American System Dbq

One of the biggest arguments in favor of a national bank was that of paying of the debts to the soldiers of the revolutionary war. The government owed a lot of money to soldiers that had fought in the revolutionary war and had not been payed what they were promised. Jefferson was worried about setting up a national bank to pay them back because he thought that the ‘I owe yous’ created had depreciated in value. He did not want to set up a system of banking that would cheat war veterans out of the money they had rightfully earned. (1)

The new government views in the late 1800’s helped to promote America’s huge industrial growth because not one party controlled the government anymore; so all views were used to formulate new ideas.

Gordon sums up the American economic history in six chapters of his book. He explains that the United States had taken on huge debts following to the American Revolution. In order to pay such debts back, Hamilton created the federal bank and convinced the Congress to issue federal bonds. This way the federal government could make interest payments on time, build credit and keep the inflation from rising. Hamilton thought that the national debt could be a useful tool in order to create capital for the new industries. In his book, Gordon also recalls that soon after the 1812 War the seventh President of the United States cleared the government debts thanks to surpluses deriving from high tariffs. Then, he explains that the introduction of the first Federal income tax in America during the Civil Was turned out to be crucial in order to investigate how to distribute the tax

A tariff is a tax on foreign goods. The price of foreign goods increases with the tax, and provides revenue for the government, which makes American products more appealing. This is because the foreign goods that were cheaper are now more expensive. However, why was there a need for tariffs in the early 19th century (1800)? The reason is because, American industries were young, Britain flooded the US market with cheap goods after the War of 1812, and foreign goods have been often cheaper. In order to make sure American businesses could prosper, there had to be tariffs on the foreign goods. The tariff of 1816 was the first substantial protective tariff of the American System; supported by Henry Clay, but opposed by John C. Calhoun and Southern cotton growers. The tariff of 1824 increased the rate of the protective tariff and opposition in the South grew. In the Tariff of 1828 (Tariff of Abominations), there were higher protective tariffs to New England Mills; and Southerners were outraged including Calhoun.

a. Increased security and self-confidence after the war produced a heightened sense of “nationalism” people associating themselves with the nation first and their respective states second. A national literature developed in the works of Washington Irving and James Fennimore Cooper and in the construction of a new capitol building in Washington A revived Second Bank of the United States was established in 1816 this time with the (support or opposition) of the Jeffersonian Republicans. (Note: Modern students can be excused for finding a discussion about tariff policy a bit boring. This section covers the first of many tariff battles throughout the 1800s. Tariffs today are not a big deal because there is a worldwide trend to reduce duties on imports and because the government gets most of its revenue through income taxes. However, there was no income taxation until 1913 and the government therefore depended almost exclusively on tariff duties for its revenue. So it’s important to have a general understanding.)

From the country 's most punctual days, Congress has battled with the natural issue of the national government 's right part in encouraging financial advancement. Henry Clay 's "American System," formulated inside the burst of patriotism that took after the War of 1812, stays one in all the chief customarily essential specimens of an administration supported project to orchestrate and adjust the country 's agribusiness, trade, and business.

Nicholas Biddle proved great opposition to President Jackson. He wanted to re-charter the National Bank; however, many people were against Biddle’s decision. This was particularly true of people in the west. They were still wary of a national bank, after the Panic of 1819, which involved mishaps in land speculation. Jackson shared the predominately western opinion that several small banks would be a better service to the nation than one, large bank would. A major problem with a national bank would lie in it’s willingness only to make loans to the wealthy. This would be of no use to the middleclass. Jackson would not allow Biddle to gain any more power than he already had.

The thirteen American colonies unified by forming a national government that began as a singular body of government under the Articles of Confederation and evolved into a government with multiple branches under the Constitution. The Articles of Confederation acted as a plan of government to help America get back on its feet during and after the Revolutionary War. However, Congress could not enforce the laws of The Articles of Confederation or ensure that their taxes would be collected. After the war America owed a lot of money to other countries and could not pay it unless they started to tax more. They faced serious economic problems and had to rely on the states for money. Therefore, people did not agree with the Articles because it taxed

With the Jackson administration into office, the Second Bank of the United States became threatened. President Jackson had a private prejudice that wasn’t party policy (Schlesinger 74). He hated banks, all banks, but he especially hated the Second Bank of the United States. He viewed all bankers as “little more than parasites who preyed upon the poor and honest working people of America” (Roughshod 2). The reason for his hatred most likely stemmed from his near ruin as a businessman (land speculator, merchant, and slaver trader) when in the 1790s he accepted some bank notes that turned out to be worthless. From then on, he never trusted anything but hard money, or specie (Roughshod 2).

