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Henry Clay and the American System

Henry Clay and the American System

Maurice G. Baxter
Copyright Date: 1995
Edition: 1
Pages: 276
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  • Book Info
    Henry Clay and the American System
    Book Description:

    This detailed study of Henry Clay and the American System -- a program of vigorous economic nationalism dependent on active government and constitutional aspects of what was perhaps Clay's greatest contribution to national policy, a contribution that has received surprisingly little study until now.

    During the first half of the nineteenth century the new United States experienced rapid material growth, transforming a largely agrarian, pre-modern economy into a diversified, industrializing one. As Speaker of the House in the years following the War of 1812, and later as founder of the Whig party, Clay argued strongly for the development of a home market for domestic goods so that Americans would not be dependent on foreign imports. This "American System" was originally little more than a protective tariff on foreign goods, but it soon came to encompass a collection of policies that included a national banking system and distribution of federal funds to improve transportation. Baxter reveals the inner workings of Clay's program and offers the first careful analysis of its successes and failures.

    This lively and incisive account will appeal to anyone interested in American history and the processes that shaped modern America

    eISBN: 978-0-8131-4859-5
    Subjects: History, Political Science

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-ix)
  4. 1 Jeffersonian Nationalist
    (pp. 1-15)

    At the beginning of the nineteenth century the new western state of Kentucky offered splendid opportunities to an ambitious young lawyer in the fast-growing town of Lexington. Near the house of Henry Clay at Mill and Second Streets were signs of a go-ahead community: shops of weavers, tailors, blacksmiths, and saddlers, as well as establishments of distillers and hemp manufacturers. A flourishing trade with the East, the South, and foreign countries passed through the great Ohio-Mississippi River system. The basic industry of agriculture, especially in this fertile bluegrass region, was thriving too. Here, as in other frontier areas, interest in...

  5. 2 The American System
    (pp. 16-33)

    The decade after the Treasty of Ghent, from 1815 to the middle twenties, was a time of emerging economic trends. The end of the European war, in which the United States had long been entangled, diplomatically and then militarily, meant that the nation could now direct more attention to domestic affairs. Westward migration into the Ohio and Mississippi Valleys populated several new states from the Great Lakes to the Gulf of Mexico. The South strengthened its plantation system and its institution of slavery to produce an ever larger output of cotton. And the Northeast was industrializing and urbanizing at a...

  6. 3 Postwar Issues
    (pp. 34-54)

    Other developmental policies besides the tariff attracted political attention during these postwar years. Congress passed measures on banking, internal improvements, and other subjects, reflecting an expansive, optimistic nationalism. Counterforces of states-rights sectionalism opposed them and indeed overtook the nationalist trend by 1825.

    An important reason for the narrower outlook must have been the impact of a depression, first felt as a financial panic in 1819 and persisting for several years. The basic industry of the country, agriculture, had expanded rapidly after the war in both the North and the South; but European markets could not or would not absorb a...

  7. 4 Secretary of State
    (pp. 55-66)

    The controversial election of 1824 did not meaningfully register popular will about economic issues, whose resolution Clay had thought would be so decisive. The collapse of the two-party system had led to sectional and factional support for several candidates and blurred, even more than usual, their positions on future policy. Then, with no candidate achieving a majority vote in the Electoral College, the decision went to the House. Here maneuvering to align a majority of state delegations pushed principles still further into the background. Clay himself missed obtaining enough electoral votes to be one of three (Jackson, Adams, and Crawford),...

  8. 5 Nullification
    (pp. 67-86)

    Early in his administration Jackson remained cautious about the tariff. Quite aware of political hazards, he preferred not to tamper with rates. If revenue produced a surplus, he suggested distributing it to the states after retiring the national debt, which seemed about to occur. It would be desirable, he said, to authorize distribution with a constitutional amendment. But he emphasized his firm belief that Congress did have full power to enact a protective tariff. In any case, he ventured his opinion that the existing tariff of 1828 had not had as much effect, either good or bad, as extremists asserted....

  9. 6 The Bank War
    (pp. 87-107)

    Concurrently with a protective tariff, the issue of a national bank moved to the political foreground. Though the charter of the Bank of the United States would not expire until 1836, the question of congressional renewal was assuming importance as early as 1829, Jackson’s first year in office. His annual message then had convinced Clay that the administration seriously threatened the bank. Its constitutionality and expediency were questionable, the president declared, and “it had failed in the great end of establishing a uniform and sound currency.” This signaled the beginning of a so-called Bank War, an enormous controversy about financial...

