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The most influential figure in George Washington’s administration was Alexander Hamilton, secretary of the treasury. More than anyone else, Hamilton was aware that the new nation had to win the lasting confidence and financial elites in order to survive and prosper.
Great Britain remained the largest source of investment capital for the new nation, and Hamilton was decidedly pro-British. He also favored a strong central government as a means of protecting property and stimulating the growth of commerce and industry.
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Most of the original bonds were no longer in the hands of the original owners but had fallen to speculators who had purchased them for only a faction of their face value. Because these securities were worth only about twenty-five cents on their dollar, the Hamilton’s program went beyond refusing the debts owned by the united states; he also undertook to pay the debts incurred by the states themselves during the Revolutionary War =. His objestive was to place the creditor elite under a deep obligation to the central government.
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In the famous case of McCulloh v. Maryland, the Supreme Court upheld the broad definition of national power suggested by Hamilton under the “necessary and proper” clause. At the same time, the Court established the principle that a state law that interfaces with a nation activity is unconstitutional.
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The centralizing effect of Hamilton’s programs and their favoring of merchants, manufactures, and shipbuilders aroused some opposition in elite circles. Southern planets and large landowners benefited little from Hamilton’s policies, and they were joined in their opposition by local and state elites who feared that a strong central government threatened their own powers. These landed elites were first called Anti-Federalists and later Republicans and Democratic Republicans.
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Because aristocratic families of the eastern seaboard seldom had reason to migrate westward, the western settlers...
