The War of 1812, which the United States and Great Britain—the world’s foremost military power—fought to a draw, inspired an outburst of nationalist pride. But the war also revealed how far the United States still was from being a truly integrated nation. With the Bank of the United States having gone out of existence when its charter expired in 1811, the country lacked a uniform currency and found it almost impossible to raise funds for the war effort. Given the primitive state of transportation, it proved very difficult to move men and goods around the country. One shipment of supplies from New England had taken seventy-five days to reach New Orleans. With the coming of peace, the manufacturing enterprises that sprang up while trade with Britain had been suspended faced intense competition from low-cost imported goods. A younger generation of Republicans, led by Henry Clay and John C. Calhoun, believed these “infant industries” deserved national protection While retaining their Jeffersonian belief in an agrarian republic, they insisted that agriculture must be complemented by a manufacturing sector if the country were to become economically independent of Britain.

In 1806, Congress, as noted in the previous chapter, had approved using public funds to build a paved National Road from Cumberland, Maryland, to the Ohio Valley. Two years later, Albert Gallatin, Jefferson’s Secretary of the treasury, outlined a plan for the federal government to tie the vast nation together by constructing roads and canals up and down the eastern seaboard, and by connecting the Atlantic coast with the Great Lakes and Ohio and Mississippi Rivers. Gallatin’s proposal fell victim to regional rivalries and fears of excessive national power. But the idea revived after the War of 1812.

An image from a broadside from the campaign of 1824, promoting the American System of government-sponsored economic development. The illustrations represent industry, commerce, and agriculture. The ship at the center is named the John Quincy Adams. Its flag, “No Colonial Subjection,” suggests that without a balanced economy, the United States will remain economically dependent on Great Britain.

John C. Calhoun in an 1822 portrait by the artist Charles Bird King. Calhoun would evolve from a nationalist into the most prominent spokesman for state sovereignty and the right of nullification.

In his annual message (now known as the State of the Union address) to Congress in December 1815, President James Madison put forward a blueprint for government-promoted economic development that came to be known as the American System, a label coined by Henry Clay. (It should not be confused with the “American system of manufactures” mentioned in the previous chapter, which referred to a way of mass-producing goods with interchangeable parts, not a political program for economic growth.) The plan rested on three pillars: a new national bank, a tariff on imported manufactured goods to protect American industry, and federal financing of improved roads and canals. The last was particularly important to those worried about the dangers of disunity. “Let us bind the nation together, with a perfect system of roads and canals,” John C. Calhoun implored Congress in 1815. “Let us conquer space.” When believers in strict construction of the Constitution objected, Calhoun replied: “If we are restricted in the use of money to the enumerated powers, on what principle can the purchase of Louisiana be justified?”

Government-sponsored “internal improvements,” as the construction of roads and canals was called, proved to be the most controversial part of the plan. Congress enacted an internal-improvements program drafted by Calhoun only to be astonished when the president, on the eve of his retirement from office in March 1817, vetoed the bill. Since calling for its enactment, Madison had become convinced that allowing the national government to exercise powers not mentioned in the Constitution would prove dangerous to individual liberty and southern interests. A constitutional amendment would be necessary, he declared, before the federal government could build roads and canals. The other two parts of his plan, however, became law. The tariff of 1816 offered protection to goods that could be produced in the United States, especially cheap cotton textiles, while admitting tax-free those that could not be manufactured at home. Many southerners supported the tariff, believing that it would enable their region to develop a manufacturing base to rival New England’s. And in 1816, a new Bank of the United States was created, with a twenty-year charter from Congress.

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