The Panic of 1819 (36 page)

Congress was of course the focal center for protectionist agitation, since the state legislatures were constitutionally prohibited from erecting tariffs. All that a state government could do, in fact, was to join in the agitation. There was little controversy on the state level since it was not an issue there.

The outstanding protectionist leader in Congress was Representative Henry Baldwin, from Pittsburgh. It was Baldwin who headed the newly formed House Committee on Manufactures, which the protectionists were able to split off from the traditional Committee on Agriculture and Manufactures, during the 1819–20 session. This new committee became the fountainhead of future protectionist measures. In the 1820 session, Baldwin promptly introduced the Baldwin Bill for a protective tariff. The bill passed the House by a substantial margin and lost in the Senate by only one vote.

Baldwin came from one of the very strongest points of the new protectionism—western Pennsylvania, centering in Pittsburgh. This was one of the leading industrial areas, not only in textiles but also in iron and glass production. Pittsburgh was now an area of heavy unemployment. For his efforts on behalf of protection from 1819 to 1821, Baldwin was feted by a citizens’ meeting in Pittsburgh, and later affectionately dubbed Father of the American System.
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Baldwin himself was an important iron manufacturer, who owned three large rolling mills, including the largest one in the Pittsburgh area. His interest in a protective tariff was quite immediate, and he did
not neglect iron in his proposed tariff increases.
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He also admitted that the cut glass industry and others centering in Pittsburgh received very large relative increases of protection in his bill.
²³

As might be expected, Pittsburgh was one of the first areas to memorialize Congress for protection. Typical was the memorial written by a committee of manufacturers in October, 1818, and again at the end of December. Further petitions were sent by the newly formed Allegheny County Society for Protecting Agriculture and Domestic Manufactures. Pittsburgh, in fact, went further than other communities by attempting to establish a cooperative marketing association for the whole town—this was the Pittsburgh Manufacturing Association, founded in 1819.
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Not only manufacturers but also farmers from the area were seemingly impressed by the arguments and anxious to secure a home market in the face of falling foreign markets; they petitioned Congress for tariff protection for industry.
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Many of the petitions signed “practical farmers” or “impartial farmers,” however, were written by industrialists, like Alexander McClurg, an associate of Baldwin, and secretary of the new Society for Promotion of Agriculture and Domestic Manufactures of Allegheny County.
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Pennsylvania support for protection was indicated by the pleas for Congressional relief issued simultaneously by Representative
Richard Povall of Philadelphia, head of the Pennsylvania House Committee on Domestic Manufactures, and by Senator Charles Shoemaker from Berks and Schuylkill Counties, of the Senate Committee on Agriculture and Manufactures.
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In addition to the standard tariff arguments, Povall asserted that free trade favored the rich at the expense of the poor, since it brought about depression and sacrifice sales to the rich. Shoemaker stressed the importance of a tariff on iron. Representative William Duane’s report as head of the select Committee on Domestic Economy stated that adequate national protection to all branches of industry was indispensable to recovery.
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Pennsylvania contributed its mite to the protection battle by levying a special duty on retailers of foreign merchandise and by requiring new licenses from retailers of foreign goods.
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Other states in the West joined in the protectionist movement. In Ohio, Governor Thomas Worthington called for a tariff to promote a shift in resources from overproduced agriculture to manufactures and to stop the specie drain. He advocated self-sufficiency and stressed a very popular exhortatory theme: calling on all good citizens to patronize domestic products. One of his major addresses for protection was delivered before the Scioto Agricultural Society, in 1819, perhaps an indication that many Ohio farmers were convinced by the home market argument.
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In his 1819–20 message to the legislature, Governor Worthington recommended the encouragement of woolen manufactures. A joint committee of the legislature was established in the next session to inquire into possible aid to Ohio manufactures by the state government. The report of Representative
Joseph Vance (from Champaign County) recommended a state loan to a Steubenville woolen factory.
³¹

General William Henry Harrison ran for the Ohio State Senate in 1819 on a pro-tariff as well as an anti-bank platform. As chairman of the Board of Supervisors of Tioga County, General Harrison spurred a series of resolutions to alleviate the hard times. The sponsors agreed to abstain from the use of any imported goods, and to give preference to domestic articles.
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Successfully elected, Harrison moved a resolution in the state legislature to support increased tariffs to bring about recovery of domestic manufactures.
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Kentucky was also enthusiastically protectionist, as typified by the Speaker of the House in Washington, Henry Clay, and this sentiment was accompanied by a widespread campaign for voluntary preference for domestic products. Ladies’ hats made of local grass were recommended as being as good as the finest wool, while roasted barley was used in many cases as a substitute for imported coffee.
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Many Missourians were eager for protection for Missouri’s lead, iron, and salt industries. The protectionist cause was particularly taken up by the St. Louis
Enquirer
and the St. Charles
Missourian
.
³⁵

