Banking, Currency, and Protection

• The War of 1812 may have stimulated the growth of manufacturing by cutting off imports, but it also produced chaos in shipping and banking, and it exposed dramatically the inadequacy of the existing transportation and financial systems.

• The aftermath of the war, therefore, saw the emergence of a series of political issues connected with national economic development.

• The wartime experience underlined the need for another national bank.

• After the expiration of the First Bank of the United States’s charter in 1811, a large number of state banks had begun operations

• Congress dealt with the currency problem by chartering a second Bank of the United States in 1816.

• It was essentially the same institution Hamilton had founded in 1791 except that it had more capital than its predecessor.

• The national bank could not forbid state banks to issue currency, but its size and power enabled it to dominate the state banks.

• It could compel them to issue only sound notes or risk being forced out of business

• The American textile industry experienced particularly dramatic growth.

• Between 1807 and 1815, the total number of cotton spindles increased more than fifteenfold, from 8,000 to 130,000.

• Until 1814, the textile factories—most of them in New England— produced only yarn and thread; families operating hand-looms at home did the actual weaving of cloth

• Francis Cabot Lowell, after examining textile machinery in England, developed a power loom that was better than its English counterpart.

• In 1813, Lowell organized the Boston Manufacturing Company and, at Waltham, Massachusetts, founded the first mill in America to carry on spinning and weaving under a single roof.

• Lowell’s company was an important step in revolutionizing American manufacturing and in shaping the character of the early industrial workforce.

• But the end of the war suddenly dimmed the prospects for American industry. British ships—determined to recapture their lost markets—swarmed into American ports and unloaded cargoes of manufactured goods, many priced below cost

Transportation

• The nation’s most pressing economic need in the aftermath of the war was for a better transportation system.

• Without one, manufacturers would not have access to the raw materials they needed or to domestic markets.

• So an old debate resumed: Should the federal government help to finance roads and other “internal improvements”?

• The idea of using government funds to finance road building was not new

• Despite high tolls, the roads made transportation costs across the mountains lower than ever before.

• At the same time, on the rivers and the Great Lakes, steam-powered shipping was expanding rapidly.

• The development of steamboat lines was already well underway before the War of 1812, thanks to the technological advances introduced by Robert Fulton and others

• Within a few years, steamboats were carrying far more cargo on the Mississippi than all the earlier forms of river transport— flatboats, barges, and others—combined.

• They stimulated the agricultural economy of the West and the South, by providing much readier access to markets at a greatly reduced cost.

• And they enabled eastern manufacturers to send their finished goods west.

• Despite the progress with steamboats and turnpikes, there remained serious gaps in the nation’s transportation network, as the War of 1812 had shown.

• Once the British blockade cut off Atlantic shipping, the coastal roads became choked by the unaccustomed volume of north-south traffic.

• In some areas, there were serious shortages of goods that normally traveled by sea, and prices rose to new heights.

• Rice cost three times as much in New York as in Charleston, fl our three times as much in Boston as in Richmond—all because of the difficulty of transportation.

• There were military consequences, too. On the northern and western frontiers, the absence of good roads had frustrated American campaigns

• President Madison called the attention of Congress to the “great importance of establishing throughout our country the roads and canals which can be best executed under the national authority,” and suggested that a constitutional amendment would resolve any doubts about Congress’s authority to provide for their construction

8.1: Expanding Westward

The Great Migrations

• The westward movement of the white American population was one of the most important developments of the nineteenth century.

• It had a profound effect on the nation’s economy, bringing vast new regions into the emerging capitalist system.

• Like earlier movements west, it thrust peoples of different cultures and traditions into intimate (and often disastrous) association with one another.

• There were several important reasons for this expansion.

• The pressures driving white Americans out of the East came in part from the continued growth of the nation’s population— both through natural increase and through immigration.

• Between 1800 and 1820, the population nearly doubled—from 5.3 million to 9.6 million.

• The growth of cities absorbed some of that increase, but most Americans were still farmers.

• The agricultural lands of the East were by now largely occupied, and some of them were exhausted.

