Emergence of a Market Economy, Nationalism & Sectionalism 1) After the War of 1812, the United States experienced an economic boom and the rise of nationalism as the federal government took a more active role in strengthening the nation. 2) Sectional divisions emerged over economic issues like the tariff, which hurt Southern agricultural exports but benefitted Northern manufacturers. 3) The era also saw the expansion of slavery into new western territories, fueling debates over the future of that institution in America.

1. Emergence of a Market
Economy, Nationalism &
Sectionalism
Chapters 8 - 9

2. We are all Republicans, we are all Federalists. If there be any among us who
would wish to dissolve this Union or to change its republican form, let them
stand undisturbed as monuments of the safety with which error of opinion
may be tolerated where reason is left free to combat it. I know, indeed, that
some honest men fear that a republican government can not be strong, that
this Government is not strong enough; but would the honest patriot, in the
full tide of successful experiment, abandon a government which has so far
kept us free and firm on the theoretic and visionary fear that this Government,
the world's best hope, may by possibility want energy to preserve itself? I trust
not. I believe this, on the contrary, the strongest Government on earth. I
believe it the only one where every man, at the call of the law, would fly to the
standard of the law, and would meet invasions of the public order as his own
personal concern. Sometimes it is said that man can not be trusted with the
government of himself. Can he, then, be trusted with the government of
others? Or have we found angels in the forms of kings to govern him? Let
history answer this question. --Thomas Jefferson, First Inaugural Address, March 4, 1801
President Thomas
Jefferson

3. Jefferson in Office
Adams’s Midnight Appointments
Federalists wanted Federalist Judges
Appointed Federalist Judges to positions before midnight
on Adams’s last day in office
Marbury v. Madison
Jefferson’s administration refused to deliver the
appointments
Marbury requested Mandamus
Court ruled:
Jefferson could not withhold appointment
Court had no jurisdiction to hear the case under the
Constitution
Supreme Court assumed the right of “Judicial Review”

5. Louisiana Purchase1803

7. Divisions in the Democratic-
Republican Party
• John Randolph and the Old Republicans
• States rights
• Strict construction
• No tariffs
• No compromise—ever
• The Burr conspiracy
• Burr and General James Wilkinson
• Louisiana territory secede and rule
• Jefferson had him arrested for treason
• Executive Privilege
• Strict Construction of Treason as a crime
• Burr was acquitted

8. War in Europe
Harassment by Britain and France
Trade with one led to harassment by the other
Impressment
The embargo 1807
Commerce clause
Hurt only U.S. Shipping (repealed in 1809)
The drift to war
The Chesapeake
“…a dish of skim milk curdling at the head of our
nation.”

9. Election of 1808
Electoral Vote 122 67
States Carried 12 5
Popular Vote 124,732 62,431
Percentage 64.7% 32.4%
James Madison
Democratic-Republican
Charles Pinckney
Federalist

10. The War of 1812
Causes
Violation of American shipping rights
Seizure of cargo
Impressment of seamen
Incitement of Indians along the border with Canada
Supported by the Northern States
Opposed by the South who relied on British purchases
Preparations
Congress adjourned without providing for
payment
Madison unprepared for fight over whether to go
to war

11. The War of 1812
British strategy
Invasion from Canada stopped by Naval battle on
Lake Champlain
Fighting in the Chesapeake
British invaded and burned Washington D.C.
Battle of Baltimore: Fort McHenry 1814
“The Star Spangled Banner”

12. The War of 1812
The war in the south
General Andrew Jackson fought the Cherokees
and broke their power at the Battle of Horseshoe
Bend.

