The tariff of 1857 had been a law but a few months when a panic swept the country with its business failures and consequent treasury deficits. The protectionists realized this as a psychological time to increase duties, yet the sentiment for low tariffs was still too strong to warrant the attempt of any radical increases. Many suggestions were made, but the bill which was approved was one drawn by Representative Morrill, and is known as the Morrill tariff. It finally became a law in 1861. Ad valorem rates were raised to about the level of the Walker tariff, and many specific duties were substituted for former ad valorem ones. This Act also introduced the compensating feature, which continued to play an important part in tariff legislation. The increase in the duty on raw wool was met with a corresponding increase in the duty on manufactured woolens.
The advent of the Civil War, with its demands upon the treasury, increased the interest in tariff rates. Some slight modifications were made in 18G2, but primarily to compensate manufacturers for the burdens which the newly inaugurated excise tax had thrust upon them. Again in 1864 a hasty revision was made, by which rates were greatly increased, partly in the hope of increasing revenues, and partly to compensate for the increased burdens of the internal revenues. After the war some attempts were made to revise the tariff in both directions, but practically nothing was accomplished. In 1872 a flat reduction of 10 per cent was secured, and duties were removed from tea and coffee. The panic of 1873 was responsible for the addition, in 1875, of the 10 per cent which had been removed in 1872.
It was not long, however, before revenues were again excessive, and it became generally recognized that some tariff changes were needed. The appointment of a commission representing varied interests, in 1882, by President Arthur, was met with general approval. Despite the protectionist flavor which was to be found in the commission, it recommended an average reduction in the tariff of from 20 to 25 per cent. Congress proceeded to disregard the views of the commission, and passed a tariff law in 1883 which, if anything, still more firmly intrenched the principle of protection.
The McKinley Tariff. - The sessions of Congress which followed were the scenes of many tariff debates. The two parties were becoming more united in their stands - the Republican for protection, and the Democratic for low tariffs. The Democrats attempted many reductions, but were unsuccessful. The first real change in the tariff after 1883 was the McKinley Act, which became a law in 1890.
The McKinley tariff was a Republican measure, yet it purported to reduce revenues. This it attempted in two ways, by raising some duties so high as to make them prohibitive, and reducing others. The reductions were on certain iron and steel products, while raw sugar and some steel were put on the free list. The net result, however, was a greater intrenchment of the protective policy because of the large number of commodities upon which duties were increased. Bounties were granted on sugar produced in the United States, while the President was given power to levy duties upon sugar, coffee, tea, and some other articles in retaliation to any country which was unfavorable to the United States with her tariff laws.
Gorman-Wilson Tariff. - The McKinley tariff proved very unpopular and the tariff became the leading issue in the Presidential campaign of 1892. The Democratic successes augured for the adoption of tariff revision downward, and this attempt was made in the Gorman - Wilson law of 1894. This represented the first real lull in the steady march of protection since the Civil War. The changes, however, were much less than is generally supposed - the reduction of rates was so slight as to leave the principle of protection unscathed. It was such an unsatisfactory attempt to redeem pledges that President Cleveland refused to sign the bill, and allowed it automatically to become a law.
High Tariffs. - Much blame was attached to the Democratic administration and its tariff legislation for the industrial conditions following 1893. When the Republicans regained power in 1897 the passage of high tariff schedules was comparatively easy. This was accomplished in the Dingley tariff of 1897, the net result of which was the highest wall of protection the country had yet known. For a number of years little tariff discussion appeared, but a feeling gradually arose that the tariff was partly responsible for some of the increased costs of living, and that a downward revision was needed. The Republicans pledged themselves to this program, and offered the Payne-Aldrich Act in 1909 as the fulfillment of this pledge. Some rates were lowered while others were raised, so that the net result represented, as a whole, a revision upward rather than downward.
Lower Tariffs. - The election of a Democratic administration in 1912, pledged to lower tariffs, was looked upon as an indication of real reduction. The result was the Underwood-Simmons Act of 1913. The rates in every schedule were reduced, yet the measure came far from inaugurating a tariff for revenue only. Large additions were made to the free list, and the average rate of duty was materially decreased. The provisions of the bill are so complicated that they lack the clearness which tariff measures should possess. Provision was also made for an expert tariff commission to investigate and report upon tariff needs. The Great War, unfortunately, interfered with any results, whether good or bad, which might have resulted from this legislation, and consequently no judgment can be given as to the success of its trial.
Recent Legislation. - It was expected that the Republican successes in the election of 1920 would result in tariff modifications. The rapid decline in the prices of agricultural products, followed by the demand of the farmers for some form of relief, hastened the attempts to modify the tariff. Before the close of the Wilson administration Congress passed the Fordney emergency tariff bill, which the President vetoed, and which failed to pass over his veto. The subcommittees of the Ways and Means Committee of the House at once began to recast the bill for presentation to the Sixty-seventh Congress.
The emergency tariff bill, as it is called, was passed by Congress and signed by President Harding in May, 1921. The provisions of the bill are much the same as the one vetoed by President Wilson. It is not designed to produce revenue, but primarily to afford protection to the agricultural interests. Comparatively high duties are placed upon a large number of agricultural products. Some aid is extended to Eastern manufacturers through the antidumping provisions of the bill. This emergency tariff is presumably but temporary legislation, and Congress has promised a thorough revision of the tariff at a later date. It is difficult to predict just what this will be, but it is likely that some increase in tariff rates may be expected.
Import duties have always been an important source of revenue, but it must be concluded from the foregoing survey that the fiscal aspects have very seldom had controlling interest in the formulation of our tariff laws. Individual and sectional interests have always been reckoned with, and have shown their influence in the legislation. Nor can the tariff controversy be considered as settled, for the problems of reconstruction have only increased the importance of the tariff in fiscal and political discussions. The situation calls to mind a statement which the author remembers his great-grandfather to have made. He remarked that the first thing he expected to hear discussed when he awoke in the next world was the tariff.