Marking the end of the War of 1812, the Treaty of Ghent, ushered in an era of heightened nationalism in the United States. Patriotic sentiments ran high as Americans delighted in their “victory” over the British and looked for ways to make their nation even stronger. People all over the country celebrated Virginian James Monroe’s election to the presidency in 1816. Meanwhile, Monroe struck an optimistic tone in his first inaugural address, noting the “present happy condition of the United States” and “the happy Government under which we live.” To further promote the happy condition, he launched a goodwill tour to mend the regional divisions that had grown during the war since the New Englanders never really supported the war. In the postwar euphoria, however, the Republican president even received a warm reception in the old Federalist stronghold of Boston in 1817, prompting a local newspaper to comment on the emergence of an “era of good feelings.” Given his popularity, it came as no surprise to most voters when Monroe won nearly unanimous reelection in 1820.
James Monroe, like many other leaders in the nation’s early years, opposed the development of political parties and believed the nation’s elite should govern the country. They felt the elites better understood what could make the country successful over time, and they could mediate the will of the people. Therefore, Monroe worked to eliminate party politics during his two terms in office. After the ill-timed Hartford Convention in 1814, where delegates from several England states met to draft several Constitutional amendments to weaken the power of the southern states, the Federalist Party faded from the political scene. In the Era of Good Feelings, only the newly christened National Republicans remained. Within this one-party system, Federalists like John Quincy Adams and Republicans like John C. Calhoun and Henry Clay worked to promote a stronger, self-sufficient United States. In the end, however, James Monroe found it as difficult to avoid factionalism as George Washington had in the 1790s. Two major events—the Panic of 1819 and the Missouri Compromise—undermined National Republican unity and paved the way for Andrew Jackson to become a major figure in American life.
12.2.1: Promoting a Nationalist Vision
Even before James Monroe ascended to the presidency, nationally-minded leaders began to think about ways to improve the three sectors of the American economy: agriculture, commerce, and manufacturing. During the War of 1812, the lack of both a national bank to help secure credit to finance the war and a functioning nationwide transportation network to help move troops and goods hindered the effort to defend the country from British attacks. Realizing the potential of the budding market revolution and the interconnectedness of the nation’s postwar economy, a majority of Congress accepted a larger role for the federal government in economic matters. At the same time, the Supreme Court deemed much of the government’s expansion as wholly in line with the Constitution. Finally, the diplomatic corps worked after 1817 to foster trade, to support territorial expansion, and to increase American influence over other countries in the Western Hemisphere.
In 1816, while James Madison was still president, Congress eagerly began to resurrect much of Alexander Hamilton’s economic vision for the country and to adapt it to meet the needs of a growing nation. Led by Henry Clay of Kentucky in the Senate and John C. Calhoun of South Carolina in the House of Representatives, Congress considered proposals for a national bank, a protective tariff, and internal improvements. Supporters believed the program, which Clay labeled the “American System” in 1824, would benefit all regions of the country. The bank would create a more stable currency system by checking the money and credit supply. The tariff would protect nascent American factories from foreign competition, make the nation less dependent on foreign trade, and raise additional revenue for the government. Finally, internal improvements would allow raw materials and finished goods to move around the country at a faster pace.
To many nationally-minded leaders, addressing the banking issue was of prime importance because the war and its aftermath suggested the potential problems of unregulated currency. As the market revolution took hold, the practice of bartering tapered off. Banks allowed people to purchase goods and services with their notes as opposed to the often cumbersome gold or silver coins (i.e., specie). In 1811 Congress refused to recharter the Bank of the United States, claiming it exceeded what was a necessary power of the government. After the demise of the national bank, the number of state banks began to rise precipitously.
During the war, financial problems pushed most state banks to suspend specie payments (meaning note holders could not exchange paper currency for its equivalent in coin). Since there was no expectation of convertibility, banks issued currency well in excess of the amount of specie they possessed. It became increasingly difficult to determine the real value of the currency in circulation; furthermore, state banks showed no indication they planned to resume specie payments after 1815. Many people feared the speculative bubble would burst; to those concerned, the best way to prevent an economic downturn was to create a new national bank.
