1ST SESS.] The Compromise Act-The Tariff. [MARCH, 1844. us a bill for raising revenue? I think it is. At | tection. Here is what each of them has said, all events it is a question of doubt: and in that case, I defer to the jurisdiction of the House which is charged with the general subject. The proposition before us is, in terms, to restore the compromise act of 1833, but in substance to substitute revenue duties for protective duties. The author of the proposition (Mr. McDUFFIE) has spoken his sentiments upon it; and, from the tenor of all that he has said, I comprehend that he goes for revenue duties, without regard to their form-that he is not wedded to the horizontal line-the uniform ad valorem of 20 per centum upon all articles without regard to their character, but that he admits of discriminating duties, and of different rates of duty, according to the nature of the article. [Mr. McDUFFIE nodded assent.] and first of South Carolina. The report of her legislative committee, remonstrating against the tariff act of 1828, says: "Every instance which has been cited, may be fairly referred to the legitimate power of Congress to impose duties on imports for revenue. It is a necessary incident of such duties to act as an encouragement to manufactures, whenever imposed on articles which may be manufactured in our own country. In this incidental manner, Congress has the power of encouraging manufactures; and the committee readily concede that, in the passage of an impost bill, that body may, in modifying the details, so arrange the provisions of the bill, as far as it may be done consistently with its proper object, and to aid manufactures. To this extent Congress may constitutionally go, and has gone from the commencement of the government; which will fully explain the precedents cited from the early stages of its operation."* The free trade convention says: "They admit the power of Congress to lay and collect such duties as they may deem necessary for the purposes of revenue; and, within these limits, so to arrange these duties as, incidentally, and to that extent, to give protection to the manufacturer."+ The Virginia convention says: "It may happen, if a wise policy prevails, that our manufacturing brethren of the North and West will be content with such incidental protection as will be afforded by duties laid to supply the constitutional wants of the Government." This being the case, I flatter myself that we shall be of accord with respect to the remedy as well as in regard to the evil. I was not in favor of the compromise act when it passed; I am not in favor of attempting to revive it. It presents an issue which is wrong in itself, and upon which we cannot go to trial-that of one uniform rate of duty upon all articles without regard to their nature or character. I am for discriminating between articles of luxury and necessity, and for making luxuries pay highest. I am for discriminating between articles made at home, and not made at home; and placing the highest revenue duty upon the foreign rivals of our own productions. In a word, am for going back to our old legislation This is what was said by these eminent freeon this subject to the system before the war; trade authorities on these recent occasions; not to the precise terms of any one of the acts, and I shall not pretend to comment upon their but to the principles and structure, the objects admissions. They are explicit upon the grounds and the incidents of the whole. They were all of discrimination and incidental protection. modelled upon the same plan. All took revenue They quote and admit by name, the system of for their object; all admitted incidental pro- our tariff legislation before the late war-that tection; all discriminated between luxuries and system under which the country was so long necessaries; and none of them admitted false tranquil and happy, and to which I am now for assumptions of value by minimum valuations. returning. They admit by name, discriminaThey were all equally free from the abuse of mini- tion for protection. The compromise act did mum valuations on the one hand, and the arbi-the same in effect. The raising the duties on trary levelling of the horizontal principle on the coarse woollens and common blankets, by that other. I am for returning to this system, with act, from 5 per cent. to 50, to come down in the single limitation that no duty, whether nine years to 20, was for protection during that. specific or ad valorem, shall exceed a maximum time. Home valuations and cash duties were of 30, or 334 per centum. In returning to this to aid manufacturers. A long list of free artiground, or rather in remaining upon it, (for it cles, used by manufacturers, was for the same has always been my doctrine,) I find myself object. Protection was granted by the act; standing upon the ground of the first twenty- and the declaration against it, and in favor of five years' action of our Government, and susrevenue duties only, was a direction for future tained by the sanction of the highest free-trade legislation, and did not prevent the compromise authorities which the tariff discussions have itself from granting protection. brought to light. I allude to the South Carolina legislative report of December, 1828-to the Philadelphia free-trade convention address of 1831, and to the Virginia democratic convention address of 1839. Each of these high authorities, and at the recent dates mentioned, and in their extremest opposition to protective tariffs, admitted the principle and the policy of discriminating duties, and of incidental pro Messrs. Gregg, Wardlow, Legare, Preston, A. P. Hayne, Elliott, and Barnwell Smith, the committee. + Two hundred and fifty delegates present, of which 51 from Virginia, 16 from North Carolina, 41 from South Caro lina, 6 from Georgia, 11 from Alabama, 1 from Mississippi, Brockenbrough, Randolph, Harrison, Young, Narbonne, MARCH, 1844.] The Compromise Act-The