13. The War of 1812
The Battle of New Orleans
Jackson outnumbered 2:1
“The Rifles of Kentucky”
The Hartford Convention
Federalists and “Democrats” proposed demands that if
not met would result in New England’s secession from
the Union.
Demands arrived at the same time as news of the
victory at the Battle of New Orleans
Federalist Party did not survive the embarrassment
The Treaty of Ghent
1814

14. War of 1812-Aftermath
 The aftermath
 2nd War for Independence
 Demonstrated that small nation could defeat a great
power
 Spurred industrialization
 US could depend on internal rather than international
markets
 Era of Good Feeling

15. Economic Nationalism
An unexpected benefit of the War of 1812
Jefferson’s embargo forced Americans to look inward for the production of their finished goods. This led to the first
American Industrial Revolution and a surge of economic growth.
The Bank of the United States
The charter for the first Bank of the United States ended in 1811 and was not immediately renewed. Without the financial
control the central bank, economic turmoil ensued.
State chartered local banks with no control flooded the
channels of commerce with bank notes
Initial economic boom
Runaway inflation
Bursting bubble caused deep recession
Banks stopped exchanging coins for paper money
National government could not float loans or transfer funds across the country
To stabilize the economy, a second bank was chartered, which would last for 20 years.
1816
Bank of the United States (B.U.S.)

16. Economic Nationalism
A protective tariff
Protect the fledgling American industrial sector from competing
British imports, the Tariff of 1816 was enacted.
North, where most of the manufacturing base was located, was for
it,
South was against it.
The agrarian economy of the south depended on shipping goods abroad to agents who sold them, purchased needed
items, and shipped them back to America.
Southerners were upset because they were forced to pay the import tax.
Internal improvements
War of 1812 revealed several shortcomings of the United States.
Transportation infrastructure.
The first attempt to fix this problem was the construction of the Cumberland, or National, Road.
Canals
Railroads

17. Economic Nationalism
The American System
Internal improvements
Creation of an industrial infrastructure,
National Banking System
Stabilizing of the American economy after the War
of 1812
Required a more active role of the federal government in the lives of the citizens.
The first proponent of the American System was Henry Clay who argued that
prosperity depended on the federal government assuming an active role in
shaping the economy.
“Market Revolution”

18. Economic Nationalism
Clay’s American System
High tariffs to impede the import of European products and protect fledgling American
industries
Higher prices for federal lands
Proceeds to be distributed to states to finance internal improvements to facilitate
delivery of goods to markets
Strong national bank to regulate the nation’s money supply and ensure sustained economic
growth

19. Economic Nationalism
Opponents of Clay’s American System
Higher prices for federal lands would discourage western migration
Tariffs benefitted industrialists at the expense of farmers and “common folk”.
B.U.S. a potentially tyrannical force, dictating the nations economic future
Centralizing power in the Federal Government
Limiting States’ rights
Limiting individual freedoms

20. Good Feelings
James Monroe
Relations with Britain
After the War of 1812, the United States never fought another war with Great
Britain
close diplomatic ties.
Rush-Bagot Treaty of 1817, which ended the naval arms race on the Great
Lakes.
Both sides agreed to limit the number of warships in the lakes.
Convention of 1818,
Settled the northern limit of the Louisiana Territory at the 49th parallel

21. Transcontinental Treaty
Boundaries 1819

22. Good Feelings
The extension of boundaries
1819
Financial Panic
Debate over extension of slavery to new territories
Concerns over Spanish sovereignty over Florida
Seminole Indians and Runaway slaves
1817 Americans burned Seminole settlement in Florida Panhandle; Seminoles responded with raids of
their own against white settlers
Secretary of War: John C. Calhoun appointed Andrew Jackson to take command of American troops
Orders: pursue attackers into Spanish territory but do not attack Spanish posts
1818 Jackson ordered troops to cross border and assault the Spanish fort at Saint. Marks,
destroying Seminole villages also.
Jackson ordered execution of two British traders accused of inciting the Seminoles to war.
Captured Pensacola and established a provisional American government then Jackson returned to
Tennessee
Jackson’s actions strengthened American bargaining position with Spain over Florida purchase
Transcontinental Treaty of 1819

