information:highlighting, structural:expansion
Monroe administration, 1817–1825

Like Jefferson and George Washington, President Madison decided to retire after two terms, leaving open the Democratic-Republican nomination for the 1816 presidential election. At the time, the Democratic-Republicans used a congressional nominating caucus to choose their presidential nominees, giving congressmen a powerful role in the presidential selection process. Monroe and Secretary of War William Crawford emerged as the two main candidates for the Democratic-Republican nomination. Clay had a favorable opinion of both individuals, but he supported Monroe, who won the nomination and went on to defeat Federalist candidate Rufus King in the general election. Monroe offered Clay the position of secretary of war, but Clay strongly desired the office of secretary of state and was angered when Monroe instead chose John Quincy Adams for that position. Clay became so bitter that he refused to allow Monroe's inauguration to take place in the House Chamber and subsequently did not attend Monroe's outdoor inauguration.

In early 1819, a dispute erupted over the proposed statehood of Missouri after New York Congressman James Tallmadge introduced a legislative amendment that would provide for the gradual emancipation of Missouri's slaves. Though Clay had previously called for gradual emancipation in Kentucky, he sided with the Southerners in voting down Tallmadge's amendment. Clay instead supported Illinois Senator Jesse B. Thomas 's compromise proposal in which Missouri would be admitted as a slave state, Maine would be admitted as a free state, and slavery would be forbidden in the territories north of 36° 30' parallel. Clay helped assemble a coalition that passed the Missouri Compromise, as Thomas's proposal became known. Further controversy ensued when Missouri's constitution banned free blacks from entering the state, but Clay was able to engineer another compromise that allowed Missouri to join as a state in August 1821.

In foreign policy, Clay was a leading American supporter of the independence movements and revolutions that broke out in Latin America beginning in 1810. Clay frequently called on the Monroe administration to recognize the fledgling Latin American republics, but Monroe feared that doing so would derail his plans to acquire Spanish Florida. In 1818, General Andrew Jackson crossed into Spanish Florida to suppress raids by Seminole Indians. Though Jackson was following Monroe's implied wishes in entering Florida, he created additional controversy in seizing the Spanish town of Pensacola. Despite protests from Secretary of War Calhoun, Monroe and Adams decided to support Jackson's actions in the hope that they would convince Spain to sell Florida. Clay, however, was outraged, and he publicly condemned Jackson's decision to hang two foreign nationals without a trial. Before the House chamber, he compared Jackson to military dictators of the past, telling his colleagues "that Greece had her Alexander, Rome her Caesar, England her Cromwell, France her Bonaparte, and, that if we would escape the rock on which they split, we must avoid their errors." Jackson saw Clay's protestations as an attack on his character and thus began a long rivalry between Clay and Jackson. The rivalry and the controversy over Jackson's expedition temporarily subsided after the signing of the Adams–Onís Treaty, in which the U.S. purchased Florida and delineated its western boundary with New Spain.