Free Republic
Browse · Search
General/Chat
Topics · Post Article

To: DoodleDawg; Kalamata
I suppose congratulations are in order; you have discovered the basic unfairness of protective tariffs. Well done for a rare, accurate summary of what was going on at the time.

Congratulations you are both wrong about tariffs. You stopped your little anti American worker story only half way through to completion. The situation is DYNAMIC and not STATIC. What happens after the price goes up is more domestic suppliers come on line because the profit margin is now artificially high. So the price pressure is now downward after the tariff with more Americans working/producing for a living and paying taxes. Get it? You do believe in the laws of supply and demand?

655 posted on 01/14/2020 3:59:16 AM PST by central_va (I won't be reconstructed and I do not give a damn.)
[ Post Reply | Private Reply | To 654 | View Replies ]


To: central_va
The situation is DYNAMIC and not STATIC. What happens after the price goes up is more domestic suppliers come on line because the profit margin is now artificially high. So the price pressure is now downward after the tariff with more Americans working/producing for a living and paying taxes.

No price pressure is upward because the price is set artificially high. Should an excess of manufacturers start forcing prices downward then other manufacturers will leave because they can't make the money they need. The supply part of supply and demand.

660 posted on 01/14/2020 5:36:59 AM PST by DoodleDawg
[ Post Reply | Private Reply | To 655 | View Replies ]

To: central_va
>>central_va wrote: "You stopped your little anti American worker story only half way through to completion. The situation is DYNAMIC and not STATIC. What happens after the price goes up is more domestic suppliers come on line because the profit margin is now artificially high. So the price pressure is now downward after the tariff with more Americans working/producing for a living and paying taxes. Get it? You do believe in the laws of supply and demand?"

In theory, yes, if you assume the tariff affected everyone equally. But other dynamics were in play. For example, the South could pay to ship protected manufactured goods down from the North, OR pay tariffs on imports. The imports, even with the tariffs, were typically cheaper than heavily-protected Northern goods, so the South paid a high percentage of the tariffs.

It is easy to get side-tracked by assuming the tariffs would affect the Northern consumer equally. But when you read the newspapers and speeches of that day, both North and South, they are almost unanimous in pointing to the North as the beneficiary of the tariffs, and the South as the victim. Perhaps a clue on how that came about can be found in the Confederate Constitution, which specifically forbids crony item-by-item protection of any branch of industry:

"The Congress shall have power- (I) To lay and collect taxes, duties, imposts, and excises for revenue, necessary to pay the debts, provide for the common defense, and carry on the Government of the Confederate States; but no bounties shall be granted from the Treasury; nor shall any duties or taxes on importations from foreign nations be laid to promote or foster any branch of industry; and all duties, imposts, and excises shall be uniform throughout the Confederate States." ["Constitution of the Confederate States." Avalon Project, March 11, 1861, Article I, Section 8]

The U.S. Constitution doesn't have that clause.

A brief history of the protective tariff includes the super-divisive 1828 tariff that created a nullification/secession crisis with South Carolina, followed by a compromise a few years later that was still objectionable to the South, followed by a complete overhaul in 1846, which mirrored the additional clause of the future Confederate Constitution by removing item-by-item rates and replacing them with an ad valorem schedule:

"As president [James Polk, who defeated the protectionist Henry Clay,] delivered on his promise in 1846 when, under the guidance of Treasury Secretary Robert J. Walker, Congress adopted a comprehensive overhaul of the tariff system featuring a moderate downward revision of rates and, importantly, the standardization of tariff categories on a tiered ad valorem schedule.

"This final feature was intended to improve the transparency of the tariff system by consolidating the somewhat convoluted list of tariff items, itself the product of many decades of lobbying and the carving out of highly specialized categories as political favors for specific companies and industries. By converting the tariff from a system that relied primarily on itemized specific duties or individually assigned ad valorem rates to a formal tiered schedule of ad valorem categories in which tariffs were assessed as a percentage of the import 's declared dollar value, Walker further limited the ability of special interests of all stripes to disguise tariff favoritism in units of volume and measurement—different tariff rates assessed by tons of iron, gallons of alcohol, yards of cord and so forth.

"The Walker reforms helped to stabilize many years of fluctuating tariff politics by instituting a moderately free trade Tariff-for-revenue system that lasted, subject to a further uniform reduction of rates in 1857, until the eve of the Civil War

[Phillip W. Magness, "Tariffs and the American Civil War." Essential Civil War Curriculum, 2017, p.8]

Needless to day, the Southerners were happy campers, that is, until the Morrill Tariff showed up with a return to cronyism:

"Between December 1858 and March 1860, Morrill was inundated with letters from manufacturers and industrialists requesting favorable protective tariff rates against their foreign competitors. Many of these petitions were copied verbatim into the text of the tariff bill. The Morrill schedule also replaced the ad valorem schedule system of Walker with the reintroduction of item-by-item rates. The new schedule utilized an ad hoc mixture of individual ad valorem rates and specific duties, assessed by import units rather than volume, making its administration less transparent. While it is difficult to measure the full effect of the revisions given this change of assessment, Morrill 's equivalent rates pushed most items well above the 1846 schedule and, in several instances, to near-parity with the Black Tariff levels of 1842."

[Ibid. p.8]

So, the division doesn't appear to be about tariffs, per se, but about crony capitalism, a.k.a., corporate welfare, a.k.a. political favoritism. When we see the word "tariff" dominating the antebellum literature, we tend to scratch our heads and wonder why it was such a big deal. But the politicians and businessmen of that day understood that the word typically meant political favoritism that helped the North, and hurt the South.

For the record, the crony-distribution of excess collected tariffs to build railroads, canals, and etc., also heavily favored the North, and more specifically, the politically-connected.

Mr. Kalamata

699 posted on 01/14/2020 8:34:34 PM PST by Kalamata (BIBLE RESEARCH TOOLS: http://bibleresearchtools.com/)
[ Post Reply | Private Reply | To 655 | View Replies ]

Free Republic
Browse · Search
General/Chat
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson