constituents , especially sheep farmers who produced raw wool . He embodied the free labor ideology of the antebellum Republican party . According to historian Eric Foner , “ In the free labor outlook , the objective of social mobility was not great wealth , but the middle-class goal of economic independence .” This remained Morrill ’ s perspective as he crafted fiscal policy .
Morrill is best known for the eponymous Morrill Land Grant Acts of 1862 and 1890 . He regretted that his formal education ended in his teens , and strove to provide the educational opportunity he missed to the “ sons of farmers to study agricultural and mechanical arts .” His land grant measures set aside federal land to create public colleges and universities and became the basis for the nation ’ s public university system . “ Justin Smith Morrill , more than any public figure in the 19th century , changed higher education in America ,” notes Peter McPherson , former president of Michigan State University . Promoting educational opportunity remained important to Morrill throughout his congressional career . As a member of the Senate Joint Committee on Public Buildings , in 1886 he wrote the bill that supported the construction of the main building that is now the Library of Congress , and he served as a regent of the Smithsonian Institution .
Morrill ’ s role as the primary author of both the internal revenue and tariff legislation enacted during the 37th and 38th Congresses remains his most profound , though little recognized , legacy . Before he took that role , he penned the Tariff of 1861 , otherwise known as the Morrill Tariff . Approved on May 18 , 1860 , then tabled , this bill was enacted after southern Democratic representatives and senators departed Washington during the secession crisis . President James Buchanan signed the tariff into law on March 2 , 1861 , during his final days in office . This tariff measure was distinctive for two reasons . First , the schedule relied on specific , as well as ad valorem , duties — a departure from the previous antebellum tariffs that were predominantly based on ad valorem rates . Relying on specific duties in tariff schedules became the pattern for tariff legislation throughout the remainder of the 19th century . Second , it was the antebellum tariff with the shortest duration . Within a month of becoming law , the Civil War erupted and the Morrill Tariff , often mischaracterized as a war measure ,
“ New Tariff on Dry Goods ” satirical illustration criticizing the Morrill Tariff in Harper ’ s Weekly , April 13 , 1861 .
was transformed to meet the fiscal needs of the Union .
The first wartime tariff revision was enacted on August 5 , 1861 , four months after the firing on Fort Sumter . This new bill imposed duties on coffee and tea , two items that had been on the free list ( list of imports admitted duty-free ), and additional duties were placed on sugar , salt and molasses . To balance the burden these import duties imposed , Morrill proposed an internal revenue bill that included the first income tax in US history . Morrill justified this measure as the “ most just and equitable ” tax to balance the imposition of additional costs on these “ necessaries of life .”
“ Ought not men with large incomes pay more in proportion to what they have than those with limited means who live by the work of their own hands ,” he asked in justifying the income tax . This legislation also revived the direct tax , last imposed during the War of 1812 . Direct taxes were apportioned through the states and relied on the valuation of land and personal property . The 1861 direct tax of $ 20 million included all states , even those that seceded . The new tariff schedule was implemented quickly ; however , the internal revenue measures were not put into effect . The infrastructure for the collection of internal taxes did not exist . Treasury Secretary Salmon P . Chase was reluctant to impose an invasive tax program upon a population at war , and many believed the war would be a short conflict . Instead , Chase went hat-in-hand to banks in New York , pleading with them to loan funds to the government . This first session of the Civil War Congresses closed on August 6 , 1861 .
When Congress readjourned on December 2 , 1861 , a more pessimistic mood had gripped Washington . The Union army had suffered military defeats , the Treasury was empty and the requisitions were approaching $ 2 million per day . Banks and financiers , who had reluctantly lent money to the government during the fall , suspended specie payments at the end of December and indicated they would no longer provide loans to the Treasury .
“ The credit of the nation is ruined , the ruin of the nation , inevitable ,” wrote a discouraged congressman to his wife .
www . MoAF . org | Fall 2024 | FINANCIAL HISTORY 25