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HISTORY OF TARIFF LEGISLATION.
At the end of the eighteenth century the power to regulate trade and commerce with foreign nations was granted to Congress.
The first Tariff Act was signed by President Washington, July 4, 1789. It was a measure suggested by Alexander Hamilton, Secretary of the Treasury, and introduced in Congress by Mr. Madison, of Virginia, April 8, 1789, which imposed specific duties on forty-seven articles, and ad valorem rates of 712, 10, 124, and 15 per cent. on four commodities. The unenumerated bills were compelled to pay 5 per cent.
The second Tariff Act passed the House by a large majority, and the Senate without division. It was approved by President Washingion, August 10, 1790. In this Act the scale of duties was higher. The third Tariff Act, of May 2, 1792, which became effective in the following July, raised the duty on unenumerated merchandise to 72 per cent., and that on numerous articles paying 742 to 10 per cent.
The fourth Tariff bill, was passed June 7, 1794, and went into effect on July 1. It imposed numerous rates in addition to those already payable, some of them specific, and others 21 and 5 per cent. ad valorem.
Other Tariff measures were enacted on March 3 and July 8, 1797, and on May 13, 1800. These acts imposed additional rates, and there was a further increase of 242 per cent. on March 26, 1804, on all imports then paying ad valorem rates.
What is now known as a protective tariff was looked upon in an entirely different point of view by Alexander Hamilton. He considered a tariff an instrument of compensation and retaliation, and a like stand was taken by Jefferson in 1793, when he advocated countervailing foreign restrictions in case they could not be removed by negotiation. The greater number of restrictions upon commerce, however, which existed during Hamilton's time, have been removed.
A more liberal system of commerce prevailed during the wars in Europe, which was largely beneficial to the merchants of the United States. From time to time moderate increase in the rates of duties were granted, but no real demand for protection until the return of peace in 1801, when the old restrictive system was reënacted by Europe. The commerce of the country was so involved by the resumption of hostilities as to create a demand for retaliation. In 1805 the importation of British manufactures was prohibited. Later on, the Berlin and Milan decrees of Napoleon, followed by the English Orders in Council, closed the ports of Europe to neutral vessels, and caused much suffering among American ship-owners. Mr. Jefferson's administration retaliated for the outrages on our commerce by the embargo law passed in December, 1807. The result of this was, that the American people, prevented from obtaining their usual supplies from Europe, began to manufacture on their own account, rendered sure of a market by the war, and also by a doubling in all tariff duties, which was done in 1812 as a war measure.
The “ Tariff of 1812" passed the House of Representatives by a vote of 76 to 48, and the Senate by a vote of 20 to 9. Amendments to it were adopted on February 25, and again on July 29, 1813. On February 15, 1816, the additional duties imposed by the Act of 1812, were repealed, and additional duties of 42 per cent. to take effect on July 1, were substituted, but the law did not go into operation. From 1812 to 1816 the average rates on all imports was 32.73 per cent. The first of the protective tariffs, known as the Lowndes-Calhoun bill, was approved April 27, 1816, and took effect the following July. It was not altogether set aside until the administration of Mr. Polk in 1842, The ad valorem duties under it ranged from 7% to 33 per cent. The unenumerated goods paid 15 per cent., the manufactures of iron and other metals generally 15 per cent., the majority of woolen goods 25 per cent., with clauses establishing" minimums,” that is, in reckoning duties, 25 cents per square yard was to be deemed the minimum cost of cotton cloth; unbleached and uncolored yarn, 60 cents, and bleached or colored yarn, 75 cents per pound. These rates became prohibitory on the cheaper goods. The law was amended April 20, 1818, and on March 3, 1819. It had the support of New England and the Middle States, but the South was opposed to it. From 1817 to 1820, the average rates on imports was 26.52 per cent., from 1821 to 1824, 35.02 per cent., and from 1821 to 1824 on dutiable goods only 36.88 per cent. The necessity for providing for the interests on the heavy debt incurred by the second war with England was due to the general increase of duties.
The general tariff measure of Mr. Clay received the President's signature May 22, 1824, and went into effect July 1, ensuing. It passed both the House and Senate by a close vote. It could not be regarded as a political measure nor yet as a party question. Adams, Clay and Jackson all voted for it. Both the Southern and New England States were dissatisfied with the result, but as iron, wool, hemp and sugar received protection, a combination of the Western and Middle States received sufficient support to pass the bill. The average rate of duties under the law of May 22, 1824, was 37 per cent.
