The Dynamics of Western Settlement and Eastern Capitalism 1790

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The Dynamics of Western Settlement and Eastern Capitalism 1790

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Title: The Dynamics of Western Settlement and Eastern Capitalism 1790

1
The Dynamics ofWestern Settlement andEastern
Capitalism17901820
2

Two powerful ideologies
Nationalism and
Sectionalism
Both grew tremendously during this period.
Lets look at the factors that helped to promote
these two ideologies, and try to understand the
impact of each on the nations history.
People frequently think that secessionist plans
originated among radical southern states rights
advocates. The earliest secession schemes began
in the Northeast and the West, we need to look
at their motives, and the reasons for their
failure.

I also want to examine the factors that fostered
the development of a capitalist economy in the
United States. Specifically the forces behind the
enactment of the Embargo Act of 1807. We need to
understand the economic hardships and
divisiveness it caused, and understand why it was
replaced by less stringent legislation. We need
to understand outwork, or putting-out, system
its origins and the effects it had on farm
families, agriculture, and the market economy.
Students often believe that after the Revolution,
Americans were united into a single homogeneous
people. The geographical expansion of the United
States from 1790 to 1820 needs to be understood,
especially the roles played by American
presidents, diplomats, military forces, and
foreign nations (including Native Americans) in
acquiring new territory. We need to examine the
power and influence of state and local
governments in the early nineteenth century, and
the numerous ways in which they sought to improve
the welfare of their citizens and to regulate
social life.

Students often believe that after the
Revolution, Americans were united into a single
homogeneous people.
The geographical expansion of the United States
from 1790 to 1820 needs to be understood,
especially the roles played by American
presidents
diplomats
military forces and
foreign nations (including Native Americans)
in acquiring new territory.
We need to examine the power and influence of
state and local governments in the early
nineteenth century, and the numerous ways in
which they attempted to improve the welfare of
their citizens and to regulate social life.

Thanks in part to purposeful political leadership
and innovative public policies, the young
American republic grew at an astounding pace
between 1790 and 1820.
First Census taken in 1790 -

The United States acquired immense new lands in
the West, particularly through Thomas Jeffersons
purchase of Louisiana from France, and settled
them quickly. By 1820, more than two million
white an black Americans were living west of the
Appalachians.

Native Americans, however, struggled with whites
for the preservation of their lands and culture.
National policy promoted farming in the West, and
state legislatures devised legal innovations and
financial incentives to stimulate economic growth
in the East.
The results of these twin initiatives were soon
apparent as per capita income in the United
States increased after 1800.

With the election of Thomas Jefferson in 1800,
Republicans began wresting political power from
northeastern merchants and creditors and
implementing policies to help yeomen farmers.
While retaining the Bank of the United States
and many Federalist officials, Jefferson
eliminated excise taxes, reduced the national
debt, cut the size of the army, and lowered the
price of land in the West.

9
Westward Expansion

Native American Resistance

Invoking the Treaty of Paris and viewing
Britains Indian allies as conquered peoples, the
U.S. government asserted its ownership of the
trans-Appalachian West
Native Americans rejected this claim and
pointed out that they had not signed the treaty
and had never been conquered.
In 1784, the United States used military threat
to force the pro-British Iroquois peoples to sign
the Treaty of Fort Stanwix and relinquish much of
their land in New York and Pennsylvania.
Farther to the west, the United States induced
Indian peoples to give up most of the future
state of Ohio.

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The Indians formed a Western Confederacy to
protect themselves against aggressive settlers
and forced a peace compromise in the Treaty of
Greenville in 1795.
In practice, this agreement eventually brought
the transfer of millions of acres of Indian land
to the U.S. government and sparked a wave of
American migration into the region, resulting in
new conflicts with native peoples over land and
hunting rights.
Most Native Americans resisted attempts to
assimilate them into white society and rejected
European farming practices.
American Indian policy from 1790 to 1820
included
- assimilation of Indians into American culture.
- acknowledging Indian ownership of western
lands.
- coercing and bribing Native Americans to cede
vast tracts of western lands to the Americans.

