American System
Henry Clay gave his famous speech in support of the American System to the House of Representatives in 1824, although Alexander Hamilton had used the same term decades before. It rested "on the idea of harmonizing all the segments of the economy for their mutual benefit and of doing so by active support from an intervening national government" (Baxter 27). Clay's conversion to this policy was surprising since Hamilton had been a member of the Federalist Party while Henry Clay was supposedly a Democratic Republican and a Jeffersonian, opposed to Federal plans for government aid to industry, a national bank, protective tariffs and federal funding for highways, canals, railroads and other internal improvements. After the War of 1812, however, the first political party system had come to an end and the Federalists were discredited by their opposition to the war and threats of secession in New England. During the war, the Jeffersonian party had also come to appreciate the virtues of the Bank of the United States and the system of tariffs that allowed American industry to...
Two new parties would soon emerge by the end of the decade, the Democrats and Whigs (National Republicans) and the old issues of an activist federal government favoring industrialization and a states' rights party representing agrarian and Southern slave holding interests would revive. Slave owners like John Randolph and John Tyler claimed to be the true Jeffersonian Republicans in blocking a system that they regarded as dangerous to their section (Baxter 21). They maintained that the South's exports would be damaged by protectionism and that it was "far better to supply raw materials to Europe and purchase imported manufactures, a natural process" (Baxter 29). This was especially true because of the great cotton boom in the South and the tremendous expansion of slavery that no one had expected in the 1790s, and it drove the two regions further apart…
