The 'First Party System' is a term used by political scientists to refer to the politics of the period from 1792 to the 'Era of Good Feeling' during the James Monroe administration. As previously noted in 'The History of the Two Party System, Pt 1', the first true American political parties were Alexander Hamilton's Federalists and the Democratic-Republicans founded by Thomas Jefferson and James Madison. The Federalist Party was pro-business, pro-bank, and in favor of a strong national government. The Democratic-Republican Party was against taxes and a national banking system and strongly advocated states' rights. The Federalists advocated a rapprochement with Great Britain, the leading economic power of the world, for the trade benefits this would bring the United States. The Democratic-Republicans favored a policy of strict loyalty to the American Revolutionaries' ally, France.
The two parties came into being during George Washington's first term and would fight bitterly throughout Washington's second. While Hamilton's economic policies largely passed as he had envisioned them, the Democratic-Republicans were more successful at building a national party. In the first great partisan election in the United States, Democratic-Republican George Clinton defeated Federalist John Jay for the position of governor of New York. Clinton used the immense political patronage available to the governor of an important state to strengthen the Democratic-Republican party.
The rematch came with Washington's decision not seek a third term as president. Vice President John Adams became the Federalist candidate while party leader Thomas Jefferson would represent the Democratic-Republicans. It should be noted that while the party apparats endorsed these candidates, however, that there was no nominating system as exists today. Other candidates ran for president as well, and most them were Federalists and Democratic-Republicans who served to divide the votes of the party's leading candidates. Candidates during this phase of U.S. history ran as individuals, not as the nominated representatives of a political party.
The Federalists won this first national clash, but the Adams administration would sow the seeds of the Federalists' destruction. The French Revolution was at its height. Many Democratic-Republican leaders saw the revolution in France as a spread of 'American' ideals to its ally and were strongly in favor of the revolutionaries. The leading Federalists, however, saw the French Revolution as a complete social and political breakdown and a threat to other nations. Democratic-Republicans wished to aid the French republic in its clash with Great Britain, while Federalists saw French Republican trade policies as hostile and wished a war with France.
Neither side got their way. John Adams was determined to have peace and to keep the United States neutral in European conflicts. Despite the outbreak of the Quasi-War with France in 1798, Adams firmly resisted declaring war and resolutely pursued a diplomatic solution to the
tensions between the two countries. This angered the dominant Hamilton faction of his own party. When Adams and Jefferson faced each other in a presidential election for the second time in 1800, Hamilton's so-called 'High Federalists' (the hard-core wing of the party) backed vice-presidential candidate Charles C. Pinckney (the hero of the so-called 'XYZ Affair' that led to the Quasi-War and the official Vice-Presidential candidate of the Federalist Party) for the presidency and the divided votes led to Adams' defeat and the fracturing of the Federalist Party.
The Democratic-Republicans were also badly damaged, however. Jefferson ended up in an electoral tie with his Vice-Presidential candidate, Aaron Burr. The decision was sent to the House of Representatives, where disgruntled Federalists who had lost their seats in the election initially began voting for Burr at a rapid clip to block Jefferson from the presidency. Hamilton, who was more afraid of a Burr presidency than even of Jefferson, used his personal influence to rally votes to ensure Jefferson's election. This was merely one sordid chapter in a political feud between Hamilton and Burr that ended with Burr shooting Hamilton dead in a duel in 1804. Hamilton's death was the final nail in the Federalist Party's coffin. Though they limped on as a regional party in New England, the Federalists never again made a serious bid for either congressional or presidential authority and in 1820's presidential election they could not even muster party unity behind a single candidate. As a result, in many states incumbent President James Monroe was the only name on the ballot.
With Monroe's re-election, the Federalist party was officially dead. A new system, however, was already forming within Monroe's own party. It would result in the birth of the Democratic Party and begin a desperate quest for effective and unified opposition to the Democrats.