tionment could be made, and the duty of course could not be imposed. Such a construction was inadmissible, because it would exempt, in times of the greatest distress, the fairest objects of contribution from the imposition of any burden. If there was doubt, we certainly ought not to incline to that side which, at the same time it might compel the legislature to impose grievous burdens on the poorest and most laborious part of the community, shall exempt the affluent from contributing for their objects of distinguishing enjoyments. This seemed not to carry into effect that doctrine of equality of which gentlemen said so much.

MR. DEXTER said a land tax was a tax on the laborious poor. If every acre is to pay the same tax, it must prove very unequal, as poor men generally live on the poorest lands, and must pay oppressive taxes. If the lands are to be valued, the delay and expense must be enormous. Lands increase in value very unequally in different places, and the proportion will be forever altering. He had been told that two thousand persons had once been concerned in apportioning and collecting the land tax of Pennsylvania. He thought that, if any mode of taxation be permanent, it will soon be equal. The most unequal imposition will, like a fluid, soon diffuse itself equally through all the proper and natural subjects of taxation. Mr. Dexter thought, also, that direct taxation ought not to be pursued by the general Government, except in time of war, because it is the only source of revenue for the support of State governments and payment of State debts.

The revenue act was repealed in 1801, owing to the advent to power of the Democratic party, whose principles were opposed to all forms of internal taxation. But, during the War of 1812 the urgent need of additional revenue made it necessary to resume the former system.

CHAPTER II

THE TARIFF OF 1816

[PROTECTION OR REVENUE?]

Revenue Measures at the Close of the War of 1812-Protective Tariff Bill Is Introduced in the House—Debate: in Favor, John C. Calhoun [S. C.], Henry Clay [Ky.], Thomas R. Gold [N. Y.]; Opposed, John Ross [Pa.], Robert Wright [Md.], Thomas Telfair [Ga.], John Randolph [Va.]; Daniel Webster [N. H.] Compromising-Bill Passes Both Houses and Is Approved by the President.

A

T the close of the War of 1812 the finances of the country were in such a deplorable condition that it was found necessary to continue several of the special taxes which had been laid during the war and were about to expire.

On April 19, 1816, President James Madison approved an act replacing the existing excise duties with licenses on stills and their output, which method still forms the basis of the system of collecting internal revenue.

The revenue bill which created the most discussion was a new tariff laid on manufactures of almost every description, with ad valorem duties on some articles and specific duties on others. This bill was proposed as the result of a report of the Congressional Committee on Trade and Manufactures. In this report, which was drafted by John C. Calhoun [S. C.], a protective tariff was strongly advocated. It is interesting to note that Calhoun, who was later to oppose protection to the verge of leading his State out of the Union, was at this time not only a protectionist but an ardent Unionist. The committee, in its report, said as follows:

PROTECTION AND UNION

JOHN C. CALHOUN, M. C.

The inducements to industry in a free government are numerous and inviting. Effects are always in unison with their causes. The inducements consist in the certainty and security which every citizen enjoys of exercising exclusive dominion over the creations of his genius, and the products of his labor; in procuring from his native soil, at all times, with facility, the raw materials that are required, and in the liberal encouragement that will be accorded by agriculturists to those who, by their labor, keep up a constant and increasing demand for the produce of agriculture.

Every State will participate in those advantages. The resources of each will be explored, opened, and enlarged. Different sections of the nation will, according to their position, the climate, the population, the habits of the people, and the nature of the soil, strike into that line of industry which is best adapted to their interest and the good of the whole; an active and free intercourse, promoted and facilitated by roads and canals, will ensue; prejudices, which are generated by distance, and the want of inducements to approach each other and reciprocate benefits, will be removed; information will be extended; the Union will acquire strength and solidity, and the Constitution of the United States, and that of each State, will be regarded as fountains from which flow numerous streams of public and private prosperity.

