In a message to Congress transmitting the treaty of peace, President Madison congratulated the country on the termination of a war “waged with a success which is the natural result of the wisdom of the legislative councils, of the patriotism of the people, of the public spirit of the militia, and of the valor of the military and naval forces of the country.” The verdict of history does not sustain this pæan of victory. “The record, upon the whole,” declares Admiral Mahan, “is one of gloom, disaster, and governmental incompetence, resulting from lack of national preparation, due to the obstinate and blind prepossessions of the Government, and, in part, of the people.” Public opinion indorsed the President’s estimate of the late struggle.

As a matter of fact, the people of the United States had seen little of the disasters and ravages of war. All the important battles took place on the borders. The great mass of the people were undisturbed in their vocations. There was hardly a day during the war when a farmer could not till his acres in tranquillity. Not an important city save Washington was taken during the war. Nor was the loss of life large in proportion to population. All told, the killed and wounded did not exceed five thousand men. Napoleon lost nearly two hundred thousand French soldiers in his disastrous Russian campaign.

American character appeared at its best and at its worst in these three years of war. Even the British press could not gainsay the resourcefulness and intelligence of the American soldier and sailor, though the phrase “Yankee smartness” conveyed also the unpleasant imputation of trickiness and moral laxity. Wherever conditions permitted a fair test, the superiority of the American gunner was incontestable. The greater losses of the British whenever the armies met on even terms proved the superior marksmanship of the American militiaman. The adaptation of the fast-sailing schooner to privateering was further evidence of an alert intellect which was quick to adapt means to ends. This quality, to be sure, has been bred in every frontier folk by the very necessities of existence, but it appeared in marked strength in the American of this time. While the shipbuilders of New England were laying the keels of these privateers, Robert Fulton was perfecting his steamboat on the Delaware and Hudson rivers. In the year before the war, the first steamboat appeared on the Ohio, and before the end of the war fourteen were plying on Western waters, and opening up a new era in the American colonization of the continent.

This instinctive adaptation of means to ends was less successful in the realm of American politics. No celerity could compensate for want of prevision on the part of the authorities at Washington. The lesson of the war was not lost upon James Madison, at least. “Experience has taught us,” said he in a message to Congress,-and the words amounted to a confession of error,-“that neither the pacific dispositions of the American people nor the pacific character of their political institutions, can altogether exempt them from that strife which appears, beyond the ordinary lot of nations, to be incident to the actual period of the world; and the same faithful monitor demonstrates that a certain degree of preparation for war is not only indispensable to avert disaster in the onset, but affords also the best security for the continuance of peace.”

The indirect effects of war were more widely felt. The blockade affected adversely all the extractive industries upon which the vast majority of the people in all the States depended. Only New England escaped unscathed-and the circumstance was not creditable to the section. In the latter months of 1814 ruin stared the Southern planter in the face. The lifting of the blockade wrought a transformation. Planters in the Old Dominion, who could find no market for their tobacco and wheat on February 13, sold their produce on February 14 at prices which made them rich again. Flour which had found almost no purchasers at seven and a half dollars a barrel sold readily at ten. Imported commodities fell in price correspondingly. Ships put to sea at once laden with the accumulated produce of two long years. The export trade, which had fallen to less than $7,000,000, leaped to $46,000,000 between March and October. Fully two thirds of this wealth accrued to the Southern planters who raised the three great staples, tobacco, cotton, and rice. The people of the Middle States shared only moderately in this prosperity. The value of the wheat and corn which the farmers of Pennsylvania, New York, and New Jersey raised for export did not much exceed that of tobacco alone.

The return of peace brought relief also to the shipping industry of New England. Vessels which the embargo and the restrictive policy and the hazards of war had kept in port now put to sea again. But the European conditions which had created such immense profits for the Yankee skipper in 1805, 1806, and 1807 had passed away. Foreign ships now bid for the carrying trade of the Atlantic, and their competition cut down freight rates to a point which caused melancholy forebodings in the homes of Boston and Salem shipowners.

