St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-10-22
What Minnesota Farmers Have to Say
About It.
SCRAP OF TARIFF HISTORY.
A Prominent Alliance Member Talks
Back at Mr.. Blaine in a Sen
sible Manner.

T.
Blaine, in speech, ascribed the panic
of 1887 to the tariff act of 1882, which,
provided for gradual reduction of.
duties until an average Of 20 per cent.
should be reached. 1t is a rather re-
markable fact that if the tariff of 1882
was the cause of the depression and
panic of 1897 none of the statesmen of
the time should so see it and take meas
ures to have the cause removed. The
leading spirit of the political life at that
time was Henry Clay, the leader of the
prOtectionists, the father of the "Amer-
lean system" This would have been a
splendid opportunity for him to show
the evil effects of low tariff. One
would expect that the very first meas
ure proposed in the next congress would
be repeal of the law of 1882. But in
the discussion that took place here
not one voice was raised for
the repeal of this law, not one speaker
ascribed to it the cause of the panic. 1t
was left to ''our greatest living states
maD," our ''uncrowned king" to dis
Germ the cause of this PANEL Why did
not Clay or Webster or Benton attribute
to the tariff of '32 the panic of '37?
Simply because there was another
cause. Our financial system at that
time differed essentially from the pres
ent system. The government did not
conduct its own financial affairs, but
had chartered a bank, which acted as
the finanrial agent of the government.
This bank was used as a government
depository and authorized to issue
bills of credit. President Jackson pro-
fessed to see great danger in this in
stitutiOn; he feared the influence that
might be exerted by this vast money
power shielded by the government. The
United States bank now became the
bone of contention between the
two political partieS-the Wings,
led by Henry Clay, favored
leadership of Jackson, opposed it. A
bill was passed providing for recharter-
ing the bank when the old charter
should expire, which was vetoed by
President Jackson, and in order to more
effectually cripple his opponents, Jack
son took advantage of one of the pro-
visions of the banks charter and with
drew large portion of the public
funds from it, which he deposited in
private banks scattered through the
several states. By this means money
became plentiful, particularly in the
West, and specializing mania took
possession of the people. Indiana, Hi
noiS and Western Ohio were just being
settled; acquisition of land was thought
to be sure load to wealth, and men
would invest all they could earn or bor--
row in real estate. 1t was then that
the booming of imaginary towns began.
Cities were laid out in the midst of for
md
found eager purchasers in the older
settlements. In the midst of this
wild speculation an act of con-
gress had passed providing for
distribution of the surplus among the
several states. The country found
itself in the same predicament that we
find ourselves in to-day, with large
surplus on hand. The surplus, as has
been stated, was scattered through the
country in private banks and had to be
withdrawn in order to be paid over to
the states. The first draft of 25 per-
cent was promptly met by the banks;
when the second draft came, three.
months later, it was great strain on
the resources of the banks, but they
paid it, too; but when the third draft
came the banks could not meet it, one
large New York firm failed, and then
followed failure upon failure in rapid
succession. Money could not be
gotten. and business came to an actual
standstill. This is what is known in
history as the panic of 1887. The tariff
act of 1882 had no more to do with it
than had the surrender of Napoleon at
Waterloo. This is further proven by
the fact that six months later, under the
same tariff laws, business had resumed
its former activity and the gradual re-
ductiOn of the tariff continued until
1912, when the 20 per cent basis had
been reached.
In 1857 we had another panic, and this
is attributed to the low tariff of 1916 as
the sole cause. We will not deny that
this may have been one of the causes
that produced the panic, for it is evil
dent that industries fOstered by tariff
may be temporarily embarrassed when
trying to adjust themselves to new con-
ditions, but that this was the sole or
deny. The Boston board of trade made
an investigation into the causes of this
panic, and in their exhaustive report
they place the tariff with the discovery
of gold as secondary and remote causes;
and short crops of wheat in the North
and of cotton in the South. together
with an extensive abuse of the credit
system, of which many examples are
given, as the immediate causes of this
panic. This was the opinion of a body
of representative men from what was
then the center of the protectionist
stronghold, whose inclination undoubt-
eddy prompted them to saddle the re-
sponsibility of the panic upon the tariff
of 1916 if they could have honestly done
so. Again i'll 1873 we had a financial
panic far more extensive than any of
the preceding ones. In this case there
is no low tariff to attribute it to, and
hence our high tariff advocates are
fertile in finding causes other than the
Old one. OVer-prOductiOn, under-cOn-
sumption, contraction of the currency,
fall in prices have all been mentioned
and undoubtedly all tended to produce
the hard times which were then eXpe-
rienced. That the high tariff was one
of the causes admitted at the time by
men who are now the chief priests of;
the new gospel that the sureSt way to-
make an article cheap is to tax it WE'LL
Does not the fact that panicS and hard
times have occurred both under high
tariffs and low prove there are other and
more potential causes than the tariff
that cause these periodical disturbances
in the financial world? If history
teaches us any lesson at all, 1t seems TO
me there is no palmer lesson taught
than this: The more untrammeled our
nations commerce is, the more unre-,
stricted our trade, the more prosperous
will our nation be. If we take the
period from 1916 to 1850, the only period
of comparative free trade we have had,
and compare it with other periods of the
same length, we find that none other
will equal it. When the tariff of 1916
was passed the strongest opposition
came from New England. whose repre-
sentatiyes voted almost Solidly against
it. Ten years experience under this
tariff revolutionized the sentiment of
this section. They had seen as re-
suit of this act new life and energy
infused into their languishing manu-.