John C. Calhoun on Tariffs

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Although a large majority of tariffs were collected in New York on the eve of the Civil War, they were ultimately paid by the consumer who bought the applicable items or, more importantly, the domestic —mostly Northern—alternatives that were insulated from competition by protective tariffs. Decades earlier, however, South Carolina Senator John C. Calhoun explained that import tariffs were basically a cost to exporters. The edited remarks below from 1831 by Louis Masur provide Calhoun's reasoning:

Calhoun argued that the tariff favored northern manufacturing interests at the expense of Southern agricultural producers and transferred wealth to the North and away from the South. "We export to import," and tariffs which raised prices on imported [and domestically manufactured alternatives] in order to protect Northern industries, cost Southerners dearly. The effect "is to compel us to purchase at high prices" goods from both domestic and foreign markets "without a corresponding increase in the price for what we sell. We are not permitted to the fruits of our labor but through an artful and complex system in violation of every principle of justice, they are transferred to others."​

If the above was valid in 1860 it was even more applicable to the postbellum South during the next fifty years when the tariff on dutiable items averaged 45% as compared to 19% on the eve of the War with the result depicted below:

unknown-2.jpg
 
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unionblue

Brev. Brig. Gen'l
Member of the Year
Joined
Feb 20, 2005
Location
Ocala, FL (as of December, 2015).
Although a large majority of tariffs were collected in New York on the eve of the Civil War, they were ultimately paid by the consumer who bought the applicable items or, more importantly, the domestic —mostly Northern—alternatives that were insulated from competition by protective tariffs. Decades earlier, however, South Carolina Senator John C. Calhoun explained that import tariffs were basically a cost to exporters. The edited remarks below from 1831 by Louis Masur provide Calhoun's reasoning:

Calhoun argued that the tariff favored northern manufacturing interests at the expense of Southern agricultural producers and transferred wealth to the North and away from the South. "We export to import," and tariffs which raised prices on imported [and domestically manufactured alternatives] in order to protect Northern industries, cost Southerners dearly. The effect "is to compel us to purchase at high prices" goods from both domestic and foreign markets "without a corresponding increase in the price for what we sell. We are not permitted to the fruits of our labor but through an artful and complex system in violation of every principle of justice, they are transferred to others."​

If the above was valid in 1860 it was even more applicable to the postbellum South during the next fifty years when the tariff on dutiable items averaged 45% as compared to 19% on the eve of the War with the result depicted below:

View attachment 354184

Let's see, the tariff in 1860 was averaged at 19%.

A large majority of the tariff was collected in New York on the eve of the Civil War.

The nearly 4 million slaves in the Confederacy imported nothing and paid no tariffs.

Calhoun and other Southerners in the US Senate were behind the Tariff of Abominations being created with the idea they would be so high that the North would reject it. Surprise!

There were more millionaires in the slaveholding South than in the North.

"We export to import" doesn't have the impact I thought it would.

Unionblue
 

lurid

First Sergeant
Joined
Jan 3, 2019
How would Calhoun know what happened after the CW when he died in 1850? He lived during the decades when tariffs were low and when it actually decreased the GDP. The raising of the tariffs actually increased the US economy by 3%. This proves that cotton exports were always expendable and were fungible.

From 1800-1870, the United States ran a trade deficit for all but three years and the trade balance averaged about –2.2 percent of GDP. Then from 1870-1970, it ran persistent trade surpluses that averaged about 1.1 percent of GDP. Therefore, low tariffs catering to cotton exports actually hurt the nation economically. Placating southern plantation owners caused the US to operate in the red. Once the placating was lifted the U.S. operated in the black.

Therefore, the south's economical woes following the CW were due to people like Calhoun who wanted to remain primitive, and refused to see the big picture.


1586391036065.png
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Unfortunately there's no denying that some of my Northern ancestors supported the Republican Party that deliberately adopted postbellum policies that impoverished an entire region—black and white—so that their's may prosper. While the racism of my Southern ancestors was lamentable, so also was the economic selfishness of my Northern ancestors, which was also racist because it impoverished the states where most of the blacks lived.

The states north of the Ohio and Potomac rivers generally, and successfully, opposed free trade until after World War II when they had a near monopoly on worldwide manufacturing due to the destruction of the European and Asian economies. The resulting high tariffs until then were not only injurious to the South's export economy but they fostered the growth of domestic monopolies at the North that amplified the injury.
 
