Democrat's 1916 Tariff Commission: responding to dumping fears and illustrating the consumer costs of protectionism.
The Tariff Commission illustrates a prominent feature of the Progressive Era: the increasing reliance on statistical and technical analysis by both business and government. Indeed, a large literature has developed on the rise of economic analysis in federal government policymaking, and the establishment of new public and quasi-public agencies to house technical data and expertise. Research in this area has examined a number of topics: federal agencies such as the Bureau of Statistics, the Bureau of Manufacturers and the Commerce and Labor Departments;(2) the creation of quasi-public research institutions such as the Brookings Institution and the National Bureau of Economic Research;(3) the information gathering functions of associations such as the Chamber of Commerce;(4) the professionalization of the social sciences;(5) and the application of scientific management principles and techniques to public policymaking.(6) The Tariff Commission is another example of a Progressive-Era institution designed to provide expert analysis and information, although existing research has not recognized it as such; indeed, many economic and regulatory histories of this period fail to mention the Tariff Commission, let alone offer an explanation for its creation.(7)
The Tariff Commission case, at first glance, also appears to provide an uncontroversial illustration of the corporate liberalism thesis: that the Progressive Era reliance on technically-skilled professionals to solve problems created by industrialization led to more cooperative business-government relations, as conflicts increasingly involved technical issues rather than deep ideological or political differences.(8) After all, with the Tariff Commission, Democrats adopted what was originally a Republican invention and concept - seemingly an act of bipartisan cooperation. However, partisan and ideological conflict, rather than cooperation, characterized the creation of the 1916 Tariff Commission, lending more support to research highlighting disagreement than to research emphasizing cooperation.(9) Indeed, the Tariff Commission case's high level of partisan conflict, marked by Democratic support and Republican opposition, illustrates how older battles over tariffs spilled into new debates, even during the Progressive Era.
Several studies have posited explanations for the creation of the Tariff Commission, although they tend to overlook key structural features of the Commission or leave an important question unanswered. For example, the "flexibility" explanation considers the Commission a concession to business interests that demanded a process for rate adjustments between major omnibus tariff acts so as to make tariff-setting more flexible and responsive to changing economic and competitive conditions.(10) But despite lobbying efforts on behalf of many business groups for a Commission with tariff-adjustment authority, Congress did not give the 1916 Tariff Commission the power to alter rates.
The "good government" explanation interprets the Commission as an institutional innovation designed to overcome deficiencies in legislators' technical expertise. According to this view, Congress delegated the technical analysis of tariffs' economic effects to an independent board of experts better equipped to analyze the tariff issue, thus minimizing legislative decision-making costs and improving the quality of tariff policy.(11) Although appealing, the good government explanation has several problems. First, legislators sitting on the committees with tariff policy oversight had accumulated considerable knowledge and expertise in tariff-writing and thus were not technically ignorant - a point made by one of the Tariff Commission's proponents, President Woodrow Wilson.(12) Second, many legislators would have preferred ignorance, as it provided political cover for tariffs that diminished the national welfare but enhanced that of local constituents. For representatives of constituents who would be harmed by Tariff Commission suggestions for tariff improvements, the commission represented bad politics, not good government. Moreover, the good government explanation fails to show why legislators did not recognize their cognitive and technical limitations and create an agency to supplement their skills earlier than 1916. Lastly, this explanation does not explain why Congress chose to create an independent agency to secure technical information: this function could have been performed by congressional staff or an existing federal agency. Indeed, one argument against the Commission was that some of its proposed functions were already being performed by the Commerce Department's Bureau of Foreign and Domestic Commerce. Moreover, several powerful politicians, such as House Ways and Means Committee Chairman Claude Kitchin (D-N.C.) and even Woodrow Wilson (until his rather abrupt conversion to the Tariff Commission concept) advanced this argument.(13)
Scholars studying the Presidency of Woodrow Wilson have also examined the Tariff Commission, but have confined themselves to the study of Wilson's motives for its creation. The Executive explanation claims Congress established the Commission because Wilson requested it. This explanation generally provides three motives for Wilson's support. The first is political expediency: public demand for a Tariff Commission had grown so strong that Wilson could no longer afford to ignore it.(14) The second motivation for Wilson's support is political conversion: Wilson grew to support a Tariff Commission because of the global economic changes caused by the First World War, necessitating accurate information for post-war tariff policymaking.(15) Lastly, Wilson is said to have supported the Tariff Commission as part of a broader effort to promote foreign market expansion.(16) While all of these explanations are plausible and partially correct, they are also incomplete, as this paper will demonstrate. Moreover, regardless of Wilson's motives for creating the Tariff Commission, an explanation focusing only on him ignores the motives of the governmental branch which would bear responsibility for creating the Commission.
The Executive explanation leaves the reader to assume that congressional Democrats supported the Tariff Commission out of obedience to Wilson's request. An assumption of a passive Congress is at odds with the reality of the many strong, opinionated legislators who sat in Congress during the Wilson Administration, particularly those on the committees charged with tariffmaking.(17) What did influential congressional Democrats, such as Senator Robert Owen, banking committee chair, have to gain by supporting the Tariff Commission? Lastly, the Executive explanation is silent in considering why congressional Republicans opposed the Commission just when their long fight for a Tariff Board seemed destined for success.
Finally, the most often cited explanation for the Tariff Commission is that Congress established it with the hope of taking the tariff "out of politics" by generating unbiased analyses of the economic effects of tariffs.(18) While the nonpartisanship and credibility of information released by the Tariff Commission was critical to its continued survival, this explanation does not say why impartial information was especially important to its sponsors. Additionally, it does not address why Democrats and their largely southern agricultural constituents wanted to remove politics from tariff policymaking, but not Republicans and their largely northern industrial constituents - a curious omission since, as the party of protection, Republicans had been subject to more political pressure on the tariff than Democrats. Lastly, this explanation ignores the historical record. Although many supporters publicly pronounced that the Tariff Commission would take the tariff out of politics, privately they admitted this was impossible.(19) If Tariff Commission supporters did not believe the tariff could be removed from politics, but publicly claimed it could, then what accounts for the disparity between their public and private statements?
A final weakness of all existing explanations for the Tariff Commission is their failure to recognize and explain the structural differences between earlier, Republican Tariff Board proposals and the Democrats' Tariff Commission. Republicans sought a commission that would primarily investigate differences in the cost-of-production between foreign and domestic producers of a good, so as to make "scientific" tariff adjustments to equalize production-cost differences. In contrast, the Democrats' mandate for the Commission was the broad study of the effects of existing tariff legislation. Each political party had different conceptions of what a Tariff Board should do based on its political needs and goals. This paper proposes answers to several previously incompletely-answered, or unanswered, questions about the Tariff Commission:
First, why did the Democratic party, which had opposed earlier Tariff Board proposals, adopt this Republican invention in 1916? Moreover, why did Republicans abruptly renounce their own idea? A common failure of the existing explanations has been the confusion of pre-1916 Republican Tariff Board experiments with the Commission created by the Democrats.
Second, Woodrow Wilson vehemently opposed a Tariff Commission until just weeks before he sought its creation. Were the changing economic conditions created by the European war a sufficient condition for Wilson's sudden conversion? If so, why wasn't Wilson converted earlier, especially since the war had been raging for over two years by the time Wilson became a Tariff Commission proponent? What accounts for the timing of the President's conversion?
Third, after more than a century of gathering information regarding tariffs' economic effects during committee hearings, why did legislative supporters decide to supplement their data-gathering with the Tariff Commission? If Congress wanted additional information on the tariff, why not undertake this function in-house by assigning it to staff, or delegate it to an established bureaucracy such as the Commerce Department or the Federal Trade Commission? What accounts for the specific institutional form chosen? Relatedly, why didn't Democrats give the Tariff Commission rate-adjustment authority, since this is what many business interest groups requested? What was the political advantage of creating merely an informational institution with no policymaking powers, especially since this was not what the most active business groups were clamoring for?
I argue in this paper that two Democratic goals governed the creation of the Tariff Commission and determined its structure. Wilson adopted the Tariff Commission idea as a politically expedient and defensive measure to counter Republican criticism of Democratic tariff policy, particularly the increasing concern in 1915 over potential post-war dumping by foreign manufacturers in the U.S. market - criticism that promised to become a prominent, and possibly successful, feature of the Republicans' 1916 election campaign. Additionally, the Tariff Commission provided a potential, longer-term political benefit for its Democratic supporters, particularly in Congress: Tariff Commission studies might settle the long-standing partisan debate and controversy over the consumer welfare effects of tariff protection in the Democrats' favor, thereby improving the party's long-term electoral fortunes.
Tariff Board Origins
The Tariff Board movement first emerged in the late nineteenth century, becoming a prominent Progressive issue in the early 1900s. Republican tariff revisionists believed in the tariff protection historically provided to industrial interests by their party, but felt that rates on many products exceeded the levels needed to protect U.S. industry and labor. Agriculture, in particular, suffered from the consequences of tariff protection - rising consumer prices, trusts in protected industries, and high foreign tariff barriers that limited export markets for otherwise internationally-competitive U.S. agricultural products. Midwestern agricultural producers and their progressive congressmembers hoped a Tariff Board would compel the highly protectionist wing of the Republican party to base future tariff changes on "scientific" information regarding the minimum tariff necessary to protect U.S. industry. However, early Republican Tariff Board proposals lacked broad support. Democrats opposed the proposed commissions because they upheld the basic principle of protectionism, albeit in the revisionist guise of cost-of-production equalization; the party of tariffs-for-revenue-only could not support even revisionist protectionism. Conservative Republicans held that any tariff analysis threatened their industrial constituents because it could be used to reduce or limit tariff rates.
By 1910, Republican support for a Tariff Board had broadened. Protectionist tariffs and monopolistic trusts were under increasing public attack, prompting conservative Republicans to adopt more reformist attitudes on tariff and trust issues.(20) To satisfy the clamor for tariff reform, Republicans advocated the cost-of-production methodology for tariff-setting. Tariffs would be adjusted to the level "scientifically" determined to equalize production-cost differences between U.S. and foreign producers. Of course, equalizing production-cost differences eliminates the lower prices that a more efficient producer can charge and erodes all potential gains from trade, just as overtly politically-determined tariff rates do. A tariff board seeking production-cost equalization simply advanced protectionism under a more politically-palatable name.
After numerous failed attempts at creating a Tariff Board, Republicans finally established a temporary one as part of the 1909 Payne-Aldrich Tariff.(21) This Act authorized Republican President William Howard Taft to create a Tariff Board to assist him in determining whether foreign countries were discriminating against U.S. products, as a precursor to the possible imposition of punitive tariffs. After reporting in 1910 that it found no discrimination, the Taft Tariff Board received additional funding from the Republican Congress to investigate production-cost differences between domestic and foreign producers in certain products. The Taft Tariff Board, however, could not complete this project because Democrats, hostile to the production-cost methodology, cut off funding to the Board in 1912 when they gained control of Congress.(22) The Tariff Board concept refused to die, however. It was constantly in the news during Wilson's first term, as both Republican and Democratic editorial writers and Republican legislators urged the President and Congress to establish one.(23) The Tariff Board issue was particularly irksome for Democrats. It was widely regarded as a progressive reform, but not supported by Wilson - a curious omission for a President who prided himself on progressive reforms.
Wilson, however, had a deep, long-standing aversion to the concept. Officially, Wilson denounced the Tariff Commission idea when he became president, arguing that the functions of gathering and analyzing information related to trade and tariffs were already performed by the Commerce Department's Bureau of Foreign and Domestic Commerce, and the Federal Trade Commission.(24) Privately, Wilson revealed a different reason for his opposition. To trusted advisor Colonel Edward House, Wilson confessed his fear that a Tariff Commission with policymaking powers would become a weapon for protectionists. To Treasury Secretary William McAdoo, Wilson voiced concern that even a Tariff Commission without rate adjustment powers could be used to justify Republican protectionism or tariff increases.(25) Moreover, Wilson had testified as a young academic before the "grandfather" of Tariff Commissions, the Arthur Tariff Board, arguing for freer trade on the grounds that it would lower consumer prices and improve industrial efficiency. The poor reception and blatant partisanship he encountered disappointed him. He viewed the Arthur Tariff Board as a "ridiculed body of incompetencies."(26)
Wilson was a life-long opponent of tariff protection, and won the presidency largely on the 1912 Democratic platform to lower tariffs and eliminate industrial privilege; a Tariff Commission that would, or might, be used to condone protectionist tariffs was politically unthinkable. Thus, any explanation of Wilson's motives for supporting the Tariff Commission must provide a political reason for his conversion that is sufficiently powerful to outweigh Wilson's misgivings about such a Commission. Wilson finally changed his mind on the Tariff Commission because of the Republican effort in late 1915 to make the public believe that U.S. industry would be devastated by post-war foreign dumping of goods - a scare campaign that was just one in a long series of attacks on the Democrats' 1913 Tariff Act.