13
Migration and the Changing Farm Economy
Cumberland Gap was "the way West" until 1810
14

The migratory upsurge of white farmers and
planters brought financial rewards to many
settlers and transformed the American farm
economy.
Most migrants who flocked through the
Cumberland Gap were white tenant farmers and
yeomen families fleeing the depleted soils and
planter elite of the Chesapeake region.
Though poor migrants to Kentucky and Tennessee
believed they had a customary right to occupy
waste vacant lands, the Virginia government
allowed them to purchase up to 1,400 acres of
land at reduced prices but sold or granted
estates of 20,000 to 200,000 acres to wealthy
individuals and partnerships.
The end result was that New lands opened by
the Treaty of Paris were primarily controlled by
rich speculators.

A second stream of migrants, dominated by
slave-owning planters and their enslaved workers,
moved along the coastal plain of the Gulf of
Mexico into the future states of Alabama,
Mississippi, and Louisiana.
Cotton financed the rapid settlement of this
region as well as the expansion of slavery
into the Old Southwest as technological
breakthroughs increased the demand for raw wool
and cotton.
Seeking land for their children, a third stream
of migrants flowed out of the overcrowded
communities of New England into New York,
Indiana, and Ohio.

In New York, speculators snapped up much of the
best land and attracted tenants to work it by
offering farms rent-free for seven years, after
which they charged rents many New England yeomen
preferred the Holland Land Company, which allowed
settlers to buy the land as they worked it, but
high interest rates and the lack of markets
initially mired thousands of these freeholders in
debt.
Unable to compete against low-priced western
grains, eastern farmers changed their agriculture
methods rotating crops, diversifying
production, and planting year round which
helped increase their productivity and boosted
the entire American economy.

17
The Transportation Bottleneck
18

Improved inland trade became a high priority for
the new state governments to overcome geographic
impediments to getting goods to market.
States chartered corporations to dredge rivers
and build turnpikes and canals. One of the
early successes in solving transportation
problems in the United States was the
construction of the Lancaster Turnpike in 1794 in
Pennsylvania.
Only after 1819, when the Erie Canal linked
central and western New York to the Hudson River,
could inland farmers easily sell their goods in
eastern markets.
Improvement in roads and the construction of
canals decreased the cost of transportation in
the East, but these conveniences did not reach
western farmers across the Appalachian Mountains.
States such as Ohio and Kentucky relied on the
transport of goods via the Mississippi River
south to New Orleans.

Western settlers paid premium prices for land
along navigable rivers, and farmers and merchants
built barges to float goods to the port of New
Orleans.
Many isolated western settlers had no choice but
to be self-sufficient self-sufficiency meant a
low standard of living.
Settlers continued to migrate westward,
confident that the canal and road system would
yield future security.

20
The Republicans Political Revolution

The Jeffersonian Presidency

Thomas Jefferson was the first chief executive
to hold office in the District of Columbia, the
new national capitol.
Before John Adams left office, the Federalist
controlled Congress had passed the Judiciary Act,
which created sixteen new judgeships and six new
circuit courts. Just before leaving office,
Adams filled the judgeships and courts with
midnight appointments.

James Madisons refusal to deliver the
commission appointing William Marbury, one of
Adamss midnight appointees, as a justice of the
peace in the District of Columbia caused Marbury
to petition the Supreme Court to compel delivery
under the terms of the Judiciary Act of 1789.
In Marbury v. Madison, Chief Justice John
Marshall asserted the Courts power of judicial
review.

Despite this setback, Jefferson mobilized
Republicans to shrink back the national
governments size and power they believed was
grossly over expanded through Federalist
policies.
Republicans refused to reenact the Alien and
Sedition Acts when they expired, amended the
Naturalization Act to permit resident aliens to
become citizens after five years, and secured
repeal of the Judiciary Act, thereby ousting
forty of Adamss midnight appointees, though
Jefferson allowed competent Federalist
bureaucrats to retain their jobs.

In foreign affairs, Jefferson met the crisis of
the Barbary pirates by initially refusing to
pay an annual bribe (tribute) to protect
American vessels in the Mediterranean, but, to
avoid war, negotiated a diplomatic settlement
that reduced the tribute payment.
In domestic matters, Jefferson set a clearly
Republican course he abolished internal taxes
reduced the size of the army and tolerated the
Bank of the United States.
With Thomas Jefferson and Albert Gallatin at
the helm, the national debt was reduced and the
nation was no longer run in the interests of
northeastern creditors and merchants.

