When Congress met under the Constitution, the first bill intro duced in the House of Representatives was a measure to pro vide revenue by means of a customs tariff. Various States had protective duties before the Constitution was adopted, and the debates on the revenue bill show clearly a general willingness to use the tariff to encourage domestic industries. Yet the rates enacted were low (in general but 5%), with specific duties on cer tain articles selected for special encouragement. During the 20 years following, the European wars created a great foreign market for American raw products, and made ship-building and shipping highly profitable, notably in New England; so there was little growth of American manufactures, and no appreciable increase of protectionist sentiment, despite the strong argument for protec tion put forth in Hamilton's Report on Manufactures (1792). As more revenue came to be needed, tariff rates were raised from time to time, but no special attention was given to their pro tective aspects, and down to 1816 the actual operation of the cus toms duties was only remotely protective.
From i8o8, however, the industrial situation changed abruptly. The Embargo act (Dec. 1807), followed by the Non-Intercourse act (1809) and the war with England, cut off a large part of the export and import trade. Small manufactures sprang up in various parts of the country to meet pressing needs. Financially weak, and often ill-equipped, they were in no position to meet the sharp competition of the more advanced British manufactures with which they were faced on the return of peace. Their cries of dis tress, together with the need for more revenue, in 1816 brought new tariff legislation. Though designed to aid the manufacturers, this measure embodied only moderate duties, running as high as 25% on textiles for three years only, with a provision for mini mum valuation. Though had crops in Europe for a time kept the price of farm products high, the farmers too found themselves in. difficulty after the crisis of 1818-19, and their thoughts turned toward the possibility of a home as opposed to a foreign market. As a result of these conditions there sprang up after 1819 an agi tation for internal improvements and a vigorous protective move ment, which aimed to insure national self-sufficiency by encour aging young manufactures and affording the farmer a home mar ket. This so-called "American system," popularly identified with the name of Henry Clay, its foremost spokesman, had its early strength in the middle and Western States, New England at first holding aloof because of its predominant shipping and commercial interests. As industrialization proceeded, however, New England swung over, and from the latter part of the '20S that section be came a foremost advocate of the protective system, which Penn sylvania had favoured from the first.
In response to the demand for protection, Congress passed the Tariff act of 1824, raising the duties on textiles, and also on iron, wool, hemp and other articles of particular interest to the middle and Western States and to the farmers. Agitation was renewed after the crisis of 1825-26, culminating in the celebrated Har risburg convention of 1827. In the following year, as a result of extraordinary political manoeuvres, a new law was enacted, the so-called "tariff of abominations," which brought further sharp increases of rates, particularly on wool and other goods whose protection was specially distasteful to the New England protec tionists. Four years later this measure was superseded by another
act, which put the tariff into a form satisfactory to its friends. Goods not produced in the United States paid low rates while textiles, iron and other articles which it was desired to protect, paid high ones. Woollens, for example, were taxed 5o%, while the specific duty on rolled bar-iron at 1832 prices was equal to 95%.
The Southern States were unable, because of slavery, to de velop manufactures, and they were interested chiefly in a good market for their raw cotton. Rightly judging that protection was bound to work directly to their disadvantage, they had from the beginning sharply opposed protection. The opposition became so fierce that South Carolina undertook to nullify the Act of 1832, but the firmness of President Jackson maintained the Federal au thority. As a consequence of Southern opposition, however, the compromise tariff of 1833 was enacted, providing for a slow re duction of duties over a period of io years, until in 1842 no rate should exceed 2o%. Manufactures had in fact by 1832 become settled on a firm basis, and interest in the tariff waned, while other questions, like internal improvements and slavery, came to occupy public attention. The final low rates of the act of 1833, it so hap pened, were in effect but two months, as the Whig Party in 1842, for political rather than economic reasons, passed a new high-tariff measure, which remained on the statute books for four years. The protective movement had largely lost force, however, so this measure was without much difficulty replaced in 1846 by the so called Walker tariff, a moderate measure under which the most im portant protected articles paid 30% except cottons, which paid 25%. There was little interest in the tariff, and in 1857a redundancy of revenue led to further reductions, the 30% rate going down to 24%. Often called a free-trade tariff, the act of 1857 in fact marked the lowest level of protective rates since the beginning of active protection. Under the circumstances then existing, the reduction of duties commanded general approval, even among the manufacturers. The protective movement of the '20S, the period in which manufactures were becoming firmly established, had gradually lost fervour after 1832, leaving the way clear for the fixed opposition of the Southern States to make itself effec tively felt. The interest of farmers and manufacturers alike turned to other methods than, tariff legislation as a means of insuring prosperity, and no real or supposed national interest was successfully invoked to stay the growing movement toward greater freedom of international trade. A revenue shortage following the crisis of 1857 occasioned the enactment of the Morrill tariff of 186t, framed to attract protectionist votes to the Republican Party in the campaign of 186o. Undertaking only to restore the rates of 1846, its authors yet sought to give added protection to Pennsylvania and the Western States by changing ad valorem to higher specific duties and by raising rates on iron and wool. Even so, the measure belongs essentially to the period of tariff liberaliza tion beginning in 1833.