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Chapter 9 Part 2 - -Henry Clay of Kentucky took the lead in...

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6. Summarize the state and national banking systems during this period. -Credit was a crucial element in the whole system. Farmers borrowed from local merchants, who received an advance on their own when they cosigned crops to a commission house or factor. The need for credit encouraged the growth of money and banking. Private or state banking institutions filled the void by issuing banknotes, promises to redeem their paper in gold or silver. 7. Describe the new American market economy. -In an effort to stabilize the currency, Congress established a second Bank of the United States in 1816. When the economy collapsed many Americans questioned whether the new system of banking and credit was as desirable as it had seemed to be in times of prosperity. Hostility to banks became a prominent feature of American politics. 8. What was the American System, and who was its leading Congressional advocate?
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Unformatted text preview: -Henry Clay of Kentucky took the lead in advocating the American System which was a high protective tariff to stimulate industrial growth and provide a “Home Market” for the farmers of the west, making the nation economically self-sufficient and free from a dangerous dependence on Europe. 9. What were the reasons for setting high tariffs?-This tariff was deemed necessary because of a flood of British manufactured goods was beginning to threaten the infant industries that had sprung up during the period when imports had been shut off by the embargo and the war. 10. In which industry and region did the factory system first develop, and what segment of the population was its initial source of labor?-A fully developed factory system first emerged in textile manufacturing in Boston, whose primary source of labor was unmarried young women residing in supervised dormitories. 1...
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