Editing James Madison (section)

===Founding the Democratic–Republican Party===
{{Main|Democratic-Republican Party}}
[[File:Official Presidential portrait of Thomas Jefferson (by Rembrandt Peale, 1800).jpg|thumb|[[Thomas Jefferson]] founded the [[Democratic-Republican Party]] with Madison and broadly represented Southern interests.|alt=Image of Jefferson who was a close friend and confidant of Madison.]]

After 1790, the Washington administration became polarized into two main factions. One faction, led by Jefferson and Madison, broadly represented Southern interests and sought close relations with France. This faction became the [[Democratic-Republican Party]] opposition to Secretary of the Treasury Hamilton. The other faction, led by Hamilton and the [[Federalist Party|Federalist]]s, broadly represented Northern financial interests and favored close relations with Britain.{{sfn|Burstein|Isenberg|2010|pages=207–208}} In 1791, Hamilton introduced a plan that called for the establishment of a [[History of central banking in the United States|national bank]] to provide loans to emerging industries and oversee the money supply.{{sfn|Burstein|Isenberg|2010|pages=221–224}} Madison and the Democratic-Republican Party fought back against Hamilton's attempt to expand the power of the Federal Government with the formation of a national bank; Madison argued that under the Constitution, Congress did not have the power to create a federally empowered national bank.{{sfn|Feldman|2017|pages=199-211}} Despite Madison's opposition, Congress passed a bill to create the [[First Bank of the United States]], which Washington signed into law in February 1791.{{sfn|Burstein|Isenberg|2010|pages=221–224}} As Hamilton implemented his economic program and Washington continued to enjoy immense prestige as president, Madison became increasingly concerned that Hamilton would seek to abolish the federal republic in favor of a centralized monarchy.{{sfn|Feldman|2017|page=343}}

When Hamilton submitted his ''[[Report on Manufactures]]'', which called for federal action to stimulate the development of a diversified economy, Madison once again challenged Hamilton's proposal.{{sfn|Feldman|2017|pages=343–347}} Along with Jefferson, Madison helped [[Philip Freneau]] establish the ''[[National Gazette]]'', a Philadelphia newspaper that attacked Hamilton's proposals.{{sfn|Feldman|2017|pages=324–326}} In an essay in the newspaper in September 1792, Madison wrote that the country had divided into two factions: his faction, which believed "that mankind are capable of governing themselves", and Hamilton's faction, which allegedly sought the establishment of an aristocratic monarchy and was biased in favor of the wealthy.{{sfn|Feldman|2017|pages=366–367}} Those opposed to Hamilton's economic policies, including many former Anti-Federalists, continued to strengthen the ranks of the Democratic–Republican Party,{{efn|The Democratic–Republican Party was often referred to as the "Republican Party". It was a separate entity from the later [[Republican Party (United States)|Republican Party]], which was founded in the 1850s.{{sfn|Meacham|2012|pp=405–406}} }} while those who supported the administration's policies supported Hamilton's Federalist Party.{{sfn|Burstein|Isenberg|2010|pages=279–280}} In the [[1792 United States presidential election|1792 presidential election]], both major parties supported Washington for re-election, but the Democratic–Republicans sought to unseat Vice President [[John Adams]]. Because the Constitution's rules essentially precluded Jefferson from challenging Adams,{{efn|Because the Constitution required presidential electors to vote for at least one individual from outside their home state, electors from Virginia would not have been able to vote for both Washington and Jefferson.{{sfn|Feldman|2017|page=369}} }} the party backed New York Governor [[George Clinton (vice president)|George Clinton]] for the vice presidency, but Adams still won.{{sfn|Feldman|2017|pages=369–370}}

With Jefferson out of office after 1793, Madison became the de facto leader of the Democratic–Republican Party.{{sfn|Burstein|Isenberg|2010|pages=305–306}} When Britain and France [[French Revolutionary Wars|went to war]] in 1793, the U.S. needed to determine which side to support.{{sfn|Burstein|Isenberg|2010|pages=261–262}} While the differences between the Democratic–Republicans and the Federalists had previously centered on economic matters, foreign policy became an increasingly important issue, as Madison and Jefferson favored France and Hamilton favored Britain.{{sfn|Feldman|2017|pages=373–374}} War with Britain became imminent in 1794 after the British seized hundreds of American ships that were trading with French colonies. Madison believed that a trade war with Britain would probably succeed, and would allow Americans to assert their independence fully. The [[British West Indies]], Madison maintained, could not live without American foodstuffs, but Americans could easily do without British manufacturers.{{sfn|Varg|1963|p=74}} Similarly, Madison argued that British industry was highly dependent on the demand of American consumers and would suffer heavily if this market was denied to the British.<ref>{{Cite journal |last=McCoy |first=Drew R. |date=October 1974 |title=Republicanism and American Foreign Policy: James Madison and the Political Economy of Commercial Discrimination, 1789 to 1794 |url=https://www.jstor.org/stable/1921607 |journal=[[The William and Mary Quarterly]] |volume=31 |issue=4 |pages=633–646 |doi=10.2307/1921607 |jstor=1921607 |access-date=September 1, 2024}}</ref> Washington secured friendly trade relations with Britain through the [[Jay Treaty]] of 1794.{{sfn|Wills|2002|pages=38–44}} Madison and his Democratic–Republican allies were outraged by the treaty; the Democratic–Republican [[Robert R. Livingston (chancellor)|Robert R. Livingston]] wrote to Madison that the treaty "sacrifices every essential interest and prostrates the honor of our country".{{sfn|Feldman|2017|pages=396–398}} Madison's strong opposition to the treaty led to a permanent break with Washington, ending their friendship.{{sfn|Wills|2002|pages=38–44}}