Tariffs

A tariff is a tax levied on goods brought into or taken out of a country. Tariffs were the primary way in which the U. S. government raised money in the 19th century, and so the tariff received a great deal of attention from Americans in the antebellum era. Eventually, disagreements over tariff rates caused the country to become bitterly divided. Southerners came to believe that the tariff bills being passed by the government favored the North at the South’s expense. At the same time, partisans on both sides of the question eventually came to equate the federal government’s ability to impose a tariff with its ability to impose controls upon the institution of slavery.

The tariff debate initially flared up in the 1780s. It immediately became apparent that while the government needed some revenue, each constituency wanted someone else to foot the bill. For example, New Englanders imported large quantities of molasses from the West Indies in order to make rum. They wanted the tariff on imported molasses to be as low as possible in order to keep their costs down. The Deep South, on the other hand, needed slave labor, and congressmen from those states pressed for a low tariff on slaves brought into the country. A compromise was called for, and on July 4, 1789, Congress passed a tariff bill that set fairly modest duties of 5 percent to 10 percent on most imported goods.

While this initial tariff had enough support for it to be adopted by Congress, some of the nation’s leaders were dissatisfied. In 1791 Secretary of the Treasury Alexander Hamilton presented his Report on Manufactures to President George Washington and to Congress, in which he argued for a high tariff. Hamilton had several reasons for this position, called protectionism: First, he believed that the United States could become an industrial power, and he wanted American industrial interests to be able to develop without interference from goods made in Britain or France. A high tariff would accomplish this by driving up the price of foreign goods. Second, Hamilton favored a strong federal government that used its power to promote American development. He hoped the government could invest tariff revenue in EDUCATlONal institutions, roads, canals, and other sorts of internal improvements.

Hamilton’s arguments were not immediately embraced by Congress, and for the rest of the 1790s, tariff rates remained low. However, the ideas presented in the Report on Manufactures found an audience in the next generation of congressional leaders. The most important was Whig leader Henry Clay, whose “American System” was largely a restatement of Hamilton’s vision. In the first three decades of the 19th century, Clay and his allies persuaded Congress to adopt an increasingly protectionist stance, culminating in the Tariff of 1828, which set rates on some imports as high as 50 percent.

By the time the Tariff of 1828 was passed, Clay’s successes with the tariff had inspired a great deal of animosity among Southern leaders, especially John C. Calhoun of South Carolina. Southerners objected to protective tariffs for a variety of reasons. They were opposed to a strong central government, which high tariff revenues helped to facilitate. Beyond that, because Southern products such as tobacco and cotton were not protected, it seemed that the North was building up its ECONOMY at the expense of the South. Most significantly, Calhoun believed that the

North was using the tariff to become the dominant player in national politics, to the exclusion of the South.

For Calhoun and his supporters, the Tariff of 1828 was the final straw. Calling it the “Tariff of Abominations,” Calhoun announced that South Carolina would not abide by its terms. To support his position, Calhoun borrowed the idea of “nullification” from the writings of Thomas Jefferson. This doctrine argued that states were the supreme authority in the United States and that they had the right to ignore the dictates of the federal government or even to secede from the Union if they wished to do so. Though it was left unstated, leaders on both sides of the conflict knew that the South was threatening not only to nullify future tariffs but also any future actions taken to curtail the institution of slavery.

Tensions remained high in the nation for several years, but eventually a compromise was reached. The Tariff of 1833 began a general reduction of rates that continued for the next 30 years. When the Civil War came, the South adopted a tariff that reflected its preference for low rates. The Northern Congress, meanwhile, passed the highly protectionist Morrill Act of 1861. After the war, tariff rates continued to be high as part of the Republican program of promoting the development of manufacturing. Although the tariff ceased to be a major point of political contention after 1833, the debate over the Tariff of Abominations had set a precedent that would eventually lead to the SECESSION of South Carolina and the start of the Civil War.

See also TAXATION.

Further reading: William W. Freehling, Prelude to Civil War: The Nullification Controversy in South Carolina, 1816-1836 (New York: Oxford University Press, 1992); Jonathan J. Pincus, Pressure Groups and Politics in Antebellum Tariffs (New York: Columbia University Press, 1977); Sidney Ratner, The Tariff in American History (New York: Van Nostrand, 1972).

—Christopher Bates