Tariff. [28TH CONG. I am for returning to the old legislation, not | obliterated by statute. We cannot make the that I would copy any one statute in particular, issue upon that act, but upon the old system of but would conform to the plan and object of revenue duties and incidental protection with the whole. These statutes admitted of duties discrimination between luxuries and necessaof various degrees, but all of them moderate in ries, and between articles made or not made at amount, and strictly calculated for revenue home. We are not to make war upon manupurposes. They admitted of duties on the factures: we do not do it. They were once as quantity (specific) as well as on the value, (ad popular in the South as in the North, and may valorem ;) and when on the value, they ad- become so again. The abuses of the high promitted of no minimums to falsify the real value tective system have destroyed their old popuand to augment the duty. They admitted of larity in the South: eradicate the abuse, and discriminations between articles of luxury and they will again be popular in every part of the articles of necessity, and very properly made Union. Manufactures are among, not only the former pay highest while many of the latter the useful and ornamental, but the noblest arts were free-as salt in the time of Mr. Jefferson, of the country. Every statesman will cherish or at the low rate of five per centum-as them, and honor the skill and industry which coarse woollens and common blankets, and perfects them, if left free to follow his own inother articles used by the laboring community. clinations. Abuse only-the conduct of politiThe specific duties, under these statutes, rarely cians and millionary capitalists--have made them exceeded a fourth or a third of the value: the enemies. Separate the real manufacturers from ad valorems ranged from five to fifteen, with these two classes-be content with ample incia temporary addition of two and a half per dental protection-and universal good-will will centum, to equip some small vessels to protect again attend them, greatly enlarging the extent the Mediterranean commerce from the depre- of their market, and the list of their customers. dations of the Barbary Powers. To this system This is our issue-the old system against the of duties, and this mode of levying them, I am new. And what can be the objection to returnin favor of returning, with the single qualifica- ing to the old one? None that cannot be tion that, in no case, shall any duty, either instantly and satisfactorily answered. I underspecific or ad valorem, exceed one-third of the take to say, that under the old system every value-33 per centum; and with the full interest connected with the imposition of duties belief that the average of the whole will not be was on a better footing than under the new; equal to the uniform twenty per centum of the that agriculture, commerce, and the revenue compromise act. To the consumer, this maxi- from customs, were all larger in proportion to mum, and this average, should be satisfactory; our population, and more free from fluctuations to the manufacturers, it will be great and am--that manufacturers themselves were advancple protection. To him, it should be also satisfac-ing faster than any other interest, and faster tory. He will get the benefit of the highest duty; or it comes within the principle of the old system, to put the highest duties upon the foreign rivals of our own productions, as well as upon luxuries: he will get the benefit of this duty, which will give him 50 per centum protection. I say 50; for 30 per centum duty is 50 per centum protection! the expenses of importation (7 per cent.) and the importing merchant's profit (12 per cent.) going into the price of the goods as well as the duty, and being just as effectual for protection as if inserted in the law. This, . with the cardinal consideration of stability, should be satisfactory to the manufacturers. This is our issue-the old system against the new; and upon this issue we can safely go to trial before the country. For it is not sufficient to have a good cause and good arguments: you must have the right issues, or you may be defeated in spite of your good cause and good arguments. The compromise is not the right issue or the safe one. In levelling all duties to one uniform line-in disregarding the distinction between luxuries and necessaries, and between articles made or not made at home-in doing this it disregards a distinction founded in the nature of things-a distinction maintained in all previous legislation-admitted most recently by the extremest free-trade authorities-and too accordant with the sympathies of mankind to be than they had ever advanced in any other My assertion is, that the income from customs was larger, population considered, and more free from fluctuation, under the low duty system before the war, than under the high duty since. In maintaining this assertion, I take the time of the first period from 1789, when this Government first went into operation, to the year 1808, when the British orders in council, and the decrees of the French emperor, and our own embargo, broke up our commerce and deranged or destroyed our income from that source. I leave out the period of the embargo and of the war with Great Britain, as belonging to neither system. I take from 1790 to 1808: and what was our income from customs during that time? It was from four and a half to near sixteen millions and a half of dollars. And what was our population during the 1823 1824 1825 1826 1827 [MARCH, 1844. 1843. Years. Population. 