<P> The British effectively restored their honor by capturing the sloop of war USS Frolic and more importantly the flagship USS President . Both ships were taken to Britain for all to see that the American ships of the so - called engagements of equal force were much larger than the British ships they had fought in single ship duels . Furthermore, the United States failed at abolishing impressment when the treaty was signed, but the British did not continue the practice as the Napoleonic Wars had ended so they no longer needed as many sailors . In doing so British honor was restored, only for the entire conflict to be overshadowed by the defeat of Napoleon . </P> <P> Although during the War of 1812 the United States' economy was severely damaged by the British blockade, the aftermath 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 . 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 . Perhaps the clearest sign of a new sense of national unity was the victorious Democratic - Republican Party, its long - time foes, the Federalists, vanishing from national politics . The result was an Era of Good Feelings with the lowest level of partisanship ever seen . </P> <P> Canadians, however, contrasted their post-war economic stagnation to the booming American economy, which Desmond Morton believes led to the Rebellions of 1837 . During the war, Bermudian privateers, with their fast Bermuda sloops, were to capture 298 ships (the total captures by all British naval or privateering vessels between the Great Lakes and the West Indies was 1,593 vessels). </P>

How did the war of 1812 affect the future of the united states