Most Southerners happily supported "revenue tariffs" as a way of funding the Federal government but still avoiding the excesses of protectionism.
Their growth is paralyzed: whilst they are mere suburbs of Northern cities." (1) When the Confederacy formulated its new Constitution in April 1861, it reinforced its free trade image by prohibiting "any duties or taxes on importations from foreign nations to be laid to promote or foster any branch of industry." With the passage of the Confederate revenue tariff of 15 percent the following summer--significantly lower than U.S.
Virginia secessionists eagerly endorsed a Confederate "revenue tariff" that also would provide "incidental" protection, giving manufacturers in the Old Dominion an important advantage over Northern competitors.
Confederate Virginians, however, realized that a revenue tariff, however low, would offer important incidental protection for a wide range of goods.
tariffs were unconstitutional; only revenue tariffs
were constitutionally sanctioned.
But as I have argued ("The Myth of Free Trade Britain and Fortress France: Tariffs and Trade in the Nineteenth Century," Journal of Economic History 51 [March 1991]: 23-46) and subsequent research has revealed, the distinction between revenue tariffs
and protective tariffs is not easy to make.
Nowhere is this more evident than in his careful teasing out of Conservative and Liberal party positions on the tariff: on the one hand, the Conservatives were hesitant to embrace protectionism as long as renewal of reciprocity was still possible (and preferable to many) but responded quickly when the protectionist fever mounted; the Liberals, on the other hand, tried to steer cautiously (but unsuccessfully) among free trade, reciprocity, revenue tariffs, and selective "incidental protection.' Forster's discussion of the emergent business interest associations is insightful, especially in assessing the qualitative shift in government-business relations from individual special-pleading and political favoritism to group lobbying and policymaking.
Research findings that show significant gains in manufacturing activity before 1880 are consistent with a belief that the revenue tariff, struck at various levels from 15 to 17.5 percent during the 1850s, 1860s, and early 1870s, afforded sufficient protection (together with natural factors like transport costs) to promote Canadian manufacturing growth.