Georgia Ave

Era of Supposed Non-Partisanship (“Era of Good Feelings”) – Hidden Fault-Lines

• President James Monroe celebrated the decline of open partisanship, yet deep divisions persisted beneath the surface.
  • Facade of unity masked questions that would “strain and eventually break” the Jeffersonian consensus created by the Virginia Dynasty (consecutive $24$ years of Virginian presidents: Jefferson → Madison → Monroe).
  • Ultimate fracture point = slavery, but other economic & constitutional issues erupted first.

Henry Clay: Career & Intellectual Influence

• Kentuckian with many offices: Speaker of the House, Senator, Secretary of State.
• Remembered earlier as a War of $1812$ Hawk; now more significant for proposing the American System.
• Championed economic nationalism that echoed (but modified) Alexander Hamilton’s energetic-government vision.

Post-War of $1812$ Burst of Economic Nationalism

• Even “Old Republicans” adopted Federalist-style measures:
  • Second Bank of the United States (BUS 2) chartered under President Madison.
  • Tariff of $1816$: average duty $25\%$ on imports → protect nascent U.S. manufacturing.
  • Modest but unprecedented peacetime military expansion.
  • Debate over federal funding of internal improvements.
  • Madison favored in principle but vetoed on constitutional scruples.
  • Monroe sought Supreme Court advice; Court said “constitutional,” yet Monroe hesitated.

John Marshall & the Supreme Court as “Citadel of Federalism”

Early Business-Friendly Contract Decisions

• Fletcher v. Peck ($1810$)
  • First time Court invalidated a state law via Constitution.
  • Upheld Article I, Section $10$ (Contract Clause) → signals that contracts are sacrosanct.
• Dartmouth College v. Woodward ($1819$)
  • NH legislature (Republican) tried to convert private Dartmouth College → public university.
  • Court (with Daniel Webster arguing) ruled charter = private contract protected by Contract Clause.
  • Result: corporations are private entities even if chartered by states; states cannot meddle once charter issued.
  • Consequences:
  • Safer climate for investment/corporate startups.
  • Surge to ~$1{,}900$ corporations in New England by $1830$.
  • Court thereby fostered a laissez-faire national economy within a Republican political order.

Federal Supremacy over States

• McCulloch v. Maryland ($1819$)
  • MD taxed notes of BUS 2; cashier William McCulloch refused.
  • Marshall’s steps:
  1. Implied powers: BUS constitutional under Necessary & Proper Clause (Art I §$8$ cl.$18$).
  2. Federal supremacy: Legitimate federal instrument cannot be burdened by a state tax (“power to tax = power to destroy”).
  • Famous triad: (i) Constitution grants broad implied powers, (ii) federal law supreme, (iii) states may not obstruct.
• Gibbons v. Ogden ($1824$)
  • NY granted Fulton-Livingston Co. exclusive Hudson steamboat rights; Thomas Gibbons (holding a federal coastal license) operated in defiance.
  • Court broadened Commerce Clause (Art I §$8$) → Congress alone regulates interstate commerce, including navigation.
  • Rejected “strict construction”; warned such theory would “cripple the government.”
  • Lawyer Daniel Webster hailed resulting “economic Union.”

The American System (Henry Clay)

• Goals: achieve economic self-sufficiency & integrate regional specializations.
  1. Protective Tariffs – higher than $25\%$ to nurture infant NE industries.
  2. Second BUS – stabilize currency & credit.
  3. Internal Improvements – federally funded roads, canals, harbors, lighthouses to tie regions together.
• Regional logic:
  • Northeast: manufacturing & commerce.
  • South: raw materials (esp. cotton).
  • West: foodstuffs for nation & export.
• Political fortunes:
  • Tariff success: rate raised to $40\%$ in Tariff of $1824$ (Southern opposition).
  • Internal improvements stalled: strict-construction Southerners & some others resisted federal funding.

Election of $1824$ & the “Corrupt Bargain”

• One party (Jeffersonian Republicans) but five prominent presidential hopefuls:
  • Andrew Jackson (TN) – $99$ electoral votes.
  • John Quincy Adams (MA) – $84$.
  • William H. Crawford (GA) – $41$.
  • Henry Clay (KY) – $37$ (4th, thus excluded from House run-off).
  • (Early dropout John C. Calhoun for VP.)
• No majority → decision moved to House of Representatives (12th Amendment).
• Clay, as Speaker, swung KY/OH/MO delegations to Adams; Adams elected on first ballot.
• Adams then appointed Clay Secretary of State → Jacksonians decried a “corrupt bargain” (no hard proof, but powerful rhetoric).

