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Content: the Deep South concentrating on cotton cultivation, and the West seeking transportation routes to market their agricultural goods. [ 2]
Despite these sectional developments, America emerged from the War of 1812 as a young nation-state, with a renewed sense of self-reliance and common identity. [ 3]
Post-War European threats and the rise of US economic nationalism[edit]
The Treaty of Ghent in December 1814 did not resolve US–British boundary and territorial disputes in  Louisianaand Spanish Florida. The frontier remained a flashpoint for international strife.[4] In addition, British economic aggressionpersisted. In a move to recapture American markets, Great Britain proceeded to systematically flood the US markets with superior manufactured items at cut-rate prices, the aim of which was to drive American manufacturers out of business. [ 5][6]
These geostrategic and economic provocations caused a shift in domestic policy. The strict constructionistideologists of the dominant Jeffersonian Republican Party – though averse to concentrating power into the hands of the federal government – recognized the expediency of nationalizing certain institutions and projects as a means of achieving national growth and economic security. [ 7][8]
In his Seventh Annual Message to the Fourteenth Congress on December 5, 1815, President James Madison suggested legislation to create 1) a national bank with regulatory powers 2) a program of federally funded internal improvementsfor roads and canals, and 3) a protective tariff to shelter emerging American manufacturing from the advanced industries in Europe. [ 9]
The Federal deficit and the tariff debate[edit]
In December 1815, Treasury Secretary Alexander J. Dallas presented a federal budget report to Congress projecting a substantial government deficit by the end of 1816. Though his budget figures were not in dispute, the means of raising the funds were, and proposals for direct or excise taxes were generally unpopular.[10] Secretary Dallas called for a limited protective tariff on manufactures to forestall the deficit.