Early Republic economic development

This chapter reviews the Early Republic federal government and its relationships with sub-state economic development. Clay’s American Plan,†the reaction of Jackson and the controversial history of Early Republic strategy for “internal improvements†are considered. Early “tools of the trade,†tax abatement and eminent domain, are discussed. The crisis need for transportation and urban infrastructure, as well as fostering banking/finance and manufacturing firms, required the development of our first hybrid public/private EDO (HEDO): the corporate charter. The strengths and weakness of the corporate charter as hybrid EDO and its eventual rejection in the 1840s exerted a profound impact on contemporary economic development in the form of state (and local) constitutional gift and loan clauses. Within a decade a second HEDO, the publicly empowered modern corporation (railroads), was utilized. The construction of roads, steamboats, canals and then railroad transportation infrastructure is examined, with emphasis on the importance of competition with other cities. The importance of railroads as an Early Republic EDO and their innovation of modern strategies of economic development (tourist, industry and people/homesteading attraction and city-building). The chapter concludes with a description and explanation of the 1868 Dillon’s Law decision which to this date has ruled city–state relationships.