Rising Tide FoundationJun 2 · Rising Tide Foundation
Cynthia Chung writes: The leaders of protectionism throughout the 19th century into the 20th century, the latter notably under William McKinley, were not shy to write down or make speeches unleashing eviscerating criticism of the British Empire’s system of free trade. Thus, we would do well to understand what exactly they were going to battle with in this regard, no?
1888 anti-free trade cartoon from Judge. Caption: FREE TRADE ENGLAND WANTS THE EARTH
“Two systems are before the world; the one looks to increasing the proportion of persons and of capital engaged in trade and transportation, and therefore to diminishing the proportion engaged in producing commodities with which to trade, with necessarily diminished return to the labor of all; while the other looks to increasing the proportion engaged in the work of production, and diminishing that engaged in trade and transportation, with increased return to all, giving to the laborer good wages, and to the owner of capital good profits… One looks to pauperism, ignorance, depopulation, and barbarism; the other in increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.”
– Henry C. Carey, Harmony of Interests, 1851
The American System to which Carey is referring in this quote is the school of economics to which protectionism originates from, largely recognised as officially beginning with the works of Mathew Carey (Henry C. Carey’s father) and Henry Clay, following the economic schools of thought of Alexander Hamilton and Benjamin Franklin.
The American System of economics did not in fact originate within the United States, but within France under the Dirigisme school of economics, also known as Colbertism as well as the German school of economics known as Cameralism, however, the American school did greatly expand and further build upon this foundation.
Leibniz was in fact in direct opposition to the philosophy of John Locke, who was heavily promoted by the Anglophiles within the United States as the philosophical system they should adopt. This was rejected by the followers of Benjamin Franklin, Alexander Hamilton and the protectionist school of economics that followed. However, Locke’s system was largely adopted within the Southern states, which not coincidentally was where all the cotton slave plantations were located in service to the British Empire.
As we can clearly discern from the name, protectionism is referring to a form of “protection” to the American economy, but protection from what exactly?
It was protection from the British Empire’s system of free trade – quite explicitly so as we will see.
This has been the core battle within the United States, as to which school of economics it would ultimately adopt as its philosophical outlook. As is made clear by the opening Henry C. Carey quote, it comes down to how you view humankind, the worth of the individual; and how you define wealth, value, liberty and happiness which differentiates the schools of economics. The two systems, the British vs. the American system as defined by Carey are inherently opposed to one another, they are not compatible with one another, and we cannot say with honesty that both can rule over a nation’s policies.
Suffice to say, if this is indeed true, we presently live in a very confused world in terms of our understanding of how American System economics should operate, if indeed we are to return to a protectionist orientation amidst rampant free trade. The leaders of protectionism throughout the 19th century into the 20th century, the latter notably under William McKinley, were not shy to write down or make speeches unleashing eviscerating criticism of the British Empire’s system of free trade. Thus, we would do well to understand what exactly they were going to battle with in this regard, no?
The leaders of the protectionist school also made it very clear in their writings that not all tariffs are made equal and thus are not always beneficial to boosting domestic industry, thus the generalised use of the term “tariffs” that is being bandied about lately does not mean that only good can come from it, and thus all judgement and criticism should exit the building, lest you be called unpatriotic. In fact, not all tariffs are protective to domestic industry, as we shall soon see.
In order to help clear this confusion, I think there is nothing more suitable than for us to review the very words of these men themselves who formed and promulgated this protectionist school within the United States. The difference between this school and the application of the so-called protective tariffs of today will be most stark with the words of William McKinley (1843-1901) himself, who is often cited today despite great disregard to what he was actually going to battle with - until his untimely assassination.
Mathew Carey, one of the founders of the American System of economics and Protectionism
Let us first start with the life and writings of Mathew Carey (1760-1839). Carey had been kicked out of Ireland for “defaming the British” when he recirculated Jonathan Swift’s “Proposal for the Universal Use of Irish Manufactures.”[1] He traveled to France where he met Benjamin Franklin and French General Marquis de Lafayette who fought for American independence in the American Revolution and was a distinguished war hero.
In France, Carey began a printing house and circulated Benjamin Franklin’s Notes from America to leading humanist circles throughout Europe to keep them informed of the progress of the American Revolution. The attempt to equip the European population, notably the French via the revolution launched in 1789, with the tools needed to defeat oligarchy ultimately failed due to London’s sabotage, which included the direct funding of the Jacobins and their Reign of Terror.
