The Road to Civil War (sic)

Part 1 of a Series

Mike Scruggs

During the War of 1812, the British blockaded American ports. Before the war, America had still been a largely agricultural country dependent on Britain for manufactured goods. The blockade forced Americans to do their own manufacturing. It started mostly in homes and barns but began to prosper. This infant manufacturing economy was concentrated in New England, New York, New Jersey, and Pennsylvania. Because cotton and other agricultural products were so profitable in the South, it remained a predominantly agricultural economy. By the end of the war, 20 percent of the Northern workforce was engaged in manufacturing compared to only 8 percent for the South.

This was the beginning of two sectional interests: one manufacturing and the other agriculture. At the end of the war a flood of low-priced British manufacturing inventory threatened the existence of the North’s budding manufacturing economy.

Over and above the revenue necessary to sustain normal U.S. Government operating expenses, the Tariff of 1816 sought to pay off war debts and act as a protective barrier for America’s emerging manufacturing economy. A tariff of 25 to 30 percent was thus placed on manufactured cotton and woolen imports. This allowed American manufacturers to raise their prices without being undercut by British competition. The average tariff on imports increased from 7 percent in 1816 to 20 percent by 1820.

This increased the profitability of American manufacturing by about 25 percent. The problem was that it meant higher consumer prices, higher costs of doing business, and lower living standards for everybody else, especially agricultural exporters. Hence the tariff that brought Northern manufacturing prosperity was a burden on the South.

Moreover, rather than being satisfied with their new prosperity at the expense of other commercial and regional interests, Northern manufacturers demanded higher tariffs to increase their profits still more. This cry grew louder in 1824, when Northern industry was experiencing a recession.

This was the perfect opportunity for Representative Henry Clay of Kentucky to introduce a new and higher tariff. On March 30, 1824, Clay, recently elected Speaker of the House, stood before his colleagues, seeking support for new tariff legislation:

“Are we doomed to behold our industry languish and decay yet more and more? But there is a remedy, and that remedy consists in modifying our foreign policy and in adopting a genuine American System… the only means which the wisdom of nations has yet discovered to be effectual: by adequate protection against the otherwise overwhelming influence of foreigners.”

Henry Clay was a proponent of what he called the “American System.” His formula for building a great industrial nation was big government intervention in three areas:

1. High protective tariffs to protect U.S. industry from foreign competition;

2. “Internal Improvements”—corporate subsidies

3. A centralized National Bank.

These were the policies of Clay’s Whig Party and had been the policies of Alexander Hamilton’s Federalist Party. They would also become the policies of the new national Republican Party in 1856.

The Tariff of 1824 was truly a protectionist tariff. The average tariff on dutiable goods was raised to 35 percent. It was broadened to include iron products and some agricultural products. Clay made extensive use of logrolling promises (You roll my log, and I’ll roll your log) to increase support for the bill. Even then, it passed only by a narrow margin, 107 to 102 votes in the House and 25 to 21 in the Senate. Only three of 67 Southern Representatives and two of 16 Southern Senators voted for it. Because it benefited manufacturing at the expense of agriculture and commerce and benefited the North at the expense of the South, it appeared to Southerners to be a violation of Article 1 Section 8 and Article 5 Section 9 of the Constitution Hence the South Carolina, Georgia, North Carolina, Alabama, and Virginia state legislatures condemned it as unconstitutional. The South Carolina Legislature also condemned Clay’s “American System” as “a system of robbery and plunder” that “made one section tributary to another.”

Thus began 37 years of heated political conflict between North and South that would eventually provoke seven major cotton-producing states to secede. The South began to see the North a driven by insatiable sectional greed and blind disregard for Constitutional limits and economic injuries suffered by the South.

In 1862, British political analyst John Spence lamented the triumph of protectionism in the sectionalist 1824 Tariff with a precise statement of its moral deformity:

“The idea of a moderate system, generally beneficial to to the industry of the country, without grievous hardship to any particular class, became altered into the reality of corrupt political bargains between special interests, to impose heavy taxation on all others for their own profit.”

English Puritan Thomas Manton ((1620-1677) is credited with this statement on how greed numbs the conscience and makes its stealthy advance:

“There is not a vice which more effectually contracts and deadens the feelings, which more completely makes a man’s affections center in himself, and excludes all others from partaking in them…When the desire has gotten hold of the heart, it shuts out all other considerations but such as may promote its views. In its zeal for the attainment of its end, it is not delicate in the choice of means. As it closes the heart, so also it clouds the understanding. It cannot discern between right and wrong; it takes evil for good; it calls darkness light, and light darkness. Beware then of the beginnings of covetousness for you know not where it will end.”
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The Road to Civil War (sic)