Chapter 8.docx

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Chapter 8: Varieties of American Nationalism Building a National Market o End of War of 1812 allowed United States to resume economic growth & territorial expansion o Vigorous power boom led to disastrous bust in 1819 Evidence that country lack basic institutions necessary to sustain long-term growth Religion began to adjust to spread Enlightment rationalism Banking, Currency, and Protection Postwar Issues o War of 1812 stimulated growth of manufacturing by cutting off imports, also produced chaos in shipping and banking Exposed inadequacy of existing transportation and financial systems Aftermath of war saw emergence of a series of political issues connected with national economic development o Wartime experience underlined need for another national bank o After the expiration of first bank, many state banks begun operations Issued vast quantities of bank notes, did not retain enough gold/silver to redeem notes on demand Actual value of notes depended on bank’s reputation Wide variety of notes circulating made honest business difficult and counterfeiting easy Second Bank of the United States o Congress chartered second Bank of the United States in 1816 Essentially same institution Hamilton had founded in 1791 More capital than its predecessor Could not forbid states to issue currency, but size and power enabled it to dominate state banks Could compel them to issue sound notes or close down o Congress began to promotes burgeoning manufacturing sector of nation’s economy Manufactured goods scarce during conflict Growth of Textile Industry o Between 1807 and 1815, total number of cotton spindles increased o Until 1814, textile factories were mostly in New England and produced only yarn and thread Families operated hand-looms and weaved cloth at home
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o Francis Cabot Lowell developed power loom that was better than English counterpart Organized Boston Manufacturing Company Founded first mill in American to carry spinning and weaving under a single roof Important step in revolutionizing American manufacturing and shaping character of early industrial workforce British ships swarmed into American ports unloading cheap manufactured goods to recapture lost market A Protective Tariff o In 1816, Congress won passage of tariff law that limits competition from abroad o Objections from agricultural interests Had to pay higher prices for manufactured goods as a result Transportation Government-Funded Roads o Idea of using government funds to finance road building was not new o In 1807, Jefferson’s secretary of Treasury, Albert Gallatin, proposed revenues from Ohio land sale should finance a national road Both president and Congress approved o Heavy traffic soon moved o Despite heavy tolls , roads made transportation costs across mountains lower Manufacturers moved from Atlantic to Ohio Valley in unprecedented qualities Steamboats o Steam-powered shipping expanding rapidly on the rivers and Great Lakes
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