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Northern Tariffs


Retrieved from V for Voluntary Library

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Protective tariffs: Primary cause of the Civil War

Although they opposed permanent tariffs, political expedience in spite of sound economics prompted the Founding Fathers to pass the first U.S. tariff act. For 72 years, Northern special interest groups used these protective tariffs to exploit the South for their own benefit. Finally in 1861, the oppression of those import duties started the Civil War.

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As early as the Revolutionary War, the South primarily produced cotton, rice, sugar, indigo and tobacco. The North purchased these raw materials and turned them into manufactured goods. By 1828, foreign manufactured goods faced high import taxes. Foreign raw materials, however, were free of tariffs.

Thus the domestic manufacturing industries of the North benefited twice, once as the producers enjoying the protection of high manufacturing tariffs and once as consumers with a free raw materials market. The raw materials industries of the South were left to struggle against foreign competition.

Because manufactured goods were not produced in the South, they had to either be imported or shipped down from the North. Either way, a large expense, be it shipping fees or the federal tariff, was added to the price of manufactured goods only for Southerners. Because importation was often cheaper than shipping from the North, the South paid most of the federal tariffs.

Much of the tariff revenue collected from Southern consumers was used to build railroads and canals in the North. Between 1830 and 1850, 30,000 miles of track were laid. At their best, these tracks benefited the North. Many rail lines had no economic effect at all. Many of the schemes to lay track were simply a way to get government subsidies. Fraud and corruption were rampant.

With most of the tariff revenue collected in the South and then spent in the North, the South rightly felt exploited. At the time, 90 percent of the federal government’s annual revenue came from these taxes on imports.

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The tariff of 1828, called the Tariff of Abominations in the South, was the worst exploitation. It passed Congress 105 to 94 but lost among Southern congressmen 50 to three. The South argued that favoring some industries over others was unconstitutional.

The South Carolina Exposition and Protest written by Vice President John Calhoun warned that if the tariff of 1828 were not repealed, South Carolina would secede. It cited Jefferson and Madison for the precedent that a state had the right to reject or nullify federal law.

In an 1832 state legislature campaign speech, Lincoln defined his position, saying, “My politics are short and sweet, like the old woman’s dance. I am in favor of a national bank … in favor of the internal improvements system and a high protective tariff.’ He was firmly against free trade and in favor of using the power of the federal government to benefit specific industries such as Lincoln’s favorite, Pennsylvania steel.

The country experienced a period of lower tariffs and vibrant economic growth from 1846 to 1857. Then a bank failure caused the Panic of 1857. Congress used this situation to begin discussing a new tariff act, later called the Morrill Tariff of 1861. However, those debates were met with such Southern hostility that the South seceded before the act was passed.

The South did not secede primarily because of slavery. In Lincoln’s First Inaugural Address, he promised he had no intention to change slavery in the South. He argued it would be unconstitutional for him to do so. But he promised he would invade any state that failed to collect tariffs in order to enforce them. The statement was received from Baltimore to Charleston as a declaration of war on the South.

Slavery was an abhorrent practice. It might have been the cause that rallied the North to win. But it was not the primary reason why the South seceded. The Civil War began because of an increasing push to place protective tariffs favoring Northern business interests and every Southern household paid the price.

Lincoln’s Tax War

UNDERSTANDING THE CAUSES OF THE UNCIVIL WAR: A Brief Explanation of the Impact of the Morrill Tariff

Another Court Historian’s False Tariff History

Lincoln’s Tariff War

My book, The Real Lincoln, has received much the same response with regard to the tariff issue. But there is overwhelming evidence that: 1) Lincoln, a failed one-term congressman, would never have been elected had it not been for his career-long devotion to protectionism; and 2) the 1861 Morrill tariff, which Lincoln was expected to enforce, was the event that triggered Lincoln’s invasion, which resulted in the death of hundreds of thousands of Americans.

A very important article that documents in great detail the role of protectionism in Lincoln’s ascendancy to the presidency is Columbia University historian Reinhard H. Luthin’s “Abraham Lincoln and the Tariff,” published in the July 1944 issue of The American Historical Review. As I document in The Real Lincoln, the sixteenth president was one of the most ardent protectionists in American politics during the first half of the nineteenth century and had established a long record of supporting protectionism and protectionist candidates in the Whig Party.

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The U.S. House of Representatives had passed the Morrill tariff in the 1859-1860 session, and the Senate passed it on March 2, 1861, two days before Lincoln’s inauguration. President James Buchanan, a Pennsylvanian who owed much of his own political success to Pennsylvania protectionists, signed it into law. The bill immediately raised the average tariff rate from about 15 percent (according to Frank Taussig in Tariff History of the United States) to 37.5 percent, but with a greatly expanded list of covered items. The tax burden would about triple. Soon thereafter, a second tariff increase would increase the average rate to 47.06 percent, Taussig writes.

So, Lincoln owed everything–his nomination and election–to Northern protectionists, especially the ones in Pennsylvania and New Jersey. He was expected to be the enforcer of the Morrill tariff. Understanding all too well that the South Carolina  tariff nullifiers had foiled the last attempt to impose a draconian protectionist tariff on the nation by voting in political convention not to collect the 1828 “Tariff of Abominations,” Lincoln literally promised in his first inaugural address a military invasion if the new, tripled tariff rate was not collected.

At the time, Taussig says, the import-dependent South was paying as much as 80 percent of the tariff, while complaining bitterly that most of the revenues were being spent in the North. The South was being plundered by the tax system and wanted no more of it. Then along comes Lincoln and the Republicans, tripling (!) the rate of tariff taxation (before the war was an issue). Lincoln then threw down the gauntlet in his first inaugural: “The power confided in me,” he said, “will be used to hold, occupy, and possess the property, and places belonging to the government, and to collect the duties and imposts; but beyond what may be necessary for these objects, there will be no invasion–no using force against, or among the people anywhere” (emphasis added).

