History 14 The Capitalist Commonwealth

Front 1

What was on of teh causes of the Panic of 1819?

Back 1

Shady operations led by state banks and issuing notes without adequate specie reserves. .

Front 2

What was the Panic?

Back 2

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.

Front 3

The panic gave Americans their first taste of the business cycle. What is the business cycle?

Back 3

Periodic expansion and contradiction of profits and employment that is an inherent part of a market economy.

Front 4

The panic also revealed what?

Back 4

That artisans and yeomen as well as merchants now depended on regional or national markets.

Front 5

Before 1790, most artisans in New England and Middle Atlantic did what with their handicrafts?

Back 5

Sold or bartered them.

Front 6

What was the system that was developed similar to the European owtwork system?

Back 6

Merchants bought raw materials, organized workers made goods and sold products.

Front 7

What did merchants do with these goods?

Back 7

shipped these goods to cities and slave plantations, while New England peddlers blanketed the South and acquired reputation as "Yankees".

Front 8

How did this system affect the American economy?

Back 8

Expanded the commercial sector.

Front 9

This economic advance stemmed initially from what?

Back 9

Innovations in organization and marketing rather than in technology.

Front 10

The next steps in the manufacturing process were accomplished under what system?

Back 10

the outwork system rather than in water-powered factories.

Front 11

Even before the textile production was centralized in factories, the nation had what?

Back 11

A profitable and expanding preindustrial outwork system of manufacturing.

Front 12

What motivated farmers to produce more goods?

Back 12

Penetration of the market economy.

Front 13

What brought new businesses to many farming towns?

Back 13

Processing raw materials.

Front 14

As the rural economy produced more goods, what else happened?

Back 14

Significant changes in environment. Even if the income had increased for farmers, their natural environment deteriorated.

Front 15

What replaced bartering transactions (a central feature of the emergent market system)?

Back 15

A cash economy.

Front 16

What were the drawbacks to a new capitalist-run market economy?

Back 16

More work, loss of economic independence (working for others), and decreased the self-sufficiency of families while it made them more productive.

Front 17

Throughout the nineteenth century, what type of governments were the most important political institutions?

Back 17

State governments by enacting legislating, establishing taxation systems, and oeverseeing officials. Has a much bigger day-day impact.

Front 18

What was the commonwealth system?

Back 18

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.)

Front 19

Limited liability?

Back 19

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.

Front 20

What did this do?

Back 20

Made it easier to attract investors.

Front 21

What also did most transportational charters include?

Back 21

Eminent domain, giving turnpike, bridge, and canal corporations the use of judicial system to force off land.

Front 22

Common law

Back 22

Centuries-old body of English legal rules and procedures that protected the king's subjects against arbitrary acts by the government.

Front 23

Why did some critics think such use of state power by private companies was contrary to republicanism?

Back 23

Charter violated "equal rights" of citizens and restricted sovereignity of people.

Front 24

What did state courts do about this?

Back 24

Consistently upheld corporate charters and routinely approved grants of eminent domain.

Front 25

What did state mercantilism also soon encompass more of?

Back 25

Transportation. Following embargo of 1807, which cut off goods and credit from Europe, states had created a new political economy.

Front 26

What did this new political economy of 1820 use?

Back 26

It was the commonwealth system. Used state incentives to encourage business and improve the general welfare .

Front 27

How did Federalists and Republicans endorse commonwealth idea in different ideas?

Back 27

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.

Front 28

Who created the Second Bank of the United States and in what year?

Back 28

Henry Clay, Republican of Kentucky in 1816.

Front 29

The following year, Clay won passage of what bill ?

Back 29

The Bonus Bill, sponored by Representative John C. Calhoun of SC to establish a national fund for internal improvements.

Front 30

Most Republicans beleived what about such policies?

Back 30

They exceeded the powers delegated to the national government by the Constitution.

Front 31

After President Madison's veto of the bill, Republicans did what?

Back 31

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.

Front 32

What happened to the difference between Federalists and Jeffersonian conceptions of public policy?

Back 32

It emerged due to John Marshall's tenure on Supreme Court.

Front 33

Marshall was ...?

Back 33

A Federalist (virginian) appointed by President John Adams. Dominated the Court until 1822.

Front 34

Where did his success stem from?

Back 34

Not his mastery of legal concepts but his power of logic and force of personality.

Front 35

How did Marshall shape the evolution of the Constitution?

Back 35

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.

Front 36

Marshall v. Madison

Back 36

Asserts principle of Judicial review. State courts used it sparingly and then only to overturn state laws that clearly interfered with Constitutional principles.

Front 37

McCulloch v. Maryland?

Back 37

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.

Front 38

What did the Maryland legislature do to preserve the competitive position of its state-chartered banks?

Back 38

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.

Front 39

What did lawers from Maryland do to make their case?

Back 39

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.

Front 40

How did Marshall and the nationalist-minded Republicans on the court react?

Back 40

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.

Front 41

Gibbons V. Ogden

Back 41

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.

Front 42

Marshall also turned to the Constitution to uphold his view of what rights?

Back 42

Property

Front 43

Federalist judges and polticians warned that what?

Back 43

Popular sovereignty had to be crubed to prevent the "tyranny of the majority"

Front 44

What did Federalist judges do to prevent state legislatures from overriding property rights of individual citizens?

Back 44

Asserted that judges had the power to void laws that violated traditional commonlaw principles or were contrary to "natural law" or
"natural rights".

Front 45

Marshall used another strategy to do what?

Back 45

Protect individuals' property from government interference.

Front 46

How did he do this?

Back 46

He seized on the contract clause of the Constitution which prohibits the state from passing any law "impairing the obligation of contacts".

Front 47

What did Marshall do to extend the reach of this constitutional provison?

Back 47

He gave an exceedingly broad definition to the term contract, enlarging it to embrace grants and charters made by the state governments.

Front 48

Fletcher v. Peck?

Back 48

Involved a large grant of land made by the Georgia legislature to Yazoo land company.

Front 49

Why did a newly elected state legislature cancell the grant?

Back 49

They alleged that it had been obtained through fraud and bribery.

Front 50

What did speculators who had purchased Yazoo lands to in response?

Back 50

Appeal to Supreme Court to uphold their titles.

Front 51

What did Marshall rule?

Back 51

That the legislature grant to Yazoo land company was a contract that could not subsequently be abridged by the state.

Front 52

What did this decision do?

Back 52

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.