Study Guide

The Federalists Analysis

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  • Law

    Matthew Lyon: Free Speech Martyr

    In 1798, Matthew Lyon was reelected to Congress while sitting in a jail cell. Convicted under the Sedition Act for maliciously criticizing President John Adams, he was forced to pay a $1,000 fine and serve four months in prison. 

    His attacks on the president had indeed been harsh. Lyon had labeled Adams' policies toward France proof of the president's "continual grasp for power" and his "unbounded thirst for ridiculous pomp, foolish adulation, or selfish avarice." Lyon made the case more succinctly in another speech—the president's policies proved him more fit for the "madhouse" than the executive office.

    The Sedition Act: Defensible? Oppressive? Progressive?

    When viewed through the ideological lens of 18th-century conservatives, Lyon's silencing appears more understandable. More interested in self-advancement than the general welfare, more interested in provocation and division than bipartisanship and consensus, Lyon embodied a form of speech that could be seen as a poison to be removed rather than protected. 

    Our own conceptions of free speech have evolved alongside our understandings of the purposes of the political process; that is, we have developed a far greater tolerance for even the most abrasive and even violent forms of speech just as we've come to accept the legitimacy of conflict, division, and self-interest within the political arena. 

    But from the standpoint of classical republican theory, with its emphasis on self-sacrificing political behavior and dispassionate political discourse, this sort of clarity vanishes. Moreover, when compared to the understanding of sedition drawn from British common law, the Sedition Act takes on a certain progressive quality.

    Sedition Under British Common Law

    British common law offered a very broad definition of sedition. A person could be found guilty of the crime for any statement that disrespected the social hierarchy upon which the political order rested. Believing that there was a natural order to things—superiors and inferiors, rulers and subjects—British common law labeled as seditious any statement that threatened to subvert the "natural" social hierarchy.

    Moreover, a person could be found guilty of sedition under British law regardless of the truth, effect, or intent of the statement. A person could whisper a half-serious but truthful joke to a friend—"the prime minister is a philandering drunk"—that resulted in no real damage to the official or the political order, but still could be found guilty. 

    This was because the courts could legally impose a "bad tendency test" and consider what might have happened as a consequence of a statement. What actually did happen was beside the point. If the court could imagine a plausible set of negative events resulting from an individual's statement, he could be convicted of sedition on the basis of this fabricated scenario.

    With the restrictive British common law as a background, the Sedition Act adopted by Congress in 1798, while far short of our standards for the protection of speech, represented in an odd way something of a half-step in the right direction. A person couldn't be convicted if his insults to the powerful were truthful. Furthermore, the state had to prove malicious intent for a charge of sedition to stick. 

    The Sedition Act also allowed juries to rule on the question of law as well as the facts; that is, citizen jurors were given the authority to determine not just whether a certain statement was made, but whether it really constituted sedition.

    The passage of this act also encouraged Americans to think more fully about what the freedom of speech and press should mean. When the 1st Amendment was added to the Constitution, most supporters believed that while the federal government had no business interfering with speech, state governments remained free to do so. 

    Moreover, the guide provided by British common law only denied government the power of prior restraint. That is, it argued that while the press couldn't be prevented from publishing something, the government could prosecute the publisher and writer for sedition following publication. Given the broad definition of sedition under British common law, there was really very little protection within this legal tradition at all. But in the aftermath of the Sedition Act, many Americans begin to question whether the understanding of free speech provided by the British was adequate to the needs of America's republic—whether freedom of the press meant freedom from subsequent prosecution as well as the guarantee of no prior restraint.

    Matthew Lyon—political opportunist, self-advancing boor, and America's first free speech martyr—isn't the easiest person to celebrate. The Sedition Act is almost as flawed a monument to our ever-unfolding concept of free speech. But each, in its own way, played a critical role in the expansion of those liberties we see as essential and defining features in our free society.

  • Economy

    The Economic Challenges of Independence

    The economic problems facing the United States in 1789 were indeed daunting. 

    For starters, the arrival of peace in 1783 had also brought recession. During the war, many Americans had found prosperity supplying goods to the three armies—American, British, and French—marching across the continent. But now, with the fighting over and the armies withdrawn, they faced a sharp reduction in demand. 

    More important in the long term, the British had decided to play commercial hardball by receiving American goods only on an as-needed basis. Among the American industries hit hardest were the shipyards of New England; their annual production fell by 80%. New England merchants and New York and Pennsylvania farmers also faced hard times, as the British closed their West Indian ports to American trade. Supplying these islands, and their 500,000 slaves, with provisions like fish, salt, and wheat had been of critical economic importance to the northern mainland states. 

    In addition, Western migrants faced an equally serious economic threat. Spain, which owned vast territories in the interior of the continent, was denying Americans access to the Mississippi River. If unable to ship goods down the Mississippi, Western farmers would be denied their only practical route to eastern and foreign markets. 

    Moreover, political separation hadn't dampened Americans' craving for British manufactured goods. But with American exports restricted, the United States soon racked up huge trade deficits. Completing the gloomy economic picture, the United States and many of the individual states had large, seemingly unmanageable debts. Unless these were paid down or refinanced, confidence in the new government and the government's ability to borrow in the future would be jeopardized.