The financial crisis of 1825 caused by a great expansion in the paper circulation, and precipitated by extensive failures in London, gave the protectionists an opportunity to attribute the distress to the operation of the tariff of 1824. New England had heretofore opposed protection as hostile to her commercial interests. Manufactures were springing up in those States, and had made such progress as to create an entire change in public sentiment. In 1826 a petition came from Boston praying for higher duties on woolen goods in order to protect this industry in New England. In 1827 a bill to increase the duties on woolens passed the House but failed to become a law. A convention of wool growers and manufacturers was held at Harrisburg in July, 1827, at which the wool, woolen, hemp, flax, iron, glass and wood industries were represented and asked to be recognized in any scheme of protection. The tariff was made a leading issue in the presidential election of 1828.
The planters of the South sought to resist a policy which they claimed as benefiting the North at their expense, and the North and East became more earnest in demanding a continuance a system which, they alleged, had prompted them to put their capital into investments which must inevitably be ruined, unless the protective policy was maintained. As an outcome of the contention, a tariff bill drawn by Silas Wright, of New York, was passed by a vote of 105 to 74, the protective features of which he said were that "it was intended to turn the manufacturing capital of the country to the working up of domestic raw material, and not foreign raw material.
The tariff act of 1828 was known as the “Tariff of Abominations.” It was the immediate cause of the nullification movement. South Carolina protested against it as a “violation of State rights and one grossly unequal and oppressive.", North Carolina also protested against the law, and Alabama and Georgia denied the power of Congress to lay duties for protection. The tariff of 1828 had special reference to iron and wool and manufacture of wool. The duty on wool was 4 cents per pound and 40 per cent. for one year; then 4 cents and 45 per cent. for one year, then 4 cents and 50 per cent. The average duty on all goods from 1829 to 1832 was 47.81 per cent. and on all dutiable goods 51.55 per cent.
The tariff measure passed July 14, 1832, maintained all of the protective features of the tariff of 1828, while reducing or abolishing many of the revenue taxes. The tax on iron was reduced, that on cotton was unchanged, and that on oolens was increased, while some of the raw wools were made free of duty. It was known as “ The Modifying Tariff.” It was passed by the Whigs, and approved March 3, 1883. Vote in the House, 132 to 66; in the Senate, 32 to 16.
The Compromise Tariff of 1833 was introduced by Mr. Clay. It was intended as a substitute for all bills pending, and looked toward a gradual reduction in duties; of all duties which were over 20 per cent. by the act of 1832, one-tenth of the excess over 20 per cent. was to be struck off after 1835, and one-tenth each alternate year thereafter until 1841.
A Provisional Tariff bill by which the operations of the existing tariff were to be continued until August, 1842, passed the House but was amended in the Senate by a proviso postponing the distribution of the proceeds of the public lands until the same date. The bill was vetoed by the President on the grounds that the bill united two incongruous subjects; that the bill proposed to give away a fruitful source of revenue, and that it was in violation of what was intended to be inviolable as a compromise in relation to the tariff system. A general tariff act was passed without the obnoxious clause.
The Tariff of 1842 was a Whig party measure, and one of protection. It became operative on August 30, 1842, and changed all existing rates. It was amended in March, 1843, and became extinct December 1, 1846. New Eng. land and the Middle States strongly supported it. The South opposed it, and the West was a tie. The average rate of all imports under it was 26.92 per cent., and on dutiable articles 33.47 per cent.
The Polk-Walker Tariff of 1846, was approved by President Polk on July 30 of that year. Robert J. Walker of Mississippi, who was President Polk's Secretary of the Treasury, advanced the principles that “No more money should be collected than is needed for economical administration"; "the duty on no articles should exceed the lowest rate which will yield the largest revenue”; “ below such rate discrimination may be made, or for imperative reasons an article may be made free”; “luxuries should be taxed on the minimum rate for revenue"; duties should be all ad valorem and never specific"; "duties should be so imposed as to operate as equally as possible throughout the Union without respect to class or section. The bill passed the House by 114 to 95. In the Senate it was a tie, Vice-President Dallas giving the casting vote in the affirmative, but on its final passage the Senate stood 28 to 27. The West and the South supported and the East opposed the bill. The average duty on all imports was, from 1847 to 1857, 23.20 per cent., and on dutiable articles 26.22 per cent.
