The Federalists opposed the War of 1812 because the policies of the opposing party that declared war, headed by Thomas Jefferson and later headed by James Madison, brought the Federalist stronghold of New England to the verge of destitution. Thomas Jefferson's embargo of American shipping, instead of protecting U.S. ships and sailors, caused massive unemployment, the closure of banks, and created a virtual standstill in commerce.
James Madison's Democratic-Republicans declared war with England not only to alleviate the shipping problem, but to give the western states and territories the opportunity to seize land from Canada. Even after the declaration of war passed Congress by a narrow margin, the Federalist states continued to oppose it, refusing to allow state militias to participate in the war effort. They accused Madison of corruption and of wanting to form an alliance with Napoleon Bonaparte. The Democratic-Republicans, on the other hand, accused the Federalists of wanting to divide the nation and realign with England. Some New England governors openly condemned the war effort.
In December 1814, delegates from a number of New England states assembled at the Hartford Convention to discuss solutions to the divisive dilemma. However, by the time representatives from the convention arrived in Washington D.C. with a list of proposed Constitutional amendments, a peace treaty had been signed with Britain and the war was over. After this, the Federalist Party declined and eventually disappeared.