Union and Democracy

by Allen Johnson

The indirect effects of war were more widely felt. The blockade affected adversely all the extractive industries upon which the vast majority of the people in all the States depended. Only New England escaped unscathed—and the circumstance was not creditable to the section. In the latter months of 1814 ruin stared the Southern planter in the face. The lifting of the blockade wrought a transformation. Planters in the Old Dominion, who could find no market for their tobacco and wheat on February 13, sold their produce on February 14 at prices which made them rich again. Flour which had found almost no purchasers at seven and a half dollars a barrel sold readily at ten. Imported commodities fell in price correspondingly. Ships put to sea at once laden with the accumulated produce of two long years. The export trade, which had fallen to less than $7,000,000, leaped to $46,000,000 between March and October. Fully two thirds of this wealth accrued to the Southern planters who raised the three great staples, tobacco, cotton, and rice. The people of the Middle States shared only moderately in this prosperity. The value of the wheat and corn which the farmers of Pennsylvania, New York, and New Jersey raised for export did not much exceed that of tobacco alone.

The return of peace brought relief also to the shipping industry of New England. Vessels which the embargo and the restrictive policy and the hazards of war had kept in port now put to sea again. But the European conditions which had created such immense profits for the Yankee skipper in 1805, 1806, and 1807 had passed away. Foreign ships now bid for the carrying trade of the Atlantic, and their competition cut down freight rates to a point which caused melancholy forebodings in the homes of Boston and Salem shipowners.

The long period of commercial restriction followed by three years of war caused a dislocation of industry in New England. Capital which had been invested in shipping now sought larger returns in the manufacture of those commodities hitherto supplied by British factories. When the embargo was laid, only fifteen cotton mills were in operation, representing a capital of about $500,000. Two years later, capital to the amount of $4,000,000 had been invested in factories which employed nearly 4000 hands. At the close of the war, $40,000,000 were invested in cotton mills which consumed 27,000,000 pounds of raw cotton and gave employment to 100,000 men and women. Hitherto much of the weaving had been done on hand looms in the farmhouses of New England: only the spinning had been done by machinery. In 1814, Francis Lowell introduced the power loom into his mill at Waltham, Massachusetts, and brought the various processes of cotton manufacturing under one roof. The foundation of the New England factory system was thus laid before the end of the war. In the following decade the famous factory towns on the Merrimac came into existence. The metamorphosis of the section had begun.

The woolen industry received a great impetus in this same period of artificial stimulation, but it failed to expand with the same rapidity, owing to the scarcity and cost of the finer grades of wool. Nevertheless, in the year 1816, about $12,000,000 were invested in the manufacture of woolen fabrics. Like the cotton industry, this owed its development to the policy of Presidents from Virginia. It is one of the ironies of history that Jefferson and Madison should have unwittingly sacrificed Southern planters to build up industries in the North, and that New Englanders should have excoriated those worthies for policies which became the source of New England prosperity.

To these new industries peace spelled disaster. English manufacturers seized the opportunity to unload the goods which they had been piling up in their warehouses for years. Importations which had amounted to $13,000,000 in 1813 rose to the staggering sum of $147,000,000 in 1816. Not even import duties stemmed the tide, for as Lord Brougham stated in Parliament, "It was well worth while to incur a loss upon the first exportation, in order, by a glut, to stifle in the cradle those rising manufactures in the United States which the war had forced into existence, contrary to the natural course of things."

In October, 1815, the cotton manufacturers of Rhode Island sent a memorial to Congress, stating that their one hundred and forty factories were threatened with destruction by this cut-throat competition. Such complaints seemed unduly apprehensive; yet before the year closed, most of the textile mills had shut down. The distress of New England was no longer feigned. Caught in a process of transition from shipping to manufacturing, capital could neither advance nor retreat. It was a legitimate case for governmental aid. Even Jefferson laid aside his early prepossessions in favor of a simple bucolic life for the American citizen, and admitted that "to be independent for the comforts of life, we must fabricate them for ourselves. We must now place the manufacturer by the side of the agriculturist." Madison, too, departed from the Virginia faith so far as to recommend sufficient protection of "the enterprising citizens whose interests are now at stake" to guard them "against occasional competition from abroad."

Within sight of the blackened walls of the Capitol, in temporary quarters which it had rented, Congress set its hand to the work of national reconstruction. Before many months had passed, the new Capitol, under the supervision of Latrobe, began to rise from the ruins of the old, a symbol of a new era. On the walls of the rotunda, John Trumbull painted scenes which were to remind coming generations of the heroic days of the Revolution, and within its confines was eventually installed what was left of the library of Congress, with the gaps supplied in part by Jefferson's private collection, which Congress purchased. The new nation was not to disdain wholly the finer aspects of life nor to despise the garnered wisdom of the ages.

In March, 1816, Congress took under consideration a tariff bill which had been drafted on lines marked out by the new Secretary of the Treasury, A. J. Dallas, of Pennsylvania. The debates brought out a wide diversity of interests. Daniel Webster represented admirably the mingled feelings of his New England constituents when he professed to favor existing manufactures, but deprecated any action calculated to produce new industries. He never wished to see the time when the young men of the country would be forced to close their eyes to heaven and earth, and open them in the dust and smoke of unwholesome factories. On the other hand, Calhoun, eschewing a narrow sectionalism, declared that manufacturing must be encouraged as a wise national policy. "Neither agriculture, manufactures, nor commerce, taken separately, is the cause of wealth," said he. "It flows from the three combined and cannot exist without each." The South showed little of the apprehension which John Randolph expressed when he cried, "Upon whom bears the duty on coarse woolens and linens and blankets, upon salt, and all the necessaries of life?" and answered, "On poor men, and on slaveholders."

The bill which Congress eventually passed fixed somewhat lower duties than Dallas had advised. A duty of twenty-five per cent was placed on cotton and woolen goods until June 30, 1819, when it was to be reduced to twenty per cent. By what was known as the minimum principle, all cotton fabrics costing less than twenty-five cents a square yard were held to have cost that amount and were made to pay corresponding duties. The object of this provision was to exclude from India the coarser and cheaper cotton textiles which would menace the products of New England looms. Other important articles were made subject to higher duties, such as rolled and hammered iron, leather goods, hats, carriages, and writing-paper. A comparison of these duties with those of the tariff of 1789 shows a marked increase. Where the average duty was seven and one half per cent in 1789, it was thirty per cent in the tariff of 1816. So far as the intent of the law is concerned, this tariff act committed the country to a fiscal policy in which "revenue was subordinated to industrial needs."

Although the largest vote against the tariff bill came from the South and Southwest, twenty-three out of fifty-seven Representatives voted for the bill. New England showed a prepondering opinion in favor of protection: only ten out of twenty-seven Representatives opposed the bill. The Representatives of the Middle States ranged themselves emphatically on the side of protection; and with them stood the Congressmen from Ohio and Kentucky.