A Brief History of Panics | Page 5

into their pockets, but it must

take out considerably more. The people appreciate this. The nation's
pocket nerve has been touched. This is the meaning of the recent
election, it seems to the writer. But whether the impending danger can
be averted even if a prompt, though wise and slow reversal of tariff
policy can be forced by the next Congress is doubtful, for unrest and
timidity have been evoked and require time to be allayed before easy
and orderly business operations will in general be resumed, unless
indeed bountiful crops here and demand abroad once again reverse the
logic of the situation.
Certain it is that our tariff laws must interfere as little as possible with
the natural law of demand and supply in making prices, or we must be
content to suffer from the instability that artificiality always brings with
it.
Our plain duty is to enact as speedily as possible a tariff that shall by
small but continued changes cut down our protective duties and
substitute non-protective duties until our tariff is for revenue only; for
thus and thus only can the vast majority of the agriculturists buy what
they need most cheaply, and so find that to purchase necessaries does
not cost them more than the total of their sales; and our exports of
produce, chiefly owing to agricultural prosperity, would increase, thus
materially helping to build up our general business so that the other
nations will have to pay us, in the gold we require for comfortable
management of our business, the growing trade balances against them.
The rough table below suggests that sudden tariff changes have
precipitated panics, which have come quickly if the change was to
higher protective duties and somewhat slower if the change was to
lower protective duties; that slow and well considered changes doing
away with protective duties generally have not caused disturbances;
and that agriculture has flourished in proportion as we approached tariff
for revenue only. It has for obvious reasons required about one year for
financial trouble to be shown by decrease in value of farm produce as
evinced by wheat-flour exports.
Special conditions, such as excessive wheat corps here and deficiency
abroad or special tariff favors to flour export, may even increase the
amount exported despite an otherwise untoward effect of the new tariff
upon farmers. I have selected flour exports as the article best reflecting
the chief interest of the farmers, and at the same time the state of

general business for manufacturing, transportation and such other
branches as are concerned with it.
------------------------------+---------+--------------------------------
TARIFFS ,- They have all | | Condition of agriculture and | been
designedly | | incidentally of general + protective | Panics. | business as
suggested by export | save the one | | of wheat flour from 1790-1890. '-
of 1846. +---------+-------------------------------- | | Year. Barrels. Dollars.
| | 1790 724,623 4,591,293 | | 1791 619,681 3,408,246 | | 1792
824,464 ......... | | 1793 1,074,639 ......... | | 1794 846,010 ......... | | 1795
687,369 ......... | | 1796 725,194 ......... | | 1797 515,633 ......... | | 1798
567,558 ......... | | 1799 519,265 ......... | | 1800 653,056 ......... | | 1801
1,102,444 ......... | | 1802 1,156,248 ......... | | 1803 1,311,853 9,310,000 |
| 1804 810,008 7,100,000 | | 1805 777,513 8,325,000 | | 1806 782,724
6,867,000 | | 1807 1,249,819 10,753,000 | | 1808 263,813 1,936,000 | |
1809 846,247 5,944,000 | | 1810 798,431 6,846,000 ,- Practical | | 1811
1,445,012 14,662,000 | exclusion of | | ,- 1812 1,443,492 13,687,000
Say + all imports | | | 1813 1,260,943 13,591,000 1814 | through the war
= | 1814 | + 1814 193,274 1,734,000 '- Prohibitory Tariff. | | '- 1815
862,739 7,209,000 | | ,- 1816 729,053 7,712,000 ,- Duties for six | | '-
1817 1,479,198 17,751,376 1816 + years @ 25% and | 1818 | ,- 1818
1,157,697 11,576,970 '- thereafter @ 20%. | | | 1819 750,669 6,005,280
| | | 1820 1,177,036 5,296,664 1818 ,- Duties 25% on | | | 1821
1,056,119 4,298,043 | Cotton and Woollens, | | + 1822 827,865
5,103,280 + and all duties | | | 1823 756,702 4,962,373 | on
Manufactured | | | 1824 996,792 5,759,176 '- Iron increased. | 1825-26 |
| 1825 813,906 4,212,127 | | | 1826 857,820 4,121,466 | | '- 1827
868,492 4,420,081 | | ,- 1828 860,809 4,286,939 1828 { Average duty
of 50%. | | | 1829 837,385 5,793,651 | | + 1830 1,227,434 6,085,953 | | |
1831 1,806,529 9,938,458 | | '- 1832 864,919 4,880,623 ,- Compromise
Tariff, | | ,- 1833 955,768 5,613,010 | gradual reduction | | | 1834
835,352 4,520,781 | of duties from | | | 1835 779,396 4,394,777 |