Republican Attacks on the Democrats' 1913 Tariff Act
One of the first orders of business for newly-elected President Wilson and the Democratic-controlled 63rd Congress in 1912 was to revise the Republican's 1909 Payne-Aldrich Tariff Act. The Democrats' 1913 Simmons-Underwood Tariff drastically lowered tariff rates, from an average of 41.5 percent under Payne-Aldrich, to 26.8 percent under Underwood, the lowest tariff level in six decades.(27) Consistent with their 1912 campaign pledges, Democrats lowered tariffs particularly dramatically on consumer goods, such as sugar and woolen clothing. Indeed, the 1912 elections were fought largely on the tariff issue, with Democrats promising that tariff reduction would lead to lower consumer prices, increased industrial efficiency, and greater overall economic prosperity (see Figures 1 and [ILLUSTRATION FOR FIGURE 2 OMITTED]). Typical of their campaign literature was the "High Tariff Primer," arranged as a child's ABC book, which instructed the electorate:
A stands for Adam. He did not have to pay a tar-iff on Ap-ples. Or a tar-iff on clothes. The high cost of liv-ing never wor-ried Adam. There was no High Tar-iff in E-den. There were no tar-iff-fos-tered Trusts. Luck-y Eden! Luck-y Adam!(28)
Before the Democrats' claims for the beneficial effects of the Underwood tariff reductions could be assessed, the First World War broke out in Europe, altering both the domestic and international economic landscapes by restricting or eliminating many export markets, altering product supply and demand, and increasing transportation costs. A mild economic depression in 1914 was blamed immediately on the 1913 tariff reductions by many manufacturer associations, businesses and Republicans, although restricted access to European markets was the more likely cause.(29) Rep. R. McCulloch (R-Ohio) launched a typical attack: "the Simmons-Underwood tariff has injured industries and brought on a depression."(30) Throughout 1914, Wilson was frequently asked whether the 1913 tariff decreases caused the economic downturn. Wilson denied any association between it and the Underwood Tariff, opining instead that the depressed business conditions were "merely psychological" - a kind of gloomy response to the war.(31) That summer, the Business Association of Montgomery County, Pennsylvania wrote a series of letters to Wilson complaining that the depression in their region was the result of the Underwood tariff cuts and asking that the tariff be repealed. Wide circulation of these letters put such pressure on the Administration that Wilson asked Commerce Secretary William Redfield to investigate the causes of the Montgomery County business depression. Redfield reported in March of 1915 that the depressed conditions were not attributable to the Underwood Tariff but rather to faulty business methods.(32)
Figure 1 1912 Democratic Campaign Literature Twelve Reasons Why Labouring Men Should Vote HIGH COST OF LIVING Actual wholesale prices, showing increase since there was a Democratic President: (Democratic) (Republican) Oct. 1, 1896 Oct. 1, 1912 Beef, lb. $0.15 1/2 $0.29 1/2 Pork, bbl. 8.00 20.00 Lard, lb. .04 2/5 .11 1/2 Flour, bbl. 4.00 6.50 Sugar, lb. .04 1/2 .05 1/10 Butter, lb. .16 1/2 .32 Eggs, doz. .18 .34 Rice, lb. .09 3/8 .17 Coffee, lb. .10 3/8 .14 3/4 Wheat, bu. .75 1/4 1.03 1/2 Corn, bu. .29 1/4 .69 3/4 FOR WILSON Source: Woodrow Wilson Papers, Library of Congress, Manuscript Division, Series 12, Reel 525.
Similarly, but on a national scale, in August 1914 Wilson ordered an investigation of the cause of rising food prices, to be conducted by U.S. attorneys and the Commerce Department. Throughout the remainder of the year, Wilson was asked repeatedly about this investigation.(33) Unsurprisingly, given the stream of bad economic news, attendant Republican criticism of the Democrat's tariff policy, and the defensive investigations the Wilson Administration kept launching, the Democrats lost many of their 1912 legislative gains in the 1914 elections. The Democratic majority in the House decreased from seventy-three to twenty-five.
Economic problems continued in 1915, along with Republican allegations that they were caused by the Underwood Tariff. That summer, the cotton crisis arose. The European market for American cotton exports was first reduced by the war, and then virtually eliminated by Great Britain's decision to treat cotton as contraband and therefore subject to seizure if found aboard ships navigating European waters. Both the Allied and American cotton exchanges closed in response. Within two months, the price of raw cotton - the U.S.'s top export at the time - declined by 30 percent.(34) A delegation of cotton growers and representatives from cotton states met with Wilson in September to discuss the problems caused for the industry by the war. The cotton issue received much publicity, some of it claiming the 1913 tariff decrease, not the war, was primarily responsible for the collapse of cotton prices and export demand.(35) Indeed, by the end of the summer, publicity had become so negative that one commentator suggested Agriculture Secretary Houston needed to more effectively publicize cotton export figures and other relevant facts regarding the cotton crisis, the tariff and the war, because "the people of the South are being misinformed and misled and should be set right."(36)
A Tariff Commission to Respond to the Dumping Scare
Against this background of attacks on the 1913 Tariff, Republicans began launching their anti-dumping campaign in 1915. The supply of dyestuffs from Germany dropped severely early in the war, necessitating the development of a domestic industry to produce sufficient supplies for the U.S. textile industry. Domestic dyestuff manufacturers grew increasingly fearful throughout 1915, as reports of the German government's funding of industries emerged and as Germany's impressive industrial and military prowess was displayed by the war, that the German dyestuff industry would destroy the nascent American industry after the war, particularly without tariff protection.(37)
Anxiety that the dyestuffs industry in particular would be destroyed by post-war dumping quickly developed into a more generalized fear that all U.S. industry was vulnerable. Republicans moved quickly to exploit and exacerbate the dumping fear, which provided motivation and justification for their proposed tariff increases to prevent post-war dumping [ILLUSTRATION FOR FIGURE 3 OMITTED]. Of all the Republican attacks on the Democrat's 1913 Underwood Tariff, the allegation that its low rates left American industry open to destructive dumping was the one Democrats felt most vulnerable to. Treasury Secretary McAdoo summarized:
The Republican leaders are most anxious to make the tariff an issue in the coming campaign. In the Spring of 1915 they made consistent and persistent attacks upon the Democratic tariff act, alleging that the business depression existing at that time was due wholly to its enactment and Democratic incompetency, when, as a matter of fact, the chief cause of the depression was the European war. When prosperity began to return [in the fall of 1915], they changed their line of attack and said [prosperity] would disappear as soon as the war ended; that American manufacturers would then begin to feel the deadly effects of the Underwood tariff law because it would permit European nations to "dump" such extraordinary quantities of their manufactured products upon the American market . . . [and] that the home manufacturer would be seriously hurt, if not destroyed by this competition.(38)
During the fall of 1915, as the administration grew increasingly concerned about the dumping issue and the political threat it posed,(39) discussions within the Cabinet about the Tariff Commission began. During October, Treasury Secretary McAdoo, who would become the most persuasive advocate for a Tariff Commission within the administration, traveled throughout the midwest and west, uncovering strong public anxiety over possible post-war dumping. While still on tour, McAdoo mentioned that the administration was thinking about how to take the tariff out of politics - the phrase that had always been used in connection with the Tariff Board concept. Several days later, McAdoo wrote that he was "very seriously considering [a Tariff Commission]" and noted that, unlike Wilson, "I've never been opposed to one." Upon his return to Washington on November 5th, McAdoo confided to Colonel House: "the results of the  elections . . . contain enough of a warning to make it necessary that some militant and effective work shall be done to organize the [Democratic] party for the next campaign [in 1916]." The same day, House discussed a Tariff Commission with Wilson, but Wilson remained opposed. A week later, McAdoo asked a subordinate to prepare a report on the general business conditions throughout the country and an outlook for the future, preferably from an impartial source such as Dun and Bradstreet, that the public would find credible.(40) McAdoo was clearly concerned by what he had heard on tour, and wanted to strengthen the party's appeal. Moreover, many Democrats who wrote McAdoo, echoed his concerns, expressing fear of a Republican victory in 1916, and suggesting that a Democratically-sponsored Tariff Commission could be an effective way to neutralize Republican tariff attacks. An influential Chicago businessman pleaded:
I advise [the Administration] take an early stand on the tariff [because] there is a feeling that there will be considerable dumping of merchandise at the close of the war. I think it would be the right thing to do, if a Tariff Commission . . . were appointed to make an immediate investigation. I feel it is the duty of the Democratic Party to save the naive from the false and crooked [tariff claims of Republicans], and that the Democratic Party now has in its power to stop [Republicans with a Tariff Commission].(41)
Wilson was receiving similar letters, such as the following from a county Democratic Committee: "If we as Democrats adopt [a Tariff Commission], we shall have taken the last breath of wind from the Republican sails, and made the reelection of the present Democratic administration absolutely certain."(42) Publicly, prominent interest groups, such as the National Grange, the American Federation of Labor, and the Tariff Commission League, issued endorsements.(43)
Mounting pressure made Wilson reassess his opposition. In late November, he asked Colonel House's opinion on the Tariff Commission and whether the topic should be raised in his upcoming State of the Union address. Although both agreed it should not be addressed specifically, Wilson did note, in both his State of the Union address on December 7th and in his address to the Democratic National Committee the following day, the importance of better understanding post-war economic readjustments. Indeed, in his Democratic Committee address, Wilson indicated how frustrated he had become with Republican attacks: "[Republicans] are desperately clinging to the one issue of the tariff, and nobody on either side of the house can prove anything about the tariff now. . . . Anyone who stands up and says that he can predict what is going to follow this war sufficiently to suggest what tariff policy should be is talking in ignorance."(44) Wilson was clearly considering a Tariff Commission at this time, since the argument that a Tariff Commission could study altered economic circumstances and threats such as dumping was the primary public justification Wilson offered to explain his switch on the issue.(45)
Throughout December 1915 and January 1916, the Cabinet wrestled with how to handle the rising public demand that something be done to prevent post-war dumping and the rising political demand from Democrats that Republicans be neutralized on the issue.(46) Three suggestions were debated: raising tariffs on selected products, enacting antidumping legislation, and establishing a Tariff Commission to study dumping. There was much disagreement within the Administration on these proposals. Indeed, about the only thing all Cabinet members agreed on was that Democrats would be "seriously handicapped in the fall campaign if we failed to do something definitive on this important subject at this session [of Congress]."(47)
The first possible response, of increasing tariff rates on products deemed most vulnerable to dumping, such as dyestuffs, received little support. Almost everyone within the Administration worried that capitulating on one product would open the floodgates for tariff increases on other items and thereby eradicate the reductions of the 1913 Underwood Tariff. Moreover, tariff increases would appear to confirm Republican claims that the Democrats didn't know how to manage business and economic conditions, claims that were already finding more electoral sympathy than Administration members felt comfortable with.(48) The second proposed response to the dumping threat came from Commerce Secretary Redfield who proposed an antidumping bill that would impose harsh tariff sanctions on any products dumped on U.S. markets. McAdoo vehemently opposed an antidumping bill, arguing that it would provide, like tariff revisions, "an entering wedge for reopening the entire tariff subject."(49)
Finally, Agriculture Secretary Houston and McAdoo suggested the creation of a Tariff Commission to address the dumping issue. This alternative offered the advantages of responding to the demand for offensive action, yet also postponing the possibility of tariff increases while the Commission studied the matter. Houston contacted his former Harvard University economics professor, noted free-trader Frank Taussig, to prepare an outline of how a Tariff Commission might be organized, and soon became convinced of the "practicality and political expediency" of a Commission.(50) McAdoo also had staff members prepare reports on a Tariff Commission. Reports and analyses on the advantages and drawbacks of the Tariff Commission versus antidumping legislation were circulated within the Administration throughout December and early January.(51) Within the Cabinet, Houston took an early lead in supporting the Tariff Commission, but quickly ceded his prominence on this issue to McAdoo, who felt the Commission was the only way to prevent Redfield's antidumping proposal.(52) Wilson advisor Colonel House and personal secretary Joseph Tumulty, Postmaster General Albert Burleson, Interior Secretary Franklin Lane and Labor Secretary William Wilson also supported establishing a Tariff Commission;(53) indeed, Redfield was its only active opponent [ILLUSTRATION FOR FIGURE 4 OMITTED].(54) Despite broad support for the Tariff Commission within his Cabinet, however, Wilson remained hesitant until after the New Year, when pressure to act on the antidumping proposal became acute.(55) McAdoo finally persuaded Wilson in favor of a Tariff Commission by arguing:
The proposals of [Redfield] for the enactment of "Anti-Dumping" legislation are, I think, most unfortunate. They can not be justified on any other ground than that advanced by the Republican orators who are trying needlessly to alarm the country. . . . Prominent Democratic members of [Congress] deplore the position taken by [Redfield] . . . they think that Democratic support of Republican alarmist theories makes the situation difficult and does infinite harm. . . If the [dumping] matter is to be considered at all, it should be considered as a part of a tariff commission program and not as a separate matter, and it would be better to confine action to an investigation by such a commission of the "dumping" problem and not go beyond that?
Three days later Wilson replied, "There is a great deal of force in what you say," and requested a meeting with McAdoo as soon as possible. After meeting with McAdoo, Wilson met with H. Gross, the President of the National Tariff Commission League, which had long been campaigning for a Tariff Commission. The next day, on January 24, 1916, Wilson wrote to Claude Kitchin, requesting that he submit a bill creating a Tariff Commission and attaching a proposed draft of the legislation? Most tellingly, the draft legislation that Wilson sent to Kitchin was very similar to a draft that Taussig had prepared for Houston and McAdoo; the only substantial difference between the two versions was that the Wilson draft explicitly gave the Commission the power to investigate dumping.(58) Wilson had been converted?
