Middle Ages, all countries were for protection. Agitation set in during the latter part of the eighteenth century. 1774. France tried free trade. 1776. Adam Smith's Wealth of Nations proclaimed free trade, and had immense influence in forming public opinion throughout the world. 1789. An act was passed by the newly formed Congress of the United States government, for the levying of duties upon foreign goods imported into the country. Its purpose was mainly for the support of the government. 1806. During a war between France and Great Britain, the British government issued an "Order in Council," declaring the coast of Europe from Brest to the Elbe in blockade. In the same year, Napoleon, by his "Berlin Decree," declared the British Isles under blockade. 1807. Great Britain issued a new Order in Council," forbidding American and other neutrals to carry any products to France, except on the two conditions, that vessels carrying such products undergo search by British authorities for contraband goods, and that they enter a British port and pay duties on the cargoes. In the same year, Napoleon issued his "Milan Decree," commanding the seizure of any vessel which should conform to the ruling of the last "Order." 1807. Subsequent to the issue of the 1807 "Order in Council," Congress, at the suggestion of President Jefferson (1801 1809), passed the Embargo Act, which closed our ports to all trade with foreign nations. 1808-1809. This act was further strengthened by additional legislation. Our exports fell in a single year from $49,000,000 to $9,000,000. 1809. To prevent smuggling, the "Force Act" was passed. It prohibited the loading of any vessel except by permit, and allowed the seizure of any produce or goods on their way to the seacoast, unless the owner gave bonds that they should not be sent out of the country. The act was enforced by the use of United States land and naval forces and state militia. The Embargo Act had a great economic effect on the country. Labor and capital were forced into home manufactures. Cotton mills, shoe, hat, and other factories were started, and many important industries were opened up. 1809. Towards the end of the year, the Embargo Act was repealed and replaced by the Non-intercourse Act, which opened our ports to all nations except France and England. 1812-1815. The war with England caused a withdrawal of foreign competition. As a result, our home industries, especially our textile manufactures, grew rapidly. 1815. The war ended, and imports began again. The newly started industries met the competition of foreign producers, and, to save them, protection was found necessary. 1816. By the tariff of 1816, the customs duties on imports were raised, especially those on cottons and woolens. The tariff then became protective, and has with slight exceptions remained so down to this day. 1824. Henry Clay advocated protection for protection's sake, and caused to be passed in Congress a new tariff, which fixed the average scale of duties at thirty-three and one third per cent. 1828. A new tariff bill was passed, increasing the previous average rate from thirty-three and one third per cent to forty-five per cent. This bill was violently opposed by the South. 1831-1832. Additional duties were laid on manufactured goods. 1833. A compromise tariff became law. It provided for a gradual reduction of duties during the following ten years. The tariff was brought about by the agitation in the South. There the cotton producers felt the restriction put upon their produce, because of the lessening of demand of foreign cotton mills, which was the result of the high imposts. The duties gradually reached a twenty per cent level. (Cf. E. L. Bogart, The Economic History of the United States, p. 153.) The result was the suspension of many factories and a general depression in trade in 1837-1842. 1840. A protectionist president (Harrison) was elected. 1845. The compromise tariff was repealed, and a new tariff act passed which raised the duties. 1846. England adopted free trade. 1846. The Walker tariff, intended chiefly for revenue and not protection, became law. The rate was about twenty-four per cent. 1857. The duties were still further lowered. 1861. The Morrill tariff act restored duties to the status of 1845 and increased the duties on iron and wool. The Southern Confederacy adopted free trade in its constitution. 1861-1865. Civil War. 1862-1864. "War tariffs" taxed every import. Almost every domestic product was taxed, and a corresponding compensatory duty imposed on imports. The average tariff rate was 40.29 per cent. 1865. Taxes were reduced. 1867. The Senate voted to repeal the tariff. The House opposed. 1870-1872. Tariff rates were reduced and the free list greatly enlarged. 1883. The tariff was revised, some taxes being lowered and some raised. 1888. The Mills bill proposed placing wool on the free list. The bill failed of enactment into law. 1890. The McKinley tariff was adopted. The duties averaged 48.2 per cent, and power was given the President to impose duties on free articles, when countries entering these free articles levied unreasonable duties on our goods. 1894. The Wilson-Gorman tariff was adopted. It made the average rate 37 per cent. Wool, copper, and lumber were on the free list. 1897. The Dingley tariff was enacted. Copper was made free, the steel duty lowered, wool and lumber were taxed. The duties were in general made higher. 1908. More or less agitation had been going on during the past decade on the subject of the tariff. Special interests in special parts of the country had sought a reduction of the existing tariff rates on certain commodities, and this agitation had become general throughout the country during the years immediately preceding, so that the government was led to institute an investigation into the matter. A Congressional Commission had before it, during the year 1908, manufacturers in various lines, and sought out facts that might lead to a change of tariff rates. The tariff question became a political issue in the presidential election which took place in this year, and both parties gave pledges of a revision of the tariff as the first step of the new administration. The Republican party won the election, and W. H. Taft became President-elect. 1909. President Taft assumed office March 4, and faithful to the pledge he had given prior to his election summoned an extra session of Congress to meet March 15, for the purpose of revising the tariff. The extra session was held at the time appointed, and after over four months' discussion in Congress, the Payne tariff became a law, August 5. Although disputed by some, the Payne tariff was generally admitted to be on the whole a slight advance of rates above those of the Dingley tariff. It reduced former rates on iron ore, lumber, and leather products, placed hides and works of art on the free list, advanced rates on cotton goods. Notwithstanding a few such changes, the new tariff practically left matters where they were before, bringing very little if any amelioration of the condition of the great mass of the people, the consumers. The new tariff contained provisions for a maximum and a minimum rate. The maximum rate was an increase of 25 per cent on all duties, and was to apply to all countries that discriminated against the products of this country.1 1912. During the preceding four years the high cost of living brought about a condition of popular unrest and dissatisfaction. The high prices were generally attributed to the tariff. Hence, revision of the tariff became the main issue in the presidential election campaign of this year. The Democratic party pledged itself to a reduction of the tariff, and a democratic President was elected. Both Houses of Congress were Democratic. 1913. On April 7, an extra session of Congress was called by President Wilson to make changes in the tariff. The Underwood bill was introduced in the House of Representatives, and, on March 8, was passed by that house by a vote of 281 to 139. The bill, if passed by the Senate, will make considerable changes in the Payne tariff. It puts on the free list all meats, raw wool, steel rails, and wood pulp. It greatly reduces the tax on sugar and removes that tax altogether after a period of three years. It lowers duties on articles of clothing, on machinery, and on live stock. To make up for the deficiency in the government revenue resulting from the reduction of the tariff, the bill provides for imposing a federal income tax on all personal incomes over a certain amount. 1 The same law provided for a corporation tax: A tax of 1 per cent was imposed on the net earnings of all corporations (excepting labor organizations, beneficiary societies, etc.) over and above $5000. Corporations were obliged to make annual reports to the Commissioner of Internal Revenue, stating their capital, income, losses, and expenditures. |