The Morrill Tariff

Provocation to Southern Secession and Northern War – Part 1

Most Americans now believe that the U.S. “Civil War” was just about slavery. They have to an enormous degree been miseducated. Since the early 1960s, powerful academic and political interests have been straining every nerve to sustain the myth that the war was a glorious moral crusade against slavery. How to manage the multi-faceted problem of slavery was often a divisive issue but not in the overly-simplified moral sense that lives in postwar and modern propaganda. But had there been no Morrill Tariff in 1861, the major cotton-exporting states would not have been so strongly compelled to secede, and there might never have been a war. The conflict that cost the lives of over 750,000 Union and Confederate soldiers and at least 50,000 Southern civilians and impoverished many millions for generations might never have been.¹

Before the Morrill Tariff, there had been nearly 40 years of political tariff wars between Northern industrial Whig/Republicans favoring high-tariff protectionism and Southern agricultural low-tariff free-trade advocates. The sharply increased rates and sectional bias of the 1824 Tariff benefited the North at Southern expense and was the first tariff to create substantial Southern distrust of Northern political dominance. 

Southern secessions and Southern plans for low free-trade tariffs would have meant a loss of 80 percent of U.S. tax revenues and a loss of most Northern shipping revenues to Southern ports. Preventing Southern secession, with its devastating losses of tax revenues and shipping commerce, was the true principal Northern cause driving the so-called “Civil War.”   

The Morrill Tariff, named for Justin Morrill, Vermont Republican and steel manufacturer, was a shamelessly partisan protectionist tax bill submitted to the House Ways and Means Committee during the 35^th Congress in 1858. The object of its astonishing 67 percent increase in import tariff burdens was to allow protected U.S. industries to raise their prices and enjoy the resulting benefit of substantially increased profits without significant price competition from abroad. ² This tariff was so unjust in its impact on consumers, agricultural interests, exporters, and especially the Southern cotton-producing states, that it became a major provocation and economic incentive to Southern secession, when it finally passed the House on May 10, 1860.

In 1860, there was no Federal income tax in the United States. Approximately 95 percent of all Federal government revenues came from tariffs on imported goods. ³ Land sales accounted for most of the rest. Tariffs, collected at entry ports, had the advantage of being easier to collect than individual income or property taxes. Their disadvantage to cost-effective government, however, was that they were an invisible tax burden on a largely unwary electorate.

The Morrill Tariff raised the average dutiable ad valorem tax on imports from just under 20 percent in 1860, regulated by the low-tariff 1857 Act, to an average of over 36 percent in 1862, with dutiable rates scheduled to go to 47 percent within three years. Because some import items are needed by protected industries, they are often exempted or non-dutiable, so the overall average tariff in 1860 was less than 16 percent, but the Morrill Tariff increased it by 67 percent to an average overall rate of over 26 percent by 1862 and to more than double by 1865 to 36 percent. ⁴

In 1860, the South accounted for almost 82 percent of U.S. export business. ⁵ Over 58 percent was from cotton alone. ⁶ The South was largely dependent, however, on Europe or the North for the manufactured goods needed for both agricultural production and consumers. U.S. tariff revenues already fell disproportionately on the South, accounting for over 83 percent of the total, even before the Morrill Tariff. Furthermore, the population of the South was less than half that of the North. Still more galling was that 75 to 80 percent of these tax revenues were expended on Northern public works and industrial subsidies, thus further enriching the North at the expense of the South. ⁷

Although it was remarkably reminiscent of the 1828 Tariff of Abominations, which had led in 1832 and 1833 to a Constitutional crisis over South Carolina’s Nullification of both the 1828 and 1832 tariff laws, accompanied by South Carolina threats of secession and Andrew Jackson’s threats of Federal armed force, the U.S. House of Representatives passed the 1860 Morrill Tariff bill 105 to 64. Only one of 40 Southern representatives voted for it. It did not come before the Senate until February 20, 1861, after Lincoln’s election. It passed 25 to 14, with no Southern or Border State votes. Lincoln and the Republican Party had made passing the Morrill Tariff their primary campaign issue, and Republican Congressmen voted for it 89 to 2 in the House and 24 to zero in the Senate. ⁸ Excluding slavery from new territories and states—not the emancipation of slaves—was a subordinate priority to high tariffs. President Buchanan, a Pennsylvania Democrat, signed it into law two days before Lincoln’s inauguration on March 4, 1861.

There is little continuity between the political philosophies of the Democratic and Republican parties of the mid to late 19th Century with their modern counterparts. Democrat and “conservative” were virtual synonyms in that era. Republicans favored high protectionist import taxes, corporate subsidies, and monetary policies that many modern Republicans would strongly disavow.

John Spence, a British political analyst writing in 1862, was appalled at “the outrageous duties imposed on articles of prime importance, at a time, when all other civilized countries were reducing duties and removing impediments to trade.” His censure was bare-knuckled: 

“It would be difficult to contrive more ingenious machinery for dealing injustice, restricting commerce, perplexing merchants, creating disputes, inviting chicanery, or driving officers of the customs to despair.” ⁹

While protectionist tariffs benefit selected industries and commercial interests, they punish everybody else. The higher prices charged by protected business interests are passed on to consumers whose purchasing power and standard of living are thus lowered. Their reduced purchasing power reduces demand for consumer products and negatively impacts employment demand. Businesses that must use the higher-priced protected goods also experience increased costs of production and services.

Protectionism is particularly hard on exporters. Besides their direct effect on the cost of doing business, tariffs negatively impact the exchange rate at which exports can be exchanged for products burdened with increased tariffs. In effect, not only are the exporters’ costs at home increased, but they are also likely to get less for their product on exchange. Furthermore, exporters often face retaliatory tariffs that result in lost business. The Morrill Tariff jeopardized the South’s cotton market in Europe, because the British and other European textile manufacturers could develop alternative sources of raw cotton in Brazil and India. The Confederate Constitution outlawed protective tariffs, and the Confederate Congress set a free-trade course using the more favorable 1857 U.S Tariff law as a guideline. Most dutiable rates were set at 15 percent or less.

Abraham Lincoln strongly backed the Morrill Tariff, and two days before his election in November of 1860, the Charleston Mercury editorialized:

“The real causes of dissatisfaction in the South with the North, are in the unjust taxation and expenditure of the taxes by the Government of the United States, and in the revolution the North has effected in this government, from a confederated republic to a national sectional despotism.” ¹⁰

Writing from London in 1861, the renowned Karl Marx, a political journalist, who was dismayed by British free trade and favored the Northern cause, summarized what the major British newspapers were saying:

“The war between the North and South is a tariff war. The war, is further, not for any principle, does not touch the question of slavery, and in fact turns on the Northern lust for power.” ¹¹

Many apologists for the Union invasion and war against the South have dismissed the Morrill Tariff as a provocation to war because many Southern States had already seceded before it was passed by the Senate and signed by President Buchanan on March 2, 1861. However, John Spence, addressing the issue in 1862, wrote:

“The cotton States had indeed seceded previously; but why? Because, as we have seen, political power had passed into the hands of the North, and they anticipated from the change, an utter disregard of their interests, and a course of policy opposed to the spirit of the Constitution, and to their rights under it. Was it possible to offer to the world more prompt or convincing proof than this tariff affords, that their apprehensions were well-founded.” ¹²

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Abbreviated Footnotes (FN)  1-12