Our wants being supplied by our own ingenuity and industry, exportation of specie, to pay for foreign manufactures, will cease. The value of American produce, at this time exported, will not enable the importers to pay for the foreign manufacture imported. Whenever the two accounts shall be fairly stated, the balance against the United States will be found many millions of dollars. Such is the state of things that the change must be to the advantage of the United States. The precious metals will be attracted to them; the diffusion of which, in a regular and uniform current, through the great arteries and veins of the body politic, will give to each member health and vigor.

In proportion as the commerce of the United States depends on agriculture and manufactures as a common basis, will it increase and become independent of those revolutions and fluctuations, which the ambition and jealousy of foreign govern

ments are too apt to produce. Our navigation will be quickened, and, supported as it will be by internal resources never before at the command of any nation, will advance to the extent of those resources.

The manufacturers of cotton, in making application to the National Government for encouragement, have been induced to do so for many reasons. They know that their establishments are new and in their infancy, and that they have to encounter a competition with foreign establishments, that have arrived at maturity, that are supported by a large capital, and that have from the Government every protection that can be required. The foreign manufacturers and merchants will put in requisition all the powers of ingenuity; will practice whatever art can devise, and capital can accomplish, to prevent the American manufacturing establishments from taking root and flourishing in their rich and native soil. By the allowance of bounties and drawbacks, the foreign manufacturers and merchants will be furnished with additional means of carrying on the conflict, and of insuring success.

Should the National Government not afford the American manufacturers protection, the dangers which invest and threaten them will destroy all their hopes, and will close their prospects of utility to their country. A reasonable encouragement will sustain and keep them erect, but if they fall, they fall never to rise again, since their mouldering piles-the visible ruins of a legislative breath-will warn all who shall tread in the same footsteps of the doom, the inevitable destiny, of their establish

ments.

But, should the National Government, pursuing an enlightened and liberal policy, sustain and foster the manufacturing establishments, a few years would place them in a condition to bid defiance to foreign competition, and would enable them to increase the industry, wealth, and prosperity of the nation; and to afford to the Government, in times of difficulty and distress, whatever it may require to support public credit, while maintaining the rights of the nation.

The bill was laid before the House of Representatives by Albert Gallatin [Pa.], Secretary of the Treasury, on February 13, 1816, and referred to the Committee on Ways and Means. On March 23 Mr. Calhoun, of the committee, laid the bill before the House. It was debated until April 8, when it was passed by a vote of 88 to 54,

The schedules that were chiefly objected to were the woolen and cotton manufactures, upon which a duty of twenty-five per cent. ad valorem was laid. It was the evident design in these schedules, and, indeed, though in a minor degree, in all the schedules, to "protect" domestic manufacturing industries that had arisen during the war, and which, upon its cessation, had been forced to reduce their prices by competing with foreign industries, chiefly English (including East Indian manufactures of cotton).

Leading speakers in favor of the principle of protection in the bill were Mr. Calhoun, Henry Clay [Ky.], and Thomas R. Gold [N. Y.]. Those speakers who were in favor of a tariff mainly for revenue were John Ross [Pa.], Robert Wright [Md.], Thomas Telfair [Ga.], and John Randolph [Va.]. Daniel Webster [N. H.] supported the protective principle under the special circumstances of the case. He did not vote on the final passage of the bill.

The bill passed the Senate on April 19 by a vote of 25 to 7, and was approved by the President on April 27.

PROTECTION OR REVENUE?

HOUSE OF REPRESENTATIVES, MARCH 23-APRIL 8, 1816

MR. WEBSTER proposed a stated graduated reduction upon the duties. He said that he was not prepared to say that the Government was bound to adopt a permanent protection, or one which would exclude those goods already in the country. From the course pursued by the Government for some years back, the community had a right to expect relief from the danger to which the sudden change of circumstances exposed our manufactures, but Government had a right to say whether that relief should be permanent or not, and to reduce the protecting duties if it thought proper.

MR. CALHOUN hoped the amendment proposed by Mr. Webster would not prevail. He believed the policy of the country required protection to our manufacturing establishments.

MR. CLAY said the object of protecting manufactures was that we might eventually get articles of necessity made as cheap at home as they could be imported, and thereby to pro