The Federalist policies called for a national bank, tariffs, and good relations with Britain as expressed in the Jay Treaty negotiated in 1794. Their political opponents, the Democratic-Republicans, led by Thomas Jefferson and James Madison, denounced most of the Federalist policies, especially the bank, and vehemently attacked the Jay Treaty as a sell-out of republican values to the British monarchy. The Democratic-Republicans, with their base in the rural South, won the hard-fought election of 1800; the Federalists never returned to power. The Federalists, too wedded to an upper-class style to win the support of ordinary voters, grew weaker every year. They recovered some strength by intense opposition to the War of 1812; they practically vanished during the Era of Good Feelings that followed the end of the war in 1815.
The Federalists left a lasting imprint as they fashioned a strong new government with a sound financial base, and (in the person of Chief Justice John Marshall) decisively shaped Supreme Court policies for another three decades.-------------------- The Federalists were dominated by businessmen and merchants in the major cities who supported a strong national government. The party was closely linked to the modernizing, urbanizing, financial policies of Alexander Hamilton. These policies included the funding of the national debt and also assumption of state debts incurred during the Revolutionary War, the incorporation of a national Bank of the United States, the support of manufactures and industrial development, and the use of a tariff to fund the Treasury. In foreign affairs the Federalists opposed the French Revolution, engaged in the "Quasi War" (an undeclared naval war) with France in 1798–99, sought good relations with Britain and sought a strong army and navy. Ideologically the controversy between Republicans and Federalists stemmed from a difference of principle and style. In terms of style the Federalists distrusted the public, thought the elite should be in charge, and favored national power over state power. Republicans distrusted Britain, bankers, merchants and did not want a powerful national government. The Federalists, notably Hamilton, were distrustful of "the people," the French, and the Republicans. In the end, the nation synthesized the two positions, adopting representative democracy and a strong nation state. Just as importantly, American politics by the 1820s accepted the two-party system whereby rival parties stake their claims before the electorate, and the winner takes control of the government.-----
As time went on, the Federalists grew steadily weaker as the political triumphs of the Republican Party grew. For economic and philosophical reasons, the Federalists tended to be pro-British – the United States engaged in more trade with Great Britain than with any other country – and vociferously opposed Jefferson's Embargo Act of 1807 and the seemingly deliberate provocation of war with Britain by the Madison Administration.After 1816 the Federalists had no national influence apart from John Marshall's Supreme Court. They had some local support in New England, New York, eastern Pennsylvania, Maryland and Delaware. After the collapse of the Democratic-Republican Party in the course of the 1824 presidential election, most surviving Federalists (including Daniel Webster) joined former Democratic-Republicans like Henry Clay to form the National Republican Party, which was soon combined with other anti-Jackson groups to form the Whig Party in 1833. Some former Federalists like James Buchanan and Roger B. Taney became Jacksonian Democrats.
The "Old Republicans," led by John Randolph of Roanoke, refused to form a coalition with the Federalists and instead set up a separate opposition since Jefferson, Madison, Gallatin, Monroe, John C. Calhoun and Clay had in effect adopted Federalist principles by purchasing the Louisiana Territory, chartering the Second national bank, promoting internal improvements (like roads), raising tariffs to protect factories, and promoting a strong army and navy after the failures of the War of 1812.
The name "Federalist" came increasingly to be used in political rhetoric as a term of abuse, and was denied by the Whigs, who pointed out that their leader Henry Clay was the Democratic-Republican party leader in Congress during the 1810s. Most Northern Whig party members after its dissolution in 1856 would start and join the Republican Party created in 1856 that survives to this day while some former southern Whigs would join the Democratic Party.