Although the War of 1812 essentially ended a stalemate, Americans came away from the conflict with a newfound sense of national spirit. They began to see themselves as Americans first and New Yorkers or Virginians second (although state pride didn’t disappear entirely). This American spirit boosted the popularity of the federal government, and the nationalistic War Hawks, who had agitated for the war, emerged as its new leaders.
One of the War Hawks, Speaker of the House Henry Clay, was an ardent proponent of his three-pronged “American System” for improving the United States. First, Clay wanted to improve the financial sector of the economy. Under his leadership, Congress created another Bank of the United States in 1816 to offer easy credit. Second, Clay sought to protect struggling American manufacturers from the postwar influx of cheap British goods. He pushed through the Tariff of 1816 , which placed a 20-percent tax on all foreign goods—the first tariff that Congress passed in order to protect merchants rather than just to raise revenue. Finally, Clay’s American System called for construction of new roads and canals in the West.
Clay’s program of internal improvements in the West was meant to help farmers ship their crops and goods and would be paid for with money raised by the Tariff of 1816. Up to that point, western farmers had a difficult time transporting their crops to eastern cities before they spoiled. The construction of new roads and canals thus helped agriculture immeasurably. Improved transportation also benefited eastern manufacturers, who suddenly had access to new markets in the West. At the same time, the construction of roads and canals accelerated the development of western cities, especially in the Ohio Valley.
The newfound national spirit after the War of 1812 also spilled over into politics. Democratic-Republican candidate James Monroe easily defeated his weak Federalist opponent in the election of 1816, effectively killing the Federalist Party for good. With the Federalists out of the picture, the popular Democratic-Republicans were left to run the show without much opposition. One newspaper dubbed these tranquil years the “Era of Good Feelings,” and the name stuck.
A string of crises toward the end of Monroe’s first term quickly dampened those good feelings, however. The first crisis hit in 1819, when overspeculation in western lands caused a financial panic. The Panic of 1819 quickly cascaded into a full-scale depression. The Bank of the United States was hit hard, and many fly-by-night “wildcat banks” in the West went bankrupt. Although all Americans were hit hard, farmers suffered the most. Hundreds were thrown into debtors’ prisons, and poverty was rampant until the economy finally recovered nearly a decade later.
Another crisis arose in 1819 when Missouri applied for admission to the Union as a slave state. Even though Missouri met all of the qualifications, the northern-dominated House of Representatives denied the territory statehood because they did not want to tip the sectional balance in favor of the South (eleven free states to twelve slave states). The House also passed the Tallmadge Amendment later in 1819, declaring that no new slaves could be taken into Missouri and that slaves already there should gradually be freed.
Southerners, outraged at these northern attempts to eliminate slavery, blocked the Tallmadge Amendment in the Senate. Congress was deadlocked over the issue for months until Henry Clay orchestrated the Missouri Compromise. In exchange for admitting Missouri as an unrestricted slave state, Southerners agreed to admit Maine as a free state, thus preserving the sectional balance. The compromise also declared slavery illegal north of the 36° 30' parallel west of Missouri.
In hindsight, the Missouri crisis reveals that the sectional differences that led to the Civil War were present decades before open conflict finally broke out in the 1860s. Antislavery northerners had wanted to end the “peculiar institution” of slavery as far back as the Constitutional Convention. Southerners, however, had become completely dependent on slave labor to produce “king cotton.” Southern elites reasoned that if slavery didn’t expand westward, the southern way of life would certainly die.
During Monroe’s term, the Supreme Court, still under diehard Federalist Chief Justice John Marshall, issued a series of landmark rulings that also increased the power of the federal government:
McCulloch v. Maryland was perhaps the most influential of Marshall’s rulings because it legitimized Hamilton’s belief that the Constitution had been “loosely constructed” to allow the federal government to act in the best interests of the people. Marshall’s decision thus gave future presidents and congresses a green light to enact a wide variety of legislation in accordance with the “spirit” of the Constitution. Likewise, Marshall’s Cohens v. Virginia ruling was highly influential because it helped establish the Supreme Court as the highest law of the land.
Monroe and his administration did much to cement a formal U.S. foreign policy. Secretary of State John Quincy Adams negotiated the Treaty of 1818 with Britain that set the border with Canada from Minnesota to the Rocky Mountains at the 49th parallel. The treaty also specified that the United States would occupy the Oregon Territory (present-day Oregon, Idaho, Washington, British Columbia, and part of Montana) jointly with Britain until 1828.
In the face of a united Britain and United States, Russia abandoned its claims to Oregon in the Russo-American Treaty of 1824 . Meanwhile, General Andrew Jackson illegally seized Florida from Spain, on the pretext that Spain was plotting with the Seminole tribe against the United States. Spain ceded Florida to the United States in 1819 in exchange for Washington’s retraction of its claims to Texas.
Monroe is most famous for the foreign policy doctrine that bears his name. Devised by John Quincy Adams, the 1823 Monroe Doctrine warned European powers to stay out of the New World and stated that the region was closed to further colonization. In return, the United States would not interfere with Europe’s affairs and would recognize all existing European colonies in the New World. The doctrine also pledged Monroe’s support for the growth of democracy throughout the western hemisphere.
The Monroe Doctrine, undoubtedly Monroe’s greatest contribution as president, has become one of the defining features of American foreign policy. Ironically, it was the British who first proposed the doctrine to John Quincy Adams, for they wanted to protect their West Indian colonies from other European powers—and, secretly, to curb U.S. expansion in the Caribbean. Sensing Britain’s motives, Adams encouraged Monroe to issue the doctrine on his own, which would give the United States more freedom than a joint U.S.-British declaration would. Ultimately, however, the British supported the Monroe Doctrine as issued, and much of the Doctrine’s authority came from the Royal Navy’s vigorous enforcement of it.