Jefferson's Republican revolution cut back
the size and scope of the federal government,
decreased the national debt, and opened up the
West. There were no work projects instituted for
the disadvantaged. Although Jefferson did away
with many Federalists policies, he removed only
about one-fourth of the Federalist officeholders
held over from the previous administration.
In foreign policy, Jefferson tried to enforce a
neutral position against Britain and France, but
he allowed the Alien and Sedition Acts to expire
and decreased the term required for
naturalization to five years.

26
Westward Expansion

The issues of westward expansion, foreign policy,
and slavery caused deep political divisions
between geographical
regions. Indian uprisings and expansionist
demands by western
Republicans led President James Madison into the
War of 1812
against Britain.
The war split the nation, prompting a
secessionist
Movement in New England, but a negotiated peace
ended the
military stalemate, and Andrew Jacksons victory
at New
Orleans preserved American honor. The diplomacy
of
John Quincy Adams led to the acquisition of
Florida
and the settlement of boundaries with British
Canada
and Spanish Texas.

27
Jefferson and the West

As president, Jefferson seized the opportunity
to increase the flow of settlers to the West
Republicans passed laws reducing the minimum
acreage available for purchase.
In 1801, Napoleon Bonaparte coerced Spain into
returning Louisiana to France then he directed
Spanish officials to restrict American access to
New Orleans.

To avoid hostilities with France, Jefferson
instructed Robert R. Livingston, an American
minister in Paris, to negotiate the purchase of
New Orleans simultaneously, he also sent James
Monroe to Britain to seek its assistance in case
of war with France.
In April 1803, Bonaparte, Livingston, and James
Monroe concluded what came to be known as the
Louisiana Purchase for 15 million dollars (450
million in todays dollars).

Since it did not provide for adding new
territory, Jefferson pragmatically accepted a
loose interpretation of the Constitution.

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The acquisition of approximately 827,000 square
miles would double the size of the United
States. The Senate ratified the treaty Oct. 20 by
a vote of 24 to 7. Spain, upset by the sale but
without the military power to block it, formally
returned Louisiana to France on Nov. 30. France
officially transferred the territory to the
Americans on Dec. 20, and the United States took
formal possession on Dec. 30.
34

"This little event, of France's possessing
herself of Louisiana is the embryo of a tornado
which will burst on the countries on both sides
of the Atlantic and involve in it's effects their
highest destinies."
Jefferson's prediction of a "tornado" that would
burst upon the countries on both sides of the
Atlantic had been averted, but his belief that
the affair of Louisiana would impact upon "their
highest destinies" proved prophetic indeed.

In 1804, Jefferson sent Meriwether Lewis and
William Clark on an expedition they returned two
years later with maps of the new territory (and
regions beyond).
Fearing that western expansion would diminish
their power, New England Federalists talked
openly of leaving the Union.
Refusing to support the secessionists,
Alexander Hamilton accused their chosen leader,
Aaron Burr, of participating in a conspiracy to
destroy the Union, and Burr shot Hamilton to
death in a duel.

As evidenced by Burrs probable plan to either
capture territory in New Spain or to foment a
rebellion to establish Louisiana as a separate
nation headed by himself, the Republicans policy
of western expansion increased party conflict and
generated secessionist schemes in both New
England and the West.

37
Conflict with Britain and France

As the Napoleonic Wars ravaged Europe, Great
Britain and France refused to respect the
neutrality of American merchant vessels.
Napoleon imposed the Continental System,
which required customs officials to seize neutral
American ships that had stopped in Britain.
The British naval blockade stopped American
ships carrying goods to Europe and also searched
them for British deserters, who were then
impressed (forced) back into service in the Royal
Navy.

Americans were outraged in 1807 when a British
warship attacked the Chesapeake, killing or
wounding twenty-one men and seizing four.
Jefferson devised the Embargo Act of 1807, which
prohibited American ships from leaving their home
ports until Britain and France repealed
restrictions on U.S. trade.
The act caused American exports to plunge,
prompting Federalists to demand its repeal.
The Embargo was an imaginative but naive
policy that hurt Americans more than anyone else.

