Modern history

Expanding the Economy and the Nation

By further expanding federal powers, the War of 1812 reinforced political changes that had been under way for more than a decade. At the Hartford Convention, Federalists who had once advocated broad national powers called for restrictions on federal authority. By contrast, the Democratic-Republicans, who gained support in 1800 by demanding restraints on federal power, now applauded its expansion. Indeed, Democratic-Republicans in Congress sought to use federal authority to settle boundary disputes in the West, make investments in transportation, and reestablish a national bank. Increasingly, many ordinary Americans viewed such federal assistance as critical to the continued development of industry and agriculture.

Governments Fuel Economic Growth

At the nation’s founding, Alexander Hamilton led a coalition that advocated the use of federal power to fuel commercial development. Over the following decade, this coalition’s efforts to expand federal authority in the interest of commerce and industry inspired opposition within Federalist ranks. In 1800 Thomas Jefferson captured the presidency by advocating a reduction in federal powers and a renewed emphasis on the needs of small farmers and working men. Once in power, however, Jefferson and his Democratic- Republican supporters faced a series of economic and political developments that led many of them to embrace Hamilton’s loose interpretation of the U.S. Constitution and support federal efforts to aid economic growth (see chapter 8). In the 1810s, for example, Democratic-Republican representative Henry Clay of Kentucky sketched out a plan called the American System, which combined federally funded internal improvements to aid farmers with federal tariffs to protect U.S. manufacturing and a national bank to oversee economic development.

Western expansion helped fuel the demand for federally funded internal improvements. The non-Indian population west of the Appalachian Mountains more than doubled between 1810 and 1820, from 1,080,000 to 2,234,000. The new residents included veterans of the War of 1812, many of whom received 160-acre parcels of land between the Illinois and Mississippi Rivers. They and their families established farms, shops, and communities throughout the territory. Four frontier states were admitted to the Union in just four years: Indiana (1816), Mississippi (1817), Illinois (1818), and Alabama (1819).

Population growth and commercial expansion moved hand in hand. In 1811 the first steamboat traveled down the Mississippi from the Ohio River to New Orleans; over the next decade, steamboat traffic expanded, and freight charges dropped precipitously. This development helped western and southern residents but hurt trade on overland routes between northeastern seaports and the Ohio River valley. The Cumberland Road, a federally funded highway linking Maryland and Ohio, reestablished this connection, and Congress passed bills to fund more ambitious federal transportation projects. But President Madison vetoed much of this legislation, believing that it overstepped even a loose interpretation of the Constitution.

Congress also developed new trade routes by negotiating treaties with Indian nations. For instance, an ancient trail from Missouri to Santa Fe, a town in northern Mexico, cut across territory claimed by the Osage Indians. White traders began using the trail in 1821, and four years later Congress approved a treaty with the Osage nation to guarantee right of way for U.S. merchants. In the following decade, the Santa Fe Trail became a critical route for commerce between the United States and Mexico.

East of the Appalachian Mountains, most internal improvement projects were funded by individual states. The most significant of these was New York’s Erie Canal, a 363-mile waterway stretching from the Mohawk River to Buffalo that was completed in 1825. Tolls on the Erie Canal quickly repaid the tremendous cost of its construction. Freight charges and shipping times plunged. In 1820 transporting a ton of grain by land from Buffalo to New York City cost $100 and took 20 days; in 1825 shipping a ton of grain by canal between those two cities cost only $9 and took 6 days. And by linking western farmers to the Hudson River, the Erie Canal ensured that New York City became the nation’s premier seaport (Map 9.2).

The Erie Canal’s success inspired hundreds of similar projects in other states. Canals carried manufactured goods from New England and the Middle Atlantic states to rural households in the Ohio River valley. Western farmers, in turn, shipped hogs, hemp, flour, whiskey, and other farm products back east. Just as important, canals linked smaller cities within Pennsylvania and Ohio, facilitating the rise of commercial and manufacturing centers like Harrisburg, Pittsburgh, Cincinnati, and Toledo. Canals also allowed vast quantities of coal to be transported out of the Allegheny Mountains, fueling industrial development throughout the Northeast.

