Editing McKinley Tariff

{{Short description|US law framed by William McKinley in 1890}}
{{Use American English|date=October 2024}}
{{Use mdy dates|date=October 2024}}
[[File:Mckin.jpg|thumb|220px|William McKinley, c. 1880]]
The '''Tariff Act of 1890''', commonly called the '''McKinley Tariff''', was an act of the [[United States Congress]] framed by then-Representative [[William McKinley]], that became law on October 1, 1890.<ref> Frank W. Taussig,  "The McKinley Tariff Act." ''Economic Journal''. 2 (1891): 326–350 [https://scholar.archive.org/work/755di7usefcpdnd7igzgzgxkxm/access/ia_file/crossref-pre-1909-scholarly-works/10.2307%252F2955801.zip/10.2307%252F2956253.pdf online].</ref> The [[tariff]] raised the average duty on imports to almost 50%, an increase designed to protect domestic industries and workers from foreign competition, as promised in the Republican platform.<ref>{{cite book |last=Reitano |first=Joanne |title=The Tariff Question in the Gilded Age: The Great Debate of 1888 |location=University Park, PA |publisher=The Pennsylvania State University |year=1994 |page=[https://archive.org/details/tariffquestionin0000reit/page/129 129] |isbn=0-271-01035-5 |url-access=registration |url=https://archive.org/details/tariffquestionin0000reit/page/129 }}</ref> It represented [[protectionism]], a policy supported by Republicans and denounced by Democrats. It was a major topic of fierce debate in the [[1890 United States elections|1890 congressional elections]], which gave a Democratic landslide. Democrats replaced the McKinley Tariff with the [[Wilson–Gorman Tariff Act]] in 1894, which lowered tariff rates.<ref>{{cite book |last=Taussig |first=F. W. |author-link=Frank William Taussig |title=The Tariff History of the United States |url=https://archive.org/details/cu31924100373475 |edition=8th |location=New York|publisher=G.P. Putnam's Sons |year=1892 |page=[https://archive.org/details/cu31924100373475/page/n312 291] }}</ref>

==Description==
{{William McKinley series}}
After 450 amendments, the Tariff Act of 1890 was passed and increased average duties across all imports from 38% to 49.5%.<ref name="Reitano 1994, p. 129">Reitano 1994, p. 129</ref> McKinley was known as the "Napoleon of Protection",<ref>[[Karl Rove|Rove, K.]], ''The Triumph of William McKinley: Why the Election of 1896 Still Matters'' (New York: [[Simon & Schuster]], 2015), [https://books.google.com/books?id=Q_agDAAAQBAJ&pg=PA67 p. 67].</ref> and rates were raised on some goods and lowered on others, always in an attempt to protect American manufacturing interests. Changes in duties for specific products such as tinplates and wool were the most controversial ones and were emblematic of the spirit of the Tariff of 1890.<ref name="Taussig 1892, p. 273">Taussig 1892, p. 273</ref> The Act eliminated tariffs altogether on certain items, with the threat of reinstatement as an enticement to get other countries to lower their tariffs on items imported from the US.

===Eliminated tariffs===
The Act removed tariffs on sugar, molasses, tea, coffee, and hides but authorized the President to reinstate the tariffs if the items were exported from countries that treated U.S. exports in a "reciprocally unequal and unreasonable" fashion. The idea was "to secure reciprocal trade" by allowing the executive branch to use the threat of reimposing tariffs as a means to get other countries to lower their tariffs on U.S. exports. Although this delegation of power had the appearance of being an unconstitutional violation of the [[nondelegation doctrine]], it was upheld by the Supreme Court in ''[[Field v. Clark]]'' in 1892, as authorizing the executive to act merely as an "agent" of Congress, rather than as a lawmaker itself.<ref name="field">[http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?friend=nytimes&court=us&vol=143&invol=649 FindLaw.com ''Field v. Clark'' decision text]</ref> The President did not use the delegated power to re-impose tariffs on the five types of imported goods, but he used the threat of doing so to pass 10 treaties in which other countries reduced their tariffs on U.S. goods.<ref>The treaties were with Austria–Hungary (May 20, 1892), Brazil (April 1, 1891), the Dominican Republic (Sept. 1, 1891), El Salvador (Feb. 1, 1892), Germany (Feb. 1, 1892), Guatemala (May 30, 1892), Honduras (May 25, 1892), Nicaragua (March 12, 1892), Spain (for Cuba and Puerto Rico, Sept. 1, 1891), and the United Kingdom (for the British West Indies and British Guiana, Feb. 1, 1892).</ref><ref>{{cite news|url=https://www.nytimes.com/1901/11/24/archives/reciprocity-treaties-with-other-countries-official-data-covering.html|title=Reciprocity Treaties with Other Countries|date=November 24, 1901|newspaper=The New York Times}}</ref>

