I love that excerpt!
Hamilton was addressing the people who did not want an energetic and powerful national government. They believed that the power would be abused by the national government as it grew and were happy with living in a union of 13 Individual states.
Hamilton wrote to his friend James Duane that the current govt (under the Articles of Confederation) was fit for neither peace nor war and that the States were energized by an uncontrollable sovereignty. I had to smile when I read that letter.
The problem was that the states had power, but the United States had no ability to defend itself from foreign invasion or develop an interstate exchange system (money). If the nation were to survive, it had to have an authority above the State governments.
The last sentence warns us of popular energies in government. Politicians who extoll the “rights of the people,” is where dangerous ambitions gain their foothold; tyranny follows.
The federal government as formed was not “above” state governments. Their jurisdictions were separate.
Thank you very much!!!