CHAPTER XI

THE GROWTH OF THE NATION

(1815-1828)

THE bonfires, the bell-ringing, and the cannonading which welcomed the joyful news of the Peace of Ghent marked the dawn of a new and glorious era in the history of the United States. For two-and-twenty years past, the issues which divided parties, tormented Presidents and Congresses, and affected the whole course of events in America, sprang directly from the long wars abroad. From 1793 to 1815 the questions which occupied the public mind were neutral rights, Orders in Council, French Decrees, the Rule of 1756, impressment, search, embargoes, non-intercourse, non-importation, the conduct of Great Britain, the insolence of the French Directory, the X Y Z affair, the war with Great Britain, the triumphs, the ambition, the treachery of Napoleon. With the return of peace these issues disappeared. Napoleon was at Elba; the old rulers were back on their old thrones; old conditions in great measure returned; and the United States, free to turn its attention to its own domestic affairs, entered at once on a career of rapid development.

The questions which for twenty years to come occupied the thoughts of the people, broke up the old parties and produced new ones, and rose in time to be great national issues, were purely domestic in origin. The state of the currency; the use of the public lands; the building of roads, canals, and turnpikes at the expense or with the aid of the Federal government; the protection of manufactures; the treatment of the Indians; the authority of Congress to charter a national bank; the extension of slavery to the territory beyond the Mississippi; the authority of the Federal Courts; the right of a State to nullify an Act of Congress - these and many other issues of a similar nature now became the questions of the day. Just as diversity of opinion regarding the financial and the foreign policy of the government in the days of Washington and Adams parted the people into Federalists and Republicans, so diversity of opinion on these new issues destroyed old party lines, and replaced Federalists and Republicans by Whigs and Democrats.

350

New questions and new parties

[1815

The transition was, of course, gradual. First, the Federalists disappeared as a national party, and after 1816 never again nominated a candidate for the presidency. Then came "the Era of Good Feeling" as it was called, an era which opened with the inauguration of Monroe in 1817, and was in reality the transition period between the old and the new. The old issues were dead; the new were still sectional and had not risen to national importance; and during this period there was but one national party. So completely were the Republicans under control that in 1820 but one candidate, Monroe, was nominated for the presidency, and to him was given the electoral vote of every State in the Union.

Such complete harmony was of short duration, and on the day Monroe was a second time inaugurated (March 5, 1821) the “Era of Good Feeling" ended; the once omnipotent Republican party began to fall to pieces; rival and sectional leaders struggled for mastery; and in the election of 1824, Adams, Clay, Jackson, and Crawford, each a staunch Republican and each representing a section of the Union, were candidates for the presidency. No one of them received a majority of the electoral votes; and for the second time the duty of electing a President fell upon the House of Representatives. Adams was chosen; Clay became his Secretary of State; and from the union of the friends of these two leaders sprang, ten years later, the Whig party. The supporters of Jackson and Crawford, driven into opposition by the defeat of their leaders, formed in time the nucleus of the Democratic party.

To make it clear how these things came to pass, the story of the rise of the new issues and of the economic development from which they sprang must be told with some fulness of detail. A quarter of a century had now passed since the old Confederation fell to pieces and the States came under "the New Roof," as the Constitution was fondly called. In the course of these five-and-twenty years the material progress of the country was astonishing. The population had risen from a little less than four millions in 1790 to a little less than eight millions in 1815 The States had increased in number from thirteen to eighteen; and the area of the country had expanded from the Mississippi river to the Rocky Mountains and the shore of the Pacific Ocean.

The enormous trade enjoyed during the long war in Europe brought prosperity to New England and the commercial States. The demand in the West Indies for American lumber, grain, flour, and food products, brought wealth to the farming sections of the Middle States. The rise of cotton-planting in the South gave to that region a staple crop which, for a century to come, overshadowed every other form of industry, and powerfully affected the economic and political history of the country. Before the adoption of the Constitution, cotton, as a staple, had never been cultivated in the United States. But the repeated destruction of

1795-1815]

Growth of trade and manufactures

351

the indigo plant in the South by insects led to the attempt to supplant indigo by cotton. The venture was successful; but the cost of cleaning the fibre of seeds by hand made it impossible to sell at a profit. At this juncture Eli Whitney invented the gin; and from that moment the prosperity of a new branch of industry was assured. In 1792, before the gin was invented, 192,000 lbs. of hand-cleaned cotton was exported. In 1795, after the invention of the machine, 6,000,000 lbs. found a foreign market. Year after year the acreage and the crop increased with astonishing rapidity, till, in 1894, one hundred years after Whitney received his patent, cotton amounting to nearly 7,000,000 bales of 500 lbs. each was grown in the planting States.

As the country grew in wealth and population, great improvements were made in the means of inter-State communication. The large rivers were bridged; thousands of miles of turnpike were constructed; and the great cities of the country were brought nearer together. When Washington was inaugurated at New York, the traveller spent two days in going from Philadelphia to New York and a week on the journey from New York to Boston. In 1815 such trips could easily be made in half the time. In 1807 Robert Fulton placed on the Hudson river the first practical steamboat the world ever saw. In 1815 steamboats were plying up and down the Hudson, the Delaware, the Ohio, the Mississippi, and on many of the bays along the Atlantic coast. In 1780 there were no banks in America; in 1791 only four were in existence; in 1815 they were to be found in every State. In the Eastern and Middle States manufactures had sprung up; and new means of earning a livelihood had been opened to tens of thousands of people. Whatever tended to abridge distance, facilitate communication, spread information, unite the country, had been so developed that the United States which fought the second war with Great Britain formed a nation very unlike the thirteen little republics that fought the War of Independence.

