Front Page Titles (by Subject) CHAPTER 28: Defense, Finance, Foreign Affairs— and the First Systematic Opposition (1790 to 1791) - The Life of George Washington
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CHAPTER 28: Defense, Finance, Foreign Affairs— and the First “Systematic Opposition” (1790 to 1791) - John Marshall, The Life of George Washington 
The Life of George Washington. Special Edition for Schools, ed. Robert Faulkner and Paul Carrese (Indianapolis: Liberty Fund, 2000).
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Defense, Finance, Foreign Affairs— and the First “Systematic Opposition” (1790 to 1791)
Meeting of Congress.—President’s speech.—Report of the Secretary of the Treasury.—Debate thereon.—Bill for fixing the seat of government.—Adjournment of Congress.—Treaty with the Creek Indians.—Relations of the United States with Great Britain and Spain.—Constitution adopted by Rhode Island.—Congress meets at Philadelphia.—Speech of the President.—Debates on the excise.—On the bank.—Division in the cabinet on the law.—Defeat of Harmar.—Adjournment of Congress.
1790On the 8th of January, 1790, the President met both Houses of Congress in the Senate chamber.
In his speech, which was delivered from the chair of the Vice-President, after congratulating Congress on the adoption of the constitution by the important state of North Carolina, and on the prosperous aspect of American affairs, he proceeded to recommend certain great objects of legislation to their more especial consideration.1 A provision for the common defence merited, he said, their particular regard. “To be prepared for war,” he added, “is one of the most effectual means of preserving peace.
“A free people ought not only to be armed, but disciplined; to which end a uniform and well-digested plan is requisite; and their safety and interest require that they should promote such manufactories as tend to render them independent on others for essential, particularly for military supplies.”
He suggested the propriety of providing the means of keeping up their intercourse with foreign nations, and the expediency of establishing a uniform rule of naturalization.
After expressing his confidence in their attention to many improvements essential to the prosperity of the interior, he recommended the promotion of science and literature to their patronage. “Knowledge,” he added, “is, in every country, the surest basis of public happiness. In one in which the measures of government receive their impression so immediately from the sense of the community as in ours, it is proportionably essential.”
“Whether this desirable object will be best promoted by affording aids to seminaries of learning already established, by the institution of a national university, or by other expedients, will be well worthy of a place in the deliberations of the legislature.”
The answers of both Houses indicated the harmony which existed between the executive and legislative departments.
Early in January, the report of the Secretary of the Treasury, containing a plan for the support of public credit, prepared in obedience to the resolution of the 21st of September, 1789, was laid before Congress.2
“It was agreed,” he said, “by all, that the foreign debt should be provided for, according to the precise terms of the contract. It was to be regretted that, with respect to the domestic debt, the same unanimity of sentiment did not prevail.”
The first point on which the public appeared to be divided, was the question “whether a discrimination ought to be made between original holders of the public securities, and present possessors by purchase.” He supported, with great strength of argument, the opinion against this discrimination.
He next proceeded to the question, whether any difference ought to remain between the creditors of the Union and those of individual states. He was earnestly opposed to this difference. “Both descriptions of debt were contracted for the same objects, and were in the main the same.” Equity required “the same measure of retribution for all. There were many reasons,” some of which were stated, “for believing this would not be the case, unless the state debts should be assumed by the nation.”
After an elaborate discussion of these and some other points connected with the subject, the secretary proposed that a loan should be opened to the full amount of the debt, as well of the particular states as of the Union.
To enable the treasury to support this increased demand upon it, an augmentation of the duties on imported wines, spirits, tea, and coffee, was proposed; and a duty on home-made spirits was also recommended.
This celebrated report, which has been alike the theme of extravagant praise and bitter censure, merits the more attention, because the first systematic opposition to the principles on which the government was administered, originated in the measures which were founded on it.
On the 8th of February, Mr. Fitzsimmons3 moved several resolutions affirmative of the principles contained in the report. To the first, which respected a provision for the foreign debt, the House agreed without a dissenting voice. The second, in favor of appropriating permanent funds for the payment of the interest on the domestic debt, and for the gradual redemption of the principal, gave rise to a very animated debate.
Mr. Scott4 avowed the opinion that the United States were not bound to pay their domestic creditors the sums specified in their certificates of debt, because the original holders had parted with them at two shillings and six-pence in the pound. He therefore moved an amendment, requiring a resettlement of the debt.
