ECONOMIC CONDITIONS UNDER THE NEW GOVERNMENT AND WAR'S REACTIONS, 1789-1815
The Chief Characteristics of the Period. Though the crisis had been passed with the attainment of independence and the adoption of the Constitution, the quarter-century that followed was destined to prove a trying one for a country and a government that were both new. For not only were there the problems of putting the new government on its feet and furthering the economic development of the nation, problems which under the most favorable conditions presented many difficulties, but these were further complicated by the outbreak of the protracted wars into which all of Europe was plunged, resulting in important reactions upon the course of both economic and political events in the United States and eventually drawing this country also into war.
These wars, therefore, brought into the period an abnormal element to complicate the situation, and in order to untangle and understand the dominant factors which shaped the economic history of this quarter- century it is essential to bear in mind these two separate groups of forces: (1) the abnormal influences arising out of wars and (2) the changes incident to the establishment of the new government and the furthering of the country's economic development along more normal lines of growth. In the following account the reactions of the European wars will be described first, as helping to explain some features in the record of the more normal course of developments that follows, and conditions during the War of 1812 will be treated separately.
The Reaction of European Wars upon Foreign Commerce to 1812. In 1789 the French Revolution broke out. The succeeding events in 1792 drew France into a war with her neighbors which soon involved the whole of Europe and continued almost without interruption until the final downfall of Napoleon at Waterloo in 1815. The effects of these wars up to 1812, as far as the economic life of the United States was concerned, were chiefly felt in the fields of foreign trade and shipping and in the resulting changes in the demand for the products of the country's agriculture and manufactures. These wars made the United States the chief neutral carrier of the world and gave a tremendous stimulus to the shipbuilding industry and the merchant marine; at the same time they con