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uaskme

2nd Lieutenant
Joined
Nov 9, 2016
Location
SE Tennessee
Tariffs. Stayed in place until the Great Depression. At the time, depression was blamed on the Tariff.

The North was paid an inflated price for their manufactured product. Cheaper and better made product could of been bought from somewhere else. However, when such item was Imported, that item was taxed so the price was the same as the Yankee made product. (Protective Tariff). So, it wasn’t imported, or the importer paid the Tax. Tax was added to the product at Sale. It became part of the expense of the item, just like the raw material and labor expense. Tax went to the Federal Government. Item purchased from the Yankee, money went to the Yankee manufacture. That revenue supported the job and all of the economic effect, stayed in the North.
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Tariffs. Stayed in place until the Great Depression. At the time, depression was blamed on the Tariff.

The North was paid an inflated price for their manufactured product. Cheaper and better made product could of been bought from somewhere else. However, when such item was Imported, that item was taxed so the price was the same as the Yankee made product. (Protective Tariff). So, it wasn’t imported, or the importer paid the Tax. Tax was added to the product at Sale. It became part of the expense of the item, just like the raw material and labor expense. Tax went to the Federal Government. Item purchased from the Yankee, money went to the Yankee manufacture. That revenue supported the job and all of the economic effect, stayed in the North.
American tariffs started coming down during the Great Depression, but the sharpest drops were during and after World War II because the states North of the Ohio and Potomac rivers had a near monopoly on worldwide manufactured goods. When they had no competition, they were all for free trade.

average_tariff_rates_in_usa_1821-2016.png
 
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lurid

First Sergeant
Joined
Jan 3, 2019
The south should have seen the writing on the wall and started to industrialize. But instead, the south wanted to sustain and spread slavery. Look at all the countries who adhered to slavery an you'll find that their literacy rates, standard of living and socioeconomic status stay behind the curve, insert the south.

High or low tariffs wouldn't have made a difference for the south's plight. People must understand that cotton was "highly" profitable for maybe 30 years or so, this had to with the boom cycle. However, it went through bust cycles in the decades following the CW, which is indicative that cotton wasn't that profitable in those decades. Insert sharecropping which overextended the acreage and caused overproduction, which devalued it. The south should have got their act together way before the CW.
 

lurid

First Sergeant
Joined
Jan 3, 2019
Tariffs. Stayed in place until the Great Depression. At the time, depression was blamed on the Tariff.

The North was paid an inflated price for their manufactured product. Cheaper and better made product could of been bought from somewhere else. However, when such item was Imported, that item was taxed so the price was the same as the Yankee made product. (Protective Tariff). So, it wasn’t imported, or the importer paid the Tax. Tax was added to the product at Sale. It became part of the expense of the item, just like the raw material and labor expense. Tax went to the Federal Government. Item purchased from the Yankee, money went to the Yankee manufacture. That revenue supported the job and all of the economic effect, stayed in the North.

No, tariffs didn't cause the Great Depression because the U.S. had a closed economy, which means trade was only 10% of the GDP. The tariffs Hoover implemented(Smoot-Hawley) didn't help, but it didn't do much harm either.

The Federal Reserve didn't supply banks with money and caused the banking collapse. And other bad economic policy caused the depression.

Why would the north pay for "inflated" goods? So the imported good were taxed twice? I would like to see the economic data that proves that assertion. The tax went to the government? Well yeah, that's how taxes work. How are you separating tax from revenue? Why wouldn't the money spent on a commodity not go to the producer? What exactly does the revenue supported the job mean? So why wouldn't a company want to accrue revenue, it's called business? Duh, the more money businesses make the more jobs are created. Ask Trump. Of course the business cycle stayed in the north, where else were there businesses that could have benefited? Not the south. I'm sure the West Coast benefited, the Midwest was pounding out agriculture, leading the world.
 