After this proposition had been negatived, Mr. Madison rose, and, in an eloquent speech, proposed an amendment to the resolution, the effect of which was to pay the present holder of assignable paper the highest price it had borne in the market, and to give the residue to the original creditor.5 The debate was long, argumentative, and interesting. At length the question was put, and the amendment was rejected by a great majority.
The succeeding resolution, affecting political interests and powers which are never to be approached without danger, seemed to unchain all those fierce passions which a high respect for the government, and for those who administered it, had in a great measure restrained.
The debt incurred in support of the war, had been contracted partly by the continent and partly by the states. When the measure of compensating the army for the depreciation of their pay became necessary, this burden, under the recommendation of Congress, was assumed by the respective states. Some of them had funded this debt, and paid the interest upon it. Others had made no provision for the interest; but all, by taxes, paper-money, or purchase, had reduced the principal.
The Secretary of the Treasury proposed to assume these debts; and to fund them in common with that which continued to be the debt of the Union.
The resolution which comprehended this principle of the report, was vigorously opposed. Even its constitutionality was questioned. But the argument which seemed to have most weight, was that which maintained that the general government would acquire an undue influence, and that the state governments would be annihilated by the measure.
After a very animated discussion of several days, the resolution was carried by a small majority. Soon after this decision, while the subject was pending before the House, the delegates from North Carolina took their seats, and changed the strength of parties. The resolution was recommitted by a majority of two voices; and, after a long and ardent debate, was negatived by the same majority.
This proposition continued to be supported with a degree of earnestness which its opponents termed pertinacious, but not a single opinion was changed. It was brought forward in the less exceptionable form of assuming specific sums from each state. But this alteration produced no change of sentiment; and the bill was sent to the Senate, with a provision for those creditors only, whose certificates of debt purported to be payable by the United States.
In this state of things, the measure is understood to have derived aid from another, which was of a character strongly to interest particular parts of the Union.
From June, 1783, when Congress was driven from Philadelphia, by the mutiny of a part of the Pennsylvania line, the necessity of selecting some place for the permanent residence of the government, in which it might protect itself from insult, had been generally acknowledged.
In September 1784, an ordinance had been passed for appointing commissioners to purchase land on the Delaware in the neighborhood of the falls, and to erect the necessary buildings thereon; but the southern interest had been sufficiently strong to arrest the execution of this ordinance by preventing an appropriation of funds, which required the assent of nine states. Under the existing government, many different places from the Delaware to the Potomac inclusive, had been earnestly supported; but a majority of both houses had not concurred in favor of any one place. Attempts had been made with as little success to change the temporary residence of Congress. At length a compact respecting the temporary and permanent seat of government was entered into between the friends of Philadelphia and the Potomac, stipulating that Congress should hold its sessions in Philadelphia for ten years, during which time buildings for the accommodation of government should be erected at some place on the Potomac to which the government should remove on the expiration of that time. This compact having united the representatives of Pennsylvania and Delaware with the friends of the Potomac, a majority was produced in favor of both situations; and a bill brought into the Senate in conformity with this arrangement, passed both Houses by small majorities. This act was immediately followed by an amendment to the bill for funding the public debt, similar to that which had been proposed unsuccessfully in the House of Representatives.
When the question was taken in the House of Representatives on this amendment, two members representing districts on the Potomac, who had voted against the assumption, declared themselves in its favor, and thus the majority was changed.
This measure has constituted one of the great grounds of accusation against the administration of Washington. It is fair to acknowledge that, though, in its progress, it derived no aid from the President, it received the full approbation of his judgment.
A bill at length passed both houses, funding the debt on principles which lessened the weight of the public burden, and was entirely satisfactory to the public creditors.
The effects produced by giving the debt a permanent value justified the predictions of the most sanguine. The sudden increase of moneyed capital derived from it, invigorated commerce, and gave a new stimulus to agriculture.
About this time a great and visible improvement took place in the circumstances of the people. Although the funding system was not inoperative in producing this improvement, it cannot be ascribed to any single cause. Progressive industry had gradually repaired the losses sustained by the war; and the influence of the constitution on habits of thinking and acting, though silent, was considerable.
