Thomas Jefferson

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Strict Construction

Another matter on which the two men disagreed intensely was the establishment of a national bank. Hamilton advocated such a bank as a means of forging a bond of common interest between business and the federal government. Jefferson felt that a national bank would encourage people to desert agriculture for speculation and give the commercial interests too much power in the federal government.

Jefferson supported his views by a “strict construction” of the Tenth Amendment of the Constitution, which specified that “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Jefferson argued that since the Constitution did not specifically empower the federal government to establish a national bank, it could not do so. Hamilton, however, argued for a “loose construction” of the Constitution. Relying on the implied-powers clause, which states that Congress can make all laws “necessary and proper” for the execution of its powers, Hamilton argued that the federal government could establish a bank. Jefferson's views were rejected when President Washington signed a bill establishing a national bank.

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Political Parties

Out of the divergent political philosophies of Jefferson and Hamilton emerged the first clearly defined political parties in the United States. Hamilton's followers called themselves Federalists, later known as the Federalist Party, and Jefferson's were Republicans, later known as the Democratic-Republican Party. Feelings ran high between the two parties. Jefferson was assailed as an atheist and a demagogue. The Federalists were accused of planning to establish a monarchy along British lines.

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Foreign Affairs

Since its defeat in the revolution, Great Britain had refused to sign a trade treaty with the United States. To force Britain to give the United States favorable commercial terms, Jefferson advocated an embargo (suspension of trade) against that country. He also wanted Britain to relinquish the forts in the Northwest Territory, which were held in violation of the peace treaty of 1783. Hamilton opposed an embargo, claiming that the United States would lose so much in customs duties that its finances would crumble. Jefferson did not get his embargo until much later, when he was president.

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Citizen Genêt

In 1793 England and France were at war. Jefferson favored France, while Hamilton and the Federalists were committed to England. Both agreed, however, that the United States should stay out of the European war. Hamilton pressed President Washington to make an open declaration of neutrality. Jefferson felt that it would be neither wise nor constitutional for the president to make such a proclamation. However, Jefferson yielded to Hamilton in order to attain a goal he considered more important: the recognition of the republican government of France. This was achieved by accrediting the French diplomatic representative to the United States, Citizen Genêt (see Genêt, Edmond Charles Édouard).

Unfortunately, Genêt repeatedly violated the neutrality of the United States and finally threatened to make a direct appeal for the support of the American people. Jefferson eventually was forced to agree that Genêt should be recalled.

The Genêt incident was one of many frustrations that Jefferson encountered as secretary of state. Late in 1793, despite President Washington's pleas, he resigned. In January 1794 he returned to his beloved Monticello, believing that he was leaving public life for good.

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Break With Washington

Even in retirement, Jefferson kept a close watch on political affairs. Federalist victories were a source of great concern to him, and his Republican allies in Congress looked to him for leadership. Jefferson was greatly distressed with Jay's Treaty, negotiated with Great Britain in 1794 by John Jay, chief justice of the Supreme Court of the United States. The treaty was intended to resolve remaining differences with Britain, including trade restrictions in the West Indies. However, the treaty had failed to win all the desired concessions for the United States, and the section dealing with West Indian trade was humiliating. Angry with Washington for having supported the treaty, Jefferson wrote his friend Philip Mazzei:

He added a barely concealed indictment of President Washington, calling him a Samson who let his head be shorn by England. Mazzei was so indiscreet as to publish the letter, and Washington never again regarded Jefferson as his friend.

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