Thirty Years' View (Vol. II of 2)

CHAPTER LXXIX.

INFRINGEMENT OF THE TARIFF COMPROMISE ACT OF 1833: CORRECTION OF ABUSES IN DRAWBACKS

The history, both ostensible and secret, of this act has been given, and its brief existence foretold, although intended for perpetuity, and the fate of the Union, in numerous State legislative resolves, and in inumerable speeches, declared to depend upon its inviolability. It was assumed to have saved the Union: the corollary of that assumption was, that its breach would dissolve the Union. Equally vain and idle were both the assumption and the inference! and equally erroneous was the general voice, which attributed the act to Mr. Clay and Mr. Calhoun. They appeared to the outside observer as the authors of the act: the inside witness saw in Mr. John M. Clayton, of Delaware, and Mr. Robert P. Letcher, of Kentucky, its real architects – the former in commencing the measure and controlling its provisions; the latter as having brought Mr. Calhoun to its acceptance by the communication to him of President Jackson's intentions; and by his exertions in the House of Representatives. It was composed of two parts – one part to last nine years, for the benefit of the manufacturers: the other part to last for ever, for the benefit of the planting and consuming interest. Neither part lived out its allotted time; or, rather, the first part died prematurely, and the second never began to live. It was a felo de se from the beginning, and bound to perish of the diseases in it. To Mr. Clay and Mr. Calhoun, it was a political necessity – one to get rid of a stumbling-block (which protective tariff had become); the other to escape a personal peril which his nullifying ordinance had brought upon him: and with both, it was a piece of policy, to enable them to combine against Mr. Van Buren, by postponing their own contention: and a device on the part of Mr. Clayton and Mr. Clay to preserve the protective system, doomed to a correction of its abuses at the ensuing session of Congress. The presidential election was over, and General Jackson elected to his second term, pledged to a revenue tariff and incidental protection: a majority of both Houses of Congress were under the same pledge: the public debt was rapidly verging to extinction: and both the circumstances of the Treasury, and the temper of the government were in harmony with the wishes of the people for a "judicious tariff;" limited to the levy of the revenue required for the economical administration of a plain government, and so levied as to extend encouragement to the home production of articles necessary to our independence and comfort. All this was ready to be done, and the country quieted for ever on the subject of the tariff, when the question was taken out of the hands of the government by a coalition between Mr. Clay and Mr. Calhoun, and a bill concocted, as vicious in principle, as it was selfish and unparliamentary in its conception and execution. The plan was to give the manufacturers their undue protection for nine years, by making annual reductions, so light and trifling during the time, that they would not be felt; and after the nine years, to give the anti-tariff party their millennium, in jumping down, at two leaps, in the two last years, to a uniform ad valorem duty of twenty per centum on all dutied articles. All practical men saw at the time how this concoction would work – that it would produce more revenue than the government wanted the first seven years, and leave it deficient afterwards – that the result would be a revulsion of all interests against a system which left the government without revenue – and that, in this revulsion there must be a re-modelling, and an increase in the tariff: all ending in a complete deception to the anti-tariff party, who would see the protective part of the compromise fully enjoyed by the manufacturing interest, and the relief part for themselves wholly lost. All this was seen at the time: but a cry was got up, by folly and knavery, of danger to the Union: this bill was proclaimed as the only means of saving it: ignorance, credulity, timidity and temporizing temperaments united to believe it. And so the bill was accepted as a God-send: the coming of which had saved the Union – the loss of which would destroy it: and the two ostensible architects of the measure (each having worked in his own interest, and one greatly over-reaching the other), were saluted as pacificators, who had sacrificed their ambition upon the altar of patriotism for the good of their country.

