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American Economic Development

By — McGraw-Hill Professional
Updated on Feb 4, 2012

Time Line

1816 Second Bank of the United States
1816 Tariff Act
1817-1825 Erie Canal
1818 Second Bank calls in all state loans
1819 Panic of 1819
1829 Doctrine of nullifi cation
1830 Railway construction begins
1836 Second Bank closes
1837 Panic of 1837

 

American Economic Development

As the nineteenth century began, the United States began developing into two distinct cultures, one in the South and one in the North. Advances in technology and improvements in transportation led the South to expand its agriculture, while the North developed a mercantile economy centered on business, industry, and trade. As the century continued, the two societies had less and less in common.

Both southern and northern cultures were divided into social and economic classes. In the North, there were the very wealthy, the middle class, and the urban poor. Many of the urban poor were newly-arrived immigrants; in the 1830s and 1840s, most of these immigrants came from Ireland. Lacking the money to buy land and farm it, they became a laboring class. They worked in mines and factories, built roads and canals, and turned their hand to any other job of work that paid wages.

The struggle between the federal government and the states continued, with the states insisting on their right to disregard federal laws with which they disagreed. Southern states in particular insisted that they were under no compulsion to obey any laws they found unconstitutional, such as tariff acts that drove up the prices of foreign goods. Two financial panics, in 1819 and 1837, suggested that a strong national bank was a necessity, but many people remained unconvinced of this.

Practice questions for these concepts can be found at:

American Economic Development Practice Test

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