Henry Clay successfully placed War Hawks in appropriate committees, and the War of 1812 ensued. After the war, foreign goods flooded America with low prices, so Henry Clay endorsed what he called “The American System.” Henry Clay proposed a tariff on foreign goods, to boost American sales as well as provide funds for internal improvements. The passing of this tariff would allow foreign prices to rise and would result in Americans buying domestic good providing more jobs and a stronger economy. Clay stated the American System basically as, “Make at home what we have been buying abroad- and in that way we will get out of debt, and keep our money. A

The Bank of the United States was technically the second bank of the U.S. since the first bank’s charter ended in 1811. The second bank held a monopoly over federal deposits, provided credit to growing enterprises, issued banknotes that served as a dependable medium of exchange, and used a restraining effect on the less well-managed state banks. Jackson didn’t trust the bank and thought it had too much power, so Jackson sought out to destroy it. There were two different groups when it came to opposition, “soft-money” and “hard-money”. Soft money supporters were progressive, they believed in economic growth and bank speculation. They supported the use of paper money and were mainly made up of bankers and allies to bankers. Hard money supporters were against expansion and bank speculation. They supported coinage only and rejected all banks that used paper money, which included the federal bank. Jackson was a hard money supporter although, he felt sympathy to the soft money supporters. Jackson could not legally end the bank before its charter expired. By removing the

There have been many controversies since the United States declared independence in 1776. One of the many domestic issues that divided American citizens was developing the First National Bank in the late 1700s. Hamilton was in favor, while Jefferson opposed and American citizens chose their side based on what they believed what was best for the country. Hamilton proposed a Report on a National Bank in December of 1790 announcing what the National Bank would include. Hamilton’s proposal included, “The bank’s stock would be worth $10,000,000. 20,000 shares would be sold privately at $400 per share ... 5,000 shares or $2,000,000 of bank stock would be bought by the U.S. government. The bank would be run by a 25-man board of directors - 20 chosen by the shareholders and 5 by the government. The bank’s president would be elected by the board of directors. Notes and bills (money) issued by the bank would be redeemable on demand ... and would be accepted by the U.S. government for all payments due. The bank’s charter would run for 20 years and would be subject to renewal by Congress. The bank would be allowed to establish branch offices in other cities; its main branch would be in Philadelphia, the nation’s capital” (http://www.digitalhistory.uh.edu/teachers/lesson_plans/pdfs/unit3_ 4.pdf). Although the first part of the bank bill, establishing a national mint, did pass with ease, supporters and opposers debated the rest of the bill, which included the development of

After the Revolutionary War, the newly formed United States still had a major task ahead of them. They had to form a new government that would satisfy the demands of the people and ensure the success of their nation. The Articles of Confederation was the first system of government that was proposed and put into effect. This attempt at creating a system that protected the people form a strong central government ultimately failed but was an important step in the development of the current government system. The weaknesses presented by the Articles of Confederation helped lead to reforms that made the Constitution successful. Both the Articles and the Constitution demonstrate the struggles that the colonists went through with the British and

By the 1820’s, the Embargo Act, War of 1812 and the Panic of 1819 played a very important role in the reshaping of our countries economic development. Hamilton believed that America would flourish only if we were involved in heavy manufacturing and commerce. He believed a strong federal government could solve many of the new country’s financial problems including establishing a stable currency. He therefore established a national bank similar to the one in England to consolidate the states debt under the federal government and enacted protective tariffs to increase American manufacturing. He also knew the importance of promoting domestic manufacturing so the United States would no longer have to rely on imported manufactured goods. Jefferson was the complete opposite. He believed that it was essential that the citizens of the new country would grow their

American federalism has changed drastically since its genesis. In 1776 the thirteen colonies adopted the Articles of Confederation in order to coordinate their efforts in the war for independence. The Articles of Confederation bound the states together in two main aspects; foreign and military affairs. The Articles of Confederation worked well while all the states had a common cause. However, as soon as the war ended and interests began to change, it became obvious that the Articles were not enough. This brings on the creation of Federalism (Reinventing American Federalism).