On the 12th of August, Congress adjourned, to meet in Philadelphia on the first Monday in the following December.
While the discussions in the national legislature related to subjects, and were conducted in a temper well calculated to rouse the active spirit of party, the external relations of the United States wore an aspect not perfectly serene. An increased degree of importance was given to the hostile temper of the Indians, by the apprehension that their discontents were fomented by the intrigues of Britain and Spain. It was feared that the latter power might take a part in the open hostilities threatened by the irritable dispositions of individuals both in Georgia and the Creek nation. From the intimate connexion subsisting between the members of the house of Bourbon, this event was peculiarly deprecated; and the means of avoiding it were sought with solicitude.6 These considerations induced the President to make another effort at negotiation; but to preserve the respect of these savages for the United States, it was resolved that the agent employed should visit their country under other pretexts. Colonel Willett was selected for this service; and he acquitted himself so well of the duty as to induce the chiefs of the nation with McGillivray at their head, to repair to New York, where negotiations were opened which terminated in a treaty of peace.
The pacific overtures made to the Indians of the Wabash and Miamis not having been successful, the inhabitants of the western frontiers were still exposed to their destructive incursions,7 and still retained the hostility they had originally manifested to the constitution.
No progress had been made in adjusting the points of controversy with Spain and Britain.
The cabinet of St. James having never appointed a minister to the United States, the President felt some difficulty in repeating advances which had been treated with neglect. Yet there was much reason to desire full explanations with the British government. The subjects for discussion were of peculiar delicacy, and could not be permitted to remain unadjusted without hazarding the most serious consequences. In October 1789, the President had resolved on taking informal measures to sound the British cabinet, and to ascertain its views respecting the points of controversy between the two nations. This negotiation was entrusted to Mr. Gouverneur Morris, who had been carried to Europe by private business.8 In his conferences with the Duke of Leeds and with Mr. Pitt, those ministers expressed a wish to be on the best terms with America; but repeated the complaints which had been made by Lord Carmaerthen of the non-execution of the treaty of peace on the part of the United States. In a subsequent note, the Duke of Leeds avowed the intention, if the delay on the part of the American government to fulfil its engagements should have rendered its final completion impossible, to retard the fulfilment of those which depended entirely on Great Britain, until redress should be granted to the subjects of his majesty on the specific points of the treaty itself, or a fair and just compensation should be obtained for their non-performance.
Whilst these negotiations were depending, intelligence was received at London, of the attack made on the British settlement at Nootka Sound.9 The vigor with which the government armed in support of its pretensions, furnished strong reasons for the opinion that a war with Spain, and probably with France, would soon be commenced.
This was considered in America as a favorable juncture for urging the claims of the United States to the free navigation of the Mississippi. Mr. Carmichael, their charge d’affaires at the court of Madrid, was instructed not only to press this point with earnestness, but to use his utmost endeavours to secure the unmolested use of that river in future, by obtaining a cession10 of the island of New Orleans, and of the Floridas.
The opinion was seriously entertained by the American government that, in the event of a war between Great Britain and Spain, Louisiana would be invaded from Canada; and the attention of the executive was turned to the measures which it would be proper to take, should application be made for permission to march a body of troops through the unsettled territories of the United States into the dominions of Spain. Lord Dorchester, the Governor of that province, had intimated a wish to visit New York on his return to England; but the prospect of a rupture with Spain had determined him to remain in Canada. Under the pretext of making his acknowledgments for the readiness with which his desire to pass through New York had been acceded to, his lordship dispatched Major Beckwith, a member of his family, to sound the American government, and, if possible, to ascertain its dispositions towards the two nations.
The communications of this gentleman were entirely amicable. He was instructed to express the conviction of Lord Dorchester that the British cabinet was inclined not only towards a friendly intercourse, but towards an alliance with the United States. After expressing the concern with which that nobleman had heard of the depredations of the savages, he declared that his lordship, so far from countenancing the depredations, had taken every proper opportunity to impress pacific dispositions on the Indians; and, on hearing of the outrages lately committed, had sent a messenger to endeavour to prevent them. Major Beckwith intimated farther, that the perpetrators of the late murders were banditti,11 composed chiefly of Creeks and Cherokees in the Spanish interest, over whom the Governor of Canada possessed no influence.
