United States import tariff in 1861
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The Morrill Tariff was an increased import tariff in the United States that was adopted on March 2, 1861, during the administration of US President James Buchanan, a Democrat. It was the twelfth of the seventeen planks in the platform of the incoming Republican Party, which had not yet been inaugurated, and the tariff appealed to industrialists and factory workers as a way to foster rapid industrial growth.
It was named for its sponsor, Representative Justin Smith Morrill of Vermont, who drafted it with the advice of the economist Henry Charles Carey. The eventual passage of the tariff in the US Senate was assisted by multiple opponent senators from the South resigning from Congress after their states declared their secession from the Union. The tariff rates were raised to both make up for a federal deficit that had led to increased government debt in recent years and to encourage domestic industry and foster high wages for industrial workers.
The Morrill Tariff replaced a lower Tariff of 1857 which, according to historian Kenneth Stampp, had been developed in response to a federal budget surplus in the mid-1850s.
Two additional tariffs sponsored by Morrill, each higher than the previous one, were passed under President Abraham Lincoln to raise revenue that was urgently needed during the American Civil War.
The tariff inaugurated a period of continuous protectionism in the United States, and that policy remained until the adoption of the Revenue Act of 1913, or Underwood Tariff. The schedule of the Morrill Tariff and both of its successors were retained long after the end of the Civil War.
History.
Origins.
Tariff in United States history has often been made high to encourage the development of domestic industry, and had been advocated, especially by the Whig Party and its longtime leader, Henry Clay. Such a tariff was enacted in 1842, but in 1846 the Democratic Party enacted the Walker Tariff, which cut tariff rates substantially. The Democrats cut rates even further in the Tariff of 1857, which was highly favorable to the South.
Meanwhile, the Whig Party collapsed, and tariffs were taken up by the new Republican Party, which ran its first national ticket in 1856. Some former Whigs from the border states and the Upper South remained in Congress as "Opposition," "Unionist," or "American," (Know Nothing) members and supported higher tariffs.
The Panic of 1857 led to calls for protectionist tariff revision. The famous economist Henry C. Carey blamed the panic on the new tariff. His opinion was widely circulated in the protectionist media for higher tariffs.
Efforts to raise the tariffs began in earnest in the 35th Congress of 1857–1859. Two proposals were submitted in the US House of Representatives.
House Ways and Means Committee Chairman John S. Phelps, Democrat from Missouri, wrote the Democrats' plan, which retained most of the low rates of the Tariff of 1857, with minor revisions to stimulate revenue.
Ways and Means members Morrill and Henry Winter Davis, a Maryland "American," produced the Republican proposal to raise the tariffs. It replaced the existing "ad valorem" tariff schedule with specific duties and drastically increased tariff rates on goods that were produced by popular "protected" industries, such as iron, textiles, and other manufactured goods. The economic historian Frank Taussig argued that in many cases, the substitution of specific duties was used to disguise the extent of the rate increases. Supporters of the specific rates argued that they were necessary because European exporters routinely provided US customers with fake invoices showing lower prices for goods than were actually paid. Specific rates made such subterfuge pointless.
However, the House took no action on either tariff bill during the 35th Congress.
House actions.
When the 36th Congress met in 1859, action remained blocked by a dispute until 1860 over who would be elected the Speaker of the House. In 1860, the Republican William Pennington of New Jersey was elected as speaker. Pennington appointed a pro-tariff Republican majority to the Ways and Means Committee, with John Sherman of Ohio its chairman.
The Morrill bill was passed out of the Ways and Means Committee. Near the end of first session of the Congress (December 1859–June 1860), on May 10, 1860, the bill was brought up for a floor vote and passed 105–64.
The vote was largely but not entirely sectional. Republicans, all from the northern states, voted 89–2 for the bill. They were joined by 7 northern Democrats from New York, New Jersey, and Pennsylvania. Five of them were "anti-Lecompton Democrats," who opposed the pro-slavery Lecompton Constitution for Kansas.
Also, 14 northern Democrats voted against the bill.
In the Border States, four "Opposition" Representatives from Kentucky voted for it, as did its cosponsor, Winter of Maryland, a Maryland "Unionist," and a Democrat from Delaware. Eight Democrats from the Border States and a member of the American Party from Missouri voted against it.
Thirty-five southern Democrats and three Oppositionists voted against it; one Oppositionist from Tennessee voted for it.
Thus the sectional breakdown was 96–15 in the North, 7–9 in the Border States, and 1–39 in the South.
There were 55 abstentions, including 13 Republicans, 12 northern Democrats, 13 southern Democrats, and 8 southern "Oppositionists" and "Americans." (The remaining Representatives were mostly "paired" with opposing Representatives who could not be present.
Senate action.
The Morrill bill was sent on to the US Senate. However, the Senate was controlled by Democrats and so it was bottled up in the Finance Committee, chaired by Robert M. T. Hunter of Virginia.
That ensured that the Senate vote would be put off until the second session in December 1860 and meant that the tariff would be a prominent issue in the 1860 election.
1860 election.
The Republican Party included a strong pro-tariff plank in its 1860 platform and sent prominent tariff advocates touting the bill, such as Morrill and Sherman, to campaign in Pennsylvania and New Jersey, where the tariff was popular. Both Democratic candidates, John C. Breckinridge and Stephen Douglas, opposed all high tariffs and protectionism in general.
