Hamilton suggested that the government should create the Bank of the United States, which would be a public-private partnership with both government and private investors. The Bank of the United States was to handle the government's banking needs. Jefferson protested because this was not allowed by the Constitution. Hamilton opposed the view of Jefferson and stated that the Constitution's writers could not have predicted the need of a bank for the United States. Hamilton said that the right to create the Bank of the United States was stated in the "elastic" or the "necessary and proper" clause in which the Constitution gave the government the power to pass laws that were necessary for the welfare of the nation. " This began the argument between the "strict constructionists" (Jefferson) who believed in the strict interpretation of the Constitution by

not going an inch beyond its clearly expressed provisions, and the "loose constructionists" (Hamilton) who wished to reason out all sorts of implications from what it said". Hamilton and Jefferson began to disagree more and more. Hamilton wrote nasty anonymous articles in John Fenno's Gazette of the United States and Jefferson responded to him in Philip Freneau's National Gazette. Jefferson's Notes of the State of Virginia in 1787 stated that rural life was beneficial to the government because cities and other areas of large population created poverty, disease, and corruption. Jefferson believed that the small farmers where the backbone of the United States. While in the Report on Manufactures of 1791,Hamilton stated that the government should be used to develop cities, industries, and trade Hamilton believed that "government's function is to maintain order in a potentially chaotic society. It needs to be remote and secure from the people's emotional uprisings".Jefferson believed the government "needs to be limited in its powers and completely responsive to the needs and desires of the people".Hamilton was strongest among merchants in the cities and throughout New England while Jefferson was strongest among artisans in the cities and throughout the South. These conflicting views would develop in two political parties, the Federalists led by Hamilton and the Democratic-Republicans led by Jefferson. Although both political parties presented enticing aspects, Hamilton's views would be the more reasonable because Jefferson's views were idealistic and too strict in reference to the constitution. The Jeffersonian beliefs were extremely idealistic. Jeffersonians' supported a country of farmers which in theory would end famine and the spread of disease that was commonly found in cities. However, without the development of cities and industries there would not be a trade industry which would allow the farmers to trade and prosper. With no trade, farmers would not be able to market their surplus and the surplus in the American economy would cause prices to fall. This situation would produce little profit for farmers and eventually an stagnant economy. An economy totally based on farming would also encounter problems if droughts and other natural disasters interfered with their harvests. The Hamiltonian belief is more realistic. Hamiltonians' supported the expansion of economic endeavors in cities, in areas such as trade and other crafts. This would help keep the economy stable and growing if the farming lands were not up to their potential. Jefferson's belief that the decisions in government should be made by the people is very unrealistic and perhaps even naive. It is

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Approximate Pages = 7 (250 words per page double spaced)