The Federalists in Power

According to Meyerson (165), Federalism is a form of government in which power and authority is given to more than one level of government over the same jurisdiction. In America, federalism had all the state governments combining to form the central government. From James Madison’s Federalist 10, it is clear that his fear for federalism is the possibility of the cropping up of the different political factions within the government. This is because of the democratic freedom of different opinions within the government. He further express his fears by stating that whenever a political faction is composed of the majority in the society, the minority interests are likely to be neglected.

Another notable fear of Madison is that, because of democracy, the elected leaders could be unsteady and unfit to lead. He warns that such people may force themselves to lead through the help of their close friends who will guard them against opposition from others. Lastly, Madison fears that the faction leaders may be having self interests to satisfy, thus ending up not serving the states that sent them to the government (Meyerson, 166).

As far as power is concerned, Madison stated that the groups that should hold power include the landowners who should have the opportunity to be part of the government so that they can selflessly serve the interests of the people. Concerning factions, he argued that it is better if the minority faction is the one coming up since they can never serve their own interests even when the majority opinions prevail (Meyerson, 165).

Alexander Hamilton’s Economic Vision

According to O’Lalor (14), Alexander Hamilton’s recommendations for solving the American economic crisis include the clearance of all the government debts; both domestic and foreign. He argues that this would allow both the foreign countries and the local individuals to have confidence in the government and to continue investing and lending money to the government. He also proposed the imposition of some taxes in form of tariffs and excise duty on distilled spirits and rebates on re-exported goods by the government. He sees this as a way raising government additional revenue for the government. Finally, he proposed the imposition of tariffs to help protect the local manufacturers from the foreign competition in the local markets.

According to O’Lalor (15), Alexander further proposed the creation of a national bank which would be called the bank of United States of America. This bank was to be bigger than all the existing banks in its scope of operations. It was to accept money deposits, deal with bank notes and the commercial paper, as well as giving short term loans to the government which will further enhance the economic activities. Finally, he recommended that the government should help fund the upcoming industries so as to encourage them in their activities.

For the purpose of industrialization, Alexander proposed that the government should invest in the agricultural industry to help boost the local trade and provide some of the locally needed raw materials. He also proposed the creation of manufacturing industries to help manufacture machinery and commodities for local use. Lastly, he recommended the improvement of the transport industry so as to aid the local trade (O’Lalor, 16).

In terms of labor, Alexander encouraged the government to allow more immigrants into the country so as to help boost the manual labor force in the country. He also encouraged the use of machinery which would ensure faster and accurate work. Finally, he recommended the employment of those who are not engaged in any form of business since they would give their best in work.

The proposal by Alexander to have a federal bank was accepted by the congress which passed a bill in 1791 in its favor. The government also provided a twenty year charter for the bank, the initial capital, accepted a twenty percent ownership and provided the headquarter location for the bank in Philadelphia.


Even though democracy as a form of government respects everyone’s opinion, the majority opinion will still override the minority opinion. There is thus the need a number of economic measures for any country to experience economic progress.

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