Germany's tariff policy has moved along somewhat different lines. At the beginning of the 19th century the present German Empire was a group of mutually antagonistic states so far as their tariff relations were concerned. The great problem was to unite them under a common external tariff and to abolish the local interstate tariffs. This was finally accomplished under the leadership of Prussia by the Zoll verein, which continued from 1834 to the es tablishment of the German Empire in 1871, when complete economic unity was effected. The tariffs under the Zollverein had been mod erate and now they moved still further in the direction of free trade, but in 1878 a change was made to protection which has since been carried further, covering agriculture as well as manufactures. The tariff has been made to serve political ends as well as industrial and fiscal purposes in Germany.
In the United States customs duties have been used from the earliest colonial period. Nearly every colonial assembly levied import duties for its own treasury in addition to those imposed by Great Britain in the execution of the Navigation Acts. They seem to have been levied for sumptuary, retaliatory or protective purposes quite as much as for fiscal ends. These colonial tariffs have been classified un der the following four heads: (1) tonnage duties or taxes on shipping; (2) export duties on tobacco and other colonial staples; (3) im port duties on slaves; (4) regular tariff sched ules in which wines and liquors were the most prominent items. These duties were generally low ad valorem duties ranging from 1 to 5 per cent, but even with these rates seem to have been largely evaded.
A national tariff act was made possible by the adoption of the Constitution and the first piece of legislation by Congress was the passage on 4 July 1789 of such an act. The main pur pose of this was revenue, but protection was also extended to certain industries which it was desired to encourage, as glass and earthen ware. The average rate of duty, however, was low, being about 81/2 per cent, but in those days distance was a• more effective barrier than it is to-day. No important changes were made until the Act of 1816, but in the meantime the Embargo and Non-intercourse acts and the War of 1812, which had interrupted foreign trade, had called into being manufactures of which it was now felt care should be taken. Ac cordingly this tariff act gave a substantial meas ure of protection to those industries most ex posed to foreign competition, namely, textiles, hats, cabinet wares, leather and paper. By 1824 other industries were demanding protec tion such as iron, wool, hemp, glass and lead and a general revision was made in the tariff, resulting in a raising of rates throughout the list but especially in the case of the articles named. For the next few years there was con
tinuous agitation of the tariff question, led by the woolen manufacturers who wished further protection. A convention of the friends of protection was held in Harrisburg in 1827 and systematic propaganda was carried on. The result was the tariff of 1828 which granted the highest protection yet accorded in any act, the chief beneficiaries being the cot ton and woolen industries. This of abominations,° as it was called, caused intense opposition both in the North and in the South, and it was replaced in 1832 by a more moderate act which eliminated the worst features , of the previous tariff and put the duties back at about the point where they were in 1824.
The opposition of the South, however, was too great to be appeased by any half-way meas ures and in the next year it flamed out in nullification. South Carolina declared the Tariff Acts of 1828 and 1832 null and void and not binding upon the State or its citizens. In order to placate the opponents of protection and at the same time prevent too sudden and radical a revision of duties, Clay introduced the so-called Compromise Tariff of 1833. This pro vided for a gradual reduction of all duties over 20 per cent to a 20 per cent level by an annual excision of one-tenth per cent until 1842 when they were all to be placed at that point. This agreement was carried out and the reductions took place according to schedule. Hardly had this been effected, however, than the protec tionists seized upon the decline in revenues which had followed the panic of 1837 as an excuse for another revision of the tariff, this time in the direction of much higher duties; in general, the Act of 1842 returned to about the level of the Act of 1832. By 1846 good times had returned, there was a surplus in the treasury and a Democratic President and Con gress were in office. They decided to make a radical change in the tariff policy which they enacted into law in the Act of 1846. This has often been called a free trade tariff, but it still retained a considerable protectionist flavor although the rates on the great bulk of com mercial products were reduced to between 15 and 30 per cent. The next few years were years of unparalleled business prosperity and commercial expansion and the revenues from import duties increased by leaps and bounds. The need of a reduction of revenue was so obvious that in 1857 another tariff measure was enacted lowering many of the duties and enlarging the free list. Before this act was fairly in effect, however, the panic of 1857 cut down importations to such an extent that a deficit resulted and accordingly in 1861 the previous duties were restored.