The three parts of the plan mutually reinforced each other. The three parts of the American System were based on a new national bank, taxing foreign goods and creating a subsidized transportation infrastructure of new roads and canals.
Facts about Henry Clay and the 'American System'
The following fact sheet contains interesting facts and information on Henry Clay and the 'American System'.
American System for kids: Background History
America was growing as a new, autonomous nation and realized that they needed to become independent from Britain and the other European countries of Europe, in an economic and commercial sense. Before the War of 1812 the US had depended on exports for most of their manufactured goods - 84% of American people were farmers. The United States was brimming with natural resources but needed factories to make manufactured goods. The government needed to create an economical environment in which American trade would flourish, money was made available for the industrialists to build factories in the east and people had the transport system to make homes in the new lands in the west. The American system was designed to meet the requirements of the new, expanding and independent nation.
The American System for kids: Henry Clay, the 'Man with a Plan' - The American System
Henry Clay (1777 – 1852) was a skilled politician and a 'man with a plan'. Henry Clay was a great supporter of the American System, an economic plan based on many of the ideas of Alexander Hamilton.
What was the American System? The Economic Plan
The economic plan called the American System was based on:
Taxing all foreign goods, to boost the sales of US products and protect manufacturers from cheap British goods
Establishing another Bank of the United States to offer easy credit to Americans
Constructing new roads and canals in the West
What were the aims of the American System?
The American system was a three-pronged plan aimed at:
Improving the economy of the United States
Introducing a protective Tariff to enable the nation to raise money from these taxes and at the same time protect the nation's goods from cheaper priced foreign items
Improving the lives of American citizens
Creating new transportation systems connecting America
What was the Purpose of the American System?
The purpose of the American System was to make the most of the opportunities provided by the acquisition of the new lands in the west and ensure that US money benefited US Citizens. In 1816 the plan that incorporated the American System was made a reality by passing two laws to meet these objectives. In 1816 Congress created another Bank of the United States and passed the Tariff of 1816, which placed a 20-25% tax on all foreign goods. (The chartering of the Second Bank of the United States on April 10, 1816 was badly managed at first and the Panic of 1819 occurred when the Second Bank of the United States tightened its loan policy.)
The Significance of the American System:
What was the significance of the American System?
New industries were established
Factories were built
America reduced their dependence on foreign goods
Americans prospered and felt confident in making homes in the new lands acquired in the Louisiana Purchase and in Florida
Roads and canals were built that enabled Americans to travel and the Cumberland Road, the Erie Canal were constructed
General Survey Act of 1824 was passed, authorizing the president to have surveys made of important transportation routes by the Corps of Engineers
The American System helped to fuel the belief in the Manifest Destiny of the United States
The American System for kids: Who was Henry Clay?
Who was Henry Clay?
Henry Clay was a strong supporter of the American System
He was a lawyer, statesman and excellent orator
Henry Clay was born on April 12, 1777 in Virginia, married Lucretia Hart Clay and had eleven children
He owned a plantation and law firm in Kentucky
Henry Clay started his political career as a State Legislator for Kentucky in 1803
He was elected to the Senate in 1806 and 1810
In 1811 Henry Clay was elected to the House of Representatives and chosen Speaker of the House
He was one of the 'War Hawks' who advocated war with the British in the War of 1812
Henry Clay was a strong supporter of the economic policies of Alexander Hamilton (who had been killed in 1804 in the Aaron Burr duel)
It was Henry Clay who named the national economic plan to build US industry, the 'American System'
Henry Clay, together with John. C. Calhoun (a politician, political theorist and proponent of a protective tariffs), helped to push through the Protective Tariff of 1816
The 'American System' was implemented during the Era of Good Feelings
The Tariff of 1828 aka the "Tariff of Abominations" raised tariffs considerably in an attempt to protect new factories
Henry Clay's American System eventually ran out of steam during the administration of President Jackson
For additional facts and a timeline refer to Protectionism and Tariffs.