After the War of 1812, America’s economy experienced a growth in industrial manufacturing. This boost created uneven tensions between the northern and southern states and required a balance of agriculture in the south, manufacturing in the north, and commerce along the coast. The nation’s financial system could not help balance this problem as it was, because it had a lack of money and made it hard for citizens to get loans without a standard currency between states. The nation’s commercial system also struggled because of a British blockade that slowed American trade.
The leader of American nationalists, Henry Clay, proposed an idea to help this problem. Clay proposed what he called The American System, which involved the establishment of a national bank and transport system as well as protective tariffs to protect American trade. Henry’s tariff, the Tariff of 1816, was enacted as a response to a flood of British-made goods in the American markets. The British, who could mass produce, were able to make products at a cheaper cost than that of American companies. The tariff, supported by northern industrial manufacturers, placed a 20% duty of most imported factory goods. The tariff was opposed by Southerners, who were being forced to pay more for goods because of a tariff they believed was only protecting Northerners.
Following suite in Clay’s American System, John Calhoun proposed a bill to fund a national system of roads and canals in an attempt to establish a national transportation system. The construction, which began in 1815 as The Cumberland to replace old, unusable roads, angered southerners because many thought it was a waste of time and the federal budget, and that the government overstepped its federal powers. With the expansion of the national road system, new land to the west was easier to access and was occupied by settlers. A problem was caused by the settlement of new territory, because admittance of any new states into the union would upset the balance of equal number of free northern states and slave-holding southern states. The territory of Missouri increased the debate over the issue of slavery, because neither the North nor the South wanted to give power to its counterpart. In 1820, a negotiation was put out to deal with the issue of slavery. Under the Missouri Compromise of 1820, Missouri would enter the union as a slave state at the expense of slavery being banned from the rest of the Louisiana Purchase obtained during Thomas Jefferson’s presidential term. The compromise served to keep the balance of slave-holding and free states in the United States Senate and kept the balance of America’s economy during its period of growth.
Notes taken from college-level lectures.