Hamilton's ambitions continued and he submitted a Second Report on Public Credit that would tax alcoholic beverages. He also proposed the establishment of a national mint. He believed that these policies would encourage manufacturing which would in turn lead to economic growth for the country. The Whisky Rebellion of 1794 resulted from the taxes that was levied on liquor in 1791. In Pennsylvania vigilantes terrorized federal revenue agents. George Washington, the first President, responded quickly and called out the militia, immediately subduing the rebellion and firmly establishing federal authority. Jefferson and Madison believed that the states should have the greatest power with a strict interpretation of the Constitution. Their view led to the establishment of the Democratic-Republican party. Washington and Hamilton were Federalists that believed in a strong federal government and a loose interpretation of the Constitution. The early differences between these men established a two-party system.
Foreign affairs, in particular the French Revolution incited political differences in the United Sates in the 1790's. The French revolution began when the people overthrew the king and initiated the beginning of a series of governments. George Washington recognized the French Revolutionary government by receiving their Ambassador, Edmond Genet. He arrived in South Carolina and began to journey northward. His actions were inflammatory as he sought to obtain money and troops for the revolutionaries. He would arrive at ports and begin recruiting men and ships. His behavior even embarrassed the Republicans that had supported him and the ideals of a revolution. Washington requested that France recall Genet until he discovered that France planned to arrest him. Washington then gave Genet U.S. citizenship to protect him. As the revolution continued the terrorists in the Reign of Terror rose to power and Jefferson felt obliged to help France gain their freedom, while the Federalists refused to get involved.
