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Early political career

Clay entered politics shortly after arriving in Kentucky. In his first political speech, he attacked the Alien and Sedition Acts, laws passed by Federalists to suppress dissent during the Quasi-War with France. Like most Kentuckians, Clay was a member of the Democratic-Republican Party, but he clashed with state party leaders over a state constitutional convention. Using the pseudonym "Scaevola" (in reference to Gaius Mucius Scaevola), Clay advocated for direct elections for Kentucky elected officials and the gradual emancipation of slavery in Kentucky. The 1799 Kentucky Constitution included the direct election of public officials, but the state did not adopt Clay's plan for gradual emancipation.

In 1803, Clay won election to the Kentucky House of Representatives. His first legislative initiative was the partisan gerrymander of Kentucky's Electoral College districts, which ensured that all of Kentucky's presidential electors voted for President Jefferson in the 1804 presidential election. Clay clashed with legislators who sought to reduce the power of Clay's Bluegrass region, and he unsuccessfully advocated moving the state capitol from Frankfort to Lexington. Clay frequently opposed populist firebrand Felix Grundy, and he helped defeat Grundy's effort to revoke the banking privileges of the state-owned Kentucky Insurance Company. He advocated for the construction of internal improvements, which would become a consistent theme throughout his public career. Clay's influence in Kentucky state politics was such that in 1806 the Kentucky legislature elected him to the United States Senate. During his two-month tenure in the Senate, Clay advocated for the construction of various bridges and canals, including a canal connecting the Chesapeake Bay and the Delaware River.

After Clay returned to Kentucky in 1807, he was elected as the speaker of the state house of representatives. That same year, in response to attacks on American shipping by Britain and France during the Napoleonic Wars, President Jefferson arranged passage of the Embargo Act of 1807. In support of Jefferson's policy, which limited trade with foreign powers, Clay introduced a resolution to require legislators to wear homespun suits rather than those made of imported British broadcloth. The vast majority of members of the state house voted for the measure, but Humphrey Marshall, an "aristocratic lawyer who possessed a sarcastic tongue," voted against it. In early 1809, Clay challenged Marshall to a duel, which took place on January 19. While many contemporary duels were called off or fought without the intention of killing one another, both Clay and Marshall fought the duel with the intent of killing their opponent. They each had three turns to shoot; both were hit by bullets, but both survived. Clay quickly recovered from his injury and received only a minor censure from the Kentucky legislature.

In 1810, U.S. Senator Buckner Thruston resigned to accept appointment to a position as a federal judge, and Clay was selected by the legislature to fill Thruston's seat. Clay quickly emerged as a fierce critic of British attacks on American shipping, becoming part of an informal group of " war hawks " who favored expansionist policies. He also advocated the annexation of West Florida, which was controlled by Spain. On the insistence of the Kentucky legislature, Clay helped prevent the re-charter of the First Bank of the United States, arguing that it interfered with state banks and infringed on states' rights. After serving in the Senate for one year, Clay decided that he disliked the rules of the Senate and instead sought election to the United States House of Representatives. He won election unopposed in late 1810.