The American System
Policy
History
Mutual Reinforcing Parts
Works Cited
Links
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A plan to strengthen and unify the nation, the American System was advanced by the Whig Party
a number of leading politicians including Henry Clay, John C. Calhoun and John Quincy Adams.
The System was a new form of federalism
Support for a high tariff to protect American industries and generate revenue for the federal government
Maintenance of high public land prices to generate federal revenue
Preservation of the Bank of the United States to stabilize the currency and rein in risky state and local banks
Development of a system of internal improvements (such as roads and canals) which would knit the nation together and be financed by the tariff and land sales revenues.
Clay argued that the West, which opposed the tariff, should support it since urban factory workers would be consumers of western foods.
In Clay’s view, the South (which also opposed high tariffs) should support them because of the ready market for cotton in northern mills. This last argument was the weak link.
This last argument was the weak link. The South was never really on board with the American System and had access to plenty of markets for its cotton exports.
Henry Clay first used the term “American System" in 1824, although he had been working for its specifics for many years previously.
Portions of the American System were enacted by Congress. The Second Bank of the United States was rechartered in 1816 for 20 years. High tariffs were maintained from the days of Hamilton until 1832. However, the national system of internal improvements was never adequately funded; the failure to do so was due in part to sectional jealousies and constitutional scruples about such expenditures.
Despite his uneven success in gaining passage of all aspects of the American System, Henry Clay was proud of the plan. In a speech in Cincinnati in 1830, he declared:
That system has had a wonderful success. It has more than realized all the hopes of its founders. It has completely falsified all the predictions of its opponents. It has increased the wealth, and power, and population of the nation. It has diminished the price of articles of consumption and has placed them within the reach of a far greater number of our people than could have found means to command them if they had been manufactured abroad instead of at home.
The American System was a three-pronged economic plan, based on the financial ideas of Alexander Hamilton, that was supported by Henry Clay. The American System emphasized the need for a strong role for federal government in the economy.
The three parts of the plan mutually reinforced each other. The three parts of the American System were based on a new national bank, taxing foreign goods and creating a subsidized transportation infrastructure of new roads and canals.
(James Monroe was the 5th American President who served in office from March 4, 1817 to March 4, 1825. The adoption of the American System was an important economic plan during his presidency and contributed to the Era of Good Feelings.)
Taxing all foreign goods, to boost the sales of US products and protect manufacturers from cheap British goods
Establishing another Bank of the United States to offer easy credit to Americans
Constructing new roads and canals in the West
The Era of Good Feelings marked a period in the political history of the United States that reflected a sense of national purpose and a desire for unity among Americans in the aftermath of the War of 1812.
America was growing as a new, autonomous nation and realized that they needed to become independent from Britain and the other European countries of Europe, in an economic and commercial sense. Before the War of 1812 the US had depended on exports for most of their manufactured goods - 84% of American people were farmers. The United States was brimming with natural resources but needed factories to make manufactured goods. The government needed to create an economical environment in which American trade would flourish, money was made available for the industrialists to build factories in the east and people had the transport system to make homes in the new lands in the west. The American system was designed to meet the requirements of the new, expanding and independent nation.
Improve the transportation system in the country. Henry Clay though that many more roads and canals should be built. These roads and canals would make trade easier and faster for everyone, helping farmers and merchants get their goods to market.
Henry Clay hoped the American System would help the United States be able to become independent from Europe.
The establishment of a national bank that would promote a single currency (money), making trade easier.
A tariff is a tax on imported goods. It made European goods more expensive and encouraged Americans to buy cheaper products made in America. The tariff also made the country money, which would be used to improve things