Yes, you read correctly, the Jacobins who transformed the French revolution into a bloodbath of terror were directly backed and funded by the British and this was the reason why the French were unable to have a successful revolution modeled off of what the Americans had accomplished just a few years prior. The mayhem and confusion that came out of the French Revolution is what brought in Napoleon, who at first promoted himself as a man of the people, only to declare himself Emperor of the world a few years later. For more on this refer here.
With the failure of the French Revolution, Carey focused his attention on working for Franklin’s circles within the United States. Upon Carey’s arrival to America, Franklin helped him to start his own publishing business and bookshop in Philadelphia, Franklin’s hometown, with the aid of Marquis de Lafayette. Carey became an ardent supporter of Alexander Hamilton and continued his collaboration with Franklin until his death. Contemporary opinion placed Mathew Carey second only to Alexander Hamilton as the nation’s leading protagonist for the ‘American System’. And Mathew Carey, under the encouragement of Franklin, founded the nation’s first book publishing company in order to help circulate and organise the population towards these very important ideas.
W. Allen Salisbury writes in “The Civil War and the American System”:
“Mathew Carey adopted the humanist organizing method of Franklin. As Franklin reports in his Autobiography, the Junto, a secret organization, agitated for continual improvements, the first fire company, and the first network of printing establishments in the nation. It was this mode that wasfollowed by Carey and the Philadelphia Association for the Promotion of National Industry to effect such improvements as the construction of the first railroad in Pennsylvania. For this reason, Edgar Allan Poe once said of his publisher Mathew Carey that he reminded one of Ben Franklin.
Around Mathew Carey’s Philadelphia circle developed the second generation of American political economists…After the assassination of Hamilton by Aaron Burr in 1804, major responsibility for keeping alive the American System program fell to this group of secondary leaders, which included as its chief spokesmen the Whig leaders John Q. Adams, Henry Clay…and the members of Mathew Carey’s Philadelphia circle…[including] the brilliant German leader Friedrich List [who created the Zollverein economic system in Germany and allowed for it to become a nation for the first time instead of disjointed provinces].
As Mathew Carey documents his own contributions in his Autobiography, he vigorously pursued the policies put forward in Hamilton’s report. In fact, he was a director for two terms of the Pennsylvania subdivision of the National Bank.”
Thus, to be clear here, Mathew Carey who is among the founders of the American System school of economics and its theory of protectionism was for Hamilton’s National Banking, and thus opposed to Aaron Burr, as well as the US Treasury Secretary Albert Gallatin under both the Madison and Jefferson administrations. In fact, Burr and Gallatin were part of the treasonous faction within the United States and were provably working for British intelligence. For more on this refer here.
“By 1814, continental Europe was reduced to war ruin and the young American nation had fought another war against Britain – the War of 1812. The unfavorable aftermath of that war and continued trade war by the British against American commerce and industry was creating havoc within the United States.
Albert Gallatin, the Secretary of the Treasury under both President Madison and President Jefferson, was Britain’s “agent-in-place” for this subversion attempt. The Treasury’s London office under Gallatin was used as a training center for agents to influence US economic policy toward free trade. There, Gallatin’s staff met with both Jeremy Bentham and David Ricardo who instructed them not to have Hamilton’s dirigiste system taught in the schools and colleges of the United States. Bentham even offered to Gallatin his services to rewrite the US Constitution – an offer Gallatin relayed to Jefferson, Madison, and the US Congress.
….
With the publication of his ‘Olive Branch’, Mathew Carey opened a campaign throughout the country for a continued national commitment to Hamilton’s economic policy [and was critical of British free trade and Adam Smith’s Wealth of Nations]…To Mathew Carey the foundation of Smith’s proposal to establish ‘freedom of trade’ was accompanied with ‘assurances’ that the wiped-out American manufacturers and mechanics could find employment in ‘collateral manufactures,’ especially agriculture.”
Mathew Carey writes in his “Autobiographical Sketches in a Series of Letters Addressed to a Friend”:[2]
“These positions, absurd, futile, and untenable as they are, form the basis of the Wealth of Nations. To a person wholly unbiased by prejudice, it must be a matter of astonishment how a work, resting on such sandy and miserable foundation, could have obtained, and still more, have so long preserved, its celebrity. The monstrous absurdity of these doctrines and the facility with which they might be refuted, induced me to enter the lists against this Goliath with the sling and stone of truth.”