The time had come for testing these opinions. We were in the eighth year of the compromise, the first part had nearly run its course: within one year the second part was to begin. The Secretary of the Treasury had declared the necessity of loans and taxes to carry on the government: a loan bill for twelve millions had been passed: a tariff bill to raise fourteen millions more was depending; and the chairman of the Committee of Ways and Means, Mr. Millard Fillmore, thus defended its necessity:

"He took a view of the effects of the compromise act, in the course of which he said that by that act one tenth of the customs over twenty-five per cent. ad valorem was to come off on the 1st January, 1834; and on the 1st January, 1836, another tenth was to be deducted; on the 1st January, 1838, another tenth; and on the 1st January, 1840, another tenth; and on the 1st January, 1842, three tenths more; and on the 1st July, 1842, the remaining three tenths were to be deducted, so that, on that day, what was usually termed the compromise act, was to go fully into effect, and reduce the revenue to 20 per cent. ad valorem on all articles imported into the country. It appeared from a report submitted to this House (he meant the financial report of the Secretary of the Treasury, document No. 2, page 20), showing the amount of imports for the seven years from 1834 to 1840 inclusive, that there were imported into this country one hundred and forty-one million four hundred and seventy-six thousand seven hundred and sixty-nine dollars' worth of goods, of which seventy-one million seven hundred and twenty-eight thousand three hundred and twelve dollars were free of duty, and sixty-nine million seven hundred and forty-eight thousand four hundred and fifty-seven dollars paid duty. Then, having these amounts, and knowing that, by the compromise act, articles paying duty over 20 per cent., and many of them paid more, were to be reduced down to that standard, and all were to pay only 20 per cent., what would be the amount of revenue from that source? Why, its gross amount would only be thirteen million nine hundred and fifty thousand dollars in round numbers – that is, taking the average of goods imported in the last seven years, the whole gross amount of duty that would pass into the Treasury, did all the imported articles pay the highest rate of duty, would only be thirteen million nine hundred and fifty-four thousand dollars – say fourteen millions of dollars in round numbers."

Thus the compromise act, under its second stage, was only to produce about fourteen millions of dollars – little more than half what the exigencies of the government required. Mr. Fillmore passed in review the different modes by which money could be raised. First, by loans: and rejected that mode as only to be used temporarily, and until taxes of some kind could be levied. Next, by direct taxation: and rejected that mode as being contrary to the habits and feelings of the people. Thirdly, by duties: and preferred that mode as being the one preferred by the country, and by which the payment of the tax became, in a large degree, voluntary – according to the taste of the payer in purchasing foreign goods. He, therefore, with the Secretary of the Treasury, preferred that mode, although it involved an abrogation of the compromise. His bill proposed twenty per centum additional to the existing duty on certain specified articles – sufficient to make up the amount wanted. This encroachment on a measure so much vaunted when passed, and which had been kept inviolate while operating in favor of one of the parties to it, naturally excited complaint and opposition from the other; and Mr. Gilmer, of Virginia, said:

"In referring to the compromise act, the true characteristics of that act which recommended it strongly to him, were that it contemplated that duties were to be levied for revenue only, and in the next place to the amount only necessary to the supply of the economical wants of the government. He begged leave to call the attention of the committee to the principle recognized in the language of the compromise – a principle which ought to be recognized in all time to come by every department of the government. It is, said he, that duties to be raised for revenue are to be raised to such an amount only as is necessary for an economical administration of the government. Some incidental protection must necessarily be given, and he, for one, coming from an anti-tariff portion of the country, would not object to it. But said he, we were told yesterday by the gentleman from Massachusetts [Mr. Adams], that he did not consider the compromise binding, because it was a compact between the South and the West, in which New England was not a party, and it was crammed down her throat by the previous question, he voting against it. The gentleman from Pennsylvania said to-day almost the same thing, for he considered it merely a point of honor which he was willing to concede to the South, and that object gained, there was no longer reason for adhering to it.

