The First Party System (Figure 1) is a model of American politics used by political scientists and historians to periodize the political party system existing in the United States between roughly 1792 and 1824. Rising out of the Federalist v. Anti-Federalist debates, it featured two national parties competing for control of the presidency, Congress, and the states: the Federalist Party, created largely by Alexander Hamilton, and the rival Democratic-Republican Party formed by Thomas Jefferson and James Madison. The Federalists were dominant until 1800, and the Republicans were dominant after 1800.
In an analysis of the contemporary party system, Jefferson wrote on Feb. 12, 1798: "Two political Sects have arisen within the US, the one believing that the executive is the branch of our government which the most needs support; the other, that like the analogous branch in the English Government, it is already too strong for the republican parts of the Constitution; and therefore in equivocal cases they incline to the legislative powers: the former of these are called federalists, sometimes aristocrats or monocrats, and sometimes tories, after the corresponding sect in the English Government of exactly the same definition: the latter are stiled republicans, whigs, jacobins, anarchists, disorganizers, etc. these terms are in familiar use with most persons."
Both parties originated in national politics, but later expanded their efforts to gain supporters and voters in every state. The Federalists appealed to the business community, the Republicans to the planters and farmers. By 1796 politics in every state was nearly monopolized by the two parties, with party newspapers and caucuses becoming especially effective tools to mobilize voters.
The Federalists promoted the financial system of Treasury Secretary Hamilton, which emphasized federal assumption of state debts, a tariff to pay off those debts, a national bank to facilitate financing, and encouragement of banking and manufacturing. The Republicans, based in the plantation South, opposed a strong executive power, were hostile to a standing army and navy, demanded a limited reading of the Constitutional powers of the federal government, and strongly opposed the Hamilton financial program. Perhaps even more important was foreign policy, where the Federalists favored Britain because of its political stability and its close ties to American trade, while the Republicans admired the French and the French Revolution. Jefferson was especially fearful that British aristocratic influences would undermine Republicanism. Britain and France were at war from 1793 through 1815, with one brief interruption. American policy was neutrality, with the Federalists hostile to France, and the Republicans hostile to Britain. The Jay Treaty of 1794 marked the decisive mobilization of the two parties and their supporters in every state. President George Washington, while officially nonpartisan, generally supported the Federalists, and that party made Washington their iconic hero. The First Party System ended during the Era of Good Feelings (1816–1824), as the Federalists shrank to a few isolated strongholds and the Republicans lost unity. In 1824-28, as the Second Party System emerged, the Republican Party split into the Jacksonian faction, which became the modern Democratic Party in the 1830s, and the Henry Clay faction, which was absorbed by Clay's Whig Party.