Babcock, "or a complete rupture at Ghent, might have loosed even the slender ties holding the administration together, and sent the fragments of a discredited government flying from the capital, just as the march of the British had dispersed the President and his cabinet in the preceding summer." The "revolution of 1800," which had brought Jefferson into power, had been based on distrust of a strong central government. It had heralded democracy--but a democracy which was suspicious of nationalism. Political power should be strongest in the local centers and delegated with decreasing confidence to the remoter "higher" authorities. But the actual management of government had taught the Republican statesmen, beginning with Jefferson himself, the impracticability of their theory, and the stress of war had completed the lesson. By 1815 the Republicans had abandoned every point of opposition to a supreme national power. The presidents had issued proclamations, and their Congresses had revived whole systems of Federalist taxation. The words spoken by Jefferson in the generous rhetoric of his first inaugural were now true in fact: there were no longer Republicans and Federalists, for the Republicans had put on Federalism. Democracy and nationalism were joined in a happy union, destined to inspire the coming generation to wonderful accomplishments in the name of the new America. The one-time author of the Virginia Resolutions wrote the program of the new age in his annual message to Congress in December, 1815-a liberal provision for national defense, new frigates for the navy, a standing army, national aid for the construction of roads and canals, encouragement to manufactures by a protective tariff, and even the reëstablishment of a National Bank. All of this was "for the great object of enabling the political authority of the Union to employ promptly and effectually the physical power of the Union in the cases designated by the Constitution." The Jeffersonian era was closed.

CHAPTER VI

THE NEW NATIONALISM

Europe extends to the Alleghenies, America lies beyond.

RALPH WALDO EMERSON

EXPANSION-POLITICAL, INDUSTRIAL, AND TERRITORIAL

The keynote of the period of American history from the close of the second war with England to the presidency of Andrew Jackson is expansion—the amplification of the power of the central government in acts of Congress and decisions of the Supreme Court, the development of industry in manufactures and agriculture, and the extension of our frontier beyond the Mississippi. This triple process of political, economic, and geographical adjustment brought new forces into play in our American life and raised the problems of states' rights, protectionism, the status of territories, internal improvements, sectional rivalries, and slavery, which characterize the years 1815-1860-the "middle period" of our history.

The response of the Republican Congress to Madison's message of December 5, 1815, was prompt and hearty, and no less hearty was the response of the country to the measures of Congress. If traces of that suspicion of the abuse of power in the hands of the central government which had been the creed of the Jeffersonian party of 1800 still remained, they were confined to the few "old Republicans," like John Randolph of Roanoke,— belated voices crying in the wilderness. The Republican party had put off its particularism and become strongly nationalistic. As Josiah Quincy remarked, with a tinge of sarcasm in his congratulation, it had "out-Federalized Federalism." No sooner was the President's message read than a committee of Congress, headed by John C. Calhoun, was appointed to deal

with the pressing question of our currency. It reported a bill for the establishment of a National Bank with a capital of $35,000,000, whose stock should be subscribed to partly in coin and partly in the funded debt of the United States and whose notes should be receivable for all dues to the government. The Bank was to be exempt from taxation and was to hold the government balances free of interest. In return for these favors it was to transfer public funds from point to point without brokerage charges, lend the government sums up to $500,000, and pay a bonus of $1,500,000 for its charter, which was to run twenty years. The United States should own one fifth of the Bank's stock and appoint one fifth of the board of directors.

Southern statesmen had opposed the establishment of Hamilton's Bank a quarter of a century earlier, on the ground that it was an undue extension of the powers "necessary and proper" to carry out the functions given to Congress by the Constitution, but Calhoun now declared that any discussion of the constitutional aspect of the case was "a useless consumption of time." Henry Clay had argued against the recharter of the old Bank in 1811, but now he descended from the Speaker's chair to urge the charter of the new Bank, confessing that he was "willing to sacrifice the pride of consistency rather than the welfare of the country." The Republican press literally took a leaf from Hamilton's book of politics by reprinting his arguments for the charter of the Bank advanced in 1791. The Bank bill passed the House by a vote of 80 to 69, the Senate concurred, and President Madison, "surmounting the prejudices of a lifetime," signed the bill on April 10, 1816. Early the next year the Bank went into operation, rapidly extending its business to nineteen branch establishments in the various states. Although the Bank was neither very wisely nor very honestly managed in the first two years, its beneficent influence on the currency of the country was felt immediately. The state banks, which had increased from fewer than 100 in 1811 to nearly 300 in 1816 and which had flooded the country with notes whose value diminished from New England southward and westward, were obliged to resume specie payment by February 20, 1817,

