People were first hunter-gatherers, then began to own their own farms independently
Originally, Europe made the market, technology, and capital, Africa provided the laborers, and the West provided raw materials like gold, soil and lumber
Encomienda System- Indians would work on plantations and be converted to Christianity, leading to slaves working on the plantations when the Indians died out
1500’s- In Britain, enclosure made smaller farms and little land for the poor and primogeniture made younger sons travel to America, leading to indentured servants brought here by the headright system of the rich paying for a servant’s travel, eventually leading to slavery
1600’s- joint-stock companies perfected, where stockholders made a profit and quickly sold for a profit a few years later, led to the way the stock market works today
1607- Jamestown settlers died out while searching for gold in America, but tobacco became theirs and eventually the whole North’s cash crop
1619- First African arrived in America, which was the beginning of slavery that the Civil War was eventually fought over
1686- Navigation Acts were first of many acts to come from Britain, they allowed Americans to trade ONLY with Britain, leading to smuggling and greater disconnection from the motherland, leading to the American Revolution
Southern women had more power than men because their husbands died at a young age, letting the women inherit their money
early 1700’s- farming, fishing, trading such as triangular trade (New England rum->African slaves->West Indies molasses), and manufacturing things like lumber were key to colonial economy
1733- Molasses Act taxed all molasses which was not from Britain, trying to lessen trade between America and West Indies, led to increased dislike of Britain and more smuggling by America
British policy of mercantilism made it so the colonies were there to benefit GB’s economy, banning home production of wool and beaver cloth, because colonies were always buying from GB, they had no currency, similar to hard money issues in the 1800’s caused by Financial Panics
French & Indian War put Britain in debt which America was expected to pay off since British soldiers had protected Americans, leading to stopping of salutary neglect and enforcement of Navigation Laws
1764- Sugar Act taxed sugar from West Indies, was first of main acts
1765- Quartering Act made colonies give food and shelter to British soldiers, arousing protest in New York which caused their legislature to be taken away by GB
1765- Stamp Act taxed paper goods, arousing protest from colonists though Brits pay a higher tax, leading to “no taxation without representation” by the colonists and virtual representation by Britain, led to Stamp Act Congress which increased unity and Sons and Daughters of Liberty who got colonists to further rebel against British rules
1766- Declaratory Act was Britain stating they had the right to tax the colonies, enforcing mercantilism
1767- Townshend Acts put low taxes on lead, paper, paint and tea, showing GB’s attempts at compromise with the colonies, eventually repealed besides tea tax, unfair taxes led to 1770 Boston Massacre
1773- British East India Company had too much tea and tried to sell it to Americans, but America’s distrust of them led to the Boston Tea Party which happened in many harbours, increasing unity
1774- Intolerable Acts of Boston Port Act which closed Boston’s harbour and Quebec Act which let the French invade colonial land were meant to punish the colonies, leading to Revolutionary War soon after
° Revolutionary Era
1775- Second Continental Congress raised revenues for army and navy, increasing unity and odds of winning for colonists
1776- Declaration of Independence caused division of Loyalists and Patriots, where Patriots stole Loyalist land and resold it
France’s economic assistance of the colonies during the war led to the colonial win, in which the colonies were ceded much land from Britain, which was later given to colonists to make a living on and to pay off the national debt (Land Ordinance of 1785)
Revolutionary War led to colonial inflation, causing the government to not be able to pay off its debts, however they could now trade with whoever they choose
1777- Articles of Confederation made a weak Congress that couldn’t regulate commerce or enforce tax collection, leading to discord in the colonies
1786- Shay’s Rebellion against farmland mortgages exposed the faults in the Articles of Confederation, leading to a later creation of a stronger federal government
1789- Constitution made a stronger federal government, a hindrance to the lower-class Anti-federalists and unfairly benefiting Federalists
George Washington Era
Alexander Hamilton’s financial program included many proposals. “Funding at Par”- federal government would pay off its debts at face value plus interest (passed in 1790), assumption- adopt states’ debts (passed in 1789), custom duties- low tariff on dutiable imports (passed in 1789), excise tax-on a few domestic items mainly whiskey (passed in 1791), a bank of the United States- would be a private company, 20 year charter, print paper money, major stockholder, federal funds in circulation, national currency (signed by Washington in 1791). It had the support of the rich and states were more attached to the federal government. The federal district would be located in Virginia, low protective law would be formed around beginning industries, and stock would be open to public sale. This was a very good way to start off a new economy, but it was very controversial. The plan improved American businesses because of the tariffs.