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
Although a large majority of tariffs were collected in New York on the eve of the Civil War, they were ultimately paid by the consumer who bought the applicable items or, more importantly, the domestic —mostly Northern—alternatives that were insulated from competition by protective tariffs. Decades earlier, however, South Carolina Senator John C. Calhoun explained that import tariffs were basically a cost to exporters. The edited remarks below from 1831 by Louis Masur provide Calhoun's reasoning:

Calhoun argued that the tariff favored northern manufacturing interests at the expense of Southern agricultural producers and transferred wealth to the North and away from the South. "We export to import," and tariffs which raised prices on imported [and domestically manufactured alternatives] in order to protect Northern industries, cost Southerners dearly. The effect "is to compel us to purchase at high prices" goods from both domestic and foreign markets "without a corresponding increase in the price for what we sell. We are not permitted to the fruits of our labor but through an artful and complex system in violation of every principle of justice, they are transferred to others."​

If the above was valid in 1860 it was even more applicable to the postbellum South during the next fifty years when the tariff on dutiable items averaged 45% as compared to 19% on the eve of the War with the result depicted below:

View attachment 354184
You forgot to add that in 1861 the Confederate Congress imposed their own tarriff's. You also forgot to add that there was a tarrif in tabacco , rice and sugar.
So it's not that it was just the evil Yankees who favored tarriff's.
Also there was no federal income tax so how exactly was the federal government supposed to fund itself? Texans complained the US Army didn't have enough troops to protect them although some of our posters claim Southern whites never ever touched a hard on an Indians head.
How exactly was the US supposed to fund troops in Texas when the US was already in debt?
Leftyhunter
 

uaskme

2nd Lieutenant
Joined
Nov 9, 2016
Location
SE Tennessee
The south should have seen the writing on the wall and started to industrialize. But instead, the south wanted to sustain and spread slavery. Look at all the countries who adhered to slavery an you'll find that their literacy rates, standard of living and socioeconomic status stay behind the curve, insert the south.

High or low tariffs wouldn't have made a difference for the south's plight. People must understand that cotton was "highly" profitable for maybe 30 years or so, this had to with the boom cycle. However, it went through bust cycles in the decades following the CW, which is indicative that cotton wasn't that profitable in those decades. Insert sharecropping which overextended the acreage and caused overproduction, which devalued it. The south should have got their act together way before the CW.

Confederacy imposed Tariffs. Those revenues stayed in the Confederacy. Most assuredly, the inflated price paid for Yankee Manufactured Goods, did not.

So, if you wanted to expand your economy, might you want to manufacture your own goods, collect your own taxes? Many Fire Eaters thought so. Slavery was a labor solution. Just like importing poor immigrants and paying them starvation wages. Neither is an economy.
 

lurid

First Sergeant
Joined
Jan 3, 2019
Confederacy imposed Tariffs. Those revenues stayed in the Confederacy. Most assuredly, the inflated price paid for Yankee Manufactured Goods, did not.

So, if you wanted to expand your economy, might you want to manufacture your own goods, collect your own taxes? Many Fire Eaters thought so. Slavery was a labor solution. Just like importing poor immigrants and paying them starvation wages. Neither is an economy.

You mean the Confederacy "tried" to impose tariffs, but it never worked out considering they only collected a measly $3.4 million in 4 years (Richard Burdekin and Farrokh Langdana, "War Finance in the Southern Confederacy, 1861-1865",Explorations in Economic History, Vol 30, No 3, July 1993). Like I said, the south should have seen the writing on the wall and didn't. It was too late for the south to rectify their plight.

No, slavery was an economy in the south during the Antebellum Era. Slavery and cotton production were co-dependent, neither one was profitable without the other, this of course was during the cotton boom. What are you talking about slavery was a labor solution? Slaves were the south's most valuable commodity(eh.net › encyclopedia › slavery-in-the-united-states). What did you think the Fugitive Slave Act was? It was nothing but an insurance policy to protect an investment. Like I told you already, do not speak for Immigrants because you don't know the "whole" story. My and Irishtom's testimony are primary documents to refute any accusations that immigrants were synonymous with slaves. Not even close.
 
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lurid

First Sergeant
Joined
Jan 3, 2019
Okay, I'm still waiting for the OP to explain why he used Calhoun as a reference for the 4 decades following the CW when he died in 1850 when tariffs were low? The OP is arguing about high tariffs after the war, which I think to make a plausible argument he should omit Calhoun.
 

Philip Leigh

formerly Harvey Johnson
Joined
Oct 22, 2014
Okay, I'm still waiting for the OP to explain why he used Calhoun as a reference for the 4 decades following the CW when he died in 1850 when tariffs were low? The OP is arguing about high tariffs after the war, which I think to make a plausible argument he should omit Calhoun.
I often don't respond to your posts because they are generally as described by Viper21 in post twelve above.

