During the Washington administration (1789-1797) differences among Americans concerning a variety of domestic and foreign policy issues led to the growth of political parties.
Federalists, led by Alexander Hamilton, supported England in their wars with France and a wide-ranging economic program assumption of state debts by the federal government, hard currency, federal excise taxes, a high protective tariff, and the creation of a national bank. In order to achieve these policy goals, they favored a loose interpretation of the Constitution that emphasized a powerful and expansive central government, including the executive. They envisioned an America with an economy resting on manufacturing and commerce.
Republicans, on the other hand, were opposed to federal assumption of state debts and particularly the requirement of hard currency to satisfy debts. They favored policies that would benefit debtors over creditors, including a loose monetary policy. They also favored the French, having been supporters of the French Revolution. They argued that a chartered national bank was unconstitutional, and advanced a strict interpretation of the Constitution that stuck as closely as possible to its language in determining the powers of the federal government. Their vision for America, while not rejecting the importance of manufacturing outright, also emphasized agriculture.