The Morrill Tariff Caused the Perfect Storm for Economic Disaster in the North

The Morrill Tariff Caused the Perfect Storm

for Economic Disaster in the North

by Gene Kizer, Jr.

Secession cost the North its Southern manufacturing market. The Morrill Tariff threatened to cost the North its shipping industry as U.S. trade was immediately rerouted away from the high-tariff North and into Southern ports where protective tariffs were unconstitutional.

(This post is Chapter Six of my book, Slavery Was Not the Cause of the War Between the States, The Irrefutable Argument., available on this website)

Contrast the North and South.

Virginia Governor John Letcher was thrilled about the future of Virginia out of the Union. He had told the House of Delegates three months earlier that “We have the best port in the country; . . . if direct trade were established between Norfolk and Europe, it would give increased prosperity to every interest in the commonwealth. It would secure for us a commercial independence” and it would give us a “great interior and exterior trade” the latter from “ships sailing directly to Europe, at regular intervals from the port of Norfolk.”ⁱ

The feeling in the North was the polar opposite. There was panic. Shortly after Letcher’s speech, The Manchester (N.H.) Union Democrat warned:

The Southern Confederacy will not employ our ships or buy our goods. What is our shipping without it? Literally nothing. The transportation of cotton and its fabrics employs more ships than all other trade. The first result will be that Northern ships and ship owners will go to the South. They are doing it even now.ⁱⁱ

Governor Letcher continued with great enthusiasm:

I am entirely satisfied, that if direct trade were established between Norfolk and Europe, it would result in the enlargement of our cities, the increase of our agricultural products, the development of our resources, the creation of manufactures, the enhancement of the value of lands, the opening of the coal and mineral beds, make the stock which the state owns in her rail roads productive — and the end would be a diminution of the state debt, as well as lower taxes.ⁱⁱⁱ

The Union Democrat continued with despair:

In the manufacturing departments, we now have the almost exclusive supply of 10,000,000 of people. Can this market be cut off, and we not feel it? Our mills run now–why? Because they have cotton. . . . But they will not run long. We hear from good authority that some of them will stop in sixty days. We don’t need any authority–everybody knows they must stop if our national troubles are not adjusted. An inflexible law cannot be violated. The shoe business is completely prostrate. . . .^iv (Bold emphasis added.)

The Union Democrat gave the North 60 days before their mills would stop because they would have no cotton. It is no coincidence that in 55 days, Abraham Lincoln called for 75,000 volunteers to invade the South.

On February 18, 1861, Jefferson Davis had said in his inaugural address as Provisional President of the Confederate States of America that the South would immediately establish the “freest trade” possible with the rest of the world:

. . . [As] an agricultural people, whose chief interest is the export of a commodity required in every manufacturing country, our true policy is peace, and the freest trade which our necessities will permit. It is alike our interest, and that of all those to whom we would sell and from whom we would buy, that there should be the fewest practicable restrictions upon the interchange of commodities. There can be little rivalry between ours and any manufacturing or navigating community, such as the Northeastern States of the American Union. It must follow, therefore, that a mutual interest would invite good will and kind offices.^v

But Davis’s good will could not touch the impending disaster in the North. There was no mention of slavery by the Union Democrat or anywhere else in the North because slavery was not the cause of the war. The North could care less about slavery or helping black people. The Union Democrat writes the day after Davis’s inaugural:

[W]hen people realize the fact that the Union is permanently dissolved, real estate will depreciate one half in a single year.–Our population will decrease with the decline of business, and matters will go in geometrical progression from bad to worse–until all of us will be swamped in utter ruin. Let men consider–apply the laws of business, and see if they can reach any different conclusion.^vi

Northern businessmen had already concluded that the Union had to be preserved or there would be “economic suicide” in the North as Philip S. Foner pointed out.

The North’s Morrill Tariff, adopted March 2, 1861, two days before Lincoln’s first inaugural and six weeks before the bombardment of Fort Sumter, was like pumping gasoline into a fire. It was astronomical and made entry of goods into the North 37 to 50% higher than entry into the South.

Southerners were brilliant. They had always wanted free trade so they made protective tariffs unconstitutional. Northerners were not only greedy but utterly ignorant of basic economics.

The Morrill Tariff immediately re-routed most of the trade of the United States away from the North and into the South in one fell swoop.

The North was unquestionably going to lose most of its trade and a huge amount of its wealth and power all at once. Nobody in the world wanted to do business with the North and pay 37 to 50% more for the pleasure when the beautiful sultry ports of the South — Charleston, Savannah, New Orleans, Galveston, Mobile, et al. — beckoned. The world, and Northern ship captains, were beating a path to the South where free trade reigned and the most demanded commodities on earth were abundant, and where protective tariffs were unconstitutional.

