The United States Economic System: The American System

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The American System transpired after the War of 1812. The need to protect the United States economy against outside influence and control became evident. A group of politicians, led by Henry Clay and John Calhoun developed an economic plan that believed that the federal government should encourage economic enterprise. The center of this new plan wanted to keep American products in the United States. The American System fell under the Market Revolution, where economic and social changes took place between the years 1812 - 1868 (Schultz, n.d.). They felt the federal government should encourage internal enterprise by creating internal improvements, establish secure economic institutions, and high tariffs. Internal improvements consisted of creating new ways to move goods…show more content…
It ran from New York City to Buffalo. The cost of moving one ton of goods reduced from nineteen cents per mile to slightly over one cent per mile and took only six days compared to twenty-six days. This proved to be a massive economic success! The South did not detect the need to invest in transportation improvements they stuck with steamboats and the comforts of plantation living. Next came railroads to further expand the reach of transportation. Railroads did not rely on water, did not freeze, and were faster than mules, giving them an edge over the other modes of travel. The second way the federal government encouraged economic enterprise, was through secure economic institutions, like banks. These banks created financing on a bigger scale and helped stabilize a national currency. These banks were later destroyed by Andrew Jackson. Protective tariffs were created to keep American goods in America and limit the buying of foreign products. All incoming goods were taxed at 25%. The American System was the first of many government sponsored programs that aided in the prosperity of American industry. Although it did not unify all areas of the U.S. it attempted to help create a unified national
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