===Tin-plates===
[[Tin-plate]]s were a major import for the United States. Tens of millions of dollars in these goods entered the country each year.<ref name="Taussig 1892, p. 273" />  In the preceding 20 years, tariff rates had been raised and dropped multiple times on tin-plates with no change in import levels, and domestic production had remained inconsequential. In a last attempt to stimulate the [[infant industry|infant domestic]] tin-plate industry, the Act raised the duty level from 30% to 70%.<ref>Taussig 1892, p. 274</ref> It also included a unique provision that stated tin-plates should be admitted free of any duty after 1897 unless domestic production in any year reached one-third of the imports in that year.<ref>[[Charles S. Olcott|Olcott, C. S.]], ''The Life of William McKinley'', vol 1 ([[Boston]]: [[Houghton Mifflin Harcourt|Houghton Mifflin]], 1916), [https://books.google.com/books?id=cxL5AwAAQBAJ&pg=PA172 p. 172].</ref> The goal was for the duty to be protective or not to exist at all.

===Wool===
The new tariff provisions for [[wool]] and woolen goods were exceedingly protectionist. Wool was previously taxed based on a schedule: more valuable wool was taxed at a higher rate. Through a multitude of complicated tariff schedule revisions, the Act made almost all woolen goods subject to the maximum duty rate.<ref>Taussig 1892, p. 262</ref> The Act also increased the tariff on carpet wool, a wool of very low quality not produced in the US. The government wanted to ensure that importers were not declaring higher-quality wool as carpet wool to evade the tariff.<ref>Taussig 1892, p. 258</ref>

==Reactions==
The tariff was not well received by Americans who suffered a steep increase in prices. In the [[1890 United States House of Representatives elections|1890 election]], Republicans lost their majority in the House with the number of seats they won reduced by nearly half, from 171 to 88.<ref>Reitano 1994, p. 130</ref> In the [[1892 United States presidential election|1892 presidential election]], Harrison was soundly defeated by Grover Cleveland, and the Senate, House, and Presidency were all under Democratic control. Lawmakers immediately started drafting new tariff legislation, and in 1894, the Wilson-Gorman Tariff passed, which lowered US tariff averages.<ref>Taussig 1892, p. 291</ref> The 1890 tariff was also poorly received abroad. Protectionists in the British Empire used it to argue for tariff retaliation and imperial trade preference.<ref>{{cite journal |first=Marc-William |last=Palen |title=Protection, Federation and Union: The Global Impact of the McKinley Tariff upon the British Empire, 1890–94 |journal=Journal of Imperial and Commonwealth History |volume=38 |issue=3 |year=2010 |pages=395–418 |doi=10.1080/03086534.2010.503395 |s2cid=159638185 }}</ref>