Americans Expand the Nation’s Borders

In 1816, in the midst of the nation’s economic resurgence, James Monroe, a Democratic- Republican from Virginia, won an easy victory in the presidential election over Rufus King, a New York Federalist. Monroe, who had served as secretary of state under Madison, hoped to use improved relations with Great Britain to resolve Indian problems on the frontier. Believing that hostile Indians would “lose their terror” once the British no longer encouraged them, he sent John Quincy Adams to London to negotiate treaties that limited U.S. and British naval forces on the Great Lakes, set the U.S.-Canadian border at the forty-ninth parallel, and provided for joint British-U.S. occupation of the Oregon Territory. In 1817 and 1818, the Senate approved these treaties, which further limited Indian rights and power in the North.

President Monroe harbored grave concerns about the nation’s southern boundary as well. He sought to limit Spain’s power in North America and stop Seminole Indians in western Florida and Alabama from claiming lands ceded to the United States by the defeated Creeks. Shifting from diplomacy to military force, in 1817 the president sent General Andrew Jackson and his Tennessee militia to force the Seminoles back into Florida. Nonetheless, he ordered Jackson to avoid direct conflict with Spanish forces for fear of igniting another war. But in the spring of 1818, having chased the Seminoles deep into Florida, Jackson attacked two Spanish forts, hanged two Seminole chiefs, and executed two British citizens allied with local Indians.

MAP 9.2

Roads and Canals to 1837 During the 1820s and 1830s, state and local governments as well as private companies built roads and canals to foster migration and commercial development. The Erie Canal, completed in 1825, was the most significant of these projects. But many other states, particularly in the Northeast and the old Northwest, sought to duplicate that canal's success over the following decade.

Jackson’s attacks spurred outrage among Spanish and British officials and many members of Congress. Indeed, the threat of conflict with Britain, Spain, and hostile Indians prompted President Monroe to establish the nation’s first peacetime army in 1818. In the end, however, the British chose to ignore the execution of citizens engaged in “unauthorized” activities, while Spain decided to sell the Florida Territory to the United States rather than fight to retain it. In the Adams-Onis Treaty (1819), negotiated by John Quincy Adams, Spain ceded all its lands east of the Mississippi to the United States along with ancient claims to the Oregon Territory.

Success in acquiring Florida encouraged the administration to look for other opportunities to limit European influence in the Western Hemisphere. By1822 Argentina, Chile, Peru, Colombia, and Mexico had all overthrown Spanish rule. In March of that year, President Monroe recognized the independence of these southern neighbors, and Congress quickly established diplomatic relations with the new nations. Yet Monroe also secretly attempted to survey Mexican lands in hopes of gaining more territory for the United States. The following year, President Monroe added a codicil to a treaty with Russia that claimed that the Western Hemisphere was part of the U.S. sphere of influence. Although the United States did not have sufficient power to enforce what later became known as the Monroe Doctrine, it had quietly declared its intention to challenge Europeans for authority in the Atlantic world.

By the late 1820s, U.S. residents were moving to and trading with newly independent Mexican territories. Southern whites began occupying Mexican lands in east Texas, while midwestern traders traveled the Santa Fe Trail. Meanwhile New England manufacturers and merchants had begun shipping their wares via clipper ships to another Mexican territory, Alta California, whose residents eagerly purchased U.S.-made shoes, cloth, and tools.

Some Americans looked even farther afield. U.S. merchants had begun trading with China in the late eighteenth century, and by the early nineteenth century, ships from eastern ports carried otter pelts and other merchandise across the Pacific, returning with Chinese porcelains and silks. In the 1810s and 1820s, the Alta California and China trades converged, expanding the reach of U.S. merchants and the demand for U.S. manufactured goods. The desire to expand trade also led some Americans to look to the Pacific, especially Hawaii and Samoa, for additional markets and land.