Adams Administration ($1825$–$1829$) & Intensifying Sectionalism

• Described as “extended nightmare” presidency.
• Party fractures:
  • National Republicans (Adams + Clay) vs Democratic Republicans (Jackson, soon just Democrats).
• Tariff of $1828$ (“Tariff of Abominations”)
  • Northern manufacturers wanted even higher duties; Southern tactic of “poison-pill” amendments backfired—bill passed.
  • Rates soared (some items >$50\%$).
  • South Carolina reaction: flags at half-mast; Rep. George McDuffie likened it to the Stamp Act.
  • VP John C. Calhoun anonymously authored South Carolina Exposition & Protest (invoked compact theory & potential nullification).

Federal Inaction ≠ Infrastructure Vacuum

• Jefferson hostile; Madison & Monroe supportive but veto-prone; Adams supportive but politically impotent.
• Yet commercial necessity persisted:
  • Example shipping cost $\$150$/ton for Cincinnati → Baltimore (month-long trek) in $1816$—unprofitable beyond $50$ mi. from a river.
  • Fear of East/West split voiced by Upstate NY congressman.

State-Led Canal Boom

Erie Canal (NY)

• Conceived since colonial era; groundbreaking $4$ July $1817$ by Gov. DeWitt Clinton.
• Specs: $363$ mi; $40$ ft wide; $4$ ft deep; $83$ locks; elevation rise $568$ ft from Hudson to Erie.
• Cost ≈ $\$7{,}000{,}000$ (state bonds + investors) → spectacular payoff:
  • Buffalo → NYC wheat freight cost fell from $\$100$/ton to $\$10$/ton.
  • Transit time cut by (\tfrac13).
  • By $1840$, Rochester (“Flour City”) milling $500{,}000$ barrels/yr (vs $26{,}000$ in $1818$).
  • Linked Great Lakes & Midwest to world via NYC—made NY “Empire State.”

Other Major Canals

• Chesapeake & Ohio Canal (MD): coal from Alleghenies.
• Pennsylvania Mainline Canal ($359$ mi, $1834$): overcame mountains via Allegheny Portage Railroad (funicular)—costly bottleneck.
• Ohio & Erie, Miami & Erie, Wabash & Erie, Illinois & Michigan canals, etc.—states issued bonds, imitated NY model.

Steamboat Revolution

• Robert Fulton’s Clermont (Hudson River, $1807$) = first viable commercial steamboat.
• Upstream travel now practical:
  • New Orleans → Louisville record shrank from $25$ days ($1817$) to $8$ days ($1826$).
  • New York City → Philadelphia fell from $2$ days ($1800$) to $1$.
  • New York → New Orleans: $4$ weeks → $2$.
  • New York → Pittsburgh < $1$ week by $1830$.
• Example anecdote: young Abraham Lincoln’s flatboat trip down the Ohio & Mississippi highlighted pre-steamboat hardship (sell cargo & boat, walk home).

Market Revolution – Definition & Components

• Synergistic transformation (late $1810$s–$1840$s):
  1. Transportation Revolution – canals, roads, steamboats (later railroads) cut cost/time.
  2. Legal/Institutional Supports – Marshall Court: sanctity of contract, corporate immunity, federal supremacy over interstate commerce.
  3. Financial Infrastructure – BUS 2 stabilized currency/credit.
  4. Protective Tariffs fueled domestic manufacturing capital formation.
• Results:
  • Integrated national market replacing isolated regional/local exchanges.
  • Farmers now produced for sale (cash-crop mentality) rather than mere subsistence.
  • Manufacturers accessed raw materials & consumers across vast distances.
  • Business confidence soared thanks to predictable legal framework ("business wants reliability").
  • Laid groundwork for forthcoming industrialization (factory system, mass production) discussed in next lecture.

Ethical, Philosophical, Practical Implications

• Debate over constitutional limits vs national development: strict vs broad construction.
• Sectional economic interests (tariff & internal improvements) foreshadowed deeper North-South fissures over slavery.
• Question of whether American System could harmonize Jeffersonian agrarianism with Hamiltonian industrial modernity; critics warned money-power would dominate yeomanry.
• Federalism tensions: who should pay & who benefits? (“general welfare” vs regional pork).
• Infrastructure