Hamilton’s vision of a powerful commercial republic won strong support from American financiers, manufacturers, and merchants. But it alarmed those who believed the new nation’s destiny lay in charting a different path of development. Hamilton’s plans hinged on close ties with Britain, America’s main trading partner. To James Madison and Thomas Jefferson, the future lay in westward expansion, not connections with Europe. They had little desire to promote manufacturing or urban growth or to see economic policy shaped in the interests of bankers and business leaders. Their goal was a republic of independent farmers marketing grain, tobacco, and other products freely to the entire world. Free trade, they believed, not a system of government favoritism through tariffs and subsidies, would promote American prosperity while fostering greater social equality. Jefferson and Madison quickly concluded that the greatest threat to American freedom lay in the alliance of a powerful central government with an emerging class of commercial capitalists, such as Hamilton appeared to envision.

The Bank of Pennsylvania, Philadelphia. Designed by the architect Benjamin Latrobe and built between 1798 and 1801, this elegant structure with Greek columns housed one of the country’s first banks. Hamilton’s program was intended to give the country’s financial leaders a stake in the stability of the federal government.

To Jefferson, Hamilton’s system “flowed from principles adverse to liberty, and was calculated to undermine and demolish the republic.” Hamilton’s plans for a standing army seemed to his critics a bold threat to freedom. The national bank and assumption of state debts, they feared, would introduce into American politics the same corruption that had undermined British liberty, and enrich those already wealthy at the expense of ordinary Americans. During the 1780s, speculators had bought up at great discounts (often only a few cents on the dollar) government bonds and paper notes that had been used to pay those who fought in the Revolution or supplied the army. Under Hamilton’s plan, speculators would reap a windfall by being paid at face value while the original holders received nothing. Because transportation was so poor, moreover, many backcountry farmers were used to distilling their grain harvest into whiskey, which could then be carried more easily to market. Hamilton’s whiskey tax seemed to single them out unfairly in order to enrich bondholders.

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