    Hamiltonian Finance

    In the face of these economic problems, Alexander Hamilton, first Secretary of the Treasury, developed a package of proposals designed to restore the public credit and boost the American economy. 

    The centerpiece of the plan was the decision to refund the national debt. He wouldn't immediately pay off the $40 million that had been borrowed by the Continental Congress during the war. Instead, he'd swap old securities (bonds, field warrants, and other forms of government IOUs) for new securities. He also proposed that the federal government assume the debts of the states; new federal government securities would be exchanged for the old state securities. For holders of the old securities, either national or state, the key feature of the new plan was that their securities would be honored at full face value. 

    In the years since these securities were first issued, many people had lost confidence in the government's ability to ever repay them. Consequently, their market value had declined, and many holders of these securities had sold them to others for less than their face value. (By the mid 1780s, government securities often sold for as little as 15¢ on the dollar.) But Hamilton pledged to refund everything at full value, assuring a hefty payoff for many who had gambled on these securities eventually recovering their worth.

    For Hamilton, an equally important feature of these new bonds was that they carried no maturation date. The government promised to pay the interest annually, usually 4 to 6%, but wouldn't commit to a certain payoff date. Hamilton's logic was more political than economic; he envisioned these bonds circulating permanently as a safe form of investment for Americans. If a holder wanted his cash, he could sell the bond to someone else. The original holder would be satisfied and the bond would pass to another person now invested in government securities—and now also interested in ensuring that the government was stable and adequately empowered to make its annual interest payments. 

    In this way, America's debt would actually become a source of strength rather than a burden—a "national blessing," as Hamilton said, joining the private interests of American investors to the public need for a strong and stable federal government. 

    What Madison gently, and the German Republican Society more bluntly, were getting at was the need for political parties—the sort of permanent, extra-governmental political organizations that Washington and many others dreaded, but which we now take for granted as fundamental to democracy.

    In the Whiskey Rebellion, Washington was able, once again, to impose order in a manner consistent with his vision of the nation's needs. But within this immediate victory, a more dynamic, less orderly, and more democratic political infrastructure continued to unfold.

  • Politics

    John Adams and Washington's Legacy

    When John Adams defeated Thomas Jefferson in a hotly-contested election for the presidency in 1796, Jefferson claimed to find solace in the extraordinary challenges awaiting the second president. By the end of George Washington's administration, the Hamiltonian economic program, the Jay Treaty, and the Whiskey Rebellion had left the public contentious and divided—and new troubles lurked on the horizon. 

    France, seeing in the Jay Treaty a de facto commercial alliance between Britain and America, had increased its attacks against American shipping. In 1796 alone, 300 American ships were seized. Leaving the presidential headaches to John Adams was perhaps not such a bad thing, Jefferson mused, commenting that "no man will bring out of that office the reputation which he carries into it." 

    President Washington had been fortunate, Jefferson elaborated to his friend James Madison, "to get off just as the bubble is bursting."

  • Diplomacy

    Genet's Visit

    When French diplomat Edmond Genet came to America in 1793, he came with an ambitious agenda: to secure American support for France in her war against Britain. 

    Ideally, he'd convince President Washington to re-embrace the Franco-American alliance signed during the American Revolution. If unsuccessful at that, Genet at least hoped to rally popular support for the French and commission some privateers—government-sanctioned pirates—to harass British shipping.

    In the end, Genet wasn't very successful, because Washington insisted on a policy of strict neutrality. The American president argued that the old treaty, signed with a French government that had since been overthrown by the French Revolution, no longer applied, and the United States could ill afford to antagonize the British at such a vulnerable early stage in its development. 

    But Genet did succeed in stirring up a hornet's nest: he tapped into a growing popular interest in politics that ultimately unsettled Washington's sense of national security almost as much as the prospect of war.

    Washington's Farewell Address

    Washington laid out the greatest threats to America in a farewell address to the nation, which he began writing at the end of his first term. 

    Convinced that the country needed his service for another four years, he put the letter away until the conclusion of his second term in 1796. But Washington's sense of the nation's security needs changed little during that time. The primary threat to national security, he felt, lay in entanglements abroad. America needed to take refuge behind its oceans for at least 20 years. By then, it might be better prepared for the dangers of international involvement. Until then, however, he deemed it America's "true policy to steer clear of permanent alliances with any portion of the foreign world."blank">Alexander Hamilton was pelted with rocks in the streets of New York while trying to defend the treaty, and the formerly untouchable Washington had to endure mobs outside his home condemning the treaty and cursing his name.

    In the final analysis, Washington was able to leverage his influence, once again, to advance his foreign policy vision. But outside the still manageable halls of Congress, a different political world was unfolding. American citizens were enthusiastically forming extra-governmental political organizations. They had assumed positions hostile to the government and had aggressively pursued a set of political objectives contrary to Washington's perception of the national interest. 

    A new political world was emerging, and Washington must have questioned how long even he, with his enormous personal influence, would be able to keep all this political energy under control.

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