Finance and Ideology
Of all the events that shaped the political life of the new republic in its earliest years, none was more central than the massive personal and political enmity, classic in the annals of American history, which developed in the course of the 1790s between Alexander Hamilton and Thomas Jefferson. The struggle ensuing from it derives its classic proportions from classic circumstances. It was in one sense personal, quickly progressing from caution to suspicion, and then to a mutual hatred that gave little quarter, but it mattered greatly that this hatred was one subsisting between the two highest officers of Washington's government. It would in time attach to itself two rival hosts of followers and form the basis for two political parties professing two rival sets of principles. The character and quality of national life in the 1790s are thus not to be understood aside from the warfare of Hamiltonian Federalists and Jeffersonian Republicans. Worth noting, however, is that the groundwork for Jefferson's side of it was laid not by Jefferson himself, but by his friend and fellow Virginian, James Madison. It is to James Madison's estrangement from his friend, Alexander Hamilton, that one must go as a first step in plumbing the political passions of the 1790s.
To contemporaries, the Hamilton-Madison rupture and its consequences would not have seemed predictable in any obvious way, though historians in long retrospect have offered rationalizations which make it appear as part of a certain unerring drift. The Federalist-Republican polarity which was the outcome of that rupture has been seen on one level as the expression of a basic conflict between the interests of commerce and money on the one hand, and of agriculture on the other. On another level, it seems to range the supporters of a powerful national government against those of state rights. And on still another, the forces in conflict are no less than those of elitism and those of an incipient democracy. None of these versions is wrong; each provides a way of understanding the problem at long range. And yet on a more immediate and more human level, they do not begin to account for the explosion which shattered a friendship between two men