Internal improvements

I the "monied gentry" and their improvement plans as visionary and extravagant, and gradually eroded public confidence in government action and authority. In their assaults on the Federalists' national agenda, Old Republicans perfected a language of opposition that provided the template for almost all future critiques of federal power: fear of centralized power; burdening taxpayers; taxing one locale for the benefit of another; creating self-perpetuating bureaucracies; distant governments undermining local authority; and subsidizing the schemes of the wealthy at public expense.

Early development

The federal role in funding and constructing internal improvements was one of the most persistent and contentious issues of American politics in the years after the revolution. With independence, elites based in the various regional economies of the American coastal plain did share an interest in developing the transportation infrastructure of the country. Unlike Europe, they were isolated from one another by poor inland transportation links and the legacy of their colonial trading patterns, and separated from their interior lands by formidable geographic obstacles. George Washington repeatedly pressed his vision of a network of canals and highways to be created and overseen through the auspices of wise leaders at the head of an active republican government. This initial thrust for internal improvements fell victim to what Washington considered the narrow-minded and provincial outlook of the individual states, and federal authority hamstrung by the Articles of Confederation to the point of impotence.

The fledgling government, however, set historic precedent and broad transportation policy in 1787 concerning new lands west of the original colonies in the Northwest Ordinance; it established free usage of its inland waterways and their connecting portages, and expressed this intent for any other lands and resources in future states. While some consider that Washington watched as rivalries between the states of Maryland and Virginia gradually rendered his Potomac Company null and void by withholding public monies, out of fear that a rival state might derive greater benefit from their own appropriations, others consider these events in a different light. The preliminary report of the Inland Waterways Commission issued in 1908, provides a unique topical perspective on these and other concurrent historical events on-going at the time. It notes: "The earliest movement toward developing the inland waterways of the country began when, under the influence of George Washington, Virginia and Maryland appointed commissioners primarily to consider the navigation and improvement of the Potomac; they met in 1785 in Alexandria and adjourned to Mount Vernon, where they planned for extension, pursuant to which they reassembled with representatives of other States in Annapolis in 1786; again finding the task a growing one, a further conference was arranged in Philadelphia in 1787, with delegates from all the States. There the deliberations resulted in the framing of the Constitution, whereby the thirteen original States were united primarily on a commercial basis —the commerce of the times being chiefly by water."

Although the country already had an extensive coastline, inland river systems, and the largest freshwater lake system in the world, the 1803 Louisiana Purchase greatly enhanced the area claimed, as well as the need for developmental improvement. The acquisition brought the combined lands of the Missouri, Ohio, and Mississippi River basins all under federal control.

Many Americans also shared the belief that increased inter-regional communications would strengthen the fragile union by fostering shared economic interests. The case for federally funded internal improvements was thus strong, because such a program could serve both local and national economic interests as well as a critical nation-building role. Promoters furthermore made a convincing case that only the federal government could effect the desired projects, since the federal budget typically operated in surplus while the states lacked adequate resources, and the states faced difficult coordination problems best solved through national political institutions. Secretary of the Treasury Albert Gallatin's 1808 Report on the Subject of Public Roads and Canals was one such early plan.

Later efforts

Main article: American System (economic plan)

Henry Clay's American System, devised in the burst of nationalism that followed the War of 1812, remains one of the most historically significant examples of a government-sponsored program to harmonize and balance the nation's agriculture, commerce, and industry. This "System" consisted of three mutually reinforcing parts: a tariff to protect and promote American industry; a national bank to foster commerce; and federal subsidies for roads, canals, and other "internal improvements" to develop profitable markets for agriculture. Funds for these subsidies would be obtained from tariffs and sales of public lands. Clay argued that a vigorously maintained system of sectional economic interdependence would eliminate the chance of renewed subservience to the free-trade, laissez-faire "British System." In the years from 1816 to 1828, Congress enacted programs supporting each of the American System's major elements. After the 1829 inauguration of Andrew Jackson, with his administration's emphasis on a limited role for the federal government and sectional autonomy, the American System became the focus of anti-Jackson opposition that coalesced into the new Whig Party under the leadership of Henry Clay.