The long period of commercial restriction followed by three years of war caused a dislocation of industry in New England. Capital which had been invested in shipping now sought larger returns in the manufacture of those commodities hitherto supplied by British factories. When the embargo was laid, only fifteen cotton mills were in operation, representing a capital of about $500,000. Two years later, capital to the amount of $4,000,000 had been invested in factories which employed nearly 4000 hands. At the close of the war, $40,000,000 were invested in cotton mills which consumed 27,000,000 pounds of raw cotton and gave employment to 100,000 men and women. Hitherto much of the weaving had been done on hand looms in the farmhouses of New England: only the spinning had been done by machinery. In 1814, Francis Lowell introduced the power loom into his mill at Waltham, Massachusetts, and brought the various processes of cotton manufacturing under one roof. The foundation of the New England factory system was thus laid before the end of the war. In the following decade the famous factory towns on the Merrimac came into existence. The metamorphosis of the section had begun.

The woolen industry received a great impetus in this same period of artificial stimulation, but it failed to expand with the same rapidity, owing to the scarcity and cost of the finer grades of wool. Nevertheless, in the year 1816, about $12,000,000 were invested in the manufacture of woolen fabrics. Like the cotton industry, this owed its development to the policy of Presidents from Virginia. It is one of the ironies of history that Jefferson and Madison should have unwittingly sacrificed Southern planters to build up industries in the North, and that New Englanders should have excoriated those worthies for policies which became the source of New England prosperity.

To these new industries peace spelled disaster. English manufacturers seized the opportunity to unload the goods which they had been piling up in their warehouses for years. Importations which had amounted to $13,000,000 in 1813 rose to the staggering sum of $147,000,000 in 1816. Not even import duties stemmed the tide, for as Lord Brougham stated in Parliament, “It was well worth while to incur a loss upon the first exportation, in order, by a glut, to stifle in the cradle those rising manufactures in the United States which the war had forced into existence, contrary to the natural course of things.”

In October, 1815, the cotton manufacturers of Rhode Island sent a memorial to Congress, stating that their one hundred and forty factories were threatened with destruction by this cut-throat competition. Such complaints seemed unduly apprehensive; yet before the year closed, most of the textile mills had shut down. The distress of New England was no longer feigned. Caught in a process of transition from shipping to manufacturing, capital could neither advance nor retreat. It was a legitimate case for governmental aid. Even Jefferson laid aside his early prepossessions in favor of a simple bucolic life for the American citizen, and admitted that “to be independent for the comforts of life, we must fabricate them for ourselves. We must now place the manufacturer by the side of the agriculturist.” Madison, too, departed from the Virginia faith so far as to recommend sufficient protection of “the enterprising citizens whose interests are now at stake” to guard them “against occasional competition from abroad.”

Within sight of the blackened walls of the Capitol, in temporary quarters which it had rented, Congress set its hand to the work of national reconstruction. Before many months had passed, the new Capitol, under the supervision of Latrobe, began to rise from the ruins of the old, a symbol of a new era. On the walls of the rotunda, John Trumbull painted scenes which were to remind coming generations of the heroic days of the Revolution, and within its confines was eventually installed what was left of the library of Congress, with the gaps supplied in part by Jefferson’s private collection, which Congress purchased. The new nation was not to disdain wholly the finer aspects of life nor to despise the garnered wisdom of the ages.

In March, 1816, Congress took under consideration a tariff bill which had been drafted on lines marked out by the new Secretary of the Treasury, A. J. Dallas, of Pennsylvania. The debates brought out a wide diversity of interests. Daniel Webster represented admirably the mingled feelings of his New England constituents when he professed to favor existing manufactures, but deprecated any action calculated to produce new industries. He never wished to see the time when the young men of the country would be forced to close their eyes to heaven and earth, and open them in the dust and smoke of unwholesome factories. On the other hand, Calhoun, eschewing a narrow sectionalism, declared that manufacturing must be encouraged as a wise national policy. “Neither agriculture, manufactures, nor commerce, taken separately, is the cause of wealth,” said he. “It flows from the three combined and cannot exist without each.” The South showed little of the apprehension which John Randolph expressed when he cried, “Upon whom bears the duty on coarse woolens and linens and blankets, upon salt, and all the necessaries of life?” and answered, “On poor men, and on slaveholders.”