on pain of having whatever government deposits they held withdrawn. In the three years following the establishment of the Bank the amount of state bank notes decreased over 40 per cent, being replaced by the uniform, specie-based notes of the Bank of the United States.1 Secretary Alexander J. Dallas, to whose genius and energy this reorganization of our fiscal system was chiefly due, retired from the Treasury in 1816, handing over to his successor, William H. Crawford, a surplus of $20,000,000.2

Seventeen days after the Bank bill became law Madison signed another bill, which gave even stronger proof of the new nationalistic spirit. Embargo, nonintercourse, and war had virtually ruined American shipping. Our foreign trade dropped from $246,800,000 in 1807 to $19,800,000 in 1814. Capital to the amount of some $100,000,000 was diverted into manufactures. A memorial presented to Congress by the New England manufacturers in December, 1815, recounted the progress of the cotton and woolen industries in that section. There were already 140 cotton mills within a radius of thirty miles of Providence, Rhode Island. Pioneer industries had been carried across the Alleghenies to the Ohio valley, where cotton and woolen mills and factories for the manufacture of their machinery were found scattered from Pittsburgh to Cincinnati. When the war ended, England began "dumping" the accumulated products of her factories on the American market at ominously cheap prices, "in order," as Lord Brougham said

1 The state banks had issued some $170,000,000 of paper currency, based on not more than $15,000,000 of specie in their vaults. When all the banks south and west of New England suspended specie payment (that is, redemption of their notes in coin), in the autumn of 1814, these notes became practically "bills of credit," whose issue is expressly forbidden to the states by the Constitution. Like bills of credit, they depreciated, passing at different values in different parts of the country. Only in New England, where the banks still paid specie, were the notes at par. The contamination of this depreciated currency added to the weakness of the country in 1814-1815, causing the United States Treasury notes also to decline and fluctuate in credit.

2It is a singular fact that the three greatest Secretaries of the Treasury in our history before the Civil War were all aliens: Hamilton and Dallas were born in the British West Indies, Gallatin in Switzerland.

in Parliament, "to stifle in the cradle those rising manufactures in the United States which the war has forced into existence, contrary to the natural course of things"-the "natural course" being England's continued monopoly of the American trade. In a single year England sent $90,000,000 of merchandise to our shores. Crates of earthenware and bales of cotton goods, piled on the docks of Philadelphia, Baltimore, and New York, were sold to eager bidders at auction. Over $450,000 was realized from a single week's sale, and the receipts of the New York customhouse from April to June, 1815, were almost $4,000,000. To what end had we finally accomplished our political independence of the Old World if we were now to be made an economic satellite of Great Britain! How could we maintain our dignity as a nation if we were to remain dependent on foreign countries for the necessities and comforts of life! Even the Virginians of the old school joined the enthusiastic prophets of the younger generation-like Clay, Lowndes, Calhoun, Grundy, and Porter-in their demand for national encouragement to the development of our national industries. Jefferson, who, in his "Notes on Virginia," had urged that "our workshops should remain in Europe," lest the introduction of their industrial proletarians should substitute the corrupting influences of the cities for the Arcadian virtues of agriculture in our land, now declared himself in favor of domestic manufactures, to save us from the alternative of being reduced to dependence on a foreign country or "to be clothed in skins and to live like wild beasts in dens and caverns." Madison recommended protection to home industries in his last two messages to Congress, and Monroe echoed the same sentiments in his inaugural address.

It was in response to this demand for economic selfsufficiency, rather than as a deliberate favor to the newly established industries, that Congress, in the spring of 1816, passed a tariff bill continuing, and even slightly enhancing, the "double duties" levied for the support of the war. Iron, glass, hardware, pottery, leather, and woolens profited by the new