The President directed that the further communications of Major Beckwith should be heard civilly, and that their want of official authenticity should be hinted delicately, without urging any expressions which might in the remotest degree impair the freedom of the United States to pursue without reproach the line of conduct which the honor or the interest of the nation might dictate.
In the opinion that it would be equally useless and dishonorable further to press a commercial treaty, the powers given to Mr. Morris were withdrawn. About the same time, the dispute between Great Britain and Spain was adjusted.
In the preceding May, Rhode Island had adopted the constitution; and the union of the states was completed.
On the 6th day of December, 1790, Congress assembled at Philadelphia.
The speech delivered at the commencement of the session, after taking a comprehensive view of the external and internal interests of the nation, concluded with the following impressive sentiment. “It will be happy for us both, and our best reward, if, by a successful administration of our respective trusts, we can make the established government more and more instrumental in promoting the good of our fellow-citizens, and more and more the object of their attachment and confidence.”
In the short debate which took place in the House of Representatives, on the address in answer to the speech, a direct disapprobation of one of the measures of the executive was, for the first time, openly expressed.
In the treaty lately concluded with the Creeks, an extensive country claimed by Georgia under treaties the validity of which was contested by Indian chiefs, had been relinquished. This relinquishment excited serious discontents in that state; and was censured by Mr. Jackson with considerable warmth.12
Scarcely were the debates on the address concluded, when several reports were received from the Secretary of the Treasury, suggesting such further measures as was deemed necessary for the establishment of public credit.
The assumption of the state debts not having been adopted until late in the preceding session, the discussion on the revenue for this portion of the public debt did not commence until the House had become impatient for an adjournment. As much contrariety of opinion was disclosed, and the subject did not press, it was deferred to the ensuing session; and the Secretary of the Treasury was required to report such further provision as might, in his opinion, be necessary for establishing the public credit. In obedience to this resolution, several reports had been prepared, the first of which repeated the recommendation of an additional impost on foreign distilled spirits, and of a duty on spirits distilled within the United States.
A new tax is the certain rallying point to all those who are unfriendly to the minister by whom it is proposed. The bill introduced in pursuance of the report was opposed with great vehemence and bitterness by a majority of the southern and western members. When required to produce a system in lieu of that which they so much execrated, the opponents of the bill alternately mentioned an increased duty on imported articles generally, a particular duty on molasses, a direct tax, a tax on salaries, pensions, and lawyers, a duty on newspapers, and stamp act.
After a very angry debate, a motion made by Mr. Jackson to strike out the section which imposed a duty on domestic distilled spirits, was negatived by thirty-six to sixteen; and the bill was carried by thirty-five to twenty-one.
Some days after the passage of this bill, another question was brought forward, which was supposed to involve principles deeply interesting to the government.
Feb. 1791The Secretary of the Treasury had been the uniform advocate of a national bank. A bill conforming to the plan he had suggested, was sent down from the Senate, and was permitted to proceed, in the House of Representatives, to a third reading.13 On the final question, an unexpected opposition was made to its passage. The great strength of the argument was directed against the constitutional authority of Congress to pass the act.
After a debate of great length and ability, the bill was carried in the affirmative by a majority of nineteen votes.
The cabinet also was divided on the measure. The Secretary of State and the Attorney-General conceived that Congress had transcended their constitutional powers; while the Secretary of the Treasury maintained the opposite opinion. The advice of each minister, with his reasoning in support of it, was required in writing; and their arguments were considered by the President with that attention which the magnitude of the question, and the interest it had excited, so eminently required. This deliberate investigation terminated in a conviction that the constitution of the United States authorised the measure; and the sanction of the executive was given to the act.
The division of opinion on this constitutional question ought not to excite surprise. It must be recollected, that the conflict between the powers of a general and state government was coeval with those governments. Even during the war, the preponderance of the states was obvious; and, in a very short time after the peace, the struggle ended in the abandonment of the general government. Many causes concurred to produce a constitution more competent to the preservation of the Union; but the old line of division was still as strongly marked as ever.
To this great and radical division of opinion, which would necessarily affect every question on the authority of the national legislature, other motives were added, which were believed to possess considerable influence on all measures connected with the finances.
