The Two Real Parties: The Hamiltonians And The Jeffersonians The two opposing political philosophies being debated in 2012 can be traced back to George Washington's presidency.  Alexander Hamilton, Washington's Secretary of the Treasury and a Federalist,  offered an economic plan that created a centralized bank (First Bank of the United States), imposed trade tariffs and exise taxes, and had the federal government assume all of the states' debt. He justified government expansion by referring to implied powers implicit in the Constitution. Former Federalist Thomas Jefferson opposed the expansion of government,  supported states rights, and followed a more explicit interpretation of the Constitution with strict limitations on federal government. Eventually, Jefferson's side formed a party referred to by historians and people of the time as Republicans, but known today as Democratic-Republicans. Hamilton and Jefferson are the patrons of the two opposing American political philosophies of big government vs. small government. President Washington didn't openly join either side, but he supported Hamilton's policies as his Treasurer. Both the House and Senate were pro-administration (Federalist) throughout Washington's presidency and remained Federalist through John Adam's (also a Federalist) presidency. During this period, there was a financial crisis in 1792 when Hamilton bailed out the Bank of New York, the bank he started, through providing securities that brought the price of securities down by 24%. There was also a land speculation bubble that burst in 1796. From 1800 to 1825, the Democratic-Republicans dominated Congress. The charter of the First Bank of The United States expired