Talking Points

Post War Expansion and Economic growth

#1 GEOGRAPHIC GROWTH  and WESTERN EXPANSION

Maintaining sectional balance is the primary goal

1800-1820 – US population grows from 5.3 million to 9.6 million 

1812-1821 – Six new states added to the Union

WHY? lots of cheap land while land prices in the East are steadily rising; Embargo (1807-09) pushed people west looking for $

Transportation revolution (Cumberland Road –1811) and successful victories over Indians led to increased migration west.
By 1820 25% of the population lived in the west

#2 HENRY CLAY’s AMERICAN SYSTEM (1824)  

 Leads to specialization  and inter regional dependency (and sectionalism)

 
Re-charter National Bank (BUS –1816) – to provide national ; extend credit for land purchases and check state banks. 

Protective tariffs – promote American manufacturing and raise revenue for transportation infrastructure- Tariff revenues would fund roads and canals and eastern trade would flourish under tariff protection

Internal improvements  used to promote growth and commercial agriculture. 

HOW? Roads and waterways + new and faster vehicles = farmers connecting to new markets!!! 

#3 TRANSPORTATION REVOLUTION
“Let us bind the republic together with a perfect system of roads and canals.  Let us conquer space”

Erie Canal – 1817

Construction on the Erie Canal financed by the state of New York + private investment finished in 1825.  

Steamboats

Robert Fulton – 1810 – improved on Fitch’s boat ;with the backing of Robert Livingston – they created the first commercial uses for a steamboat 

#4 GROWTH OF MANUFACTURING

AFTER THE WAR OF 1812:

British Merchants saw the U.S. as a market for their goods. They were willing to sell at well below costs – just to re-establish business in America this hurt American manufacturers who were just starting to get on their feet these businesses pushed for protection

#1 system of interchangeable parts – Eli Whitney

#2 system of all the work done in one building was developed by Lowell 

#5 THE SECOND B.U.S (1816)
With the economy expanding – our financial system had to keep up 

FIRST BUS: In 1811 – the original charter for the Bank of the United States ended and wasn’t renewed by James Madison and the Republican Congress 
  

SOLUTION  1816 – the Second Bank of the United States was chartered. Henry Clay and John C Calhoun had led the move in Congress.

#6 THE PANIC of 1819 
An economic panic and depression 

First financial since at the “Critical Period (1780’s) under the Articles of Confederation – Cyclic panics and depressions will occur every 20 years

CAUSES

#1 Over speculation of frontier lands by Banks (especially BUS)

#2 Inflation from war of 1812 + economic drop-off = vulnerable economy

#3 Deficit trade in balance with Britain

#4 BUS forced wildcat western banks to foreclose on western farms

RESULTS
Western farmers viewed banks as a evil financial monster
Hard hit poor classes looking for more representative government (beginnings of Jacksonian democracy) 

Attention drawn to the inhumanity of debtors prisons