Publication Date


Document Type


First Advisor

Israel, Jerry||Jones, Thomas B.

Degree Name

M.A. (Master of Arts)

Legacy Department

Department of History


Clay; Henry; 1777-1852; United States--Economic policy


This study of Henry Clay and the "American System" views the topic from a political-economic point of view. In the past most biographers of Clay and historians of the period following the War of 1812 have emphasized only the political aspects of the subject. Consequently the importance of the "American System" as a plan for American economic development and the implications of this plan for American foreign policy have been ignored. The introductory section sets the stage for the discussion of Clay's formulation of the "American System." The first decade after the War of 1812 was a transitional period in American economic life marked by mixed prosperity. The immediate post-war years (1815-1818) witnessed a dramatic rise in prices accompanied by increased speculation in Southern and Western lands. The "boom" ended abruptly in 1819 followed by three years of severe depression which prostrated the agricultural sector of the economy. American manufacturers, also adversely effected by the depression, increased their agitation for governmental action in the form of a protective tariff. Henry Clay formulated his "American System" in the midst of this changing political and economic scene. The West as a section and Lexington as a nascent industrial center combined with Clay's strong nationalism and political ambition to become the primary influences on him during this period. Most of Clay's ideas were set forth in his speeches delivered in the House of Representatives before 1825. According to Clay, internal improvements were essential for the creation of a well-balanced, integrated economy. A protective tariff was needed to stimulate domestic manufacturing and to enable the United States to attain economic independence. Clay's advocacy of a central bank was based on the assumption that a truly national economy could function properly only with a well-regulated national currency. Implicit in Clay's conception of the "American System" was the idea that the federal government should play an active role in the economy to provide for the corporate welfare. The "American System" in practice was not as successful as its supporters had hoped it would be. Presidential vetoes of internal improvements legislation by James Madison and James Monroe were serious setbacks for Clay and his friends. When John Quincy Adams was elected President in 1825 and chose Clay as Secretary of State it appeared that success was near. A hostile Congressional majority, however, took little decisive action to implement the Administration's proposals for a comprehensive system of federally sponsored internal improvements. Tariff legislation during these years was always an extremely sensitive topic. Through 1832 tariff rates were clearly protective and the debates indicative of the tensions created by a society in transition. After the Nullification Crisis of the late 1820's the Compromise Tariff of 1833 was passed and reduced tariff levels considerably. Clay and the friends of the "American System" both won and lost in their efforts to create a centralized banking system. In 1816 the second Bank of the United States was chartered but an effort to recharter the Bank in 1832 failed. The conclusion of this study is based on the speculative assumption that there existed, in Clay's mind at least, a broader conception of the "American System" and that the "American System" as a plan for American economic development constituted only one aspect of this broader idea. Viewed in this manner the "American System" had important implications for American foreign policy. Clay and Adams believed that the implementation of the "American System" at home was essential if the United States was to successfully pursue a course of landed and commercial empire. This wider application of the phrase "American System" can be used to describe the policies of Clay and Adams, especially their Latin American policy.


Includes bibliographical references.


56 pages




Northern Illinois University

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