American System

Monroe and Calhoun were driven by a vision of what came to be called the “American System,” a way of harnessing the full power of the federal government to nurture struggling American industry through a protective tariff to ward off competition from imports; the creation of the Bank of the United States to provide a reliable source of credit to industry; and federal financing of road, canal, and harbor construction. Unfortunately, Monroe and Calhoun were never able to agree on all three of these components. While both supported the bank, Monroe repeatedly vetoed bills to fund “internal improvements”—roads and the like—while he endorsed heavy tariffs. Without adequate transport, Calhoun noted with bitterness, the West could not compete commercially with the East. He also said that the tariff, instead of protecting all American industry, fostered eastern development while operating to keep the isolated West financially strapped. A three-legged stool can stand; a two-legged one cannot. The American economy tottered.