and Pinckney Treaties and the Alien and Sedition Acts, their views differed in every aspect of political processes. Therefore, it can be concluded that this period was essential for forming the parties’ future courses.

Reference List

Sylla, R., Cowen, D. J. Hamilton and the US financial revolution. Journal of Applied Corporate Finance. 2019; 31(4): 10-15.

Report relative to a provision for the support of public credit. National Archives. Web.

Final version of the second report on the further provision of necessary for establishing public credit (report on a national bank), 1790. National Archives. Web.

Alexander Hamilton’s final version of the report on the subject of manufactures. National Archives. 2020. Web.

Green, N. C. “The focus of the wills of converging millions”: Public opposition to the Jay Treaty and the origins of the people’s presidency. Journal of the Early Republic. 2017; 37(3): 429-469.

Treaty of San Lorenzo/ Pinckney’s Treaty, 1795. Office of the Historian. 2020. Web.

Karol, D. Political parties in American political development. In: Valelly R. M., Mettler S., Lieberman R. C. Eds. The Oxford Handbook of American Political Development. Oxford University Press; 2016:473-490.

Constitutional Rights Foundation. The troubled elections of 1796 and 1800. Bill of Rights in Action. 2016; 32(1): Web.

Alien and Sedition Acts: Primary documents in American history. Library of Congress. 2020. Web.

Watkins, W. J. Reclaiming the American Revolution: The Kentucky and Virginia Resolutions and Their Legacy. New York, N.Y.: Springer; 2016.

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