APUSH: Period 4, 1800-1848 - The American System and Market Revolution

Why This Matters

The American System and Market Revolution (1790s-1840s) was a pivotal period in American history, marking a significant shift from a largely agrarian and mercantilist economy to a more industrialized and market-driven one. This transformation had far-reaching consequences for American identity, politics, and power dynamics. As the United States transitioned from a colonial economy to a global industrial power, it began to assert its independence from European influences and forge its own path, exemplifying the AP theme of American Identity.

Key Events & People

• Alexander Hamilton (1755-1804): As Secretary of the Treasury, he advocated for a strong central government and a national bank to finance the American System, which included tariffs to protect American industries and a system of tariffs to fund internal improvements.
• The Tariff of 1816: A protective tariff that raised taxes on imported goods to benefit American manufacturers and stimulate economic growth.
• The Second Bank of the United States (1816-1836): A national bank chartered by Congress to stabilize the currency, manage government finances, and provide credit to American businesses.
• Robert Fulton (1765-1815): An inventor and engineer who developed the steamboat, which revolutionized transportation and facilitated the growth of industry and trade.
• The Erie Canal (completed in 1825): A waterway connecting the Great Lakes to the Hudson River, which enabled the transportation of goods and people between the East Coast and the Midwest.
• The Factory System: A new form of industrial organization that emerged in the early 19th century, characterized by the use of machinery and the employment of wage labor.
• Samuel Slater (1768-1835): A textile manufacturer who introduced the factory system to the United States and helped establish the country's first textile mills.
• The Transportation Revolution: A period of rapid growth in transportation infrastructure, including roads, canals, and railroads, which facilitated the movement of people and goods across the country.
• The Market Revolution: A broader economic transformation that saw the growth of trade, commerce, and industry, and the emergence of a new middle class.

Cause & Effect Chain

• Cause: The American Revolution created a new nation with a strong desire for economic independence and growth.
• Effect: The adoption of the Constitution and the creation of a strong central government enabled the development of a national economy and the implementation of policies to promote growth.

• Long-term consequence: The American System and Market Revolution laid the foundation for the United States to become a global industrial power and a major economic force in the world.

• Cause: The growth of industry and trade created new opportunities for entrepreneurship and innovation.

• Effect: The emergence of a new middle class and the growth of cities created new markets and consumers for goods and services.

• Long-term consequence: The Market Revolution helped to create a more prosperous and consumer-oriented society, but also led to increased income inequality and social unrest.

• Cause: The development of new technologies, such as the steam engine and the textile machine, enabled the growth of industry and the factory system.

• Effect: The factory system created new forms of employment and new social relationships, but also led to the exploitation of workers and the growth of urban poverty.
• Long-term consequence: The factory system helped to create a more complex and dynamic economy, but also laid the groundwork for the social and economic problems of the Industrial Revolution.

Essential Vocabulary

• American System: A set of economic policies and institutions, including tariffs, a national bank, and internal improvements, designed to promote economic growth and independence.
• Market Revolution: A broader economic transformation that saw the growth of trade, commerce, and industry, and the emergence of a new middle class.
• Factory System: A new form of industrial organization that emerged in the early 19th century, characterized by the use of machinery and the employment of wage labor.
• Tariff: A tax on imported goods, used to protect American industries and stimulate economic growth.
• Internal Improvements: A set of infrastructure projects, including roads, canals, and bridges, designed to facilitate the growth of industry and trade.
• National Bank: A bank chartered by Congress to stabilize the currency, manage government finances, and provide credit to American businesses.
• Transportation Revolution: A period of rapid growth in transportation infrastructure, including roads, canals, and railroads, which facilitated the movement of people and goods across the country.
• Entrepreneurship: The act of starting and running a business, often characterized by innovation and risk-taking.
• Industrialization: The process of transforming an economy from agrarian to industrial, characterized by the growth of factories and the use of machinery.
• Urbanization: The process of people moving from rural areas to cities, often in search of work and better living conditions.