Despite discontent over the embargo, voters
elected Republican James Madison to the
presidency in 1808. As president, James Madison
replaced the embargo with new economic
restrictions, none of which persuaded Britain and
France to respect Americas neutrality rights.
Republican congressmen from the West thought
Britain was the major offender as evidenced by
its assistance to the Indians in the Ohio River
Valley.
Republican expansionists in Congress condemned
British support of Tecumseh and his brother
Tenskwatawa, who had revived the Western
Confederacy, and threatened to invade Canada in
retaliation.

In 1811, following a series of clashes between
settlers and the Western Confederacy, William
Henry Harrison, the governor of the Indian
Territory, led an army against Tenskwatawas
village of Prophetstown, fended off the
confederacys warriors at the Battle of
Tippecanoe, and burned the village to the ground.
Henry Clay and John C. Calhoun, hoping to gain
new territory and discredit the Federalists,
pushed Madison toward war with Britain.

With elections approaching Madison demanded
British respect for American sovereignty in the
West and neutral rights on the Atlantic
When the British did not respond quickly,
Madison asked Congress for a declaration of war.
In June 1812, a sharply divided Senate voted 19
to 13 for war, and the House of Representatives
concurred, 79 to 49.

42
The War of 1812
43

Pressure for war with Britain primarily came
from western Republicans who saw British support
for the Indians as a threat to American
expansion.
The War of 1812 was a near disaster for the
United States, both militarily and politically.
Political divisions in the United States
prevented a major invasion of Canada in the East
New Englanders opposed the war, and Boston
merchants declined to lend money to the
government.

deeply divided along party lines the
Federalist merchants in the Northeast were
opposed to war, while most Republicans supported
the war.
After two years of sporadic warfare, the United
States had made little progress along the
Canadian frontier and was on the defensive along
the Atlantic moreover, the new capital city was
in ruins. The war was going badly for the
United States when it ended.

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In the Southwest, Andrew Jackson led an army of
militiamen to victory over British supported
Creek Indians in the Battle of Little Horseshoe
Bend and forced the Indians to cede 23 million
acres of land.

47
Federalists met in Hartford, Connecticut to
discuss a strategy for a radical reform in the
National Compact. Some proposed secession but
the majority wanted an amendment to the
Constitution that would limit presidents to a
single four-year term rotate the presidency
among citizens of different states They also
suggested amendments restricting commercial
embargoes requiring a two-thirds majority in
Congress to declare war, to prohibit trade, and
to admit a new state to the Union.
48

The war continued to go badly an American naval
victory on Lake Champlain narrowly averted a
British invasion of the Hudson River Valley
British troops landed outside New Orleans and
threatened to cut American trade down the
Mississippi River.
American military setbacks strengthened
opposition to the war, but, fortunately, Britain,
sapped from its twenty-year war with France,
wanted peace.
The Treaty of Ghent, signed December 24, 1814,
restored the prewar borders of the United States.

Andrew Jacksons victory against the British at
New Orleans not only made him a national hero but
it also redeemed the nations pride, and,
together with the coming of peace, undercut the
Hartford conventions demands for a significant
revision of the Constitution.

50

On January 8, 1815, American forces, under
General Jackson, decisively defeated the British
forces at New Orleans.
51

As a result of John Quincy Adamss diplomacy,
the United States gained undisputed possession of
nearly all the land south of the forty-ninth
parallel and between the Mississippi River and
the Rocky Mountains.
It was also at Adamss urging that Monroe
announced a new American foreign policy (the
Monroe policy) in which it was declared that the
American continents were not subject for further
colonization in return for which the United
States agreed not to interfere in the internal
concerns of European nations.

52
The Capitalist Commonwealth

Banks, Manufacturing, and Markets

As Americans imposed a new political economy on
the lands of the West, they developed a
capitalist economy in the East.
Beginning in the 1790s, merchant capitalists
created a flourishing outwork system of rural
manufacturing, and state governments, by means of
the commonwealth system, awarded corporate
charters and subsidies to assist transportation
companies, manufacturers, and banks.
The commonwealth system involved the
following policies
- corporate charters with limited liability.
- monopoly charters with eminent domain for
transportation projects.
- judicial support of corporate activity on the
basis of "social utility."

America was a nation of merchants, and to
finance enterprises, Americans needed a banking
system.
In 1791, Congress chartered the first Bank of
the United States however, it did not survive.
When the banks twenty-year charter expired in
1811, President Madison did not seek its renewal.
Republican minded state legislatures enacted
statutes that encouraged economic development by
redefining common law property rights.