John C. Calhoun was revealing a principle about tariff economic that transcended his lifetime. The same is true for Newton's [F=ma]. Neither principle dies at the death of its discoverer.
 

lurid

First Sergeant
Joined
Jan 3, 2019
I often don't respond to your posts because they are generally as described by Viper21 in post twelve above.

John C. Calhoun was revealing a principle about tariff economic that transcended his lifetime. The same is true for Newton's [F=ma]. Neither principle dies at the death of its discoverer.

Dude, stop taking things personal on the internet and just defend your assertions.

Newton's second law of motion is exact and never changing, economics fluctuate. Nothing is going to change Newton's laws and economics change. So how how is that a fair comparison? One is fixed and one is not fixed. Too many variables involved that make up macroeconomics to fix it.

Calhoun lived to 1850 and the graph you posted I posted 10 times on here already and it clearly indicates that tariffs were at the lowest rate in the history of this country the last twenty years of his life. So, how is Calhoun a primary source for "high" tariffs in the 1860 to the 20th century when he lived the better part of his life when tariffs were low? Calhoun complained about the tariffs in 1828 but never said word about the Walker Tariff of 1846 that initiated free trade. I just don't how you can correlate a statement from 1828 to 50 years later?
 

Potomac Pride

Sergeant Major
Joined
Oct 28, 2011
Location
Georgia
Although a large majority of tariffs were collected in New York on the eve of the Civil War, they were ultimately paid by the consumer who bought the applicable items or, more importantly, the domestic —mostly Northern—alternatives that were insulated from competition by protective tariffs. Decades earlier, however, South Carolina Senator John C. Calhoun explained that import tariffs were basically a cost to exporters. The edited remarks below from 1831 by Louis Masur provide Calhoun's reasoning:

Calhoun argued that the tariff favored northern manufacturing interests at the expense of Southern agricultural producers and transferred wealth to the North and away from the South. "We export to import," and tariffs which raised prices on imported [and domestically manufactured alternatives] in order to protect Northern industries, cost Southerners dearly. The effect "is to compel us to purchase at high prices" goods from both domestic and foreign markets "without a corresponding increase in the price for what we sell. We are not permitted to the fruits of our labor but through an artful and complex system in violation of every principle of justice, they are transferred to others."​

If the above was valid in 1860 it was even more applicable to the postbellum South during the next fifty years when the tariff on dutiable items averaged 45% as compared to 19% on the eve of the War with the result depicted below:

View attachment 354184
The economy of the southern states was very dependent on trade. The southern states had a very small manufacturing base so they depended on the importation of goods from overseas or from the northern states for the manufactured items they needed. Therefore, a tariff on imported goods from abroad increases the costs for manufactured items. Furthermore, the southern economy was very dependent on the export of their agricultural goods to other nations. Import tariffs impose an undue burden on export dependent regions such as the southern states. Tariffs cause the price of certain goods to rise but exporters are unable to pass the costs on because they have to sell their items at market prices and swallow the costs. International economists call this the "pass through effect" of a tariff. Finally, tariffs create another burden because foreign producers earn less profit as a result of a tariff that is imposed. As a result, they will have less money to spend on exports in order to balance the decrease in imports. It is for these reasons that the southern states were opposed to protectionist tariffs because of the undue burden it put on their economy.
 

Potomac Pride

Sergeant Major
Joined
Oct 28, 2011
Location
Georgia
You forgot to add that in 1861 the Confederate Congress imposed their own tarriff's. You also forgot to add that there was a tarrif in tabacco , rice and sugar.
So it's not that it was just the evil Yankees who favored tarriff's.
Also there was no federal income tax so how exactly was the federal government supposed to fund itself? Texans complained the US Army didn't have enough troops to protect them although some of our posters claim Southern whites never ever touched a hard on an Indians head.
How exactly was the US supposed to fund troops in Texas when the US was already in debt?
Leftyhunter
Yes, the Confederacy imposed tariffs in order to raise revenue. However, their Constitution forbid the implementation of protective tariffs in order to protect domestic industry. Revenue tariffs have small individual costs and do not appreciably affect the cost of imported goods to the consumer. Protective tariffs, on the other hand, are designed to raise the price of imported goods in order to encourage the purchase of comparable domestic products.
 