1817 9,000,000 Income. $26,283,348 1818 17,176,385 1819 20,283,608 1820 9,638,000 15,005,612 1821 13,004,447 17,559,761 19,088,433 17,878,325 20,098,713 23,341,331 19,712,283 23,205,523 same time? From four millions to seven mil- | Second table: High protective duties, from 1817 to lions. The revenue then commenced at the rate of about one million of dollars to one million of people, and rose gradually to near two a half millions of dollars to one million of people. So much for the first period; now for the second. Beginning with the year 1817, which was the first under the operation of the new system, and the revenue, commencing at twenty-six millions of dollars, fell as low as ten, rose again as high as thirty, fell again as low as twelve, thirteen, and fourteen millions, and for the last year was about seventeen and a half. Our population at the same time was from nine to eighteen millions; so that, at the best, the product of the high duties never rose higher than two and a half millions of dollars to one million of people, often fell as low as three-quarters of a million of dollars for a million of people, and is now at the rate of a million for a million! In other words, that the rate of product is exactly the same now, when duties average more than 50 per cent, that it was in the first year of Washington's time, when the average was one-fourth of that sum! and twice and a half less than it was in the last year of Mr. Jefferson, when the average of duties was not a third of what it is now. And here let it be remembered that the wars of the French revolution had nothing to do with our revenue. They increased importations, but not consumption. Duties were only paid on what remained in the country for consumption; the large amounts re-exported paid nothing. I have prepared tables, Mr. President, of the annual income from customs, with a note of the population, during each period into which I have divided our financial history. These tables will illustrate my positions in detail, and more fully and completely than can be done in general statements. They will enable every Senator, and every individual who sees them, to make the comparison for himself, and will sustain to the uttermost all that I have said of the superior productiveness of low duties over high. These are the tables: First table: Low revenue duties, from 1791 to 1808. 1842 1843 These, Mr. President, are the tables of the income under the two systems; and now let us examine them, and compare them together. Look first upon this picture, and then upon that! See the annual income from 1791 to 1808 see the largeness of the amount for the smallness of the population, the freedom from fluctuation, and the steadiness of the increase. Beginning at four and one-third millions, rising gradually, never varying more than a million in a year, and attaining in seventeen years the extraordinary amount of near seventeen millions of dollars, and that for only seven millions of people. Now look upon the other picture. Beginning in the year 1817, with twenty-six and a quarter millions of dollars, it falls the very next year to seventeen millions! and the year after rises to twenty and a quarter millions! tumbles down the next year to fifteen millions! and the year after tumbles again to thirteen millions! being an actual fluctuation of thirteen millions out of twenty-six in five years! All the rest of the period is about in the same proportion. Twice in twenty years the income got up as high as it was in 1817: twice again it fell to 17-twice to 15-twice to 13-once to 10-and is now at 17-which is near ten millions less than it was in the year 1808! This is bad enough: but to show off this period in proper contrast, a third table is necessary--a table showing at one view the actual income received, and the amount that ought to have been received during the same period, according to the increase of population, and according to the rate of the income during Mr. Jefferson's administration. This third table has been prepared, and here it is: The Compromise Act-The Tariff. MARCH, 1844.] Should have been. 20,283,608 Population. 1817 9,000,000 1818 1819 = 17,176,385 1820 9,638,000 1821 1822 17,559,761 10,159,339 15,789,173 1843 18,500,000 17,500,000 [28TH CONG. The miseries of the high duty system we have all seen and felt, and now see and feel, in the deplorable condition of our financesa debt of near thirty millions created-loans to defray current expenses-four times a resort $22,500,000 to treasury notes-and now an illegal and fraudulent issue of a paper money currency. Compared to the termination of the low duty system at the end of Mr. Jefferson's administration, and how does it stand? As confusion, misery, and deformity stand to order, beauty, and happiness. Mr. Jefferson's administration 27,000,000 required an expenditure nearly equal, and, population considered, more than double what we require now; and the customs produced all that was wanted, and to spare; for the lands produced but little. The interest and principal 31,500,000 of the debt of the revolution was then to be paid; the interest of the Louisiana purchase had to be met; a war with the Barbary Powers had to be kept up; a military peace establishment, larger than the present in proportion to our population, was kept up; and the revenue for all this expenditure, amounting to seventeen or eighteen millions of dollars, came from the customs, with a population of 42,500,000 only seven millions, leaving every year a real 43,000,000 surplus in the treasury. But let Mr. Jefferson himself present this picture. He presented it to the two Houses of Congress in his last annual message, and never was a time more fit to look at it again than the present. He said: 37,500,000 46,250,000 According to this table, Mr. President, which I have made out with great care, it will be seen that in 1817, when our population was nine millions, the income was 26 millions instead of 22, which it should have been: that in 1820 it was 15 millions instead of 24; and in 1821 it was 13 millions instead of 25; in 1825, instead of 27 millions, it was 20; in 1830 it was 22 millions instead of 27; in 1835, we had 13 millions instead of 374-being just the one-half of the product of 1817! In 1840, we had 20 millions instead of 421; in 1841 it was 