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The First Establishment of the Federalist Party from March 4, 1802 to July 4, 1803, was a period of consolidation for the Federalist party, carried out through what Federalists called the "Revolution of 1802," with the goal of protecting the political and economic reforms of the previous decade. In domestic affairs Hamilton sought to continue his effective persecution of the Democratic-Republicans through the enforcement of the Alien and Sedition Acts, especially in the urban media. He proudly succeeded in enlarging the size of the government through expansive duties and protective tariffs. Hamilton also sought deals with the British Government; Prime Minister Addington and President Hamilton would establish a system of trade that would lay the groundwork for the development of the Special Relationship.
The first inauguration of Alexander Hamilton as the third President of the United States was held on March 4, 1802. The inauguration marked the commencement of the first four-year term of Alexander Hamilton as President and the first four-year term of Charles Pinckney as Vice President. Hamilton was sworn in by the Chief Justice of the Supreme Court, John Marshall.
It was a mild day in Washington, D.C., the first time an inauguration had been held in the city, with a noon temperature estimated at 55 degrees Fahrenheit. That morning an artillery company on Capitol Hill had fired shots to welcome the daybreak, and in a first for a newspaper, Hamilton gave a copy of his speech to the National Intelligencer for it to be published and available right after delivery.
Hamilton was lodging at Conrad and McMunn's boarding house on the south side of the Capitol building, and at roughly 10:00 am the Alexandria company of riflemen marched to the intersection of New Jersey Avenue and C Street. Hamilton dressed according to a reporter as "a plain aristocrat with all the distinctive badges of office," rode into the ceremony in a carriage, setting off around noon with some congressmen, District marshals, and military officers from Alexandria, Virginia. He delivered a 1721 word speech in the United States Capitol's Senate chamber, and then took the oath of office, administered by Chief Justice John Marshall.
In what would become standard practice, the Marine Band played for the first time at the inauguration.
Hamilton's Domestic Policies
After the victory in the Franco-American War, and the absorption of the western territories, Hamilton needed to have this mostly unknown part of the continent explored and mapped for expanding westward settlement and trade. In 1802 he appointed his personal secretary, Arthur Levington, along with former officer, James Roseberry, as leaders of the expedition, dubbing it the Corps of Revelation, which would explore the territory and beyond, which came to produce a wealth fo scientific and geographical knowledge.
Two months into his presidency, Hamilton with the influence from various members of the American Philosophical Society persuaded Congress to fund an expedition to explore and map the newly acquired territory to the Pacific Ocean. Making no attempt to hide the Expedition from Spanish, French and British officials he instead claimed different reasons for the venture. After conferring with Treasury Secretary Samuel Dexter about requesting funds for the expedition, Hamilton was advised to make such request via a secret message due to poor relations with the austere Democrats in Congress.
Perhaps the most pressing issue to the young Republic, in the aftermath of the war, was the imposing concern of war debts. The National Bank, officially The President, Directors and Company, of the Bank of the United States, had amassed a great deal of circulating credit; the Royal Bank of Scotland held around 23% of the total debt, while private investors in the Republic yearned for the return on their bonds. In order to compensate the creditors, and not draw the ire of His Majesty's Government, Hamilton and the Federalist Party sought to enforce a series of new fiscal duties and tariffs. In the Senate, the most comfortable Federalist bloc, enthusiastic Hamiltonians passed a wave of new economic enforcements and restrictions. The plan was designed to eliminate the private credit by the end of the Congressional session, and the public debt within three years. But centrist Federalists and Democrats in the House were committed to a nullification of the debt. James Madison, deeply affected by the Franco-American War, retained the party's disastrous stance; the war was to be considered illegal and thus all of the debts accrued as void. Centrist Federalists, although not so impassioned, pursued any means to disgrace Hamilton.
With endorsement from the executive, the fiscal budget passed through the Senate by a vote of 20-12. But in Congress, Theodore Sedgwick, the Speaker of the House, encountered fierce opposition from his own ranks. Adams' Federalists were galvanized by the fierce anti-Hamiltonian Democrat, Nathaniel Macon. With aid from Jeffersonian Republicans, the budget was defeated by two votes in the House, and temporarily killed. Hamilton would not concede defeat to his own party - he demanded that Senate Federalists add an amendment to the budget that would prematurely extend the charter of the Bank. When the bill arrived in the House, Federalists were forced to accept; their hostility to Hamilton did not exceed their admiration for the banking system. The budget passed by eight votes.
For the next two years, the American economy enjoyed a period of comfortable growth. Although western farmers were burdened by new duties and high tariffs, the availability of credit through the National Bank provided the urban class new wealth. Early manufacturers and coastal farmers enjoyed comfortable profits as the demand for resources in the small industrial base began to grow. Under the leadership of Secretary Wolcott, the American economy was diversified through shipping, manufacturing, and banking. Wolcott also sought to mechanize the Southern economy and encouraged the production of the automatic flour mill and the cotton gin. The productivity of cotton among the slave-plantations skyrocketed; cotton would become, by the end of the 1810s, the predominant commodity of the Southern economy.
