Financial History 143 Fall 2022 - Page 39

By Ramon Vasconcellos
In the 246-year existence of the United States , the country has periodically embraced the imposition of tariffs either for protection of domestic manufactures , or for the purposes of revenue generation . Alexander Hamilton ’ s late 18th century idea of a protective tariff as a means of defending our infant industries even found favor with industrialists in the waning decades of the 19th and early 20th centuries . On the contrary , many politicians during the same period advocated a tariff solely for revenue , declaring that big business tariff protections harmed small scale manufacturers and agriculturalists . In recent years , the debate has centered on “ leveling ” the international playing field with the Trump administration imposing levies against the European Union , Mexico and China .
Despite being contradictory to macroeconomic efficiency theory regarding comparative advantages associated with free trade , domestic politics often negate the economic benefits of cheaper imports . Still , political winds change abruptly and tariff policies have been no exception . For example , Congress pivoted from a restrictive measure in 1842 , adopting a more “ free-trade ,” lower tariff several years later as a means of ensuring economic prosperity and promoting global cooperation . The resulting “ Walker Tariff of 1846 ,” contrived by Secretary of the Treasury Robert J . Walker and supported by President James K . Polk , exemplified free trade ideas and contributed to the country ’ s prosperity until the Civil War .
Polk and Walker , both Democrats , voiced much support for the southern wing of the party , a faction primarily consisting of planters and farmers . These interests had opposed the Tariff of 1842 with backing for the legislation coming mostly from the manufacturing sectors of New England and the Mid-Atlantic states . Given the measures ’ popularity within certain regions , some members of the Whig Party contended that it had helped end the depression lasting from 1839-1843 . However , the Democratic leadership generally
Portrait of Robert J . Walker , circa 1860 – 65 .
Portrait of President James K . Polk , who supported the Walker Tariff of 1846 .
expressed notable opposition , much of it coming from the President himself .
Raising import duties as much as 20 %, the 1842 law , according to President Polk , bestowed upon “ capitalists and monopolists ” significant economic benefits in the sum of “ enormous profits .” Reforming the law was left to Secretary Walker , who had already served in the Senate and was set about surveying customs officials and importers before adopting the legislation . Furthermore , he studied how rates could be applied to certain goods without the bill impeding exports and , perhaps , being deemed protectionist .
Elected as a senator from Mississippi in 1835 , Walker quickly rose to prominence within the Democratic Party for his ardent support of Texas annexation in
1845 and an independent Treasury system . The latter was the Democratic Party ’ s alternative to the Bank of the United States , the institution allowed to become defunct under President Andrew Jackson . Texas annexation would permit agricultural expansion , particularly for southern planters ; an independent Treasury system , unlike the Bank of the United States , could hold public monies without perceivably competing with state banks for deposits . “ Jacksonian democrats ,” like Polk and Secretary Walker , found the support for these issues , as well as tariffs , to be diametrically opposed to the views of the Whig Party . Regarding protective tariffs specifically , the Democratic platform during the presidential election of 1844 railed against the idea that promotion of “ one
National Portrait Gallery , Smithsonian Institution ; Gift from the Trustees of the Corcoran Gallery of Art www . MoAF . org | Fall 2022 | FINANCIAL HISTORY 37