Postwar Exapansion after the war of 1812

The overall picture of America was changed after the War of 1812. The Industrial Revolution in Europe had its impact on America too. US economy was rapidly improving after the development of manufacturing as well as the farming sector. Americans began to involve themselves in market economy and there started the Market Revolution.

Eli Whitney's invention of Cotton Gin had revolutionized the cotton industry. The availability of large number of slaves to work resulted in the establishment of factories. Variety of goods were produced during the Industrial Revolution such as goods with interchangeable parts. Agriculture also received a boost with the invention of steel plow and mechanical-mower-reaper. Transportation Revolution also began with the introduction of steam boats in canals, rivers and high seas. One of the famous canals completed during the period was Erie Canal which connected North with Western farmers. There was a development of the economy of North and west, while the south lagged behind. There were better transportation facilities with the introduction of railroads, canals, and roads. The invention of Telegraph by Samuel Morse in 1835 enabled faster communication between US and Europe.

The rise in manufacturing resulted in beginning of commercial activities and onset of financial institutions. There started large number of new banks. The dramatic growth in economy was followed by downturn in cotton prices, contraction of credit by the Bank of United States, and closing of many factories due to foreign competition. There was also a congressional order requiring payment with hard currency during land purchase. Thus the post war boom, large scale speculation in public lands and the policies of the government led to the Panic of 1819.