The Morrill Tariff of 1861 was a major protectionist tariff bill instituted in the United States. The act is informally named after its sponsor, Rep. Justin Morrill of Vermont, who designed the bill around recommendations by economist Henry C. Carey. It was signed into law by Democratic president, James Buchanan. The tax is significant for severely altering American commercial policy after a period of relative free trade to several decades of heavy protection. It replaced the Tariff of 1857. Some historians argue that it was a contentious issue that fueled sectional disputes on the eve of the American Civil War.
The immediate effect of the Morrill Tariff was to more than double the tax collected on most dutiable items entering the United States. In 1860 American tariff rates were among the lowest in the world and also at historical lows by 19th century standards, the average rate being around 18% ad valorem. The Morrill Tariff immediately raised this average to 36.2%, and in subsequent years was revised upward until in 1864 (when it could only be collected from states under Union control) the average rate stood at 47.56%.
Frank Taussig, whose work "The Tariff History of the United States" is recognized as the foremost authority on the subject wrote: "In 1857 duties were still further reduced, the rate on most protected commodities going down to 24 per cent., and remaining at this comparatively low level until the outbreak of the Civil War." Taussig goes on to say:
It is true that the first steps towards a policy of higher protection were taken just before the war began. In the session of 1860-61, immediately preceding the outbreak of the conflict, the Morrill Tariff Act was passed by the Republican party, then in control because the defection of Southern members of Congress had already begun. It substituted specific duties for the ad valorem duties of 1846 and 1857, and made some other changes of significance, as in the higher duties upon iron and steel. Nevertheless, the advances then made were of little importance as compared with the far-reaching increases of duty during the Civil War.[1]
Taussig also concludes: "It is clear that the Morrill tariff was carried in the House before any serious expectation of war was entertained; and it was accepted by the Senate in the session of 1861 without material change. It therefore forms no part of the financial legislation of the war, which gave rise in time to a series of measures that entirely superseded the Morrill (p. 159) tariff."[2]
The act passed the United States House of Representatives by a strictly sectional vote during the first session of the 36th Congress on May 10, 1860. Virtually all of the northern representatives supported it and southern representatives opposed it. The bill was headed toward adoption in the United States Senate when Senator Robert M. T. Hunter of Virginia, a free trade advocate, employed parliamentary tactics to delay the vote until the second session after recess. This second session did not meet until after the 1860 election, so the move guaranteed that the tax issue would come up during the campaigns that fall.
During the campaign the Republican Party endorsed higher tariffs in their 1860 platform and campaigned on a protectionist ticket - especially in iron and manufacturing states like Pennsylvania (home of powerful Congressman and iron producer Thaddeus Stevens) and New Jersey where several industrial interests backed the rate hike. A large majority of Southerners opposed the tax increase because it hurt them financially and campaigned against it (protective tariffs could theoretically benefit Louisiana's sugar plantation owners from Caribbean imports, but Louisiana's congressional delegation voted unanimously against the Morrill bill). Unlike the north where manufacturers benefited from protection, the south had few manufacturing industries. Most of the southern economy depended on the export of crops like cotton and tobacco, which were hurt on the world scene by policies that adversely impacted international trade.
Returning in December, after the election, the Senate again took up the Morrill bill and intensely debated it for the next several months. On February 14, 1861 the new President-elect Abraham Lincoln publicly announced that he would make a new tariff his priority if the bill did not pass by inauguration day on March 4th.
According to my political education, I am inclined to believe that the people in the various sections of the country should have their own views carried out through their representatives in Congress, and if the consideration of the Tariff bill should be postponed until the next session of the National Legislature, no subject should engage your representatives more closely than that of a tariff.
The Southern cotton states that might have been hurt by the new tariff all left the Union to form the Confederate States of America. Therefore they did not have a voice in the policies of the country they had renounced. On February 28 the Senate finally voted on and adopted the Morrill Tariff. The vote was again on sectional lines and came at the height of the secession crisis, but many southern senators had already resigned their seats to side with their states (somewhat ironically, thus ensuring easy passage). It was one of the last bills signed by outgoing Democratic president, James Buchanan of Pennsylvania.