“We are going to make tax slaves out of you,” Lincoln was effectively saying, “and if you resist, there will be an invasion.” That was on March 4. Five weeks later, on April 12, Fort Sumter, a tariff collection point in Charleston Harbor, was bombarded by the Confederates. No one was hurt or killed, and Lincoln later revealed that he manipulated the Confederates into firing the first shot, which helped generate war fever in the North.

With slavery, Lincoln was conciliatory. In his first inaugural address, he said he had no intention of disturbing slavery, and he appealed to all his past speeches to any who may have doubted him. Even if he did, he said, it would be unconstitutional to do so.

But with the tariff it was different. He was not about to back down to the South Carolina tariff nullifiers, as Andrew Jackson had done, and was willing to launch an invasion that would ultimately cost the lives of 620,000 Americans to prove his point. Lincoln’s economic guru, Henry C. Carey, was quite prescient when he wrote to Congressman Justin S. Morrill in mid-1860 that “Nothing less than a dictator is required for making a really good tariff” (p. 614, “Abraham Lincoln and the Tariff”).

Historical Ignorance Part I

The victors of war write its history in order to cast themselves in the most favorable light. That explains the considerable historical ignorance about our war of 1861 and panic over the Confederate flag. To create better understanding, we have to start a bit before the 1787 Constitutional Convention in Philadelphia.

The 1783 Treaty of Paris ended the war between the colonies and Great Britain. Its first article declared the 13 colonies “to be free, sovereign and independent states.” These 13 sovereign nations came together in 1787 as principals and created the federal government as their agent. Principals have always held the right to fire agents. In other words, states held a right to withdraw from the pact — secede.

During the 1787 Constitutional Convention, a proposal was made that would allow the federal government to suppress a seceding state. James Madison rejected it, saying, “A union of the states containing such an ingredient seemed to provide for its own destruction. The use of force against a state would look more like a declaration of war than an infliction of punishment and would probably be considered by the party attacked as a dissolution of all previous compacts by which it might be bound.”

In fact, the ratification documents of Virginia, New York and Rhode Island explicitly said they held the right to resume powers delegated should the federal government become abusive of those powers. The Constitution never would have been ratified if states thought they could not regain their sovereignty — in a word, secede.

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Both Northern Democratic and Republican Parties favored allowing the South to secede in peace. Just about every major Northern newspaper editorialized in favor of the South’s right to secede. New York Tribune (Feb. 5, 1860): “If tyranny and despotism justified the Revolution of 1776, then we do not see why it would not justify the secession of Five Millions of Southrons from the Federal Union in 1861.” Detroit Free Press (Feb. 19, 1861): “An attempt to subjugate the seceded states, even if successful, could produce nothing but evil — evil unmitigated in character and appalling in content.” The New York Times (March 21, 1861): “There is growing sentiment throughout the North in favor of letting the Gulf States go.”

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The War of 1861 brutally established that states could not secede. We are still living with its effects. Because states cannot secede, the federal government can run roughshod over the U.S. Constitution’s limitations of the Ninth and Tenth Amendments. States have little or no response.

Historical Ignorance Part II

We call the war of 1861 the Civil War. But is that right? A civil war is a struggle between two or more entities trying to take over the central government. Confederate President Jefferson Davis no more sought to take over Washington, D.C., than George Washington sought to take over London in 1776. Both wars, those of 1776 and 1861, were wars of independence. Such a recognition does not require one to sanction the horrors of slavery. We might ask, How much of the war was about slavery?

Was President Abraham Lincoln really for outlawing slavery? Let’s look at his words. In an 1858 letter, Lincoln said, “I have declared a thousand times, and now repeat that, in my opinion neither the General Government, nor any other power outside of the slave states, can constitutionally or rightfully interfere with slaves or slavery where it already exists.” In a Springfield, Illinois, speech, he explained: “My declarations upon this subject of Negro slavery may be misrepresented but cannot be misunderstood. I have said that I do not understand the Declaration (of Independence) to mean that all men were created equal in all respects.” Debating Sen. Stephen Douglas, Lincoln said, “I am not, nor ever have been, in favor of making voters or jurors of Negroes nor of qualifying them to hold office nor to intermarry with white people; and I will say in addition to this that there is a physical difference between the white and black races, which I believe will forever forbid the two races living together on terms of social and political equality.”

What about Lincoln’s Emancipation Proclamation? Here are his words: “I view the matter (of slaves’ emancipation) as a practical war measure, to be decided upon according to the advantages or disadvantages it may offer to the suppression of the rebellion.” He also wrote: “I will also concede that emancipation would help us in Europe, and convince them that we are incited by something more than ambition.” When Lincoln first drafted the proclamation, war was going badly for the Union. London and Paris were considering recognizing the Confederacy and assisting it in its war against the Union.

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Lincoln did articulate a view of secession that would have been heartily endorsed by the Confederacy: “Any people anywhere, being inclined and having the power, have the right to rise up and shake off the existing government and form a new one that suits them better. … Nor is this right confined to cases in which the whole people of an existing government may choose to exercise it. Any portion of such people that can may revolutionize and make their own of so much of the territory as they inhabit.” Lincoln expressed that view in an 1848 speech in the U.S. House of Representatives, supporting the war with Mexico and the secession of Texas.

Why didn’t Lincoln share the same feelings about Southern secession? Following the money might help with an answer. Throughout most of our nation’s history, the only sources of federal revenue were excise taxes and tariffs. During the 1850s, tariffs amounted to 90 percent of federal revenue. Southern ports paid 75 percent of tariffs in 1859. What “responsible” politician would let that much revenue go?



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