The U.S. Constitution was, of well-to-do merchants and slave-holding

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however, a division developed within the examines the background of these events in planters.

Soon after in order to keep the Southern states in the union.

Nevertheless, the planters harbored a long-standing fear that the central government, if it were dominated by the more populous Northern states, would pass taxes, duties, and trade restrictions weighing upon the agricultural economy of the South.

Indeed, the planters' anxiety seemed to be confirmed in the policies of the new secretary of the Treasury, Alexander Hamilton.

The public debt Alexander Hamilton was the chief spokesperson of the Northern merchants and financiers. As early as 1780, he urged that a constitutional convention be held in order to establish a new national government as a "solid, coercive union" with "complete sovereignty" over the 13 states.

Hamilton hoped to bind the financial aristocracy to the central government. Upon their continued prosperity, he argued, rested the fortunes of the nation. The "powerful cement of our union," Hamilton said, was to be the establishment of a national debt.

After the Constitution had been ratified, Hamilton began to put his program into effect. The government would assume the war debts owed by the states. Holders of old state and Continental securities could exchange them for new bonds bearing interest.

Hamilton's plan called for the federal government to guarantee payment of some $60 million of war debts at face value. But the old securities had been bought up by speculators at 20 cents or less on the dollar. Thus, Hamilton's proposals amounted to a gift of millions of dollars to the "rich, the well-born, and the good."

"The prostration of agriculture"

Although the Northern states owed two-thirds of the state debts, Hamilton proposed taxing the entire country to finance the repayment. This was too much to stomach for James Madison, the "Father of the Constitution." His home state, Virginia, had already paid off its debt.

Madison turned away from Hamilton-his former close collaborator. He led a wing of the planters, centered in the Piedmont region of Virginia, against Hamilton's policies.

These "gentlemen farmers"—notably Thomas Jefferson—had been influenced by the egalitarian ideas of the nearby frontier. Most of them, had declared their abhorrence of slavery, for example, although few actually freed their slaves.

In 1790, Patrick Henry, also from the Piedmont, warned the Virginia Assembly of "the prostration of agriculture at the feet of commerce." Henry introduced a resolution, which the assembly adopted, opposing the federal government's assumption of the wartime debts of the states.

Thoroughly alarmed, Hamilton wrote to Supreme Court Chief Justice John Jay: "This is the first symptom of a spirit which must either be killed, Constitution of the United States."

Hamilton attacked. He converted a semi-official government newspaper into a defense of his works and )lans. Thomas Jefferson charged the paper with "disseminating the doctrines of monarchy, aristocracy, and the exclusion of the influence of the people." He soon replied with his own newspaper.

Two parties in the making Two political parties were in the making. The Federalist Party, representing mercantile capitalism, identified with Hamilton's policies. The agrarian-based Republican Party (the antecedent of today's Democratic Party) identified with Jefferson's and Madison's demands for "states' rights."

The Republican Party appealed to the concerns of the backcountry small farmers—over one-third of the population-who had overwhelmingly rejected ratification of the Constitution. In their writings and speeches, the Republicans echoed the farmers' distrust of a "moneyed aristocracy" controlling the distant national government.

In 1794, the conflict verged on civil war. In order to finance the new public debt, Congress levied a tax on whiskey. The sale of this commodity, distilled from surplus grain, provided almost the only cash known in the backwoods regions. People in western Pennsylvania took up arms to protest the tax.

Hamilton soon set out for Pittsburgh to crush the "Whiskey Rebellion." His 15,000 troops pillaged their way westward; citizens were snatched from their homes and marched to concentration camps. All told, the action was an effective test of the Constitution, which provides the federal government the means to "suppress insurrections."

Meanwhile, in the cities, skilled workers were organizing the first independent trade unions and strikes for higher wages. The workers were attracted to the "Democratic Societies" and "Republican Clubs," which the Jeffersonians set up to campaign for reforms in public education and social welfare.

The societies also attempted to raise support for the revolutionaries in France.

"Ten thousand people in the streets of Philadelphia," exclaimed Vice President John Adams, "threatened to drag Washington out of his house and effect a revolution in the government, or compel it to declare war in favor of the French Revolution and against England."

As the elections of 1800 approached, the Federalists denounced their adversaries as "Jacobins" and "apostles of atheism and anarchy, bloodshed and plunder." Several Republican leaders were imprisoned under the Sedition Act, which outlawed any speech or writing "with intent to defame" the president or Congress.

Despite this early attempt at a "red scare," Jefferson and the Republicans won the presidency. In his inaugural address, Jefferson immediately offered his former opponents the olive branch. "We are all Republicans, we are all Federalists!" he proclaimed.

The so-called "Revolution of 1800," transferred leadership of the country from a commercial aristocracy to a landed aristocracy. But the strong central government—set up by the Constitution and given shape by the Federalists—was left virtually intact.

Sixty years later, a second revolution-the Civil War—would be waged to reestablish the political and economic dominance of the Northern capitalist class once and for all.

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ruling-class coalition. the early

"Slavery was 'the price' to be paid to keep the Southern states in the union.'

the Constitution was ratified, This final article of a three-part series of the federal republic.