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How Did Henry Clay Shaped The American Economy

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The Development of the American Economy
Before Henry Clay’s American system, America has been importing goods from outside of the country and only buying goods within their region. Clay’s American system helped America limit buying consumer products from foreign countries and increased the sales of local producers. The post-Civil westward expansion plays an important role in expanding farmlands for agriculture. Large quantities of food supply were available and railroads were used to transport these foods because it was fast, efficient and inexpensive. Henry Clay’s American system and the post-Civil War westward expansion, and the significance of railroads all helped shaped the transition of America’s economy from regional to national economy. …show more content…

A strong emphasis was put on the need for the federal government to play a strong role in the economy. The federal government would sponsor this system by unifying the nation's agriculture, commerce and industry (Classic Senate Speeches, 2017). The American system is composed of three reinforcing parts. One was a tariff that would protect and promote American industry as well as generate revenue for the federal government. They did this by taxing all goods that were purchased outside of the United States, this was to increase the sales of local producers. This strategy helps limit the amount of money being spent on foreign goods which help keep money within United States. Money will be used and spent within America. The second one was a national bank that would foster commerce to stabilize the currency in local banks. Currency will be stable and not fluctuate, and all states would have the same rate of a dollar. This was the Bank of the United States. The bank of United States offered easy credit to Americans. The third one was internal improvements for roads, canals and other subsidies (Classic Senate Speeches, 2017). This would be subsidized by tariffs and sales of public lands. The improvements will bring the nation together as well as generate federal revenue. The roads and canals will help agriculture travel from one place to another. States will be trading goods with one another instead of importing foreign goods which brings money out of the

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Despite the financial troubles, most American’s still believed that American needed to commercially advance. Watson explained that Henry Clay’s American System, which was the Whig’s main platform, comprised of three main parts: economical protection via tariffs, transportation infrastructure and a banking and credit system that encourages the use of paper money. Clay believed that with the implementation of his economic system, citizens’ independence and individual prosperity would be improved. He believed that the improvement is a key idea in the republicanism ideology. On the other hand, Jackson preferred a simple agrarian society that had no place for a strong financial sector.

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In the late 1800s, the Transcontinental Railroad was constructed and that transformed the United States in many ways. This railroad helped expand the United States out to the west that could sew the country together and be connected in some sort of way. The Transcontinental Railroad impacted the United States economically by populating new areas for agriculture and mining, taxing railway shipping, and by importing and exporting. To start off with, a reason for an economic impact is the way the railroad helped populate new land that can open for mining, agriculture, and retail. Due to being able to mine, farm, and sell more helps the country expand in valuable resources found in the country, while also being able to sell food and clothes the

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The American System also created higher land taxes to get more money for the government infrastructure, this included construction of canals and roads which would be financed

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Additionally, due to the railroads being built all across America, new raw materials were able to be moved from city to city allowing for rapid industrial and manufacturing growth which America always was challenged of since its break from Britain. The industrial revolution following the Civil War also differed as agriculture began to become more valuable to a developing nation. For instance, whereas before farmers were isolated from one another and lived in separate homes, due to the reliance of the nation to use the profits derived from agriculture to get more money to buy manufacturing goods stimulating industry more farmers began to move to the cities changing their lives completely. Due to the decrease in the agricultural, scattered, and isolated communities in the Midwest, America was able to become a more compact economic, independent, and industrial powerhouse. For generations, America had relied on old-fashioned, traditional ways of creating

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The Democratic-Republican politicians came up with the American System, based on the financial ideas of Alexander Hamilton. Henry Clay and John Calhoun helped create a vision that the federal government should encourage economic enterprise (Schultz, 2103). This economic system was to help improve the economy and lives of Americans in the United Stated, create a new transportation system connecting America and taxing foreign goods (Alchin, 2017). The main factor in the American system was the creation of a national bank, known as the Second Bank of the United States.

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This resulted in the creation of national banks would be able to purchase bonds to be deposited into the treasury. One third of the money received was invested into US securities. Originally, there was not much regulation. The National Banking Act created basic changes in the banking system and how credit was distributed. A single capital market began to emerge and there was the creation of a uniform and stable currency.

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Goods were shipped faster and at lower cost, and more land opened up for cotton growers and other farmers. Moreover, another technological development that influenced the growth of the United States economy was the development of railroads. Railroads were “shrinking distances, dramatically lowering costs, opening new markets, and increasing competition” (Doc 9). Railroads were basically essential for keeping the economy in balance. They supplied cities and towns with food, fuel, building materials, and access to markets.

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Throughout American History, revolutions in transportation have affected the American society politically, socially and economically. Soon after the war of 1812, American nationalism increased which leads to a greater emphasis on national issues, the increase in power and prevalence of the national government and a growing sense of the American Identity. Railways, canals, and Turnpikes began to increase making many people employed. The era of 1830-1860 represents a shift from agrarianism to industrialism. Overall, during the transportation revolution, construction of turnpikes, roads, canals, and railroads led to the market economy expansion, an increased population in America and alternations of the physical landscape of America.

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