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The Dynamics ofWestern Settlement and

Eastern Capitalism1790–1820

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Two powerful ideologies

Nationalism and Sectionalism

Both grew tremendously during this period. Lets look at the factors that helped to promote these two ideologies, and try to understand the impact of each on the nation’s history.

People frequently think that secessionist plans originated among radical southern states’ rights advocates. The earliest secession schemes began in the Northeast and the West, we need to look at their motives, and the reasons for their failure.

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I also want to examine the factors that fostered the development of a capitalist economy in the United States. Specifically the forces behind the enactment of the Embargo Act of 1807. We need to understand the economic hardships and divisiveness it caused, and understand why it was replaced by less stringent legislation. We need to understand outwork, or putting-out, system; its origins and the effects it had on farm families, agriculture, and the market economy.

Students often believe that after the Revolution, Americans were united into a

single homogeneous people. The geographical expansion of the United States from 1790 to 1820 needs to be understood, especially the roles played by American presidents, diplomats, military forces, and foreign nations (including Native Americans) in acquiring new territory. We need to examine the power and influence of state and local governments in the early nineteenth century, and the numerous ways in which they sought to improve the welfare of their citizens and to regulate social life.

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Students often believe that after the Revolution, Americans were united into a single homogeneous people.

The geographical expansion of the United States from 1790 to 1820 needs to be understood, especially the roles played by

American presidentsdiplomatsmilitary forces and foreign nations (including Native Americans)

in acquiring new territory.

We need to examine the power and influence of state and local governments in the early nineteenth century, and the numerous ways in which they attempted to improve the welfare of their citizens and to regulate social life.

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Thanks in part to purposeful political leadership and innovative public policies, the young American republic grew at an astounding pace between 1790 and 1820.

First Census taken in 1790 -

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The United States acquired immense new lands in the West, particularly through Thomas Jefferson’s purchase of Louisiana from France, and settled them quickly. By 1820, more than two million white an black Americans were living west of the Appalachians.

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Native Americans, however, struggled with whites for the preservation of their lands and culture. National policy promoted farming in the West, and state legislatures devised legal innovations and financial incentives to stimulate economic growth in the East.

The results of these twin initiatives were soon apparent as per capita income in the United States increased after 1800.

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With the election of Thomas Jefferson in 1800, Republicans began wresting political power from northeastern merchants and creditors and implementing policies to help yeomen farmers.

While retaining the Bank of the United States and many Federalist officials, Jefferson eliminated excise taxes, reduced the national debt, cut the size of the army, and lowered the price of land in the West.

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Westward Expansion

Native American Resistance

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Invoking the Treaty of Paris and viewing Britain’s Indian allies as conquered peoples, the U.S. government asserted its ownership of the trans-Appalachian West;

***Native Americans rejected this claim and pointed out that they had not signed the treaty and had never been conquered.

In 1784, the United States used military threat to force the pro-British Iroquois peoples to sign the Treaty of Fort Stanwix and relinquish much of their land in New York and Pennsylvania.

Farther to the west, the United States induced Indian peoples to give up most of the future state of Ohio.

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The Indians formed a Western Confederacy to protect themselves against aggressive settlers and forced a peace compromise in the Treaty of Greenville in 1795.

In practice, this agreement eventually brought the transfer of millions of acres of Indian land to the U.S. government and sparked a wave of American migration into the region, resulting in new conflicts with native peoples over land and hunting rights.

Most Native Americans resisted attempts to assimilate them into white society and rejected European farming practices.

***American Indian policy from 1790 to 1820 included - assimilation of Indians into American culture.- acknowledging Indian ownership of western lands.- coercing and bribing Native Americans to cede vast tracts of western lands to the Americans.

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Migration and the Changing Farm Economy

Cumberland Gap was "the way West" until 1810

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The migratory upsurge of white farmers and planters brought financial rewards to many settlers and transformed the American farm economy.

Most migrants who flocked through the Cumberland Gap were white tenant farmers and yeomen families fleeing the depleted soils and planter elite of the Chesapeake region.

