610. Considerations determining early tariff policy.—The development of manufactures at this time gave rise, in the following period, to a demand for protection which marks a turning-point in the tariff history of the country. When the first national tariff was adopted, at the founding of the Federal government in 1789, the legislators had a difficult problem of policy to solve. They found the commerce of the country fenced in by foreign tariffs composed of high duties and of some actual prohibitions. They desired the reduction of these duties that American commerce might expand. Many of them expressed their belief in a policy of retaliation, if no other means availed to secure the reduction. At this time, however, the commercial position of the country was not strong enough to permit the tariff to be used as a weapon with which to menace foreign states. Other countries showed but a languid desire for the products which were then our staple exports, and we had great need of the foreign wares composing our imports. We could not afford even to discriminate against the importation of manufactured goods, with an idea of protecting native manufactures; our manufactures were then so weak that a policy of high protection, to exclude foreign wares, would have caused serious distress to the consumers at home.
611. Survey of tariff policy.—Barred by these considerations from a tariff of high duties, the legislators framed the first tariff mainly as a revenue measure. Comparatively few articles were placed upon the free list, duties being levied on articles like tea and coffee as well as on manufactured wares, which might possibly be produced at home. The general scale of duties was much lower than in foreign countries at the time, or in the United States later; it was estimated that an assorted cargo paid about 71⁄2 per cent. Of the results of the first tariff a recent investigator says: “The most careful examination fails to show that it affected the volume, variety, or direction of our foreign trade in the slightest degree.” In the course of the period the tariff was frequently amended, and rates were raised considerably; but the tariff continued to be used chiefly as a source of revenue, and was not seriously affected by protectionist ideas until after 1815.
QUESTIONS AND TOPICS
1. Prepare yourself for studying the policy of this period by mentally reviewing the present commercial policy. Does the government now encourage or discourage exports or imports? Does it grant favors to one foreign country over another? Do foreign countries prohibit or restrict trade with their dependencies? What is the present policy of this and other countries with respect to shipping?
2. When England excluded the United States from trade with the West Indies, what classes would be hurt, what classes would be helped, in England, in the West Indies, and in the United States?
3. Indicate on a rough sketch map the markets wholly or partially closed to American commerce about 1789.
4. Financial, military, and naval weakness of the United States in 1789. [Manuals and standard works on U. S. History.]
5. Make a chart first of the figures of total exports in sect. 601; then indicate the relative share of foreign and domestic exports. Leave room at the top or bottom, where the dates are written, to write in the chief historical events affecting the course of commerce in the period.
6. It has been generally believed that the adoption of the Federal Constitution led to a great growth in business and prosperity. Prof. G. S. Callender has suggested that the growth of prosperity, due to influences acting from outside America, caused, on the contrary, the Constitution to be popular and successful. What facts support this latter view?
7. Prepare a list of the dates showing the beginning and spread of the European wars, and insert on the chart as suggested above.