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- Formation of the Union - 40/46 -

HISTORICAL MAPS.--Nos. 1 and 5, this volume, and No. 1, Wilson, _Division and Reunion_ (_Epoch Maps_ Nos. 7, 8, and 10); Labberton, _Atlas_, lxvii.; T. MacCoun, _Historical Geography, Scribner, Statistical Atlas_, Plate 14.

GENERAL ACCOUNTS.--H. Von Holst, _Constitutional History_, I. 273-408; R. Hildreth, _United States_. VI. 575-713 (to 1821); James Schouler, _United States_, II. 444-463, III. 1-335; Bryant and Gay, _Popular History_. IV. 244-281; J. B. McMaster, _People of the United States_, IV. (to 1820); Geo. Tucker, _United States_, III. 146-408; J. T. Morse, _John Quincy Adams_, 102-164; Ormsby, _Whig Party_, 129-172.

SPECIAL HISTORIES.--Henry Adams, _History of the United States_, IX.; Carl Schurz, _Henry Clay_, I. 137-202; N. P. Gilman, _James Monroe_, 125- 174; F. W. Taussig, _Tariff History_, J. L. Bishop, _American Manufactures_, II. 146-298; G. F. Tucker, _Monroe Doctrine_, Payne, _European Colonies_, E. Stanwood, _Presidential Elections_, H. L. Carson, _Supreme Court_, I. chs. xii.-xiv.; A C. McLaughlin, _Cass_, chs. ii., iv.

CONTEMPORARY ACCOUNTS.--J. Q. Adams, _Memoirs_, IV.-VI.; Josiah Quincy, _Figures of the Past_, _Niles Register_, T. H. Benton, _Thirty Years' View_, I. 1-44; Nathan Sargent, _Public Men, and Events_, I. 17-56; R. Rush, _Residence at the Court of London_, J. Flint, _Recollections of the last Ten Years_ (1826); R. Walsh, _Appeal from the Judgment of Great Britain_ (1819); D. Warden, _Statistical, Political, and Historical Account of the United States_ (1819); S. G. Goodrich, Recollections, II. 393-436; _The National Intelligencer_; Featon, _Sketches of America_, _Fifth Report_; works of Clay, Calhoun, Webster, Madison, Woodbury.-- Reprints in F. W. Taussig, _State Papers and Speeches on the Tariff_, _American History told by Contemporaries_, III.


[Sidenote: Prosperity.]

The population of the United States at the end of the war was about eight million five hundred thousand, and it was increasing relatively faster in the South and West than near the seaboard. The return of peace seemed also a return of prosperity. Short crops abroad revived the demand for American cereals, so that the surplus accumulated during the war could be sold at fair prices, and the exports in 1816 ran up to $64,000,000. In 1815, American shipping recovered almost to the point which it had reached in 1810. The revenue derived from taxation in 1814 was but $11,000,000; in 1816 it was $47,000,000. More than twenty thousand immigrants arrived in 1817. Wealth seemed increasing both in the North and the South.

[Sidenote: National literature.] [Sidenote: The Clergy.]

Another evidence of the quickening of national life was the beginning of a new national literature. In 1815 was founded the "North American Review," and in an early number appeared Bryant's "Thanatopsis." Already in 1809 had appeared the first work of an American which was comparable with that of the British essayists,--Washington Irving's "Knickerbocker" History of New York. His quaint humor was not less appreciated from his good-natured allusions to the Jeffersonian principle of government "by proclamation." The hold of the clergy had been much weakened in New England; there had been a division of the Congregational Church, with the subsequent founding of the Unitarian branch; and the Jeffersonian principle of popular government was gaining ground. The people were keen and alert.

[Sidenote: Means of transportation.] [Sidenote: Steamboats.]

In two respects the war had taught the Americans their own weakness: they had had poor facilities for transportation, and they had lacked manufactures of military material. There was a widespread feeling that the means of intercommunication ought to be improved. The troops on the northern frontier had been badly provisioned and slowly reinforced because they could not readily be reached over the poor roads. A system had been invented which was suitable for the rapid-running rivers of the interior and for lake navigation: in 1807 Fulton made the first voyage by steam on the Hudson River. Nine years later a system of passenger service had been developed in various directions from New York, and a steamer was running on the Mississippi.

[Sidenote: Rise of manufactures.] [Sidenote: Foreign competition.]

Manufactures had sprung up suddenly and unexpectedly in the United States. The restrictive legislation from 1806 to 1812, though it had not cut off foreign imports, had checked them; and shrewd ship-owners had in some cases diverted their accumulated capital to the building of factories. In 1812 commerce with England was totally cut off, and importations from other countries were loaded down with double duties. This indirect protection was enough to cause the rise of many manufactures, particularly of cotton and woollen goods. In 1815, the capital invested in these two branches of industry was probably $50,000,000. On the conclusion of peace in England and America an accumulated stock of English goods poured forth, and the imports of the United States instantly rose from $12,000.000 in 1814, to $106,000,000 in 1815. These importations were out of proportion to the exports and to the needs of the country, and they caused the stoppage of a large number of American factories. Meanwhile, American ships had begun to feel the competition of foreign vessels in foreign trade. Without intending it, the country had drifted into a new set of economic conditions.


