Last week, I published a post explaining why I believed that the term “bounties” contained in Article I, Section 8 of the Confederate Constitution referred to payments made to specified industries to offset tariffs, and particularly to the codfish industry to offset the tariff on salt. Now that I have access to my books, I am writing to amplify upon that post.
As I explained, the very first Tariff, enacted in 1789, contained a provision for payments to exporters of dried and pickled fish. However, the real furor over “bounties” did not erupt until early 1792, when Congress debated a law that repealed the 1789 payments and replaced it with direct payments to cod fishermen and their crews.
Ironically, it was Secretary of State Thomas Jefferson who set in motion a series of events that caused the 'bounty” issue to explode. On February 1, 1791, Jefferson issued a Report on the Cod and Whale Fisheries in which he concluded that the New England codfish industry remained in financial distress. The industry's continued problems were the result of “heavy duties on their produce abroad, and bounties on that of their competitors; and duties at home on several articles particularly used by the fisheries.” The earlier rebate on salt duties was inadequate, and the rebate was paid to the exporters rather than to the fishermen.
Jefferson's proposed solution targeted his favorite whipping boy: the British. In the words of David P. Currie:
Jefferson saw this occasion as an opportunity to impose retaliatory regulations and duties to counteract British restrictions on American trade. The crux of his recommendation was the Government should fulfill “its obligation of effectuating free markets” for exporting fish by making “friendly arrangements towards those nations whose arrangements are friendly to us.” He did not have to add that the result would be arrangements that were less friendly toward Great Britain.
Jefferson's Brit-bashing project went badly awry. Although Congress agreed there was a problem, it decided to fashion a remedy entirely different from that envisioned by the Sage of Monticello. On January 11, 1792, the Senate passed and sent to the House a bill entitled An Act for the encouragement of the bank and other cod fisheries, and for the regulation and government of the fishermen employed therein. The Senate bill proposed to repeal the 1789 system of payments and provided (Prof. Currie again) “for paying to the owners of vessels employed in the cod fisheries a 'bounty' based upon the size of their boats and the quantity of fish they landed, to be divided among all their crew.”
As Stanley Elkins and Eric McKitrick have described, “the term 'bounty' touched off an uproar” in the House (paragraph breaks added):
William B. Giles of Virginia was “averse to bounties in almost any shape”; they were in a class with “exclusive rights, monopolies, &c.”; “occupations that stand in need of bounties, instead of increasing the real wealth of a country, rather tend to lessen it”; and the authority to grant them, if admitted, “would lead to a complete system of tyranny.”
Hugh Williamson of North Carolina warned: “Establish the doctrine of bounties, [and] . . . . all manner of persons – people of every trade and occupation – may enter at the breach, until they have eaten up the bread of our children.”
Even the members of from Massachusetts – those most directly concerned to get the bill passed – found themselves squirming at the word. [Elbridge] Gerry urged that “in reality it is no bounty,” and [Fisher] Ames protested that “instead of asking bounties . . . we ask nothing but to give us our money back.” “The word 'bounty'” lamented Benjamin Goodhue, “is an unfortunate expression, and I wish it were entirely out of the bill.”
Once again irony intervened, for it was James Madison who stepped into the breach to fashion a compromise that exalted form over substance. Congress did not have power under the Constitution, Madison gravely declared, to grant bounties.
The happy solution [in the words of Elkins and McKitrick] was to substitute “allowance” every time the word “bounty” appeared, and to pass the bill. This sophistry had the effect of recognizing the fisheries as a special case, and at the same time giving the coup de grace to that entire aspect of [Alexander] Hamilton's report [on manufactures] which envisioned a comprehensive system of bounties on industrial products. “This is the Virginia style,” wrote the long-suffering Fisher Ames to a friend back home. “It is chiefly aimed at the report of the Secretary of the Treasury [Hamilton] on the subject of manufactures.”
The bill, now entitled An Act concerning certain Fisheries of the United States, and for the Regulation and Government of the Fishermen employed therein, was enacted February 16, 1792.
Seventy years later, the codfish industry "bounty" continued to exist in modified form, and it continued to rankle secessionists as a prime example of Northern robbery. As Georgia Senator Robert Toombs argued to his state's legislature in his speech of November 13, 1860 (which may be found in Secession Debated: Georgia's Showdown in 1860):
Even the fishermen of Massachusetts and New England demand and receive from the public treasury about half a million of dollars per annum as a pure bounty on their business of catching codfish. The North, at the very first Congress, demanded and received bounties under the name of protection, for every trade, craft, and calling which they pursue . . ..