Though poor migrants to Kentucky and Tennessee believed they had a customary right to occupy “waste vacant lands,” the Virginia government allowed them to purchase up to 1,400 acres of land at reduced prices but sold or granted estates of 20,000 to 200,000 acres to wealthy individuals and partnerships.

*** The end result was that New lands opened by the Treaty of Paris were primarily controlled by rich speculators.

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A second stream of migrants, dominated by slave-owning planters and their enslaved workers, moved along the coastal plain of the Gulf of Mexico into the future states of Alabama, Mississippi, and Louisiana.

Cotton financed the rapid settlement of this region as well as the expansion of ***slavery into the Old Southwest as technological breakthroughs increased the demand for raw wool and cotton.

Seeking land for their children, a third stream of migrants flowed out of the overcrowded communities of New England into New York, Indiana, and Ohio.

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In New York, speculators snapped up much of the best land and attracted tenants to work it by offering farms rent-free for seven years, after which they charged rents; many New England yeomen preferred the Holland Land Company, which allowed settlers to buy the land as they worked it, but high interest rates and the lack of markets initially mired thousands of these freeholders in debt.

Unable to compete against low-priced western grains, eastern farmers changed their agriculture methods — rotating crops, diversifying production, and planting year round — which helped increase their productivity and boosted the entire American economy.

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The Transportation Bottleneck

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Improved inland trade became a high priority for the new state governments to overcome geographic impediments to getting goods to market.

States chartered corporations to dredge rivers and build turnpikes and canals. *** One of the early successes in solving transportation problems in the United States was the construction of the Lancaster Turnpike in 1794 in Pennsylvania.

Only after 1819, when the Erie Canal linked central and western New York to the Hudson River, could inland farmers easily sell their goods in eastern markets.

***Improvement in roads and the construction of canals decreased the cost of transportation in the East, but these conveniences did not reach western farmers across the Appalachian Mountains. States such as Ohio and Kentucky relied on the transport of goods via the Mississippi River south to New Orleans.

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Western settlers paid premium prices for land along navigable rivers, and farmers and merchants built barges to float goods to the port of New Orleans.

Many isolated western settlers had no choice but to be self-sufficient; self-sufficiency meant a low standard of living.

Settlers continued to migrate westward, confident that the canal and road system would yield future security.

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The Republicans’ Political Revolution

The Jeffersonian Presidency

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Thomas Jefferson was the first chief executive to hold office in the District of Columbia, the new national capitol.

Before John Adams left office, the Federalist controlled Congress had passed the Judiciary Act, which created sixteen new judgeships and six new circuit courts. Just before leaving office, Adams filled the judgeships and courts with “midnight appointments.”

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James Madison’s refusal to deliver the commission appointing William Marbury, one of Adams’s midnight appointees, as a justice of the peace in the District of Columbia caused Marbury to petition the Supreme Court to compel delivery under the terms of the Judiciary Act of 1789.

In Marbury v. Madison, Chief Justice John Marshall asserted the Court’s power of judicial review.

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Despite this setback, Jefferson mobilized Republicans to shrink back the national government’s size and power they believed was grossly over expanded through Federalist policies.

Republicans refused to reenact the Alien and Sedition Acts when they expired, amended the Naturalization Act to permit resident aliens to become citizens after five years, and secured repeal of the Judiciary Act, thereby ousting forty of Adams’s “midnight appointees,” though Jefferson allowed competent Federalist bureaucrats to retain their jobs.

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In foreign affairs, Jefferson met the crisis of the Barbary “pirates” by initially refusing to pay an annual bribe (“tribute”) to protect American vessels in the Mediterranean, but, to avoid war, negotiated a diplomatic settlement that reduced the tribute payment.

In domestic matters, Jefferson set a clearly Republican course: he abolished internal taxes; reduced the size of the army; and tolerated the Bank of the United States.

With Thomas Jefferson and Albert Gallatin at the helm, the national debt was reduced and the nation was no longer run in the interests of northeastern creditors and merchants.

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***Jefferson's Republican revolution cut back the size and scope of the federal government, decreased the national debt, and opened up the West. There were no work projects instituted for the disadvantaged. Although Jefferson did away with many Federalists policies, he removed only about one-fourth of the Federalist officeholders held over from the previous administration.