  10. 7 Internal Improvements
    (pp. 108-120)

    During John Quincy Adams’s presidency (1825-29) and that of his successor Jackson, the question of internal improvements continued to generate lively discussion, some of it ending in important legislative action. As secretary of state, senator, and party leader, Clay attempted to advance programs developing transportation, which he viewed as an integral part of his American System. If a protective tariff was essential to industrialization and if a central bank was essential to economic growth, he believed a positive policy must also include an active role of the national government in promoting a network of roads and waterways unifying the young...

  11. 8 Jacksonian Ascendancy
    (pp. 121-130)

    Despite Jacksonian opposition to many proposals for federal internal improvements, Clay did not wholly abandon his effort. Although stung by the Maysville Road veto, the senator sponsored or supported other measures during the middle thirties.

    Completion of the National Road was a recurrent issue. In February 1835 the Senate took up a bill for repairing and extending the road before turning it over to western states. He helped passage but believed that the national interest in this artery of transportation surpassed any state interest. And he continued to disagree with Monroe’s veto of 1822 as constitutional precedent prohibiting national administration...

  12. 9 Financial Problems
    (pp. 131-147)

    When Jackson handed the presidency over to his valued friend and chief lieutenant Martin Van Buren in March 1837, he could not have been more pleased. This New Yorker, principal architect of the Democratic party, prototype of a seasoned politician, experienced in high-level offices, and fully committed to Jeffersonian ideology, seemed certain to continue the policies of his popular predecessor. Yet almost as soon as he had been inaugurated, his misfortunes began, not to end during his four years in the White House. A financial panic, followed by a protracted depression, afflicted the country and beclouded his unhappy term.


  13. 10 Log Cabin
    (pp. 148-158)

    Late in 1839 politicians were thinking seriously about the next presidential election, then only a year away. As a key figure in the coming contest, sure of Democratic renomination, Van Buren still had every reason to worry about the outcome. From the very beginning of his term, he had encountered endless problems, most of them rising out of the troubled economy. The financial panic, spreading across the land soon after his inauguration, had eased in the following year but then had led into a nasty depression. Despite his commitment to states’ rights, the chief executive had alienated even fellow Democratic...

  14. 11 Veto
    (pp. 159-171)

    When Congress assembled for a critical special session on May 31, 1841, Clay was the most visible figure in the Senate chamber, probably in all of Washington not excepting the “accidental” president, John Tyler. He had a modest majority of followers in both houses and a key position as chairman of both the Finance Committee and a select committee to handle banking and currency affairs. Typically, he had prepared a series of resolutions as a legislative agenda and presented them within a week. Heading his list was abolition of the Independent Treasury, an item of old business he had not...

  15. 12 Limited Success
    (pp. 172-185)

    After returning to Lexington in fall 1841, Clay spent many an hour reviewing the disturbing course politics had taken. What had caused a reversal when at last his party had gained an opportunity to launch its economic program? And even though an unforeseen change in the presidency had occurred, why could the Whigs not have prevailed in the deplorable confrontation of two branches of government? He concluded that the principal problem was Tyler’s faulty and stubborn position on the fundamental power to relieve the nation from its desperate condition by essential legislation. Always the senator came back to the belief...

  16. 13 Disappointments
    (pp. 186-197)

    Soon after Congress ended its long, acrimonious session in late August 1842, attention shifted to the coming fall elections, which would be influenced by the disrupted relations between legislative and executive branches of government in Washington. As the acknowleged front runner for the Whig presidential nomination, Clay was unusually active in a day when there was a lingering belief that a candidate for the high office ought to avoid open electioneering. In addition to an extensive correspondence and statements appearing in the press, his widely reported speeches through the next several months addressed leading issues, most of them economic.


  17. 14 Retrospect
    (pp. 199-210)

    In an overview of Clay’s political career, a theme that stands out is his economic nationalism, his advocacy of governmental encouragement of growth in all sectors of the economy. He sought a balance of agriculture, commerce, and manufacturing so that the United States would have a home market, not largely dependent upon imports from abroad. The country must industrialize to supply manufactured goods, he believed, while agriculture provided food and raw materials. Improved transportation and financial institutions rounded out an economic program, known as the American System.

    An important influence upon his thinking was his own experience as a young...

  18. Appendix
    (pp. 211-212)
  19. Notes
    (pp. 213-246)
  20. Index
    (pp. 247-261)