26 ChaPter^1
industries—such as the railroads, as we shall see—prior to 1860, it would
continue to foster Capitalism even more in Reconstruction and after.
Tariffs, as noted above, were one crucial element in the government’s sup-
port for Capitalism. Competition was dangerous to the young American
industries, which could not produce goods as efficiently, cheaply, or in the
quantities of the European countries that had already industrialized [such as
Britain, Germany, and France]. Cloth from Britain, for example, cost much
less than textiles made in Massachusetts because its industry had advanced
technologically and had more capital. But the government could artificially
balance the system by putting tariffs in place. Using the example above, a
tariff would be put on British textiles, so they would cost more, and American
consumers would find it cheaper to buy the goods made in Massachusetts or
elsewhere. Tariffs, however, did not help all American businesses. They were
intended to help northern industry, and this meant they would hurt agricul-
ture. To protest the tariffs, European countries would retaliate by placing high
tariffs of their own against American products coming into their ports, but
almost all exports from the U.S. were farm commodities [cotton, tobacco,
wheat and the like]. So farmers, especially in the South, carried the burden
of the tariffs [this, for instance, was the situation in 1828 when the dreaded
“tariff of abominations” passed and led to southern protests]. And, because
the tariffs protected northern industries, which could keep their prices high
because they did not fear European competition, the cost of farm equipment
was higher too. As a leading Republican, Benjamin Eaves, put it, “free trade
is a fiction.” In fact, the U.S. at that time was adopting policies that it today
bans in groups like the World Trade Organization! This was no free market,
but a government-designed plan to create and expand the industrial capitalist
system.
The Republicans, the party of northern Industrial Capitalism after the
Civil War, championed the tariff. Woodrow Wilson would later claim that
“the bills of the Republican Party were paid for by business men who want-
ed a high tariff.” Tariffs protected those capitalists against foreign competition.
William McKinley of Niles, Ohio, a congressman and later president, believed
that “the people of this country want an industrial policy that is for America
and Americans." But the Republicans publicly defended the tariffs [which
did cause higher prices because of that lessened competition] as a way to help
workers. James Blaine, a Republican speaker of the house and then senator,