Republican reform was based on economic policy. Public debt and taxes were evils of the highest magnitude in the Jeffersonian scripture. Money from the mass of citizens was drained by the debt and redirected it from the industrious enterprise of people, and resulted to a system of freedom, coercion, and corruption that was the nuisance of every government and deadly to a free one. The options were apparent: liberty and economy, and profusion and servitude. The debt had stood at $83 million and consumed in yearly interest nearly half the federal revenue. Gallatin created a scheme to differentiate the debt in 16 years by huge yearly appropriations though, astonishingly, to decrease taxes at the same time. All the internal taxes- Hamilton’s whiskey exercise, the land tax of the Adams administration- would be repealed. The government would entirely rely on the customhouses’ revenue. The plan needed deep reduction of expenditure: reduction in navy and army, in foreign embassies, and in civil offices, starting with the tax collectors.
Economic problems were the most problems facing the new government. The federal government had obtained a huge debt of $54 million including interest as a result of the revolution. Another $25 million were owed by the states. Paper money issued under the Continental Congresses and Articles of Confederation had no worth. Foreign credit was not available. 32-year-old Hamilton was therefore assigned to the task of resolving these problems. Hamilton, as Treasury Secretary designed a financial system that made the U.S. the best credit risk in the western world. Huge national debt was the paramount problem facing Hamilton. He proposed that that the entire debt of the federal government and states should be assumed by the government. His objective was to retire the old devalued obligations by borrowing new money at a lower interest rate.
Since 1815 to 1860, there was rapid economic development with the most significant being establishment of free markets, low interest rates on loans, and development of new markets. Increased food supply- due to agrarian revolution, cheap labor and readily available row materials are the factors which were involved in creating market revolution and industrial revolution. Consequently, these revolutions led to rapid economic development in America with emergence of specialized business men and women. It also facilitated religious development with numerous churches and other places of worshipping being developed.
In the 19thC upper and lower south came to differ in that in the upper south, the more relaxed system expanded to other aspects of slave life. It appears that in Virginia and Maryland most slaves were permitted to marry and have families even though these families lacked legal standing. They only existed through permission of the master. Furthermore, laws against holding church service and literacy in absence of white person were ignored or unenforced widely. In the lower south on the other hand, slaves were usually ill housed, ill cared for and ill fed. It was highly profitable to keep slaves work at cotton than permit them time to construct a decent shelter. Even the little garden plots permitted slaves in the upper south were normally absent in Mississippi.
Since 1802 to 1860, slavery spread westward through Deep South due to increased price of slaves. It was also due to increased need of cotton that required high production level with lower production costs. Slavery constructed a distinctive Southern economy and class structure in that owner of the slaves became first class, overseers second and slaves fall under lower class. Southern economy developed rapidly with industries developing at a rapid rate. Legal status and job opportunities available for free slaves were working in cotton plantation and industries where they offered cheap labor.
The final trigger for secession was the election of Lincoln in November 1860. Attempts at compromise such as the Crittenden Compromise and Corwin Amendment failed. Southern leaders were afraid that expansion of slavery would be stopped by Lincoln and put it on a course towards extinction. The slave states were now encountering future as a continuous minority in the Senate and Electoral College against an increasingly strong North. Seven slave states had declared their secession and joined together to for the Confederacy before Lincoln took office in March 1861.
A series of events between 1848 and 1860 that led to deepening national divisions and ultimately to war were industrial development, permitting slaves to have free time and do their activities including marriage, 1860’s election and finally secession. Slaves’ masters feared losing slaves since slavery was being brought to an end hence they had to fight so as to keep on slaves working for them at low costs while they make high incomes.