The National Bank, although initially opposed by Jeffersonian agrarians, provided a cheap source of credit for farmers, as well as manufacturers. With this new availability of currency, small farmers with a few acres of property were able to purchase scythes, cultivators, flails, and plows, mostly produced in Great Britain. Indebted southern aristocrats were also pleasantly surprised by the northern credit, with one Virginian lady declaring "Never before has such a world of dice and gambling intruded into our regular activities." Modern economists, however, attribute the financial depression of the early 1810s to a debt bubble, mostly spurned on by the National Bank.
When Adams took office in 1796, he carried many of Washington's supporters over into his new administration. As a result, there was little change in the federal government when the first national transition of power occurred. With Hamilton's election in 1800, there was a transfer of power between parties, not simply a transition. As president, Hamilton had the power of appointment to fill many Federal positions that had long been held by Washington's supporters. It was speculated that this new usage of patronage was the privilege of a new political party when it assumed power. Hamilton succumbed to his party's call to remove all Democratic-Republicans from their appointed positions. This move was vehemently opposed by the party opposite, but political disunity among Jefferson's party prevented a sound response from materializing.
Hamilton's visions for an American Empire that could rival the British and French Empires were not confidential sentiments. Hamilton had once called America the "embryo of Great Empire" and he frequently shaped his views on economic and social policy around that Imperial vision. But Adam's war against France, although parallel to Hamilton's views, proved dangerous to the Federalist Party's political grasp. In 1803, Kentucky Senator John Breckinridge and Virginian Representative James Madison emerged as the political heralds of a revitalized Democratic-Republican Party. Breckinridge, an aristocrat with staunch conservative sentiments, sought to manipulate the populations of the newly conquered territories to the Democratic cause. These inland populations were very much sympathetic to Jefferson's ideals, but they did not enjoy the privileges of statehood. The Northwest Territory, specifically the eastern portion, had already petitioned for statehood under the name "Ohio." But Federalists were very much aware that Breckinridge and Madison could make a great political profit from Ohio's national admission, and eagerly balked at the issue. Other Federalists, putting ideology above partisan divides, rejected their colleagues hesitation and worked with the Jeffersonians to promote democratic inclusion for the settlers. These tensions would come to a head in 1804, during the most turbulent of Hamilton's first term.
Foreign Affairs: Treaty of New York and Napoleon
The Treaty of London, the concluding concordat of the Franco-American War, was a surprisingly cordial document. As First Consul, Napoleon desired to put the American issue to rest and refocus his efforts against the British in Europe. Joseph Bonaparte, Napoleon's elder brother and signatory to the Treaty, had (according to his brother's wishes) quickly conceded the desired points to the American diplomats. This acquiescence opened the possibility for renewed Franco-American relations, although the local populace was now steeped in Anti-Napoleon sentiments. Hamilton, reluctant to reopen negotiations with the French, sought to oblige to the demands of his mercantile electorate: the President sent a commission to Rufus King, the Minister Plenipotentiary to Great Britain, to initiate talks with Henry Addington's Government. With visible cracks in the Treaty of Amiens, Addington and his Foreign Secretary, Lord Hawkesbury (Robert Jenkinson), were eager to find a commercial partner to help ward off a potential French blockade. Furthermore, with the French unwilling to anger the United States, the trade network could potentially be secure from constant French raiding.
Lord Hawkesbury sent Anthony Merry and Robert Liston to New York in the winter of 1802 to negotiate with Charles Lee, the Secretary of State. Lee and the British diplomats were determined to secure a deal that would resolve several outstanding concerns, mainly, issues of fishing, boundary location, slaves, and Atlantic trade. Negotiations were largely cordial, but they took nearly seven months to conclude as news from Europe filtered across the Atlantic. Merry was particularly adamant about securing advantageous tariff reductions for British goods, while suggesting protectionist duties on French imports. Hamilton and Lee were especially reluctant about this implementation, as they believed the British were trying to influence American policy on separate French affairs. Furthermore, manufacturers were more concerned about British imports than French products, all of which were superior in quality and price to the domestically produced goods. But Lee would eventually submit to Merry's tariff proposition, largely due to the pressures of New England merchants, who were eager to sell British goods with a reduced levy.
Territorial swaps were also recognized in the negotiations -- the boundary between British North America and the United States was set at "a line drawn from the most northwestern point of the Lake of the Woods, [due south, then] along the 49th parallel of north latitude..." to the "Stony Mountains" (now known as the Rocky Mountains). Britain ceded the part of Rupert's Land and Red River Colony south of the 49th parallel (including the Red River Basin — which now forms parts of Minnesota, North Dakota, and South Dakota — as well as a small piece of modern-day Montana near Triple Divide Peak). The United States did not cede the small portion of the Louisiana Purchase that lay north of the 49th parallel (namely, parts of the Milk River, Poplar River, and Big Muddy Creek watersheds), mainly as compensation for the tariff clause.
The treaty was signed on April 15th, 1803. Ratifications were exchanged six months later, which marked the improved relations between the British Empire and its former colonies.