Confederate Dissent Over Protective Tariffs and Bounties

I have written several times in the past concerning Article I, Section 8, Subsection (1) of the Confederate Constitution, which, among other things, barred "bounties" and protective tariffs.

Toward the end of his fine book, The Fragile Fabric of Union: Cotton, Federal Politics and the Global Origins of the Civil War, Brian Schoen provides a brief outline of the debate leading to the provision. Surprisingly - since protective tariffs and bounties had long been complaints of the lower south - there appears to have been a fair amount of dissent (the internal quotes are from Robert Barnwell Rhett, A Fire-Eater Remembers: The Confederate Memoir of Robert Barnwell Rhett [ed. William C. Davis]):

Some [delegates] argued for the desirability and even necessity of offering incentives to manufacturing by permitting protective tariffs, also noting that such a policy would help attract Upper South states. When [Robert Barnwell] Rhett, an ardent free trader, proposed a constitutional prohibition on protective tariffs or bounties, to his "astonishment" he "found great opposition to this policy. Georgia, Mississippi, and Louisiana were opposed to it; South Carolina, Florida and Texas were in favor of it." In the end, at least according to his autobiography, direct personal negotiation with the Alabama delegation resulted in that state's support.

About the illustration, entitled Funeral Obsequies of Free-Trade (1846):

A gloomy view of the effects of the Polk administration's Tariff of 1846. The artist echoes Whig condemnation of the measure as adverse to American trade. A funeral cortege, composed of administration supporters, carries the coffin of "Free Trade" to a grave marked by a monument with the names of sixteen states. The names of Pennsylvania and New York, two states particularly resistant to the new tariff, appear in large letters. Alabama, Arkansas, Illinois, Indiana, Louisiana, Michigan, Mississippi, Missouri, South Carolina, Tennessee, and Virginia are missing. Over the grave is a banner reading, "Here lies Free Trade! Be it understood / He would have liv'd much longer if he could." The pall-bearers are (left to right) Vice President George M. Dallas, James K. Polk, Secretary of State James Buchanan, and Secretary of War William L. Marcy, wearing his characteristic fifty-cent trouser patch (see "Executive Marcy and the Bambers," no.1838-5). Polk: "This is a dead weight and verry heavy Mr. Vice." Dallas replies: "I agree with every thing you say Mr. President. if you were to insist that the moon was made of green Cheese I would swear to it for a Consideration." Buchanan complains: "I say, army lower down your side a little, you are throwing all the weight on me." Buchanan, from Pennsylvania, drew considerable fire from his native state for his support of the new lower tariff. Marcy suggests: "Raise your side, state and then we'll throw the whole weight on our leaders." The mourners are administration supporters: editor Thomas Ritchie (here called "Mother Ritchie" and dressed as a woman), senators John C. Calhoun and George McDuffie, and congressmen Ambrose H. Sevier, Robert Barnwell Rhett, and Dixon Hall Lewis. Ritchie: "If he should be resucitated! What a paragraph it would make in my paper!! Nous Verrons." Calhoun: "Hung be the heavens with black!" McDuffie: "If the whigs should get in we must resort to Nullification!" Sevier: "this sticks in my gizzard!" Lewis (notoriously obese): "We must grin and bear it, though it makes me feel very heavy!" Rhett: "a plagu of this sighing! it wells one up most villainously!" In the lower margin is the narrative: "This unfortunate youth died of Home Consumption & was buried at Washington in Nov: 1846 [the date the tariff was passed]. He was carried to the grave by Polk, Dallas, Buchanan & Marcy. The chief Mourners were his Nurse Mother Ritchie, [. . .] the cenotaph is to be erected by the Whigs. 16 States have already contributed & others are coming in."

"The general principles of this bill receive my approbation"

In Henry Clay: The Essential American, David S. and Jeanne T. Heidler recall the drama of the moment when the public learned for the first time that the Nullification Crisis would be resolved.

In early 1833, Senator Henry Clay of Kentucky fashioned a compromise tariff bill that would gradually reduce the tariff over a period of years, until it would ultimately decrease to a level merely sufficient to raise the necessary income for the federal government, with protection of industry being abandoned. Clay privately discussed his ideas with John Caldwell Calhoun of South Carolina and “emerged from these discussions . . . confident that Calhoun would support it.”

