The hopes which the protectionist branch held for the tariff of 1832 proved to be ill founded. While a part of the South appeared satisfied, yet the people of South Carolina were too much incensed to be appeased by such slight amendments as the law offered. The legislature was not long in passing what is known as the Nullification Act - the tariff law, so far as it applied to South Carolina, was null and void.
Compromise Tariff. - The Nullification Act was the signal for Congress to do something, and a bill providing for extreme reductions was submitted - so extreme that little hope could be entertained for its passage. Henry Clay came to the rescue with a compromise bill, which was passed in 1833, and which is generally known as the Compromise Tariff. The important features were the enlargement of the free list, and a gradual reduction of duties, so that industries would have a chance to readjust themselves. All duties that exceeded 20 per cent were to be gradually reduced. Every two years between 1834 and 1842 one tenth of the excess above 20 per cent was to be taken off. On January 1, 1842, one half of the remaining excess was to be removed, and on July 1 the remainder. The final result, then, was to be a tariff of 20 per cent rates or less.
Whether the law of 1833 tied the hands of Congress on tariff legislation until 1842 is beyond our province to decide. At any rate there was a marked lull in tariff discussion. The great falling off in revenue, due to the panic of 1837, led some to suggest that the succeeding biennial reductions should be canceled. No legislation was effected, however, until 1842, when the Whigs, a party with the protectionist viewpoint, were in power. The law which was passed was a radical departure from the previous trend and much higher rates were imposed.
Some opposition of course arose, but this was kept to a minimum because the treasury was actually in need of increased funds. The South did not seriously press its claim of breach of faith on the part of Congress. As prosperity increased, however, the tariff again became a vital question and entered extensively into the presidential campaign of 1844. The result of it all was the Walker tariff of 1846.
Walker Tariff. - Under the Walker tariff rates in general were greatly reduced, and while it was not a free trade measure, it has frequently been designated as such. The system of arranging the articles under particular schedules was inaugurated, and the change was made from specific to ad valorem duties. The system of providing warehouses, which has been continued to the present time, was inaugurated under this Act. These were built, and importers permitted to store goods in them, the duty to be paid when the goods were removed. In 1857 the rates provided for under the Walker tariff were materially reduced, with no strenuous opposition, and it seemed the country was drifting to a free trade, or at least a revenue basis, for its tariff.