July 27, 2018
Pat Buchanan argues that Tariffs made the United States great and while I may not agree with his overall conclusion he makes a great point.
Tariffs were intended to be the sole source of revenue for the U.S. and as such acted as a limiting factor in the growth of the central government.
Anyway, Buchana argues; "As our Revolution was about political independence, the first words and acts of our constitutional republic were about ensuring Americaâ€™s economic independence.
"A free people should promote such manufactures as tend to render them independent on others for essentials, especially military supplies,â€ said President Washington in his first message to Congress.
The first major bill passed by Congress was the Tariff Act of 1789.
Weeks later, Washington imposed tonnage taxes on all foreign shipping. The U.S. Merchant Marine was born.
In 1791, Treasury Secretary Alexander Hamilton wrote in his famous Report on Manufactures: "The wealthâ€¦independence, and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nationâ€¦ought to endeavor to possess within itself all the essentials of national supply. These compromise the means of subsistence, habitation, clothing, and defence.â€
During the War of 1812, British merchants lost their American markets. When peace came, flotillas of British ships arrived at U.S. ports to dump underpriced goods and to recapture the markets theyâ€™d lost.
Henry Clay and John Calhoun backed James Madisonâ€™s Tariff of 1816, as did ex-free traders Jefferson and John Adams. It worked.
In 1816, the U.S. produced 840,000 yards of cloth. By 1820, it was 13,874 thousand yards. America had become self-sufficient.
Financing "internal improvementsâ€ with tariffs on foreign goods would become known abroad as "The American System.â€
Said Daniel Webster, "Protection of our own labor against the cheaper, ill-paid, half-fed, and pauper labor of Europe isâ€¦a duty which the country owes to its own citizens.â€
This is economic patriotism, a conservatism of the heart. Globalists, cosmopolites, and one-worlders recoil at phrases like "America First.â€
He's right, in that America rose with tariffs. At worst they did no major harm.
What gives them a bad name is Smoot-Hawley, which started a trade war at the exact wrong time and ushed in the Great Depression. Tariffs have had a bad name since, but the fact is they were not responsible for the Great depression - the Federal Reserve contracted the money supply by one quarter and Hoover raised taxes all around at that same time, as well as imposed governmenht regulations. It was a perfect storm. Oh, the tariffs did hurt,, but they were secondary to the Keynsian style of economic policy promoted by Hoover, a man whom Calvin Coolidge mocked as "the Wonder Boy".
Anyway, this is a worthwhile read, even if you do not agree with him.
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