American System (economics)

The American System, pioneered by Henry Clay, created a high tariff to support internal improvements such as road-building. This mercantilist system benefited New England and hurt the South and West.

The high tariff was supported by New England, which had a heavy manufacturing base, because it protected the factories from foreign competition and allowed higher prices. The South, on the other hand, produced cotton for export and feared retaliatory tariffs on its products from other countries.

Amongst the most important improvements created under the American system were the Erie Canal and the Cumberland Highway. NOTE: anyone with American history knowledge--verify these?

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