Kitchin was another matter. He was, and remained, opposed to a Tariff Commission, despite a widely published plea from Wilson, several personal meetings with Wilson and McAdoo to persuade him, and numerous letters from constituents and legislative colleagues urging that he support such a Commission.(60) A week after Wilson asked Kitchin to submit the legislation, the bill was handed over to second-ranking Ways and Means member Henry Rainey of Illinois, who was happy to steer it through the House. Like most members of the Wilson Administration, Rainey felt a Tariff Commission could neutralize Republicans on the dumping issue. Moreover, when Republicans began criticizing the very Commission they had advocated for so long, Rainey became particularly dedicated: "Their change of front and the reasons they give for it are conclusive to my mind as to the necessity for the appointment of this Commission."(61)
Democratic support for the Tariff Commission in Congress, though strong, was not unanimous. In addition to Kitchin, Oscar Underwood opposed the Commission. His main concerns were that Tariff Commission analyses might undermine, rather than support, the 1913 Tariff Act that bore his name, and that the Commission could be altered by Republicans to serve protectionist ends.(62) However, several prominent members of Congress strongly supported the Commission, such as Carter Glass, architect of the 63rd Congress' banking reforms, and Robert Owen, chair of the Senate banking committee. Regrettably, no congressional vote on the Tariff Commission issue alone is available that provides clear evidence of each member's support or opposition.(63) Several months after Rainey submitted the Tariff Commission bill, it was incorporated in the 1916 Revenue Act, a tax bill raising the $500 million in Navy and Army appropriations that had been authorized earlier in the year. The congressional leadership felt the only practical way to pass the volume of legislation before it was to consolidate as many items as possible.(64) Democrats in both houses of Congress unanimously supported the Revenue bill to fund Wilson's military preparedness plan, while 81 percent of Senate and 82 percent of House Republicans opposed it because it raised the revenue primarily via an increase in the income tax, rather than by increases in tariff rates.(65)
Illustrating the Consumer Costs of Tariff Protection
While the Wilson Administration's main goal in establishing the Tariff Commission was to respond to pressure for action on the dumping threat, and many legislators supported the Commission for this reason, some supporters hoped for an additional, longer-term benefit from the Tariff Commission. They hoped its studies would educate the electorate on the consumer welfare costs of tariff protection, thereby undermining electoral support for the Republican party and their protectionist tariff policies.(66) Moreover, this second goal explains the main structural differences between earlier Republican Tariff Board proposals and the Democrats' 1916 Tariff Commission.
During the nineteenth and early twentieth centuries, misinformation and contradictory partisan assertions characterized legislative debate on the tariff. Tariff incidence was particularly bitterly contested. Republicans maintained that tariffs were paid by foreigners and should be considered a toll for the privilege of selling in the U.S. During debate on the 1916 Revenue Act, Rep. Penrose (R-Pa.) opined: "Duties are paid by the foreigner, and not by the American consumer, and the best illustration of that fact . . . is that the price of living has not gone down under the present free-trade [Underwood Tariff] but, on the contrary has constantly gone up." On the other hand, Democrats argued that tariffs were paid for by consumers of dutied products, and called tariffs a "tax upon the necessities of life" and a "tax of selfishness" imposed by wealthy industrial interests upon working Americans.(67) The parties also contested the relationship between the tariff and economic prosperity, as Republican attacks on the 1913 Underwood Tariff have illustrated. Democrats claimed that low tariffs lowered the cost-of-living as prices on dutiable products declined and helped labor because efficiency increases by domestic firms ensured that jobs would remain in the U.S. In contrast, Republicans predicted U.S. industry and labor would collapse against cheap-labor imports [ILLUSTRATION FOR FIGURE 5 OMITTED].(66)
Media accounts did not clarify the debate. Some publications claimed that Democratic tariff policy was responsible for economic prosperity. Others supported Republican tariffs and urged that protection be restored to guard U.S. labor and industry against the day when the war ended and the much-feared dumping began. The average voter could not help but be confused. Politicians knew this: McAdoo claimed that one weakness of the Democratic party was a "dearth of Democratic newspapers and the consequent absence of opportunity to get salient facts before the people."(69)
Economists offered little help in clarifying the debate. Although they had reached consensus that protectionist tariffs were not responsible for U.S. economic prosperity, and were borne by consumers, not foreign exporters, they disagreed over the price effects of protection.(70) Some economists argued that tariff-associated consumer price increases were so small as to have almost no effect on the cost-of-living,(71) while others maintained that the protectionist tariff had been a primary cause of the rising cost of living.(72) However, some "renegade protectionists" still argued that protection was not borne by consumers and was associated with greater welfare gains than losses.(73) In general, U.S. turn-of-the-century economists devoted little attention to international trade and tariff analysis. Many influential economics texts of the era either ignored the economics of foreign trade, or paid scant attention to it.(74)
Republicans had asserted for decades that a protectionist tariff provided national benefit, with apparent success, since Republicans dominated federal elections and thus Republican tariff rates prevailed after the Civil War and until the 1913 Underwood Tariff, with the brief exception of the three years of the Democrats' 1894 Wilson-Gorman Tariff.(75) Tariff protection did provide the protected industries, and labor within those industries, with an economic surplus in the form of higher profits and wages than would have prevailed under full competition, but it provided this surplus at the expense of consumers, an issue Republicans avoided because the tariff transferred income from consumers and farmers (primarily Democratic constituents) to industries and workers in protected industries (primarily Republican constituents).(76) Also, the tariff was not paid for solely by foreigners, but rather by both domestic consumers and foreign exporters. In short, Republican arguments about the economic effects of tariff protection discussed only benefits of the policy because they accrued primarily to their constituents, while the costs were borne primarily by Democratic constituents. Democrats confronted another problem. The broadly distributed nature of protectionism's costs and the highly concentrated distribution of its pecuniary benefits made mobilization of a low-tariff political coalition difficult. Thus, a second reason for Democratic support of the Tariff Commission was to have its studies illuminate the consumer welfare costs of Republican tariff protection.
This goal for the Tariff Commission was clearly reflected in the two major changes made by Congress to Wilson's draft legislation. The first of these concerned the Commission's mandate. Whereas Wilson's draft instructed the Tariff Commission to "investigate the administration and fiscal effects" of customs laws, the mandate was broadened in the Senate Finance committee to include "the administration and fiscal and industrial effects" of customs laws. Wilson's mandate appeared to stress technical issues of customs administration and revenue sufficiency, while many legislators wanted the Commission to also examine the more normative issue of tariffs' effects. Rep. Sabath (D-Ill,) observed: "For years I have wondered how it was possible for the Republican party to make the masses believe that [its protective tariff] was being paid by foreign producers. That this [Tariff Commission] legislation will put an end to such foolish contentions is my wish." Similarly, Rep. Cox (D-Ill.) understood that "the dominant feature of the [Tariff Commission] is not to gather the facts but rather to gather the effect of what certain tariff duties mean."(77)
Legislators were not alone in appreciating this potential. Agriculture Secretary Houston praised the potential value of a Tariff Commission in educating an ignorant public:
I believe the results of [the Tariff Commission's] labors would rid the public of many misconceptions it has concerning the tariff. It would dissipate the fog. It would rid the public mind of many of the exaggerations it has as to the influence of the tariff for good or evil, but this would happen provided only the public had confidence in the commission in its fairness and in its competency.(78)
Indeed, Houston believed Tariff Commission studies might even spur fundamental industrial transformation: "an investigation might result in Louisiana realizing that she could very much better direct her labor and capital into other enterprises than sugar." Perhaps more tellingly, Republicans strongly objected to the mandate to investigate industrial effects, claiming the "unfortunate wording [investigate the industrial effects of tariffs] carries with it a meaning which could only be translated in partisan terms. If the country were prosperous, the Democrats . . . might say that it was due to the 'effects' of [their] tariff."(79)
Democratic supporters of the Tariff Commission hoped its studies would provide information that consumer price increases were associated with tariff protection. Because the tariff is an indirect tax, paid for through higher prices on protected products and through the invisible efficiency losses associated with tariff distortions, it was easy for Republicans to disguise tariff incidence. Democratic legislators knew this but many voters did not: "A tariff is a tax on consumption . . . and would never have been tolerated if the American people could have seen it when they paid it." Oscar Underwood said in his memoirs that the Tariff Commission "tested accurately the degree of protection afforded by a tariff tax in a way that the consuming public can both understand and fully realize."(80)
The form chosen for the Tariff Commission - a legislatively separate, nonpartisan fact-finding agency - is explained by the politicized nature of the tariff debate. Commission reports had to be considered credible by voters if they were going to effectively demonstrate the welfare costs of tariff protection, or assure the public that fears of postwar dumping were exaggerated. The apolitical structure of the Tariff Commission was intentionally designed to make its analyses appear politically neutral and credible - in short, elevated above the intense politics that had characterized tariff debates. As Sen. Pomerene (D-Ohio) noted:
. . . most Senators are able to get statistics to prove anything they want, on any side of a question. I believe that if we have a permanent board composed of men who will use discretion, talent and experience in the investigation of these subjects, they will be able to furnish data which will receive more credit than any that we have heretofore had.
Indeed, according to Rep. Cline (D-Ind.), the Tariff Commission's mandated annual reports would ensure that the Commission's "findings should be made public for the information of all the people."(81)
The second important difference between Wilson and Congress's drafts of the legislation concerned Commission structure. Wilson's draft suggested five members, but this composition was denounced by congressional supporters who felt it would result in partisan domination. Instead, the Tariff Commission created by Congress was comprised of six commissioners with not more than three from the same party. Moreover, overlapping twelve-year terms would ensure that no one President would ever appoint all commissioners (after Wilson's initial appointments), and thus keep the Commission from becoming associated with just one administration or political party. This membership structure was intended to neutralize the influence of overt politics, so that Commission analyses would be perceived as credible.(82)
Democrats chose the independent, fact-finding institution for the Tariff Commission because it was best suited to producing seemingly unbiased tariff analyses. Significantly, they rejected two institutional alternatives that would not have done this as well. First, broadening the Federal Trade Commission's mandate to include tariff analyses was rejected, even though the FTC was empowered to investigate trade conditions with foreign countries. Requiring the FTC to also examine tariff issues would have diluted its focus on anticompetitive practices and might not have provided the in-depth scrutiny of the tariff that Democrats desired. Moreover, an executive agency like the FTC would always be vulnerable to charges of capture by either the sitting President or the congressional oversight committees.(83)
A second institutional alternative, expanding the mandate of the Bureau of Foreign and Domestic Commerce in the Commerce Department, was rejected for similar reasons. Taussig explained why Tariff Commission functions should not go to Commerce: "Commission members would be subordinate officials of the department. To have weight, the Tariff Commission must be composed of big men. It must bulk large in public opinion." Similarly, a Commerce Department official felt an independent Tariff Commission would have the advantage over an expanded Commerce Department of having its "findings given more weight by the public, and [thus a Tariff Commission] is in a better position to . . . give publicity to its work." Wilson viewed Commerce's function as "an active sort of business promotion, which is different in kind from the business of scientific study." And both Interior Secretary Lane and Agriculture Secretary Houston felt neither the public nor members of Congress would trust an executive agency as much as an independent commission because of the overt partisanship of agencies.(84) Finally, establishing an independent Tariff Commission appeared to be a very focused, serious response to the dumping issue; lodging the Commission's functions in an existing agency might have seemed more casual. Moreover, creating the Commission had the added political benefit of "borrowing" a major Republican campaign platform, thereby neutralizing likely ex post criticism of the Democrat's Tariff Commission and preempting Republican advocacy of a Commission in the Presidential campaign.
The Democrats' 1916 Tariff Commission differed from earlier Republican Tariff Boards and proposals in many respects, most significantly in its absence of a central mandate to study cost-of-production differences.(85) Unsurprisingly, Republicans focused their criticism on this absence during congressional debate on the measure. Republicans claimed a Tariff Board's only value lay in determining production-cost differences between domestic and foreign producers. Indeed, almost all Republican-sponsored amendments to the Tariff Commission involved altering its mandate to study this. Democrats easily defeated these proposed amendments.(86) Clearly, Democrats would not mandate a methodology they considered the "most monstrous extension of protection ever proposed [because it] would annihilate foreign trade [with] universal and unlimited protection [and] would add great numbers of new [protectionist] recruits."(87) Instead, Democrats had successfully modified the Republican Tariff Board invention to promote their goals.
The Tariff Commission's Work and Political Results, 1916-1922
The primary goal of creating a Tariff Commission to respond to the dumping scare, without having to raise tariff rates, was highly successful. After announcing his intention to create a Tariff Commission, Wilson received overwhelmingly supportive correspondence and editorial coverage, as well as numerous interest group endorsements for his candidacy in the upcoming Presidential election. Wilson and other Democrats were able to deflect pressures to increase tariff rates by citing the necessity of waiting for a Tariff Commission investigation to understand the precise nature of the threat. Additionally, Democrats were particularly exultant about the side-benefit of having robbed Republicans of one of their more popular campaign planks. Adopting the Republican's Tariff Board invention was widely regarded as a clever and effective political maneuver (see cover).(88)
Wilson referred to the Tariff Commission repeatedly during the 1916 campaign, as in this New York speech days before the election:
Have you noticed the interesting gyrations of the [Republicans] with regard to the protective tariff?. It is very interesting how they have disclosed their real mind about it. You know, for a long time they said this ought not to be a matter of partisan politics. . . . We ought to have a Tariff Commission to put this upon a scientific instead of a political footing. Very well. We gave them the Tariff Commission. But that does not satisfy them. . . . They say we have got to have protection on the old lines without waiting for the conclusions of the Commission. It merely illustrates how they have been playing all along with this idea. A real scientific tariff in their opinion can be written only in a private room. The deception is so old it no longer deceives . . . [Republicans] make predictions about what is going to happen after the war which are absolutely incredible. They say [the warring European nations] are secretly engaged in manufacturing a great body of products which are going to be dumped on us after the war when they are struggling for their breath in the titanic struggle for their life. . . . But [Republicans] don't know what is going to happen after the war. I don't know what is going to happen after the war, and you don't. The only thing that we can do is to prepare the impartial eyes and methods of inquiries which will find out for us what is happening as fast as it happens and then deal with the facts as they arise.(89)
After the Tariff Commission legislation was submitted, the number of letters from other Democrats to Wilson, his Cabinet members, and Democratic legislators urging that action was needed on dumping or other tariff matters declined dramatically. Redfield happily noted how effective the Tariff Commission was in silencing Republican criticism: "The result of the [Commission] proposal has been to draw the teeth of the high protectionist in the east and leave them no ground for the coming campaign . . . hence their rage at the commission."90
Wilson appointed three Democrats and three Progressive Republicans to the first commission, which was chaired by Frank Taussig, the leading Harvard economist and advocate of freer trade. Daniel C. Roper, former clerk to the Ways and Means Committee and First Assistant Postmaster General to William McAdoo, was appointed co-chair. Roper resigned from the Tariff Commission after just six months to become Commissioner of Internal Revenue. Roper was replaced by Thomas Walter Page, a University of Virginia economist and a former Democratic member of the Taft Tariff Board. David Lewis, a self-educated lawyer and former seven-term House member from Maryland, was the final Democrat appointed. William Kent was a prominent Progressive Republican and three-term Representative from California. Edward Costigan was a Colorado lawyer who had run unsuccessfully for Governor twice on the Progressive ticket. William Culbertson, the youngest member of the original Tariff Commission, held a LL.D. from Yale and had been a member of the Federal Trade Commission prior to his appointment to the Tariff Commission.
