The Economic Growth of the United States, 1790-1860

The Economic Growth of the United States, 1790-1860

The Economic Growth of the United States, 1790-1860

The Economic Growth of the United States, 1790-1860

Excerpt

An analysis of the American economy during this period subdivides into three distinct parts. The first covers the years from the ratification of the Constitution to the outbreak of the European War in 1793; the second ends with the imposition of the Embargo at the end of 1807; the last terminates with the peace treaty of 1814.

The most important developments for subsequent growth in the economy before 1793 took place in the domestic sector. They were the policies of Alexander Hamilton, specifically the funding of the foreign, domestic and state debts, and the creation of the first Bank of the United States, and they formed the monetary and fiscal underpinnings of the new nation. The first established a sound credit basis; the second was an important beginning of an elaborated capital market.

Between 1793 and 1808, the economic development of the United States was tied to international trade and shipping. In the light of previous analysis, one would expect that the rapid growth of these years would reflect the strategic role of the carrying and re-export trades in inducing expansion. Since direct income from both of these trades flowed into the Northeast, it might be supposed that the maritime cities of this section and particularly the four major seaports would grow most rapidly. In the same manner one might predict the equally rapid development of Charleston and other ports of the cotton trade. The disposition of income from the carrying and re-export trade, however, was very different from that of the cotton trade, and consequently the development which took place in the Northeast was in sharp contrast to that of the cotton South.

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