motion was carried by a vote of 84 to 65.* It was then moved that the duty of 25 per cent. be extended for three years, after which it was to be 20 per cent., and this motion was carried by a large majority.† The House, by a vote of 89 to 51, next reduced the duty on iron to 45 cents per hundredweight and, by a vote of 86 to 56, cut the duty on sugar from 32 cents to 2 cents per pound. ‡ Pickering then secured the passage of an amendment providing that cotton piece-goods imported in American vessels which should have sailed for the United States before February 1, 1816, and which should arrive before March 1, 1817 (the original cost of which should be less than 25 cents per square yard), should pay a duty of 33% per cent. on the cost, with the usual 20 per cent. added.|| The consideration of amendments being finished, Randolph moved that the House strike out the minimum clause with respect to cotton goods; but, after a long speech by Calhoung (p. 148) points out that the New England members voted against the high duty in the proportion of two to one; the members from New York, New Jersey, Pennsylvania and Ohio favored high protection in the proportion of four to one (36 to 8); while the members from States south of Pennsylvania stood five to one against high protection (53 to 11). † Annals, pp. 1316-1325; Benton, pp. 637-639. Annals, pp. 1326-1327. Ibid, p. 1329; Stanwood, Tariff Controversies, vol. i., pp. 148–150. § For a resumé of which see Von Holst, Life of Calhoun, pp. 33-35. The text is given by Jenkins, Life of Calhoun, pp. 104-117; see also pp. 118-129. April 6 and after a motion to reduce the minimum to 15 cents per square yard had been rejected by a vote of 66 to 72, Randolph withdrew his motion.* Several other attempts were made to alter rates, but were rejected and on April 8 the bill was ordered to its third reading. Randolph then moved that further consideration be postponed until December, but after the motion had been defeated by a vote of 95 to 47, the bill was passed by a vote of 88 to 54. † In the Senate consideration of the bill began on April 15. As the protectionists were much stronger in this body than in the House, all hostile amendments were defeated by large majorities. The House rates were not changed in any important particulars with the exception of that on sugar, which was raised from 22 to 3 cents per pound. On the 20th the bill was passed without a division and returned to the House. The latter concurred in the minor amendments without debate and the increase on sugar was accepted by a vote of 54 to 48. On the 25th the House again Annals, pp. 1329-1337; Benton, Abridgment, pp. 640-643. * Annals, pp. 1350-1352; Benton, p. 645; Stanwood, Tariff Controversies, vol. i., pp. 150-153. Thompson (History of Protective Tariff Laws, p. 135) classifies the vote as follows: New England 16 yeas, 10 nays; Middle States, 44 yeas, 10 nays; Western States, 14 yeas, 31 nays. See also O. L. Elliott, The Tariff Controversy in the United States, in Leland Stanford Jr. Univ. Monographs in History and Economics, no. 1., pp. 163-191. For the debate see Annals, pp. 311, 321, 326331, 334. || Annals, p. 1438. BRITISH SCHEMES TO CIRCUMVENT TARIFF. passed the act and it became law on April 27, 1816, by the President's signature.* As finally passed, the bill provided for prohibitory duties on cloth and foreign articles with which the country could be fully supplied by home manufacturers. Articles with which domestic manufacture could not fully supply the country were to be taxed 20 per cent. ad valorem, while those consumed in large quantities but made almost entirely abroad were to be taxed for revenue only. The schedule included 109 articles, on which separate or specific duties were imposed and five rates of ad valorem duties. There were a free list, a discriminating duty on goods, merchandise, etc., imported in vessels of foreign ownership, and a continuation of the bounty and drawbacks on pickled fish and sugar exported. The principle of the minimum was introduced. The law provided that after June 30, 1816, all cotton fabrics, except nankeens direct from China, the cost of each square yard of which at the place whence imported was less than $.25 (20 per cent. being added if that place were the Cape of Good Hope or beyond it, and 10 per cent. if elsewhere) should be considered to have cost that much and the duty levied accordingly. The effect of this was to double and treble the rates and to put a stop to the importation of low-priced India or negro cloths, * United States Statutes-at-Large, vol. iii., p. 310; Annals, pp. 1870-1875. 117 which were thenceforth manufactured in this country.