The Morrill Tariff is the epitome of Northern greed and abuse of the economic system, which are major, primary causes of the War Between the States. Its imminent passage had caused “a fierce onslaught by all sorts of interests.” Ida Tarbell, historian and Lincoln biographer, said that protection of 20% was even given to wood-screws though there was “but one small factory for wood-screws in the country.” The Rhode Island senator who had gotten this protection, Sen. James F. Simmons, was from then on known as “Wood-Screw Simmons.”^vii

Wood-Screw Simmons is a cute story but there is nothing cute about the 800,000 lives lost in the War Between the States or the million who were wounded.

The Morrill Tariff slammed the door shut on any possibility that the North would be able to deal with the loss of its captive Southern market and now its shipping industry. Northerners had said over and over that their labor needed protection, that they could not compete on an even basis with Europe. Out of a sense of entitlement from long years of protectionism that benefited the North at the expense of the rest of the country, they were not even willing to try.

They were also petrified of the industrialization of the South, which was a certainty. Southerners were extremely excited about developing their own manufacturing.

The secession of the South and the Morrill Tariff were the perfect storm of economic disaster for the North. The Morrill Tariff guaranteed that the Northern economy would not recover but that wasn’t the worst of it.

With the goods of the world flowing into Southern ports, they would then be floated up the Mississippi and distributed throughout the rest of the country. Southerners had always wanted more trade with the West and now they would have it.

The New York Evening Post ten days after the passage of the Morrill Tariff stated the hopelessness of the Northern position:

[A]llow railroad iron to be entered at Savannah with the low duty of ten per cent., which is all that the Southern Confederacy think of laying on imported goods, and not an ounce more would be imported at New York: the railways would be supplied from the southern ports. Let cotton goods, let woolen fabrics, let the various manufactures of iron and steel be entered freely at Galveston, at the great port at the mouth of the Mississippi, at Mobile, at Savannah and at Charleston, and they would be immediately sent up the rivers and carried on the railways to the remotest parts of the Union.^viii

Philip S. Foner confirms the position of the New York Evening Post:

A Southern Confederacy made economically independent of the North meant, of course, the total loss [to the North] of Southern trade [and] would very likely attract to it the agrarian sections of the Southwest and Northwest. The [Northern] merchants knew that the South had sought for years to cement economic ties with the West. Prior to the secession movement it had failed. But direct trade with England on the basis of a low tariff or free trade, together with the aid of English capital for railroad connections with the West, would be too attractive to be rejected by the Western states.^ix

English capital would build factories and railroads, and the South, with its free trade philosophy and control of King Cotton, would not only dominate United States trade thanks to the Morrill Tariff, but would manufacture, ship, and compete in every respect in world commerce. There was nothing preventing this and every reason for the South to rush forward. Free trade is what it had always wanted.

Cotton and other bountiful Southern commodities would be a hop and a skip to Southern manufacturing facilities, which would be a hop and a skip to Southern ports. People would immigrate into the South and increase its wealth and power as had happened in the North for the past half century. Southerners did not need high tariffs and protectionism. They would compete on a level playing field with the rest of the world. They were enthusiastic, confident, and anxious to get going.

ⁱ Governor John Letcher, “Governor John Letcher’s Message on Federal Relations to the legislature of Virginia in extraordinary session on January 7, 1861,” in Journal of the House of Delegates of the State of Virginia, for the Extra Session, 1861 (Richmond: William F. Ritchie, Public Printer, 1861), Document I, iii-xxvii.

ⁱⁱ The Manchester (N.H.) Union Democrat, “Let Them Go!”, editorial of February 19, 1861, in Perkins, ed., Northern Editorials on Secession, Vol. II, 592.

ⁱⁱⁱ Letcher, “Governor John Letcher’s Message on Federal Relations to the legislature of Virginia in extraordinary session on January 7, 1861,” Document I, iii-xxvii.

^iv The Manchester (N.H.) Union Democrat, “Let Them Go!”, editorial of February 19, 1861 in Perkins, ed., Northern Editorials on Secession, Vol. II, 592.

^v Jefferson Davis, “Inaugural Address,” as Provisional President of the Confederate States of America, 18 February 1861, at Montgomery, Alabama in Lynda Lasswell Crist, ed., The Papers of Jefferson Davis (Baton Rouge: Louisiana State University Press, 1992), Volume 7, 46-50.

^vi The Manchester (N.H.) Union Democrat, “Let Them Go!”, editorial of February 19, 1861 in Perkins, ed., Northern Editorials on Secession, Vol. II, 592.

^vii Adams, When in the Course of Human Events, 65; and Ida M. Tarbell, The Tariff in Our Times (New York: The Macmillan Company, 1911), 8-11.

^viii New York Evening Post, March 12, 1861, “What Shall Be Done for a Revenue?” in Perkins, ed., Northern Editorials on Secession, Vol II, 598.

^ix Foner, Business & Slavery, 284.

The New Tariff on Dry Goods.

Unhappy condition of the Optic Nerve of a Custom House Appraiser who has been counting the Threads in a Square Yard of Fabric to ascertain the duty thereon under the New MORRILL Tariff. The Spots and Webs are well-known Opthalmic Symptoms. It is confidently expected that the unfortunate man will go blind.