Tariffs, South Carolina, and the Compromise of 1833
In the late 1820s, a protective movement in America had taken a strong hold in the agricultural states of the middle and the west, including New York, New Jersey, Pennsylvania, Ohio, and Kentucky. Despite objections in the Northeast, the Tariff of 1828, later denounced in the South as the “Tariff of Abominations”, placed a hefty duty of 38% on more than 90% of all imported goods. The tariff gave a huge boost to American industries like the iron market but led to a growing belief that the federal government was using tariff policy to favor northern manufacturing interests at the expense of southern agriculture.
Ultimately, nobody was happy, and each side blamed the other. In 1830, Andrew Jackson's Vice President, John C. Calhoun, led an effort to demand that the tariffs be reduced. Calhoun was from South Carolina, where the crisis reached its peak. Opponents of the tariff invoked state sovereignty and attempted to nullify the federal tariff. The resulting Nullification Crisis forced Congress to choose between confrontation and compromise. Former president John Quincy Adams worked with both Calhoun and Henry Clay to push through the House a compromise bill that would reduce the tariffs. On July 14th, Adams succeeded, and Congress passed the bill, which was to go into effect on March 3, 1833, but the reduction was too little for Calhoun and his supporters. The Compromise Tariff of 1833 placed all duties on a gradual downward schedule, ultimately reducing tariffs to a uniform level of about 20 percent by 1842. Politically, this was a decisive victory for the South. Protective tariffs were dismantled, and the federal government accepted tariff reduction as settled law. The battle was over, tariffs were defeated, but the war over the economic use of tariffs and who bore their burden remained deeply contested.
American View of Tariffs in 1830
To better understand the battle over tariffs, we need to understand the worldview of early 1800s America and how they viewed tariffs. We get a glimpse of this view in the August 30, 1830 issue of Niles’ Weekly Register. Writing in response to southern claims that tariffs “robbed the planter of sixty out of every hundred bales of cotton,” the author rejected the idea that tariffs fell primarily on rural producers or subsistence households. Instead, he argued that tariff burden followed patterns of consumption, not land ownership or agricultural output. As Niles observed:
“The family of any respectable mechanic in that city, will use more of coffee, sugar, tea, and other highly taxed articles, than is given to a hundred field slaves—and one day’s wages more tax on his clothing, wines, &c. and groceries, than is paid for the entire family of any prudent cotton planter for himself and household… where those who own the land also guide the plough, and ‘live at home’—mainly fed and clothed with the products of their own soil.”
This passage reveals an important aspect of their worldview. In the early nineteenth century, large portions of the population, especially in rural areas, were only partially integrated into markets—they lived off the grid. Poor and working-class Americans often grew their own food, produced their own clothing, distilled their own spirits, and relied on barter or local exchange. They relied very little on imported goods, and therefore tariffs had little impact on them. The Niles author reinforced this point by noting that even those who lived in comfort and wealth were untouched by the tariff:
“There are thousands of wealthy farmers in Pennsylvania, who live on the ‘fat of the land,’ and are as well clad as they desire to be—and, perhaps, do not pay more dollars a year for foreign taxed articles, making the whole of their substantial clothing in their own families, with all their own spirits and wines…”
In this understanding, tariffs were not household taxes in the modern sense. They were commercial imposts, experienced most acutely by urban, market-dependent populations who purchased imported goods regularly. This helps explain why tariffs were widely viewed as falling more heavily on wealthier consumers even if that perception conflicted with southern political rhetoric.
Political Victory for the South, Economic Victory for the North
The Compromise Tariff of 1833 resolved the political crisis, but it did not validate the southern economic argument about tariff incidence. Congress reduced tariffs not because it accepted the claim that tariffs oppressed subsistence farmers, but because separation was intolerable. In this sense, the South won politically. But the economic consequences caused by tariff reduction are a different story. Lower tariffs reduced trade barriers, expanded imports, and stimulated commercial activity. Urban areas with ports, manufacturing towns, and financial centers benefited from increased trade, cheaper imports, and new flows of capital. The same cities that Niles identified as bearing much of the tariff burden were also the places that gained most from tariff reduction. Thus, political power and economic benefit did not align. The southern planter secured tariff reduction through constitutional pressure, while urban America reaped much of the economic expansion that followed.
Van Buren’s Warning in 1839
By the time Martin Van Buren delivered his 1839 State of the Union address, tariff reduction was no longer a matter of debate. Van Buren had no intention of changing what had become law, and what concerned him was declining revenue and spending discipline, not trade policy itself. In 1839, customs duties still constituted most of the federal income. Van Buren warned Congress that declining tariffs would materially reduce revenue just as the nation was recovering from the Panic of 1837. He projected that tariff reductions alone would cut federal receipts by millions of dollars annually and insisted that this reality demanded “rigid economy.”
Van Buren’s concern was practical, as he emphasized that the federal government must remain unencumbered by debt to act decisively in moments of crisis. Borrowing in peacetime, he warned, had repeatedly led nations into permanent financial dependence. His solution was not to restore protective tariffs, but to reduce spending and align government scale with revenue. America had to resist the temptation to substitute borrowing for discipline. This warning was not based on liberating families from the burden of tariffs, but on tariffs as a commercial revenue base and constraining the Treasury to that base. If tariffs remained low, then Van Buren warned that deep federal spending cuts would be needed.
