Question

what were the economic effects of the War of 1812?

Answer 1

The War of 1812 gave a dramatic boost to the manufacturing capabilities of the United States. The British blockade of the American coast created a shortage of cotton cloth in the United States, leading to the creation of a cotton-manufacturing industry, beginning at Waltham, Massachusetts by Francis Cabot Lowell. The war also spurred on construction of the Erie Canal project, which was built to promote commercial links yet was also perceived as having military uses should the need ever arise.[22]
As the charter of the First Bank of the United States had been allowed to expire in 1811, the federal government was ill-prepared to finance the war and resorted to such expediencies as the suspension of specie payment and the issuance of Treasury Notes. These actions set a precedent for future Federal responses to financial crises. Also, this exposure of the nation's financial weaknesses explained in part the Congressional decision to charter the Second Bank of the United States in 1816. The readiness of Southern leaders especially John C. Calhoun to support such a measure also indicates a high degree of national feeling.[23] Perhaps the clearest sign of a new sense of national unity was the victorious Democratic-Republican Party, its long-time foes the Federalists vanished from national politics. The result was an Era of Good Feelings with the lowest level of partisanship ever seen.[24]
Canadians, however, contrasted their post-war economic stagnation to the booming American economy, which Desmond Morton believes led to the Rebellions of 1837[25]