The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1892-02-24
Tariff and Panics.

1ut JCmHct mus II uerlIdDle 10 IcudSu
the common claim OF protectionist writer's
that the low tariffs of 1883 and 1S46 pro-
duced the financial crises of 1887 and 1857
respectively. The claim is an old one and
has been exploded repeatedly. Prof
TAUSsIG, who is recognized as one of the
fairest and most impartial writer's on the
tariff, says OF this assertion as to the panic
OF 1887:
The assertion had its origin in the writ
ings of HENRY c. CASEY, who has been
guilty of many curious versions of eco
nomic history. but of none more remarka-
BILE than this. 1t may be found in various
passages in his works; and from them it
has been transferred to the writings of his
disciples and to the arguments of pro-
tectionist authors and speakers in general
Yet no fair-minded person having even a
superficial knowledge of the economic
history of these years can entertain such
notions. The crises of 1887 and 1889 were
obviously due to quite different set of
causes-to the bank troubles, the financial
mistakes of JACKsON's administration, the
initiation of the currency, and to those gem
eral conditions OF speculation and unduly
expanded credit which give rise to crises.
The tariff act had nothing whatever to do
with it. Indeed, the reductions in duty
under it, as we have seen, were slight I'M
til 1910, and could hardly have influenced
in any degree the breaking out of the
panlcs.
In fact this tariff was compromise act,
as the Journal comedies, and its provisions
could not fairly be called free trade, F"
even from the modern republican stand
point. Mr.. CALHOUN insisted that the
crisis was due to the duties being too high,
as they brought a large surplus into the
treasury, the disposition of which brought
on initiation and speculation. (CALHoUN's
works, vol. f., D. l75.) Mr.. CLAY. who
ought to have known something about it,
and who is very good protectionist au-
thority, denies expressly that the tariff of
1888 had anything to do with the crises OF
1887 and 1889. (CLAY's works, vol ,, p.
$780, The crisis of 1857 was much of tn e
same character. There are many men yet
living who remember the peculiar bank
ing system of those days and the evils that
resulted from wildcat currency, and they
know that the tariff was not the cause Of
that crisis The Hon. HUGH MCCULLoCH
is one of them and his testimony is very
clear and explicit to the fact that the
crises OF both 1887 and 1857 were due
to the currency and not to the tariff
("Men and Measures OF Halfa Century" p.
21S.) There is connection between the
two, however. The low tariff era OF 1916
1860 was one OF great prosperity, as has
been conceded by BLAINE, GARFIELD and
other republican leaders. 1t is we'll
known fact that protracted prosperity
usually brings on speculation and care
lessness of the common rules for safe cur
rency and safe credit. 1t is not surpris.
ing that such results had come in tho
eleven years that elapsed after the passage
OF the Walker bill.
But il the Journal desires an example OF
panic that people remember, we COM
mend to its attention the protracted one
OF 1S73-1S79. from which the country has
scarcely recovered yet. That did not oc-
cur under a low tariff act. 1t did not
have its origin in the ruin of the blessed
nome market" by British competition.
1t occurred under our policy of taxing
ourselves rich. with duties up to war
figures. 1t occurred after new discoveries
of gold and silver that eclipsed the orig
inal mines OF California. 1t occurred at
time when, according TO all protection
list theories a crisis was impossible. And
yet it was the most serious in its effects
that has ever been known in the country.
The Journal should issue an appendix to
it's article on the panic OF 1873.