The War of 1812, because of the dangers imposed upon shipping, and because of the various regulations which were placed upon trade, greatly disturbed the foreign commerce of the United States. Revenue decreased with the diminution of imports, but with the close of war, when Europe began to unload her accumulated stocks of goods upon our markets, the values of imports reached an unprecedented figure, with a corresponding increase in revenue.
In this stimulated importation, however, was sensed the destruction of many of the American industries which had sprung up from necessity and under difficulty during the war. The clamor naturally arose for succor. President Madison was an advocate of some kind of relief and urged protection to these growing enterprises. The final result was the tariff bill, which became a law April 27, 1816. The tariff imposed by this Act has often been designated as the first protective tariff of the United States.
Tariff of 1816. - The policy of protection unquestionably superseded any fiscal considerations in the tariff of 1816. Little opposition was registered except in the South and Southwest, and even here nearly as many votes were in favor of the measure as were cast against it. The industrial emergency was clearly recognized, and the country as a whole showed its willingness to come to the rescue. It was not until later that sectional feelings were strongly evidenced. The rates provided were both specific and ad valorem, and were highest upon textiles, leather, glass, and paper, and ranged from 25 to 35 per cent. An interesting feature of this measure was the introduction of the minimum principle in regard to cotton cloth. All kinds of cloth which had ordinarily cost less than twenty-five cents a yard should be considered under the application of the law as having cost that much, and the tariff would be levied accordingly.
For decades following the passage of this law the tariff became the center of discussion from the standpoint of both revenue and industry. Fiscal officials were interested in it because internal revenues were not used from 1817 until the Civil War, and hence import duties were the principal source of revenue. It became important to industry because of what particular individuals and sections of the country expected to accomplish by either inaugurating or abandoning certain tariff policies.
The tariff of 1816 had scarcely gone into action when dissatisfaction arose from interests which considered that the protection granted to them was not strong enough. The producers of iron were the first to register extensive protest because they felt the textile industries were afforded better protection than those who were engaged in iron production. The agitation was so effective that the duties upon iron were increased in 1820.
Tariffs of 1824 and 1828 - The falling off in revenues due to the industrial depression of 1819 led the fiscal officials to ask a further extension of tariff duties. Those engaged in industry were not backward in asking for further protection, while many saw in this kind of legislation a method for enticing foreign capital to invest in the United States. So effective was the demand from the various quarters that a law was enacted in 1824 which greatly extended and increased the duties. The demand for such legislation, however, was much more sectional than was that for protection in 1816. The commercial interests of New England, as well as the solid South, were opposed, so that the bill secured a bare majority of votes in the House of Representatives.
The effect of the legislation was to increase the protection afforded to manufacturers of textiles, iron, glass, and cutlery. The minimum valuation on cotton goods was raised, and this principle was also applied to woolens. An important feature, which was destined to be the source of much difficulty in the future, was the introduction of a tariff on raw wool. The difficulty which this inaugurated was in the securing of a woolen schedule which would be satisfactory to both wool producers and manufacturers of woolen materials.
Even though the duties now in force were highly protective, and apparently satisfactory to some industries, representatives of other industries, particularly the woolen, sought to seize upon the existing protectionist sentiment to secure still greater increases in rates. The political trickery and intrigue which resulted, the outcome of which was the tariff of 1828, need not be reviewed here. The protection on woolens was increased to such a degree that the law has frequently been called the " Woolen Tariff." The tariff, as a matter of fact, was unpopular in all sections, and has been generally called the " Tariff of Abominations." Many rates were excessive, and particular sections were favored at the expense of others. The South was particularly hostile, and the Act added new fuel to the nullification flame which the tariff had already helped to kindle.
The general dissatisfaction, with its accompanying protests to Congress, together with the fact that a large surplus of revenue was accumulating, led many to believe that reductions might be expected. Some attempts were made in 1830, but nothing of importance was accomplished and the agitation continued. The necessity of modifying some of the more objectional features of the tariff of 1828 was becoming obvious. Much difficulty was encountered, however, in agreeing on what the modifications should be. A bill was finally passed in 1832 which, while it did not eliminate the protective features, did lower some of the excessive rates. The protectionists now hoped that the measure was in a form that would not call forth such hostile objection.