Finally, Salisbury writes:
“Mathew Carey, Henry Clay, and others revived Hamilton’s Society for the Promotion of Useful Manufactures. The new Philadelphia Association for the Promotion of National Industry included manufacturers, as well as agriculturalist, scientists, and skilled mechanics. As part of their work, Mathew Carey correctly noted that Hamilton had already refuted all that [Adam] Smith had to say and, in fact, Hamilton’s report subsumed the work of the great seventeenth century French Finance Minister Colbert.”
In Mathew Carey’s “Addresses of the Philadelphia Society for the Promotion of National Industry” published throughout the year 1819, he focused on a critique of Adam Smith’s “Wealth of Nations” and a defense of the American System as understood under the school of Alexander Hamilton. These addresses by Carey were effective at keeping the United States committed to Hamilton’s economic policy until Andrew Jackson’s election in 1828.
Jackson, contrary to what you might have heard in some speeches from Trump, was not for protectionism or the American System school of economics to which it stems from. In fact, under the Jackson presidency from 1829 to 1837 there was a policy of British free trade that was implemented to the benefit of Wall Street, and protective tariffs were decreased substantially. Jackson left the American people with one of the worse depressions they have ever suffered in their entire history, the Depression of 1837, otherwise known as the Panic of 1837, where millions of Americans lost their jobs and went hungry.
[Note to the reader: It would be useful here to know a little of the origins of Wall Street which will give you a clearer idea as to what their loyalty and outlook was always beholden to. Wall Street was quite literally named after an actual wall built in New Amsterdam, the 17th century Dutch settlement at the southern tip of Manhattan. More specifically, the wall was constructed by the Dutch West India Company as a defense during the Anglo-Dutch wars. The Dutch, along with the Portuguese, had begun a brutal colonisation of other parts of the world and the trading of things, including slaves, that had superseded the British. It was the Dutch colonists who could be found in almost every part of the “savage” world and were the most powerful empire for some time in service to the Kingdom of the Netherlands.
The Dutch West India Company worked in service to the Bank of the Netherlands. It was this model to which the British had modelled themselves directly off of in the establishment of their British East India Company and their Bank of England. There was a period of territorial warfare between the two for the possession of the Manhattan region. It was from these institutions that the slave market was first introduced in 1711, with the sale and rental of enslaved Africans and Indians.[3][4] This market operated from 1711 to 1762 at the corner of Wall and Pearl streets. It was the natural outcome of a system which held the maxim of “buying cheap and selling dear” as its core philosophy.
This outlook has never changed, and after the decay of the Dutch empire, still lived on within the British empire’s system of free trade, and thus it is no coincidence that Wall Street is very much the child of the City of London. For more on the role of the British East India Company being responsible for the introduction of slavery into the United States refer here.
And it is also thus, very much in character that the pro-Wall Street president Andrew Jackson was responsible for the Trail of Tears, one of the largest genocides committed against the Native American people. You can read more about this here.
“Thus then we should find ourselves pursuing Adam Smith’s sublime system; buying cheap bargains of wheat or flour from one nation, cotton from another, hardware from a third; and, to pursue the system throughout, woollen, and cotton, and linen goods from others; while our country was rapidly impoverishing of its wealth, its industry paralyzed, the labouring part of our citizens reduced to beggary, and the farmers, planters, and manufacturers, involved in one common mass of ruin.”
Carey is stating here that this policy of Adam Smith’s free trade, in buying cheap and selling dear was making the British Empire wealthier at the expense of the United States, a system under which its industry could not function - leading to the impoverishment of the nation.
“On almost every subject of discussion, fellow-citizens, there are certain hacknied phrases, which pass current as oracular, and though extremely fallacious, are received with scarcely any investigation. There is probably no science that has been more distorted in this respect than that of political economy, on which so much of human happiness depends.
We propose, in the present number, to consider a maxim of this description, fraught with destruction in any nation by which it is adopted; but which is implicitly believed in by a large portion of our citizens, and has had considerable influence on the legislature of the union.
