In this lesson, you will learn about the Federalist Party and its key leaders, including Alexander Hamilton, John Adams, and John Marshall. Find out more about those who joined the party and how the party eventually declined.

Historical Background

The Federalist Party, along with the Democratic-Republican Party, was part of the first two-party system in United States history. The Federalist Party formed during the 1790s as the country’s leaders disagreed over key provisions of the Constitution and major foreign policy issues. The party advocated a strong national government at the expense of the states, favored an economy based upon strong banking, commercial, and manufacturing development, and tended to support Britain over France in its foreign policy.

As George Washington prepared to leave office after the end of his second term as president, he wanted to leave the nation with parting words of advice. In 1796, he published his famous Farewell Address where he urged the nation to stay clear from ‘combinations or associations,’ that tend, ‘to become potent engines by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people.’ Despite Washington’s warnings against forming distinct political parties, his administration witnessed the rise of two competing political entities, the Federalist Party and the Democratic-Republican Party.

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Key Leaders

The Federalist Party was mainly organized by Alexander Hamilton, who served as Washington’s aide during the Revolutionary War and then as the first Secretary of the Treasury in Washington’s cabinet.

Portrait of Alexander Hamilton
Alexander Hamilton

As Secretary of the Treasury, Hamilton was given the important responsibility to secure the new nation’s financial future. Following the Revolutionary War, the nation was burdened by debt and had no established credit with other nations. In 1790, Hamilton published a series of reports that outlined the steps necessary to relieve the nation’s debt and promote economic development. Some of the key provisions of this plan included the establishment of a national bank, the creation of a tariff (tax on imported goods), and the assumption of state debt to add more strength to the national government. Washington supported Hamilton’s plans and they were put into action. However, other key government leaders like Thomas Jefferson (Secretary of State) and James Madison (Speaker of the House) felt that Hamilton’s plans favored the wealthy classes at the expense of the common people, weakened the states, and put the country on a path that would model the British economic system.

These disagreements led to the formation of defined political parties. In order to secure his plans and vision for the country’s development, Hamilton went to great lengths to organize the Federalist Party in opposition to Jefferson and Madison’s Democratic-Republicans. Hamilton used his influence in the Treasury Department to make connections with those who shared his vision, especially on economic matters, within the states. Soon, the Federalists had established party bases throughout the country, with their greatest strength in New England.

New England helped elect their own John Adams as the first Federalist President of the United States. Adams served as Washington’s first vice president and attempted to continue the policies of the first president.

Portrait of John Adams
John Adams

While Adams would deny that he had any connections to an organized political party, Federalist members of Congress voted to make him their candidate for president in 1796 and 1800. Adams relied on their support for his candidacy, which helped him defeat Jefferson in 1796. Adams continued to support Hamilton’s financial programs and supported a closer relationship with Britain over France, which was important to Federalist foreign policy. However, Adams broke from Hamilton in his insistence on remaining neutral in the war between Britain and France at the time. Hamilton urged Adams to openly support Britain which would further cement the commercial ties between the two nations and weaken the power of the Democratic-Republicans, who tended to support France.

However, Adams agreed with Washington’s earlier policy of neutrality and felt that the young country was not ready for war. This neutral stance weakened Adams’ support among Federalists. Even though he still received their nomination as the party’s presidential candidate in 1800, this weakened relationship between Adams and Hamilton led to Adams’ defeat and Jefferson’s victory.

Before leaving office, Adams appointed John Marshall as the Chief Justice of the Supreme Court. Marshall was a strong supporter of the Federalist Party and served on the court from 1801 to 1835.

Portrait of John Marshall
John Marshall

Adams’ appointment of Marshall was the most significant act in continuing Federalist policy. While the Federalist Party would disappear from the political map following the War of 1812, Marshall’s long career on the bench insured that Federalist policy would continue long after the party’s demise.

Marshall continued to support a stronger national government and a strong economic policy that favored the business and commercial interests in the nation. Key court decisions like McCulloch v. Maryland (1819), where Marshall upheld the constitutionality of the Bank of the United States and defeated Maryland’s attempt to destroy the bank through taxation, and Cohens v. Virginia (1821), where Marshall asserted that the Supreme Court had the right to review state supreme court decisions, advancing national power over the states.