Organization of the Tariff Commission was completed on April 1, 1917. Five days later, the U.S. declared war on Germany. U.S. participation in the First World War immediately affected the work of the Tariff Commission. The first study Ways and Means requested was on revenue sources for war funding. The Tariff Commission recommended that income taxes rather than tariffs be raised to pay for war expenses, a suggestion largely followed in the War Tax Act of 1917. In its first year, the Commission completed only the revenue study, although it began work on several other studies.(91) Despite the unexpected war demands, the Commission was able to fulfill its original mandate surprisingly well. The studies undertaken in its first three years focused on (1) issues either mentioned in the enabling legislation or emphasized during legislative debate on the Tariff Commission, such as examining the potential for post-war dumping, (2) war-related matters such as studies of foreign commercial treaties to prepare for peace talks, or (3) studies of tariff protection's broad industrial effects. Consistent with Wilson's immediate promise for the Tariff Commission, one of the first studies completed after the war revenue report was an analysis of potential post-war dumping in the dyestuffs industry (see Figure 6). The Commission concluded that further study was needed as the war progressed to determine both the likelihood of dumping and the U.S. industry's ability to withstand it.(92)
During its first two years, the Tariff Commission considered work on the Tariff Information Catalogue its most important endeavor and concentrated the majority of its time on it.(93) This Catalogue eventually contained a study of each product or industry (dutiable and on the free list) of the 1913 Underwood Tariff. Each product or industry study included (1) production, price, and employment trends, (2) import, export, and market share statistics, and (3) foreign and domestic competitor analysis, emphasizing the likelihood of post-war dumping. These studies were consistent with Democratic expectations of the Tariff Commission: each of them assessed the likelihood of dumping and provided information on consumer costs of tariff protection of the item. Interestingly, the Commission initially emphasized studies of consumer rather than industrial goods, a prioritization consistent with the goal of highlighting the consumer costs of tariff protection.(94)
The Tariff Information Catalogue's industry studies did an excellent job bringing the consumer costs of protectionism into plain view.
For example, the cotton glove study's price data suggested that tariff increases were entirely passed through to consumers. Before the Republicans' 1909 Payne-Aldrich Tariff Act, the average retail price of a pair of gloves was ten cents; after a five-cent per pair duty was imposed, the price rose to fifteen cents. When the duty was eliminated by the Democrats' 1913 Tariff, the price fell back to ten cents again. This industry report also responded to glove manufacturers' plea for higher tariff protection by noting how competitive the U.S. industry had become during the war and how unlikely it would be that any foreign manufacturers could dump on the industry: "[American glove manufacturers] will be able to hold their own [against foreign n the future. This is not their view of the situation, however; most of them have expressed the opinion that the present rate of duty is too low to enable them to meet foreign competition."(95)
Similarly, the industry study on bleaching powder (which had both consumer and industrial uses) noted that a pound cost $1.50 in 1912 under the Payne-Aldrich Tariff but only $1.20 in 1914 after the Underwood Tariff cut the duty in half. Also included in this industry report were predictions made by protectionists during congressional hearings on the proposed tariff reduction: "A reduction . . . would arrest the progress made in cheapening the price to the consumer."(96) Juxtaposing such predictions against the actual retail prices under various tariff acts was clearly a political act that discredited Republican claims about tariff protection.
Unfortunately for Democrats, the Commission operated for only two years under Democratic control. When Republicans regained control of Congress in May 1919, they crippled the Commission by slashing its appropriations, rendering it incapable of completing most reports in progress. Republicans clearly did not want Wilson's free-trade oriented Tariff Commission to undertake studies that would further undermine protectionist principles. Work on the Tariff Information Catalogue continued, but financial constraints prevented the Commission from publishing its industry studies that year. Study manuscripts were instead transmitted to Congress, which decided whether to print them. Not surprisingly, few of the 1919 industry studies were cleared by the Republican Ways and Means Committee and disseminated to the general public. The only published report Republicans allowed in 1919 was on unfair competition, one that could be used to bolster the case for high tariffs.(97)
The Tariff Commission was further hindered by personnel losses. Taussig's 1919 resignation was followed by Kent's in 1920; the Republican Congress refused to act on Wilson's proposed replacements, allowing the vacancies to go untilled for two years.(98) When President Harding took office in 1921, he replaced Taussig with Thomas Marvin, the well-known protectionist President of the Home Market Club. Kent was replaced by William Burgess, a Pennsylvania manufacturer and protectionist.
Commission studies undertaken in 1920 and 1921 reflected Republican concerns by focusing on industrial goods, unfair trade practices and cost-of-production studies [ILLUSTRATION FOR FIGURE 7 OMITTED].(99) For example, a 1920 survey of the British wool industry emphasized production-cost differences between the U.S. and British industries, a focus the earlier, Democratic-controlled industry studies avoided. A report on foreign exchange concluded that postwar shifts in exchange rates meant a German laborer was paid one-half that of an American laborer. This wage differential was an important justification for the 1921 and 1922 tariff increases on German imports.(100)
The Tariff Commission's information gathering and dissemination were profoundly influenced by the tariff ideologies of the commissioners, and by the nature of the requests made by the President and Congress. When Republicans gained unified political control of the federal government in 1921, they not only gained appointment power but also altered the mandate of the Tariff Commission to undertake cost-of-production studies so as to "inform" the Republican tariff increases of the 1920s. Clearly, the Tariff Commission was not insulated from partisan politics.(101) At best, Tariff Commission studies may have very modestly constrained the Republican tariff increases of the 1920s. The average tariff rate under Republicans in the five years after passage of the 1909 Payne-Aldrich Tariff Act was 41.3 percent; in the five years following passage of the 1922 Fordney-McCumber Tariff Act the average was 35.6 percent. Additionally, the Democrats' Tariff Commission may have contributed to constraining future Republican claims about tariff incidence. When Republicans debated the 1922 Fordney-McCumber Tariff, they rarely claimed that tariff protection was paid for exclusively by foreign exporters, unlike debate sex years earlier on the Revenue Act. Indeed, in 1922, Republicans regularly conceded that "the tariff is an imposition upon the public, who have to pay the tariff in some form."(102)
In the broadest sense, however, Tariff Commission studies under Democratic control failed to create an electoral groundswell of opposition to protectionist candidates, as the Republican political victories of the 1920s and early 1930s illustrate. Observing the evolution of the Tariff Commission under the Republicans, former Agriculture Secretary Houston said: "I argued for a commission . . . to give the public information. I am now inclined to think . . . that I was wrong. . . . it has been pretty well demonstrated that the Commission cannot get the facts to the public for its education."(103) And Kitchin's ex ante fear that a Tariff Commission would become a vehicle for dispensing tariff protection was confirmed, as Republicans used production-cost studies in the 1920s to justify raising tariff rates on several major products.(104)
The 1916 Tariff Commission, hailed as an expert, nonpartisan institution that would remove politics from tariff-making, was the result of an ongoing political battle. Previous explanations have failed to appreciate this by taking Wilson's explanation that the Commission was created to study post-war economic changes at face value, without delving further into the historical record. Wilson and congressional Democrats strongly opposed and resisted the Republican Tariff Board invention for years. Wilson finally changed his mind because Treasury Secretary McAdoo persuaded Wilson that creating a Tariff Commission to study possible post-war dumping was the best response to mounting pressure for action. A Tariff Commission provided the major advantage of responding to dumping anxiety without raising tariff rates; indeed, studying the topic provided an excuse to delay any tariff increases, and diverted some political pressures for doing so. Moreover, adopting and modifying the Republican Tariff Board concept gave Democrats the added political benefit of taking a major Republican plank from their 1916 platform. Most Democrats supported the Commission for these immediate reasons, as well as for its long-term potential of influencing the long-standing partisan debate over tariffs' economic effects. Many Democrats hoped Tariff Commission studies would illustrate the consumer costs of protectionism, thereby undermining future electoral support for Republicans.
Adopting the Tariff Commission served Wilson well in the 1916 campaign. It was widely applauded and Wilson received numerous endorsements from business groups. During its first two years, while the Tariff Commission was dominated by Wilson appointees, it performed as expected, demonstrating that concerns over post-war dumping in most industries were exaggerated and focusing studies on consumer goods to illustrate how retail prices had increased under Republican tariffs and decreased under Democratic ones. However, the Tariff Commission failed to fulfill the longer-term goal of reeducating the electorate and increasing support for low-tariff Democratic candidates. Two years after its creation, Republicans reassumed power and recast the Commission in their original vision, to study production-cost differences between domestic and foreign producers of goods.
The Tariff Commission shares many features with other Progressive-Era institutions designed to provide expert economic analysis of the increasingly complex problems and issues created by the development of a modern, industrial society. However, the fact that Commission studies were relied on by business and government for technical analysis should not blind scholars to the reality that the primary goals the Commission was created to further were deeply political, reflecting an almost century-old partisan tariff battle. As the Tariff Commission case makes apparent, the more some things changed during Progressive-Era reforms, the more they stayed the same.
Tariff Commission's Published Studies, 1917-1919, Under Democratic Control
Report Title and Date
Report on Interim Revenue Legislation, April 1917
Tariff Information Report 1: Papers and Books, 1917
Tariff Information Report 2: The Dyestuff Situation, 1918
Tariff Information Report 3: Silk and Manufactures of Silk, 1918
Tariff Information Report 4: The Button Industry, 1918
Revision of U.S. Customs Administrative Laws, 1918
Survey of Foreign Trade with Japan, 1918
Tariff Information Report 5: Glass Industry as Affected by War, 1918
Tariff Information Report 6: Census of Dyes and Coal-Tar Industries, 1918
Tariff Information Report 7: Surgical Instrument Industry in the U.S., 1918
Tariff Information Report 8: The Brush Industry, 1918
Tariff Information Catalogue, 1919
Tariff Information Report 9: Reciprocity and Commercial Treaties, 1919
Tariff Information Report 10: Production Costs in the Sugar Industry, 1919
Tariff Information Report 11: Cotton Venetians, 1919
Free Zones in Ports of the U.S., 1919
Tariff Information Report 12: Census of Dyes and Coal-Tar Industries, 1919
Tariff Information Report 13: Cotton Yarns, 1920
Sources (for figures 6 and 7): United States Tariff Commission, Individual Published Reports (Washington, D.C.); First through Seventh Annual Reports of the United States Tariff Commission (Washington, D.C., 1917-1923); Various documents, container 45, Culbertson Papers; Various Documents, USITC Records.
Tariff Commission's Published Studies, 1919-1922, Under Republican Control
Report Title and Date
Dumping and Unfair Competition in the U.S., 1919
Tariff Information Report 13.' Acids of Paragraph 1, 1920
Tariff Information Report 14: Incandescent Gas-Mantle Industry, 1920
Tariff Information Report 15: Costs of Production in the Dye Industry, 1920
Reciprocity with Canada, 1920
Tariff Information Report 16: Refined Sugar - Costs, Prices, and Profits, 1920
Survey of Commercial Treaties, 1920
Survey of Colonial Tariff Policies, 1920
Tariff Information Report 17: Subject Index, 1920
Tariff Information Report 18: Costs of Production in Barytes, Barium Chemical and Lithopones, 1920
Survey of British Wool-Manufacturing Industry, 1920
Industrial Readjustment of Mineral Industries Affected by the War, 1920
Tariff Information Report 19: Crude Botanical Drugs, 1920
Tariff Information Report 20: Agricultural Staples, 1920
Summary of Tariff Information, 1920
Statistics of Imports and Duties, 1908-1918, 1920
Tariff Information Report 21: Mineral Industries, 1921
Tariff Information Report 22 and 23: Census of Dyes and Coal Tar Manufactures, 1921
Tariff Information Report 24: Costs of Production in Lithopone Industry, 1921
The Foreign Exchange Situation, 1921
Extent and Causes of Unemployment, 1921
Japanese Cotton Industry and Trade, 1921
Tariff Information Report 25: Census of Dye and Coal-Tar Chemicals, 1922
Tariff Information Report 26: Census of Dyes and other Synthetic Organic Chemicals, 1922
Report on Preferential Transportation Rates, 1922
Tariff Information Report 27: The Emergency Tariff Act and Long Staple Cotton, 1922
Tariff Information Report 28: Hides and Skins
Tariff Information Report 29: The Emergency Tariff Act: Its Effect on Meats
Tariff Information Report 30: Cattle and Beef in the U.S.
An earlier version of this paper was presented at the 40th Annual Meeting of the Business History Conference, at the College of William and Mary, Williamsburg, Va., on Mar. 11-13, 1994. I would like to thank the following for helpful comments on earlier drafts of the paper: Michele Daley, John Faucher, Allan Meltzer, David Mowery, Joanne Oxley, Doug Schuler, Emerson Tiller, Werner Troesken, Oliver Williamson, Duane Windsor, Larry Zacharias, and Stephen Zeff. Clara Montz provided very thorough and able research assistance. All errors and omissions are my own.
1 U.S. Statutes at Large, Ch. 463, 64th Congress, 1st sess., 796 (Public Law 271, 8 Sept. 1916). The creation of the Tariff Commission also marks the beginning of ever-greater delegations of congressional authority over trade policy to other political actors and institutions. The Commission is still a prominent part of the U.S. trade bureaucracy, although it is now the United States International Trade Commission.
