Dallas tariff

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The Dallas Tariff was a protective tariff, introduced in the United States in 1816, which was in force between 1816 and 1824 and formed the basis of the Compromise of 1833, ending the Nullification Crisis in which South Carolina had threatened secession from the United States. It was introduced following a report from U.S. Treasury Secretary Alexander J. Dallas and adopted by the Fourteenth Congress. Henry Clay, then Speaker of the House, was a staunch advocate of the measure which he saw as developing American industries. There was significant opposition to the measure led by Daniel Webster and John Randolph.

1 Background
2 Introduction
3 History
4 References

[edit] Background

The level of tariffs had been increasing in the United States since the passage of a general administrative tariff act. The First Barbary War led to a slight rise of the tariff called the Mediterranean Fund with the tariff applicable to staple imports ranging from ten to fifteen per cent.

These tariffs were doubled in order to pay for the War of 1812. These tariffs were believed to have led to the strengthening of American industry not only in New England but also in New York and Pennsylvania.

[edit] Introduction

The Tariff of 1816 was put in place after the War of 1812. Britain had developed a large stockpile of iron and textile goods. Because this stockpile was so large, the price of British goods soon plummeted in comparison to that of American goods. Consequently, many people bought British goods rather than American goods, hurting the American economy. James Madison and Henry Clay devised a plan to help give American goods a chance, called the American System. It included a protective tariff more commonly known as the Tariff of 1816, which increased the price of British goods so that American goods could compete with them. The northern United States were quite pleased by this tariff. Since the north's economy was based on manufacturing, its goods could compete with British goods thanks to the aforementioned tariff. The Southerners, however, were outraged. The South liked British goods because they were cheap. Once the Tariff of 1816 was passed, however, the South had to pay more.

Dallas recommended the retention of the tariff regime in place during the 1812 War in a report published in February 1816 in order to develop American industry in the event of another war with the United Kingdom or other European powers. The proposal was adopted by President James Madison and congressional leadership notably Speaker Clay. A House of Representatives Committee recommended the adoption of this tariff predicting that it would only be necessary for a few years until the United States was strong enough to defend itself against foreign powers.

The tariff was popular in areas such as Pennsylvania and New York where manufacturing industry was growing rapidly. It was supported widely in those states to defend American manufacturers against competition from UK manufacturers. It was also popular in the West in states such as Kentucky, Clay's home state, where it was hoped to develop hemp and flax as crops and who wanted new tariffs to support these infant industries.

The proposal was less popular with New England merchants who were hoping to restore trade with the UK and other European powers and import products from Europe in return for US exports such as cotton. Daniel Webster represented their viewpoint and he managed to win some concessions about the level of the tariff.

It was also less popular in the South as it would increase the costs of production of their export crops notably cotton. It was also opposed by people who saw it as raising the costs of living of the poor. John Randolph in his speech in opposition raised both of these points. "Upon whom bears the duty on coarse woollens and linens and blankets, upon salt and all the necessaries of life? Upon poor men and upon slaveholders." (1) However, the tariff was supported by notable Southern leaders such as President Madison and former president Thomas Jefferson. Notably, John C. Calhoun who would be a strong opponent of future tariff regimes supported the Dallas tariff in the Congress.

The act was passed in April 1816 with rates of twenty-five per cent against woollen and cotton goods and a highest rate of thirty per cent. Further, no duty on cotton and woollen goods was to be less than six and a quarter cents a yard which would have a regressive impact over time. The measure had support from elected representatives from every state except Delaware and North Carolina.

[edit] History

The tariff was retained until 1824 when it was massively increased. In 1828, the so-called "Tariff of Abominations" was introduced increasing the rate of tariffs significantly to assist Northern manufacturers. This was massively unpopular as it raised the costs of production significantly. Further, as the measure increased the price of cotton goods, British textile manufacturers sold less in the US and reduced their purchases from Southern cotton growers accordingly.

This tariff was massively unpopular in the South and opposition was led by Vice-President Calhoun who broke with President John Quincy Adams over the issue. Calhoun then became Vice-President under Andrew Jackson who introduced the Tariff of 1832 that reduced the level of tariffs somewhat but not enough for Calhoun. He resigned in order to become a Senator for South Carolina thus prompting the Nullification Crisis where South Carolina declared the 1828 and 1832 tariffs null and started raising a military force in support of their action.

This crisis was averted through the Compromise of 1833 negotiated by Clay where tariff rates were progressively returned to the level of the Dallas Tariff by 1842. This averted further threats of nullification although the debate was a precursor to the arguments over slavery in the future. The Dallas Tariff then remained in force until after the U.S. Civil War with some further reductions.

[edit] References

Webroots US History for the early 19th century
"Alexander James Dallas." Dictionary of American Biography Base Set. American Council of Learned Societies, 1928-1936.

Reproduced in Biography Resource Center. Farmington Hills, Mich.: Thomson Gale. 2005.

"Henry Clay." Gale Encyclopedia of U.S. Economic History Gale Group, 1999.

Reproduced in Biography Resource Center. Farmington Hills, Mich.: Thomson Gale. 2005.

"John Caldwell Calhoun."Dictionary of American Biography Base Set. American Council of Learned Societies, 1928-1936.

Reproduced in Biography Resource Center. Farmington Hills, Mich.: Thomson Gale. 2005.

"Soylent Communications" Biography of Henry Clay
Albert Bushnell Hart, Formation of the Union, Kessenger Publishing, June 2004 ISBN 1-4191-2036-0 page 186
"Tariff" in Eric Foner and John Arthur Garraty, Editors, The Reader's Companion to American History Houghton Mifflin Books 1991 page 1059 ISBN 0-395-51372-3
John Randolph cited in Andrew Bushnell Hart, Op. Cit.