Other key decisions like Gibbons v. Ogden (1824), where Marshal ruled that New York State could not monopolize an interstate waterway and impede business transactions, and Dartmouth College v. Woodward (1818), where Marshall upheld that contracts had to be fulfilled, helped further commercial and business development within the nation.

Membership Base

The decisions of the Supreme Court furthered Federalist ideals, which promoted the commercial and business interests of the nation. As such, the party had great support among merchants and businessmen in urban areas. These individuals favored a strong national government that would facilitate the transaction of business and support the commercial development of the nation.

Part of Hamilton’s original financial plans presented to Congress and adopted in 1790 created new bonds sold by the treasury department to finance the country’s debt. The trading of these bonds led to the formation of the New York Stock Exchange on Wall Street. Therefore, speculators and investors also flocked to the Federalist Party. Finally, manufacturing was starting to become a major part of the United States economy during the early 1800s. Industrialists who sought economic support from banks and investors to begin a manufacturing endeavor also found a home in the Federalist Party.

Decline ; Legacy

The Federalist Party began to lose strength with the onset of the War of 1812, which pitted the country against Britain. The Federalist stronghold of New England openly protested against the war by continuing to trade with Britain through Canada and failing to send the required soldiers requested by Congress. Furthermore, important Federalists met in Hartford, Connecticut toward the end of the war to formally complain about the war’s damaging effect on the New England economy. This meeting, called the Hartford Convention, drafted a series of proposals which limited the power of the President and Congress during war. The war ended before these proposals were formally presented. However, the details of the proposals were leaked in the press, which painted the Federalists as unpatriotic among a population that was rejoicing over the end of the war. Although the Federalist Party eventually ceased to exist, Federalist economic ideals would prevail with the Whig Party in the 1830s and the modern Republican Party, which began in the 1850s.

Lesson Summary

The Federalist Party formed during the 1790s as the country’s leaders disagreed over key provisions of the Constitution and foreign policy issues. The party advocated a strong national government at the expense of the states, favored an economy based upon strong banking, commercial, and manufacturing development, and tended to support Britain over France in its foreign policy. As such, bonds traders, speculators and investors, and industrialists all found a home in the Federalist Party.

The Federal Party was mainly organized by Alexander Hamilton, who served as Washington’s aide during the Revolutionary War and then as the first Secretary of the Treasury in Washington’s Cabinet. In 1790, Hamilton published a series of reports that outlined the steps necessary to relieve the nation’s debt and promote economic development. Some of the key provisions of this plan included the establishment of a national bank, the creation of a tariff (tax on imported goods), and the assumption of state debt to add more strength to the national government. In order to secure his plans for the country’s development, Hamilton went to great lengths to organize the Federalist Party in opposition to Jefferson and Madison’s Democratic-Republicans.

As a result, New England helped elect their own John Adams as the first Federalist president of the United States. Adams had served as Washington’s first vice president and continued to support Hamilton’s financial programs and a closer relationship with Britain. Before leaving office, Adams appointed John Marshall, a strong supporter of the Federalist Party, as the Chief Justice of the Supreme Court who served on the court from 1801 to 1835. Adams’ appointment of Marshall was the most significant act in continuing Federalist policy. Marshall’s long career on the bench ensured that Federalist policy would continue long after the party’s demise. The decisions of the Supreme Court furthered Federalist ideals, which promoted the commercial and business interests of the nation.

The Federalist Party began to lose strength with the onset of the War of 1812. New England Federalists openly protested against the war and eventually got together to formally complain about the war’s damaging effect on the economy. This meeting, called the Hartford Convention, drafted a series of proposals which limited the power of the president and Congress during war. The details of the proposals were leaked in the press, which painted the Federalists as unpatriotic among a population that was rejoicing over the war’s end. Although the Federalist Party eventually ceased to exist, Federalist economic ideals would prevail with the Whig Party in the 1830s and the modern Republican Party, which began in the 1850s.