* The framers of the tariff, however, had ignored agents which were destined in time to break down the tariff, destroy the manufactures it was intended to prop, and prostrate the retail business. After the war thousands of men were thrown out of employment in England and turned to other channels of industry. The competition for work which followed tended to lower the wages of labor, with the result that English manufacturers were able to produce fabrics much cheaper than before and could sell these fabrics at most tempting prices. To find a market for his goods, the British manufacturer turned to America; but, as the tariff had already gone into effect, it was necessary to resort to indirect means. Therefore he devised a most ingenious plan. Two agents, one of whom was kept ignorant of the value of the goods, were sent to some American city, and to one of them the manufacturer would pretend to sell his goods at a price much less than the cost of manufacturing. The manufacturer would then present the invoice setting forth this false state * McMaster, vol. iv., pp. 339-340; Taussig, Tariff History, p. 30; Bishop, History of Manufactures, vol. ii., pp. 227-228. On the question as to whether this was in reality a protective tariff, see Stanwood, Tariff Controversies, vol. i., p. 154 et seq.; Bishop, p. 229; Thompson, History of Protective Tariff Laws, chap. xiv. 501. American State Papers, Finance, vol. iii., p. 118 BRITISH EFFORTS TO SECURE AMERICAN MARKET. ment of sale to the American consul at the port of shipment for endorsement, and of course the duties levied at the costom house in America would be levied upon the prices stated in the invoice. Having passed the custom house, the goods would be sold by the first agent to the second agent, who knew the exact cost of the goods and whose duty it was to sell them. None of these men were liable to punishment under the law, for the owner of the goods resided in a foreign land. The agent to whom the goods were shipped had no knowledge of the value of the goods save the false invoices, and the second agent was not a party to the fraudulent transaction at the custom house. Immediately upon receipt of the goods, the second agent would sell them at auction and thus avoid storeroom charges, clerk hire and the import license tax, all which gave them a still greater advantage over the American merchants.* Again, when the American merchant would order goods from England for a particular market, the British manufacturers would immediately send a duplicate shipment invoice at reduced prices, and, by the aid of his two agents operating under the auction system, would sell his own goods before the American merchant would have his packages in his store. Furthermore, the auction encouraged a new kind of fraud. When goods in * McMaster, vol. iv., pp. 340-341. in their original packages were being auctioned the invoice could not be seen nor could the goods be examined. Knowing this, the British manufacturers turned out articles poor quality, though fine in appearance; selling them at the higher price, though the cost of their manufacture had been considerably smaller. * Perceiving that they were being slowly but surely ruined by this system, the merchants and traders of New York in February of 1817 petitioned the legislature to stop the retail auctions by imposing a prohibitive tax; but the licensed auctioneers then in New York protested and stated that the evil of which the merchants complained was only temporary and would soon pass away, having been caused by the war and the great changes in conditions in Europe. Futhermore, they said that taxes would not clarify the atmosphere, but would create still further hardship by driving the auctioneers outside the State, which would thus be the poorer from the loss of the taxes paid by the auctioneers. This argument had great weight with the legislature, and no new taxes were laid. A petition was sent to Congress on February 4, 1817, requesting that the tariff of 1816, instead of being limited to two years, should be made permanent; that inspectors be appointed to examine the goods imported to make certain that the invoices rendered Stanwood, Tariff Controversies, vol. i., p. 169. FURTHER APPEALS FOR PROTECTION. were not false; that a duty of 10 per cent. be levied on sales at auction of foreign goods, with one or two exceptions, and that more severe laws be passed against smuggling.* But memorials and petitions were for some time unavailing and the merchants appealed to the State legislatures for protection. In this appeal they were to a great extent successful. The Connecticut Assembly resolved that it was expedient that the people of that State should buy and use American cotton and woolen fabrics in preference to foreign-made goods.† The New York legislature in March of 1817 recommended that the State's Representatives in Congress should request higher duties; that all the public officials should wear American-made clothes only; that no taxes should be laid on the buildings and plants of cotton and woolen mills, etc.