From the start, the Federalist and the Democratic Republican parties headed towards achieving different goals of forming a government; Federalists favored the national government whereas the Democratic Republicans favored modest central government with powers given more to the states and the people. Led by Alexander Hamilton, the Secretary of Treasury, the Federalist Party's domestic and foreign policies mainly involved creating a commercial economy with manufacturing and the national bank, and paying off the debt to earn international credibility. Opposed to most of the Federalists' ideas, a group called the Democratic Republican Party wanted the United States to stay rural, and agricultural and have close ties with France rather than England. Because of their contrasting views of a government and society, Federalist Party and the Democratic Republican Party consisted of different constituencies.
Alexander Hamilton, a brilliant man of intelligence who became the President George Washington's right hand at his young age, led the Federalist Party and developed its main purposes: the Party's domestic and foreign policies mainly involved creating a commercial economy with manufacturing and the national bank, and paying off the debt to earn international credibility.
Alexander Hamilton thought U.S government needs the support of the states and confidence of wealthy investors. Therefore, with the support of many of the wealthy and powerful, Alexander Hamilton proposed that the national government take responsibility of existing public debt. By taking responsibility of the debts of the States, he thought that the national government would gain the support of the States. Subsequently, the Federalists passed new laws, similar to the Townshend Act, called the excise tax and tariffs on goods to increase the revenue for the national government to pay the debt and encourage domestic manufacturing. Not only that, the Federalists supported the idea of a national bank that could manage a...