To raise money for the War of 1812, the federal government imposes excise taxes and raises money before issuing Treasury notes. The government also imposes an extra tax on imported rum to discourage its consumption. In 1817, these taxes are repealed. It raises duties on imported goods so they will sell at higher prices than American-made goods. The tariff aims to discourage people from purchasing imported goods and encourage them to buy American goods.
Higher tariffs are unpopular in the South because they make needed products more expensive.
Due largely to Henry Clay of Kentucky, the Compromise Tariff is adopted by the federal government and accepted by South Carolina. It will gradually reduce tariff rates to their 1816 level. By the spring, it is clear that the War Between the States will be long and expensive. New excise taxes are adopted on such things as playing cards, gunpowder, feathers, telegrams, iron, leather, pianos, yachts, billiard tables, drugs, patent medicines and whiskey. In addition, many legal documents are taxed.