Hamilton’s reply to this bill of indictment was simple and straightforward.  Some rascally speculators had profited from the funding of the debt at face value, but that was only an incident in the restoration of public credit.  In view of the jealousies of the states it was a good thing to reduce their powers and pretensions.  The Constitution was not to be interpreted narrowly but in the full light of national needs.  The bank would enlarge the amount of capital so sorely needed to start up American industries, giving markets to farmers and planters.  The tariff by creating a home market and increasing opportunities for employment would benefit both land and labor.  Out of such wise policies firmly pursued by the government, he concluded, were bound to come strength and prosperity for the new government at home, credit and power abroad.  This view Washington fully indorsed, adding the weight of his great name to the inherent merits of the measures adopted under his administration.

=The Sharpness of the Partisan Conflict.=—­As a result of the clash of opinion, the people of the country gradually divided into two parties:  Federalists and Anti-Federalists, the former led by Hamilton, the latter by Jefferson.  The strength of the Federalists lay in the cities—­Boston, Providence, Hartford, New York, Philadelphia, Charleston—­among the manufacturing, financial, and commercial groups of the population who were eager to extend their business operations.  The strength of the Anti-Federalists lay mainly among the debt-burdened farmers who feared the growth of what they called “a money power” and planters in all sections who feared the dominance of commercial and manufacturing interests.  The farming and planting South, outside of the few towns, finally presented an almost solid front against assumption, the bank, and the tariff.  The conflict between the parties grew steadily in bitterness, despite the conciliatory and engaging manner in which Hamilton presented his cause in his state papers and despite the constant efforts of Washington to soften the asperity of the contestants.

=The Leadership and Doctrines of Jefferson.=—­The party dispute had not gone far before the opponents of the administration began to look to Jefferson as their leader.  Some of Hamilton’s measures he had approved, declaring afterward that he did not at the time understand their significance.  Others, particularly the bank, he fiercely assailed.  More than once, he and Hamilton, shaking violently with anger, attacked each other at cabinet meetings, and nothing short of the grave and dignified pleas of Washington prevented an early and open break between them.  In 1794 it finally came.  Jefferson resigned as Secretary of State and retired to his home in Virginia to assume, through correspondence and negotiation, the leadership of the steadily growing party of opposition.