10 millions instead of 43; and in 1843, with a population of 18 millions, we wound up with 17 millions of dollars instead of 461! These tables speak a language which cannot be misunderstood, and they place in the strongest contrast the working of the two systems during the two periods: the beauty and advantages of one, and the deformities of the other, standing out in the boldest relief. In the first period, amplitude of amount, steadiness of the product, and regularity of the increase, strike every beholder. In the second period, all this is reversed: confusion and madness seem to reign in our treasury. Sometimes millions too much-then not half enough. Sometimes surpluses to be distributed-then deficits to be supplied. Giving away one day -begging or borrowing the next. Always a feast, or a famine-never the right thing. Our poor treasury becomes a balloon-sometimes soaring above the clouds-then dragging in the mud-now bursting with distension-now collapsing from depletion. "It is ascertained that the receipts have amounted to near eighteen millions of dollars, which, with the eight millions and a half in the treasury at the beginning of the year, have enabled us, after meeting the current demands, and interest incurred, of the principal of our funded debt, and left us in the to pay two million three hundred thousand dollars treasury on that day near fourteen millions of dollars. Of these, five million three hundred and fifty thousand dollars will be necessary to pay what will be due on the first day of January next, which will complete the reimbursement of the eight per cent. stock. These payments, with those made in the six years and a half preceding, will have extinguished thirty-three million five hundred and eighty thousand of the principal of the funded debt; being the whole which could be paid or purchased within the limits of the law and of our contracts; and the liberated the revenue from about two millions of amount of principal thus discharged will have dollars of interest, and added that sum annually to the disposable surplus.” Such, Mr. President, was the working of the low duty system-ample and steady revenue-no loans, no taxes, no paper money33 millions and a half of public debt paid in eight years-a surplus of 14 millions left in the treasury-the result not of lands exchanged for paper, but the regular result of steady revenue, strict economy, and hard money. How dif ferent from the state of things under the high duties of the present day? Instead of paying above thirty millions of public debt in eight 1ST SESS.] The Compromise Act-The Tariff. [MARCH, 1844, years, we have created near thirty millions | the second. Here is the table of the first in four years; instead of a surplus in the period: treasury, there is a deficit; loans and taxes Table of foreign and domestic exports from the are the order of the day; and, to crown all, we have an illegal and fraudulent issue of federal paper-money currency, issued by executive power, and sustained by bank alliances. Such is the difference between the working of the two systems after twenty-five years' trial of each! United States from 1791 to 1807. - the 1803 55,800,033 1804 77,899,074 1805 95,566,021 1806 101,536,963 1807 108,343,150 1808 Upon this view of the question, I submit, Mr. President, that I have made good my first assertion, and demonstrated the superiority of low duties over high ones, in all that relates to good and wholesome revenue, the amplitude of its amount, the steadiness of the supply, the regularity of the increase. Embargo. 7,000,000 2. I proceed to the next assertionsuperiority of low duties over high ones, in relation to their effect upon agriculture and foreign commerce. These two interests, in our country, go together, and the state of one is a good index to the other. The exports make the imports, and agriculture is at the Observe, Mr. President, the regular and bottom of the whole. The tables of exports onward course of our exports during this and imports for the two periods which we period-always advancing, always increasing. contrast, will show how agriculture and com- Beginning in 1791 at twenty millions of dolmerce fared during the continuance of these lars for four millions of people, they advance periods, and to these tables I now have re-gradually and regularly to one hundred and course. And here I will premise that I fully understand the nature of our neutral position during the wars of the French revolution, and the effect which that neutrality had in moting imports for re-exportation. We reexported much from 1791 to 1807, and have re-exported exactly as much from 1817 to 1844 Mexico, South America, and the West Indies, have opened new markets for our reexportation; and it is a fact, proved by the custom-house returns to be the same. Five hundred and twenty millions of dollars are, as near as I can ascertain from the most careful research, the amount of re-exportations for each period; so that in a comparison of the foreign trade in each period, they may either be both omitted or both included, as the speaker pleases. Finding them included in the tables, I choose to use them in that way. The table of revenue has already settled the question in favor of the large amount of foreign goods which remained in the country for consumption. Duties were only paid on the amount so remaining; and a revenue of sixteen or seventeen millions of dollars from customs, with the low duties then paid, show that the importations for home consumption were greater then than now. I will now show the tables of exports for these two periods; and they will be found (each in its place) to be characterized by the same features which distinguish the corresponding revenue· the same large amount, steady progress, and regular increase in one period-the same excesses and deficiencies, 1817 Exports. 9,000,000 risings and fallings, and violent fluctuations in part of the income from customs during the |