Merchants, artisans, and farmers petitioned
their state legislatures to charter new banks and
by 1816 there were 246 state-chartered banks with
68 million in banknotes in circulation.
Many banks issued notes without adequate specie
reserves and made ill-advised loans to insiders.
The Panic of 1819, sparked by a sharp drop in
world agricultural prices, gave Americans their
first taste of the business cycles periodic
expansion and contraction of profits and
employment.

The Panic of 1819 also revealed that artisans
and yeomen as well as merchants now depended on
regional or national markets merchant-entrepreneu
rs developed a rural based manufacturing system
similar to the European outwork, or putting-out,
system.
The economic advances that the economy enjoyed
during this time stemmed primarily from
innovations in organization and marketing rather
than in technology.
The penetration of the market economy into
rural areas motivated farmers to produce more
goods.

As the rural economy turned out more goods, it
significantly altered the environment by the
mid-nineteenth century, most of the forests in
southern New England and eastern New York
disappeared and mill dams altered the flow of New
Englands rivers.
The new market system decreased the self
sufficiency of families and communities even as
it made them more productive.

58
Public Policy The Commonwealth System

Throughout the nineteenth century, state
governments had a much greater impact on the
day-to-day lives of Americans than did the
national government.
As early as the 1790s, state legislatures
devised an American plan of mercantilism, known
as the commonwealth system.
State legislatures granted hundreds of
corporate charters to private businesses to build
roads, bridges, and canals to connect inland
market centers to seaport cities.

Incorporation often included a grant of limited
liability and transportation charters included
the power of eminent domain.
By 1820, innovative state governments had
created a new political economy the
Commonwealth system that used state incentives to
encourage business and improve the general
welfare.

60
Federalist Law John Marshall and theSupreme
Court

Led by the Federalist John Marshall, the
Supreme Court protected the traditional rights of
property owners and the charter privileges of
business corporations.
Entrepreneurs took advantage of state
legislation and judicial protection in order to
create new business enterprises, strong regional
economies, and the beginnings of a national
market system.

Both Federalists and Republicans endorsed the
idea of the commonwealth system, but in different
ways Federalists supported Alexander Hamiltons
program of national mercantilism a funded debt,
tariffs, and a central bank where Jeffersonian
Republicans generally preferred the state-based
commonwealth system.
Following the War of 1812, some Republicans
advocated national economic initiatives in 1816,
Republican Henry Clay of Kentucky won legislation
creating the Second Bank of the United States and
persuaded President Madison to sign it.

The difference between Federalist and
Jeffersonian Republican conceptions of public
policy emerged during John Marshalls tenure on
the Supreme Court.
Marshall was a committed Federalist who shaped
the evolution of the Constitution through three
principles that formed the basis of his
jurisprudence a commitment to judicial
authority the supremacy of national over state
legislation and a traditional, static view of
property rights.
After Marshall proclaimed the power of judicial
review in Marbury v. Madison, the doctrine
evolved slowly the Supreme and state courts used
it sparingly and only to overturn state laws that
conflicted with constitutional principles.

Marshall adopted a loose construction of the
Constitution and asserted the dominance of
national statutes over state legislation
(McCulloch v.Maryland, 1819, and Gibbons v.
Ogden, 1824).
Under Marshall, the Supreme Court construed the
Constitution so that it extended protection to
the property rights of individuals purchasing
state-owned lands (Fletcher v. Peck, 1810, and
Dartmouth College v. Woodward, 1819).
In Fletcher v. Peck, John Marshall
contributed to the emergence of a national
capitalist economy by expanding the contract
clause of the Constitution to include state
grants and charters, thus securing the validity
of contracts across state lines and encouraging
companies to do interstate business.

Nationalist-minded Republicans won the
allegiance of many Federalists in the East, while
Jeffersonian Republicans won the support of
western farmers and southern planters.
Chief Justice John Marshall
- was a loose constructionist.
- used the contract clause to defend property
rights.
- claimed the right of judicial review.

Although the decline of the Federalists and of
party politics prompted observers to dub James
Monroes two terms as president (18171825) as
the Era of Good Feeling, the Republican Party
divided into a national faction and a
Jeffersonian, or state oriented, faction.
This division in the ranks of the Republican
Party would produce a second party system in
which national-minded Whigs faced off against
state-focused Democrats.