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So high ran party spirit that the Virginian leaders thought or affected to think it necessary to prepare for armed resistance to Federalist oppression; and Madison and Jefferson, acting through the State legislatures of Virginia and Kentucky respectively, caused the adoption of two striking series of resolutions stating the crisis in Republican phraseology. In each case, after denouncing the Alien and Sedition laws as unconstitutional, the legislatures declared that the constitution was nothing more than a compact between sovereign States; that the Federal government, the creature of the compact, was not the final judge of its powers, and that in case of a palpable usurpation of powers by the Federal government it was the duty of the States to "interpose," in the words of Madison, or to "nullify" the Federal law, as Jefferson phrased it. Such language seemed to Washington, Adams, and their party to signify that the time was coming when they must fight for national existence; but to the opposition it seemed no more than a restatement of time-hallowed American principles of government, necessary to save liberty from a reactionary faction. Party hatred now rivalled that between revolutionary Whigs and Tories.

Under these circumstances the election of 1800 took place. The Federalist party {179} leaders, feeling the ground quaking under them, clung the more desperately to the continuance of the French "quasi-war" as their sole means for rallying popular support. But at this stage President Adams, seeing the folly of perpetuating a sham war for mere party advantage, determined to reopen negotiations. This precipitated a bitter quarrel, for the members of his Cabinet and the leading congressmen still regarded Hamilton, now a private citizen in New York, as the real leader, and followed him in urging the continuance of hostilities. Adams, unable to manage his party opponents openly, took refuge in sudden, secret, and, as they felt, treacherous conduct and sent nominations for a new French mission without consulting his advisers. The Federalist Senate, raging at Adams's stupidity, could not refuse to ratify the appointments, and so in 1799 the new mission sailed, was respectfully received by Bonaparte, and was promptly admitted to negotiations.

The Federalist party now ran straight toward defeat; for, while the leaders could not avoid supporting Adams for a second term, they hated him as a blunderer and marplot. On his part, his patience exhausted, Adams dismissed two of his secretaries, in a passion, in 1800. Later, through the wiles of Aaron Burr, Republican leader in New {180} York, a pamphlet, written by Hamilton to prove Adams's utter unfitness for the Presidency, was brought to light and circulated. Against this discredited and disorganized party, the Republicans, supporting Jefferson again for the Presidency and thundering against the Sedition Law, triumphantly carried a clear majority of electoral votes in the autumn; but by a sheer oversight they gave an equal number for Jefferson and for Burr, who was only intended for Vice-president. Hence under the terms of the constitution it became necessary for the House of Representatives to make the final selection, voting by States. It fell thus to the lot of the Federalist House of 1800-1801 to choose the next President, and for a while the members showed an inclination to support Burr, as at least a Northerner, rather than Jefferson. But better judgments ruled, and finally Jefferson was awarded the place which he had in fairness won. The last weeks of Federalist rule was filled with a discreditable effort to save what was possible from the wreck. New offices were established, including a whole system of circuit judgeships; and Adams spent his time up to the last hour of his term in signing commissions, stealing away in the early morning in order not to see the inauguration of his rival.

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So fell the Federalist party from power. It had a brilliant record in legislation and administration; it had created a new United States; it had shown a statesmanship never equalled before or since on the American continent; but it ruined itself by endeavouring openly to establish a system of government founded on distrust of the people, and modelled after British precedents. For a few years, England and the United States approached nearer in government and policy than at any other time. But, while in England a large part of society—the nobility, gentry, middle classes, the professions, the church, and all strong political elements—supported Pitt in suppressing free speech and individual liberty, the Federalists represented only a minority, and their social principles were abhorrent to the vast majority of the inhabitants of the United States.

The Republican party, which conquered by what Jefferson considered to be a revolution no less important than that of 1776, represented a reaction to the old ideals of government traditional in colonial times,—namely as little taxation as possible, as much local independence as could exist, and the minimum of Federal authority. Jefferson professed to believe that the conduct of foreign relations was the only important function of the central government, {182} all else properly belonging to the States. So complete was the Republican victory that the party had full power to put its principles into effect. It controlled both Houses of Congress, and was blessed with four years of peace and prosperity. Thomas Jefferson, for all his radicalism in language, was a shrewd party leader, whose actions were uniformly cautious and whose entire habit of mind favoured avoidance of any violent change. "Scientific" with the general interests of a French eighteenth-century "philosopher," he was limited in his views of public policy by his education as a Virginia planter, wholly out of sympathy with finance, commerce, or business. Under his guidance, accordingly, the United States government was subjected to what he called "a chaste reformation," rather than to a general overturning.

All expenses were cut down, chiefly at the cost of the army and navy; all appropriations were rigorously diminished, and all internal taxes were swept away. Since commerce continued active, there still remained a surplus revenue, and this Gallatin, the Secretary of the Treasury, applied to extinguishing the debt. A few of the more important Federal offices were taken from embittered Federalists and given to Republicans, but there was no general {183} proscription of office-holders. The only action at all radical in character was the repeal of the law establishing new circuit judgeships, a step which legislated a number of Federalists out of office. The repeal was denounced by fervid Federalist orators as a violation of the constitution and a death-blow to the Union; but the appointments under the law itself had been so grossly partisan that the country was unalarmed. With these steps the Republican reaction ended. Jefferson and his party carried through no alteration of the central departments; they abandoned no Federal power except that of imposing an excise; they did not even repeal the charter of the National Bank. The real change lay in the more strictly economical finances and in the general spirit of government. The Federalist opposition, criticizing every act with bitterness and continually predicting ruin, found that under the "Jacobins" the country remained contented and prosperous and was in no more danger of atheism or the guillotine than it had been under Adams. So matters went on, year after year, the Federal government playing its part quietly and the American people carrying on their vocations in peace and prosperity.

Jefferson's general theory of foreign affairs was based on the idea that diplomacy was {184} mainly a matter of bargain and sale, with national commerce as the deciding factor. He believed so firmly that national self-interest would lead all European powers to make suitable treaties with the United States that he considered the navy as wholly superfluous, and would have been glad to sell it. But when circumstances arose calling for a different sort of diplomacy, he was ready to modify his methods; and he so far recognized the unsuitability of peaceful measures in dealing with the Barbary corsairs as to permit the small American navy to carry on extensive operations during 1801-3, which ended in the submission of Tripoli and Algiers.

Simultaneously, Jefferson was brought face to face with a diplomatic crisis, arising from the peculiar actions of his old ally, France. At the outset of his administration, he found the treaty made by Adams's commissioners in 1800 ready for ratification, and thus began his career with all questions settled, thanks to his predecessor. But he had been in office only a few months when the behaviour of the Spanish officials at New Orleans gave cause for alarm; for they suddenly terminated the right of deposit, granted in 1795. It was quickly rumoured that the reason was to be found in the fact that France, now under the First Consul, Napoleon, {185} had regained Louisiana. It was, in fact, true. Bonaparte overthrew the Directory in 1799 and established himself, under the thin disguise of "First Consul," as practical military despot in France. He had immediately embraced the idea of establishing a western colonial empire, which should be based on San Domingo, now controlled by insurgent negroes, and which should include Louisiana. By a treaty of October 1, 1800, he compelled Spain to retrocede the former French province in return for a promise to establish a kingdom of "Etruria" for a Spanish prince. During 1802 large armaments sailed to San Domingo and began the process of reconquest. It needed only the completion of that task for Napoleon to be ready to take over Louisiana, and thereby to gain absolute control over the one outlet from the interior territories of the United States.