|| The Pennsylvania senate, regretting that the State could afford no adequate protection, called upon the Government for a law exempting factories from taxation and workmen from duty in the militia and bade their members in Congress put forth every endeavor to secure the enactment of such measures as would protect and encour *American State Papers, Finance, vol. iii., pp. 168-169; Annals of Congress, 14th Congress, 2d session, pp. 849-851. Niles' Register, vol. xii., p. 300. Ibid, vol. xii., p. 78; Bishop, History of Manufactures, vol. ii., p. 237. See the report in Niles' Register, vol. xii., pp. 235-236. 119 The New age home manufactures.* During its second session the Fourteenth Congress (1816-1817) received 40 memorials. The cotton manufacturers of Massachusetts, Connecticut and Pennsylvania petitioned for protection against the low-priced goods from England and India. The printers and paper manufacturers wanted protection against Holland and France; and the sugar planters of Louisiana, the hemp growers of Kentucky, the gunsmiths of Lancaster, Pennsylvania, the hat makers of New York, and the cordage manufacturers of Massachusetts were equally as insistent in their demands for protection. The Pittsburgh memorialists complained that there was an alarming depression in the manufacture of cotton, woolen goods, flint glass, and the finer articles of iron. They said that some branches of trade had been destroyed entirely or partially suspended; that the tide of importation had inundated the country with foreign goods; and that some of the most valuable and enterprising citizens had been overwhelmed with bankruptcy and ruin, while others had suffered * Niles' Register, vol. xii., pp. 39-41. † Ibid, vol. xii., p. 314; McMaster, vol. iv., pp. 345-346. Coman, Industrial History of the United States, pp. 186-187. See also O. L. Elliott, The Tariff Controversy, pp. 192–200. 120 THE COMMERCIAL CONVENTION WITH ENGLAND. enormous losses.* At about this time (June of 1817) the American Society for the Encouragement of American Manufactures was formed under the auspices of New York capitalists, not only to cultivate a public sentiment favorable to a National policy of protection, but also with the idea of operating upon Congress. Vice-President Tompkins was president of this society and John Adams, Jefferson, Madison and Monroe were elected to membership. Various local societies were established in different States and memorials were sent to Congress.† The importers and manufacturers, however, were not the only ones to experience dull times, for the shippers also suffered from lack of trade. After the signing of the Treaty of Ghent terminating the war, Gallatin, Clay and Adams immediately entered upon the arrangement of a commercial convention with Great Britain to supplement the peace. In their negotiations the commissioners attempted to introduce neutral rights, but the British government refused to treat upon that basis, and commercial relations alone were dealt with. A tedious and not altogether pleasant or satisfactory discussion ensued, and not until July 3, 1815, was a commercial convention framed to continue for four years, ratifications being ex * See the report in Niles' Register, vol. xii., pp. 129-135. † Schouler, United States, vol. iii., p. 43; Niles' Register, vol. xii., pp. 311-313, 412-413. See the letters of the commissioners in Niles' Register, vol. ix., p. 334 et seq. changed the following December.* The first part of this convention related to trade with the European possessions of Great Britain, and provided that neither power should impose a discriminating duty on the products or ships of the other. The second part related to the British West Indies and North American possessions, the traffic between which and America was to be regulated as either country saw fit. The third part had to do with the British possessions beyond the Atlantic, and specified that trade must be direct.† The first part of the convention, forbidding the imposition of a discriminating duty, necessitated the repeal of the act which imposed a higher duty on vessels and goods brought in British vessels than on goods brought in American-owned ships. Accordingly Senator Forsyth reported a bill on December 29 providing the same duties on British articles brought in British or American ships, the same tonnage duties on British ships as on American ships, except those which came from the East or West Indies or from British North American possessions, and the same *For text see American State Papers, Foreign Relations, vol. iv., pp. 7-8; Annals of Congress, 14th Congress, 1st session, pp. 1478-1481; Niles' Register, vol. ix., pp. 310–312. A resumé is given in Snow, Treaties and Topics in American Diplomacy, pp. 76-77. The correspondence will be found in Annals, p. 1481 et seq. American State Papers, Commerce and Naviga tion, vol. ii., pp. 248-249, and Foreign Relations, vol. iv., pp. 7-8; Niles' Register, vol. ix., pp. 310 312. |
