Western Lands and the Political Economy of Henry Clay's American System, 1819-1832

Abstract

For generations, the American System, a nationalist program to unite the country economically and make Henry Clay president, has been standard fare for historians. But the public lands element of Clay's systemmight be viewed in more specific relation to the political economy and social circumstances that generated it. In his time, economic doctrines that glorified agriculture held sway with many in Congress and elsewhere, threatening the tariff protection that Clay urged. Also, as James Madison warned, the tendency of vacant lands to pull away the laboring class could frustrate any protectionist approach in America: This is the great obstacle to the spontaneous establishment of Manufactories, and will be overcome with the most difficulty wherever land is cheapest, and the ownership of it most attainable. The apparent dilemma of reconciling a manufacturing policy with the promotion of western interests troubled Clay through much of the early nineteenth century. From 1824 on, Missouri Senator Thomas Hart Benton's political dramatizing of the land question, with various proposals to reduce progressively-or graduate-the minimum price of federal lands according to their length of time for sale, damaged Clay's image as a western leader and questioned his economic affinity for his own section. Alternatively, Illinois governor Ninian Edwards's agitation in the late 1820s for Congress to cede the lands outright to the new states, within whose boundaries they lay, posed less a challenge to Clay's position.1 Could the federal government promote manufacturing without pegging federal land prices so high as to stem a free flow of westward migration? And if Congress were to balance western growth against that of manufacturing, would this choice undermine the cherished Jeffersonian vision of an expanding agricultural republic in America? During the 1820s and early 1830s, Clay and his followers answered with a strained yes to the first question and a cautious no to the second. These responses came when economic events after 1815 necessitated much rethinking of republican political economy, not only in light of foreign trade prospects, but also to accommodate an increasingly diverse and more fluid domestic society. To understand the evolution of Clay's position on unsettled lands is to clarify both his role as a leader from the West and the way that his economic views helped to shape the varied landscape of Jacksonian-era politics. Perhaps because historians have seen the American System chiefly in terms of protective tariffs, federally funded internal improvements, and a national bank, they have understated the importance of public land policy to Clay and other nationalists. As if swayed by Benton's egalitarian rhetoric, many writers have assumed the Kentuckian's advocacy of the theory of the national domain to mean that he stood against rapid settlement. True, his 1832 plan to distribute land proceeds among the states was designed to quell western agitation for cheap lands, undermine proponents of cession, preserve the need for tariff receipts, and please his entrepreneurial supporters back home and elsewhere. But to leave it at that is still to ignore much of the basis for Clay's land program. In fact, the actual settling of lands mattered to him as much as revenue because of its impact on the social structure, economic stability, and moral character of the West. In his mind, there was never any serious conflict between revenue and settlement objectives; both could be served well enough in a system that kept lands reasonably cheap but did not give them away.2 More broadly, the Panic of 1819 was a moment of reckoning for Clay and other protectionists. Much of the American System emerged in reaction to the social and economic chaos of the panic-not just the need for national selfsufficiency after the War of 1812. Although historians have long considered the effect of the panic on Jacksonian ideology, its role in the political economy of Jackson's opponents, Clay and the National Republicans, has attracted less attention. …