==Background==
Tariffs (taxes on foreign goods entering a country) served two purposes for the United States in the late 19th century. One was to raise revenue for the federal government, and the other was to protect domestic manufacturers and workers from foreign competition, known as [[protectionism]].<ref>{{cite journal|last=Irwin|first=Douglas A.|author-link=Douglas Irwin|year=1998|title=Higher Tariffs, Lower Revenues? Analyzing the Fiscal Aspects of 'The Great Tariff Debate of 1888'|journal=[[Journal of Economic History]]|volume=58|issue=1|pages=59–72|doi=10.1017/S0022050700019884|s2cid=154971301 |url=http://www.nber.org/papers/w6239.pdf}}</ref> In December 1887, President [[Grover Cleveland]], a [[History of the Democratic Party (United States)|Democrat]], devoted his entire [[State of the Union Address]] to the issue of the tariff and called emphatically for the reduction of duties and the abolition of duties on raw materials. The speech succeeded in making the tariff and the idea of protectionism a true party matter.  In the 1888 election, the Republicans were victorious with the election of [[Benjamin Harrison]] and majorities in both the Senate and the House. For the sake of holding the party line, the Republicans felt obligated to pass stronger tariff legislation.<ref>Taussig 1892, p. 256</ref>

[[William McKinley]] of [[Ohio]] was defeated by [[Thomas Brackett Reed]] to be Speaker of the House after the 1888 elections.<ref name="Reitano 1994, p. 129" />  McKinley instead became chairman of the [[House Ways and Means Committee]] and was responsible for framing a new tariff bill. He believed that a protectionist tariff had been mandated by the people through the election and that it was necessary for America's wealth and prosperity.<ref name="Reitano 1994, p. 129" /> In addition to the protectionist debate, politicians were concerned about the high revenue accruing from tariffs.<ref name="Irwin 1998, p. 59">Irwin 1998, p. 59</ref> After the [[American Civil War]], tariffs remained elevated to raise revenue and to cover the high costs of the war. By the early 1880s, the federal government was running a large surplus. Both parties agreed that the surplus needed to lessen but disagreed about whether to raise or lower tariffs to accomplish the same goal. The Democrats' hypothesis stated that tariff revenue could be reduced by reducing the tariff rate. Conversely, the Republicans' belief was that by increasing the tariff, imports would be lessened, and total tariff revenue would drop. The debate would be known as the Great Tariff Debate of 1888.<ref name="Irwin 1998, p. 59" />

==Effects==
{{Unreferenced section|date=December 2024}}
[[Douglas Irwin]]'s 1998 paper<ref>{{Cite journal |last=Irwin |first=Douglas A. |date=1998 |title=Higher Tariffs, Lower Revenues? Analyzing the Fiscal Aspects of "The Great Tariff Debate of 1888" |url=https://www.jstor.org/stable/2566253 |journal=The Journal of Economic History |volume=58 |issue=1 |pages=59–72 |jstor=2566253 |issn=0022-0507}}</ref> examines the validity of the opposing tariff hypotheses posed by Republicans and Democrats in 1890. Irwin analyzed historical data to estimate import demand elasticities and export supply elasticities for the United States in the years before 1888. He calculated that tariffs had not yet reached the maximum revenue rate, suggesting that a reduction, rather than an increase, in tariffs would have reduced both revenue and the federal surplus. This finding supported the Democrats’ hypothesis and refuted the Republicans’.

Irwin further analyzed tariff revenue data and observed that total revenue decreased by about 4%, from $225 million to $215 million, after the 1890 Tariff increased rates. He attributed this drop largely to the provision that moved raw sugar to the duty-free list. Since sugar was the top revenue-generating import at the time, making it duty-free caused a significant revenue reduction. Irwin also calculated that if sugar were excluded from import calculations, tariff revenue actually increased by 7.8%, from $170 million to $183 million. He concluded that the tariff hastened the development of domestic tinplate production by about a decade but argued that the benefit to this industry was outweighed by the overall cost to consumers.

==See also==
* [[Panic of 1893]], while the high tariffs were in effect.