Common Student Mistakes

• What students often get wrong: The American System was a set of policies designed to promote economic growth and independence, but it was not a single event or person.
• Correction: The American System was a complex set of policies and institutions, including tariffs, a national bank, and internal improvements, that were designed to promote economic growth and independence.
• What students often get wrong: The Market Revolution was a single event or person, rather than a broader economic transformation.
• Correction: The Market Revolution was a period of rapid growth in trade, commerce, and industry, and the emergence of a new middle class, which was characterized by the growth of cities, the emergence of new technologies, and the development of new social relationships.
• What students often get wrong: The factory system was a single event or person, rather than a new form of industrial organization.
• Correction: The factory system was a new form of industrial organization that emerged in the early 19th century, characterized by the use of machinery and the employment of wage labor.

DBQ / LEQ Connections

• Possible essay prompt: Analyze the impact of the American System on the growth of industry and trade in the early 19th century. Be sure to include specific examples from the period, such as the Tariff of 1816 and the Second Bank of the United States.
• Specific evidence: Students could cite the Tariff of 1816, the Second Bank of the United States, and the growth of industry and trade in the early 19th century as evidence of the impact of the American System.
• Possible essay prompt: Evaluate the role of entrepreneurship in the growth of industry and trade in the early 19th century. Be sure to include specific examples from the period, such as the development of the steam engine and the textile machine.
• Specific evidence: Students could cite the development of the steam engine and the textile machine, as well as the growth of industry and trade in the early 19th century, as evidence of the role of entrepreneurship.
• Possible essay prompt: Discuss the impact of the Market Revolution on the social and economic relationships in the early 19th century. Be sure to include specific examples from the period, such as the growth of cities and the emergence of a new middle class.
• Specific evidence: Students could cite the growth of cities, the emergence of a new middle class, and the development of new social relationships as evidence of the impact of the Market Revolution.

Quick Self?Check

1. What was the main goal of the American System? a) To promote economic growth and independence b) To reduce government spending and debt c) To increase tariffs on imported goods d) To establish a national bank

Answer: a) To promote economic growth and independence

Explanation: The American System was a set of economic policies and institutions designed to promote economic growth and independence.

1. What was the impact of the Market Revolution on the social and economic relationships in the early 19th century? a) It led to increased income inequality and social unrest b) It led to decreased income inequality and social stability c) It had no impact on social and economic relationships d) It led to the emergence of a new middle class and the growth of cities

Answer: d) It led to the emergence of a new middle class and the growth of cities

Explanation: The Market Revolution led to the emergence of a new middle class and the growth of cities, which had a significant impact on social and economic relationships.

1. What was the main feature of the factory system? a) The use of machinery and the employment of wage labor b) The use of manual labor and the employment of apprentices c) The use of natural resources and the employment of farmers d) The use of technology and the employment of entrepreneurs

Answer: a) The use of machinery and the employment of wage labor

Explanation: The factory system was characterized by the use of machinery and the employment of wage labor, which marked a significant departure from traditional forms of industrial organization.

Last?Minute Cram Sheet

• The American System was a set of economic policies and institutions designed to promote economic growth and independence ().
• The Market Revolution was a period of rapid growth in trade, commerce, and industry, and the emergence of a new middle class ().
• The factory system was a new form of industrial organization that emerged in the early 19th century, characterized by the use of machinery and the employment of wage labor ().
• The Tariff of 1816 raised taxes on imported goods to benefit American manufacturers and stimulate economic growth ().
• The Second Bank of the United States was a national bank chartered by Congress to stabilize the currency, manage government finances, and provide credit to American businesses ().
• The Erie Canal connected the Great Lakes to the Hudson River and enabled the transportation of goods and people between the East Coast and the Midwest ().
• The Transportation Revolution was a period of rapid growth in transportation infrastructure, including roads, canals, and railroads, which facilitated the movement of people and goods across the country ().
• The American Revolution created a new nation with a strong desire for economic independence and growth ().
• The Constitution established a strong central government that enabled the development of a national economy and the implementation of policies to promote growth ().