210 Chapter 7 National Growing Pains
Congress doubled all tariffs. In 1816, when the rev-
enue was no longer needed, a new act kept duties close
to wartime levels. Infant industries that had grown up
during the years of embargo, non-intercourse, and
war were able to exert considerable pressure. The act
especially favored textiles because the British were
dumping cloth in America at bargain prices in their
attempt to regain lost markets. Unemployed workers
and many farmers became convinced that prosperity
would return only if American industry were shielded
against foreign competition.
At first every section endorsed high duties, but
with the passage of time the South rejected protection
almost completely. Besides increasing the cost of nearly
everything they bought, Southerners exported most of
their cotton and tobacco and high duties on imports
would limit the foreign market for southern staples by
inhibiting international exchange. As this fact became
clear, the West tended to divide on the tariff question:
The Northwest and much of Kentucky, which had a
special interest in protecting its considerable hemp
production, favored high duties; the Southwest, where
cotton was the major crop, favored low duties.
National banking policy was another important
political issue affected by the war and the depression.
Presidents Jefferson and Madison had managed to
live with the Bank of the United States despite its
dubious constitutionality, but its charter was not
renewed when it expired in 1811. Aside from the
constitutional question, the major opposition to
recharter came from state banks eager to take over
the business of the Bank for themselves. The fact that
English investors owned most of the Bank’s stock was
also used as an argument against recharter.
Many more state banks were created after 1811,
and most extended credit recklessly. When the British
raid on Washington and Baltimore in 1814 sent pan-
icky depositors scurrying to convert their deposits
into gold or silver, the overextended financiers could
not oblige them. All banks outside New England sus-
pended specie payments; that is, they stopped
exchanging their bank notes for hard money on
demand. Paper money immediately fell in value; a
paper dollar was soon worth only eighty-five cents in
coin in Philadelphia, less in Baltimore. Government
business also suffered from the absence of a nationalTable 7.1 Key Sectional IssuesIssue West South North
Favorite leaders Henry Clay (Kentucky) John Calhoun (South
Carolina), William Crawford
(Georgia), Andrew Jackson
( Tennessee)John Quincy Adams
(Massachusetts), Daniel
Webster (Massachusetts),
Martin Van Buren (New York)
Should import taxes (tariffs)
be high?Yes and no, depending on
the regionNo, because high tariffs
increased the cost of manu-
factured goods and harmed
export trade (cotton, tobacco)Yes, because manufacturers
and factory workers wanted
protection from inexpensive
foreign-made products; the
exception: New England,
because high tariffs
harmed trade
Should federal government
support construction of
roads and canals?Yes, to reduce transportation
costs of products from west-
ern farmsNo, because this would require
more federal revenue—and
thus an increase in the tariffYes and no, depending on the
localityShould federally owned
lands be sold as cheaply
as possible?Yes, because pioneers and
farmers needed cheap land.No, because income from land
sales would reduce the need
for tariffs to raise money; and
the products of cheap west-
ern farms would compete
with southern farms.No, because cheap land in the
west would drain off surplus
labor and increase labor costs
in the EastShould slavery be allowed in
the new states being cre-
ated in the West?Yes and no, but generally yes
because much of the West was
economically tied to the South,
which supported slaveryYes, because slaveowners
were moving into western
regions and were entitled to
keep their “property”No, because new “slave
states” would give the South
more power in the Senate
and because free labor could
not fairly compete with a
slave system
The shaded boxes indicate the critical issue for each region.