2 Robert D. Cuff, "Creating Control Systems: Edwin F. Gay and the Central Bureau of Planning and Statistics, 1917-1919," Business History Review 63 (Autumn 1989): 588-613; Burton I. Kaufman, "The Organizational Dimension of U.S. Economic Foreign Policy, 1900-1920," Business History Review 46 (Spring 1972): 17-44; Paul J. Miranti, Jr., "The Mind's Eye of Reform: The ICC's Bureau of Statistics and Accounts and a Vision of Regulation," Business History Review 63 (Autumn 1989): 469-509.
3 William J. Breen, "Foundations, Statistics, and State-Building: Leonard P. Ayres, the Russell Sage Foundation and U.S. Government Statistics in the First World War," Business History Review 68 (Winter 1994): 451-482; Donald T. Critchlow, The Brookings Institution, 1916-1952: Expertise and the Public Interest in a Democratic Society (DeKalb, Ill. 1985); Donald T. Critchlow, "Think Tanks, Antistatism, and Democracy: The Nonpartisan Ideal and Policy Research in the US, 1913-1987," in Michael J. Lacey and Mary O. Furner, eds., The State and Social Investigation in Britain and the United States (Washington, D.C., 1993); David C. Hammack and Stanton Wheeler, Social Science in the Making: Essays on the Russell Sage Foundation, 1907-1972 (New York, 1994); Ellis Hawley, "The Discovery and Study of a 'Corporate Liberalism,'" Business History Review 52 (Autumn 1978): 309-319; James Allen Smith, The Idea Brokers: Think Tanks and the New Policy Elite (New York, 1991).
4 Richard Werking, "Bureaucrats, Businessmen, and Foreign Trade: The Origins of the U.S. Chamber of Commerce," Business History Review 52 (Autumn 1978): 321-341; Robert Wiebe, Businessmen and Reform: A Study of the Progressive Movement (Cambridge, Mass., 1962).
5 Robert L. Church, "Economists as Experts: The Rise of an Academic Profession in the U.S., 1870-1920," in The University in Society, vol. 2, ed. Lawrence Stone (Princeton, N.J., 1974), 571-609; Mary O. Furner, Advocacy & Objectivity: A Crisis in the Professionalization of American Social Science, 1865-1905 (Lexington, Ky., 1975); Talcott Parsons, "Social Science: A Basic National Resource," in Samuel Z. Klausner and Victor M. Lidz eds., The Nationalization of the Social Sciences (Philadelphia, 1986); John Recchiuti, "The Rand School of Social Science During the Progressive Era," Journal of the History of Behavioral Sciences 31 (1995): 149-161.
6 Samuel Haber, Efficiency and Uplift: Scientific Management in the Progressive Era, 1890-1920 (Chicago, 1964); Jerry Israel, "A Diplomatic Machine: Scientific Management in the Department of State, 1906-1924," in Jerry Israel, ed., Building the Organizational Society (New York, 1972); Morton Keller, Regulating a New Economy: Public Policy and Economic Change in America, 1900-1933 (Cambridge, Mass., 1990); Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities 18771920 (New York, 1982).
7 Marver Bernstein, Regulating Business by Independent Commission (Princeton, N.J., 1955); Robert Cushman, The Independent Regulatory Commissions (New York, 1941); Henry Friendly, The Federal Administrative Agencies (Cambridge, Mass., 1962); Louis Galambos and Joseph Pratt, The Rise of the Corporate Commonwealth: U.S. Business and Public Policy in the Twentieth Century (New York, 1988); Samuel Hays, The Response to Industrialism, 1885-1914 (Chicago, 1957); Edward S. Kaplan and Thomas W. Ryley, Prelude to Trade Wars: American Tariff Policy, 1890-1922 (Westport, Conn., 1994); Skowronek, Building a New American State.
Additionally, the contemporary political economy literature has virtually ignored the original Tariff Commission, despite numerous studies of its descendant, the United States International Trading Corporation (USITC). See Robert Baldwin, The Political Economy of U.S. Import Policy (Cambridge, Mass., 1985); I. M. Destler, American Trade Politics: System Under Stress (New York, 1986); Judith Goldstein, "The Political Economy of Trade: Institutions of Protection," American Political Science Review 80 (Mar. 1986): 161-184; and Stefanie A. Lenway, The Politics of U.S. International Trade: Protection, Expansion and Escape (Boston, Mass., 1985).
8 David W. Eakins, "The Origins of Corporate Liberal Policy Research, 1916-1922: The Political-Economic Expert and the Decline of Public Debate," in Jerry Israel ed., Building the Organizational Society (New York, 1972); Louis Galambos, "The Emerging Organizational Synthesis in Modern American History," Business History Review 44 (Autumn 1970): 279-290; Hawley, "Corporate Liberalism"; Burton I. Kaufman, Efficiency and Expansion: Foreign Trade Organization in the Wilson Administration, 1913-1921 (Westport, Conn., 1974).
9 Gerald Berk, "Adversarial by Design: Railroads and the American State, 1887-1916," Journal of Policy History 5 (1993): 355-365; Leonard DeGraaf, "Corporate Liberalism and Electric Power System Planning in the 1920s," Business History Review 64 (Spring 1990): 131; Thomas K. McCraw, "Business and Government: The Adversary Relationship," California Management Review 27 (1984): 33-52.
10 E. Pendleton Herring, Public Administration and the Public Interest (New York, 1936); Kaufman, Efficiency and Expansion; Joseph F. Kenkel, Progressives and Protection: The Search for a Tariff Policy, 1866-1936 (Landham, Md., 1983); Phillip Wright, Tariff-Making by Commission (Washington, D.C., 1930).
11 E. Pendleton Herring, "The Political Context of the Tariff Commission," Political Science Quarterly 49 (Sept. 1934): 421-440; Herring, Public Administration; Kaufman, Efficiency and Expansion; Mark A. Smith, "Scientific Tariff Revision," American Economic Review 10 (1920): 417-426.
12 Press Conference of 14 Apr. 1913 in Arthur Link, David Hirst, John Little, Fredrick Aandahl, eds., The Papers of Woodrow Wilson (Princeton, N.J., 1982), volume 50, 21 [hereafter PWWW].
13 Kitchin claimed, "all facts necessary to write a revenue bill . . . can easily be secured through other sources than a Tariff Commission." 15 Apr. 1916 letter to R. Bowker, roll 9, Claude Kitchin Papers, Southern Historical Collection, University of North Carolina Library [herafter Kitchen Papers]. Wilson's statement to Governor J. Cox of Ohio was representative of his publicly-stated opposition to the Tariff Commission: "the functions of a Tariff Commission have already been lodged in the Bureau of Foreign and Domestic Commerce." 27 Aug. 1915 letter, series 4, subject 180, reel 233, Woodrow Wilson Papers, Library of Congress, Manuscript Division [hereafter Wilson Papers]. See also references in footnote 24.
14 Richard Abrams, "Wilson and the Southern Congressmen, 1913-1916," The Journal of Southern History 22 (1956): 417-437; William Diamond, The Economic Thought of Woodrow Wilson (Baltimore, Md., 1943); John Dobson, Two Centuries of Tariffs: The Background and Emergence of the U.S. International Trade Commission (Washington, D.C., 1976); Arthur S. Link, Woodrow Wilson and the Progressive Era (New York, 1954).
15 Kaufman, Efficiency and Expansion; Kenkel, Progressives and Protection; Joseph Kenkel, "The Tariff Commission Movement: The Search for a Nonpartisan Solution to the Tariff Question" (Ph.D. diss., U. of Maryland, 1962); William E. Leuchtenburg, "Progressivism and Imperialism: The Progressive Movement and American Foreign Policy, 1898-1916," Mississippi Valley Historical Review 39 (Dec. 1952): 483-504; Robert A. Waller, Rainey of Illinois: A Political Biography, 1903-34 (Urbana, Ill. 1977), 105-109.
16 Paul Wolman, Most Favored Nation: The Republican Revisionists and U.S. Tariff Policy, 1897-1912 (Chapel Hill, N.C., 1992).
17 Historians have described the Ways & Means Committee during the Wilson administration as one of the best ever assembled. David Sarasohn, The Party of Reform: Democrats in the Progressive Era (Jackson, Miss., 1989), 93-95. Indeed, the Ways and Means committee reporting the Tariff Committee bill was also the same committee responsible for the highly progressive income tax structure of the 1916 Revenue Act - a tax structure that Wilson did not propose but which has been called one of the great achievements of the Progressive Era. Arthur Link, Wilson: Campaigns for Progressivism and Peace (Princeton, N.J., 1965), 65.
18 William Barber, From New Era to New Deal: Herbert Hoover, the Economists and American Economic Policy, 1921-1933 (New York, 1985); George Bronz, "The Tariff Commission as a Regulatory Agency," Columbia Law Review 61 (1961): 463-489; Judith Goldstein and Stefanie Lenway, "Interests or Institutions: An Inquiry into Congressional-ITC Relations," International Studies Quarterly 43 (1989): 303-327; Keller, Regulating a New Economy; W. B. Kelly Jr., "Antecedents of Present Commercial Policy, 1922-1934," in W.B. Kelly Jr., ed., Studies in United States Commercial Policy (Chapel Hill, N.C., 1963); Kenkel, "Tariff Commission Movement"; Roger Noll, "The Behavior of Regulatory Agencies," Review of Social Economy 29 (1971): 15-19; Frank Taussig, "The U.S. Tariff Commission and the Tariff," American Economic Review Supplement 16 (1926): 171-181; Dwight Waldo, The Administrative State: A Study of the Political Theory of American Public Administration (New York, 1948); Wright, Tariff-Making by Commission.
19 For example, in a public address on 10 July 1916, Wilson said "party politics ought to have nothing to do with the question of what is for the benefit of the business of the United States, and that is the reason we ought to have a Tariff Commission." PWW 37, 392. See also 28 July 1916 letter from Wilson to S. Hastings, PWW 37, 492-3. In private, however, to trusted advisor Colonel Edward House, Wilson "expressed the belief that the tariff was a political question which one could not relegate out of active politics." PWW 36, 177. See also "Tariff: Economic Argument" (1913) in Wilson Papers, series 12, reel 525; and 12 May 1916 memo of Ray Baker on conversation with Wilson, PWW 37, 37.
A Tariff Commission supporter in the Wilson cabinet, Agriculture Secretary David Houston, also said that expecting a Tariff Commission to take the tariff out of politics would be futile since "taxation [constitutes] the very essence of political difference." David F. Houston, Eight Years with Wilson's Cabinet, 1913 to 1920 (New York, 1926), I, 196-7. See also 18 Dec. 1915 letter from Houston to F. Taussig, in box 335, General Correspondence File, Records of the Office of the Secretary of Agriculture, National Archives II, Record Group 16 [hereafter Agriculture Records].
20 On the relationship between tariff protection and trusts, and the anti-monopoly movement this spawned during the Progressive Era, see Franklin Pierce, The Tariff and Trusts (New York, 1907), and Daniel T. Rodgers, "In Search of Progressivism" in Stanley I. Kutter and Stanley N. Katz, eds, The Promise of American History: Progress and Prospects (Baltimore, Md., 1984), IV, 4.
21 U.S. Statutes at Large, Ch. 6, 61st Congress, 1st sess., 83. For more information on Republican Tariff Board proposals and support see Congressional Record 53 (1916): 138034 [hereafter CR]; Kenkel, "Tariff Commission Movement"; Herbert Margulies, Reconciliation and Revival: James R. Mann and the House Republicans in the Wilson Era (Westport, Conn., 1996): 55, 78-79; and Senator Lenroot of Wisconsin (Columbia, Mo., 1977), 112, 163-5, 194; 13 Aug. 1910 letter from I. Lenroot to F. Gray, box 2, Irvine L. Lenroot Papers, Library of Congress, Manuscript Division, and "The Legislative History of the Law Creating the U.S. Federal Tariff Commission," box 134, William S. Culbertson Papers, Library of Congress, Manuscript Division [hereafter Culbertson Papers]. The last Tariff Board proposal prior to the Democrats' Tariff Commission was the 1911 Longworth bill to study production cost differences. The bill passed in the House with the support of 99 percent of Republicans and 28 percent of Democrats, mostly from midwestern states where the tariff board movement originated and where popular and business support was highest. In the Senate, Democrats filibustered and killed the bill (CR 46 : 1676, 1679-81, 1683, 1688-9, 1693).
22 See CR 62 (1922): 7570, 7646, 7821.
23 See Houston Chronicle, 16 Oct. 1915. New York Times, 25 July 1915.22, 26 & 29 Sept. 1915; 8 & 23 Oct. 1915; 5 Nov. 1915; 10 & 20 Dec. 1915. On the pressure to establish a Tariff Commission, Wilson replied during a press conference on 29 Nov. 1914, to a question about whether he'd given more thought to a Tariff Commission, "Well, it is called to my attention about once every twenty-four hours." PWW 50, 661. Industrial and organized interest groups demanding a permanent tariff commission included the U.S. Chamber of Commerce, the National Association of Clothiers, the Tariff Commission League (Chicago), the National Grange, the National Association of Manufacturers, the National Tariff Commission Association, the Eastern Supply Association, the Silk Manufacturers Association, and the Chemical Industry Association.
24 In a 8 Jan. 1915 speech, Wilson claimed the FTC "is authorized and empowered to inquire into and report to Congress, not only upon the conditions of trade in this country, but upon the conditions of trade, the cost of manufacture, the cost of transportation - all the things that enter into the question of the tariff - in foreign countries as well as in the U.S." PWW 32, 37. See also 29 Nov. 1914 Press Conference, PWW 50, 661; 14 Jan. 1915 interview, PWW 32, 4; 17 Aug. 1915 letter from Wilson to M. Mathew, series 4, subject 180, reel 233, Wilson Papers.
