[Sidenote: Calhoun's Bonus Bill.]
[Sidenote: Madison's veto.]
The passage of the bank bill in 1816 was to give the United States a million and a half of dollars (Section 120). Calhoun, therefore, came forward, Dec. 23, 1816 with a bill proposing that this sum be employed as a fund "for constructing roads and canals and improving the navigation of watercourses." "We are" said he, "a rapidly—I was about to say a fearfully—growing country…. This is our pride and danger, our weakness and our strength." The constitutional question he settled with a phrase: "If we are restricted in the use of our money to the enumerated powers, on what principle can the purchase of Louisiana be justified?" The bill passed the House by eighty-six to eighty-four; it was strongly supported by New York members, because it was expected that the general government would begin the construction of a canal from Albany to the Lakes; it had also large support in the South, especially in South Carolina. In the last hours of his administration Madison vetoed it. His message shows that he had selected this occasion to leave to the people a political testament; he was at last alarmed by the progress of his own party, and, like Jefferson, he insisted that internal improvements were desirable, but needed a constitutional amendment. The immediate effect of the veto was that New York, seeing no prospect of federal aid, at once herself began the construction of the Erie Canal, which was opened eight years later. [Sidenote: State improvements.] Other States attempted like enterprises; but the passes behind the Susquehanna and Potomac rivers were too high, and no permanent water way was ever finished over them.
122. THE FIRST PROTECTIVE TARIFF (1816).
[Sidenote: Increase of duties.]
[Sidenote: Jefferson's attitude.]
The protection controversy had hardly appeared in Congress since the memorable debate of 1789 (Section 76). From time to time the duties had been slightly increased, and in 1799 a general administrative tariff act had been passed. The wars with the Barbary powers had necessitated a slight increase of the duties, known as the Mediterranean Fund, and this had been allowed to stand. Up to the doubling of the duties in 1812 the average rate on staple imports was only from ten to fifteen per cent, and the maximum was about thirty per cent. The whole theory of the Republican administration had been that finance consisted in deciding upon the necessary expenses of government, and then in providing the taxes necessary to meet them. This theory had been disturbed by the existence of a debt which Jefferson was eager to extinguish; and he therefore permitted the duties to remain at a point where they produced much more than the ordinary expenditure of the government.
[Sidenote: The manufacturers.]
[Sidenote: The West.]
A change had now come over the country. The incidental protection afforded by the increase of duties, and then by the war, had built up manufactures, not only in New England, but in New York and Pennsylvania. In these strongholds of capital and trade there was a cry for higher duties, and it was much enforced by the attitude of the Western members. There were a few staple crops, particularly hemp and flax, which could not be produced in the face of foreign competition, and for which Western States were supposed to be adapted. Hence a double influence was at work in behalf of a protective tariff: the established industries pleaded for a continuance of the high duties which had given them an opportunity to rise; and the friends of young industries asked for new duties, in order that their enterprises might be established.
[Sidenote: Dallas's tariff bill.]
[Sidenote: Opponents.]
[Sidenote: Advocates.]
Accordingly, in February, 1816, Secretary Dallas made an elaborate report in favor of protective duties. John Randolph, who still posed as the defender of the original Republican doctrine, protested. "The agriculturist," said he, "has his property, his lands, his all, his household gods to defend;" and he pointed out what was afterward to become the most effective argument against the tariff: "Upon whom bears the duty on coarse woollens and linens and blankets, upon salt and all the necessaries of life? Upon poor men and upon slaveholders." Webster, representing the commercial interest of New England, decidedly opposed the tariff, especially the minimum principle, and succeeded in obtaining a slight reduction. One of the strongest defenders of the tariff was Calhoun. Manufactures, he declared, produced an interest strictly American, and calculated to bind the widespread republic more closely together. The chief supporter of the system was Henry Clay of Kentucky, the Speaker of the House. His argument was that the country ought to be able to defend itself in time of war, It was not expected at this time that a protective tariff would become permanent. In a few years, said a committee of the House, the country would be in a condition to bid defiance to foreign competition.
[Sidenote: Protective policy.]
[Sidenote: The minimum.]