Extended trade routes along with wartime disruptions of European imports fueled the expansion of U.S. manufacturing. By 1813 the area around Providence, Rhode Island, boasted seventy-six spinning mills with more than 51,000 spindles. Two years later, Philadelphia claimed pride of place as the nation’s top industrial city, turning out glass, chemicals, metalwork, leather goods, and dozens of other products. Workers in factories, artisans’ shops, and homes as well as in prisons and poorhouses contributed to an economic boom that seemed boundless.

Regional Economic Development

Clay’s American System was intended to bind the various regions of the United States together. Yet even as roads, rivers, canals, and steamboats helped unify a growing nation, they also reinforced the development of regional economies. Although regional ties remained fluid, between 1815 and 1830 increasingly distinct economies developed that promoted the rise of particular labor systems and political priorities.

In the South, for instance, the defeat of the Creek nation, vast Indian land cessions, and the acquisition of Florida ensured the growth of cotton cultivation, which had been initiated by the invention of the cotton gin (see chapter 8). Although the foreign slave trade had ended in 1808, planters extended slavery into new lands to produce cash crops like cotton, sugar, and rice. They used profits from these goods to buy food from the West and shoes and cloth from the North. Small farmers, too, sought to benefit from rising cotton prices, planting as much of their land in cotton as they could. Because continuous cultivation drained nutrients from the soil, planters and small farmers constantly sought more fertile fields, leading to further pressure on those Indians who still controlled large areas of rich southern soil.

When James and Dolley Madison returned to Montpelier in 1817, they experienced the new possibilities and problems of southern agriculture. Plantation homes in long- settled areas like the Virginia piedmont became more fashionable as they incorporated luxury goods imported from China and Europe. The Madisons entertained hundreds of guests, hosted dinners and dances, and provided beds and meals for three dozen people at a time. But soil exhaustion in the region limited the profits from tobacco and made a shift to cotton impossible. While some Virginia planters made money by selling slaves to other planters farther south, James Madison refused to break up slave families who had worked the plantation for decades. With no desire to leave for lands farther west, he and Dolley were forced to reduce their standard of living.

Other white Americans, however, benefited from the expansion of southern agriculture. Of course, many cotton farmers made substantial profits in the 1810s. So did western farmers, who shipped vast quantities of food and other farm products to the South. Towns like Cincinnati, located across the Ohio River from Kentucky, sprang up as regional centers of commerce. In 1811 Cincinnati settlers still confronted Indians along the nearby White Water River. Eight years later, the booming town was incorporated as a city with nearly ten thousand residents.

Americans living in the Northeast increased their commercial connections with the South as well. Northern merchants became more deeply engaged in the southern cotton trade, opening warehouses in port cities like Savannah and Charleston and sending cotton factors, or agents, into the countryside to broker deals with planters. Meanwhile the southern cotton boom fueled industrial expansion. Indeed, factory owners in New England shipped growing amounts of yarn, thread, and cloth along with shoes, tools, and leather goods to the South. As merchants in New England and New York focused on the cotton trade, those in Philadelphia and Pittsburgh built ties to western farmers, exchanging manufactured goods for agricultural products across the Appalachian Mountains.

Plan of Cincinnati, 1815 This map, drawn four years before Cincinnati was incorporated as a city, illustrates the importance of the Ohio River to the city's development. Nestled along the riverbank, the village of Cincinnati was laid out in a grid pattern. The map lists a steam mill; two breweries; ferries; a potash factory, sugar refinery, and sawmill; churches; banks; and other important locations. Courtesy Archives & Rare Books Library, University of Cincinnati


• What role did government play in early-nineteenth-century economic development?

• How and why did economic development contribute to regional differences and shape regional ties?

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