| Passage of the Tariff of 1832 by the House of Representatives. |
The House, however, was neither convinced by his argument nor intimidated by his threat. It passed the bill on June 28th, by a large majority, a majority of more than two to one.
Meanwhile the Senate had been occupying itself with an exhaustive discussion of the principle of the tariff. On January 9th, 1832, Mr. Clay introduced the famous resolution for making the tariff upon articles coming into competition with home manufactures a system of permanent high duties, and for abolishing, or greatly reducing, the duties upon all other articles.
Senator Hayne immediately grasped the import of this proposition. He declared that it marked a new era in the tariff system. He demonstrated that down to that time the protection of manufactures had been regarded by all persons and parties as a temporary policy and had been justified as such, while this proposition looked to its establishment as a permanent principle of the policy of the country, which neither revenue surplus nor manufacturing experience should affect.
| The "American System." |
Mr. Clay, who had himself spoken of protection before this as only a temporary policy, acknowledged the truth of Colonel Hayne's criticism, and proceeded, in his famous three days' speech, to develop the arguments for the permanent protective system, the "American System," as he termed it, which made up the text-book for the later supporters of that system. His idea was simply to collect the duties from those foreign products which come into competition in the home markets with domestic products, and prevent the accumulation of a Treasury surplus by fixing the duties so high in rate as to make them largely prohibitory. As we have seen, this idea had been already foreshadowed in one of President Jackson's earlier messages. It now received its complete formulation and its economic justification.
But it was a sad prospect for the South. The South had looked forward to the extinguishment of the debt as necessarily bringing in its train the decrease of duties to the gross amount of at least ten millions of dollars per annum, and now it was called upon to consider the plan for a decrease of revenue by an increase of duties. It is hardly astonishing that the disappointment should have been bitter, and that passionate men should have thought of resistance to what appeared to them so grievously unjust.