What was the most important goal of the american system?

Henry Clay

Senator Henry Clay of Kentucky is considered the architect of the “American System,” the first government-sponsored attempt to invigorate the national economy.  Not a “system” in the true sense of the word, the American System was really a series of plans for strengthening the infrastructure and financial institutions of the United States.  The plan included:

• the regimenting of high tariffs to protect fledgling American industries
• federally supporting 'internal improvements’ in transportation
• the creation of a strong banking system that would make loans available for businessmen

The system was an attempt to bring Alexander Hamilton’s proposals to fruition, as outlined in his 1792 “Report on Manufacturers.”

The most important internal improvements resulting from the American System were the Erie Canal and the Cumberland Road.  The Erie Canal created a system of interlocking canals that ran from the Hudson River to Lake Erie.  The Cumberland Road, also called the National Road, was the first “highway” built by the Federal government.  It ran from Maryland to Virginia. 

Cartoon by E.W. Clay published in 1831 cartoon lampooning the American System as a Monkey System.

The Northeast benefited greatly from the American System because industry was beginning to grow in the region and good transportation routes were needed to move products and supplies around.   But the American system did not offer much to the South where little industrial growth was occurring and navigable rivers provided easy transportation routes for farmers and planters moving their crops to markets. 

As proposed under the American System, a protective tariff of 20 to 25 percent on imported goods—such as woolens, cottons, leather, fur, hats, paper, sugar and candy—would protect the nation’s fledgling industries from foreign competition.  Congress passed a tariff in 1816 that increased the price of European goods, which encouraged consumers to buy less expensive American-made goods.    

Clay argued that America has a “great diversity of interests,” from agriculture and fishing to manufacturing, shipbuilding, and commerce and that the “good of each...and of the whole should be carefully consulted.”  Clay believed that stimulating manufacturing would create a demand for western raw materials and as westerners grew more affluent, they would purchase eastern manufactured goods. 

To move products and materials between western and eastern states efficiently, the government looked to improve the country ’s infrastructure, particularly its transportation routes.  Improved roads and canals would facilitate commerce, speeding it up and making it less costly. 

Bank of the United States

North façade of the Second Bank of the United States

Congress chartered the first Bank of the United States in 1791.   The charter lasted twenty years and gave the Bank the power to meet the financial needs of the newly formed government.  Supported mainly by northern merchants and the New England states, southern states eyed the Bank with suspicion because agriculture formed the basis of the southern economy and it did not require the concentrated capital that northern industries needed to succeed. 

When the Bank ’s charter expired, the Democratic-government refused to extend its charter, claiming it was unconstitutional.  With no centralized banking system in place, the government found it difficult to finance the War of 1812.  Five years later, the Second Bank of the United States was chartered, primarily to stabilize the country’s currency.  Patterned after the first, the Bank established branches in several states.

The Bank remained politically controversial throughout the period, especially following the economic downturn of the Panic of 1819.   Critics complained that the bank was corrupt and that it had mismanaged funds, promoting detrimental conservative policies.  Several states enacted legislation that levied taxes to restrict the Bank’s power.  For example, Maryland imposed a tax on the bank’s operations, a move that led to the Supreme Court case McCulloch v. Maryland, where the Supreme Court denied Maryland’s ability to tax the bank, claiming it unconstitutional.  Despite this, the Bank remained controversial and President Andrew Jackson repealed its charter in 1832.      

Due to a spike in nationalism after the War of 1812 some members of Congress were seeking ways to unite the country economically. Their intent was to force the U.S. to be more reliant on itself and not on Great Britain. Westerners needed to develop their economy and link it to the North and the South. The American System was proposed.

Clay first used the term “American System” in a speech he gave in 1824. It was a federal policy based on a market economy. Sections of the country would produce specific commodities which they would sell to other regions.

The policy had three main components:

• Transportation – In order to promote trade among the regions, North, South and West, transportation needed to be improved. The American System included financial support for roads, canals, bridges. These improvements to the nation’s infrastructure would facilitate trade and increase accessibility to markets.
• Revenue – Money would be raised by selling public land and imposing tariffs. In addition to raising money, tariffs would protect American products from imports.
• Federal Bank – A strong national currency would assist in interstate trade and make the Bank of the United States more stable. The bank would be used as a depository for federal money collected from the tariffs and land sales.