The bill was proposed after the Panic of 1857, which northerners such as Henry Carey blamed on the country's free trade policy - a problem he claimed the bill would rectify with protectionism (economists now relate the Panic of 1857 to other factors). The main purpose of the Morrill Tariff's high rates was the protection of industrial manufacturing, located mostly in the northeast, from foreign competitor products. Due to the penalties it imposed on foreign traded goods the act formented hostility and condemnation of the United States from abroad. Anger over the new American tariff caused many British commentators and politicians to express sympathy for the new Confederate States of America over the north. The high rates probably also contributed to the rapid decline in British exports to the United States in the early summer of 1861.
Other provisions of the bill altered and restricted the Warehousing Act of 1846.
As the leading expert on the Republican's economic policies has explained, Morrill's goal was to benefit everyone equally in every section of the nation. For the first time protection was extended to every major farm product. [Richardson, 105]
Planning to distribute the benefits of a tariff to all sectors of the economy, and also hoping to broaden support for his party, Morrill rejected the traditional system of protection by proposing tariff duties on agricultural, mining, and fishing products, as well as on manufactures. Sugar, wool, flaxseed, hides, beef, pork, corn, grain, hemp, wool, and minerals would all be protected by the Morrill Tariff. The duty on sugar might well be expected to appease Southerners opposed to tariffs, and, notably, wool and flaxseed production were growing industries in the West. The new tariff bill also would protect coal, lead, copper, zinc, and other minerals, all of which the new northwestern states were beginning to produce. The Eastern fishing industry would receive a duty on dried, pickled, and salted fish. "In adjusting the details of a tariff," Morrill explained with a rhetorical flourish in his introduction of the bill, "I would treat agriculture, manufactures, mining, and commerce, as I would our whole people—as members of one family, all entitled to equal favor, and no one to be made the beast of burden to carry the packs of others."
The Morrill tariff was compared to and even higher than the 1828 Tariff of Abominations, which had led to the 1832 Nullification Crisis. On November 19, 1860 US Senator Robert Toombs denounced the "infamous Morrill bill" as the product of a coalition of "the robber and the incendiary...united in joint raid against the South" in his speech advocating secession to the Georgia Legislature. Howver, Toombs said preservation of slavery was the cause of secession. Of the four Secession Declarations, only Georgia's mentions the tariff issue. [3] The December 25, 1860 Address of South Carolina to Slaveholding States complains about excessive taxation and heavy import duties - a reference to the then-pending Morrill Bill:
And so with the Southern States, towards the Northern States, in the vital matter of taxation. They are in a minority in Congress. Their representation in Congress, is useless to protect them against unjust taxation; and they are taxed by the people of the North for their benefit, exactly as the people of Great Britain taxed our ancestors in the British parliament for their benefit. For the last forty years, the taxes laid by the Congress of the United States have been laid with a view of subserving the interests of the North. The people of the South have been taxed by duties on imports, not for revenue, but for an object inconsistent with revenue— to promote, by prohibitions, Northern interests in the productions of their mines and manufactures.[4]
Historians are not unanimous as to the relative importance which Southern fear and hatred of a high tariff had in causing the secession of the slave states. Charles Beard argued in the 1920s that economic issues were critical, with the pro-tariff industrial Northeast forming a coalition with the anti-tariff agrarian Midwest against the plantation South. Beard's model fell out of favor in the 1950s, and few historians any longer agree with it, as shown by Richard Hofstadter (Progressive Historians") Historians also emphasize that with a major war looming that the USA urgently needed much higher federal revenue, and as Taussig has shown, the tariff was the easiest way to get it. However, there has been a resurgence of interest in Beard's theory among free-traders (who want to eliminate tariffs), economists, and pro-southern historians. A 2002 study by economists Robert McGuire and T. Norman Van Cott concluded
A de facto constitutional mandate that tariffs lie on the lower end of the Laffer relationship means that the Confederacy went beyond simply observing that a given tax revenue is obtainable with a "high" and "low" tax rate, a la Alexander Hamilton and others. Indeed, the constitutional action suggests that the tariff issue may in fact have been even more important in the North-South tensions that led to the Civil War than many economists and historians currently believe."
