The First Years of the Union (1797-1809)

Jefferson and the Republicans saw themselves as the saviors of the nation, freeing it from the tyrannical grips of a party bent on elitism and tending toward monarchy. While there was certainly a vast difference between the Federalists' style of government and the Republican style which Jefferson would bring to the national government, most historians think that to frame the transition as one from incipient monarchy to virtuous republicanism is to exaggerate the circumstances a great deal. John Adams was certainly not in pursuit of monarchy. He very much believed in the principles of democracy. However, he came from a school of thought that considered all men to be basically evil, and he sought to place the power of government in the hands of the least evil and most rational, which he thought to be represented by the political and social elites. Jefferson, for his part, most likely similarly considered men to be driven by self-interest and greed. However, he was from the school of thought which believed that the pursuit of self-interest could lead to social benefits, and thought that government should not limit the governed so much that they could not undertake this pursuit. The difference in ideology was thus not as stark as Jefferson would have painted it.

While the majority of the nation supported the Louisiana Purchase, many Federalists raised some opposition to it because they believed the expansion of the nation would dilute the political power of their strongholds on the eastern seaboard. Jefferson's consistent assertion that the farmers were the backbone of America and would benefit from this expansion of arable land did not help to assuage these fears. Thus what little debate there was over ratification centered largely on the assertion on the part of the Federalist minority that no new states should be created in the Louisiana Territory without the consent of the original thirteen. The Republican majority easily rebuffed this claim, and the treaty was easily ratified. The appeal to states' rights by the Federalists seems anomalous considering it had been the Republican opposition during John Adams' presidency that had brought the issue to the fore, and the Federalists who had consistently advocated for a strong central government. Historians point to the debate over ratification to argue that perhaps the states' rights doctrine was less of an ideological cornerstone for the Republicans than a universally useful defense mechanism raised by those out of power against those in control of the national government.

Alexander Hamilton's main initiatives as secretary of treasury had been the establishment of a national bank, a running national debt, and the regulation of commerce. Once in office, Jefferson and Gallatin strove to tear down these remnants of Federalist economics one by one. Both Jefferson and Gallatin believed in the principle of free trade and sought to cut regulation of commerce within reason. They immediately cut nearly all internal taxes, and balanced the cut with reductions in the military, which had been built up under Adams. Frugal spending and an increase in trade, which resulted in higher customs receipts, meant that by 1806 the US was running a budgetary surplus which Gallatin used to pay down the debt. Gallatin's boldest move, which attacked both the governmental attachment to the national bank and the national debt, was the 1802 sale of the US government's stock in the bank to the House of Baring in London. Gallatin used the profit from this sale to pay a large installment on the debt owed to the Dutch. Thus Gallatin had successfully attacked the bastions of Federalist economics, and would continue to do so throughout his tenure.