The document discusses several economic and political developments in the United States following the War of 1812, including issues with currency and banking, growth of the textile industry, transportation problems and solutions, Henry Clay's American System of tariffs and internal improvements, and westward expansion. Key developments were the chartering of the Second National Bank in 1816, passage of the tariff of 1816 to protect industry, and the beginning of federally-funded roads like the National Road for internal improvements.

2. Banking, Currency,
Protection
 War of 1812:
 Stimulated growth of manufacturing
 Produced chaos in shipping and banking
 Currency issues & transportation problems
 Led to an emergence of political issues connected to
economic development

3. National Bank Issue
 First National Bank charter expired in 1811
 State banks began operations
 Issued bank notes but never had enough reserve to
redeem the notes
 The value of the notes depended on the bank’s
reputation
 Counterfeiting was common

4. Second National Bank
 Chartered in 1816
 Had more capital than first one
 Could not forbid state banks from existing & issuing
currency
 Its size and power dominated state banks

5. Growth of Textile Industry
 Dramatic growth
 Between 1807-1815, total # of cotton spindles
increased 15x
 Most were in N.E. and produced yarn and thread
only
 * “First American Factories”
 http://www.ushistory.org/us/25d.asp

6. Francis Cabot Lowell
 Developed a power loom
 Organized Boston
Manufacturing Company
 Founded first mill in America
with all means of production
under one roof (Waltham)
 Important step in
revolutionizing American
manufacturing

7. British Problem
 After War of 1812, British ships unloaded cargoes of
manufactured goods below cost
 Meant to stop the manufacturing boom in America
 New companies were unprotected and wanted help
from gov’t

8. American Solution
 1816: Congress passed tariff law
 Limited competition from abroad
 Most important was cotton cloth

9. Transportation
 The most pressing economic need after War of 1812
in America
 Needed for access to raw materials and domestic
markets
 Should the feds help finance roads or not??

10. Henry Clay’s “American System”
 Post-war plan for the
American economy
 Similar to Hamilton’s
financial plan
 1. A protective tariff
 Protect American industry
by taxing imports
 Also, create revenue
 Passed in 1816
 2. Second Bank of the U.S.
 Jointly owned by private
stockholders & the fed.
gov’t
 Created in 1816
 Charter expired in 1836
 3. Federal $$$ for internal
improvements
 Left up to states for the
most part

11. Sec. of State—1825-1829
Served in Senate & House
Speaker of House 3X
Ran for President 3X
1824, 1832, 1844
“Great Compromiser”
“War Hawk”

12. National Road
 1807: Gallatin (Sec. of
Treasury for Jefferson)
 Proposed a National Road
from Potomac River to
Ohio River
 Federally funded
 This led to building of other
roads
 Cheaper costs for
transporting goods
 Not federally funded
 Construction from 1811-1841
 Only to Baltimore by 1824
 Eventually covered 800
miles
 AKA Cumberland Road

13. Madison’s flip-flop
 In 1815 stressed to Congress the importance of
establishing roads and canals
 Last day in office (1817) he vetoes Calhoun’s internal
improvements bill
 Thought Congress lacked the power to fund the
internal improvements

15. 1800 1830
Pittsburgh 2 1
Detroit 4 2
St. Louis 5 2.5
Travel Time from NYC
(in Weeks)

16. Steam Power
 On rivers and Great Lakes
 Fulton began this before War of 1812
 Dangerous & slow at first
 Steamboats carried more cargo on MS River than all
earlier forms of transport combined
 Helped south and west
 Provided better access to markets at reduced cost
 Eastern manufacturers sent goods west
 Still, a work in progress

17. Expanding Westward
 Connected to the issue of internal improvements
 1:4 lived in west by 1820
 1:7 in 1810, so growth is rapid

18. Great Migrations
 U.S. population in 1800=5.3 million; U.S. population
in 1820=9.6 million
 Eastern lands were largely occupied
 War of 1812 had diminished Native power in the West
 Most settlers traveled to West via river, on flatboats,
before traveling overland with wagons and
handcarts

19. Plantation System in SW
 Cotton farmers
 Seeking new, fresh land
 Suitable climate
 The west was Alabama
and Mississippi
 Led to spread of slavery
Cotton production in 1820

20. Rapid Growth Leads to
New States
 Led to admission of new states in north and south:
 Indiana, 1816, 19th
 Mississippi, 1817, 20th
 Illinois, 1818, 21st
 Alabama, 1819, 22nd

21. Trade and Trapping in Far
West
 Mexico: independent in 1821 from Spain
 Opened TX, NM, CA, rest of SW to trade with US
 Merchants from US moved into area, used Santa Fe
Trail between MO and NM
 Fur traders in OR, used own trappers to hunt beaver
 John Jacob Astor, American Fur Co., Astoria
 Eventually fur trading routes went from Great Lakes to
OR to UT to NM
 Mountain Men; lived peacefully w/ Native Americans

22. Stephen Long
 Charted territories in west, including NE, KS, and CO
 Labeled Great Plains (including NE) as the “Great American
Desert”
 His account of the Plains meshed with Pike’s account from 15
years earlier

23.  OOPS, bad call Stephen Long!