American Tariff History 1

AMERICAN TARIFF HISTORY 1. Political and trade boundaries. 12. Prevalence of protective tariffs. § 3. Specific and ad valorem rates. § 4. Some technical feat ures of the tariff. § 5. The tariff, 1789-1815. § 6. The tariff, 1816 1845. 5 7. The tariff, 1846-1860. § 8. The tariff, 1881-1871. § 9. The tariff, 1872-1889. § 10. The tariff, 1890-1886. § 11. The Dingley tariff, 1897-1909. § 12. Sentiment favoring lower rates, 1908. § 13. The Payne-Aldrich tariff, 1909-1913. § 14. The Underwood tariff, 1913. § 15. Operation of the tariff, 1913-1921. § 16. The return to high tariff, 1921.

§ 1. Political and trade boundaries.

By international trade is meant, in general, trade between persons resident in different countries; comparatively rare is the case in which one of the two parties to a trade is a whole nation acting through its government as a unit (e. g., in the purchase of munitions of war in neutral countries). Outside of a com munistic group such as the family, trade is a necessary ac companiment of division of labor. As territorial division of labor began between neighboring tribes,' international trade was the earliest kind of regular interchange of goods. In deed, the very word "market" meant originally the bound ary between tribes. Thus, from primitive times when wan dering savages gave bits of flint or copper in return for salt or fish, individuals have sought to adjust their goods to their desires through trade with men of other political groups. With the progress of the world in the means of com munication and transportation, international trade has widened in extent and grown in volume.

Economic relations never have been coextensive with politi I See Vol. I, eh. 17, § 10.

207 cal relations. The economic groupings of men connected by a network of trades never have and never will correspond very nearly with political groupings of men bound together by common citizenship in particular states. Indeed, it is not uncommon for many of the residents in two adjoining states to trade far more with each other than they do with their own fellow citizens. Lawmakers and rulers from the beginnings of formal governments have constantly tried to hinder this kind of trade. They have done this chiefly be

cause of their belief that they could strengthen their states in political and economic ways, and could favor some of their citizens, by confining economic relations within politi cal boundaries—if not exclusively; more closely than when trade was left to take its natural course, guided by individual motives. The regulation of international trade, therefore, has always constituted an economic problem of great impor tance in the field of political action.

§ 2. Prevalence of protective tariffs. For a century and a half most serious students of economics have favored a larger measure of freedom, if not absolute freedom, in for eign trade. But the actual practice of most nations has never been in accord with the principles laid down by the philosophers. Great Britain alone among the larger coun tries has, since 1846, steadily pursued a low-tariff policy for revenue only, and her example has been most nearly followed by Holland and Denmark. Germany, which had always had restrictive duties, adopted still more protective measures un der Bismarck in 1879. France, Italy, and most of the other nations of Europe have strong protective tariffs. The United States has followed a restrictive policy since near the begin ning of the last century. The explanation of this contradic tion between precept and practice is not entirely simple. Great interests are affected by foreign trade, and certain of these interests are able to influence opinion and to dominate legislation. Free trade is not the most desirable thing for every one. The general policy of free trade between nations, as advocated by most economists since Adam Smith, has usually been rejected by the people and the legislators.

In its details American policy in tariff legislation under the Constitution has been varied and vacillating. The changes have been determined in most cases by motives of temporary partizan advantage or by the political activity of the immediate beneficiaries rather than by clear knowledge and consistent purpose of the electorate as a whole. Thus its lessons for the student are largely of a negative nature, but they well repay serious study.