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American History: Government, Lesson Five – Political Parties 4-4.5: Compare the social and economic policies of the two political parties that were formed in America in the 1790s. Social and economic differences among Americans and the differing ideas of Thomas Jefferson and Alexander Hamilton helped form two political parties in the 1790s. The Federalist Party was led by Alexander Hamilton. Federalists included businessmen, large landowners, and professional people who believed that the country should grow and expand through industrialization. These Federalists felt that the federal government should be led by educated people and have a sound financial system in order to grow. This would require a system of taxes to repay national debts (to war allies like France and those who served the new United States or loaned it money) and a National Bank to handle these matters. The Federalists, who had supported the writing and ratification of the Constitution, wanted the new federal government to be more powerful than the state governments in order to have a stronger and more unified country, rather than the loose union (confederation or confederacy) of states it was under the Articles of Confederation. Despite the fact that the US was independent from the British mother country, the Federalists believed in the heritage of English traditions and they therefore wanted their governments to be modeled after the British government that all former colonists were used to. Thomas Jefferson led the Democratic-Republican Party (also called the Jeffersonian Republican Party). The Democratic-Republicans included mostly farmers and common people. Jefferson believed that the United States would be an agrarian, or agricultural, society. His followers believed that most of the power of government should lie in the state governments because they were closer to the common man (who was wise because of his close ties to his soil and therefore did not need education) and that the federal government should therefore remain weak. Democratic-Republicans admired the French, because the French had been the major allies of the US in the Revolution and they believed the new French government to be following in the footsteps of the American Revolution. Standard 4-4: The student will demonstrate an understanding of the beginnings of America as a nation and the establishment of the new government.