Henry Clay proposed the American System to protect northern industries.
The American System was an American mercantilist economic plan based on the ideas of the American School of Alexander Hamilton, developed later by Friedrich List, which proposed high tariffs to support public works (such as road construction), a national bank to promote productive companies, and create a national currency. It was assumed that this program would allow the United States to grow and prosper by providing defense against dumping of cheaper foreign products, mainly from the British Empire.
The Liberal Party and a number of political leaders including Henry Clay, John C. Calhoun and John Quincy Adams proposed a plan to strengthen and unify the nation that included high tariffs, maintain high public land prices to generate income, creation of a national bank and the development of public works. Clay first used the term American system in 1824 although he had been working on its details many years before.
Both the South and the West of the USA opposed the plan because these regions exported agricultural products and did not want to pay more expensive the manufactured products they needed.
Congress approved some measures of this plan. The Second Bank of the United States was reconstituted in 1816 for 20 years and the high tariffs were maintained from the days of Hamilton until 1832. However, the national public works system was never properly financed, due in part to factional jealousies and constitutional disputes over those expenses.