Here is the Van Buren’s warning from his 1839 State of the Union address:
“These considerations can not be lost upon a people who have never been inattentive to the effect of their policy upon the institutions they have created for themselves, but at the present moment their force is augmented by the necessity which a decreasing revenue must impose. The check lately given to importations of articles subject to duties, the derangements in the operations of internal trade, and especially the reduction gradually taking place in our tariff of duties, all tend materially to lessen our receipts; indeed, it is probable that the diminution resulting from the last cause alone will not fall short of $5,000,000 in the year 1842, as the final reduction of all duties to 20 per cent then takes effect. The whole revenue then accruing from the customs and from the sales of public lands, if not more, will undoubtedly be wanted to defray the necessary expenses of the Government under the most prudent administration of its affairs. These are circumstances that impose the necessity of rigid economy and require its prompt and constant exercise. With the Legislature rest the power and duty of so adjusting the public expenditure as to promote this end. By the provisions of the Constitution it is only in consequence of appropriations made by law that money can be drawn from the Treasury. No instance has occurred since the establishment of the Government in which the Executive, though a component part of the legislative power, has interposed an objection to an appropriation bill on the sole ground of its extravagance. His duty in this respect has been considered fulfilled by requesting such appropriations only as the public service may be reasonably expected to require. In the present earnest direction of the public mind toward this subject both the Executive and the Legislature have evidence of the strict responsibility to which they will be held; and while I am conscious of my own anxious efforts to perform with fidelity this portion of my public functions, it is a satisfaction to me to be able to count on a cordial cooperation from you.”
Federal revenue did tighten in the early 1840s, but despite Van Buren’s warnings, political pressure to increase tariffs began to rise again. Rather than continuing these deep spending cuts, the Whig-controlled Congress responded by raising tariffs again in 1842. Yet Van Buren’s warnings were eventually vindicated. As trade recovered and imports expanded, lower tariffs, especially after the Walker Tariff of 1846, produced rising customs revenue and boosted economic growth. Commerce in the urban areas flourished, manufacturing expanded, and the federal government avoided a permanent debt spiral. The danger Van Buren identified was not in tariff reduction itself, but in the transition. Revenue fell before it rose, and without proper spending discipline federal debt would spiral upward.
In the following paragraphs of Van Buren's address, he outlined the spending since 1836
- 1834–1835: “gross expenditures of seventeen and eighteen millions”
- 1836: “swelled to twenty-nine millions”
- 1837: “the expenditure to rise to the very large amount of thirty-three millions”
- 1838: “somewhat to reduce this amount”
- 1839: “will not in all probability exceed twenty-six millions”
- 1840 (estimates): “less than the expenditures of 1839 by over $5,000,000”
"At the time I entered upon my present duties our ordinary disbursements, without including those on account of the public debt, the Post-Office, and the trust funds in charge of the Government, had been largely increased by appropriations for the removal of the Indians, for repelling Indian hostilities, and for other less urgent expenses which grew out of an overflowing Treasury. Independent of the redemption of the public debt and trusts, the gross expenditures of seventeen and eighteen millions in 1834 and 1835 had by these causes swelled to twenty-nine millions in 1836, and the appropriations for 1837, made previously to the 4th of March, caused the expenditure to rise to the very large amount of thirty-three millions. We were enabled during the year 1838, notwithstanding the continuance of our Indian embarrassments, somewhat to reduce this amount, and that for the present year (1839) will not in all probability exceed twenty-six millions, or six millions less than it was last year. With a determination, so far as depends on me, to continue this reduction, I have directed the estimates for 1840 to be subjected to the severest scrutiny and to be limited to the absolute requirements of the public service. They will be found less than the expenditures of 1839 by over $5,000,000. The precautionary measures which will be recommended by the Secretary of the Treasury to protect faithfully the public credit under the fluctuations and contingencies to which our receipts and expenditures are exposed, and especially in a commercial crisis like the present, are commended to your early attention.
Conclusion
Today, Martin Van Buren’s warnings from 1839 may make little sense to us but placing them in the proper context of 1839 brings them to life. In 1839, Americans did not view tariffs as household sales taxes. They understood them as an indirect commercial tax, spread unevenly through patterns of consumption shaped by geography, class, and market participation. The South won its political fight over tariffs, but the economic expansion that followed favored the cities. Van Buren’s concern was not trade, but good governance: how the federal government should adjust its spending habits when its primary revenue source declines. In that light, modern Americans can relate to his warning of economy, restraint, and the prevention of debt.
References
“Article on Tariff Burden and Cotton Planters.” Niles’ Weekly Register, 30 Aug. 1830.
Van Buren, Martin. Third Annual Message. 1839. The American Presidency Project, https://www.presidency.ucsb.edu/documents/third-annual-message-4. Accessed 12/26/2025.
“1832: Andrew Jackson — Tariff of 1832.” State of the Union History, Oct. 2019, https://www.stateoftheunionhistory.com/2019/10/1832-andrew-jackson-tariff-of-1832.html. Accessed 12/26/2025.
“1828: John Quincy Adams — British Manufactures and the Tariff of 1828.” State of the Union History, July 2018, https://www.stateoftheunionhistory.com/2018/07/1828-john-quincy-adams-british.html. Accessed 12/26/2025.
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