|In 1828, the US Congress passed the first import Tariff, a protective tax. The tariff increased the cost of imported goods, and thus protected some of the new industries of the North. The South, whose economy was based on the export of the cotton and did not manufacture significant products opposed the tariff, as a result, the tariff became known as the "tariff of Abominations". today.
|From the early days of the United States there was support to place tariffs (taxes on imported goods) to help new American industries to effectively compete. After the War of 1812, the British were able to flood the American markets with cheaper goods. Support grew to increase tariffs. Leading that charge to increase tarrifs was Henry Clay of Kentucky. Clay believed in an American system of trade; a system where American manufacturers were protected and allowed to grow, while the income from the tariffs would be used for internal improvements. Clay also wanted to insure that the US would not be dependant on the British. The rising quantity of manufacturing in the North converted some New Englanders, including Daniel Webster, who had supported free trade, to become supporters of a rise in tariffs.
In 1816, in the aftermath of the war, the Congress passed another tariff Act that levied a Tariff of 25% on many imported goods. While this represented a rise, it was not considered very high for the times. The Panic of 1819, largely caused by the worldwide drop in the commodity prices, encouraged many in Congress to try to wall the US off, as much as possible, from the vagaries of the world wide markets. In 1820 a more protective measure passed the House, but failed to pass the Senate, due to Southern opposition. The South, however, was fighting a losing battle. The North continued to develop industry rapidly, while the South relied more and more on growing and selling cotton. The population of the North continued to expand. More importantly, in the battle over the tariffs, the western states that were being added to the Union tended to favor stronger tariffs. Finally, in 1824, with Henry Clay in the powerful position of Speaker of the House, tariffs were raised to 35 percent on imported iron, wool and hemp. Many supporters of tariffs thought that 35 percent was not high enough. There were many tariff supporters who wanted to raise the tariffs even higher. Supporters of soon to be President Jackson devised a plan to increase tariffs in a way to help the Mid Atlantic states, states that would be crucial to Jackson’s election hopes. They did this, despite the clear opposition of Southern states, led by Senator Calhoun. Supporters of a tariff rise were victorious and some tariffs were increased to as much as 50%.