In the following essay, based on my knowledge of history and historical data, I will prove that the ideological differences that emerged in Washington's Cabinet not only fanned the flames of factions, but influenced the future of American politics.
After George Washington took oath as president of the United States in 1789, he and his cabinet were faced with a state of financial crisis. The federal government had no money and had inherited war debts to the French and also to its own citizens.
These questions concerning finance were the first significant issues faced over the Constitution and also for the first political parties. Alexander Hamilton, who was Secretary of Treasury of the United States, had a plan for dealing with the nations financial problems. He proposed that the federal government pay of war debts and assume the debts of the states, protect the nation's industries and goods, and create a national bank for depositing government funds.
Also, according to this plan, paper money will be made by the bank, which would create a stable currency. Hamilton strongly believed that his views would make the United States a wealthy and economically stable nation.
Hamilton wanted the United States to assume the state debts and since there was no permanent capital yet, Hamilton provided Jefferson with a offer which said that he would have his followers vote to have the capital located in Philadelphia for 10 years and then move it to the Potomac River. In return to this, Madison had to allow the government to assume state debt. This was called the Assumption Plan.
Hamilton was part of the Federalist Party, which also included John Adams. They represented the manufacturers and commercial interests. They had a loose interpretation of the Constitution.
Thomas Jefferson and James Madison were part of the...