Democratic Republicans envisioned a central government that was strong enough to protect property but not strong or active enough to threaten property or other republican rights. Jefferson feared the national debt, the federal taxes, and the enlarged civil service that Hamilton's plans required. When Jefferson was elected president in 1800, he paid off much of the debt that Hamilton had envisioned as a permanent fixture of government. The Jeffersonians then abolished federal taxes other than the tariff, reduced the number of government employees, and drastically reduced the size of the military. They did, however, retain the Bank of the United States. Internationally, the Jeffersonians had no ambitions other than free trade-the right of Americans to trade the produce of their plantations and farms for finished goods from other countries. Unfortunately for both Federalists and Democratic Republicans, it was very hard for the United States to act as a free and neutral country in the international arena because of the wars that followed the establishment of a republic in France .
The French republic became violent and expansionist, and Britain led three coalitions of European powers in wars against its expansionist activities. These wars affected the domestic policy and the foreign policy of the new United States. Federalists valued American sovereignty, but they also valued the old trading relationship with Britain; Americans did 90 percent of their trade with Britain. The Federalists also admired British political stability, and they sided with Britain in its wars against France. In Jay's Treaty of 1794 the Washington administration tried to create a postrevolutionary relationship with Britain. The British agreed to abandon the forts they occupied in the Northwest Territory. An American army under General Anthony Wayne had defeated the northwestern Native Americans at the Battle of Fallen Timbers in 1794, and the British were glad to leave. But the British refused to allow Americans to trade internationally on any basis other than as part of the British mercantile system. The Federalists, knowing that they could ask for nothing better, agreed. The French regarded Jay's Treaty as an Anglo-American alliance. They recalled their ambassador and began harassing American merchant ships at sea. By 1798 the Americans and the French were fighting an undeclared naval war in the Caribbean. During this crisis, Federalists passed the Alien and Sedition Acts. These acts undermined civil liberties and were clearly directed against Jeffersonian newspaper editors, who were critical of the Federalist-dominated government. The Federalist government also began to raise a large army. The size of the Federalist government and the danger of Federalist repression were the principal issues in the election of 1800.
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