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52 Cards in this Set

  • Front
  • Back
What was on of teh causes of the Panic of 1819?
Shady operations led by state banks and issuing notes without adequate specie reserves. .
What was the Panic?
A credit crisis sharped by a spark drop in world agricultural prices. Farm income plummeted and many farmers could not buy things, thus causing bankrupcy in merchants.
The panic gave Americans their first taste of the business cycle. What is the business cycle?
Periodic expansion and contradiction of profits and employment that is an inherent part of a market economy.
The panic also revealed what?
That artisans and yeomen as well as merchants now depended on regional or national markets.
Before 1790, most artisans in New England and Middle Atlantic did what with their handicrafts?
Sold or bartered them.
What was the system that was developed similar to the European owtwork system?
Merchants bought raw materials, organized workers made goods and sold products.
What did merchants do with these goods?
shipped these goods to cities and slave plantations, while New England peddlers blanketed the South and acquired reputation as "Yankees".
How did this system affect the American economy?
Expanded the commercial sector.
This economic advance stemmed initially from what?
Innovations in organization and marketing rather than in technology.
The next steps in the manufacturing process were accomplished under what system?
the outwork system rather than in water-powered factories.
Even before the textile production was centralized in factories, the nation had what?
A profitable and expanding preindustrial outwork system of manufacturing.
What motivated farmers to produce more goods?
Penetration of the market economy.
What brought new businesses to many farming towns?
Processing raw materials.
As the rural economy produced more goods, what else happened?
Significant changes in environment. Even if the income had increased for farmers, their natural environment deteriorated.
What replaced bartering transactions (a central feature of the emergent market system)?
A cash economy.
What were the drawbacks to a new capitalist-run market economy?
More work, loss of economic independence (working for others), and decreased the self-sufficiency of families while it made them more productive.
Throughout the nineteenth century, what type of governments were the most important political institutions?
State governments by enacting legislating, establishing taxation systems, and oeverseeing officials. Has a much bigger day-day impact.
What was the commonwealth system?
Also the mercantilist system in which the goal was to increase the common wealth of society. State legislatures devised this and measures off infrastructure :roads, bridges, canals. (except the National Road-build by the federal gov.)
Limited liability?
A contractual clause that ensures that the personal assets of shareholderse cannot be seized to cover the debts of a corporation. By 1800, state governments had granter more than 300 charters, many which included this.
What did this do?
Made it easier to attract investors.
What also did most transportational charters include?
Eminent domain, giving turnpike, bridge, and canal corporations the use of judicial system to force off land.
Common law
Centuries-old body of English legal rules and procedures that protected the king's subjects against arbitrary acts by the government.
Why did some critics think such use of state power by private companies was contrary to republicanism?
Charter violated "equal rights" of citizens and restricted sovereignity of people.
What did state courts do about this?
Consistently upheld corporate charters and routinely approved grants of eminent domain.
What did state mercantilism also soon encompass more of?
Transportation. Following embargo of 1807, which cut off goods and credit from Europe, states had created a new political economy.
What did this new political economy of 1820 use?
It was the commonwealth system. Used state incentives to encourage business and improve the general welfare .
How did Federalists and Republicans endorse commonwealth idea in different ideas?
Federalists looked to national government to for economic leadership and supported Hamilton's program of national mercantilism (funded debts, tariffs, and a central bank). Jeffersonian Republicans opposed preferring state-based initiatives but following War of 1812 they began to support national economic policies.
Who created the Second Bank of the United States and in what year?
Henry Clay, Republican of Kentucky in 1816.
The following year, Clay won passage of what bill ?
The Bonus Bill, sponored by Representative John C. Calhoun of SC to establish a national fund for internal improvements.
Most Republicans beleived what about such policies?
They exceeded the powers delegated to the national government by the Constitution.
After President Madison's veto of the bill, Republicans did what?
Urged state legislatures to take the lead in promoting economic development. This fundamental disagreement over the role of the national government remained a key issue of political debate over the next 30 years.
What happened to the difference between Federalists and Jeffersonian conceptions of public policy?
It emerged due to John Marshall's tenure on Supreme Court.
Marshall was ...?
A Federalist (virginian) appointed by President John Adams. Dominated the Court until 1822.
Where did his success stem from?
Not his mastery of legal concepts but his power of logic and force of personality.
How did Marshall shape the evolution of the Constitution?
Winning support and using these three principles to form the basis of his jurisprudence: a commitment to judicial authority, supremacy of national over state legislation, and a traditional, static view of property rights.
Marshall v. Madison
Asserts principle of Judicial review. State courts used it sparingly and then only to overturn state laws that clearly interfered with Constitutional principles.
McCulloch v. Maryland?
Expressed the position of the Marshall court on federal-state relations. In 1816, BUS 2 was created and Congress gave it authority to handle notes of state-chartered banks.
What did the Maryland legislature do to preserve the competitive position of its state-chartered banks?
Imposed an annual tax of $15000 on notes. In response, the BUS 2 contested the constitutionality of the Maryland law, claiming it infringed on powers of nationakl government.
What did lawers from Maryland do to make their case?
Adopted Jefferson's argument against BUS1 that Congress lacked the constitutional authority to charter a national bank. Lawyers said even if such bank culd be created, MD has a right to tax in state.
How did Marshall and the nationalist-minded Republicans on the court react?
Rejected both arguments BUS2 was constitutional because it was nec. and proper (loose construction of constitution was used). Maryland's right to tax the national bank was not intended by the Constitution.
Gibbons V. Ogden
Asserted the dominance of national statutes over state legislation. This case struck down a monopoly that NY legislature had granted to Ogden for steamboat passenger service. Asserted that the Constituion gave the federal government authority to regulate interstate commerce.
Marshall also turned to the Constitution to uphold his view of what rights?
Federalist judges and polticians warned that what?
Popular sovereignty had to be crubed to prevent the "tyranny of the majority"
What did Federalist judges do to prevent state legislatures from overriding property rights of individual citizens?
Asserted that judges had the power to void laws that violated traditional commonlaw principles or were contrary to "natural law" or
"natural rights".
Marshall used another strategy to do what?
Protect individuals' property from government interference.
How did he do this?
He seized on the contract clause of the Constitution which prohibits the state from passing any law "impairing the obligation of contacts".
What did Marshall do to extend the reach of this constitutional provison?
He gave an exceedingly broad definition to the term contract, enlarging it to embrace grants and charters made by the state governments.
Fletcher v. Peck?
Involved a large grant of land made by the Georgia legislature to Yazoo land company.
Why did a newly elected state legislature cancell the grant?
They alleged that it had been obtained through fraud and bribery.
What did speculators who had purchased Yazoo lands to in response?
Appeal to Supreme Court to uphold their titles.
What did Marshall rule?
That the legislature grant to Yazoo land company was a contract that could not subsequently be abridged by the state.
What did this decision do?
Gave constitutional protection to those who purchased state-owned lands and also promoted the development of a national capitalist economy by protecting out-of-state investors.