Having laid the groundwork, on the morning of February 11, 1833 Clay took the Senate floor and “announced that he would present a formal compromise proposal the following day.” He provided no details.

The next morning, February 12, 1833, Clay delivered a speech that lasted “several hours”, in which he outlined his plan. At the conclusion, he “asked 'leave' to present his bill formally.” Supporters of president Andrew Jackson immediately objected, “if only to keep Clay from gaining plaudits for breaking the impasse.”

Amid the disorder, however, “the chair recognized Calhoun. The gallery watched the South Carolinian rise from his desk. Clay's eyes were on him, and the chamber fell suddenly silent, like a church in prayer.”

The Gales and Seaton Register of Debates, which reported the proceedings, provides only an indirect account of Calhoun's remarks (e.g., “Mr. Calhoun rose and said . . .”). I have taken the liberty of translating the account back into direct speech. I have also added paragraph breaks. After rising, the Senator from South Carolina made the following brief statement:

I will make but one or two observations.

Entirely approving of the object for which the bill is introduced, I shall give my vote in favor of the motion for leave to introduce it.

He who loves the Union must desire to see this agitating question brought to a termination. Until it is terminated, we can not expect the restoration of peace or harmony, or a sound condition of things, throughout the country. I believe that to the unhappy divisions which have kept the Northern and Southern States apart from each other, the present entirely degraded condition of the country (for entirely degraded I believe it to be) is solely attributable.

The general principles of this bill receive my approbation. I believe that if the present difficulties are to be adjusted, they must be adjusted based on the principles in the bill, of fixing ad valorem duties, except in the few cases in the bill to which specific duties are assigned.

It has been my fate to occupy a position as hostile as any one could, in reference to the protecting policy; but, if it depends on my will, I will not give my vote for the prostration of the manufacturing interest. A very large capital has been invested in manufactures, which have been of great service to the country; and I will never give my vote to suddenly withdraw all those duties by which that capital is sustained in the channel into which it has been directed. But I will only vote for the ad valorem system of duties, which I deem the most beneficial and the most equitable.

At this time, I do not rise to go into a consideration of any of the details of this bill, as such a course would be premature, and contrary to the practice of the Senate. There are some of the provisions which have my entire approbation, and there are some to which I object. But I look upon these minor points of difference as points in the settlement of which no difficulty will occur, when gentlemen meet together in that spirit of mutual compromise which, I doubt not, will be brought into their deliberations, without at all yielding the constitutional question as to the right of protection.

The Register of Debates dryly reports the reaction of the gallery to the stunning news that the Crisis was on its way to resolution:

[Here there was a tumultuous approbation in the galleries, which induced the CHAIR to order the galleries to be cleared. On the expression of a hope, by Mr. [George] POINDEXTER [of Mississippi] and Mr. [John] HOLMES [of Maine] [the same John Holmes, by the way, who was the addressee of Thomas Jefferson's “fire bell in the night” letter], that the order would not, at this time, be enforced, the CHAIR subsequently withdrew it; but gave notice that on any repetition of the disorder, the officers of the House would act without any further direction.]

Drawing on contemporaneous letters (according to the endnotes), the Heidlers provide some additional color:

Spectators in the gallery were not aware that the two [Clay and Calhoun] had made an arrangement. Now, as Calhoun spoke, they heard his words in amazement and immediately exploded into loud cheers, stamping, whistling, and raising such a noise that only the threat of eviction caused the celebration to end. Clay had seized the momentum from the administration. As Calhoun took his seat, Clay's eyes were upon him.

About the illustration, entitled Destruction of the Snake of South Carolina:

Eagle holds a dead snake in beak and another in claws as many smaller snakes slither in surrounding grass. American flag behind eagle with Andrew Jackson and John Calhoun watching from top corners. White envelope with colored ink. Image covers sheet. The destruction of the snake of South Carolina, nullification and secession, and all her progeny by the national bird. To portray the ultimate overthrow of the evil power, which strikes at the life of the national government, is the object of this cut.

