The development of the Federalists and Republicans developed gradually in the mid-1790's. The Republicans first came together as a group of people against Alexander Hamilton's policies that focused on a strong central federal government, because they feared that a Federalist government would have too much power and would create a small elite group of merchants and financiers that would create a new type of monarchy. They believed that state governments were more likely to protect the people's liberties than the central government. In the opinion of many Republicans, the government should work to support the interest of ordinary citizens who were the majority. If they let the aristocrats rule, the United States would be putting themselves back on the road to a new type of monarchy. We find the best insights into why the Republican believed the states should have more power and of their mindsets by reading the following documents: the Debate on the First National Bank, the Alien and Sedition Acts of 1798, and the Kentucky and Virginia Resolutions of 1798. .
Ultimately, we will see that at the heart of the matter, the two political parties were formed because they disagreed on how much power the central government should have and how capable the people were in governing themselves. .
The apparent differences in the views of the people became more apparent with the debates of establishing the Bank of the United States and how best to deal with the Nation's debt. On February 15, 1791, Thomas Jefferson gave his opinion on the constitutionality of a National Bank by quoting the Tenth Amendment stating that "all powers not delegated to the United States, by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people." Jefferson believe that the Constitution did not delegate the Central government the right to form a National Bank. He believed the Central government had the power to tax for the sole purpose of paying the United States debts and to provide for the general welfare of the United States, but for no other reasons.