In foreign policy, Jefferson tried to enforce a neutral position against Britain and France, but he allowed the Alien and Sedition Acts to expire and decreased the term required for naturalization to five years.

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Westward Expansion

The issues of westward expansion, foreign policy,and slavery caused deep political divisions between geographicalregions. Indian uprisings and expansionist demands by western Republicans led President James Madison into the War of 1812 against Britain.

The war split the nation, prompting a secessionist Movement in New England, but a negotiated peace ended the military stalemate, and Andrew Jackson’s victory at NewOrleans preserved American honor. The diplomacy ofJohn Quincy Adams led to the acquisition of Floridaand the settlement of boundaries with British Canadaand Spanish Texas.

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Jefferson and the West

As president, Jefferson seized the opportunity to increase the flow of settlers to the West; Republicans passed laws reducing the minimum acreage available for purchase.

In 1801, Napoleon Bonaparte coerced Spain into returning Louisiana to France; then he directed Spanish officials to restrict American access to New Orleans.

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To avoid hostilities with France, Jefferson instructed Robert R. Livingston, an American minister in Paris, to negotiate the purchase of New Orleans; simultaneously, he also sent James Monroe to Britain to seek its assistance in case of war with France.

In April 1803, Bonaparte, Livingston, and James Monroe concluded what came to be known as the Louisiana Purchase for $15 million dollars ($450 million in today’s dollars).

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Since it did not provide for adding new territory, Jefferson pragmatically accepted a loose interpretation of the Constitution.

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The acquisition of approximately 827,000 square miles would double the size of the United States.

The Senate ratified the treaty Oct. 20 by a vote of 24 to 7. Spain, upset by the sale but without the military power to block it, formally returned Louisiana to France on Nov. 30. France officially transferred the territory to the Americans on Dec. 20, and the United States took formal possession on Dec. 30.

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"This little event, of France's possessing herself of Louisiana … is the embryo of a tornado which will burst on the countries on both sides of the Atlantic and involve in it's effects their highest destinies."

Jefferson's prediction of a "tornado" that would burst upon the countries on both sides of the Atlantic had been averted, but his belief that the affair of Louisiana would impact upon "their highest destinies" proved prophetic indeed.

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In 1804, Jefferson sent Meriwether Lewis and William Clark on an expedition; they returned two years later with maps of the new territory (and regions beyond).

Fearing that western expansion would diminish their power, New England Federalists talked openly of leaving the Union.

Refusing to support the secessionists, Alexander Hamilton accused their chosen leader, Aaron Burr, of participating in a conspiracy to destroy the Union, and Burr shot Hamilton to death in a duel.

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As evidenced by Burr’s probable plan to either capture territory in New Spain or to foment a rebellion to establish Louisiana as a separate nation headed by himself, the Republicans’ policy of western expansion increased party conflict and generated secessionist schemes in both New England and the West.

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Conflict with Britain and FranceAs the Napoleonic Wars ravaged Europe, Great Britain and France refused to respect the neutrality of American merchant vessels.

Napoleon imposed the “Continental System,” which required customs officials to seize neutral American ships that had stopped in Britain.

The British naval blockade stopped American ships carrying goods to Europe and also searched them for British deserters, who were then impressed (forced) back into service in the Royal Navy.

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Americans were outraged in 1807 when a British warship attacked the Chesapeake, killing or wounding twenty-one men and seizing four.

Jefferson devised the Embargo Act of 1807, which prohibited American ships from leaving their home ports until Britain and France repealed restrictions on U.S. trade.

The act caused American exports to plunge, prompting Federalists to demand its repeal.

*** The Embargo was an imaginative but naive policy that hurt Americans more than anyone else.

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Despite discontent over the embargo, voters elected Republican James Madison to the presidency in 1808. As president, James Madison replaced the embargo with new economic restrictions, none of which persuaded Britain and France to respect America’s neutrality rights.

Republican congressmen from the West thought Britain was the major offender as evidenced by its assistance to the Indians in the Ohio River Valley.