James Madison sent a message to Congress requesting it consider a proposal for a national bank in 1816. Five years before, questions about the constitutionality of such a venture derailed the recharter effort, but after the War of 1812, few people mentioned such considerations in the debate about the new bank because the fight with the British convinced many American leaders of the necessity of supporting economic development. Members voted to charter the Second Bank of the United States (the “BUS” or the “bank”) for a period of twenty years. Under the terms of the charter, the government would deposit government funds in the bank, accept the bank’s notes as payment for government transactions, and buy one-fifth of the bank’s stock. The bank, a private corporation, agreed to transfer Treasury funds without charge, to allow the federal government to appoint five of the bank’s twenty-five directors, and to pay the government a fee of $1.5 million. The BUS could open branches anywhere it saw fit; therefore, its notes became the only currency accepted all over the country. It could also demand the state bank notes it accepted be redeemable in specie, a policy which could help curb inflation.
After settling the banking question, John C. Calhoun, with the backing of Henry Clay, pushed Congress to consider implementing an openly protective tariff (import tax). Calhoun and Clay saw the tariff as having two functions: protecting manufacturers from foreign competition by making it costprohibitive for consumers to buy anything other than American made goods and providing the government the revenue necessary to fund internal improvements.4 The potential for uneven economic benefits had, in previous years, prevented Congress from enacting the tariff. Opponents of the tariff maintained that while the commercial sector would benefit from protection, the agriculture sector would suffer. Protected industries would see their profits increase, while farmers would find it more difficult to sell raw materials on the international market and more expensive to purchase goods in an uncompetitive market. Thus, a small segment of the American population would gain at the expense of the rest of the population.
Although Calhoun and Clay worried about the reaction of frontier farmers who traditionally opposed federal taxes, they persevered in their effort to increase the tariff rate. They convinced enough members of both chambers to support the Tariff of 1816, which set the rate at 20 percent for most goods and 25 percent for textiles. As with the bank, the war provided the impetus for this measure. With foreign trade virtually cut off by the British blockade, it became apparent to most Americans that some measure of self-sufficiency in manufactured goods was important. Even delegates in western and southern states, usually hostile to tariffs, could see the connection between manufacturing and commercialized agriculture.
Finally, Congress took up the question of internal improvements—by far the most controversial issue on the nationalist’s agenda. Federal support for roads, canals, and other transportation improvements would help develop the nation’s economic capacity by cutting the costs and time of shipping raw materials to markets and manufactured goods to consumers. Moreover, rising revenues from federal land sales and tariffs provided the government surplus revenue to fund such ventures. In late 1816, Calhoun and Clay supported the Bonus Bill, designed to use the revenue from the Second National Bank to fund internal improvements. The question of the constitutionality of the measure, specifically that it might not be a necessary function of the government, colored the debate.
While National Republican leaders secured enough votes to pass the bill, James Madison vetoed it shortly before leaving office. Although Madison had bent his strict constructionist views to support the bank, he told Calhoun he would not do the same for internal improvements. The outgoing president suggested introducing a constitutional amendment that would give the government the power to fund improvements. Once in office, James Monroe did encourage Congress to adopt an amendment for funding roads and canals. However, Henry Clay, convinced that Congress already had the power to fund improvements, prevented the consideration of an amendment. Thus, internal improvements became the purview of the state governments. Some wholly embraced the development of a transportation network, while others seemed reluctant to commit funds to such projects in the 1820s and 1830s.
In 1801, John Adams (in one of his final acts as president) appointed John Marshall, his fellow Federalist, to head the nation’s top court; he hoped to protect his party’s nationalist agenda after he left office. During the Jefferson and Madison years, the Supreme Court worked to establish itself as the authority over constitutional matters at the federal level in Marbury v. Madison (1803) and at the state level in Fletcher v. Peck (1810). However, the chief justice thought the time was not right to decide major constitutional questions on the “necessary and proper” clause as it related to government support for economic development. Only in the Era of Good Feelings did Marshall and the associate justices issue a series of decisions strengthening the role of the federal government and bolstering the turn toward manufacturing and commercial agriculture.
