by Mitch Kokai
Senior Political Analyst, John Locke Foundation
[T]here was a larger, existential question that confronted Americans: Where did the new nation stand in relation to the world? Was it powerful enough to dictate the terms of international relations, or did it have to acknowledge that bigger forces, beyond its control, were at work? These questions split the body politic in half, reinforcing the political cleavages that existed between, on one hand, the Republicans of James Madison’s and Thomas Jefferson’s stripe and, on the other, the Federalists of Alexander Hamilton’s party.
The Republicans believed that they should drive a hard bargain with the British, who had begun harassing American merchants on the high seas. They reckoned that industrialization and imperialism had robbed Britain of its self-sufficiency — that it did not grow the food necessary to feed its people both at home and in its West Indian colonies. Instead, Britain relied on the United States for food, which meant that America could boldly demand respect from its former colonial masters.
The Federalists, especially Hamilton, saw matters from exactly the opposite perspective. Great Britain, with its diversified economy and fearsome navy, was the preeminent world power and could easily dispense with the United States, even while engaging in a war with France. Moreover, the public treasury depended upon import duties primarily from British goods, which were doing more than simply enabling the government to pay its bills. Hamilton had adroitly used newfound public confidence in the government as the foundation for an elaborate system of public and private finance. So he privately warned President George Washington that a trade war with Britain would “cut credit up by the roots” and ruin the national economy. He suggested instead that Americans approach Britain with “the most conciliatory language” and “the most sincere desire . . . to settle all grounds . . . on an amicable and permanent principle.”
Ultimately, neither side had a particularly convincing argument.