Republican expansionists in Congress condemned British support of Tecumseh and his brother Tenskwatawa, who had revived the Western Confederacy, and threatened to invade Canada in retaliation.

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In 1811, following a series of clashes between settlers and the Western Confederacy, William Henry Harrison, the governor of the Indian Territory, led an army against Tenskwatawa’s village of Prophetstown, fended off the confederacy’s warriors at the Battle of Tippecanoe, and burned the village to the ground.

Henry Clay and John C. Calhoun, hoping to gain new territory and discredit the Federalists, pushed Madison toward war with Britain.

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With elections approaching Madison demanded British respect for American sovereignty in the West and neutral rights on the Atlantic

When the British did not respond quickly, Madison asked Congress for a declaration of war. In June 1812, a sharply divided Senate voted 19 to 13 for war, and the House of Representatives concurred, 79 to 49.

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The War of 1812

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***Pressure for war with Britain primarily came from western Republicans who saw British support for the Indians as a threat to American expansion.

The War of 1812 was a near disaster for the United States, both militarily and politically.

Political divisions in the United States prevented a major invasion of Canada in the East; New Englanders opposed the war, and Boston merchants declined to lend money to the government.

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***deeply divided along party lines; the Federalist merchants in the Northeast were opposed to war, while most Republicans supported the war.

After two years of sporadic warfare, the United States had made little progress along the Canadian frontier and was on the defensive along the Atlantic; moreover, the new capital city was in ruins. *** The war was going badly for the United States when it ended.

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In the Southwest, Andrew Jackson led an army of militiamen to victory over British supported Creek Indians in the Battle of Little Horseshoe Bend and forced the Indians to cede 23 million acres of land.

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Federalists met in Hartford, Connecticut to discuss a strategy “for a radical reform in the National Compact.”

Some proposed secession but the majority wanted an amendment to the Constitution that would:

limit presidents to a single four-year termrotate the presidency among citizens of different states

They also suggested amendments: restricting commercial embargoes

requiring a two-thirds majority in Congress to declare war, to prohibit trade, and to admit a new state to the Union.

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The war continued to go badly; an American naval victory on Lake Champlain narrowly averted a British invasion of the Hudson River Valley; British troops landed outside New Orleans and threatened to cut American trade down the Mississippi River.

American military setbacks strengthened opposition to the war, but, fortunately, Britain, sapped from its twenty-year war with France, wanted peace.

The Treaty of Ghent, signed December 24, 1814, restored the prewar borders of the United States.

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Andrew Jackson’s victory against the British at New Orleans not only made him a national hero but it also redeemed the nation’s pride, and, together with the coming of peace, undercut the Hartford convention’s demands for a significant revision of the Constitution.

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On January 8, 1815, American forces, under General Jackson, decisively defeated the British

forces at New Orleans.

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As a result of John Quincy Adams’s diplomacy, the United States gained undisputed possession of nearly all the land south of the forty-ninth parallel and between the Mississippi River and the Rocky Mountains.

It was also at Adams’s urging that Monroe announced a new American foreign policy (the Monroe policy) in which it was declared that the American continents were not “subject for further colonization” in return for which the United States agreed “not to interfere in the internal concerns” of European nations.

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The Capitalist Commonwealth

Banks, Manufacturing, and Markets

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As Americans imposed a new political economy on the lands of the West, they developed a capitalist economy in the East.

Beginning in the 1790s, merchant capitalists created a flourishing outwork system of rural manufacturing, and state governments, by means of the commonwealth system, awarded corporate charters and subsidies to assist transportation companies, manufacturers, and banks.

***The commonwealth system involved the following policies: - corporate charters with limited liability.- monopoly charters with eminent domain for transportation projects.- judicial support of corporate activity on the basis of "social utility."

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America was a nation of merchants, and to finance enterprises, Americans needed a banking system.

In 1791, Congress chartered the first Bank of the United States; however, it did not survive. When the bank’s twenty-year charter expired in 1811, President Madison did not seek its renewal.

Republican minded state legislatures enacted statutes that encouraged economic development by redefining common law property rights.

