George Washington was the first president of the United States and served for two terms. In his farewell address, he issued several stern warnings to the citizens and politicians of the young nation. He warned against accruing a large debt, involvement in foreign wars, and bitter partisanship. Two political parties had emerged in these early years of the United States: the Federalists and the Anti-Federalists. The Federalists advocated for a strong central government and the interests of business. The Anti-Federalists advocated for states' rights and the interests of farmers. Washington felt that political parties were dangerous and aimed to be a bipartisan leader, not favoring one party over another. Yet it was difficult to avoid partisan politics even at this early period in the nation's development. When Washington's secretary of the Treasury, Alexander Hamilton, proposed the creation of a national bank that the Anti-Federalists opposed, Washington sided with Hamilton.
Led by John Adams and Alexander Hamilton, the Federalist Party was formed in 1791. The Federalists were a leading force in the ratification of the Constitution. The Federalist Party was in control of the U.S. government from 1789 to 1801. Federalist John Adams was George Washington's successor to the presidency.
The Anti-Federalist Party began as a 1787 movement led by then Minister to France Thomas Jefferson. Its founding members included James Monroe and Patrick Henry. Anti-Federalists feared a strong central government, opposed ratification of the Constitution, and were responsible for the addition of the Bill of Rights. They generally supported Washington's presidency but opposed the national bank and other fiscal policies of Alexander Hamilton.
In the first years of the new government, Hamilton's fiscal policy was at the center of the debates between the Federalists and Anti-Federalists. In addition to a national bank, Hamilton believed that the enormous debts accrued by the Continental Congress as well as by the states during the American Revolution should be assumed and paid off by the national government. Many of the Southern states, whose voting population primarily consisted of farmers, had repudiated their debts and were wary of any policy that would require them to pay taxes for debts owed by other states. The Anti-Federalists opposed creation of a national bank, believing it was not within the powers granted to Congress by the Constitution. As an Anti-Federalist, Washington's secretary of state, Thomas Jefferson, agreed with this assessment. To strengthen their position, Jefferson, James Madison, and other Anti-Federalists formed the Republican Party—the first opposition political party in the United States.