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Category: Mike Scruggs' Column

Mostly about Tariffs versus Free Trade rather than Slavery

President Abraham Lincoln  elected November 2, 1860. Favored high protective tariffs and corporate subsidies.
President Abraham Lincoln elected November 2, 1860. Favored high protective tariffs and corporate subsidies.

The photo accompanying last week’s article was an 1860 Republican poster urging voters to vote straight Republican the next Tuesday, November 2 [1860]. In the top third of the poster were these words:

$  IN YOUR POCKET  $

Protect Your Job—Your Farm—Your Business

The Only Issue Before the Voters is The

PROTECTIVE TARIFF

Please note carefully that the poster says:

“The Only Issue Before the Voters is The Protective Tariff.There was nothing on the poster touching any issues with slavery. As stated by Lincoln and the Republican Platform of 1860, the Republican objective regarding slavery was only to limit its geographic expansion to states that already permitted it. 

The Protective Tariff here refers to the Morrill Tariff introduced in the U.S. House in 1858 and finally passed by the House on May 10, 1860. Only one Southern Congressman of 40 voted for it.  It was not passed by the Senatuntil a few days before Lincoln’s inauguration, and its passage received not a single Southern vote. Tariffs on imports represented 95 percent of Federal revenue at that time. Over 83 percent was paid at Southern ports. The Morrill Tariff would more than double the already heavy burden on the South, particularly large cotton exporting states that imported manufactured goods from Britain and France.   

The above referenced poster was posted only in Northern States. Lincoln was not even on the ballot in most Southern statesand would have received few votes there anyway. Lincoln only got 10 percent of the vote in the border state of Missouri, which grew some cotton, and where about 60 percent of the settlers were of Southern origin. Federal troops initially blocked Missouri’s secession, but most of the Legislature was able to escape to Neosho, Missouri, where they declared the state’s secession on October 31, 1861. One of the 13 stars in the Confederate Battle Flag is for Missouri, and another is for Kentucky. 

Protective tariff policies and corporate subsidies are political behavior that economists call “rent-seeking.It is the practice of establishing economic advantage by government regulation rather than successful free market competition. In rent-seeking economies, lobbyists seek special privileges and exemptions to establish monopolies, government subsidies, government contracts, and protection from foreign or domestic competition. They often seek government regulations that would crush competitors. While lip-service is paid to economic freedoms, the reality of more and more legislative control and regulation of the economy makes new business start-ups more difficult and continuously hinders the ability of small and mid-size firms to prosper. This departure from classical economic competition has produced a new breed of “political entrepreneurs” who succeed primarily by influencing government to enact favorable legislation or to establish regulations that reduce competition. 

President Trump’s use of tariffs to force China and other nations to desist from terribly unfair trade practices that harm all Americans is a very different situation, which has so far been remarkably successful.  

Lincoln campaigned hard for higher tariff rates before and during the Republican Convention and during the general election of 1860.  Pro-tariff Pennsylvania was vitally important to winning the Republican nomination and, as a swing state, vitally important to winning the general election. In addition, New York and New Jersey were crucial industrial swing states that could be won by an appeal for higher tariffs. Increased tariff levels also ranked high among the objectives of the 1860 Republican platform. The evidence is strong that Lincoln made high tariffs his primary campaign message and the highest priority for the Lincoln Administration. 

This is made perfectly clear by Pennsylvania Republican Thaddeus Stevens, a sponsor of the Morrill Tariff and as a member of the House Ways and Means Committee, one of nine men who wrote the bill. On September 27, 1860, Stevens addressed a Republican rally in New York City in the Cooper Union Hall for the Advancement of Science and Art. He told them that there were two main issues in the presidential campaign: excluding slavery from the national territories and raising Federal import taxes. Of these two, he told the crowd, raising Federal import taxes was the most important. He emphasized that Abraham Lincoln and the Republican Party strongly supported raising Federal import taxes much higher. But the other four candidates—Breckenridge, Douglas, Everett, and Bell—favored keeping them the same or even lowering them to nearly free-trade levels.

