Do Now!!!  Imagine you and your group are aides to James Madison in 1815 following the War of He is about to make his State of the Union Address to Congress and needs your advice on how to address the 3 issues below: 1. The nation is $20 million dollars in debt from the war and has no central banking system to collect or manage payment of the national debt. (You let the B.U.S. die in 1811) 2. The American Industries that emerged and grew during the war, because we could not trade, are being threatened by cheap foreign goods. 3. Farmers in the western region of the nation are producing an abundance of agricultural goods but have a limited market place to sell their goods. Work with your group to develop a solution to each of these issues. Place your group’s solutions in your do now section.

Following the War of 1812…  In 1815, in his State of the Union Address, James Madison delivered a message to a Congress dominated by Jeffersonian-Republicans. In his message he discussed several important tasks the nation had to undertake following the War of 1812.

Following the War of 1812…  First he said the nation needed to adopt a central banking system to help manage taxes and repaying the government’s debt. (Created the Second B.U.S.)

Following the War of 1812…  Second, he discussed the need to create higher taxes on imported goods to help promote American industry and provide government subsidies to emerging industries in the nation. (Protective Tariff)

Following the War of 1812…  Third, Madison called on Congress to invest in improving the nation’s transportation system of canals and roads in order to promote industry and western agriculture in the new nation. (Internal Improvements)

 The ideas that Madison discussed in his speech would later be known as the American System – an economic plan designed to help boost agriculture and industry in the nation in early 1800s, while helping eliminate the nation’s debt from the War of  The biggest supporter of this plan would be Henry Clay of Kentucky, one of the most prominent members of Congress during the early 19 th century. He was the first to nickname the plan the American System. Following the War of 1812…

The Protective Tariff of 1816  The government wanted to protect and promote emerging American industries by taxing imported goods.  The tariff caused foreign goods to be more expensive, forcing consumers to buy American made goods.  The money collected from the taxes on imported goods was used to give out subsidies, government payments, to emerging industries.

The Second Bank of the United States  Established and chartered in 1817  20% of its money came from the government and 80% came from private investors  Helped manage the payment of the government’s debt that occurred because of the war ($20 million)  Promoted a standard currency throughout the nation  Helped reduce inflation in the nation caused by state banks that sprung up after the First B.U.S. died in 1811.

Internal Improvements  The idea that the national government would provide funding for projects that built roads and canals throughout the nation to help connect industries and agriculture to new marketplaces.  An example of an internal improvement was The National Road, a project begun during Jefferson’s Presidency, that connected Maryland to Ohio.  National government funding for internal improvements was not well supported by many and very little funding went to these projects. However, states took up the task and built canals and roads in their own borders. Example, New York state funded the construction of the Erie Canal.

 Compare and Contrast the American System and Hamilton’s Economic Program by creating a Venn Diagram.  Before you leave… Did politics and government really change from Washington to Madison? Explain. (5 to 7 lines)