What were the political and sectional responses to the Tariff of 1789?

Alfonso Llanes, Master Degree in International Development

Answered just now

History of international commerce in general teaches that: Tariffs are another form of taxation placed on foreign goods by sovereign governments making imported products more expensive and discourage domestic consumption.

The historical record indicates that tariffs were the first piece of legislation ever enacted by Congress on July 4, 1789 and it had double purpose:

• To raise revenues for the newly formed government by taxing the importation of foreign goods.
• To inspire domestic industrial production by taxing the imports of products from foreign sources.

"Whereas it is necessary for that support of government, for the discharge of the debts of the United States, and the encouragement and protection of manufactures, that duties be laid on goods, wares and merchandise:"

However, enacted tariffs were not free of controversy. Debates over the drive for tariffs exposed special interests in the process. In the Northeast manufacturers favored high duties to protect its industrial base while Southern states with a mainly agriculture economy wanted a low tariff that would raise cheap consumer imports. As it turned out the final bill got concessions from both sides, but it also delivered benefits to maritime and industrial parts of the country.

“The act established tonnage rates favorable to American carriers by charging them lower cargo fees than those imposed on foreign boats importing similar goods. Coastal trade was reserved exclusively for American flag vessels. These provisions were consistent with mercantilists policies practice by European powers at the time.”

The legislation produced major tensions within the Federalist coalition of northern industrialists and southern farmers. Southern states farmers saw the high tariff and tonnage rates as a victory for the northern industrial base with their successful lobbying efforts of the young government.

After the American Revolution economic reorganization took place which contained a period of uncertainty and hard times for businesses and citizens alike. Investment had been detracted during the conflict from the manufacturing of mainly of weapons of war. The male population had developed skills that were no longer needed in peace time. Prices dropped as a result of diminishing demand which combined negatively with cheaper imports coming from Europe. This resulted in a comparative disadvantage for a nascent manufacturing sector once resumption of normal trade relations took place.

In addition,the British Navigation Acts made things worse. The only significant clause in the treaty of peace of 1783 regarding commercial trade was a guarantee for free navigation of the Mississippi River forever for the United States. “Free trade” between the United States and the British colonies was subjected to the British Navigation Act 1783, which admitted only British-built ships to the ports of the West Indies and imposed heavy tonnage dues on American vessels in other British ports. Furthermore, It was amplified to prevent British registration of American vessels and prohibited imports of American goods through foreign islands.

The French treaty of 1778 stated "perfect equality and reciprocity" in commercial relations, but it was found to be impossible for making a commercial treaty on that basis. On the other hand, Spain demanded as the price for reciprocal trading, surrender by the United States for 25 years the right of navigating in the Mississippi River.

Richard Campanella, at Tulane University writes in his account of: “New Orleans: Timeline of Economic History”

That New Orleans became a “mercantile node after the Louisiana Purchase in 1803, as Americans moved westward and needed a downriver transshipment port to which they could export their agricultural surpluses, and from which new steamboats could return with imports. Vast sugar and cotton plantations near New Orleans, with their insatiable 1840 New Orleans, by one measure, ranks as fourth busiest commercial port in Western world, exceeded only by London, Liverpool, and New York.”

Also included in the historical record of New Orleans are passages of conflict among colonial powers mainly France, Spain and Britain. For instance, in order to pay a war debt, France gave up control of Louisiana to Spain, who controlled the colony from 1763 until 1803. Moreover, the proximity of New Orleans to all of the Spanish colonies in the Gulf of Mexico and the Caribbean provided a significant amount of Spanish influence into the city of New Orleans. The city is located at mouth of the Mississippi River, which spans over 2,348 miles and as such it is the second longest river in the United States. The river became a vital aspect of industry and during the Civil War control of the waterway was a major strategic objective of the Union forces. The mouth of the Mississippi River made New Orleans one of the most significant transportation hubs in the early United States before the establishment of railroad and road systems. The history of the port of New Orleans states that it was one of the greatest ports in the world, with 33 different steamship lines and trade worth 500 million dollars passing through the city. The Civil War interrupted its vital status as a port for export of Southern-produced trade goods with cotton comprising fully half of the estimated $156,000,000 exports, followed by tobacco and sugar.

Campanella says that early in the Civil War, New Orleans became a prime target for the Union Army and Navy to seize control of the city and its vital port, in order to choke a major source of income and supplies for the inexperienced Confederacy.

During its historical period the port of New Orleans, collected taxes (tariffs) from ships leaving or entering its harbor in international commerce attributed in colonial times to either the French, Spanish or British occupiers.