Two Key Elements Of The Economic System

The American System had two key elements: a tariff on certain imported goods, and federal funding for transportation projects such as roads and canals. This economic system was in place from 1816 through 1828. It was designed to help the young United States grow its economy and infrastructure and provide more for itself, therefore depending less on other nations. The American System tariff placed a tax on manufactured goods imported from Europe. US manufacturers had sprung up in the years before and during the War of 1812, when the United States had outlawed trade with Great Britain (and for part of that time with France too). But these young businesses had difficulty competing with well-established European factories, which could produce goods much more cheaply. A tariff on imported cloth, clothing, iron, hemp, fur, flax, and liquor raised prices on those products and encouraged Americans to buy cheaper items from US manufacturers instead, which in turn encouraged those businesses to grow. More US manufacturing and less importation allowed the country to be less affected by events in Europe. A tariff on imports served a second goal as well. The money it brought in was a key source of revenue for the federal government. …show more content…
This infuriated white Southerners, who called it the Tariff of Abominations. Calhoun prepared a forceful opposition to the tariff. (Calhoun was vice president under Adams at the time; he continued in that position under Jackson.) Later the same year, he wrote a document called the “South Carolina Exposition and Protest,” which explained that the 1828 tariff was unconstitutional. It also claimed that each state had the right to nullify, or cancel, inside its borders any law it considered unconstitutional. A state could do this by assembling a nullification convention. If 75 percent of the other states agreed the law was constitutional, the dissenting state could secede from the Union—leave the United