leftyhunter

Brev. Brig. Gen'l
Joined
May 27, 2011
Location
los angeles ca
Yes, the Confederacy imposed tariffs in order to raise revenue. However, their Constitution forbid the implementation of protective tariffs in order to protect domestic industry. Revenue tariffs have small individual costs and do not appreciably affect the cost of imported goods to the consumer. Protective tariffs, on the other hand, are designed to raise the price of imported goods in order to encourage the purchase of comparable domestic products.
It's a distinction without a difference. Tarriff's were at a historic low before the ACW. If the Southern states didn't secede they could easily defeat the new tarriff law in the Senate. Southerners didn't complain on tarriff's for sugar,rice and tabacco.
No one has identified what imported items were so critical that people would fight and die over them.
Leftyhunter
 

unionblue

Brev. Brig. Gen'l
Member of the Year
Joined
Feb 20, 2005
Location
Ocala, FL (as of December, 2015).
From the book, The Road To Disunion: Secessionists at Bay, 1776-1854, by William W. Freehling, chapter 15, The First Confrontation Crisis, II: South Carolina versus the South, pg. 284-285:

"...Final terms of the Calhoun-Clay compromise revealed that Clay had compromised protectionism only in the distant future. The bill left 50% rates unchanged throughout 1833. On the first day of 1834, duties in excess of 20% would be lowered one-tenth of the excess (not, let it be noted, the larger reduction of one-tenth of the whole rate). That new rate of 47% would prevail throughout 1834 and 1835. Similar one-tenth reductions of the excess over 20% would take place biannually, making the rate 44% in 1836 and 1837, 41% in 1838 and 1839, and 38% in 1840 and 1841. Finally and at long last ten years hence, in two big cuts at the beginning and in the middle of 1842, rates would be sliced to 20%--where the Jackson administration's Verplanck's Bill would have them in two years!"

...The July 1, 1842, reduction to 20% would not last out the year. A Whig majority, in the Tariff of 1842, would hoist rates back up to the 35% level. Henry Clay, the Great Compromiser, had compromised protection remarkably little."

Clay compromised not at all on a matter Calhoun considered vital: the constitutionality of protection. Carolina went to the brink to secure not just low tariffs but the principle that any general welfare legislation, whether protection of industries or the colonization of blacks, was unconstitutional. But constitutional laws cannot be legally enforced for ten years. Clay's "compromise," by reinforcing the general welfare legislation for a decade, nullified Nullifiers' larger constitutional purposes.

If constitutionally Calhoun had secured nothing, economically he had perpetuated the highest tariffs ever to be charged in antebellum America, throughout the worst cotton depression his constituents would ever suffer
. Carolinians had breathed defiance partly because the tariff robbed them, so they thought, of 40 bales per 100. Such thievery, so they believed, would imminently sap their resistance by demolishing their finances. For nine more year, in the settlement bearing Calhoun's stamp of approval, the robbery would continue at or above the Forty Bale rate, while cotton prices would remain debilitatingly low..."

Unionblue
 

Potomac Pride

Sergeant Major
Joined
Oct 28, 2011
Location
Georgia
It's a distinction without a difference. Tarriff's were at a historic low before the ACW. If the Southern states didn't secede they could easily defeat the new tarriff law in the Senate. Southerners didn't complain on tarriff's for sugar,rice and tabacco.
No one has identified what imported items were so critical that people would fight and die over them.
Leftyhunter
There is a significant difference between revenue and protective tariffs. Revenue tariffs were used to generate revenue for the federal government but did not appreciably increase the cost of imported goods to the consumer. Protective tariffs, on the other hand, were designed to raise the price of foreign goods in order to encourage the purchase of comparable domestic products. High protective tariffs tend to support domestic production but they also hurt trade and were opposed by those in the import-export business. Since high protective tariffs were often reciprocated by other nations, high tariffs tended to stifle trade in general.

You asked what imported items were so critical to the Confederacy but that really isn’t the point. The very nature of the southern economy was what really mattered. The southern states depended on foreign trade to sustain their economy. They depended on the importation of goods from overseas because they had a small manufacturing base. Furthermore, the southern economy was very dependent on the export of their agricultural goods to other nations. Therefore, the south opposed any type of trade barriers such as protective tariffs which stifled foreign trade. High protective tariffs imposed an undue burden on import-export dependent regions such as the southern states. The southern states were opposed to protectionist tariffs because of the negative affect it had on their economy.
 
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