The Tariff in our Times
9781465628954
118 pages
Library of Alexandria
Overview
If there was any public question on which the minds of the people of the United States were made up fifty years ago, it was that of the tariff. They had not been made up in a day. On the contrary, it had taken nearly seventy years of experimenting to bring them where they were—seventy years in which all forms of taxation on imported goods had been tried, from the supposed 8½ per cent of the first Congress to the 43 per cent of the “tariff of abominations” in 1828. Some of their experiments had been good and some bad, but out of them all they had struck a mean which was something like this: As a nation we intend to raise money to carry on our business by putting a duty on certain raw and manufactured goods brought from foreign countries. If we find we are getting too large a revenue we will cut down the duty, if too small we will raise it. In placing these duties we will do as Alexander Hamilton advised—that is, if there is a young industry in the country trying to produce something which is essential to war or on which our daily living depends, we will protect it from foreign competition until it is established—but no longer. For ten years the country had been working on this tariff platform, and so satisfied were they with it that when they found in 1857 they were taking in more money than they needed for expenses, they promptly passed a bill cutting the duties down to an average of 20 per cent—the lowest they had been since 1816. The duty on many articles they removed entirely—thus, cheap raw wool was allowed to come in free. Nobody, except the Pennsylvanians, and a few New Englanders, objected strongly to the bill; even the majority of manufacturers and old Henry Clay tariff men agreed. Henry Clay had told them that protective duties were never meant to be perpetual, and they looked upon this lowering of taxes as a natural step in the process of gradual extinction which they had been taught to expect. Not only was the mind of the country satisfied with lower duties and an increasing list of free goods, but it had accepted the idea that a Christian nation should establish as rapidly as possible reciprocal trade relations with its neighbors. For three years a reciprocity treaty between ourselves and Canada had been working. It was not as good a treaty as might be, and the Canadians were getting greater advantages from it than we; but it could be improved, and there was much pride in the country over the advance it was felt this treaty showed in national broad-mindedness and generosity. That was fifty years ago. To-day the average tax on dutiable goods imported into the United States is nearer 50 per cent than 20. Instead of reciprocity with Canada we have had for fifty years in many cases prohibitive protection. Why is this? What has become of the theories and practices of fifty years ago? The answer lies in a curious story—a story of a panic and a war and the natural penalties which panics and wars impose. The panic came first—in 1857, just after Congress had lowered duties to prevent the collection of more money than we needed for actual expenses. It was a logical enough panic—panics always are logical. For several years the country had been making money. It had lost its head over its growing wealth—had speculated, had built railroads faster than they were needed, had spent lavishly. Its expenses finally outran its income and a crash naturally came.
