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The Federalist Party was one of the first national political parties in the United States. It was formed by Alexander Hamilton during the first term of President George Washington from the "federalist" movement that pushed for the ratification of the Constitution in the late 1780's. The Federalists drew considerable support from the Northeast, New England in particular, and were made up largely of urban businessmen and bankers.
The Federalist party favored a strong and robust federal government, and because both George Washington and John Adams were Federalists (Washington was a Federalist in all but name), they succeeded in establishing one. Occasionally, however, they strayed into the authoritarian side of things; under Adams, they passed the Alien and Sedition Acts, which made it illegal to print "malicious" or "scandalous" criticism of the federal government (but not of Democratic-Republican Vice President Thomas Jefferson) and gave an unprecedented amount of power to the President.
The party fell out of favor after the War of 1812 due to the events of the Hartford Convention, in which a large group of New England Federalists seriously discussed the prospect of secession from the United States due to the effect that the war with Britain was having on the region's trade-based economy. The talk of secession went over with the rest of the country about as well as one would expect, and the Federalist Party was disgraced. The Whig Party (not to be confused with the Modern Whig party) is its closest descendant.