"Did the gentleman contend that no law was binding on New England, and on him, unless it is sanctioned by him and the New England delegation? Sir, said Mr. G., I believe that it is binding, whether sanctioned by New England or not. The gentleman said that he would give the public lands to the States, and the compromise act to the dogs. Sir, if the lands are to be given to the States, if upwards of three millions are to be deducted from that source of revenue, and we are then to be told that this furnishes a pretext, first for borrowing, and then for taxing the people, we may well feel cause for insisting on the obligations of the compromise. Sir, said Mr. G., gentlemen know very well that there is some virtue in the compromise act, and that though it may be repudiated by a few of the representatives of the people, yet the people themselves will adhere to it as the means of averting the greatest of evils. But he had seen enough to show him that the power of giving might be construed as the power of taking, and he should not be surprised to see a proposition to assume the debts of the States – for the more that you give, the more that is wanted.

"After some further remarks, Mr. G. said that he was opposed to the hurrying of this important measure through at the present session. Let us wait until sufficient information is obtained to enable us to act judiciously. Let us wait to inquire whether there is any necessity for raising an increased revenue of eight millions of dollars from articles, all of which, under the compromise act, are either free of duty or liable to a duty of less than 20 per cent. Let us not be told that on account of the appropriations for a home squadron, and for fortifications amounting to about three millions of dollars, that it is necessary to raise this large sum. We have already borrowed twelve millions of dollars, and during the remainder of the year, Mr. Ewing tells us that the customs will yield five millions, which together, will make seventeen millions of dollars of available means in the Treasury. Then there was a large sum in the hands of the disbursing officers of the government, and he ventured to assert that there would be more than twenty millions at the disposal of the Treasury before the expiration of the next session of Congress. Are we to be told, said Mr. G., that we are to increase the tariff in order to give to the States this fourth instalment under the deposit act? No sir; let us arrest this course of extravagance at the outset; let us arrest that bill which is now hanging in the other House [the distribution bill], and which I trust will ever hang there. Let us arrest that bill and the proceeds from that source will, in the coming four years, pay this twelve million loan. But these measures are all a part of the same system. Distribution is used as a pretext for a loan, and a loan is used as a pretext for high duties. This was an extraordinary session of Congress, and inasmuch as there would be within a few months a regular session – inasmuch as the Committee on Commerce had reported a resolution contemplating the organization of a select committee, with a view to the collection of information to aid in the revision of the tariff for revenue – and inasmuch as the compromise goes fully into operation in July next – he thought that wisdom, as well as justice, demanded that they should not hurry through so important a measure, when it was not absolutely essential to the wants of the government.

"After some further remarks, Mr. G. said that it was time that he and his whig friends should understand one another. He wanted now to understand what were the cardinal principles of the whig party, of which he was an humble member. He had for six or seven years been a member of that party, and thought he understood their principles, but he much feared that he had been acting under some delusion; and now that they were all here together, he wished to come to a perfect understanding."

The perfect understanding of each other which Mr. Gilmer wished to have with his whig friends, was a sort of an appeal to Mr. Clay to stand by the act of 1833. He represented that party on one side of the compromise, and Mr. Calhoun the other: and now, when it was about to be abrogated, he naturally called on the guaranty of the other side to come to the rescue. Mr. Charles Jared Ingersoll, pleasantly and sarcastically apostrophized the two eminent chiefs, who represented two opposite parties, and gloriously saved the Union (without the participation of the government), at the making of that compromise: and treated it as glory that had passed by:

"I listened with edification to the account of the venerable member from Massachusetts [Mr. Adams], of the method of enacting the compromise act – what may be called the perpetration of that memorable measure. Certainly it put an end to fearful strife. Perhaps it saved this glorious Union. I wish to be understood as speaking respectfully of both the distinguished persons who are said to have accomplished it. After all, however, it was rather their individual achievement than an act of Congress. The two chiefs, the towering peaks, of overhanging prohibitory protection and forcible nullification, nodded their summits together, and the work was done, without the active agency of either the executive or legislative branches of government. Its influences on public tranquillity were benignant. But how to be regarded as economical or constitutional lessons, is a different question, which, at this session, I am hardly prepared to unravel. Undiscriminating impost, twenty per cent. flush throughout, on all articles alike, will not answer the purposes of the Union, or of my State. It is not supposed by their advocates that it will. The present bill is to be transient; we are to have more particular, more thorough and permanent laws hereafter. Without giving in my adhesion to the compromise act, or announcing opposition to it, I hope to see such government as will ensure steady employment, at good wages, by which I mean high wages, paid in hard money; no others can be good, high, or adequate, or money at all; for every branch of industry, agricultural, commercial, manufacturing, and navigation, that palmy state of a country, to which this of all others is entitled, pulcherrimo populi fasligio."