As an inevitable effect of the state of society, the public debt had greatly accumulated in the middle and northern states. This circumstance could not fail to contribute to the complacency with which the plans of the secretary were viewed by those who had felt their benefit, nor to the irritation with which they were contemplated by others who had parted with their claims on the nation. It is not impossible that personal considerations also mingled themselves with those which were of a public nature.
This measure made a deep impression on many members of the legislature, and contributed not inconsiderably to the complete organization of those distinct and visible parties which, in their long and dubious conflict for power, have since shaken the United States to their centre.
Among the last acts of the present Congress, was one to augment the military establishment of the United States.
The earnest endeavors of the President to give security to the north-western frontier, by pacific arrangements, having proved unavailing, he had planned an expedition against the hostile tribes in that quarter.
1790General Harmar marched from fort Washington on the 30th of September, with three hundred and twenty regulars.14 The army, when joined by the militia of Pennsylvania and Kentucky, amounted to fourteen hundred and fifty-three men. About the middle of October, Colonel Hardin was advanced with six hundred men, chiefly militia. On his approach, the Indians set fire to the principal village, and fled to the woods. As the object of the expedition could not be accomplished without defeating the savages, Colonel Hardin was again detached at the head of two hundred and ten men, thirty of whom were regulars. About ten miles west of Chillicothe, he was attacked by a party of Indians. The militia fled at the first appearance of the enemy. The regulars, commanded by Lieutenant Armstrong, made a brave resistance. After twenty-three of them had fallen in the field, the surviving seven rejoined the army.
Notwithstanding this check, the remaining towns on the Scioto were reduced to ashes, and the provisions laid up for the winter were utterly destroyed.
Being desirous of wiping off the disgrace which his arms had sustained, General Harmar once more detached Colonel Hardin, with orders to bring on an engagement. His command consisted of three hundred and sixty men, of whom sixty were regulars, commanded by Major Wyllys. Early next morning, this detachment reached the confluence of the St. Joseph and St. Mary, where it was divided into three columns. The left was commanded by Colonel Hardin in person; the centre, consisting of the regular troops, was led by Major Wyllys; and the right was commanded by Major M’Millar. The columns were soon met by a considerable body of Indians, and a severe engagement ensued. The militia retrieved their reputation. The right flank of the centre was attacked with great fury. Though Major Wyllys was among the first who fell, the battle was maintained by the regulars with spirit. At length, the scanty remnant of this small band was driven off the ground, leaving Major Wyllys, Lieutenant Farthingham, and fifty of their comrades, dead on the field. The loss sustained by the militia was also severe. It amounted to upwards of one hundred men, among whom were nine officers. After an obstinate engagement, the detachment rejoined the main army, which proceeded to fort Washington.
The information respecting this expedition was quickly followed by intelligence stating the deplorable condition of the frontier. The communications made by the President induced the legislature to add a regiment to the permanent military establishment; and to authorise him to raise a body of two thousand men for six months, and to appoint a Major-General and a Brigadier-General, to continue in command so long as he should think their services necessary.
With the 3d of March, 1791, the first Congress elected under the constitution of the United States terminated. The party denominated federal having prevailed at the elections, a majority of the members were steadfast friends of the constitution.15 To organize a government, to retrieve the national character, to establish a system of revenue, and to create public credit, were among the arduous duties which were imposed upon them, by the situation of their country. With persevering labor, guided by no inconsiderable portion of virtue and intelligence, these objects were, in a great degree, accomplished. Had it even been the happy and singular lot of America to see its national legislature assemble uninfluenced by those prejudices which grew out of the previous divisions of the country, the many delicate points which they were under the necessity of deciding, could not have failed to disturb this enviable state of harmony, and to mingle some share of party spirit with their deliberations. But when the actual state of the public mind was contemplated, and due weight was given to the important consideration that, at no very distant day, a successor to the present chief magistrate must be elected, it was still less to be hoped that the first Congress could pass away, without producing strong and permanent dispositions in parties, to impute to each other designs unfriendly to the public happiness. As yet, however, these imputations did not extend to the President. His character was held sacred, and the purity of his motives was admitted by all.
[1. ]The presidential speech delivered at the commencement of a session of Congress was for many years called the Annual Address; not until later was it referred to by the language of Article II, section 3, of the Constitution, as the “State of the Union” address.
[2. ]Hamilton’s first Report on the Public Credit, often termed Hamilton’s report on “the funding system,” which produced the Funding Act of August 4, 1790.
