yeoman's Republic

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Not all of the Founding Fathers were of this mind. In the first years following independence, America had been governed by the Federalists who largely created the foundations of the modern Federal state. Under the leadership of Washington and the astonishing ministry of Alexander Hamilton, they tackled the huge job of building a strong competitive economy based on the most successful model available, the British one, and set up a central bank, national public debt, a Treasury department, customs department and most of the other essentials we recognize today as being necessary for a stable financial system. [2]

However this grubby pragmatism did not sit well with those who saw the War of Independence as being driven by higher ideals. There was a large group of people who felt that the war of Independence truly had been a revolution not just a rebellion. Like many revolutionaries they felt that people could be improved upon. With the death of Washington and the self destruction of the Federalists, the way was open for the long reign of the Jeffersonians through the Democratic-Republican party who did much to dismantle this structure, folding up the Bank of The United States, dispersing the army and even letting the young navy wither away.

The radical political manifesto behind this was thoroughly Jeffersonian. It was Jefferson’s vision which drove a “commitment to a rural republicanism that rested on the widespread farm ownership of relatively independent adult males”[3] These petty landowners allied to a benign, although slaveholding rural aristocracy were to be the backbone of Jefferson’s America whose agricultural economy contrasted sharply with what much of the American ruling class felt to be the near insanity of paper based capitalist financial system.

The war of 1812 had not been the first time the Jeffersonians had pitted the rural republican against the commercial urbanite. During the long lead up to the war in the various skirmishes over British impressments, Jefferson himself had tried to effectively blockade the warring British and French with the Embargo Act of 1807, in effect putting the rest of the world under blockade from America until it could see sense. The impact was a commercial disaster for the US with American exports plummeting from $108 million to $22 million.[4] Since the vast majority of the international trade was carried out from the north eastern states, this fiasco drove further divisions between north and south.

Writing to his son in law in 1813, he felt that only “England and her copyist, the United States” could accept that the circulation of paper money was good and that all other countries would share his opinion that it was an “evil”[5] . Jefferson had unequivocally damned the First Bank of the United States as being virtually illegal and his opinion remained the same during the 1812 war, writing to his son in law “The idea of creating a national bank, I do not concur in, because it seems now decided that Congress has not that power…”[6]