Delaware is an interesting example of the swell of protectionist sentiment. At the beginning of the crisis, in 1819, the Delaware Senate passed a resolution declaring that manufactures were a great national concern, in the public interest, and hence required protection. The resolution passed the Senate, but lost in the House by a vote of 7 to 10.
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Delaware, however, became one of the prime centers of the protectionist movement. E.I. du Pont, from Wilmington, the nation’s leading powder manufacturer, was one of that movement’s original sponsors.
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By the next session, sentiment had changed. Representative Whitely reported from the House Committee on Agriculture and Manufacturing of Delaware that the origin of the distress was the present commercial system, aiding as it did foreign manufactures at the expense of domestic manufactures. The distress of domestic manufactures had thrown agriculture into depression for lack of a home market. Whitely’s concluding resolution asking Congress for protection was adopted unanimously.
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By a slim margin, and after a sharp battle, the Delaware legislature took supplemental measures to aid their manufactures, exempting all owners of cotton and woolen machinery from either taxes or the debt-paying execution process.
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A proposed blow at imports was defeated, however, when a bill narrowly failed to pass which provided that peddlers must acquire a license under the condition that they sell no foreign goods.
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Supposedly “free-trade” North Carolina, however, doubled its tax on peddlers who sold goods imported into the state. Kentucky debated a similar measure.
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Neighboring Maryland boasted two of the nation’s leading protectionists: Hezekiah Niles, who worked tirelessly for protection in
his
Weekly Register;
and Daniel Raymond, whose
Thoughts on Political Economy
strongly backed a protective tariff and was a treatise particularly designed to be a counterweight to the free trade position of the classical economists.

New York was the site of one of the main organs of the protectionist movement, the New York
Columbian
, a paper reflecting De Witt Clinton’s views.
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The
Columbian
pursued the cause through letters and editorials and reprinted Carey’s Addresses of the Philadelphia Society. The emphasis in New York was on the cotton manufacture. One letter stressed that protection to cottons would be particularly useful to the state. Further, protection would inspire confidence and thus “would produce capital” and remedy the depression.
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One of the most interesting protectionist writings was an article in the
Columbian
stressing that protection would furnish “constant employment.” As a remedy the writer, “H.B.”, further suggested that the state establish a woolen and cotton factory, state owned, to teach the youth of New York City the “useful art of spinning and weaving—the state to furnish the raw material and receive the proceeds as it is finished for the consumer.” He also suggested a state owned cotton and woolen warehouse to sell the cloth wholesale and retail.
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Everyone was urged to wear only domestic clothing, and the clergy were particularly requested to set the proper example.

One of the most ambitious efforts of the protectionists in this period was the establishment of a semi-weekly newspaper in New York,
The Patron of Industry
, to serve as the bellwether of the
movement. It ran a brief course in 1820 and 1821, at the height of this wave of tariff agitation. The
Patron
was published by the National Institute for the Promotion of Industry.
⁴⁵
,
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The two major groups in New York State politics were the followers of Governor Clinton and the bitterly opposed Tammany faction of the Democratic-Republican party. That the two groups were not very far apart on the tariff as well as on monetary questions may be seen in the famous
Tammany Address
of John Woodward. One of Woodward’s many proposed remedies for the crisis was the absolute prohibition against importing any article that could be manufactured domestically “on tolerable terms.” To supplement these legal measures, all citizens and governments were expected to give preference to American products.
⁴⁷

New England was a more difficult field for protectionists to plow. New manufacturers in New England were largely in the cotton industry, and tariff agitation from this area centered on this commodity. An interesting development was the use of the Washington Insurance Company of Providence, insurer for most of the Rhode Island cotton mills, as lobbyist for protection of the cotton industry. The protectionists also established a
Manufacturers’ and Farmers’ Journal
in Rhode Island during 1819.

By May, 1820 (when the Baldwin Bill came to a vote in Congress), seven state legislatures had passed resolutions urging Congress to pass the bill. These states were Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, and Ohio.
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The heavy investments in cottons and woolens were stressed in the Pennsylvania declarations, and the textiles were stressed by New
York Governor De Witt Clinton, in his advocacy of protection.
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Under Clinton’s leadership, New York extended subsidies to woolen manufactures in the state.

Many minor industries, in addition to the major ones of cotton, wool, and iron, asked for protection. Typical was the petition of the Society of Paper Makers of Pennsylvania and Delaware. They pointed to the extent of paper manufacture and the number employed in the industry, and advocated protection to remedy its distress and to keep the profit of its manufacture in the country.
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Even the book printers demanded protection, headed by Matthew Carey, a leading Philadelphia printer.
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The protectionists, while concentrating on the major industries, were generally quite willing to include numerous industries under the protection umbrella. “An Agriculturist” advocated absolute prohibition of all imports of foreign industry, in order to build up a home market for American grain produce.
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Hezekiah Niles, though a staunch protectionist leader, balked at this trend. He stated emphatically:

most of these manufacturers are prostrated not for want of protecting duties, but in consequence of general impoverishment of the country arising principally from want of protection to the great leading branches of cotton, wool, and iron.
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Emphasis on cotton and wool and the lure of a home market for agriculture were, in fact, the features of a typical “grass roots”
tariff petition. Thus, some citizens of Middletown, Connecticut, in a petition to Congress, stressed the advantage to agriculture of domestic manufactures.
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Using an “infant industry argument,” they declared that

adequate protective duties . . . would soon create or revive such a number of manufacturing establishments, that ere long their rivalry would probably reduce the price of their fabrics below the present standard of those imported.

On the other hand, if we now permitted American manufactures to die of neglect, we would have to buy only European goods at an exorbitant advance and reimburse manufacturers for their present losses. In essence, this was a forerunner of the classic argument that a firm undercuts prices in order to crush its rival and later extract a monopoly price.

Protection reached a peak in Congress late in the 1819–20 session, with the battle over the Baldwin Bill.

The heart of the Baldwin Bill was a rise in tariffs on cottons and woolens from 25 percent to 33 percent duty, plus a minimum for cheap cottons, the total increase in cotton duty being 50 to 70 percent. Tariffs were also to be increased on a variety of manufactured goods.