[3. ]Thomas Fitzsimmons (1741–1811) of Pennsylvania, state legislator and Confederation Congressman, delegate to the 1787 Constitutional Convention, U.S. Representative from 1789 to 1795, Federalist.
[4. ]Thomas Scott (1739–96) of Pennsylvania, lawyer, state legislator, judge, U.S. Representative from 1789 to 1791 and from 1793 to 1795.
[5. ]The amendments proposed by Representatives Scott and Madison would thwart the first of the recommendations of Hamilton’s report mentioned by Marshall—that “certificates of debt” should be repaid at face value, and that there should be no “discrimination” made between “original holders” of these certificates or the government “bills of credit” (paper currency) on the one hand and “present possessors” who had purchased such notes on the other. Hamilton thought both measures were necessary to restore faith in the public finances. Rampant inflation from 1775 to 1781 (when the paper currency collapsed) and throughout the 1780s had severely depreciated the value of these notes (the eventual Funding Act recognized this, recommending that specific certificates of debt be paid at face value or “specie value,” but that old currency be purchased at a rate of one hundred for one new interest-bearing bond). Such depreciation had forced many poor, agrarian holders of these notes to sell them to “speculators” for a fraction of their face value. Resettling the debt (as Scott proposed), by paying holders less than face value, would prevent speculators from making great gains at the expense of the poorer, original holders of either kind; this end could also be achieved by paying part of the value to current holders, and part to the original holders (as Madison proposed).
[6. ]Descendants of the House of Bourbon ruled both Spain and France in this period, as a consequence of the War of Spanish Succession (1701–14), which failed to stop Philip of Anjou, grandson of King Louis XIV of France, from succeeding Charles II as King Philip V of Spain. Thus, Charles III of Spain was the uncle of Louis XVI of France. Washington pressed his friend the Marquis de Lafayette—who in 1790 was seen as both a patron of liberty and a protector of the throne, and was thus for a moment among the most powerful men in France—to urge the Bourbon rulers of France to employ their influence with the Bourbons of Spain. The aim was to prevent Spain from waging war against America in conjunction with McGillivray, the Creek chieftain then on the Spanish payroll.
[7. ]These tribes are in the Ohio territory, part of the Northwest Territory established by Congress in 1787. The Wabash river is in what is now northern Indiana; the Miami and Little Miami rivers are in what is now southwestern Ohio.
[8. ]Gouverneur Morris (1752–1816) of New York, lawyer, financier, state revolutionary leader and drafter of the 1777 New York Constitution, Confederation Congressman, leading drafter of the 1787 U.S. Constitution; later U.S. ambassador to France and U.S. Senator, Federalist.
[9. ]Britain had established a fur-trading station in Nootka Sound, Vancouver Island, in what is now British Columbia, Canada; this was a deliberate challenge to Spanish claims on the Pacific coast of North America, and Spanish forces seized the British ships.
[10. ]A ceding, yielding up.
[11. ]Outlaws; plural of the Italian, bandito.
[12. ]James Jackson (1757–1806) of England and Georgia, officer in the militia, lawyer, state legislator, U.S. Representative (1789–91), U.S. Senator (1793–95, 1801–6), Governor (1798–1801), Republican.
[13. ]A term of parliamentary procedure adopted from the British; bills go through several readings—when first presented, then when examined and developed in committee and in floor debate—before going to a final question (final vote).
[14. ]Josiah Harmar (1753–1813) of Pennsylvania, Colonel in the Continental army, breveted Brigadier General; from 1784 to 1791 Commander of the U.S. Army. Fort Washington was in what is now Cincinnati, Ohio.
[15. ]Though Marshall has previously discussed the “two great parties” which existed at the time of the American founding, this is his first mention of a name for either. The supporters of the 1787 Constitution, with its augmentation of governmental power at the national level, gave themselves the name “Federalist,” thereby blunting some of the attacks made by the opponents to the Constitution that it had abandoned a properly federal league between states in favor of a consolidated national government. During the ratification debate such opponents were called Anti-Federalists, but with the formation of the new government a different name emerged, and under the leadership of Thomas Jefferson this party was known as the Republicans or (later) Democratic-Republicans. The pre-eminent leader of the Federalists was Alexander Hamilton, with John Adams second only to Hamilton in importance.