23. Crises and Compromises
The Panic of 1819
In 1819, Great Britain, still the chief importer of the South’s cotton, turned to its colony of India to obtain
cheaper cotton.
To enlarge their loans, state banks issued more bank notes than they could redeem with gold or silver
coins.
Extensive fraud and embezzlement in the Baltimore Branch of the B.U.S. by Bank officials
Langdon Cheves: reduced bank salaries, dividends, reduced extension of credit and presented bank notes for
redemption.
These actions put pressure on the state banks who put pressure on their debtors, making it more difficult to
renew old loans or get new loans.
The Missouri Compromise
After the Revolution, the United States followed an alternating pattern when admitting states into the union:
one slave then one free state.
When Missouri requested admittance, there were twenty-two states—eleven free, eleven slave.
The Northwest Ordinance of 1787 had dictated that there were to be no slave states there
Missouri gained statehood under a compromise: no more slave states would be allowed north of the 36⁰
30’ line.

24. The Missouri Compromise, 1820

25. Judicial Nationalism
John Marshall, chief justice
Strengthening the federal government
McCulloch v. Maryland (1819).
Did the Federal government have the right to create a
bank when this was not specifically mentioned as a
power given to Congress in the Constitution.
Marshall ruled that a clause in Article I, section 8 was
purposefully left vague to allow Congress to create
“necessary and proper” entities for them.
“To make all laws which are necessary and proper into
execution of the foregoing powers and all other
powers vested by this Constitution in the government
of the United States or in any department or officer
thereof.”
Gibbons v. Ogden (1824) , Marshall exerted the right
of the nation to regulate state commerce.

26. Nationalist Diplomacy
The Pacific Northwest
John Quincy Adams to Russia, “the American continents are no longer subjects for any new
European colonial establishments.”
Treaty of 1824
The Monroe Doctrine
The American continents are not subject to any further expansion of European colonial
power
The political system of European powers is different from that of the United States who will
consider any attempt on their part to extend their system to any portion of the Western
hemisphere as “dangerous to our peace and safety”
U.S. would not interfere with existing European colonies
U.S. will keep out of the internal affairs of European nations and their wars.
Monroe Doctrine could not be unilaterally enforced and depended on naval supremacy of
Great Britain. European powers at the time did not acknowledge it.

27. One-Party Politics
Presidential nominations in 1824
Snatching defeat from the jaws of victory: with no political party to contend against,
the Democratic-Republicans turned on themselves and ran four candidates for the
presidency.
No candidate won an electoral majority, and the election was sent to the House of
Representatives.
The corrupt bargain
Each state got one vote, regardless of how its citizens voted.
John Quincy Adams won the presidency, though he had lost the popular vote and
had come in second to Jackson in the electoral vote.
He nominated his fellow candidate Henry Clay, the speaker of the house, to be his
secretary of state.
Because most past presidents had served as secretary of state, Jackson took this as
a “corrupt bargain” struck by the two by which Clay would use his influence in the
House to secure Adams the presidency and thus would be made heir apparent.

30. One-Party Politics
John Quincy Adams
Bold programs which would expand power of federal government
Promote internal improvements
Set up a national university
Finance scientific explorations
Build astronomical observatories
Create a department of the interior
Praised the example of “the nations of Europe and of their rulers” which confirmed suspicions that the Adams’s were
“closet monarchists”
The election of Andrew Jackson
Jacksonian Democrats
The Sequester is NOT new! Presented an alternative tariff bill with such outrageously high duties on raw materials that
the manufacturers in the Mid-Atlantic states would join the South and the Southwest to defeat the tariff allowing
Jacksonian supporters in the North could still support the tariff and retain voter loyalty while Jacksonian supporters in the
South could take credit for opposing the tariff.
The tariff passed.
Doctrine of Nullification: John C. Calhoun changes sides and opposes a tariff
Jackson elected President in 1828

31. 1828 Presidential Election
Andrew Jackson John Quincy Adams