"Even the fisherman of Massachusetts and New England demand and receive . . . a pure bounty"

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 . . ..

George McDuffie's Forty-Bale Theory

George McDuffie’s Forty-Bale Theory held that “a tariff that imposed duties averaging 40 percent robbed cotton planters of the value of 40 percent of their crop – forty bales out of every hundred.” Was he right?

The modern consensus seems to be that he was about twenty bales high.

Daniel Walker Howe: “A modern economist has calculated that a 40 percent tariff cost antebellum planters 20 percent of their real income from cotton – less that McDuffie claimed but still very significant.” Citing John A. James, "The Optimal Tariff in the Antebellum United States,” American Economic Review 71 (1981): 731.

John Majewski: “McDuffie’s famous ‘forty bale’ theory undoubtedly exaggerated the impact of the tariff, but his argument contained a kernel of truth. Economic historians have estimated that a tariff of 40 percent in 1859 would have reduced the real incomes of southern slaveholders by at least 20 percent.” Citing Jeremy Atack and Peter Passell, A New Economic View of American History: From Colonial Times to 1940, 2nd ed. (New York: W.W. Norton, 1994), 137-40.

About the illustration:

A gloomy view of the effects of the Polk administration's Tariff of 1846. The artist echoes Whig condemnation of the measure as adverse to American trade. A funeral cortege, composed of administration supporters, carries the coffin of "Free Trade" to a grave marked by a monument with the names of sixteen states. The names of Pennsylvania and New York, two states particularly resistant to the new tariff, appear in large letters. Alabama, Arkansas, Illinois, Indiana, Louisiana, Michigan, Mississippi, Missouri, South Carolina, Tennessee, and Virginia are missing. Over the grave is a banner reading, "Here lies Free Trade! Be it understood / He would have liv'd much longer if he could." The pall-bearers are (left to right) Vice President George M. Dallas, James K. Polk, Secretary of State James Buchanan, and Secretary of War William L. Marcy, wearing his characteristic fifty-cent trouser patch (see "Executive Marcy and the Bambers," no.1838-5). Polk: "This is a dead weight and verry heavy Mr. Vice." Dallas replies: "I agree with every thing you say Mr. President. if you were to insist that the moon was made of green Cheese I would swear to it for a Consideration." Buchanan complains: "I say, army lower down your side a little, you are throwing all the weight on me." Buchanan, from Pennsylvania, drew considerable fire from his native state for his support of the new lower tariff. Marcy suggests: "Raise your side, state and then we'll throw the whole weight on our leaders." The mourners are administration supporters: editor Thomas Ritchie (here called "Mother Ritchie" and dressed as a woman), senators John C. Calhoun and George McDuffie, and congressmen Ambrose H. Sevier, Robert Barnwell Rhett, and Dixon Hall Lewis. Ritchie: "If he should be resucitated! What a paragraph it would make in my paper!! Nous Verrons." Calhoun: "Hung be the heavens with black!" McDuffie: "If the whigs should get in we must resort to Nullification!" Sevier: "this sticks in my gizzard!" Lewis (notoriously obese): "We must grin and bear it, though it makes me feel very heavy!" Rhett: "a plagu of this sighing! it wells one up most villainously!" In the lower margin is the narrative: "This unfortunate youth died of Home Consumption & was buried at Washington in Nov: 1846 [the date the tariff was passed]. He was carried to the grave by Polk, Dallas, Buchanan & Marcy. The chief Mourners were his Nurse Mother Ritchie, [. . .] the cenotaph is to be erected by the Whigs. 16 States have already contributed & others are coming in."

The Irony of the Tariff

This may annoy some people no end:

Before the Civil War, federal taxation was almost completely synonymous with the tariff. . . . [T]he historical origin of the tariff lay in a separate issue. In addition to its administrative and economic characteristics, a tax on imports offered a political advantage over other forms of taxation. Congress could design a tax on imports without talking about slavery. The irony here is extraordinary. The tax that southerners would resent and resist so famously – because it forced them to subsidize northern industry – originated in a political accommodation to slavery during the Revolution.

Robin L. Einhorn, American Taxation, American Slavery (University of Chicago Press 2006), at 117.