The American System

Leading members of the Republican party, long known for their opposition to federal power, began to view central government more favorably after the victory of Britain in 1815. Young republicans such as Henry Clay of Kentucky and John c. Calhoun of South Carolina urged Congress and the president to encourage the growth of enterprise, with the aid of the government, creating roads, canals, a strong navy and a national bank. The future of the country, Clay and Calhoun believed, lay in commerce and industry. The government should ally itself with the forces of trade. These nationalists called their vision the “American System.” Because far too little cash spread across its vast growing territory, much business within the country rested on nothing more than trust and promises. Monroe supported a new national bank to stabilize the economy and distribute scare money more uniformly. The expanding country's economic system needed a central institution to coordinate the flow of money. Accordingly, in 1816, congress chartered the Second Bank of the United States. The bank pumped large amounts of paper currency into the system in an attempt to feed the voracious hunger of the postwar economy, especially in the new states of the West where specialization in land fueled demands for access to easier credit.

Courts increasingly favored market forces over customs and stability in property relation, shifting the advantage from farmers and landowners to developers. The Supreme court, under Chief Justice, John Marshall issued number of important decisions following the War of 1812 that also hastened economic development.The outcome of the Dartmouth College V. Woodward case sheltered corporations form legislative interference. The McCulloch V. Maryland case established the consiutionality of the bank of the United States and protected it from state taxation.

The preceeding year, 1818, the U.S. government opened the "National Road" connecting the Potomatic River at Cumberland, Maryland with Wheeling, West virginia on the Ohio River. The raod was the best that technology could provide at the time, with excellent bridges and a relatively smooth stone surface. Fortunately for New York, a passage broke through the Appalachian mountains within the state's borders. New Yorker's believed that a canal through this area, connecting the Hudson River to Lake Erie would far surpass any other kind of transportation. Other states looked enviously upon the glorious and profitable Erie Canal and began their own plans and excavations.

Rivers offered faster and cheaper travel, especially along Mississippi, Missouri, and Ohio. As soon as Jackson won at New Orleans in 1815 the Enterprise churned its way upriver from Lousiana all the way to Louisville Kentucky. Though the shallow, high powered and top heavy steamboats showed a dangerous propensity to explode, run aground, and slam into submerged obstacles, no one thought of going back to the old way of travel.