Strict vs. Loose Constructionism

Jefferson argued that creating a national bank would be unconstitutional because nowhere was it written in the Constitution that Congress had the authority to do so. He and his supporters were “strict constructionists”—they believed that the Constitution forbade everything it did not expressly permit.

Hamilton and most nationalistic Federalists, on the other hand, believed the opposite. These “loose constructionists” argued that the Constitution allowed everything it did not expressly forbid. President Washington agreed with Hamilton and signed the charter of the Bank of the United States in 1791.

The Elastic Clause

The controversy over the national bank stemmed from differing interpretations of the Constitution’s “elastic clause,” which grants Congress the power “to make all laws which shall be necessary and proper” to carry out its duties. Hamilton believed this clause justified creation of the national bank; Jefferson believed that the bank was unconstitutional and stripped power from the individual states.

Hamilton’s Report on Manufactures

Hamilton also believed that the financial future of the United States depended on manufacturing, which at the time was meager and confined primarily to New England. Hamilton argued in his Report on Manufacturesthat building more factories and producing manufactured goods would make the nation rich and financially stable.

Jefferson again disagreed, believing that agriculture was the key to American success. Moreover, he felt that agrarian interests and farmers should form the foundations of any free republic in order to preserve liberty.

The Roots of Political Parties

The constant debates between Hamilton and Jefferson—and their own personal animosity for each other—split the cabinet and Congress during Washington’s presidency and eventually led to the maturation of the Federalists and the Democratic-Republicans into distinct political parties. Though Federalist and Anti-Federalist factions had formed during the debate over ratification of the Constitution, neither were full-fledged political parties until Hamilton and Jefferson polarized political opinions in Congress and Washington’s cabinet meetings.

At the time, political parties were looked down upon and viewed as undemocratic and even disloyal in the wake of the Revolution. Many, including Washington, believed that parties would only split the Union and destroy everything that Americans had worked so hard to achieve. Today, in contrast, political parties are regarded as essential components of any thriving democracy.

Popular pages: The Constitution (1781–1815)