At the close of the second war the issue which pressed most urgently for settlement was the state of the currency. Under the Articles of Confederation and before the adoption of the Constitution, the currency of the country was made up of very heterogeneous elements- foreign coins which had come in through the channels of trade, or had been introduced by the troops sent over by France during the War of Independence; thirteen kinds of paper money or bills of credit issued by the thirteen States; some small change coined by a few of the States; and tickets of small denominations issued to meet a serious public need by churches, town treasurers, stage companies, ferry companies, and merchants. Under the Constitution the States were deprived of the power to coin money, or to issue bills of credit, or to make anything else than gold and silver legal tenders for debt. The duty of furnishing a uniform circulating medium now rested solely on Congress, and was performed in three ways- by authorising the Bank of the United States,

352

Rise of banking

[1790-1814

which was chartered in 1791, to issue notes not exceeding in amount $10,000,000; by establishing a mint and coining American money; and by making certain foreign gold and silver coins legal tender at specified rates for a short time. But the Bank put out no notes of small denominations; the annual coinage at the Mint fell very short of the needs of the country; and, had it not been for the rise of State banks and the action of corporations and individuals, the people would have been almost without money suitable for the transactions of the market and the shop.

The State banks, which increased from four in 1790 to eighty-eight in 1811, issued notes in denominations of one and two dollars; merchants, unincorporated associations, steamboat companies, ferry companies, private bankers, issued change bills, tickets, due bills, and promissory notes drawn for fractions of a dollar to serve as small change; and the money of the people thus became a paper medium which did not bear the stamp, and was not under the control, of the Federal government. In 1811 the charter of the Bank of the United States expired; and a re-charter was refused by Congress. Partly because of the struggle to secure its business and the government deposits, partly because of the lapse about the same time of the charters of scores of State banks, and partly because the westward movement of population had opened great areas of country in which no financial institutions were to be found, a mania for banks swept over the country. In three years the number rose from 88 to 208; and, as each put out notes, the circulating medium of the country became a paper currency which could not possibly be redeemed in specie.

Such was the condition of the currency, when, in the summer of 1814, a British army landed on the shore of Chesapeake Bay, marched to the city of Washington and burned the Capitol, the President's house, and the public buildings. That Baltimore would be next attacked was so certain that the banks in that city sent their gold and silver into the country, where it was buried; and, of necessity, specie payment on their notes was stopped. When news of this reached Philadelphia, the depositors rushed to the banks to demand specie and forced the banks of that city to suspend payment. The banks of other cities quickly followed their example; and in a few weeks not a bank in any seaboard State outside of New England was redeeming its notes in coin. Nothing in the nature of a uniform circulating medium passing at its face-value all over the country now existed; and business of every kind was paralysed. Specie small change having disappeared, resort was again had to small paper bills issued by merchants, tradesmen, manufacturers, stagecoach companies, even by towns and villages. Thus the city of New York issued $190,000 in one, two, and six cent notes, which were bought with bank-notes by the citizens and were receivable in payment of taxes by the city. The banks at New York and Philadelphia printed notes in

1803-7]

War and manufactures

353

denominations of 61, 121, 25, and 50 cents; and the New York and New Jersey Steamboat and Ferry Companies did likewise.

When peace was proclaimed in 1815, it was supposed that specie payments would speedily be resumed. But 1815 passed and 1816 came without a bank showing any signs of resumption. Then Congress, in desperation, determined to exercise its powers to regulate the currency, chartered the second Bank of the United States as a regulator, and fixed a day in February, 1817, on and after which nothing but specie, or bank-paper convertible on demand into specie, should be received for duties, taxes, and debts due to the United States. These measures forced the State banks to resume. Specie again went into circulation, and, with the notes of the new Bank of the United States, formed a circulating medium which passed at its face-value in every State of the Union.

Congress next turned its attention to manufactures, for the protection of which urgent appeals had come from many States. The extraordinary development of commerce which followed the opening of the war in Europe had done much to retard the growth of manufactures. The demands for ships and cargoes to put into them, the ready markets for fish, lumber, flour, grain, cotton, and food products of every sort, had greatly stimulated the shipping and agricultural interests of the Eastern and Middle States and of Kentucky. The demand for cotton had already made it the staple of the Southern States; and, under the stimulus thus afforded by the long war abroad, capital, enterprise, and business energy had been drawn into commerce and agriculture rather than into manufacturing. So far had this gone that when, in 1806, it was proposed in Congress to cut off all intercourse with Great Britain, it was clearly shown that the people of the United States were so dependent on Great Britain for manufactures of prime necessity that such a measure would be ruinous. China, glass, pottery, hardware, cutlery, edged tools, blankets, woollen cloths, linen, cotton prints, and a hundred other articles of daily use came from Great Britain in such quantity that the value of each year's imports amounted to $35,000,000, and the duties paid on them to $5,500,000, or nearly one-half the entire receipts of the Treasury from customs.

In spite of these facts measures of retaliation soon became imperative; and when the Orders in Council and the Berlin Decree placed American ships and commerce under ban, the "long embargo" was laid; and in December, 1807, all trade with Europe and her dependencies was cut off. From that moment the encouragement of home manufactures became the duty of every patriotic American. The Embargo Act was not eight days old when the men of Baltimore organised the Union Manufacturing Company of Maryland. The Philadelphia Premium Society offered prizes for the best specimens of broad-cloth, fancy cloths for vests, raven duck, and thread in imitation of that made at Dundee. The

C. M. H. VII.

23