The historian Reinhard H. Luthin documents the importance of the Morrill Tariff to the Republicans in the 1860 presidential election. Lincoln's record as a protectionist and support for the Morrill bill, he notes, helped him to secure support in the important state of Pennsylvania and neighboring New Jersey. Lincoln carried Pennsylvania handily in November, as part of his sweep of the North.
On February 14, 1861, President-elect Lincoln told an audience in Pittsburgh that he would make a new tariff his priority in the next session if the bill did not pass by his inauguration, on March 4.
Renewed Senate action.
The second session of the 36th Congress began in December 1860. At first, it appeared that Hunter would keep the Morrill bill tabled until the end of the term in March.
However, in December 1860 and January 1861, seven southern states seceded, and their low-tariff senators withdrew. Republicans took control of the Senate in February, and Hunter lost his hold on the Finance Committee.
Meanwhile, the Treasury was in financial crisis, with less than $500,000 on hand and millions in unpaid bills. The Union urgently needed new revenue. A recent historian concludes that "the impetus for revising the tariff arose as an attempt to augment revenue, stave off 'ruin,' and address the accumulating debt."
The Morrill bill was brought to the Senate floor for a vote on February 20 and passed 25 to 14. The vote was split almost completely down party lines. It was supported by 24 Republicans and the Democrat William Bigler of Pennsylvania. It was opposed by 10 Southern Democrats, 2 Northern Democrats, and 2 Far West Democrats. Twelve Senators abstained, including 3 Northern Democrats, 1 California Democrat, 5 Southern Democrats, 2 Republicans, and 1 Unionist from Maryland.
There were some minor amendments related to the tariffs on tea and coffee, which required a conference committee with the House, but they were resolved, and the final bill was approved by unanimous consent on March 2.
Though a Democrat himself, President James Buchanan favored the bill because of the interests of his home state, Pennsylvania. He signed the bill into law as one of his last acts in office.
Adoption and amendments.
The tariff took effect one month after it was signed into law. Besides setting tariff rates, the bill altered and restricted the Warehousing Act of 1846.
The tariff was drafted and passed the House before the Civil War began or was expected, and it was passed by the Senate after seven States had seceded.
At least one author has argued that the first Morrill should not be considered "Civil War" legislation.
In fact, the tariff proved to be too low for the revenue needs of the Civil War and was quickly raised by the Second Morrill Tariff, or Revenue Act of 1861, later that Fall.
Impact.
In its first year of operation, the Morrill Tariff increased the effective rate collected on dutiable imports by approximately 70%. In 1860, American tariff rates were among the lowest in the world and also at historical lows by 19th-century standards, the average rate for 1857 to 1860 being around 17% overall ("ad valorem"), 21% on dutiable items only. The Morrill Tariff immediately raised those averages to about 26% overall, or 36% on dutiable items. Further increases by 1865 left the comparable rates at 38% and 48%. Although higher than in the immediate antebellum period, the new rates were still significantly lower than between 1825 and 1830, when rates had sometimes been over 50%.
The United States needed $3 billion to pay for the immense armies and fleets raised to fight the Civil War, over $400 million for 1862 alone. The chief source of revenue had been tariffs. Therefore, Secretary of the Treasury Salmon P. Chase, despite being a longtime free-trader, worked with Morrill to pass a second tariff bill in summer 1861, which raised rates another 10% to generate more revenue. The subsequent bills were primarily revenue driven to meet the war's needs but enjoyed the support of protectionists such as Carey, who again assisted Morrill in the bill's drafting.
However, the tariff played only a modest role in financing the war and was far less important than other measures, such as $2.8 billion in bond sales and some printing of greenbacks. Customs revenue from tariffs totaled $345 million from 1861 to 1865, or 43% of all federal tax revenue, but military spending totaled $3,065 million.
Reception abroad.
The Morrill Tariff was met with intense hostility in Britain, where free trade dominated public opinion. Southern diplomats and agents sought to use British ire towards the Morrill Tariff to garner sympathy, with the aim of obtaining British recognition for the Confederacy. The new tariff schedule heavily penalized British iron, clothing, and manufactured exports by making them more costly and sparked public outcry from many British politicians. The expectation of high tax rates probably caused British shippers to hasten their deliveries before the new rates took effect in the early summer of 1861.
When complaints were heard from London, Congress counterattacked. The Senate Finance Committee chairman snapped, "What right has a foreign country to make any question about what we choose to do?"
When the American Civil War broke out in 1861, British public opinion was sympathetic to the Confederacy, in part because of lingering agitation over the tariff. As one diplomatic historian has explained, the Morrill Tariff:
not unnaturally gave great displeasure to England. It greatly lessened the profits of the American markets to English manufacturers and merchants, to a degree which caused serious mercantile distress in that country. Moreover, the British nation was then in the first flush of enthusiasm over free trade, and, under the lead of extremists like Cobden and Gladstone, was inclined to regard a protective tariff as essentially and intrinsically immoral, scarcely less so than larceny or murder. Indeed, the tariff was seriously regarded as comparable in offensiveness with slavery itself, and Englishmen were inclined to condemn the North for the one as much as the South for the other. "We do not like slavery," said Palmerston to Adams, "but we want cotton, and we dislike very much your Morrill tariff."
Many prominent British writers condemned the Morrill Tariff in the strongest terms. The economist William Stanley Jevons denounced it as a "retrograde" law. The famous novelist Charles Dickens used his magazine, "All the Year Round," to attack the new tariff. On December 28, 1861, Dickens published a lengthy article, believed to be written by Henry Morley,
which blamed the