New Sectional Issues

The War of 1812 and the depression that struck the country in 1819 had shaped many of the controversies. The tariff question was affected by both. Before the War of 1812 the level of duties averaged about 12.5 percent of the value of dutiable products, but to meet the added expenses occasioned by the conflict,

Table 7.1 Key Sectional Issues

The shaded boxes indicate the critical issue for each region.

Congress doubled all tariffs. In 1816, when the revenue was no longer needed, a new act kept duties close to wartime levels. Infant industries that had grown up during the years of embargo, non-intercourse, and war were able to exert considerable pressure. The act especially favored textiles because the British were dumping cloth in America at bargain prices in their attempt to regain lost markets. Unemployed workers and many farmers became convinced that prosperity would return only if American industry were shielded against foreign competition.

At first every section endorsed high duties, but with the passage of time the South rejected protection almost completely. Besides increasing the cost of nearly everything they bought, Southerners exported most of their cotton and tobacco and high duties on imports would limit the foreign market for southern staples by inhibiting international exchange. As this fact became clear, the West tended to divide on the tariff question: The Northwest and much of Kentucky, which had a special interest in protecting its considerable hemp production, favored high duties; the Southwest, where cotton was the major crop, favored low duties.

National banking policy was another important political issue affected by the war and the depression. Presidents Jefferson and Madison had managed to live with the Bank of the United States despite its dubious constitutionality, but its charter was not renewed when it expired in 1811. Aside from the constitutional question, the major opposition to recharter came from state banks eager to take over the business of the Bank for themselves. The fact that English investors owned most of the Bank’s stock was also used as an argument against recharter.

Many more state banks were created after 1811, and most extended credit recklessly. When the British raid on Washington and Baltimore in 1814 sent panicky depositors scurrying to convert their deposits into gold or silver, the overextended financiers could not oblige them. All banks outside New England suspended specie payments; that is, they stopped exchanging their bank notes for hard money on demand. Paper money immediately fell in value; a paper dollar was soon worth only eighty-five cents in coin in Philadelphia, less in Baltimore. Government business also suffered from the absence of a national

The Bank of Philadelphia (1801), designed by Benjamin Latrobe, combined the Ionic columns of an ancient Athenian temple and the circular dome of ancient Rome. By appropriating the grandeur of antiquity, Americans were seeking to liberate themselves from modern Europe. Sectional tensions led to many disputes over the tariff, banking, federal land policy, and internal improvements. Overshadowing all of these was the debate over slavery.

Bank. In October 1814 Secretary of the Treasury Alexander J. Dallas submitted a plan for a second Bank of the United States, and after considerable wrangling over its precise form, the institution was authorized in April 1816.

The new Bank was much larger than its predecessor, being capitalized at $35 million. However, unlike Hamilton’s creation, it was badly managed at the start. Its first president, William Jones, a former secretary of the treasury, allowed his institution to join in the irresponsible creation of credit. By the summer of 1818 the Bank’s eighteen branches had issued notes in excess of ten times their specie reserves, far more than was prudent, considering the Bank’s responsibilities. When depression struck the country in 1819, the Bank of the United States was as hard pressed as many of the state banks. Jones resigned.

The new president, Langdon Cheves of South Carolina, was as rigid as Jones had been permissive. During the bad times, when easy credit was needed, he pursued a policy of stern curtailment. The Bank thus regained a sound position at the expense of hardship to borrowers. “The Bank was saved,” the contemporary economist William Gouge wrote somewhat hyperbolically, “and the people were ruined.” Indeed, the bank reached a low point in public favor. Irresponsible state banks resented it, as did the advocates of hard money.

Regional lines were less sharply drawn on the Bank issue than on the tariff. Northern congressmen voted against the Bank fifty-three to forty-four in 1816—many of them because they objected to the particular proposal, not because they were against any national bank. Those from other sections favored it, fifty-eight to thirty.

The collapse occasioned by the Panic of 1819 produced further opposition to the institution in the West.

Land policy in the West also caused sectional controversy. No one wished to eliminate the system of survey and sale, but there was continuous pressure to reduce the price of public land and the minimum unit offered for sale. The Land Act of 1800 set $2 an acre as the minimum price and 320 acres (a half section) as the smallest unit. In 1804 the minimum was cut to 160 acres, which could be had for about $80 down, roughly a quarter of what the average artisan could earn in a year.

Since banks were pursuing an easy-credit policy, land sales boomed. In 1818 the government sold nearly 3.5 million acres. Thereafter, continuing expansion and the rapid shrinkage of the foreign market as European farmers resumed production after the Napoleonic Wars led to disaster. Prices fell, the panic struck, and western debtors were forced to the wall by the hundreds.

Sectional attitudes toward the public lands were fairly straightforward. The West wanted cheap land; the North and South tended to look on the national domain as an asset that should be converted into as much cash as possible. Northern manufacturers feared that cheap land in the West would drain off surplus labor and force wages up, while southern planters were concerned about the competition that would develop when the virgin lands of the Southwest were put to the plow to make cotton. The West, however, was ready to fight to the last line of defense over land policy, while the other regions would usually compromise on the issue to gain support for their own vital interests.

Sectional alignments on the question of internal improvements were similar to those on land policy, but this issue, soon to become very important, had not greatly agitated national affairs before 1820. As we have seen, the only significant federal internal improvement project undertaken before that date was the National Road.

The most divisive sectional issue was slavery. After the compromises affecting the “peculiar institution” made at the Constitutional Convention, it caused remarkably little conflict in national politics before 1819. Although the importation of blacks rose in the 1790s, Congress abolished the African slave trade in 1808 without major incident. As the nation expanded, free and slave states were added to the Union in equal numbers with Ohio, Indiana, and Illinois being balanced by Louisiana, Mississippi, and Alabama. In 1819 there were twenty-two states, eleven slave and eleven free. The expansion of slavery occasioned by the cotton boom led Southerners to support it more aggressively, which tended to irritate many Northerners, but most persons considered slavery mainly a local issue. To the extent that it was a national question, the North opposed it and the South defended it ardently. The West leaned toward the southern point of view, for in addition to the southwestern slave states, the Northwest was sympathetic, partly because much of its produce was sold on southern plantations and partly because at least half of its early settlers came from Virginia, Kentucky, and other slave states.