Learn about Henry Clay's American system, the goal of the American system, and how it was put into effect. Read about related projects such as Cumberland Road.
Updated: 11/21/2023
Henry Clay & the American System | Overview, Goal & Significance
Table of Contents
- What Was the American System?
- Background
- What Was the Goal of the American System?
- When Was the American System Created?
- The Significance of Henry Clay's American System
- Lesson Summary
Frequently Asked Questions
What was the American System, and who created it?
The American System was a plan to help rebuild the U.S. economy after the War of 1812. Congressmen Henry Clay worked to create and implement this plan through various pieces of legislation.
What does the term American System mean?
The term American System refers to a three-step plan by Henry Clay. This plan worked to place high taxes on imports, re-charter the 2nd bank of the U.S., and provide federal money for internal improvements like roads and canals.
Table of Contents
- What Was the American System?
- Background
- What Was the Goal of the American System?
- When Was the American System Created?
- The Significance of Henry Clay's American System
- Lesson Summary
What is the American System definition? The American System was an economic plan to make the United States more economically self-reliant and less dependent on Europe, especially Great Britain. Who created the American System? The American System was created and promoted by Henry Clay. The American System was created in 1815 in a speech given by Henry Clay. Clay would hold the elected positions of Congressman, Speaker of the House, and later Senator of Kentucky. While he was living, he was one of the most influential politicians in America. The American System incorporated several parts, such as tariffs on foreign goods, the building of roads and canals, etcetera, to promote the American economy. It was based on Alexander Hamilton's "American School" approach.
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Henry Clay's American System was an extension of the American School, promoted initially in the 1790s by the first Secretary of the Treasury, Alexander Hamilton. The American School, also known as the National System, existed in various forms. This economic policy of the United States existed from the 1790s into the 20th century.
After the War of 1812, when the United States defeated Great Britain, a wave of nationalism swept the United States. In the years following the War of 1812, many Americans believed that America should become self-sufficient, that it would generate industry in America and create markets for its agricultural products. If these steps were taken, many Americans believed that foreign nations would not dictate to the nation; America would become economically viable regardless of what other nations might do.
The American Economy During the Early 19th Century
America in the early 19th century was primarily a rural country. Most of the manufactured goods used in America were purchased abroad, mainly from Great Britain, the world's first industrialized nation. Events heavily influenced America's economy in Europe. Consumers in America had to pay the prices demanded by foreign governments or do without the goods.
Henry Clay
Henry Clay was born in Virginia in 1777. At the age of twenty and already a lawyer, Clay moved to Kentucky to be closer to his parents and siblings. He would remain a Kentuckian for the rest of his life. In 1818, when he was Speaker of the House of Representatives and continuing for the remainder of his career, Clay proposed what would become known as the American System. Clay had realized the difficulty of moving goods from Kentucky to the rest of the country and that most manufactured goods were being imported from Europe, specifically Great Britain. The American System would allow America to develop American industry and become less dependent on foreign trade. To achieve these goals, Clay saw that the nation's infrastructure needed to be built up and that tariffs had to be enacted to protect the nascent industries from foreign competition.
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Henry Clay & the American System | Overview, Goal & Significance
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