The term “American System” is typically used to refer to a particular economic plan for how the US was to develop. The plan is most closely identified with Henry Clay and is similar to what Alexander Hamilton proposed in the early days of the independent United States.
The American System proposed by Clay had three main elements. These elements were to work together to advance American economic prosperity. The elements were a national bank, a protective tariff, and a program of internal improvements.
The national bank was meant to put the country on a firm financial footing. It would ensure that the US currency would be sound and that banks would not lend excessively and in risky ways. The protective tariff was meant to make it easier for American manufacturing to get started. The tariff would make imported goods more expensive, thus making it easier for American goods to sell. Finally, the internal improvements would make commerce within the US easier. Internal improvements were things like good roads and canals. This would make it easier to transport goods from place to place.
Clay and others felt that these elements could combine to help the US economy develop.