The War of 1812 ended with the Federalist Party all but destroyed, and a new party, the Democratic-Republicans, was ushered in. By 1816, the Democratic-Republicans controlled 85% of the seats in Congress, and James Monroe was elected president.
The Era of Good Feelings was marked by economic changes, some of which had been backed by James Madison. Some of these changes included: chartering the second Bank of the United States, establishing tariffs to protect American manufacturing, and federally-funded internal improvements.
Chartering the Second Bank of the United States
After the War of 1812, the United States was facing money troubles due to an unregulated currency and a lack of fiscal order. In order to move forward from an agrarian society into one that was more industrial, something had to be done.
The Second Bank of the United States was chartered in 1816 with the same powers and responsibilities as the First Bank (to serve as a repository for federal funds, to be the government's fiscal agent, to help fund military operations). The SBOTUS was a private corporation with public responsibilities, as it handled all fiscal transactions for the US Government, and was accountable to the US Treasury and Congress. Twenty percent of the Bank's capital was owned by the federal government, the Bank's largest stockholder; 4,000 private investors held the other 80% of its capital, with some of those investors being wealthy Americans and many being wealthy Europeans (including wealthy British). The bulk of the stocks that were owned by private investors were held by a few wealthy Americans. The main duties of the SBOTUS was to regulate the public credit issued by private banking institutions through the fiscal duties it performed for the US Treasury, as well as to establish a stable national currency.
The SBOTUS also tried to limit the disbursement of paper currency/bank notes to prevent post-war inflation. By doing so, they instead focused on issuing lines of credit--giving small loans to farmers, small manufacturers, and entrepreneurs which encouraged rapid economic expansion.
However, not everyone was a fan of this Bank; many believed that the Bank was unconstitutional and fought against it, going to the Supreme Court twice. The first SCOTUS case dealing with the SBOTUS was McCulloch v. Maryland (1819). The state of Maryland had tried to impede the operations of the SBOTUS by imposing a tax on all bank notes that were not issued by banks that were chartered in the state of Maryland...at this time, that was the SBOTUS. Despite the law saying it taxed all bank notes not issued by banks chartered in Maryland, this was seen as a direct attack against the SBOTUS. The Supreme Court invoked the Necessary and Proper Clause of the Constitution, which allowed the Federal government to pass laws not expressly provided for in the Constitution's list of express powers as long as those laws are useful in furthering the express powers of Congress under the Constitution. The ruling of the case was that state action may not impede valid constitutional exercises of power by the Federal government.
Later, under the presidency of Andrew Jackson, the SBOTUS would not have its charter renewed, but that's a post for another day.
Establishing Tariffs to Protect American Manufacturing
After the War of 1812 and the Embargo that preceded it, the US economy was stimulated and manufacturing, industry, and trade boomed. A system of tariffs (taxes on imported goods) was necessary to protect the new boom in industry. Southern cotton was being exported around the world, not just around the United States, and it drove the Southern economy to new heights; prosperity was felt around the country. The tariffs, as well as land sales, made the federal government all the money it needed to run properly. However, it wouldn't be all sunshine and daisies for the young country--the economy would soon come to a screeching halt in 1819 and the nation would become economically divided...this will be explained further in another post.
Federally-funded Internal Improvements
The period from post-American Revolution through much of the 19th century was known for the creation of transportation infrastructure such as roads, turnpikes, canals, bridges, harbors, and other improvements.
Two major improvements of this era were in transportation--the invention of the steamboat by Robert Fulton and the construction of the Erie Canal.
The steamboat was invented by Robert Fulton prior to the War of 1812, taking its first voyage from New York City up the Hudson River to Albany in 1807. They steamboat was a lot quicker than other modes of transportation at the time, and would revolutionize the shipping industry. For example, in the South, cotton was often shipped up the Atlantic Coast or up the Mississippi River in order to get to its destinations. The steamboat made transporting goods much quicker.
The Erie Canal was a canal that linked the waters of Lake Erie in Western New York to the Hudson River at the state capital of Albany. Ground was broken in 1817 after about a decade of various proposals for where the canal would be located and how far it would travel, and the canal was finished in 1825. The Erie Canal allowed for more western settlement beyond the Appalachian Mountains and allowed people to offer a cheap and safe way to move their products to market.
For more information about the Erie Canal, you can visit eriecanal.org.
The Era of Good Feelings was marked by numerous changes to the United States, which would propel us well into the 19th century and would have an impact on our country's history.
Next time on the blog I'll be writing about why the Era of Good Feelings was anything but.
Remember to follow the blog and to "Like" the Facebook page: Marie Williams; The Half-Pint Historian!