This specious maxim is, that “Trade Will Regulate Itself,”
which in all probability, led to that refusal of adequate protection to the national industry, which has overspread the nation with distress – lowered the price of some of our chief staples, by depriving them of a domestic market – bankrupted so many of our merchants and traders – deprived so many thousands of our citizens of employment – and, in a word, reduced us from the most towering prospects to a most calamitous reverse.”
Thus, to stress here Carey is stating that it is this Adam Smith maxim that “trade will regulate itself” that is in fact in opposition to protectionism. Thus, the United States was being encouraged to have its industry gutted by British free trade and that government should not intervene in invoking protectionism that would allow their industries to grow. This is a point that continues to be a source of confusion today due to the continued distortion of the real scientific teachings of political economy that have conscientiously been suppressed by the adherents to the British system and have written the true American System teachings out of the textbooks.
Clearly you cannot have both, you cannot have “trade regulate itself” and protectionism, they are the anti-thesis of the other. Thus, the claim that you can have both is a manipulation, a form of doublethink, going on today that is very clearly false and calls for the individual to take a closer look at what is in fact truly going on.
As we can see with the above graph, it was during the presidencies of Andrew Jackson (1829-1837) and his colleague from the same pro-British free trade/Wall Street school Martin Van Buren (1837-1841) that protectionism fell dramatically. There was a slight increase during the presidency of John Tyler but again fell until the Morrill Tariff which dramatically bolstered protectionism. The Morrill Tariff was done under Henry C. Carey, Mathew Carey’s son, and chief economic advisor to Abraham Lincoln.
Thus, we can see there is a very clear trend going on depending on the school of economics the president is beholden to. It is a direction, either up or down in its trajectory for the manufacturing industries of a country and its true wealth and prosperity.
It is a battle that has been waged since the very beginning of the nation’s origin. And it is not a coincidence that we see protectionism take a dramatic plunge from the 1950s on, when a consistent policy of deindustrialisation was taking place. Such a policy that resulted in the creation of America’s Rust Belt. After nearly 70 years of a policy that has moved towards free trade policies and the belief that “trade will regulate itself” with religious zeal and that Adam Smith’s invisible hand has replaced God and any morality in how an economy is to be run; and all this at the expense of protectionism (for you can only have one) the jury is out – it has been out for decades but many were too foolish to notice. There should no longer be any confusion as to where the source of the problem lies. Free trade has done just what the leaders of the American System have been warning us all along, that it will gut your industries, expand an unpayable debt, and impoverish the nation.
Mathew Carey continues in his “Addresses of the Philadelphia Society for the Promotion of National Industry”:
“It will be perceived that this is a vital part of Adam Smith’s doctrine – indeed, the basis on which he has raised his great superstructure[referring to the maxim that “trade will regulate itself”]…But its immense influence on the fate of nations, and its most destructive tendency, demand a more minute investigation, to which we now solicit your attention.
How far its advocates deem it proper to have it carried, we are not quite certain. In its strict acceptation, it meansa total exclusion of all regulations of commerce, so that the intercourse between nations should be as free as between different provinces of the same empire. In fact, if it does not mean this, it is difficult to define what it can mean; for if a government enacts any regulation whatever, it cannot with truth or justice be said, that “trade regulates itself.”
We shall, therefore, consider it in its upmost latitude, as excluding all regulations. The result, however, would not be materially affected by any modification, or restriction of it provisions, short of effectual protection of national industry. These would, as the case might be, only accelerate or procrastinate the final catastrophe, to which it infallibly leads.
This maxim [that trade will regulate itself] ought to have been consigned to oblivion centuries since, by the consideration that no trading or commercial nation has ever prospered without, “regulation of trade”;that those nations which have devoted the most scrupulous attention to its regulation, have been the most prosperous; and that in proportion as it has been neglected, just in the same proportion have nations gone to decay.
…
We have hitherto confined our calculations of the effects of this plausible but destructive system [reference to Adam Smith’s free trade], to the manufacturers alone. Its pernicious consequences, if they extended no farther than to this class of citizens, would be sufficient to induce liberal minded men – those worthy to legislate for this rising empire, to abandon the maxim. But those consequences, how deplorable soever, are but as “mere dust in the balance” compared with its general effects on the wealth, strength, resources, power, and happiness of any devoted nation which enlists itself under the banners of Adam Smith. [Author’s note: Referring to how Adam Smith’s policies also increase an unpayable debt which subjects the nation to foreign control, notably that of the British Empire which was buying up American bonds, thus American debt, and insisting they be paid back in gold.]