The new Confederacy also needed revenue and it imposed a copy of the U.S. tariff (at 1857 levels) on all trade with the USA. The Lincoln government refused to recognize the Confederacy as independent and did not impose a tariff on goods moving from south to north. It did however impose a blockade on foreign trade with the south and a war embargo on north-south trade in provisions deemed to be helpful to the Confederate war efforts.
A debate was waged in England over which side to support in the war. Two views emerged. Tax historian Charles Adams has selected two authors that he considers the most prominent representaives of these views in England. One of the early voices in Britain was that of Karl Marx, who contended that the major cause of secession was slavery – and that the tariff was just a pretext. Marx wrote, in October 1861:
Naturally, in America everyone knew that from 1846 to 1861 a free trade system prevailed, and that Representative Morrill carried his protectionist tariff through Congress only in 1861, after the rebellion had already broken out. Secession, therefore, did not take place because the Morrill tariff had gone through Congress, but, at most, the Morrill tariff went through Congress because secession had taken place.[5]
Following Lincoln's orders early in the American Civil War rescinding the orders (of Union generals) freeing slaves in captured territories, people in England (and even in the North) began to doubt the genuineness of the claim that slavery was the cause of the war. The tariff hurt the British economy and many British newspapers opposed it, siding with the South, and contending that the tariff was the major reason why the Southern states wanted to secede. A single unsigned article taking this viewpoint appeared in Charles Dickens' magazine All the Year Round on 28 December 1861:
If it be not slavery, where lies the partition of the interests that has led at last to actual separation of the Southern from the Northern States? …Every year, for some years back, this or that Southern state had declared that it would submit to this extortion only while it had not the strength for resistance. With the election of Lincoln and an exclusive Northern party taking over the federal government, the time for withdrawal had arrived … The conflict is between semi-independent communities [in which] every feeling and interest [in the South] calls for political partition, and every pocket interest [in the North] calls for union … So the case stands, and under all the passion of the parties and the cries of battle lie the two chief moving causes of the struggle. Union means so many millions a year lost to the South; secession means the loss of the same millions to the North. The love of money is the root of this, as of many other evils.… [T]he quarrel between the North and South is, as it stands, solely a fiscal quarrel.
Like nearly all articles from All the Year Round, the article was printed without naming its author. Whether this article (and another on a similar topic a week earlier) was written by Dickens or by staff writer Henry Morley is disputed, but historians generally agree that the article does reflect Dickens' opinions on the Morrill Tariff as they are similar to his privately stated views on the subject1.
Many modern historians have tended to preserve these opposing positions that developed in England, with few if any exploring any middle ground. Economist Thomas DiLorenzo has identified the Morrill Tariff as an underlying cause for the Civil War. He contends that the tariff was a source of major irritation for the south, and also note that many northerners opposed secession for fear that it would undermine the Morrill Tariff's implementation and the protection they received from it.
Historians including Allan Nevins and James M. McPherson downplay the significance of the tariff dispute, arguing that it was secondary to the issue of slavery. They point out that slavery dominated the secessionist declarations from the four states that published them (only Georgia's mentions tariffs at length). Nevins also points to the argument of Alexander Stephens, who initially opposed Georgia's secession and who, in a speech to the Georgia Secession Convention, disputed the severity of the threat that the Morrill Bill posed; although by the time of his Cornerstone Speech (March 1861), he makes a strong point of how Georgia in particular was "compelled to pay into the common treasury several millions of dollars for the privilege of importing the iron, after the price was paid for it abroad"[6] thus making its ambitious rail building even more expensive. However, the "cornerstone" he refers to was slavery and he made it clear that was the "immediate cause" of the war.