The First bank of the US was chartered. It was proposed by Alexander Hamilton, as a part of Hamilton’s financial program, for a 20 year charter. It created a standard form of currency, stabilized, and improved national credit, and improved handling of the financial business. The bank set a precedent for a federal bank that would be continued to the Second bank. It marked the beginning of much controversy over states vs. federal rights and increased economy because of one currency.
Thomas Jefferson Era
The Non-Importation Act banned certain imports from Britain. This was an attempt to get back at Britain for not following the agreement of neutrality. Britain was supposed to be threatened by losing the American market. When the British economy wasn’t hurt by the act, the US didn’t realize the effects of the act on its own economy and kept passing laws that actually hurt the US economy.
The Embargo Act prohibited trade with all foreign countries. It was meant to hurt the economies of France and Britain for not staying true to peace treaties/neutrality, but it really hurt the US economy: farm surpluses were impossible, shippers and southern plantation owners protested the act, many merchants were smuggling, and the act failed to change British and French policies. The decline of economy led to a lot of public protest to the Embargo Act.
The Non-Intercourse Act opened trade with all foreign countries except France and Britain. If France and Britain said they wouldn’t violate the neutrality they had with the US, then trade would commence. This act failed to change British and French policies and still hurt the US economy because France and Britain were the main trading countries with the US. The US learned from the declining economy that the US economy is dependent on other economies and is connected with other economies.
James Madison Era
The charter of the first national bank expired. It had a 20 year charter from 1792-1812. Democratic-Republicans were against the bank from the start and were in power when the charter expired, so they let it run out. This led to a debate about central government power and more debate about implied powers of the Constitution. It also symbolized the death of the Federalist Party and there was no more national currency. The Bank expired because the Democratic-Republicans were in power and believed that the bank was unconstitutional. This is an example of how politics can affect major legislation and can affect the country.
The Second bank of the US was chartered for 20 years. It handled all transactions for the US government, was modeled on the First Bank of the US, and pushed by John C. Calhoun. The bank regulated public credit, and established stable national currency. The Bank was established to stop confusion between state banks and state currency.
The Tariff of 1816 was a tax on imports and raised average rates to 20%. Britain flooded the US market with goods that weren’t sold during the War of 1812 and the US needed a tax so the US businesses wouldn’t have to compete so much. This tariff protected budding American businesses and made New England happy. The tariff also continued the precedent set with Hamilton’s Financial Plan to protect small businesses from foreign competition.
James Monroe Era
The Era of Good Feelings was a time of economic prosperity. The country was at peace and the Second National Bank was in effect, as well as the Tariff of 1816. Construction of the Cumberland Road was underway and Federalist Party was in decline. There was a big increase in nationalism and a one party government was in place. The economic prosperity made people feel secure and open to invest and the investing put more money in circulation.
In McCulloch v. Maryland, Maryland passed a tax on the Second National Bank. QUESTIONS: Did Congress have the authority to establish the bank? Did Maryland law unconstitutionally interfere with congressional power? VERDICTS: Congress had the authority to establish the Bank and Maryland didn’t have the authority to tax the National Bank. This decision supported Federalist supremacy, strengthened judicial review, and supported broad interpretation of the Constitution. This also showed that states couldn’t put taxes on federal programs.
The Financial Panic of 1819 was the first major financial crisis in the US. Economic expansion failed, banks failed, there was widespread unemployment, and agriculture and manufacturing was impaired. This was a learning experience for US about downward economic spiral. The US economy was not prosperous until 1824.
Henry Clay’s American System supported a high tariff to protect American industries and generate revenue for the federal government, more federal revenue generated by high land prices, preservation of the Second Bank to keep risky banks and national currency in check, and development of infrastructure to knit the nation together and raise revenue from tolls. This system strengthened and unified the nation. Nationalism at a high point and power was in favor of the federal government. Economic prosperity resulted from it, as well as national growth. This was a way to save the economy after the Financial Panic of 1819. It generated a lot of revenue for the government, and more money was in circulation.