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Merchants, artisans, and farmers petitioned their state legislatures to charter new banks and by 1816 there were 246 state-chartered banks with $68 million in banknotes in circulation.

Many banks issued notes without adequate specie reserves and made ill-advised loans to insiders.

The Panic of 1819, sparked by a sharp drop in world agricultural prices, gave Americans their first taste of the business cycle’s periodic expansion and contraction of profits and employment.

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The Panic of 1819 also revealed that artisans and yeomen as well as merchants now depended on regional or national markets; merchant-entrepreneurs developed a rural based manufacturing system similar to the European outwork, or putting-out, system.

The economic advances that the economy enjoyed during this time stemmed primarily from innovations in organization and marketing rather than in technology.

The penetration of the market economy into rural areas motivated farmers to produce more goods.

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As the rural economy turned out more goods, it significantly altered the environment; by the mid-nineteenth century, most of the forests in southern New England and eastern New York disappeared and mill dams altered the flow of New England’s rivers.

The new market system decreased the self sufficiency of families and communities even as it made them more productive.

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Public Policy: The Commonwealth System

Throughout the nineteenth century, state governments had a much greater impact on the day-to-day lives of Americans than did the national government.

As early as the 1790s, state legislatures devised an American plan of mercantilism, known as the “commonwealth system.”

State legislatures granted hundreds of corporate charters to private businesses to build roads, bridges, and canals to connect inland market centers to seaport cities.

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Incorporation often included a grant of limited liability and transportation charters included the power of eminent domain.

By 1820, innovative state governments had created a new political economy: the Commonwealth system that used state incentives to encourage business and improve the general welfare.

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Federalist Law: John Marshall and theSupreme Court

Led by the Federalist John Marshall, the Supreme Court protected the traditional rights of property owners and the charter privileges of business corporations.

Entrepreneurs took advantage of state legislation and judicial protection in order to create new business enterprises, strong regional economies, and the beginnings of a national market system.

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Both Federalists and Republicans endorsed the idea of the commonwealth system, but in different ways: Federalists supported Alexander Hamilton’s program of national mercantilism: a funded debt, tariffs, and a central bank where Jeffersonian Republicans generally preferred the state-based commonwealth system.

Following the War of 1812, some Republicans advocated national economic initiatives; in 1816, Republican Henry Clay of Kentucky won legislation creating the Second Bank of the United States and persuaded President Madison to sign it.

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The difference between Federalist and Jeffersonian Republican conceptions of public policy emerged during John Marshall’s tenure on the Supreme Court.

Marshall was a committed Federalist who shaped the evolution of the Constitution through three principles that formed the basis of his jurisprudence: a commitment to judicial authority; the supremacy of national over state legislation; and a traditional, static view of property rights.

After Marshall proclaimed the power of judicial review in Marbury v. Madison, the doctrine evolved slowly; the Supreme and state courts used it sparingly and only to overturn state laws that conflicted with constitutional principles.

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Marshall adopted a loose construction of the Constitution and asserted the dominance of national statutes over state legislation (McCulloch v.Maryland, 1819, and Gibbons v. Ogden, 1824).

Under Marshall, the Supreme Court construed the Constitution so that it extended protection to the property rights of individuals purchasing state-owned lands (Fletcher v. Peck, 1810, and Dartmouth College v. Woodward, 1819).

***In Fletcher v. Peck, John Marshall contributed to the emergence of a national capitalist economy by expanding the contract clause of the Constitution to include state grants and charters, thus securing the validity of contracts across state lines and encouraging companies to do interstate business.

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Nationalist-minded Republicans won the allegiance of many Federalists in the East, while Jeffersonian Republicans won the support of western farmers and southern planters.

Chief Justice John Marshall - was a loose constructionist. - used the contract clause to defend property rights. - claimed the right of judicial review.

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Although the decline of the Federalists and of party politics prompted observers to dub James Monroe’s two terms as president (1817–1825) as the “Era of Good Feeling,” the Republican Party divided into a “national” faction and a “Jeffersonian,” or state oriented, faction.

This division in the ranks of the Republican Party would produce a second party system in which national-minded Whigs faced off against state-focused Democrats.