• In the South, the spread of the plantation system, and of a slave labor force, limited opportunities for new settlers.

• At the same time, the West itself was becoming increasingly attractive to white settlers.

• A series of treaties in 1815 wrested more land from the Indians.

• In the meantime, the government was erecting a chain of stockaded forts along the Great Lakes and the Mississippi to protect the frontier.

• It also created a “factor” system, by which government factors (or agents) supplied the tribes with goods at cost

The Plantation System in the Southwest

• In the Southwest, the new agricultural economy emerged along different lines.

• The principal attraction was cotton.

• The cotton lands in the uplands of the Old South had lost much of their fertility through overplanting and erosion.

• But the market for cotton continued to grow, so there was no lack of ambitious farmers seeking fresh soil in a climate suitable for the crop.

• In the Southwest, there were vast tracts of land appropriate for growing cotton.

• They included what would become known as the Black Belt of central Alabama and Mississippi, a large region with a dark, productive soil of rotted limestone.

• The growth of southern settlement spread cotton, plantations, and slavery

• The rapid growth of the Northwest and Southwest resulted in the admission of four new states to the Union in the immediate aftermath of the War of 1812: Indiana in 1816, Mississippi in 1817, Illinois in 1818, and Alabama in 1819.

Trade and Trapping in the Far West

• Mexico, which controlled Texas, California, and much of the rest of the Southwest, won its independence from Spain in 1821.

• Almost immediately, it opened its northern territories to trade with the United States.

• American traders poured into the region—overland into Texas and New Mexico, by sea into California. Merchants from the United States quickly displaced both Indian and Mexican traders who had previously dominated trade.

• Steady traffic of commercial wagon trains was moving back and forth along the Santa Fe Trail between Missouri and New Mexico

• At first, fur traders did most of their business by purchasing pelts from the Indians. But increasingly, white trappers entered the region and began to hunt beaver on their own.

• As the trappers, or “mountain men,” moved west from the Great Lakes region, they began to establish themselves in what is now Utah and in parts of New Mexico.

• In 1822, Andrew Henry and William Ashley founded the Rocky Mountain Fur Company and recruited white trappers to move permanently into the Rockies in search of furs, which were becoming increasingly scarce farther east.

• Henry and Ashley dispatched supplies annually to their trappers in exchange for furs and skins

• Many trappers and mountain men lived peacefully and successfully with the Native Americans and Mexicans whose lands they shared.

• Perhaps two-thirds of the white trappers married women of Indian or Spanish backgrounds while living in the West.

• But white-Indian relations were not always friendly or peaceful

Eastern Images of the West

• Americans in the East were only dimly aware of the world the trappers were entering and helping to reshape

• Smith and others became the source of dramatic (and often exaggerated) popular stories.

• But few trappers themselves wrote of their lives

• On the published map of his expedition, he labeled the Great Plains the “Great American Desert.”

8.2: Era of Good Feelings

The End of the First Party System

• Ever since 1800, the presidency seemed to have been the special possession of Virginians.

• With the decline of the Federalists, Monroe’s party faced no serious opposition.

• With the conclusion of the War of 1812, the nation faced no important international threats

• American politicians had dreamed since the first days of the republic of a time in which partisan divisions and factional disputes might come to an end.

• Soon after his inauguration, Monroe did what no president since Washington had done: he made a goodwill tour through the country

John Quincy Adams and Florida

• Like his father, the second president, John Quincy Adams had spent much of his life in diplomatic service.

• Even before becoming secretary of state, he had become one of the great diplomats in American history.

• He was also a committed nationalist, and he considered his most important task to be the promotion of American expansion.

• Adams’s first challenge as secretary of state was Florida.

• The United States had already annexed West Florida, but that claim remained in dispute.

• Most Americans believed the nation should gain possession of the entire peninsula.

• In 1817, Adams began negotiations with the Spanish minister, Luis de Onís, in hopes of resolving the dispute and gaining the entire territory for the United States.

• Jackson’s raid demonstrate to the Spanish that the United States could easily take Florida by force.

• Adams implied that the nation might consider doing so.