The first major decision addressing these issues, Dartmouth College v. Woodward (1819), related to the sanctity of contracts. During the colonial era, Dartmouth received a royal charter to conduct its business in New Hampshire; however, in 1816 the state legislature passed a law to convert the private college into a public university by granting the governor the right to appoint a new Board of Trustees. After the state implemented the change, the old trustees sought to reverse the statute. Their case made it to the Supreme Court. Daniel Webster, an alumnus of Dartmouth, made an impassioned plea to the justices about how the college, like all corporations, should be protected from shifts in the public mood. The majority opinion in favor of the college suggested that the government could not modify (or regulate) corporate charters or other contracts once issued without the consent of both parties.
The second major decision, McCulloch v. Maryland (1819), related to the constitutionality of the Second Bank of the United States. The state of Maryland decided to tax the bank at a high rate in an effort to give preference to state chartered banks. The BUS refused to pay, prompting the state to file a suit in federal court in an effort to collect the taxes. The Marshall Court sided with the bank, not with the state. Their decision noted “that the act to incorporate the Bank of the United States is a law made in pursuance of the constitution, and is a part of the supreme law of the land.” Moreover, the justices indicated a state did not have the power to impede the legitimate actions of the federal government. In making its decision, the Supreme Court finally weighed in on the “necessary and proper” clause by supporting the concept of implied powers.
The third major decision, Gibbons v. Ogden (1824), related to the interstate commerce. After Robert Fulton invented the steamboat in 1807, New York state legislature granted Fulton and Robert Livingston exclusive control over ferry traffic on the Hudson River for twenty years. As such, they had the right to grant permits to any ferry operator they chose. They granted a permit to Thomas Gibbons but not to Adam Ogden to transport passengers and freight across the river. Thus, Ogden sued Gibbons to challenge his monopoly of the ferry traffic. The case eventually made its way to the Supreme Court because it involved traffic going from New York to New Jersey. The Marshall Court deemed the New York monopoly law “repugnant” to the Constitution since the power to regulate commerce between two or more states went to Congress, not the individual states.
Collectively, these three decisions suggested the federal government had a rightful role to play in promoting economic development. Dartmouth College v. Woodward suggested the government could not legitimately regulate private businesses, which encouraged free enterprise in the United States. McCulloch v. Maryland and Gibbons v. Ogden supported a broad interpretation of the federal government’s power in relation to the states.
While Congress and the Supreme Court promoted economic development, John Quincy Adams, James Monroe’s secretary of state, sought to formulate an imperial rhetoric for the United States that fit with the president’s nationalism. Skilled in diplomacy during his father’s administration, Adams believed in the unique virtue of the United States, in the necessity of remaking the world in the American image, and in the nation’s God-given right to expand. Based on his beliefs, the secretary of state (with the president’s blessing) sought to promote foreign trade, to pursue continental expansion, and to lessen the influence of European powers in Latin America.
In the wake of the War of 1812, both Great Britain and the United States sought ways to improve their relationship, largely because the war settled none of their differences. The British reached out to the Americans to address issues not resolved in the Treaty of Ghent; their effort led to several agreements that brought long-term peace between the two nations. The Rush-Bagot Agreement of 1817 demilitarized the Great Lakes region; the Congress of 1818 provided for American fishing rights off the coast of Canada, restricted British travel on the Mississippi River, ended British trade with the Indians in the Louisiana Purchase, and set the boundary between the United States and Canada at the Rocky Mountains. The Anglo-American rapprochement also tacitly gave American shippers the protection of the British Navy in the Atlantic. Thus, the Americans could spend less on their own navy and devote those resources to other projects. The agreements improved foreign trade and helped both nations improve their economic health.
The American government had long wanted to acquire Spanish Florida (a haven for runaway slaves), and members of the Monroe administration were no different. During the War of 1812, the Americans had seized West Florida (the panhandle). After the war, Andrew Jackson—in his attempt to quell the Indians in the Southeast—took American forces into Spanish-controlled East Florida under dubious circumstances. Rather than apologize for Jackson’s violation of Spanish territorial integrity, Adams used the incident to put pressure on the Spanish foreign minister Don Luis de Onís to return to the negotiating table. In 1819, with the Adams-Onís Treaty, the United States took control of Florida in exchange for $5 million. Spain relinquished its claim to Oregon, and the United States renounced, at least temporarily, its claim to Texas. The treaty helped pave the way for further expansion across the continent.