John Quincy Adams Era
The Tariff of Abominations was very high duties on imports. It was favored by the Northern merchants and manufacturers because it cut down on foreign competition. It was not favored by the Southern planters because they bought a lot of their goods from foreign countries. This led to the South Carolina Exposition and Protest, as well as protest from across the US.
Andrew Jackson Era
President Jackson vetoed the bill to recharter the Second National Bank, believing that the Bank was corrupt. He also had a personal grudge against banks. There is debate if Jackson vetoed the Bank for personal or political motives. This veto firmly inserted the President into the legislative process. Second Bank couldn’t continue so Bank committee lost jobs and led to the Financial Panic of 1837.
The Compromise Tariff was proposed by John C. Calhoun and Henry Clay as a resolution to the Nullification Crisis and it gradually reduced rates. This compromise resolved the tariff conflict, but only temporarily resolved conflict between the North and the South. The tariff chilled the states vs. federal and North vs. South conflicts and helped the Southern economy because of lowered tariffs on foreign items.
Specie Circular was an executive order by Jackson that payment for government must be in gold and silver and was carried on by Martin Van Buren in his presidency. The consequences of Specie Circular were in Van Buren’s presidency: devaluation of paper currency, inflation, and the Panic of 1837. This order was a piece in the debate of paper vs. hard money. Hard money was difficult to get because there wasn’t much of it around.
Martin Van Buren Era
The Financial Panic of 1837 was caused by caused by Specie Circular and the death of the Second Bank. Banks restricted credit and called in loans. Unemployment was high and there were food riots. This lingered until 1843. The Financial Panic caused the government to realize that Banks are needed to regulate money and transactions.
The Independent Treasury System was developed. Government funds were placed in a treasury in Washington and sub treasuries. This is important because private banks wouldn’t be able to speculate with the government’s money. This is a similar system to a bank and the government realized that they needed to protect their money from speculators.
John Tyler Era
The Independent Treasury System was repealed because the Whig party wanted another centralized bank. The Treasury System was the next best thing. This act reversed the thinking of the Whig administration. The system that worked like a bank was taken away and this led private banks to speculate over the government’s money.
James K. Polk Era
1846 – The Walker Tariff made substantial cuts in the high rates of tariffs and enacted by the Democrats to combat the Whig’s Black Tariff of 1842. Lead to increased trade and relations with Britain.
1848 – The Treaty of Guadalupe – Hidalgo with Mexico at the end of the Mexican War. Treaty called for the U.S. to pay $15 million to pay off the claims of American citizens against Mexico. This lead to much territorial gain in parts of New Mexico, Nevada, Wyoming and Colorado and Cali.
Franklin Pierce Era
1853 – The Gadsden Purchase allowed the U.S. to acquire 29,670sq miles of land from Mexico for $10 million. This was the last major territorial acquisition in the contiguous U.S.
1854 – The Ostend Manifesto was a document that described the rationale for the U.S. to purchase Cuba from Spain while saying that the U.S. should declare war on Spain if they refused. The plan was foiled and lead to a shift in foreign policy by justifying the use of force.
1857 – The Financial Panic was caused by the declining international economy and over-expansion of the domestic economy. Britain circumvented the requirements of the Peel Banking Act of 1844 which required gold and silver reserves to back up the amount of money in circulation and set off a worldwide economic crisis.
1859 – The Comstock Lode was discovered. This is a lode of silver ore under the eastern slope of Mount Davidson in Nevada. This sparked the silver rush of prospectors to the area. This was the first major discovery of silver and lead to much advancement in mining.
Civil War Era
1861 – The Civil war was fought between the States and the Confederacy. The States won which lead to the abolishment of slavery and the South’s dependence of slavery and the collapse of the southern economy.
1862 – Homestead Act was to liberalize the homesteading requirements of the Preemption Act of 1841. It required that the applicant must fill out an application, improve the land, and file for the deed of title. This encouraged small farms in the west and gave incentive by granting 160 acres.
1862 – Legal Tender Act issued “Greenbacks”, and the Union started using paper money. This allowed financing for the war long before the gold and silver reserves were depleted.
1863 – The National Bank Act established a system of national banks for banks and created the U.S. National Banking System. The banks encouraged development of national currency and a uniform policy that stands today.