The bill which Congress eventually passed fixed somewhat lower duties than Dallas had advised. A duty of twenty-five per cent was placed on cotton and woolen goods until June 30, 1819, when it was to be reduced to twenty per cent. By what was known as the minimum principle, all cotton fabrics costing less than twenty-five cents a square yard were held to have cost that amount and were made to pay corresponding duties. The object of this provision was to exclude from India the coarser and cheaper cotton textiles which would menace the products of New England looms. Other important articles were made subject to higher duties, such as rolled and hammered iron, leather goods, hats, carriages, and writing-paper. A comparison of these duties with those of the tariff of 1789 shows a marked increase. Where the average duty was seven and one half per cent in 1789, it was thirty per cent in the tariff of 1816. So far as the intent of the law is concerned, this tariff act committed the country to a fiscal policy in which “revenue was subordinated to industrial needs.”

Although the largest vote against the tariff bill came from the South and Southwest, twenty-three out of fifty-seven Representatives voted for the bill. New England showed a prepondering opinion in favor of protection: only ten out of twenty-seven Representatives opposed the bill. The Representatives of the Middle States ranged themselves emphatically on the side of protection; and with them stood the Congressmen from Ohio and Kentucky.

The close of the war found the country with a badly disordered currency and with a bankrupt treasury. Nowhere were the remedial efforts of Congress needed more. The condition of the currency was due, in part at least, to the failure of Congress in 1811 to perceive the regulative influence of a national bank. By refusing to recharter the United States Bank, Congress not only deprived the Treasury of an exceedingly valuable fiscal agent during the war, but also threw the door wide open to indiscriminate and unregulated state banking. Between 1811 and 1816 the number of these state institutions increased from eighty-eight to two hundred and forty-six, all of which exercised the right of issuing notes with little or no restriction. Inflation followed inevitably. During the blockade the banks of the Middle and Southern States suffered great distress by the constant drain of specie to New England and abroad. After the capture of Washington, practically all banks outside of New England were forced to suspend specie payments. The country experienced once more all the evils of a depreciated currency. Southern bank notes were refused for deposit in Philadelphia banks. Notes of these institutions in Philadelphia, in turn, were subject to a discount of twenty-four per cent in Boston. Uncertainty and distrust demoralized financial operations everywhere.

Wiser by the experience of five years, Congress was now disposed to establish another national bank. A first bill, however, fell short of the President’s desires and was vetoed. A second bill became law on April 10, 1816. The provisions of this Bank of the United States differed in several particulars from that chartered in 1790. Its capital was three and one half times as large. One fifth of the total capital of $35,000,000 was to be subscribed by the Government, and the remainder by individuals. Five of the twenty-five directors were to be appointed by the President of the United States. The funds of the Government were to be deposited in the Bank unless the Secretary of the Treasury should otherwise direct, laying his reasons for any such change before Congress. In return for the privileges granted in the charter, the Bank was required to transfer the government funds from place to place without charge, and to pay $1,500,000 to the Government. On its side the Government agreed not to charter any other bank except in the District of Columbia. The circulation of the Bank was limited to the amount of its capital. Its notes were to be payable on demand in specie and to be receivable in all payments to the Government.

Such an institution gave promise of serving the Government as a sound fiscal agent and of assisting materially in the restoration of the currency to a specie basis. The stock was subscribed promptly by 31,334 individuals, all but three thousand of whom resided in the Middle States. New England was still reluctant to support the plans of Mr. Madison; the South had other uses for its capital. To facilitate the resumption of specie payments, Congress passed a joint resolution, that after February 20 of the following year (1817), all dues to the Government should be paid in specie, treasury notes, national bank notes, or notes of banks payable in the “said currency of the United States.” This was strong medicine for the state banks. Unwilling or unable to contract their circulation and to call in their loans, the banks of the Middle States asked to have the date of resumption deferred, on the ostensible ground that the new bank could not be organized in time to assist them. The energetic Secretary of the Treasury disposed of this plea by putting the Bank in operation in January, 1817. On the date set by Congress the banks very generally resumed specie payments.

