The Drive for State and Federal Protective Tariffs in Early America
[Chapter 3 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
Every depression generates a clamor among many groups for special privileges at the expense of the rest of society—and the American depression that struck in 1784–1785 was no exception. If excess imports were the culprit, then voluntary economizing could help matters, and the press was filled with silly fulminations against ladies wearing imported finery. Less foolish and more pernicious was a drive by the beleaguered and often sub-marginal artisans and manufacturers for the special privilege of protective tariffs.
As early as July 1783, a group of manufacturers from Philadelphia met to petition the Assembly for protection against foreign imports. The following year, a group of Boston manufacturers submitted a similar plea. During the depression year of 1785, the urban artisans banded together in earnest. The Boston manufacturers in twenty-six trades formed The Association of Tradesmen and Manufacturers of the Town of Boston in the spring of 1785 to agitate for a protective tariff in their state, and they were followed by the formation of a General Committee of Mechanics in New York, which soon merged with the Manufacturers Society of New York to fight for protection. Mechanics from Philadelphia, Baltimore, Providence, and Charleston were also active though not formally organized. In particularly hard-hit New England, he town of Nantucket actually asked the state legislature in 1785 for permission to secede and rejoin Great Britain in order to try and regain prosperity. In Philadelphia, the master cordwainers, the shoemakers of the city, decided in March 1785 to engage in concerted economic pressure to try and block further imports of boots and shoes. They agreed not to buy, sell, or mend any imported shoes, and they obtained the support of their employees, the journeymen cordwainers.
Since the bulk of the country’s imports came from Great Britain, it was easy for the protectionists to employ anti-British demagogy and denounce American economic troubles as a British plot. For their part, the urban merchants were of course happy to ban British importers or British ships, but did not want any restrictions on British goods; in short, each group sought its own special privileges. Thus, when the Boston merchants agreed to boycott all British merchants, the Boston manufacturers bluntly pointed out that they didn’t care whether British goods were imported by British or American merchants, and they petitioned for a comprehensive protective tariff in Massachusetts. Finally, in the summer of 1785 the Massachusetts General Court passed a protective tariff for artisans and a navigation act for the merchants. The navigation act banned any exports from Massachusetts in a British vessel, and goods imported in all foreign vessels were to pay double duties as well as a special levy. Import duties, for their part, were raised to a new high and were levied on almost every type of manufactured good; excise taxes were also levied on the consumption of luxuries. While the merchants chafed at the protective tariff, the Boston artisans maintained their organization as a pressure group and a vigilance committee to check upon local merchants. In August 1785, the Boston artisans wrote to “tradesmen and manufacturers” of the other large towns, urging them to put equivalent pressure for a protective tariff upon their legislature. Massachusetts raised the tariff rates again the following year. However, because its navigation law had also injured French shipping while all French ports were open to American vessels, Massachusetts was pressured into repealing her navigation act in 1786.
Rhode Island levied a schedule of protective tariffs in 1785; New Hampshire levied import duties in 1784, forbade exports of goods on British ships the following year, and added a protective tariff schedule in 1786. Much lower tariff duties were levied by Virginia, the Carolinas, and Georgia.
Most important was the drive for a protective tariff in the most industrialized and populous city in the United States, Philadelphia. Under artisan pressure the radical-dominated legislature passed a protective tariff in the autumn of 1785, as well as an anti-British navigation law. The conservatives, it may be noted, were far more enthusiastically in favor of a tariff than were the radicals. By 1786, indeed, virtually every state had passed a navigation law against British shipping. However, there were sharp differences in degree, with Connecticut, New Jersey, Delaware, South Carolina, and Georgia only discriminating against British shipping to a slight extent.
It soon dawned upon the manufacturers and the merchants, however, that state tariffs and state navigation laws were not as effective a grant of privilege as they desired. For while most of the manufacturing states of the North imposed high protective tariffs for the benefit of their manufacturers, the South, with less manufacturing, understandably imposed lower tariffs upon themselves. The growing manufacturing of Pennsylvania and the rest of the North now wanted to secure the large southern market for themselves. Even enjoying the mild tariffs of the South, they could not successfully compete with the more efficiently produced and lower-cost English goods, or with English shipping. Hence, the northern manufacturers concluded that a nationalist system in which only the federal government could set a uniform tariff was important for monopolizing the southern market—at the expense, of course, of the southern consumers and any of the consumers of the low tariff states. Hence, the urban artisans in the North began to look with favor on the old nationalist idea of a strong, overriding central government and began to ally their important mass support with the longstanding schemes of the northern financial oligarchy.
Merchants, too, began to long for a uniform national navigation law. For those states which taxed or restricted foreign vessels very heavily (e.g., New Hampshire, Massachusetts, and Rhode Island) soon found that t
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