…The result is easily seen. A prosperous nation, with a specie capital of $20,000,000 is by this simple process in four years reduced to a most abject, impoverished, and dependent state. Its wealth is drained away to support a foreign nation [i.e. Britain]. Every species of industry is paralyzed. Ships rot at the wharves. Trade languishes. Merchants and traders, as well as manufacturers, become bankrupts. Artisans, mechanics, and labouring people, who had largely contributed to the welfare of the state, are transformed into mendicants, or driven to desperate courses to prolong their existence; and desolation extends itself over the face of the land.
… it is obvious that where the tariff of one nation is so wholly inefficient, that she can be completely undersold in her own markets by another, as the people of the United States are at present, the ultimate effect is actually the same, as if ‘trade were allowed to regulate itself’.”
What Mathew Carey is stating here, is that protective tariffs may be in place, but if they are executed in a manner or level that renders them inefficient, and thus ineffective, it creates the same outcome then as if “trade had been allowed to regulate itself.” In other words, an inefficient tariff system services British free trade. We can see from the drastic plunge in protectionism under the presidencies of Jackson and Van Buren that this is exactly what happened. It rendered the protectionism that was put in place prior ineffective and was the same as if British free trade were allowed free reign over American industries. This is why it is concerning when Trump promotes Andrew Jackson as a president who was for protectionism, for this could not be more false, and calls into question whether Trump simply does not understand this, or is purposefully muddying the waters.
“The duties imposed by our tariff have merely delayed, not averted, the work of destruction. But that it is as sure in its operation, is placed beyond the reach of doubt by the desolation and ruin that pervade so many invaluable manufacturing establishments throughout the union, on which millions of dollars have been expended, and whose fall, as we have so often repeated, and must re-echo in the ears of those who alone have the power of applying a remedy, involved the ruin of the citizens engaged in them.
The most cursory reader must perceive, and no one possessed of candour can deny, that we have given the advocates of the maxim, “let trade regulate itself,” far more advantage in the argument than was necessary, or proper.
…
England well knew, that in the mutual exchange of raw products for manufactured goods, all the advantage was on her side, the loss on that of the colonies. She, therefore, restricted them [those on the receiving side of British free trade] to the cultivation of the soil [agriculture], except permitting a few handicrafts of first necessity, and the fisheries to the New England colonies, which raised no production she required.
This system kept the colonies in a wretched condition. They were totally destitute of the precious metals, either to constitute or regulate a currency. Every hard dollar that found its way into them, was immediately exported to England in payment of debts.
[Author’s note: Britain was insisting at the time that all American debt to them be paid in gold, which in turn further strengthened Britain’s dominance, whereby gold coinage was the centerpiece of the British financial system.[8] Thus, Adam Smith’s recommendations would come full circle, destroy American industry, have the young nation accrue unpayable debt, Britain buys said debt in the form of US bonds to which Wall Street was gleefully selling to the British and Britain demands payment in gold keeping the United States forever poor and destitute and unable to form and strengthen their own currency.]
‘Those that are acquainted with America, know as I do,’ said Captain Luttrel in a debate in Parliament, ‘that from Rhode Island, northwards, they have no money; that their trade is generally carried on by barter, from the most opulent merchant to the most necessitous husbandman. Sir, before your fleet and armies visited their coasts, you might almost as soon have raised the dead, as one hundred pounds in specie from any individual, in those provinces.’
…
The time, however, is not remote, when we shall be awakened to the true situation of our commercial relations with Europe, and its consequences [Author’s note: since many European countries were practising protectionism and the United States was not at the time of Carey writing this. It was Mathew Carey who in turn was responsible for the beginning of protectionism within the United States due to his advocacy and guidance ]. The evils, which now press on us, many vainly flatter themselves, are mere temporary effects, similar to those which have before arisen from slight derangement of commerce. We are firmly persuaded, they are of a very different character, and of a more formidable nature. We have no doubt, that they are the same, as the evils under which this country suffered when colonies, and during the peace subsequent to the revolution. The sooner we satisfy ourselves that such is the case, the earlier we shall extricate ourselves from the embarrassments, that must grow out of this position, in which we are placed…
We fear, from this view of the subject, though little flattering to our pride, it will be apparent, that after having expended the best blood of the nation, and millions of treasure to shake off the yoke of colonization, we have voluntarily adopted the colonial policy of England, and placed ourselves with respect to her, and in truth to most of the world, in the situation of colonies.
