Tariff of 1833

Speaker of the House Henry Clay

Vice President of the United States John C. Calhoun

The Tariff of 1833 (also known as the Compromise Tariff of 1833, ch. 55, 4 Stat. 629) was proposed by Henry Clay and John C. Calhoun as a resolution to the Nullification Crisis. It was adopted to gradually reduce the rates after southerners objected to the protectionism found in the Tariff of 1832 and the 1828 Tariff of Abominations, which had prompted South Carolina to threaten secession from the Union. This Act stipulated that import taxes would gradually be cut over the next decade until, by 1842, they matched the levels set in the Tariff of 1816—an average of 20%.^[1] The compromise reductions lasted only two months into their final stage before protectionism was reinstated by the Black Tariff of 1842.

Background

The Tariff of 1828

The Tariff of 1828, enacted on May 19, 1828, was a protective tariff passed by the U.S. Congress. It was the highest tariff in U.S. peacetime history until that point, enacting a 62% tax on 92% of all imported goods. The goal of the tariff was to protect northern U.S. industries by placing a tax on low-priced imported goods, which had been driving northern industries out of business. Nevertheless, the South strongly resisted the Tariff of 1828 for several reasons. Firstly, they were forced to pay higher prices on goods that the region did not produce, and secondly, the reduced importation of British goods made it difficult for the British to pay for cotton imported from the South. In essence, the South was simultaneously forced to pay more for goods and to face reduced income from sales of raw materials.^[2] These unfortunate results caused many in the South to refer to the Tariff of 1828 as the Tariff of Abominations.

Current Vice-President John C. Calhoun opposed the tariff and anonymously authored a pamphlet called the South Carolina Exposition and Protest, in which he urged nullification of the tariff within South Carolina.  The South Carolina legislature printed and distributed 5,000 copies of the pamphlet, but it did not take the pamphlet's suggested legislative action to nullify the Tariff of 1828, since many figured the tariff would be reduced with the election of Andrew Jackson.^[3][4]

The Tariff of 1832

Nevertheless, Andrew Jackson's administration did not address the tariff concerns until July 14, 1832, when Jackson signed into law the Tariff of 1832. This tariff, written mostly by former President John Quincy Adams, reduced tariffs to resolve the conflict created by the Tariff of 1828. However, while Northerners essentially saw the tariff as a settlement, many Southerners merely saw it as a harbinger of things to come. The tariff, to them, was still unsatisfactory and needed improvement. In particular, the state of South Carolina vehemently opposed the tariff, leading to the Nullification Crisis.

The Nullification Crisis

Disappointed by the Tariff of Abominations and the Tariff of 1832, the South Carolina government declared that the Tariff of 1828 and the Tariff of 1832 were unconstitutional and therefore unenforceable within the state of South Carolina. Jackson issued the Proclamation to the People of South Carolina, in which he called the positions of the nullifiers as "impractical absurdity." He provided this concise statement of his belief:

“

I consider, then, the power to annul a law of the United States, assumed by one State, incompatible with the existence of the Union, contradicted expressly by the letter of the Constitution, unauthorized by its spirit, inconsistent with every principle on which It was founded, and destructive of the great object for which it was formed.[5]

”

The state, ready to defend itself from the government, began making military preparations to resist federal enforcement.^[6] Meanwhile, Congress passed the Force Bill, which granted Jackson the ability to use whatever force necessary to enforce Federal tariffs.^[7]

The Tariff of 1833

Shortly after the Force Bill was passed through Congress, Henry Clay and John C. Calhoun proposed The Tariff of 1833, also known as the Compromise Tariff, to resolve the Nullification Crisis. The bill was very similar to the Tariff of 1832, but with a few exceptions. Most importantly, the Tariff of 1833 guaranteed that all tariff rates above 20% would be reduced by one tenth every two years with the final reductions back to 20% coming in 1842. This essentially forced import tariffs to gradually drop over the next decade, pleasing South Carolina and other Southern states that depended on cheap imports.^[8]

In addition, the Tariff of 1833 had some other notable impacts. First, it allowed many raw materials used by American industry to be admitted completely free of duty. In addition, it stated that all duties must be paid in cash, with no credit allowed the importing merchant. Some claimed that this was equivalent to an additional 5 percent on tariff rates.

Ultimately, South Carolina and the rest of the United States would accept the Tariff of 1833, and warfare between the South Carolina army and the Union was avoided. Both sides received some benefit from the deal. South Carolina now had a much more agreeable tariff and did not have to risk lives to protect its economy, and the United States government, through the Force Act, was given the power to use force to enforce tariffs.

Many believe that were it not for the Force Act, South Carolina may have continued its Nullification policies because the Force Act gave the United States government the ability to use military force to enforce tariffs and other economic policies, which posed a clear threat to South Carolina. Though the exact impact of the Force Act on South Carolina's decision to accept the Tariff of 1833 cannot be measured, there is no doubt that it made fighting for nullification a potentially devastating choice. Ultimately, the House passed the Tariff of 1833 by a vote of 119-85 and the Senate passed it by a vote of 29-16.^[9]

The Aftermath

The Tariff of 1833 was ultimately abandoned in favor of the Black Tariff of 1842, and protectionism was reinstated. Average tariff rates nearly doubled from the initial 20% target for 1842 to about 40%, and the percentage of dutiable goods jumped from about 50% of all imports to over 85% of all imports. For some goods, such as those made with iron, the import tax constituted about two thirds of the overall price of the good. Unsurprisingly, the impact of the Black Tariff of 1842 was immediate: as the cost of imports jumped, there was a sharp decline in international trade in 1843.

See also

• Force Bill

References

1. ^ David and Jeanne Heidler, Henry Clay: The Essential American p.253
2. ^ "1816–1860: The Second American Party System and the Tariff", Tax History Museum. http://www.taxanalysts.com/museum/1816-1860.htm
3. ^ Remini, Robert V., Andrew Jackson and the Course of American Democracy, 1833-1845, pp. 136–137, (1984) ISBN 0-06-015279-6
4. ^ Niven, John. John C. Calhoun and the Price of Union, pp. 135–137 >, William W., Prelude to Civil War: The Nullification Crisis in South Carolina 1816-1836, p. 143 (1965) ISBN 0-19-507681-8
5. ^ Ellis pg 83-84. Full document available at: http://www.yale.edu/lawweb/avalon/presiden/proclamations/jack01.htm
6. ^ Freehling, Prelude to Civil War pg. 1-3. Freehling writes, “In Charleston Governor Robert Y. Hayne ... tried to form an army which could hope to challenge the forces of ‘Old Hickory.’ Hayne recruited a brigade of mounted minutemen, 2,000 strong, which could swoop down on Charleston the moment fighting broke out, and a volunteer army of 25,000 men which could march on foot to save the beleaguered city. In the North Governor Hayne’s agents bought over $100,000 worth of arms; in Charleston Hamilton readied his volunteers for an assault on the federal forts.”
7. ^ Text of the Force Bill, Wikisource
8. ^ “Tariff Protection and Production in the early U.S. Cotton Textile Industry.” Journal of Economic History. Cambridge University Press. Vol. 44, No. 4, Dec., 1984. http://www.jstor.org/stable/2122117.
9. ^ Peterson, Merrill D. The Great Triumvirate: Webster, Clay, and Calhoun