• Onís realized, therefore, that he had little choice but to come to terms with the Americans.

• Under the provisions of the Adams-Onís Treaty of 1819, Spain ceded all of Florida to the United States and gave up as well its claim to territory north of the 42nd parallel in the Pacific Northwest.

• In return, the American government gave up its claims to Texas

The Panic of 1819

• But the Monroe administration had little time to revel in its diplomatic successes, for the nation was falling victim to a serious economic crisis: the Panic of 1819.

• It followed a period of high foreign demand for American farm goods and thus of exceptionally high prices for American farmers

• This precipitated a series of failures by state banks.

• The result was a financial panic, which many Americans, particularly those in the West, blamed on the national bank.

• Six years of depression followed and began a process that would eventually make the Bank’s existence one of the nation’s most burning political issues.

8.3: Sectionalism and Nationalism

The Missouri Compromise

• When Missouri applied for admission to the Union as a state in 1819, slavery was already well established there.

• Since the beginning of the republic, partly by chance and partly by design, new states had come into the Union more or less in pairs, one from the North, another from the South.

• In 1819, there were eleven free states and eleven slave states; the admission of Missouri as a free state would upset that balance and increase the political power of the North over the South.

• Hence the controversy over slavery and freedom in Missouri. Complicating the Missouri question was the application of Maine (previously the northern part of Massachusetts) for admission as a new (and free) state.

• Speaker of the House Henry Clay informed northern members that if they blocked Missouri from entering the Union as a slave state, southerners would block the admission of Maine.

• But Maine ultimately offered a way out of the impasse, as the Senate agreed to combine the Maine and Missouri proposals into a single bill.

• Maine would be admitted as a free state, Missouri as a slave state.

• Senator Jesse B. Thomas of Illinois proposed an amendment prohibiting slavery in the rest of the Louisiana Purchase territory north of the southern boundary of Missouri (the 36 ° 30 ' parallel).

• Nationalists in both North and South hailed this settlement—which became known as the Missouri Compromise—as a happy resolution of a danger to the Union

Marshall and the Court

• John Marshall served as chief justice of the United States from 1801 to 1835, and he dominated the Court more fully than anyone else before or since

• Dartmouth College v. Woodward (1819) further expanded the meaning of the contract clause of the Constitution. H

• In overturning the act of the legislature and the decisions of the New Hampshire courts, the justices also implicitly claimed for themselves the right to override the decisions of state courts

• Meanwhile, in McCulloch v. Maryland (1819), Marshall confirmed the “implied powers' ' of Congress by upholding the constitutionality of the Bank of the United States.

• The Bank had become so unpopular in the South and the West that several of the states tried to drive branches out of business by outright prohibition or by confiscatory taxes.

• This case presented two constitutional questions: Could Congress charter a bank? And if so, could individual states ban it or tax it? Daniel Webster, one of the Bank’s attorneys, argued that establishing such an institution came within the “necessary and proper” clause of the Constitution and that the power to tax involved a “power to destroy.”

• If the states could tax the Bank at all, Webster said, they could “tax it to death.” Marshall adopted Webster’s words in deciding for the Bank

• In the case of Gibbons v. Ogden (1824), the Court strengthened Congress’s power to regulate interstate commerce

The Court and the Tribes

• The nationalist inclinations of the Marshall Court were visible as well in a series of decisions concerning the legal status of Indian tribes within the United States.

• But these decisions did not simply affirm the supremacy of the United States; they also carved out a distinctive position for Native Americans within the constitutional structure.

• The first of the crucial Indian decisions was in the case of Johnson v. McIntosh (1823).

• Leaders of the Illinois and Pinakeshaw tribes had sold parcels of their land to a group of white settlers (including Johnson) but later signed a treaty with the federal government ceding territory that included those same parcels to the United States.

• The government proceeded to grant homestead rights to new white settlers (among them McIntosh) on the land claimed by Johnson.

• The Court was asked to decide which claim had precedence. Marshall’s ruling, not surprisingly, favored the United States.

• But in explaining it, he offered a preliminary definition of the place of Indians within the nation.