From this state of humiliating and injurious dependency, the United States are bound to vindicate the sovereignty of a free people. For in vain will they make pretensions to a perfect independence, while they incur through the medium of their wants, all the consequences of subjection.”
As already mentioned, along with John Quincy Adams and Mathew Carey, Henry Clay (1777-1852) is considered one of the founders of the American System of economics following the school of Alexander Hamilton. Due to the length of this paper, I won’t go into too much detail of his life and role, however, an excellent resource to read more on this subject would be Anton Chaitkin’s work, including the legendary “Treason in America: from Aaron Burr to Averell Harriman” which can be read for free on archive.org, as well as his newly published two volume book series “Who We Are" which you can purchase via his Substack.
On February 2, 3 and 6th, 1832, Senator Henry Clay of Kentucky delivered a speech entitled “In Defense of the American System, Against the British Colonial System.” Clay had recently completed a term as U.S. Secretary of State (1825-1829) where he ably advanced and defended the joint interests and independence of the new republics in the North and South America, urging the adoption of anti-colonial principles of the American Revolution for all developing nations. Something we would do well to remember and revive today in contrast to Marco Rubio’s tour of Latin American countries recently.
Anton Chaitkin writes in his paper “Henry Clay: National Development Must Take Precedence Over Debt Payments”:
“The instruments of the American System included: the Bank of the United States - run by American nationalists - controlling speculators and guaranteeing cheap credit for farmers and developers; tariffs to protect home industry against foreign trade war; and growing government expenditures for the creation of roads, canals, and rail lines.
South Carolina was threatening to secede from the Union unless the protective system were ended. The anti-national (‘Free Trade’ or what would today be termed a ‘pro-free market’) movement was led by the former U.S. Treasury Secretary Albert Gallatin of Switzerland. During his own long reign at the Treasury (1801-14), Gallatin had canceled the Founding Fathers' industrial development program and had virtually dissolved the American armed forces, using the money instead to ‘try to pay off the national debt’.”
To be clear here, of course one wants to pay off their debt, and a nation that owes little debt or none is best. However, there were two outlooks to this, one was the use of debt as productive credit. What this essentially comes down to is that if you borrow money to invest in projects, namely industry, that will in time create a much higher return then the loan you required, this is considered productive credit. However, if a nation is borrowing without much thought into investments that will give a higher return, such as in crucial industries, and prioritises the payment of said debt, it creates a sinking ship. There will be less and less revenue generated, and more and more debt accrued, which again would have put the United States into the “good graces” of Britain who was happily buying up this debt through Wall Street bonds. In addition, the debt should never be prioritised over the investment of crucial and essential industry, which was being demanded by the Anglophile camp within the United States during Clay’s time.
In Henry Clay’s speech delivered in 1832 titled “In Defense of the American System, Against the British Colonial System” he states:
“[The] decision on the system of policy embraced in this debate, involves the future destiny of this growing country. One way...it would lead to deep and general distress; general bankruptcy and national ruin; the other, the existing prosperity will be preserved and augmented, and the nation will continue rapidly to advance in wealth, power and greatness....
Eight years ago, it was my painful duty to present to the other House of Congress, an unexaggerated picture of the general distress pervading the whole land. We must all yet remember some of its frightful features. We all know that the people were then oppressed and borne down by an enormous load of debt; that the value of property was at the lowest point of depression; that ruinous sales and sacrifices were everywhere made of real estate [such as forced sales of farms]; that stop laws and relief laws [i.e., debt moratoria] and paper money were adopted to save the people from impending destruction; that a deficit in the public revenue existed, which compelled Government to seize upon, and divert from its legitimate object, the appropriation to the sinking fund to redeem the national debt....