Mr. Pickens, of South Carolina, the intimate friend of Mr. Calhoun, also raised his voice against the abrogation of the act which had been kept in good faith by the free-trade party, and the consuming classes while so injurious to them, and was now to be impaired the moment it was to become beneficial:

"All the gentlemen who had spoken denied the binding force of the compromise act. Was this the doctrine of the party in power? Mr. P. had wished to hear from Kentucky, that he might discover whether this had been determined in conclave. The struggle would be severe to bring back the system of 1824, '28, and '32. The fact could no longer be disguised; and gentlemen might prepare themselves for the conflict. He saw plainly that this bill was to be passed by, and that all the great questions of the tariff policy would be again thrown open as though the compromise act had no existence. Was this fair? In 1835-6, when the last administration had taken possession of power, it was determined that the revenue must be reduced; but Mr. P. had at that time insisted that, though there was a surplus, the compromise act was not lightly to be touched, and that it would therefore be better to forbear and let that act run its course. Gentlemen on the other side had then come up and congratulated him on his speech; for they had already received the benefit of that act for four years. Then his doctrine was all right and proper; but now, when the South came to enjoy its share of the benefit, they took the other side, and the compromise was as nothing. One gentleman had said that twenty-eight millions would be needed to carry on the government; another, that twenty-seven; another, that twenty-five; and in this last opinion, the gentleman from Pennsylvania [Mr. Ingersoll] agreed. And, as this sum could not be raised without duties over 20 per cent. the compromise must be set aside. Until lately Mr. P. had not been prepared for this; he had expected that at least the general spirit of that act would be carried out in the legislation of Congress; but he now saw that the whole tariff question must be met in all its length and breadth."

Very justly did Mr. Pickens say that the bill had been kept inviolate while operating injuriously to the consumers – that no alteration would be allowed in it. That was the course of the Congress to such a degree that a palpable error in relation to drawbacks was not allowed to be rectified, though plundering the Treasury of some hundreds of thousands of dollars per annum. But the new bill was to be passed: it was a necessity: for, in the language of Mr. Adams, the compromise act had beggared the Treasury, and would continue to beggar it – producing only half enough for the support of the government: and the misfortune of the free trade party was, that they did not foresee that consequence at the time, as others did; or seeing it, were obliged to submit to what the high tariff party chose to impose upon them, to release eminent men of South Carolina from the perilous condition in which the nullification ordinance had placed them. It passed the House by a vote of 116 to 101 – the vote against it being stronger than the resistance in debate indicated.

The expenses of collecting the duties under the universal ad valorem system, in which every thing had to be valued, was enormous, and required an army of revenue officers – many of them mere hack politicians, little acquainted with their business, less attentive to it, giving the most variant and discordant valuations to the same article at different places, and even in the same place at different times; and often corruptly; and more occupied with politics than with custom-house duties. This was one of the evils foreseen when specific duties were abolished to make way for ad valorems and home valuations, and will continue until specific duties are restored as formerly, or "angels" procured to make the valuations. Mr. Charles Jared Ingersoll exposed this abuse in the debate upon this bill, showing that it cost nearly two millions of dollars to collect thirteen; and that two thousand officers were employed about it, who also employed themselves in the elections. He said:

"Even the direct tax and internal duties levied during the late war cost but little more than five per cent. for collection; whereas, now, upon an income decreasing under the compromise act in geometrical ratio, the cost of collecting it increases in that ratio; amounting, according to the answer I got from the chairman of the Committee of Ways and Means, to at least twelve per cent.; near two millions of dollars, says the gentleman from Massachusetts [Mr. Saltonstall] – one million seven hundred thousand dollars. To manage the customs, government is obliged to employ not less than two thousand officers, heavily paid, and said to be the most active partisans; those who, in this metropolis, are extremely annoying by their importunate contests for office, and elsewhere still more offensive by misconduct, sometimes of a gross kind, as in the instance of one, whom I need not name, in my district. The venerable gentleman from Vermont [Mr. Everett] suggested yesterday a tax on auctions as useful to American manufactures. On that, I give no opinion. But this I say, that a stamp tax on bank notes, and a duty on auctions, would not require fifty men to collect them. It is not for us of the minority to determine whether they should be laid. Yet I make bold to suggest to the friends of the great leader, who, next to the President, has the power of legislation at present, that one of three alternatives is inevitable."

The bill went to the Senate where it found its two authors – such to the public; but in relative positions very different from what they were when it was passed – then united, now divided – then concurrent, now antagonistic: and the antagonism, general upon all measures, was to be special on this one. Their connection with the subject made it their function to lead off in its consideration; and their antagonist positions promised sharp encounters – which did not fail to come. From the first word temper was manifest; and especially on the part of Mr. Clay. He proposed to go on with the bill when it was called: Mr. Calhoun wished it put off till Monday. (It was then Friday.) Mr. Clay persevered in his call to go on with the bill, as the way to give general satisfaction. Then ensued a brief and peremptory scene, thus appearing in the Register of Debates:

"Mr. Calhoun thought the subject had better lie over. Senators had not an opportunity of examining the amendments; indeed, few had even the bill before them, not expecting it to come up. He agreed with the senator from Kentucky that it was important to give satisfaction, but the best way was to do what was right and proper; and he always found that, in the end, it satisfied more persons than they would by looking about and around to see what particular interest could be conciliated. Whatever touched the revenue touched the pockets of the people, and should be looked to with great caution. Nothing, in his opinion, was so preposterous as to expect, by a high duty on these articles, to increase the revenue. If the duty was placed at 20 per cent. it would be impossible to prevent smuggling. The articles in question would not bear any such duty; indeed, if they were reduced to 5 per cent. more revenue would be realized. He really hoped the senator would let the matter lie over until to-morrow or Monday."

"Mr. Clay said he always found, when there was a journey to be performed, that it was as well to make the start; if they only got five or six miles on the way, it was so much gained at least."

"Mr. Calhoun. We ought to have had some notice."

"Mr. Clay. I give you notice now. Start! start! The amendment was very simple, and easily understood. It was neither more nor less than to exempt the articles named from the list of exceptions in the bill, by which they would be subjected to a duty of 20 per cent. Those who agreed to it could say 'aye,' and those who did not 'no;' and that was all he should say on the subject."

The bill went on. Mr. Calhoun said:

"He was now to be called on to vote for this bill, proposing, as it did, a great increase of taxes on the community, because it was an exigency measure. He should give his votes as if for the permanent settlement of the tariff. The exigency was produced by the gentlemen on the opposite side, and they should be held responsible for it. This necessity had been produced by the present administration – it was of their making, and he should vote for this as if he were settling the taxes, and as if the gentlemen had done their duty, and had not by extravagance and distribution created a deficiency in the Treasury, for which they were responsible. They yesterday passed a bill emptying the Treasury, by giving away the proceeds of the public lands, and to-day we have a bill to supply the deficiency by a resort to a tax which in itself was a violation of the compromise act. The compromise act provides that no duty shall be laid except for the economical support of the government; and he regarded the giving away of the public lands a violation of that act, whether the duty was raised to 20 per cent. or not, because they had not attempted to bring down the expenses of the government to an economical standard. He should proceed with this bill as if he were fixing the tariff; he thought an average of twelve and a half per cent. on our imports would raise an ample revenue for the support of the government, and in his votes on the several classes of articles he should bear this average in mind, imposing higher duties on some, and lower duties on others, as he thought the several cases called for."