Spain’s reluctance to complete an agreement with the United States over Florida stemmed from its fear of losing control over its entire New World Empire. Since the turn of the century, a series of revolutions had shaken Latin America. The United States seemed both sympathetic to these revolutions and concerned about the ability of the new republics to maintain their independence. As a show of support, the Americans opted to recognize the revolting governments as a means to undercut European influence, to assist commerce, and to nominally encourage the growth of republicanism. By the early 1820s, American leaders feared the possibility that even if Spain could not regain its hegemony, other European powers might try to expand their influence in the Western Hemisphere.
Initially, Monroe considered issuing a joint declaration with the British pledging to protect the fledgling governments in Latin America. However, Adams convinced him that the United States should chart its own course. In his annual message to Congress in 1823, the president outlined the Monroe Doctrine. Adams, who drafted the statement, believed the Americans had to make a forceful statement suggesting that future European colonization would not be welcome in the Western Hemisphere. Moreover, since American and European political systems were different, neither side should meddle in the affairs of the other. Most Americans praised the doctrine for its assertion that the United States was unique among nations. Few people realized their government would have found it difficult to back up the Monroe Doctrine had the Europeans challenged its provisions.
12.2.2: The Retreat from Nationalist Tendencies
During the Era of Good Feelings there was only one political party; however, differences of opinion on the role of the federal government never completely disappeared. Most national leaders believed the government should serve the interests of the common good, but they disagreed on what exactly the common good meant. The Republicans had never spoken with one voice. Moderates tended to support the same programs to promote commercial development as the Federalists. Radicals, or Old Republicans, opposed any talk of loose construction, preferring a very limited federal government. By 1820, an economic crisis and a debate on slavery in the territories underscored existing differences within the National Republican coalition.
Panic of 1819
The market revolution created a remarkable amount of economic growth in the United States as commodity prices rose after the war. Simultaneously, inflation and speculation also increased. State banks issued notes in excess of their reserves and made somewhat risky loans. When Congress chartered the Second Bank of the United States, supporters hoped its policies would lead to deflation. The bank’s Board of Directors, like most Americans during this era, found the opportunity to make money too appealing. Rather than working to limit the amount of money in circulation, their policies only led to more inflation and speculation. Furthermore, Congress had hoped to make the United States more self-sufficient through the bank and the tariff. To some extent, those measures achieved their goal, but the American economy was never completely divorced from the European economy. If anything, the market revolution made the American business cycle more sensitive to the world market.
After 1815, rising prices had encouraged the inflation and speculation, but most financial experts realized any excessive demand for specie could destabilize the entire credit system. In late 1818, the Second Bank of the United States shifted from an inflationary policy to a deflationary policy to stave off a drop in their specie reserves. It began to demand repayment of outstanding loans, and it required state banks to convert their notes held by the BUS to specie. The BUS clearly acted to save itself. In the process, it brought ruin to numerous state banks and, in turn, the American people. International developments compounded the American credit problems. The American speculative boom had rested on the expectation that commodity prices would continue to rise, but they began a steep decline in 1819 as Europe recovered from the Napoleonic Wars, lessening their need for American foodstuffs. Moreover, pent-up European demand for cotton had caused the price to rise after 1815. English manufacturers then began to look for a cheaper source from which to obtain raw cotton, causing a collapse in the American market. Finally, European nations adopted the gold standard, leading to a drain on world gold reserves. The combined domestic and international problems caused the Panic of 1819 and a subsequent depression in the United States.
During the panic, American cities faced the direst circumstances, but farmers far from commercial centers also felt the strain. Around 500,000 urban residents could not find work. For example, in Philadelphia approximately 75 percent of workers remained idle. The number of paupers rose dramatically as did the numbers of debtors imprisoned for nonpayment. People who owned their own homes faced foreclosures, and those who did not own homes stopped believing they someday could. Rural landowners, even those considered well off, struggled to pay back their debts when banks called in their loans. For example, in Nashville the number of reported bankruptcies reached 500 in 1819 alone. Throughout the crisis, the BUS avidly pushed its debtors to repay their outstanding loans, leading to more business failures, more property seizures, and more unemployment. Across the nation, popular protest became common. Some debtors called for “stay laws” to provide more time to pay back their creditors. Others sought the abolition of debtor’s prisons. Finally, many voters sought to reduce state and federal expenditures in order to cut the people’s tax burden. It would take several years for the economy to recover, and those harmed by their creditors never lost their suspicion of financial institutions, which they thought did more damage than good for the American economy.