The Tariff of 1857 was approved on March 3 of that year. It made a still further reduction in duties and remained in force until April 1, 1861. It passed the House by a vote of 123 to 72, and the Senate 33 to 12. New Eng. land and the South united in securing its passage. The average duty on all goods from 1858 to 1861, was 15.66 per cent., and on dutiable articles 20.72 per cent.
The Morrill Tariff of 1861 was dissimilar to all previous bills, in that it made a distinction between goods imported from different parts of the world, and provided for a general system of compound and differential duties, specific and ad valorem. It passed the House May 11, 1860, by a vote of 105 to 64, and the Senate on February 20, 1861, by a vote of 25 to 14. It was an out and out protective tariff. It was several times changed during the war, from 1861 to 1865. Every year produced some revisions, and in 1879 there was a general modification of rates. Tea and coffee, taxed since 1861, were put upon the free list; the duties on cotton and woolen goods, wool, iron, paper, glass and leather were lowered about 20 per cent. The free list was enlarged, but the reduction was rescinded by the Act of March, 1875. The duty on quinine was abolished July 1, 1870. The average duty on all imports from 1862 to 1883 was 34.16 per cent., and on all dutiable articles 42.74 per cent.
The Commission Tariff was passed by the Senate March 2, 1883, and the House March 3, 1883. The vote in the Senate was 32 to 31, and in the House 152 to 116. This tariff act remained in force until October 6, 1890, when it was superseded, except as to tobacco and tin plate, by the McKinley Tariff bill.
The McKinley Tariff bill passed the House by a vote of 152 to 81, and the Senate by a vote of 33 to 27. Under it Senator Aldrich computed the average at 45.13 per cent., and Senator Carlisle computed the average at 60 per cent.-the highest in the history of the government.
The tariff averages are as follows: From 1791 to 1812, 19.58 per cent.; from 1812 to 1817, 32.73 per cent.; from 1817 to 1825, 26.52 per cent.; from 1825 to 1829, 47.17 per cent.; from 1829 to 1832, 47.81 per cent.; from 1832 to 1834, 28.99 per cent.; from 1834 to 1843, 19.25 per cent.; from 1843 to 1847, 26.92 per cent.; from 1847 to 1858, 23.20 per cent. ; from 1858 to 1862, 15.06 per cent.; from 1862 to 1884, 34.16 per cent.; from 1884 to 1890, 45.50 per cent.; from 1890, about 60 per cent.*
* For Cleveland's Tariff Message, text of the Mills and McKinley Bills, and further developments of Tariff legislation, up to the moment of going to press, see Appendices and Addenda, preceding Index.
UNITED STATES CUSTOMS DUTIES. LEADING ARTICLES IMPORTED, GIVING RATE OF TAXATION AT ENTRY BY
THE NEW TARIFF COMPARED WITH TARIFF OF 1883. The articles covered by the Tariff Act of 1890 number many thousands. The fol. lowing table embraces about 300 selected articles, being mainly those in most general use in the United States. * Indicates “When not otherwise provided for."
10 per ct. ad valorem. 10 per ct. ad valorem Free...
15c per lb. 85 per cent.
35 per cent. Free...
Free. 1's per lb.
1.6c and 1.8c lb. 40 per cent.
2e per lb. 10c per bushel 30c per bushel. 50 per cent.
10 per cent. 1c per lb.
2c per lb. 20c per gallon
20c per gallon. 35c
400 35 per cent.
40 per cent. 35
50 30c lb. and 50 per ct. 60c a lb. and 60 per et. 85
40 30 per cent.
60 per cent. 30
30 46 25
Free. 45 per cent
45 per cent. 30
40 $1 per ton
11c per cubic foot. 20 per cent
40 per cent. 4c per lb.
6c per lb. 25 per cent.
24.c line and 25 per ct. 25
50 per cent. 30c lb. and 50 per ct. 60c a lb. and 60 per ct 30 per cent.
50 per cent. 85
85 120 sq, yd. and 30 perct. 19c sq.yd. and 40 per ct. 8c 30
30 28c 450
40 4c per lb.
6c per lb. $2.50 lb. and 25 per ct. $4.50 lb. and 25 per ct. 30 per cent.
45 per cent. 135
60 400 lb. and 35 per cent. 49%c lb. and 60 per ct. Free...
Free. 75c per ton..
750 per ton. Free...
Free. 5c per lb
5c per lb. 45 per cent
45 per cent. 40