[Sidenote: Banks and currency.]

The first evidence of this change of feeling was a demand for the renewal of the bank which had been allowed to expire in 1811 ( 110). The country had been thrown entirely upon banks chartered by the States; the pressure of the war had caused their suspension, and the currency and banking capital of the United States had thus been thrown into complete confusion. For example, the Farmers Exchange Bank of Gloucester, R. I., was started, with a capital of $3,000; accumulated deposits so that one of the directors was able to steal $760,000; and then it failed, with specie assets of $86.46. In 1811 there were eighty-eight State banks; in 1816 there were two hundred and forty-six.

[Sidenote: Bank bill of 1814.] [Sidenote: The Bank Act.]

Since the re-charter bill of 1811 had failed by only one vote, Dallas, Secretary of the Treasury in 1814, again proposed a national bank. Congress accepted the principle, but an amendment proposed by John C. Calhoun so altered the scheme that upon Dallas's advice Madison cast his first important veto against it on Jan. 30, 1815. What Dallas desired was a bank which would lend money to the government; what Congress planned was a bank which would furnish a currency based on specie. In the next session of Congress Madison himself urged the creation of a bank, and this time Calhoun supported him. The Federalists, headed by Daniel Webster,-- remnants of the party which had established the first national bank,-- voted against it on the general principle of factious opposition. A small minority of the Republicans joined them, but it was passed without much difficulty, and became a law on April, 10, 1816.

[Sidenote: Bank charter.]

The bank was modelled on its predecessor ( 78), but the capital was increased from $10,000,000 to $35,000,000, of which the United States government held $7,000,000. It was especially provided that "the deposits of the money of the United States shall be made in said bank or branches thereof." In return for its special privileges the bank agreed to pay to the government $1,500,000. The capital was larger than could safely be employed; it was probably intended to absorb bank capital from the State banks. The prosperity of the country, aided by the operations of the bank, secured the renewal of specie payments by all the sound banks in the country on Feb. 20, 1817.

[Sidenote: Loose construction accepted.]

The striking feature in the bank was not that it should be established, but that it should be accepted by old Republicans like Madison, who had found the charter of a bank in 1791 a gross perversion of the Constitution. Even Henry Clay, who in 1811 had powerfully contributed to the defeat of the bank, now came forward as its champion.


[Sidenote: Local improvements.] [Sidenote: Cumberland road.] [Sidenote: Gallatin's scheme.]

Side by side with the bank bill went a proposition for an entirely new application of the government funds. Up to this time internal improvements--roads, canals and river and harbor improvements--had been made by the States, so far as they were made at all. Virginia and Maryland had spent considerable sums in an attempt to make the Potomac navigable, and a few canals had been constructed by private capital, sometimes aided by State credit. In 1806 the United States began the Cumberland Road, its first work of the kind; but it was intended to open up the public lands in Ohio and the country west, and was nominally paid for out of the proceeds of those public lands. Just as the embargo policy was taking effect, Gallatin, encouraged by the accumulation of a surplus in the Treasury, brought in a report, April 4, 1808, suggesting the construction of a great system of internal improvements: it was to include coastwise canals across the isthmuses of Cape Cod, New Jersey, upper Delaware and eastern North Carolina; roads were to be constructed from Maine to Georgia, and thence to New Orleans, and from Washington westward to Detroit and St. Louis. He estimated the cost at twenty millions, to be provided in ten annual instalments. Jefferson himself was so carried away with this prospect of public improvement that he recommended a constitutional amendment to authorize such expenditures. The whole scheme disappeared when the surplus vanished; but from year to year small appropriations were made for the Cumberland road, so that up to 1812 more than $200,000 had been expended upon it.

[Sidenote: Calhoun's Bonus Bill.] [Sidenote: Madison's veto.]

The passage of the bank bill in 1816 was to give the United States a million and a half of dollars (Section 120). Calhoun, therefore, came forward, Dec. 23, 1816 with a bill proposing that this sum be employed as a fund "for constructing roads and canals and improving the navigation of watercourses." "We are" said he, "a rapidly--I was about to say a fearfully--growing country.... This is our pride and danger, our weakness and our strength." The constitutional question he settled with a phrase: "If we are restricted in the use of our money to the enumerated powers, on what principle can the purchase of Louisiana be justified?" The bill passed the House by eighty-six to eighty-four; it was strongly supported by New York members, because it was expected that the general government

Formation of the Union - 40/46

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