In the years after the Revolutionary War, states in the North, inspired by the egalitarian sentiments of the fight for independence, began to rethink the merits of bound labor. By the mid-1780s, all northern states had ended slavery or had made plans to end slavery in their states. At the same time, the Northwest Ordinance of 1787 prohibited slavery in the territories north of the Ohio River. Some northerners thought the South would turn away from slavery as well. Manumission (freeing slaves on an individual basis) was not unheard of in the years immediately following the revolution. However, after the invention of the cotton gin, most southern states committed themselves to maintaining slavery. Moreover, as the nation expanded westward, so too did slavery, especially in areas where cotton grew well. Kentucky, Tennessee, Alabama, Mississippi, and Louisiana all joined the union as slave states. Through the years, the country maintained a balance of slave and free states in the Senate by chance more than anything else; however, the free states had an advantage in the House of Representatives because more people lived in the North than the South.
In 1819, the sectional balance nearly came unhinged when Missouri petitioned to become the first state carved out of the unorganized portions of the Louisiana Purchase. As a territory, Missouri had allowed slavery and would continue to do so as a state. Amidst concerns about an uneven balance in the Senate, James Tallmadge—an anti-slavery representative from New York—introduced a measure designed to prohibit slavery in Missouri and provide for the gradual emancipation of the 10,000 slaves living there. While Tallmadge feared the expansion of slavery, most members of Congress expressed more concern about the balance of power in the national government. Rufus King, in support of the Tallmadge Amendment, attacked the morality of slavery, suggesting laws protecting slavery went against the “law of God.” However, Old Republicans distrusted the motives of the Old Federalists who seemed to want to use the debate to revive their party. King and other former Federalists had long opposed the boost in representation the slave states received because of the “three-fifths” rule allowed them to count slaves toward their total population. Forcing Missourians to free their slaves would cut southern political power. Ultimately, the House opposed statehood for Missouri unless accompanied by the Tallmadge Amendment, while the Senate supported it. As the end of the congressional session approached in March, no decision had been made.
Led by Speaker of the House Henry Clay, nationally-minded leaders hoping to avoid disunion worked toward an agreement as the new Congress gathered in December. The resulting Missouri Compromise (Compromise of 1820) brought Missouri in as a slave state and Maine in as a free state, since Maine had petitioned for independent statehood shortly after Missouri. To soothe northern concerns about the expansion of slavery, the compromise also included the Thomas Proviso (named for Jesse Thomas of Illinois) that banned slavery north of the southern boundary of Missouri, the 36°30’ line, for the rest of the land within the Louisiana Purchase.
Both sides believed they managed to divert a major crisis. Southerners, however, thought they had won a major victory with the Missouri Compromise. Although the vast northern regions of the Louisiana Purchase would bar slavery, most people assumed no one would settle in the “Great American Desert.” From his home in Virginia, however, Thomas Jefferson worried about the compromise. In a letter to John Holmes, the former president predicted the growing divisions on the question of slavery might be “the knell of the Union” because “the angry passions of men, will never be obliterated; and every new irritation will mark it deeper and deeper.”
The Corrupt Bargain
By James Monroe’s second term, divisions about economic development and the expansion of slavery were setting the stage for the presidential election of 1824. Meanwhile, Martin Van Buren, an upstate New York lawyer and politician, took a seat in the United States Senate in 1821. As a senator, he hoped to develop a strong political party to promote a limited government. In an age where more white men gained the right to vote because many states abandoned property qualifications for voting, he quickly realized the role public opinion played in the political system. While the nation’s founders seemed to think political parties served no lasting purpose, Van Buren saw them as a necessary function of government and as a means to draw power away from privileged insiders. Seeking out other likeminded politicians, he began to dwell on how to use the election in 1824 to build a solid political organization committed to Jeffersonian principles such as a strict construction.