25 28 Nov. 1915 diary of E. House, PWW 35, 261. 23 Nov. 1915 letter from McAdoo to Wilson, container 520, William G. McAdoo Papers, Library of Congress, Manuscript Division [hereafter McAdoo Papers].
26 23 Sept. 1882 testimony in Atlanta, PWW 2, 140-3, 285-6. In 1882 Republican President Arthur appointed a temporary Tariff Board to make recommendations on tariff decreases to reduce the $100 million federal budget surplus that had been produced by the highly protectionist tariffs of the Republican post-Civil War congresses. Congress ignored the recommendation to lower tariffs by 20 percent, raising them by that amount instead. Wilson had no allusions that the Arthur Tariff Board, comprised of Republican protectionists, would be sympathetic to his free trade arguments; he appeared in the hopes that his testimony would be included in the Board's published report and influence the tariff debate through print.
27 The Historical Statistics of the United States (Washington, D.C., 1975), 888.
28 Series 12, reel 525, Wilson Papers. In the same reel, see other campaign literature: "What High Tariff Sugar Means to You Mr. and Mrs. Consumer," "Wilson Exposes High Tariff System of Favors," and "Twelve Reasons Why Laboring Men Should Vote for Wilson." Of the dozens of pieces of campaign literature in these folders, more than half focus on how Republican tariff protection led to high consumer prices and how the promised Democratic tariff cuts would bring prices down.
29 See New York Times, 16 Jan. 1914, 6; 19 Jan. 1914, 11; 8 Feb. 1914, viii, 10; 28 Mar. 1914, 12; 9 Apr. 1914, 2, 10; 19 Apr. 1914, ix, 12; 21 Apr. 1914, 10; 4 May 1914, 11; 10 May 1914, ix, 12; 22 May 1914, 12; 5 June 1914, 14; 21 June 1914, ii, 3; 30 June 1914, 12; 1 July 1914, 1; 5 July 1914, viii, 8; 19 July 1914, viii, 16; 29 July 1914, 12; 8 Oct. 1914, 7; 11 Oct. 1914, ii, 4; 14 Dec. 1914, 4; 21 Dec. 1914, 6; 27 Dec. 1914, 7. Wall Street Journal, 26 Feb. 1914, 2; 7 Mar. 1914, 3; 5 June 1914, 2; 11 June 1914, 8; 22 June 1914, 2; 1 July 1914, 1; 8 July 1914, 6.
30 1 June 1916 press release of R. McCulloch, reel 234, Wilson Papers. See also 11 June 1914 letter from w. Hirth to D. Houston, box 130, Agriculture Records.
31 See 28 May 1914 Wilson press release, PWW 30, 93-6; New York Times, 29 May 1914. Privately, Wilson confided: "There is a real fight on. The Republicans are every day employing the most unscrupulous methods of partisanship and false evidence to destroy this administration." 31 Jan. 1915 letter from Wilson to N. Toy, PWW 32, 165.
32 On the complaints by the Business Association of Montgomery County and attending publicity see 23 July 1914 and 29 Dec. 1914 press conferences, PWW 50, 519, 664; Houston Chronicle, 27 Dec. 1914: 18; New York Times, 27 Dec. 1914; and Washington Post, 20 July 1914. On the Commerce Department investigation see New York Times, 24 Feb. 1915, 7; and 8 Mar. 1915, 8; 9 Mar. 1915, 6, 8; and 30 Apr. 1915 letter from G. Weber to E. Pratt and "Effects of the Tariff of 1913," box 1, U.S. Tariff Commission Records, National Archives II, Record Group 81 [hereafter Tariff Commission Records].
33 In Feb. 1915, Attorney General Gregory concluded that collusion by trusts was not the cause of rising food prices. See Houston Chronicle, 14 & 17 Aug., 1914; New York Times, 13, 14, 15 & 20 Aug. 1914 and 24 Feb. 1915; and Wall Street Journal, 13 & 26 Aug. 1914. Wilson press conferences of 1 June 1914, 24 Aug. 1914, 3 Sept. 1914, 1 Oct. 1914 and 2 Mar. 1915 in PWW 50, 478, 548, 561, 586, 703; and PWW 31, 79. See also the following 1914 documents: 13 Apr. letter from Houston to Tumulty, 23 July letter from C. Marvin to A. Green, 22 Aug. letter from Houston to Rep. J. Eagan, 9 Sept. letter from Houston to A. Ricqles, 10 Sept. letter from G. Woolley to Wilson, Sept. "Workers' Monster Petitions," 14 Oct. memo from C. Brand to W. Callendar, and 16 Dec. letter from C. Vrooman to Rep. G. O'Shaunessy, box 130, Agriculture Records.
34 The U.S. exported 67 percent of U.S. raw cotton production in 1913. U.S. Statistical Abstract (Washington, D.C., 1915), 521, 562.
35 See Houston Chronicle, 5 Jan. 1915, 14; 28 Feb., 1915, 39; 14 Mar. 1915, 43; 14 Apr. 1915, 1; 5 May 1915, 1; 1 June 1915, 18; 17 July 1915, 7; 21 July 1915, 6; 24 Aug. 1915, 9; 27 Aug. 1915, 4; 2 Nov. 1915, 1; 3 Dec. 1915, 20; 17 Dec. 1915, 16. New York Times, 4 Feb. 1915, 15; 6 Feb. 1915, 15; 12 Feb. 1915, 15; 14 Feb. 1915, 11; 2 Mar. 1915, 11; 29 Apr. 1915, 14; 23 Apr. 1915, 12; 28 Apr. 1915, 3; 8 May 1915, 19; 8 July 1915, 16; 3 Aug. 1915, 13; 15 Aug. 1915, 3; 17 Aug. 1915, 9; 20 Aug. 1915, 20; 24 Aug. 1915, 20; 4 Sept. 1915, 12; 21 Sept. 1915, 1; 13 Oct. 1915, 1; 24 Oct. 1915, 9; 29 Oct. 1915, 18. Wall Street Journal, 14 Jan. 1915, 1; 6 Feb, 1915, 1; 9 Mar. 1915, 7; 8 May 1915, 8; 15 June 1915, 2; 3 July 1915, 8; 24 July 1915, 8; 4 Aug. 1915, 8; 26 Aug. 1915, 8; 31 Aug. 1915, 3; 30 Dec. 1915, 3. See also 29 June 1915 letter from Rep. John Williams (D-Miss.) to Wilson, 12 July 1915 letter from A. Leven to Wilson, and 24 July 1915 letter from J. Williams to Wilson, container 1, John Sharp Williams Papers, Library of Congress, Manuscript Division [hereafter Williams Papers].
36 29 July 1915 letter from E. House to Wilson, PWW 34, 42. On correspondence Wilson received regarding the cotton crisis, see 22 July 1915 letter from M. Sheppard to Wilson; various correspondence to Wilson of 27 July 1915; 31 July 1915 letter from Rep. H. Sumners (D-Tex.) to Wilson; PWW 34, 13, 32, 34, 62, 99, 106. See also 13 Jan. 1916 letter from O. Brothers to W. McAdoo, and 20 Jan. 1916 letter from E. Pringle to W. McAdoo, McAdoo Papers, containers 152 and 153. On Republican criticism, see Marguiles, Reconciliation and Revival, 123. See also Arthur Link's account in Wilson: The Struggle for Neutrality, 1914-15 (Princeton, N.J., 1960), 107-8, 124-8, 171-4.
37 The 1913 Tariff put dyestuffs on the free list. As both Chair of the House Ways and Means committee and Representative from a textile state, Claude Kitchin received much mail from textile manufacturing constituents expressing concern over potential dumping and support for a protective tariff for dyestuffs. Roll 6, Kitchin Papers. See also 4 Nov. 1915 letter from Assistant Treasury Secretary J. Peters to w. McAdoo outlining the dyestuffs situation, container 156, McAdoo Papers; 1 Feb. 1916 letters from A. Allen (Sherwin Williams) to J. Williams, and from J. French (Cardinal Mills) to J. Williams, box 15, Williams Papers; and 6 Nov, 1915 letter from Trade and Transportation Bureau to J. Tumulty, box 9, Joseph Patrick Tumulty Papers, Library of Congress, Manuscript Division [hereafter Tumulty Papers]. Between Jan. and Mar. 1916, the House Ways and Means Committee received 702 petitions and letters, either directly or forwarded to them from eighty-eight other legislators, from businesses urging that the committee support H.R. 702, a bill introduced by Rep. Ebenezer Hill (R-Conn.) to place a protective tariff on dyestuffs. Boxes 468 and 469, Records of the U.S. House of Representatives, 64th Congress, National Archives I, Record Group 233.
38 14 Jan. 1916 letter to Wilson, PWW 35, 475.
39 The Administration was also legitimately concerned about the threat as a policy issue. A 1915 report on "Dumping and Monopoly" prepared for Wilson concluded that Germany had "fostered foreign trade by every means available," including plans to subsidize industries while they mined foreign competitors through dumping. The report also suggested that Germany would recuperate swiftly, given the extraordinary industrial strength she was demonstrating in the war. Series 12, reel 525, Wilson Papers. The American Consul in Denmark was convinced that "a great dumping plan is being worked out by [German manufacturers and bankers] by which Germany intends to export vast quantities of cheap goods when peace comes." The industries said to be particularly vulnerable were toys, optical and surgical instruments, electrical machinery, machine tools, and clothing. 25 Apr. 1916 memo from E. Winslow to C. Kitchin, roll 12, Kitchin Papers.
40 4 Nov. 1915 letter from McAdoo to F. Cobb; 5 Nov. 1915 letter from McAdoo to House; 8 Nov. 1915 letter from McAdoo to T. Love; 10 Nov. 1915 memo from McAdoo, container 487, McAdoo Papers. 5 Nov. 1915 diary entry of E. House, PWW 35, 177.
41 6 Jan. 1916 letter from B. Rosenthal to McAdoo, container 151, McAdoo Papers. See also in container 147: 26 Oct. 1915 letter from J. Hawthorne of King County Democratic Club; 29 Oct. letter from W. Miller to McAdoo; 8 Nov. letters from W. Sands and S. Untermyer. In container 148:13 Nov. letter from J. Cathey; 14 Nov. letter from H. Green. In container 149:26 Nov. letters from A. Billingslea and from L. Williams. In container 150: 21 Dec. letter from E Hall of California Democratic State Committee. In container 151: 29 Dec. letter from A. Chapman; and 1915 letter from G. Brosius. In container 153:28 Jan. 1916 letter from F. Plachy. See also 18 Dec. 1915 letter from American Consul in Greece to McAdoo and forwarded to Wilson, series 2, reel 75, Wilson Papers.
42 27 Sept. 1915 letter from Democratic Central Committee, Placer, California to Wilson. Relatedly, M. Mathew argued on 11 Aug. 1915, "The opposition party advocated a [Tariff Commission]. Should the Republicans come into power again they will create it among the first things they do. Let us prevent them from having that weapon. [Creating a Tariff Commission] will disarm and leave them without a constructive idea on which to wage next year's battle." See also the following letters to Wilson: 28 July 1915 from J. Gaines; 17 Aug. 1915 from T. Robinswan; 24 Aug. 1915 from Gov. J. Cox of Ohio and from J. Ano; 11 Sept. 1915 from H. Gross; 13 Oct. 1915 from Philadelphia Mayor R. Blankenburg; 30 Nov. 1915 from Wilson to S. Mead; 30 Nov. 1915 from G. Bretzfelder; 7 Dec. 1915 from G. Loft (DN.Y.); 15 Dec. 1915 from W. Winchester; 22 Dec. 1915 from C. Weninger; 27 Dec. 1915 from J. Farwell; 5 Jan. 1916 from J. Landstreet; 7 Jan. 1916 from S. Berton; 24 Jan. 1916 from E. Farrar; and 26 Jan. 1916 from W. Cox (D-Ind.). All in series 4, file 180, reel 233, Wilson Papers. See also the editorials urging Wilson to adopt a Tariff Commission cited in footnote 23. Other Wilson cabinet members received similarly pessimistic letters and warnings. To Joseph Tumulty see 16 Nov. 1915 letter from R. Mitchell, 29 Nov. 1915 from E. Grosscup, 23 Jan. 1916 from S. Lynch, and 19 Feb. 1916 from O. Carmichael, box 9, Tumulty Papers; 4 Oct. 1915 letter from E. Wood to A. Burleson and 7 Feb. 1916 from R. Hudson to W. McAdoo, box 6, Albert Burleson Papers, Library of Congress, Manuscript Division; 10 Dec. 1915 letter from F. Lane to J. Daniels, reel 55, Josephus Daniels Papers, Library of Congress, Manuscript Division; and 30 Apr. 1915 letter from J. Week to W. Redfield, box 1, Tariff Commission Records.
43 "Resolutions Unanimously Adopted by the National Grange," 10 Nov. 1915, container 147; Nov, letter from McAdoo to Wilson, container 520; and 8 Nov. 1915 letter from G. Emerson to McAdoo, container 150; McAdoo Papers.
44 28 Nov. 1915 diary entry of E. House; State of the Union Address; and Democratic National Committee address, PWW 35, 261,298, 312-6.
45 Indeed, in his letter to Kitchin explaining the reasons for his switch, Wilson noted: "You will remember that in my last message to Congress I foreshadowed just the considerations which were operating in my mind in this matter [of changed economic conditions necessitating a Tariff Commission to make thorough study of them]." 26 Jan. 1916 letter from Wilson to Kitchin, reel 6, Kitchin Papers.
46 Secretary of State Robert Lansing's diaries reveal that the topic of dumping was discussed in the Cabinet meetings of 7, 17, 18, 19, 21 and 28 Jan. 1916, reel 2, Robert Lansing Papers, Library of Congress, Manuscript Division.