The propulsive force given to the Government by the war seemed likely to continue. The task of the National Government no longer seemed merely negative,-to “restrain men from injuring one another,” in the Jeffersonian phrase,-but positive and constructive. Even Madison, in his annual message of 1815, recommended liberal provision for defense, more military academies, an improved and enlarged navy, protection to manufactures, new national roads and canals, and a national university. He gave his support to Monroe’s proposal to fix the peace establishment at twenty thousand men; and he experienced the unique sensation of finding himself in advance of his party, which finally agreed upon an army of ten thousand men. Still more striking evidence of the change which had passed over the party of Jefferson was its willingness to retain the entire naval establishment and to appropriate $4,000,000 for frigates and ships-of-the-line. Clay and Calhoun, speaking for the younger Republicans, agreed that the greatest danger of the future lay in weak government. They were not in the least intimidated by the addition of $80,000,000 to the national debt as the result of war. That sum represented to their minds simply the price, none too large, of commercial and industrial independence.

These young aggressive spirits seemed at times quite indifferent to nice questions of constitutional law. Calhoun dismissed constitutional objections to a national bank with a wave of the hand: he thought discussion of such abstract themes “a useless consumption of time.” On introducing his bill for internal improvements, in December, 1816, he intimated that he did not propose to indulge in metaphysical subtleties respecting the Constitution. “The instrument was not intended as a thesis for the logician to exercise his ingenuity on; ... it ought to be construed with plain good sense.” If Clay exhibited more sensitiveness to constitutional limitations, it was because he had to clear himself from the charge of inconsistency. In supporting the Bank Bill in 1816 he frankly confessed that he had changed his mind on the point of constitutionality. He had believed the incorporation of a bank in 1811 unwarranted by the Constitution; but conditions had changed. What was then neither necessary nor proper was now both necessary and proper. The interpretation of the Constitution must always take existing circumstances into account. If Clay did not add to his reputation as an expounder of the Constitution by this speech, he represented admirably, nevertheless, the changes which circumstances had wrought in the convictions of his associates.

Against these new tendencies John Randolph set himself stark and grim. “The question is,” said he, replying to Calhoun’s new nationalism, “whether or not we are willing to become one great consolidated nation, or whether we have still respect enough for those old, respectable institutions [the States] to regard their integrity and preservation as a part of our policy.” Randolph spoke for a generation which was passing away; but his words touched a responsive chord in the breast of President Madison. On March 3, 1817, as he was about to leave office, he sent to Congress a message vetoing the Internal Improvements Bill and warning his party associates of the danger of latitudinarian views of the Constitution. This message was Madison’s farewell address. It was thoroughly characteristic of the man and the statesman.

The relaxing of Republican doctrines, and of party ties generally, divested the presidential election of any real political significance. The Federalists were thoroughly discredited. As a party they made no concerted effort to nominate candidates. Virtually, therefore, the selection of a President rested with the congressional caucus of the Republican party. The choice lay between two members of the President’s Cabinet: James Monroe, Secretary of State, and William H. Crawford, Secretary of the Treasury. Governor Tompkins, of New York, was put forward by enthusiastic partisans from that State, but he was not a national figure in any sense and commanded no support outside of his State. Intrigue played a part in this caucus, if contemporary testimony may be believed. Tradition has it that Martin Van Buren and Peter B. Porter prevented their New York delegation from voting for Crawford and thus threw the nomination to Monroe. Governor Tompkins was the choice of the caucus for Vice-President. No one could safely affirm that these nominees were the choice of the rank and file of the party. Here and there public meetings were held to protest against the dictation of the congressional caucus; but no organized opposition developed. The campaign proved to be a tame affair. Nowhere was there a real contest. Only three States, Massachusetts, Connecticut, and Delaware, chose Federalist electors. Not a ripple of excitement stirred the public when announcement was finally made that Monroe had received 183 electoral votes and Rufus King, 34. For the fourth time a Virginian had been raised to the Presidency.