Most people expected James Monroe would support John Quincy Adams, his secretary of state and son of a former president, for president in 1824. However, Monroe said nothing about his choice of a successor, which left Van Buren control over the Congressional Caucus and the party’s nominee. At Van Buren’s behest, the National Republicans nominated William H. Crawford, the secretary of treasury from Georgia, known for his support of states’ rights. To Van Buren, Crawford’s southern roots could help build a regionally balanced political party. Fearing their constituents more than Van Buren, many Republicans failed to show up for the caucus vote. Therefore, more candidates entered the race, including John Quincy Adams, Henry Clay, and Andrew Jackson. Each candidate appealed to voters in their home region, but it seemed unclear if any could develop nationwide support. John C. Calhoun also considered running, but he opted to be the only nominee for vice president.
In many ways, the election of 1824 was the battle of the favorite son candidates. Adams polled well in New England, Crawford and Jackson split the South, and Clay and Jackson split the West. Jackson led in the popular (42 percent) and Electoral College (38 percent) votes, but he did not have the needed majority in the Electoral College. Per the Constitution, the House of Representatives would choose from the top three candidates— Jackson, Adams, and Crawford. Jackson assumed the House would choose him; he did not expect that Clay, the Speaker of the House, would actively work to deny him the presidency. Clay did not think Jackson had the necessary qualifications to be president. On the other hand, Adams and Clay shared many of the same principles on the government’s role in economic development. In the end, Adams won thirteen states to Jackson’s seven.
Just days after the voting in the House, Adams announced Clay was to serve as his secretary of state. What seemed normal politics to Adams and Clay seemed to the defeated Jackson a sure sign the two men had conspired to steal the presidency. Not one to be slighted easily, Jackson frequently complained about the “corrupt bargain.” While little evidence surfaced to suggest Clay had in fact made a blatant deal with Adams by giving his support in the House vote for a position in the cabinet, the prevailing rumors made it quite difficult for Adams to govern effectively. Once in office, Adams set out to complete the National Republic agenda, which only confirmed the opposition’s suspicions.
In his first message to Congress, the new president outlined a grandiose plan for national development, including support for roads, canals, a national university, and a national astronomical observatory, among others. He also suggested Congress support such programs for the “common good” regardless of what their constituents thought best.19 Most members of Congress found Adams slightly audacious for even making the proposal, as it seemed contrary to what the people wanted. In the recent election, more voters chose Jackson and Crawford with their calls for a smaller government than Adams or Clay with their calls for a larger government. Adams lacked the political skill to implement much of his program. As a result, Congress never acted on any of his proposals.
12.2.3 Before You Move On...
After the War of 1812, patriotic feelings ran high in the United States, leading to the emergence of the Era of Good Feelings. During this time of one-party rule, American leaders worked to promote a stronger, self-sufficient United States. Congress chartered the Second Bank of the United States and approved a protective tariff. The bank created a more stable currency system by checking the money and credit supply. The tariff protected American factories from foreign competition, raised additional revenue for the government, and theoretically made the nation less dependent on foreign trade. The Supreme Court issued a series of decisions designed to enhance the power of the federal government and support economic development. These decisions, Dartmouth College v. Woodward, McCulloch v. Maryland, and Gibbons v. Ogden, supported a broad interpretation of the federal government’s role in relation to the states and to economic development. Finally, James Monroe and John Quincy Adams developed foreign policy that protected American rights in the Western Hemisphere, especially with the Monroe Doctrine. Although political divisions faded from view, the president could not eliminate differences of opinion about the role of government. The Panic of 1819, the Missouri Compromise, and the “corrupt bargain” all suggested that a new era of partisan politics would soon emerge because economic, social, and political concerns continued to divide the American people. The expansion of democratic sentiment helped bring Andrew Jackson to the forefront of those developments.
Which of the following did not represent the government’s nationalist tendencies in the Era of Good Feelings?
a. Second Bank of the United States
b. Tallmadge Amendment
c. Tariff of 1816
d. Gibbons v. Ogden
The Panic of 1819 increased the American people’s faith in the Second Bank of the United States.
As a result of the “corrupt bargain,”
a. Henry Clay’s plans for economic development were defeated.
b. John Quincy Adams became president.
c. the protective tariff rate increased.
d. Congress approved the Monroe Doctrine.