==References==
{{Reflist}}

==Further reading==
* Eckes, Alfred E. ''Opening America's market: US foreign trade policy since 1776'' (Univ of North Carolina Press, 1995). [Opening America's market online]

* Howells, Gareth. " 'A star-spangled dragon': What was the immediate effect of the McKinley Tariff on the South Wales tinplate industry: 1880-1895? A reassessment of Welsh production and foreign protectionism." (PhD dissertation, Open University, 2018). [https://oro.open.ac.uk/56050/1/Howells_A329_RVoR.pdf online]

* Irwin, Douglas A. "Trade policy in American economic history." ''Annual Review of Economics'' 12 (2020): 23–44. [https://ccd.ucsd.edu/_files/papers/paper_irwin_annurev-economics.pdf online]
* Irwin, Douglas A. "Did late-nineteenth-century US tariffs promote infant industries? Evidence from the tinplate industry." ''Journal of Economic History'' 60.2 (2000): 335–360. [https://www.nber.org/system/files/working_papers/w6835/w6835.pdf online]
* Irwin, Douglas A. "Higher tariffs, lower revenues? analyzing the fiscal aspects of 'the great tariff debate of 1888'."  ''Journal of Economic History'' 58.1 (1998): 59–72. [https://www.nber.org/system/files/working_papers/w6239/w6239.pdf online]
* Irwin, Douglas A. "Tariffs and growth in late nineteenth century America." (NBER, 2000) [Irwin, Douglas A. "Tariffs and growth in late nineteenth century America." (2000). online].
* Morgan, H. Wayne. ''William McKinley and his America'' (Syracuse University Press, 1963). [https://archive.org/details/williammckinleyh00morg online]

* Palen Marc-William. Marc-William Palen''Journal of Imperial and Commonwealth History'' 38#3 2010, pp. 395–418.  [https://www.academia.edu/download/28641358/Palen_Protection__Federation_and_Union.pdf online]

* Reitano, Joanne. ''Tariff Question in the Gilded Age: The Great Debate Of 1888'' (Penn State Press, 2010). [https://archive.org/details/tariffquestionin0000reit online]
* Taussig, Frank W. "The McKinley Tariff Act." ''Economic Journal'' 1.2 (1891): 326–350. [https://scholar.archive.org/work/755di7usefcpdnd7igzgzgxkxm/access/ia_file/crossref-pre-1909-scholarly-works/10.2307%252F2955801.zip/10.2307%252F2956253.pdf online]
** Taussig, F. W. ''Tariff History Of The United States'' (1931) [https://archive.org/details/in.ernet.dli.2015.46434 online]
* Taussig, F. W. ''Some aspects of the tariff question: an examination of the development of American industries under protection'' (1931), covers all major industries [https://archive.org/details/someaspectsoftar0000taus_y8t4 online]

===International impact===
* Grey, Earl. ''The Commercial Policy of the British Colonies and the McKinley Tariff'' (London: Macmillan, 1892). [https://archive.org/details/commercialpolic00greygoog online]
* Lawder, Robert H. ''Commerce between the United States & Canada, Observations on Reciprocity and the McKinley Tariff'' (Toronto: Monetary Times Printing, 1892). [https://archive.org/details/cihm_09012 online]
* Palen, Marc-William. "Protection, federation and union: The global impact of the McKinley tariff upon the British Empire, 1890–94." ''Journal of Imperial and Commonwealth History'' 38.3 (2010): 395–418 [https://www.academia.edu/download/28641358/Palen_Protection__Federation_and_Union.pdf online]{{dead link|date=January 2025|bot=medic}}{{cbignore|bot=medic}}.
* Rioux, Hubert. "Canada First vs. America First: Economic Nationalism and the Evolution of Canada–US Trade Relations." ''European Review of International Studies'' 6.3 (2019): 30–56. [https://budrich.de/Zeitschriften/Leseprobe/ERIS-2019-3-04-Rioux-Canada-America-Economy-Nationalism-Trade-Relations.pdf online]

{{Benjamin Harrison}}
{{William McKinley}}
{{US tax acts}}

{{DEFAULTSORT:Mckinley Tariff}}
[[Category:1890 in American law]]
[[Category:1890 in economic history]]
[[Category:Agriculture in Hawaii]]
[[Category:William McKinley]]
[[Category:Tariff laws in the United States]]
[[Category:1890 in international relations]]
[[Category:October 1890]]