The Morrill Bill passed the House in May, 1860, but the Senate would have none of it. That body was still Democratic and the South still led. Not only was the South strongly free trade in its opinions, but at that moment no bill originating with the Republicans had a ghost of a chance, such was the bitterness of the feeling. The bill went over to the next session, and the next session brought a tragic change in the Senate. By the time Mr. Morrill’s bill had a hearing six states had withdrawn from the Union, and their Senators had left Washington. The withdrawal of the Southern Senators left the control to the Republicans, and it soon became evident that the bill would probably pass. The result was a fierce onslaught by all sorts of interests. Almost everybody got what he wanted. Some of the items which went into the schedule were long subjects of mirth and scandal to the opposition. Such was the protection of 20 per cent accorded to wood-screws. At that time there was but one small factory for wood-screws in the country. It was situated in Providence, Rhode Island, and Senator Simmons, who secured its protection, and who was popularly supposed to be interested in the concern, was long known as “Wood-Screw” Simmons. The bill also carried a generous basket clause into which all raw materials and all manufactured articles “not otherwise provided for” were dumped.
It was little wonder that jobbery found an easy way into the bill. The country was in an uproar over secession and in a state of doubt and unrest about Mr. Lincoln—what would he do? Was he the man for a crisis? A poor time indeed to consider deliberately so serious a matter as new tariff schedules! There was an imperative need of money and it looked as if this bill would give it, so the Morrill Bill finally went through, and 48 hours before his term ended President Buchanan gave it his signature.
The immediate effect of the Morrill Bill was something quite unlooked for. The increased tariffs made Europe deeply indignant. England and France were particularly hard hit; for instance, the duties on cheap clothes, of which they sent us great quantities, were largely raised. Besides the growing free trade sentiment abroad, the sentiment of the liberal party everywhere was shocked that the new Republican party, which had arisen against human slavery, should take the narrower view of commerce. To make the matter worse for the Republicans, the seceders, in session at Montgomery, adopted a tariff for revenue only. Thus, before Sumter was fired on, Europe had turned to the Confederacy as the more liberal in commercial policy. It is probable that if the Morrill Bill had been simply a revenue measure the cause of the North would have met a very different reception in Europe from what it did.
The London Times clearly stated the foreign point of view:
“It will not be our fault if the inopportune legislation of the North combined with the reciprocity of wants between ourselves and the South should bring about considerable modification in our relations with America. No one after the recent debate on the slave trade can doubt that England is still in earnest on this point, and will never buy commercial advantage at the cost of her honor. We should infinitely prefer dealing with a single responsible government to maintaining two embassies and running the risk of misunderstandings with two highly sensitive democracies. But the tendencies of trade are inexorable, and our manufactures will infallibly find their way to the best market with the regularity of a mechanical law.... It may be the Southern population will become our best customers.... Granted that a permanent secession can be effected by a ‘peaceful appeal to the ballot-box,’ and that the moral and economical evils of slavery do not prove fatal to a society based on it, material prosperity will not fail to follow unrestricted intercourse, and the free States will long repent an act which brings needless discredit on the intrinsic merits of their cause.”
This “discredit” to the cause grew in Europe as the days went on. Not only did the bill hurt Northern trade and alienate European sympathy, it was the chief reason the Confederates had for thinking their new government would succeed. It was driving trade to their ports, thus giving them money. It was making Europe their friend, thus giving them position. And nothing could be done. On all sides the Morrill tariff was denounced as a stupidity, a blunder, an outrage. There were even many demands for an extra session to repeal it. Too late the Republicans saw that their first measure as a party had been a mistake. And then suddenly the whole situation of the unhappy bill was changed by the breaking out of war between the North and South.
The first and most imperative necessity in war is money, for money means everything else—men, guns, ammunition. Mr. Lincoln and his cabinet when they found in the spring of 1861 that they were in for a war of more than 90 days, at once called an extra session of Congress to provide the means for carrying it on. It fell to Mr. Chase, the new Secretary of the Treasury, to suggest what could be done. Practically our whole income came at that time from duties on imported goods. How could they be made to yield more? What other sources of revenue could be tapped? Mr. Chase had various suggestions to make, but it is with only one of them that we have to do here—the raising of the tariff on imported goods.
Under other circumstances it would not have been agreeable for Mr. Chase to suggest increased duties. All his life he had been what the Whigs called a free trader—that is, he had preached Democratic doctrines on the tariff. He was one of a large number of leaders in the Republican party who had originally been Democrats and who had joined the new organization solely because of its anti-slavery sentiments, and who had reluctantly swallowed the new party’s leanings towards protection, hoping always, no doubt, to uproot them finally. Mr. Chase had probably been the less inclined to make any show of objection to the protectionist program of the new organization because he had hoped to be its choice for president. But Mr. Chase had not been his party’s choice for president. On the contrary, he had been obliged to accept from his successful rival a portfolio for which he had no love and no training—that of Secretary of the Treasury. Disappointed as he was, badly used as he felt himself to be, he undertook manfully the hard task of raising money for the war. From the first his determination and confidence were the firmest. The money was in the country. It must come into the National Treasury, if not by one means, then by another. “The war must go on,” he told the bankers who hesitated to take his loans, in July, 1861, “until this rebellion is put down, if we have to put out paper until it takes a thousand dollars to buy a breakfast.” And when they gave him their terms with a “this-is-our-ultimatum,” he replied, “It is for me to make ultimatums; not you.” Higher tariffs then instead of lower Mr. Chase naturally advised, and he asked Congress to amend the Morrill Bill to this end. Many of its duties he raised, articles which it placed on the free list he took off. On many articles he arranged for a double duty, that is, duty on both value and quantity, and he tacked to the bill a direct tax of $20,000,000 to be divided among the states and a tax on all incomes of over $800. Mr. Chase expected from this measure as amended to get something like $80,000,000 of the $318,000,000 he calculated he would need in the next year (ending June 30, 1862).
There was no delay in the adoption of the bill. Its worst enemies were for it. Even the New York Evening Post, which had fought the Morrill Bill with teeth and claws, which had called it a “booby of a bill,” the “blunder of the age,” now said resignedly that in the situation the best thing to do was to “patch it up.” “The great object we have in view during the continuance of the war by financial regulations,” said the Post, “is to raise, in the easiest and least burdensome manner, the largest possible amount of revenue. To further this object, free traders can readily work with protectionists. War is an exceptional state and demands extraordinary measures. For this reason we are prepared to support a scale of duties at present which we should oppose if the nation were at peace.”
Thus, in less than five months after its passage the Morrill Bill, a protectionist measure, framed when there was but little protectionist sentiment in the country and made a law by the signature of a Democratic president elected on a platform of free trade throughout the world, a bill so changed from its first condition that its author had been inclined to abandon it, loaded with jobs, the cause of serious business disturbances in the North, of the alienation of European sympathy, of great gain and satisfaction to the South, had been accepted with resignation by its most intelligent enemies. Almost without knowing it the country had returned to a policy which nearly 20 years before it had abandoned. It is not too much to call the measure the foundation of a revolution in our commercial life. Henry C. Cary, the economist, did not greatly exaggerate its importance when he wrote Mr. Morrill: “You have connected your name with what is destined, I think, to prove the most important measure ever adopted”; nor did Mr. Blaine when he said, in his Recollections, that if the Morrill Bill had been passed under other circumstances, it would have been regarded as an “era in the history of the government.”