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Walker Tariff of 1846

When the Democrats regained control of the Government in 1844 they immediately set about reducing the Whigs' higher tariffs. President James K. Polk chose as his Secretary of the Treasury Robert J. Walker, a man who enjoyed a reputation as one of the most articulate and intelligent U.S. spokesmen for the free-trade philosophy. In a special message to Congress late in 1845, Walker outlined his proposals in as forceful and convincing a manner as his predecessor Alexander Hamilton had done in the early 1790's.

The thrust of his remarks, of course, was quite different. Although Walker did not oppose all protection, he wished to set tariff rates at levels that would maximize their revenue-producing capabilities. This policy would rule out prohibitively high, strictly protectionist rates that discouraged imports and therefore generated less customs revenue.

Walker's low-tariff predilections corresponded with British thinking at that time. The long struggle that Richard Cobden and John Bright had carried on to place the British Empire on a free-trade course was finally succeeding. The dam of British protectionism broke in the summer of 1846, when Parliament repealed the notorious "Corn Laws," which had overtaxed imports of grain and thereby increased the cost of food in England. The Corn Laws had originally served as a protectionist measure for the land-owning aristocracy. After 1846, low tariffs and an extensive free list characterized British trade policy. Many Americans, including Walker, favored a similar policy for the United States.

Because they controlled both the legislative and executive branches of the Federal Government, the Democrats were able to write the Treasury Secretary's concepts into law. The Walker Tariff of 1846 abandoned all specific rates and relied exclusively upon ad valorem duties. Commodities were sorted into an alphabetic series of schedules, with schedule A having the highest duty at 100 percent ad valorem, schedule B at 40 percent, schedule C at 30 percent, and so on down to a free list. Schedule C contained most of the items that had formerly benefited from protectionist specific rates, such as cotton, woolens, and iron. At 30 percent, the duty was still mildly protective, but the average rate of all duties was considerably lower than that in either the 1842 act or any of its predecessors. Indeed, the 1846 act, on average, provided lower rates than any law the United States had passed since 1816.

Designed primarily as a revenue measure, the act proved very successful. The Government found itself adequately supplied with funds, although during the Mexican War (1846 to 1848) the Treasury suffered a heavy drain. The war debts quickly disappeared afterward, and the Nation enjoyed widespread prosperity. The progress of the industrial revolution continued, although perhaps not as rapidly as it might have with heavier import restrictions. The tariff essentially ceased being an issue for 11 years. It reappeared only when the Treasury surplus had grown uncomfortably large. The Democrats' response to this problem was the Tariff Act of 1857, which cut schedule C, for example, from 30 percent to 24 percent and made similar downward adjustments on the other schedules.

The sharp financial panic that swept the North in 1857 signaled the beginning of a fundamental political and economic change in the United States. Frustrated protectionists claimed that the panic had resulted from the baleful influence of the recent tariff revision. As the newly created Republican Party began to reach out toward the Presidency in 1860, it capitalized upon the economic discontent of midwestern farmers and eastern workers. Republican doctrine taught that higher tariff rates would insure prosperity and full employment.

Although their attempt to change the laws in 1859 and 1860 failed, the Republicans decided to emphasize protective tariffs in their 1860 platform. When Republican Abraham Lincoln won the Presidency, several southern States seceded from the Union, and their low-tariff Democratic Congressmen therefore withdrew from Washington. This withdrawal shifted the congressional balance in favor of the industrial North and the Republicans, and it enabled them to put through their tariff program.





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Page last modified: 06-10-2017 19:05:46 ZULU