Stevens acknowledged that a dramatic increase in the tariff would cause people in the South and West to suffer and remain poor, while people living in the Northeast would gain wealth through increased industrial production and the higher prices manufacturers would be able to charge for goods. He warned that the Southern States would never develop manufacturing and commerce as long as their state governments permitted African slavery. To be prosperous, the South would somehow have to do away with African slavery. 

Stevens, who also owned an iron works facility, was the floor leader for the tariff bill and would later become Chairman of the House Ways and Means Committee. He became the leader of the Radical Republicans in the House, and after Lincoln’s death, many referred to him as “the Boss of America.” He was also a radical abolitionist who authored much of the oppressive anti-Southern legislation of Reconstruction. Stevens was not a cordial person, and he had a ruthless and dictatorial style of leadership. However, he was an intense and persuasive speaker. Many Democrats thought him a perfect demagogue and not averse to exaggeration and emotional appeal:     

“Let us now see which of the candidates are in favor of a policy of low import taxes which depresses the price of agricultural produce, destroys our manufacturing enterprises, breaks down our iron works, throws laborers out of employment, and brings suffering, if not starvation, on their families.”

In truth, all the social and economic ills he describes would more likely fall on the Southern victims of protective tariffs. He was particularly hard on the Northern and Southern Democratic parties, describing them as evil and detestable. Stevens’ political punch line intending to alarm his audience was that:

“Both the northern states Democratic Party and the southern states Democratic Party have adopted a platform plank that declare in favor of progressive free trade throughout the world.“

In closing, he discounted the possibility of Southern secession but promised that if they did secede, he would “lead an invasion to hang everyone involved.”

Lincoln strongly endorsed the newly passed Morrill Tariff during his inaugural speech, and though most of his speech was conciliatory on slavery, he promised to enforce collection of the tariff whether or not the Southern States remained in the Union. After promising that his objective was only to defend and maintain the Union, he added: 

“In doing this there needs to be no bloodshed or violence, and there shall be none unless it is forced upon the national authority. The power confided to me will be used to hold, occupy, and possess the property and places belonging to the Government and to collect the duties and imposts; but beyond what may be necessary for these objects, there will be no invasion, no use of force against or among the people anywhere…” (Italic emphasis added.). 

In other words, there would be no Federal violence against Southern states except to collect the tariff and to secure control of the places where it might be collected, for example, Fort Sumter in Charleston Harbor. It is obvious from his inaugural speech that Lincoln’s conciliatory words on slavery contrasted with his hard line on tariffs. Raising the tariff was by far his most important objective. 

Lincoln met secretly on April 4, 1861, with Colonel John Baldwin, a delegate to the Virginia Secession Convention. Baldwin, like a majority of that convention, would have preferred to keep Virginia in the Union.  But Baldwin learned at that meeting that Lincoln was already committed to taking some military action at Fort Sumter in South Carolina.  He desperately tried to persuade Lincoln that military action against South Carolina would mean war and also result in Virginia’s secession.  Baldwin tried to persuade Lincoln that if the Gulf States were allowed to secede peacefully, historical and economic ties would eventually persuade them to reunite with the North. Lincoln’s emphatic response was:

“And open Charleston, etc. as ports of entry with their ten percent tariff? What then, would become of my tariff?”

Despite Colonel Baldwin’s advice, on April 12, 1861, Lincoln manipulated the South into firing on the tariff collection facility of Fort Sumter in volatile South Carolina.  This achieved an important Lincoln objective. Northern opinion was now enflamed against the South for “firing on the flag.” Three days later Lincoln called for 75,000 volunteers to put down the Southern “rebellion.” This caused the Border States to secede along with the Gulf States.  Lincoln undoubtedly calculated that the mere threat of force backed by a now more unified Northern public opinion would quickly put down secession.  His gambit, however, failed spectacularly and erupted into a terrible and costly war.

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