• The tribes had a basic right to their tribal lands, he said, that preceded all other American laws.

• Individual American citizens could not buy or take land from the tribes; only the federal government—the supreme authority—could do that.

• Even more important was the Court’s 1832 decision in Worcester v. Georgia, in which the Court invalidated Georgia laws that attempted to regulate access by U.S. citizens to Cherokee country.

• Only the federal government could do that, Marshall claimed, thus taking another important step in consolidating federal authority over the states (and over the tribes).

• In doing so, he further defined the nature of the Indian nations.

• The tribes, he explained, were sovereign entities in much the same way Georgia was a sovereign entity—” distinct political communities, having territorial boundaries within which their authority is exclusive.”

• In defending the power of the federal government, he was also affirming, indeed expanding, the rights of the tribes to remain free from the authority of state governments.

• The Marshall decisions, therefore, did what the Constitution itself had not done: they defined a place for Indian tribes within the American political system.

• The tribes had basic property rights.

• They were sovereign entities not subject to the authority of state governments.

• But the federal government, like a “guardian” governing its “ward,” had ultimate authority over tribal affairs

The Latin American Revolution and the Monroe Doctrine

• Americans looking southward in the years following the War of 1812 beheld a gigantic spectacle: the Spanish Empire in its death throes, a whole continent in revolt, new nations in the making.

• Already the United States had developed a profitable trade with Latin America and was rivaling Great Britain as the principal trading nation there.

• Many Americans believed the success of the anti-Spanish revolutions would further strengthen America’s position in the region.

• In 1815, the United States proclaimed neutrality in the wars between Spain and its rebellious colonies, implying a partial recognition of the rebels’ status as nations.

• Moreover, the United States sold ships and supplies to the revolutionaries, a clear indication that it was not genuinely neutral but was trying to help the insurgents.

• Finally, in 1822, President Monroe established diplomatic relations with five new nations—La Plata (later Argentina), Chile, Peru, Colombia, and Mexico—making the United States the first country to recognize them.

• In 1823, Monroe went further and announced a policy that would ultimately be known (beginning some thirty years later) as the “Monroe Doctrine,” even though it was primarily the work of John Quincy Adams. “The American continents,” Monroe declared, “. . . are henceforth not to be considered as subjects for future colonization by any European powers.”

• At the same time, he proclaimed, “Our policy in regard to Europe . . . is not to interfere in the internal concerns of any of its powers.”

• The Monroe Doctrine emerged directly out of America’s relations with Europe in the 1820s

• The Monroe Doctrine had few immediate effects, but it was important as an expression of the growing spirit of nationalism in the United States in the 1820s.

8.4: The Revival of Opposition

The “Corrupt Bargain”

• Until 1820, when the Federalist Party effectively ceased operations and James Monroe ran for reelection unopposed, presidential candidates were nominated by caucuses of the two parties in Congress.

• The outrage the Jacksonians expressed at what they called a “corrupt bargain” haunted Adams throughout his presidency

The Second President Adams

• Throughout Adams’s term in the White House, the political bitterness arising from the “corrupt bargain” charges thoroughly frustrated his policies.

• Adams proposed an ambitiously nationalist program reminiscent of Clay’s American System.

• But Jacksonians in Congress blocked most of it. Adams also experienced diplomatic frustrations

• Even more damaging to the administration was its support for a new tariff on imported goods in 1828.

• Adams signed the bill, earning the animosity of southerners, who cursed it as the “tariff of abominations.”

Jackson Triumphant

• By the time of the 1828 presidential election, a new two-party system had begun to emerge out of the divisions among the Republicans.

• On one side stood the supporters of John Quincy Adams, who called themselves the National Republicans and who supported the economic nationalism of the preceding years.

• Opposing them were the followers of Andrew Jackson, who took the name Democratic-Republicans and who called for an assault on privilege and a widening of opportunity.

• Adams attracted the support of most of the remaining Federalists

• Jackson appealed to a broad coalition that opposed the “economic aristocracy.”

• America had entered, some Jacksonians claimed, a new era of democracy, the “age of the common man.”