[Author’s note: It was during this troubled time eight years ago that in reaction to this Henry Clay enacted the 1824 protective tariffs which allowed for American industry to regain its foothold and prosper once again. This was the second protective tariff to ever be enacted by the United States, the first being the protective tariff of 1816 in reaction to the destruction that was being waged to American industries as a consequence of British free trade and the reason why the British launched the War of 1812 against the United States in the first place. There was a great deal of American unity against the British for a period afterwards. But by the time of Clay’s 1824 tariff, Americans were split once again on their allegiance to British free trade, notably between the North and South. For more on this see footnote (9)]
[Today by contrast] we behold cultivation extended, the arts flourishing, the face of the country improved, our people fully and profitably employed...a People out of debt; land rising slowly in value, but in a secure and salutary degree; a ready, though not extravagant market for all the surplus productions of our industry; innumerable flocks and herds browsing and gamboling on ten thousand hills and plains, covered with rich and verdant grasses; our cities expanded, and whole villages springing up, as it were, by enchantment; our exports and imports increased and increasing; our tonnage [shipping], foreign and coastwise, swelling and fully occupied; the rivers of our interior animated by the perpetual thunder and lightning of countless steam boats; the currency sound and abundant; the public debt of two wars nearly redeemed; and, to crown all, the public treasury overflowing....[referring to the War of Independence and War of 1812 both against the British Empire.]
This transformation of the condition of the country from gloom and distress to brightness and prosperity, has been mainly the work of American legislation, fostering American industry, instead of allowing it to be controlled by foreign legislation, cherishing foreign industry....
It is now proposed to abolish the system, to which we owe so much of the public prosperity [i.e. to abolish the American System which used productive credit to build up American industry.]...I have been aware that, among those who were most eagerly pressing the payment of the public debt, and, upon that ground, were opposing appropriations to other great interests [i.e. prioritising debt payment over the building of industry]…But the People- of the United States, have not coupled the payment of their public debt with the destruction of the protection of their industry....If it is to be attended or followed by the subversion of the American system, and an exposure of our establishments and our productions to the unguarded consequences of the selfish policy of foreign Powers, the payment of the public debt will be the bitterest of curses. Its fruit will be like the fruit:
Of that forbidden tree, whose mortal taste Brought death into the world, and all our woe, With loss of Eden.
...When gentlemen have succeeded in their design of an immediate or gradual destruction of the American System, what is their substitute? Free trade! Free trade! The call for free trade, is as unavailing as the cry of a spoiled child, in its nurse's arms, for the moon or the stars that glitter in the firmament of heaven. It never has existed; it never will exist....[i.e. there is no fairness in “free” trade]
Gentlemen deceive themselves. It is not free trade that they are recommending to our acceptance. It is, in effect, the British colonial system that we are invited to adopt; and, if their policy prevail, it will lead, substantially, to the recolonization of these States, under the commercial dominion of Great Britain.
....But, Sir, the gentleman to whom I am about to allude [Albert Gallatin], although long a resident of this country, has no feelings, no attachments, no sympathies, no principles, in common with our People. Nearly fifty years ago, Pennsylvania took him to her bosom, and warmed, and cherished, and honored him; and how does he manifest his gratitude? By aiming a vital blow at a system endeared to her by a thorough conviction that it is indispensable to its prosperity…
To [recommend] the…theories by Mr. Gallatin...to favorable consideration…[South Carolina's Senator Robert Y. Hayne] has cited a speech by my Lord Goderich, addressed to the British Parliament, in favor of free trade....I dislike this resort to authority, and especially foreign and interested authority, for the support of principles of public policy. I would greatly prefer to meet gentlemen on the broad ground of fact, of experience, and of reason; but since they will appeal to British names and authority, I feel myself compelled to imitate their bad example. Allow me to quote from the speech of a member of the British Parliament, bearing the same family name with my Lord Goderich...:
[The following is quote from Goderich cited by Henry Clay in his speech] “It was idle for us to endeavor to persuade other nations to join with us in adopting the principles of what was called 'free trade.' Other nations knew...what we meant by 'free trade' was nothing more nor less than...to prevent them, one and all, from ever becoming manufacturing nations....The policy that France acted on, was that of encouraging its native manufactures, and it was a wise policy; because if it were freely to admit our manufactures, it would speedily be reduced to the rank of an agricultural nation; and therefore a poor nation, as all must be that depend exclusively upon agriculture. America acted too upon the same principle with France. America legislated for futurity -- legislated for an increasing population...since the peace, France, Germany, America, and all the other countries of the world, had proceeded upon the principle of encouraging and protecting native manufactures.”