The Whig party led the way for the American System with support from Congressman Henry Clay from Kentucky, John Quincy Adams from Massachusetts and John Calhoun from South Carolina.

Calhoun later withdrew his support because his region believed this system would hurt the South’s economy and favored only the North and the West.

The West opposed the tariff, though Clay argued they should support it, as urban factory workers were potential consumers of western agricultural products. In the end, the West supported the plan, creating increased sectionalism between the regions.

Only portions of the American System were actually put in place, particularly the tariffs, which were opposed by the South. John Calhoun opposed the tariffs, believing it put a financial strain on the South while the North and West profited. He called the tariff, “Tariff of Abomination” and questioned the authority of the federal government to force a state to abide by a law that caused that state harm. Many historians feel that this event was a main reason for the Civil War – the conflict between state’s rights and the rights of the federal government.

Though some areas did receive financial assistance, in the long run, the national system of internal improvements was never adequately funded; the failure was due in part to sectional jealousies and constitutional concerns about such expenditures.

Lesson Overview

In this lesson, students will examine speeches and cartoons relating to the American system. Though their exploration, they will answer some of the following questions:

• What was the American System?
• What role did Henry Clay play in the American System?
• What impact did the American System have on the U.S. during the early to mid-1800s?
• What impact did the American System have on Springfield and the Connecticut River Valley?
• How does the American System set the stage for the Industrial Revolution and sectionalism?

This lesson is broken down into 3 parts; obtaining background knowledge, analyzing primary resources and synthesizing knowledge the American System and how if affected the Connecticut River Valley and Springfield.

Learning Objectives

Know:

1. The importance of the American System and what it entailed.
2. The influence of Henry Clay, John Quincy Adams and John Calhoun.

Understand:

1. The effect of federal policy and how it led to sectionalism
2. How local history is connected to national history.
3. How to analyze a primary document.

Be able to:

1. Make connections between national policy and how it affected various regions.
2. Analyze a primary document and infer its intent.
3. Understand how the American System set the stage for the Industrial Revolution.

Lesson Procedure

Part 1 – Background knowledge

1. Have students read The American System and the Student Essay on the Steamboat Barnet.
2. Have students do research on Henry Clay, John Calhoun and John Quincy Adams.
   • Who are they?
   • Where are they from?
   • What influence did they have on the American System? What was their position?
   • Did their region of the country benefit? Why or why not?
3. The class as a whole should review their responses so that students have an in-depth understanding of the people who were involved in the American system.

Part 2 – The Speeches of Henry Clay

Divide students into pairs and have them analyze sections of [permalink href=”7421″]Clay’s speeches[/permalink].
Focus questions:

1. What is Clay promoting?
2. Does he support nationalism or sectionalism and explain why?
3. What effect will it have on the economy, according to Clay?

Part 3 – Cartoon Analysis

Next, have students analyze the Clay cartoon, without showing them the explanation or source information.

Focus questions:

• What is the point of view of the cartoon’s creator? Using the elements of the cartoon, explain your answer.
• What do the labels on the cages represent?
• Drawing on your knowledge of the American System, what can you infer from the caption?

Share the explanation and source information with students:

1. Does this change their interpretation of the cartoon? How?

Part 4 – Conclusion

1. Based on your background knowledge and the class discussion of Calhoun and Adams how would they have responded to Clay’s speech?
2. After reading information on the Connecticut River Valley and the Barnet, what connection did the American System have to improving transportation and trade in Western Massachusetts?
3. How did the American System influence growing sectionalism in the country? What affect could this have cohesion and the Union?

Extension activities

Break the class into three groups, each representing one of the regions of the United States – the North, the South and the West. Appoint three students as judges.

• Have a three-way debate, with each side focusing their arguments on their region’s response to the American System.
• Judges will decide who wins the debate and gains the upper hand in designing the American System.
• Follow up discussion questions
  • What parts of American System do we see in our government today?
  • If the American System was to be implemented today, would the debate be the same or different as it was in the early 19th century?