Sunday, August 21, 2011

Antecedents of the Civil War Part II

"That wouldn't have been necessary if that secesh woman hadn't started it. They never learn. You see secesh has to be cleared away by the hand of God like the Jews of old. Now I will have to burn this town."
--Col James Montgomery (Glory)

Previously, we discussed the advent of the American System and its influence on politics in the first half of the 1800s. While central banking and internal improvements were operationalized with some success, it was the third plank of the American System, protectionism via tariffs, that made the most headway during this period.

The first tariffs motivated by the American System were enacted in the mid 1810s and imposed taxes of 20-25% on manufactured imports. Tariffs make a market for political favor, and Northern manufacturers and their interests exchanged votes and other 'political capital' for special treatment in the form of being shielded from competition. Northern stakeholders also saw federal funds, primarily sourced from tariffs collected at Southern ports, disproportionately flow their way for internal improvement projects.

The South, on the other hand, generally opposed tariffs. Because most US exports came from the South and because the South's economy was primarily an agrarian one, high tariffs meant that Southerners would have to pay more for manufactured goods--whether they came from abroad or from the North.

By the 1820s, Southern politicians ritually condemned tariffs as unconstitutional tools of plunder on Southern states. The South was paying a tax in the form of artificially high priced manufactured goods to finance spending and wealth building in the North. Essentially, the South was paying the lion's share of all federal taxes (there was no federal income tax at the time) and getting the short end of the stick in this wealth transfer scheme.

In 1824, American System founder Henry Clay proposed a sharp increase in tariff rates because the previous rates were falling short of what his special interests desired (Remini, 1991). The South immediately opposed it, calling it the 'Tariff of Abominations.' Many Southern states considered secession. South Carolina voted to nullify the tariff by refusing to collect the tax at Charleston harbor. Stiff Southern resistance forced the federal government to back down and reduce the tariff.

The South's stand against the Tariff of Abominations infuriated proponents of the American System--particularly those of the Whig Party from which the system had originated. Henry Clay personally vowed to "defy the South, the president, and the devil" if necessary to get rates back up to Tariff of Abomination levels (Remini, 1991).

The American System was dealt a further blow in the early 1830s when Andrew Jackson and a primarily Southern-led political force struck down the charter of Second Bank of the United States--which essentially shattered the American System's national banking plank.

By the end of the 1830s, the American System, to the extent that it was enacted, clearly favored interests in the North. This increasingly spawned animosity in the South. And when the South pushed back to block the system's implemention, primarily through Constitutional channels, this increased the determination of American System proponents to fully implement the system, come hell or high water.

Or war.


Remini, R.V. 1991. Henry Clay:Stateman for the Union. New York: Norton.

1 comment:

dgeorge12358 said...

Today, it's not North vs South, but tax payers vs. tax consumers.

According to the Tax Policy Center, 47 percent of Americans pay no federal income tax.