[Henry Clay continues] But I have said that the system nominally called ‘free trade’...is a mere revival of the British colonial system, forced upon us by Great Britain during the existence of our colonial vassalage. The whole system is fully explained and illustrated in a work published as far back as 1750, entitled "The trade and navigation of Great Britain considered, by Joshua Gee"....In that work the author contends—
[The following is a quote from Joshua Gee cited by Henry Clay in his speech] “That manufactures, in the American colonies, should be discouraged or prohibited...we ought always to keep a watchful eye over our colonies, to restrain them from setting up any of the manufactures which are carried on in Britain; and any such attempts should be crushed in the beginning: for, if they are suffered to grow up to maturity, it will be difficult to suppress them....The advantages to Great Britain from keeping the colonists dependent upon her for their essential supplies...not one-fourth part of their product redounds to their own profit: for, out of all that comes here, they only carry back clothing and other accommodations for their families; all of which is the merchandise and manufacture of this kingdom....All these advantages we receive by the plantations, besides the mortgages on the planters' estates, and the high interest they pay us, which is very considerable; and therefore very great care ought to be taken, in regulating all affairs of the colonists, that the planters [plantation owners, namely in cotton] be not put under too many difficulties, but encouraged to go on cheerfully’."
Thus, as Henry Clay makes the point most abundantly clear, it was well known by the British system advocates of free trade that this had always as its intention the ruination of other nation’s manufacturing industries and to reduce them to a state of a colony, a raw materials exporter, namely agricultural production, the natural outcome being plantations reliant on cheap labor and slavery.
As we can see, already by Henry Clay’s time the South was strongly aligning with British free trade interests and was reducing itself to a raw materials exporter, namely cotton, despite this being utterly against their own welfare and interests to which there continues to be confusion over to this day.
In order to clear the matter up in a few sentences, I would like to share a quote from Lord Robert Cecil, who later became Marquess of Salisbury, a very prominent position in British peerage and who served three times as Prime Minister of Britain. He had this to say in Parliament during the American Civil War:
“The Northern States of America never can be sure friends because we are rivals, rivals politically, rivals commercially…With the Southern States, the case is entirely reversed. The population are an agricultural people. They furnish the raw material of our industry, and they consume the products which we manufacture from it. With them, every interest must lead us to cultivate friendly relations, and when the war began they at once recurred to England as their natural ally.”
It was the battle between these two opposing economic schools of thought, that of the British System vs. the American System which led the country into the most bloody and costly war it has ever fought, the American Civil War.
With this I will end the first instalment to this overview of leaders of the American System due to the length of this paper. The second instalment will focus on Henry C. Carey and William McKinley which will incontestably clarify for the reader how the present application of tariffs that is being executed today within the United States is in fact not of the same school as the American System leaders. The second instalment will be published soon.
[1] The full title of Swift’s 1720 pamphlet was: “A proposal for the universal use of Irish manufacture, in clothes and furniture of houses, etc, utterly rejecting and renouncing every thing wearable that comes from England”
[3] Slave Market Archived March 6, 2013, at the Wayback Machine. Mapping the African American Past, Columbia University.
[4] Peter Alan Harper (February 5, 2013). How Slave Labor Made New York Archived January 31, 2021, at the Wayback Machine. The Root. Retrieved April 21, 2014.
[5] Addresses of the Philadelphia Society for the Promotion of National Industry
[9] The Tariff of 1824 was a protective tariff in the United States designed to protect American industry from cheaper British commodities, especially iron products, wool and cotton textiles, and agricultural goods.
The second protective tariff of the 19th century, the Tariff of 1824 was the first in which the sectional interests of the North and the South truly came into conflict. The Tariff of 1816 eight years before had passed into law upon a wave of American nationalism that followed the War of 1812. But by 1824, this nationalism was transforming into strong sectionalism. Henry Clay advocated his three-point "American System", a philosophy that was responsible for the Tariff of 1816, the Second Bank of the United States, and a number of internal improvements. John C. Calhoun embodied the Southern position, having once favored Clay's tariffs and roads, but by 1824 was opposed to both. He saw the protective tariff as a device that benefited the North at the expense of the South, which relied on foreign manufactured goods and open foreign markets for its cotton to which they sold to the British and relied upon cheap labor and slavery.
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