Alexander Hamilton's Farewell Address

George Washington famously warned against the influence of political parties in his Farewell Address. As a patriot and founding father, he worried partisanship, the love of party, would supersede the love of country. Ironically, during his presidency, the first two political parties were formed. The Federalists coalesced around the ideas of Alexander Hamilton as laid out in his Financial Plan. The Democratic-Republicans, led by the author of the Declaration of Independence, Thomas Jefferson, and the father of the Constitution, James Madison, united to oppose Hamilton’s plans. It was Hamilton’s Financial Plan including the Bank of the United States, assumption, and a tariff on imported goods that directly led to the formation of political

George Washington selected Alexander Hamilton to be Secretary of Treasury and in charge of “directing federal economic policy.” (ushistory.org, Hamilton's Financial Plan) Hamilton then composed and proposed his Financial Plan which contained four major parts: assumption of state debt, The National Bank, promotion of manufacturing and the implementation of taxes. Hamilton believed “the federal government should pay off all state debts at full value” (ushistory.org, Hamilton's Financial Plan) using federal funds. He believed this would increase the validity of the new central government and claimed doing otherwise would “cause citizens to lose faith in the credit and integrity of the struggling government and sabotage the new Constitution.” Hamilton’s National Bank, also referred to as the Bank of the United States, was proposed to help stabilize America’s economy and make it more flexible. It would store federal income revenue, give loans to those who need it, and control state bank policies. Hamilton was a strong advocate for manufacturing, evidenced by his Report on Manufacturing. Hamilton aspired to make American manufacturers self-sufficient and have America adopt a mercantilist economic policy rather than remain sustained by other nations. Traditionally, the American economy depended on agricultural exports to pay for the import of manufactured goods--mainly from Britain. Hamilton thought this reliance on costly foreign goods ”kept the American economy at a limited level.” (ushistory.com, Hamilton's Financial Plan) Making America a manufacturing powerhouse would allow them to place tariffs on their products and increase revenue that could help pay off the debt. Hamilton also desired excising taxes on goods, most famously on whiskey. Hamilton’s Financial Plan was mainly supported by the elite class and the his future political party: the Federalists. However, many