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The tariff bill of 1832 disappointed the pro-tariff Henry Clay, but it also disappointed the anti-tariff Nullifiers. They had hoped that with their proclamation of the principal of Nullification, and the Vice President being the author of the principal, and Jackson's partial tendencies towards States rights -- Jackson and the Congress would go a long way in their direction. But the reduction of the tariff was too little, Calhoun was losing power, and Jackson, with his stance of "The Union must and will be preserved" was on his way to reelection.
On October 22 1832, the South Carolina legislature declared a convention on November 19, to decide whether the state would, according to Calhoun's formula, Nullify the new tariff. The convention did declare the law null in South Carolina, by a vote of 136 to 26.
Actually, they said the law will become "null", and "no law" after February 1, allowing two months to work out a compromise. The South Carolina legislature also took Robert Y. Hayne out of the Senate and made him governor, replacing a more radical nullifier, while Calhoun resigned the Vice Presidency to replace Hayne in the Senate. This all suggests they were looking for a way out the tight spot they had put themselves in.
On December 11, 1832, Jackson published a proclamation giving strong constitutional arguments, written by the Secretary of State Livingston, "... I consider then, the power to annul a law of the United States, assumed by one State, incompatible with the existence of the Union, contradicted expressly by the letter of the Constitution, unauthorized by its spirit, inconsistent with every principle on which it was founded, and destructive of the great object for which it was formed".
It ended in a strong plea and threat which was mostly pure Jackson: "Those who told you that you might peaceably prevent [the execution of the laws] deceived you; they could not have been deceived themselves... Their object is disunion. But be not deceived by names. Disunion by armed force is treason. Are you really ready to incur its guilt? If you are, on the heads of the instigators of the act be the dreadful consequences; on their heads be the dishonor, but on yours may fall the punishment. On your unhappy State will inevitably fall all the evils of the conflict you force upon the Government of your country... I adjure you ... to retrace your steps."
Most of the nation responded to this with wild enthusiasm. Jackson claimed he could have 100,000 men on the side of the Union in a matter of weeks. Still, the South Carolina legislature authorized its Governor to call a draft, and appropriated $200,000 for arms. Jackson's actual military moves were on a fairly large scale, but careful, and calculated to avoid confrontation while negotiations went on.
Meanwhile a battle went on in Congress. Jackson was skillfully wielding threats and promises. On January 8, the administration submitted a bill, known as the Verplanck bill after one of Van Buren's allies, which cut the tariff in half over two years. On the 16th Jackson also sent to Congress the "Force Bill" (often called the "Bloody Bill"), to get Congressional approval for deploying the military to put down armed rebellion. It was another ringing Jacksonian propaganda document, and made Jackson the "first and only statesman of the early national period to deny publicly the right of succession (Remini, Life... p246)".
The Verplanck Bill was rejected by Nullifiers and Clay's pro-tariff men. Then came a move to save Calhoun's face and take credit away from Jackson. Clay stood up to propose a "Compromise bill", and was seconded by Calhoun. The bill was, in fact, much less of a tariff reduction (at least until nearly 10 years out) than the administration bill. Clay got a friend in the house to deftly swap his bill for the Verplanck bill and it was quickly passed, taking the administration by surprise. The Senate then passed this bill with the nullifiers perversely lending their support.
Meanwhile the Force Bill had passed in the Senate 32-1, with nearly all the nullifiers having walked out to avoid casting any vote. And on March 1, the Senate passed the "Compromise Tariff" and the House passed the Force Bill 149-48.
In South Carolina, with such face saving as the revised tariff gave them, the legislature rescinded the nullification proclamation against the tariff. They also declared the Force Bill to be null - a petty act since Jackson no longer had any need for a Force Bill.