47 4 Jan. 1916 letter from Redfield to Wilson, PWW 36, 428.
48 "Dumping and Monopoly," series 12, reel 525, Wilson Papers.
49 On Redfield's antidumping bill see 13 Dec. 1915 "Proposed Draft of Antidumping Bill," transmitted by A. Thurman, series 2, reel 75, Wilson Papers, and 3 Feb. 1916 letter from Redfield to Wilson, PWW 36, 127. On McAdoo's opposition to the antidumping proposal, see 14 Jan. 1916 memo from McAdoo to Wilson, PWW 35, 477.
50 20 Dec. 1915 letter from Houston to Taussig, and memo on "Tariff Commission," in box 335, Agriculture Records.
51 Houston, Eight Years I, 196-7. 17 Dec. 1915 letter from Redfield to Houston, 18 Dec. 1915 letter from Houston to Taussig, and 20 Dec. 1915 letter from Houston to Taussig, box 335, Agriculture Records. 17 Dec. 1916 report by F. Taussig on a Tariff Commission, with transmittal letter to D. Houston, series 2, reel 75, Wilson Papers. Taussig was skeptical that a Tariff Commission could really predict post-war conditions, but felt an independent commission of experts to study the fiscal effects of tariffs could greatly improve tariff-making. 10 Jan. 1916 memo from A. Peters to McAdoo attaching "Essentials of a draft of a Tariff Commission bill," container 520, McAdoo Papers. See also the following letters from W. Redfield: 7 Dec. 1915 letter to P. Brown and 23 Dec. 1915 to Taussig, in the Records of the Office of the Secretary of Commerce, National Archives II, Record Group 40 [hereafter Commerce Records].
52 Historians have not appreciated McAdoo's pivotal role in persuading Wilson and shepherding the legislation through Congress. Wilson biographer Arthur Link overlooks McAdoo entirely in his account of the Tariff Commission, overemphasizing the influence of Sen. R. Owen, who wrote one letter of support for the Tariff Commission to Wilson. Arthur Link, Confusion and Crisis (Princeton, N.J., 1964), 342. Other accounts of the Tariff Commission have relied too heavily on Agriculture Secretary Houston's assertion that he was the Commission's primary advocate within the Wilson Administration. See Houston, Eight Years I, 196, Kenkel, "Tariff Commission Movement," 113-5 and Wolman, Most Favored Nation, 206. However, these accounts are not supported by the historic record. Houston's main role was in putting economist Frank Taussig in touch with the Administration, and in convincing McAdoo of the value of a Tariff Commission (see references in footnote 51). But McAdoo, not Houston, convinced Wilson of the merits of a Tariff Commission and then oversaw the Administration's efforts to secure its passage. McAdoo's files are filled with correspondence between himself, Wilson, congressional leaders and interest groups on drafts of the Tariff Commission bill and strategies for its passage. See 31 Jan. 1916 letter from D. Roper to Kitchin, reel 6, Kitchin Papers. In the McAdoo Papers, see the following letters from 1916: 1 Feb. from H. Gross to McAdoo, and McAdoo to D. Roper, Burleson, and Houston; 5 Feb. from Houston to McAdoo; 7 Feb. from A. Peters to McAdoo; 9 Feb. from H. Gross to McAdoo, container 154. 14 Feb. to McAdoo from B. Taylor, and 28 Feb. from W. Tucker, container 155. 28 Mar. from G. Cooksey, container 157. See also 1 Feb. 1916 memo from McAdoo to Houston, box 335, Agriculture Records.
53 5 Nov. 1915 diary entry of E. House, and 4 Mar. 1916 letter from Burleson to Wilson, PWW 36, 177, 249; 8 Dec. 1915 letter from Lane to Redfield, Commerce Records; and 4 Sept. 1915 letter from McAdoo to William Wilson, container 165, McAdoo Papers.
54 Redfield felt that creating a Tariff Commission to study some of the same issues then being addressed in the Commerce Department's Bureau of Foreign and Domestic Commerce sent a signal that federal agencies were incapable of providing credible, technical studies. 22 Dec. 1915 letter from Redfield to Wilson, series 2, reel 75, Wilson Papers, and 23 Dec. 1915 letter from Redfield to Taussig, box 335, Agriculture Records.
55 Redfield stressed the importance of taking action on the dumping issue during the election year and urged Wilson to approach Congress as early as possible in its newly-opened session, to ensure that legislative action on dumping would be completed before the fall elections. 4 Jan. 1916 letter from Redfield to Wilson, PWW 35, 428-9.
56 14 Jan. 1916 letter from McAdoo to Wilson, PWW 35, 476-7. Wilson was also receiving direct pressure from legislators to support a Tariff Commission to address the dumping scare. For instance, Sen. R. Owen wrote on Jan. 5th, "It is of the greatest importance to prevent the Republicans coming together and using the protective tariff issue to the disadvantage of the Democratic Party. . . . [A]s a matter of party expediency, such a tariff commission would conciliate two or three millions of progressive men." Wilson met with the Senator a few days later to discuss the matter in person. PWW 35, 433-4.
57 19 Jan. 1916 memo from Wilson to McAdoo, container 520, McAdoo Papers; 21 Jan. 1916 letter from J. Fitzgerald to Wilson, series 4, subject 180, reel 233, Wilson Papers; and 24 Jan. 1916 letter from Wilson to Kitchin, roll 6, Kitchin Papers.
58 For Taussig's draft legislation, see 28 Jan. 1916 letter from D. Roper to C. Kitchin, reel 6, Kitchin Papers. For Wilson's draft legislation (which was modified from the Taussig draft by McAdoo and Houston), given to second-ranking Ways and Means member Henry Rainey (D-Ill.) and submitted to Congress as H.R. 10585, see 3 Feb. 1916 letter from McAdoo to Rainey, container 154, McAdoo Papers, and 23 Feb. 1916 letter from W. Kent (R-Calif.) to Wilson, series 4, file 180, reel 234, Wilson Papers.
59 The Tariff Commission could also be used to advance another policy interest of Wilson's: expanding export opportunities for U.S. manufacturers, to simultaneously resist pressures for protectionism and aid businesses. McAdoo worked hard on such trade expansion, particularly with his Pan-American Conferences (Proceedings of the Pan American Financial Conference [Washington, D.C., 1915]). The Tariff Commission prepared several early studies consistent with this interest (see Figure 6, reports on Reciprocity and Commercial Treaties and Free Zones in Ports of the U.S.). Unfortunately, it is beyond the scope of this paper to fully address this issue. See instead Wolman, Most Favored Nation.
60 On the reasons for Kitchin's opposition see 15 Apr. 1916 letter from Kitchin to R. Bowker, reel 6, Kitchin Papers, and 17 Jan. 1916 letter from Houston to Taussig, box 335, Agriculture Records. On the meeting between Wilson and Kitchin see 25 Jan. 1916 letter from Tumult-y to Wilson, PWW 36, 524. On constituent and colleague support for a Tariff Commission see the following letters from 1916:25 Jan. from T. Thacher. 25 Jan. from E. Rumely and from M. Cuff; 26 Jan. from W. Richardson; 27 Jan. from G. Randall, and from J. Livingston, reel 6, Kitchin Papers. And finally, Wilson explained his switch: "I have changed my mind because 'all the circumstances of the world have changed and it seems to me that in view of the extraordinary and far-reaching changes which the European war has brought about it is absolutely necessary that we should have a competent instrument of inquiry." 26 Jan. 1916 letter from Wilson to Kitchin, reprinted in part on the front page of the New York Times that day, emphasizing that the Commission was a step to prevent dumping; 31 Jan. 1916 from D. Roper to Kitchin and 1 Feb. 1916 from McAdoo to Kitchin, reel 6, Kitchin Papers. On Wilson's reasons for his switch, see also public addresses on 3 and 10 Feb. 1916, PWW 36, 113 and 156; 12 May 1916 memo by R. Baker, PWW 37, 37; and New York Times, 27 Jan. 1916, 4.
It is also possible that the friction and conflict between Kitchin and Wilson over the military "preparedness" issue was spilling over into unrelated issues. See Alex Arnett, Claude Kitchin and the Wilson War Policies (New York, 1937). There are frequent references to the strained relations between the Wilson administration and Kitchin in the papers of Progressive-Era politicians. See 9 Nov. 1915 letter from J. O'Neil to McAdoo and 11 May 1916 letter from McAdoo to A. Farquahar, containers 147 and 158, McAdoo Papers. 18 Oct. 1915 letter from Kitchin to V. Murdock, box 58, Victor Murdock Papers, Library of Congress, Manuscript Division. Wilson described Kitchin as "That distinguished stubborn North Carolinian who when he made up his mind would never open it." Daniels, Cabinet Diaries, 330.
61 27 Jan. 1916 letter from Rainey to McAdoo, container 153, McAdoo Papers. The New York Times also noted how foolish the sudden Republican opposition looked, 4 Feb. 1916, 8. Unfortunately, we know very little else about Rainey's thoughts on the Tariff Commission. His papers are sparse and there is only one letter in twenty containers that makes any reference to the Tariff Commission: a constituent urging Rainey's support, 20 Apr. 1916 letter from C. Brown, container 1, the Henry, Rainey Papers, Library of Congress, Manuscript Division.
62 18 Apr. 1916 letter from Underwood to R. Bowker, roll 9, Kitchin Papers, and 17 Jan. 1916 letter from Houston to Taussig, box 335, Agriculture Records. During legislative debate, Underwood warned: ". . . even if every [Commissioner] when first appointed should be a rank free trader, in a few years he will be a rank high protectionist. . . Every complainant and every petitioner that come before him will be a protectionist." CR 53 (1916): 13788, A1949. Underwood's fear was well-founded: the majority of the correspondence the Tariff Commission received from businesses consisted of appeals for increased tariff protection, reels 1 & 2, General Correspondence, Records of the U.S. International Trade Commission, National Archives II, Record Group 81 (hereafter USITC Records). Interestingly, Underwood praised the Tariff Commission in his 1928 memoirs (see footnote 80).
63 For evidence of Glass and Owen's support see: 3 June 1916 letter from A, Peters to McAdoo, container 160, McAdoo Papers and 5 Jan. 1916 letter from Owen to Wilson, PWW 35, 433-4. Evidence of support for or opposition to the Tariff Commission is also available for the following other legislators. In favor: Sen. J. Alexander (D-Mo.), 26 Aug. 1916 letter to McAdoo, container 165, McAdoo Papers; H. Barnhart (D-Ind.), CR 53, A1416; C. Cline (D-Ind.), CR 53, 10611; J. Collier (D-Miss.), CR 53, 10584; Sen. A. Cummins (R-Iowa), CR 53, 13795; Sen. C. Curtis (R-Kans.), CR 53, 12971; C. Dickinson (D-Mo.), CR 53, 10601; L. Dixon (D-Ind.), CR 53, 10579; Sen. J. Gallinger (R-N.H.), CR 53, 13797; F. Gillet (R-Mass.), CR 53, 10603; G. Helvering (D-Kans.), CR 53, A1771; W. Green (R-Iowa), CR 53, 10588; Sen. F. Newlands (D-Nev.), box 335 Agriculture Records; R. Olney (D-Mass.), CR 53, 10615; Sen. A. Pomerene (D-Ohio), CR 53, 13804; P. Quin (D-Miss.), CR 53, 10613; C. Randall (R-Calif.), CR 53, Appendix 1500; A. Sabath (D-Ill.), CR 53, Appendix 1872; Sen. H. Smith (D-GA), CR 53, 13794; C. Sloan (R-Nebr.), CR 53, 10593; W. Stephens (Progressive-Calif.), 25 Mar. 1916 letter to Wilson, series 4, file 180, reel 234, Wilson Papers; Sen. F. Simmons (D-N.C.), 1 Sept. 1916 letter to McAdoo, container 165, McAdoo Papers. Opposed: I. Bacharach (R-N.Y.), CR 53, A1536; W. Bailey (D-Pa.), CR 53, 10616; Sen. J. Bankhead (D-Ala.), CR 53, 13868; L. Dyer (R-Mo.), CR 53, A1466; H. Emerson (R-Ohio), CR 53, A1456; J. Fordney (R-Mich.), CR 53, 10517; E. Hamilton (R-Mich.), CR 53, 10599; Sen. T Hartwick (D-Calif.), CR 53, 13868; Sen. P. McCumber (B-N.D.), CR 53, 13801; J. Meeker (R-Mo.), CR 53, 10605; J.H. Moore (R-Pa.), CR 53, 10579, A1415; Sen. J. Shields (D-Ind.), CR 53, 13868; I. Siegel (B-N.Y.), CR 53, A1450; Sen. T. Sterling (R-S.D.), CR 53, 13794; and Sen. J. Vardaman (D-Miss.), CR 53, 13868.
64 28 Mar. 1916 letter from G. Cooksey to McAdoo, and 28 May 1916 letter from House Speaker C. Clark to McAdoo, containers 157 & 159, McAdoo Papers.
65 Interestingly, only four House Republicans and eight Senate Republicans opposed the appropriations bill. Republicans disliked the Revenue Act. CR 53 (1916): 9190, 11383.
66 This focus of the Commission's studies on the consumer costs of tariff protection provides support for research that has examined the growing importance of consumer versus producer interests during the Progressive Era. Research in this area has demonstrated how antitrust, health and safety, and other laws increasingly considered and protected consumer interests. See Robert Aduddell and Louis Cain, "Public Policy Toward the 'Greatest Trust in the World'," Business History Review 55 (Summer 1981): 217-242; Richard Hofstadter, The Age of Reform (New York, 1955); and Robert Mayer, The Consumer Movement (Boston, Mass., 1989).
