§ 15. Some lessons from our tariff history. From the checkered course of tariff history in America it is difficult to draw clear lessons of wisdom for the future; but at least certain negative conclusions may be safely drawn. It is a history of a vacillating public opinion toward the policy of protective duties. Always the policy has kept some hold on public sentiment, but it has varied in strength, now waxing, now waning. The time of revisions has been determined nearly always by varying needs of revenue. When more income has had to be raised, this has nearly always been made the occasion and pretext for increasing the degree of protection for many industries. This is not at all a necessary connection, for it would be possible to couple internal revenue taxes and customs duties in such a way that the rates would go up and down together and give the varying amounts of revenue required for the government without appreciably altering the relative profitableness of various private enterprises. Now that customs duties are no longer the chief source of revenues for the federal government, and are outweighed many times in fiscal importance by income taxes and internal revenues, the question of fostering favored industries should be more easily kept distinct from that of raising public revenues.

Our tariff history is too largely a record of special favors granted to classes of citizens, to citizens of certain localities, and to particular enterprises. This is apparent even in a general survey, but almost every more detailed examination of particular protective rates reveals evidence of suspicious and sometimes scandalous personal influences at work. The protective policy has always professedly been advocated for the general welfare, to raise wages or to make the country prosperous; but the initiative has always been taken, and the valiant work in contributing funds for campaign purposes and in lobbying bills through Congress has been done, by the interested manufacturers. Even if it were beyond question sound in principle to exclude goods that can be bought more cheaply by trade, it is very doubtful whether any net good could have resulted from this policy as it has been in fact applied and followed. The frequent and unpredictable changes have been a great evil, and have again and again brought unmerited losses to the many in business and still greater and unearned gains to a favored few. It is incredible that such a hit-or-miss, in large part selfishly determined, policy could have been an important cause of our national prosperity. The fundamental causes of the general high wages and popular welfare that we have enjoyed is to be found rather in our rich natural resources, our capacity for self-government with free institutions, and the industrial energies of our people.17

17 See Vol. I, e. g., pp. 228, 431, 445ff, 466, 490, 506ff.

References

Whitaker, A. C., Foreign exchange. New York. Appleton. 1919. Daniels, W. M., The elements of public finance. Pt. II, ch. VII.

N. Y. Holt. 1904. Johnson, E. H., The effect of a tariff on production. Q. J. E., 18:

135-137. 1903-1904. Patten, S. 2V., The economic basis of protection. Phil. Lippincott.

1890. Wallace, H. B., A balanced tariff. A. E. Rev., 2: 568-575. 1912.