67 Republican quote in CR 53 (1916): 13063. For additional Republican claims that foreign exporters paid U.S. tariffs see CR 53 (1916): 10604, 10618, 10659, 12972, 13044, 13063, A1475, A1496, A1505. First Democratic quote by Rep. Goodwin (D-Alaska), CR 53 (1916): 10510. Second Democratic quote by Woodrow Wilson, New York Times, 9 Jan. 1915, 1. For additional Democratic arguments that tariff incidence fell on consumers see 14 Apr. 1913 and 11 Nov. 1913 Wilson press conferences, PWW 50, 21,230; "Tariff: Economic Argument" (1913): series 12, reel 525, Wilson Papers; and 18 Dec. 1915 letter from Wilson to Kitchin, PWW 35, 370. For further illustrations of conflicting partisan claims, see the majority and minority opinions in the Aldrich Report (Senate Report No. 2332; 50th Congress, 1st sess.), 4 Oct. 1888; McKinley Report (House Report No. 1466; 51st Congress, 1st sess), 16 Apr. 1890; Wilson Report (House Report No. 234, 53d Congress, 2d sess.), 19 Dec. 1893; and Dingley Report (House Report No. 1, 55th Congress, 1st sess.). See also William Allen, "Issues in Congressional Tariff Debates, 1890-1930," The Southern Economic Journal 20 (1954): 340-355; and Richard Edwards, "Economic Sophistication in Nineteenth Century Congressional Tariff Debates," The Journal of Economic History 30 (Dec. 1970): 802-838.
68 See CR 53 (1916): 10604, 10619, 10647, 10659, 13062, 13116, 13122, 13802, 13834.
69 For pro-Democratic articles see: Literary Digest, 10 Jan. 1914. New York Herald, 17, 20, 21 & 22 Feb. 1914. New York Times, 2 & 6 Feb. 1914; 20 Mar. 1914; 30 June 1914; 10 July 1914; 14 & 16 Mar. 1915; 11 Apr. 1915; 9 Nov. 1915; 20 Feb. 1916. Saturday Evening Post, 21 June 1913, 2 Aug. 1913. Washington Post, 16 Jan. 1916, 23 Aug. 1916. For pro-Republican articles see: New York Herald, 16 Aug. 1916. New York Times, 21 Jan. 1914; 19 May 1914; 21 June 1914; 29 July 1914; 8 & 10 Mar. 1915; 5 Oct. 1915; 30 Nov. 1915; 12, 28 & 30 Apr. 1916. St. Louis Globe Democrat, 17 Aug. 1916. McAdoo quote in 25 Feb. 1916 letter to W. Brown, container 156, McAdoo Papers.
70 Roy Blakey, "The New Income Tax," American Economic Review 4 (Mar. 1914): 3547; Guy Callender, Economic History of the U.S., 1765-1860 (Boston, Mass., 1909); Donald Dunbar, The Tin Plate Industry (Boston, Mass., 1915); Alfred Marshall, Principles of Economics (London, 1890); Carl Plehn, Introduction to Public Finance (New York, 1916); Frank Taussig, Principles of Economics (New York, 1911); Chester Wright, Wool Growing and the Tariff (New York, 1910).
71 Herbert Emery, "Democrats and the Tariff," Yale Review 2 (1913): 193-214; Fabian Franklin, Cost of Living (New York, 1915). Most economists agreed that the rising cost of living during the late nineteenth and early twentieth century was the result of gold devaluation; see Irving Fisher, "A Remedy for the Rising Cost of Living," American Economic Review Supplement 3 (Mar. 1913): 20-28, and Taussig, Principles. However, economists and statisticians noted that better data and indices were needed; see Henry Pratt Fairchild, "The Standard of Living," American Economic Review 6 (Mar. 1916): 9-25, and Walter Wilcox, "The Statistical Work of the U.S. Government," Quarterly Publication of the American Statistical Association 14 (1914): 416-421.
72 Pierce, Tariff and Trusts; Edwin Segilman, The Shift and Incidence of Taxation (London, 1902); and Harvey Wooster, "The Tariff and the Ultimate Consumer," American Economic Review 6 (Mar. 1916): 26-39.
73 Henry Emery, "The Tariff and the Ultimate Consumer," American Economic Review 5 (Sept. 1915): 534-553 (this Yale economist chaired the 1909 Taft Tariff Board); Bernard Holland, The Fall of Protection (New York, 1913); Simon Patten, The Economic Basis of Protection (London, 1890); and James Whepley, The Trade of the World (New York, 1913).
74 W. Jevons, Theory of Political Economy (London, 1911); and Marshall, Principles.
75 From the end of the Civil War until Democrats' 1913 Underwood Tariff, the average tariff rate set by Republican Tariff Acts during the period was 47 percent. Democrats' 1894 Wilson-Gorman Act reduced tariffs to an average rate of 41 percent, while Democrats' 1913 Underwood Act set an average rate of 28 percent. Historical Statistics, Table U207-212.
76 There are four welfare effects associated with a tariff: (1) the transfer of consumer surplus to protected domestic producers in the form of higher prices; (2) the transfer of consumer and foreign producer surpluses to the government in the form of the tariff duty; (3) the consumer surplus lost through inefficient domestic production; and (4) the consumer loss associated with having less supply of the dutied product than would exist under free trade. See Beth and Robert Yarbrough, The World Economy (New York, 1988), 194. In 1916 many economists believed tariffs were responsible for resource allocation distortions, even though they were unable to formally articulate these hunches. Widespread consensus on the precise welfare costs of protection was reached with the Stolper-Samuelson theorem. Wolfgang Stolper and Paul Samuelson, "Protection and Real Wages," Review of Economic Studies 9 (1941): 58-73.
77 Compare H.R. 10585 transmitted with 23 Feb. 1916 letter from Kent to Wilson, series 4, file 180, reel 234, Wilson Papers, with Taussig's "Draft for a Tariff Commission" transmitted with 28 Jan. 1916 letter from Roper to Kitchin, reel 6, Kitchin Papers. Sabath quote in CR 53 (1916): A1873. Cox quote in 21 Feb. 1916 letter to Wilson, series 4, file 180, reel 234, Wilson Papers. In same series, see also 2 May 1916 letter from D. Dolan to J. Tumulty.
78 "Tariff Commission" memo and 18 Dec. 1915 letter from Houston to Taussig, box 335, Agriculture Records. A Harvard economist had suggested to Houston that the real value of a Tariff Commission was in addressing ignorance about tariffs' effects: "All students of taxation are agreed that every tax has some effect aside from the mere putting of money into the public treasury, and that a tariff duty is no exception to this rule. [This issue is so complicated and difficult that it] could be handled only by a permanent body of trained and expert investigators." 4 Jan. 1916 letter from T. Carver to Houston, box 335, Agriculture Records. Wilson was receptive to these arguments because of his sensitivity to the importance of public opinion, having argued earlier in his Presidency against the sugar lobby's attempt to influence the sugar tariff reductions under the 1913 Underwood Tariff Act with a misinformation campaign: ". . . [G]reat bodies of astute men seek to create an artificial opinion and overcome the interests of the public for their private profit. It is thoroughly worth the while of the people of this country to take knowledge of this matter. Only public opinion can check and destroy it." PWW 50, 84. McAdoo was also keenly aware of the importance of publicizing Democratic achievements and views, suggesting many ways to do so. See 27 Dec. 1915 letter from T. Pence to McAdoo; 13 June 1916 letter from F. Howe to McAdoo; 29 June 1916 memo of W.P.G.H., 24 Aug. 1916 letter from Sen. Hollis to McAdoo; and 4 Sept. 1916 letter from McAdoo to G. Cooksey, containers 151, 10, 161 and 165, McAdoo Papers.
79 23 Feb. 1916 letter from Kent to Wilson, series 4, file 180, reel 234, Wilson Papers.
80 CR 53 (1916): 10525. Oscar Underwood, Drifting Sands of Party Politics (New York, 1928), 230. Similarly, Taussig felt the Commission's value lay not so much in responding to the dumping situation, but rather in "its value as a permanent policy of [information gathering]." 17 Dec. 1915 letter from Taussig to Houston, series 2, reel 75, Wilson Papers.
81 CR 53 (1916): 13804 and 10611. See also 28 Jan. 1916 letter from D. Roper to Kitchin, reel 6, Kitchin Papers. 28 Nov. 1915 diary of E. House, PWW 35, 261. 28 Dec. 1916 letter from Houston to Wilson, series 2, reel 84, Wilson Papers. Additionally, tariff studies needed to be broadly disseminated to influence the public. One legislator noted that studies of a separate Tariff Commission might receive broader publicity than those of the FTC or Commerce Department. CR 53 (1916): 10611.
82 Compare H.R. 10585 transmitted with Feb. 23, 1916 letter from Kent to Wilson, series 4, file 180, reel 234, Wilson Papers with the final legislation. The Taft Tariff Board and all Republican Tariff Board proposals had five commissioners, no doubt contributing to Democratic legislators' dislike of this structure. See also 13 Mar. 1916 letter from Houston to Wilson in which Houston says he understands that a six-member board is necessary to secure congressional support because only an even number of commissioners can be perceived as nonpartisan. Box 335, Agriculture Records.
83 See CR 53 (1916): 10611, 13823. See also 24 Jan. 1916 letter from J. Fahey to Rep. R. Olney, container 153, McAdoo Papers; 18 Dec. 1915, and 4 Jan. 1916 letters from Houston to Taussig, and memo "Tariff Commission," box 335, Agriculture Records.
84 20 Dec. 1915 and 4 Jan. 1916 letters from Taussig to Houston, box 335, Agriculture Records; 5 June 1916 memo from G. Weber to Redfield, box 1, Tariff Commission Records; 12 Jan. 1915 Wilson Press Conference, PWW 50, 676; and 8 Dec. 1915 letter from Lane to Redfield, Commerce Records.
85 While the bill was still in the Ways and Means committee, the section ennumerating the kinds of studies the Commission could undertake was expanded to include cost-of-production studies. This was inserted against the wishes of some Commission supporters such as Houston in the hopes that the bill would thereby secure greater Republican support. However, cost-of-production studies were the last of over a dozen kinds of investigations the bill suggested were appropriate for the Commission; Republican Tariff Board proposals had always had as their central mandate the investigation of production-cost differences. See 13 Mar. 1916 letter from Houston to Wilson, box 335, Agriculture Records.
86 On Republican opposition during legislative debate see CR 53 (1916): 10651, 13044, 13257, 13805, A1457, A1466, A1474. For behind-the-scenes Republican opposition see 9 Feb. 1916 letter from H. Gross to McAdoo and 28 Feb. 1916 letter from W. Tucker to Wilson, container 155, McAdoo Papers; and 1 June 1916 letter from R. McCulloch (R-Ohio) to Wilson, reel 234, Wilson Papers. On amendment activity see CR 53 (1916): 10767, 10756, 13848-9, 13869.
87 "Tariff: Economic Argument" (1913): series 12, reel 525, Wilson Papers. Wilson once remarked: "There is no such animal as the cost-of-production. . . . [Cost] differs always with management." Collier's 53 (28 Oct. 1916): 5.
88 See following 1916 letters to Wilson: 31 Jan. from E. Wood; 28 Jan. from T. Love; 31 Jan. from Massachusetts State Board of Trade; 3 Feb. from C. Reeves; 11 Feb. from T. Gibbons, series 4, subject 180, reel 233, Wilson Papers. 1 July from F. Heney, PWW 37, 341. See also 10 Aug. 1916 letter O. Carmichael to J. Tumulty, box 9, Tumulty Papers, and 26 Jan. 1916 letter from J. Levi to J. Williams (D-Miss.), box 14, Williams Papers.
For editorials see Chicago Daily News, 26 Apr. 1916. New York Commercial, 29 Jan. 1916 New York Times, 30 Jan. 1916; 1, 3, 4, 9 & 17 Feb. 1916; 3 Mar. 1916; 17 May 1916; 7 June 1916. For Wilson endorsements see the following 1916 letters: 29 Feb. from National Association of Manufacturers to Tumulty; 16 Feb. from Economics Club of St. Louis to Wilson; 16 Mar. from N.Y. Weavers to Tumulty; 28 Apr. from Tariff Commission League to Tumulty; 1 May from Chicago Businessmen's Association to Wilson; 20 May from American Tariff Reform League to Wilson; and 27 July from Ohio Valley Manufacturers to Wilson, series 4, file 180, reel 234, Wilson Papers. Democrats referred to the Tariff Commission in their 1916 National Platform, PWW 37, 193.
89 28 Oct. 1916 speech, PWW 38, 55-56. Other 1916 speeches in which Wilson referred to the Tariff Commission included: 27 Jan. to the New York Railway Business Association (Houston, Eight Years I, 197), 3 Feb. to the Businessmen's League of St. Louis (PWW 36, 113), 10 Feb. to U.S. Chamber of Commerce (PWW 36, 11), 10 July to the World's Salesmanship Congress (PWW 37, 387), 2 Sept. accepting Presidential nomination, Sept. 25 to Grain Dealer's Association, 30 Sept. to Young Democrats, 17 Oct. for Wilson Day, 19 Oct. to Chicago Press Club, 19 Oct. Nonpartisan Women, 1 Nov. to Ellicot Club (PWW 38, 1367, 266, 308, 463, 478, 486, 574). 9 Sept. in Long Branch, N.J. (New York Times, 3 Sept. 1916, 4).
90 14 Feb. 1916 letter from W. Redfield to P. Brown, Commerce Records.
91 See the Tariff Commission meeting minutes of 3 Apr. through 14 Nov. 1917, box 1, Minutes of Commission Hearings and Meetings, USITC Records.
92 U.S. Tariff Commission, First Annual Report (Washington, D.C., 1917). Report on Interim Revenue Legislation (Washington, D.C., 1917). U.S. Tariff Commission, Tariff Information Series Report No. 2: The Dyestuff Situation (Washington, D.C., 1918). See also 25 Jan. 1918 memo from D. Lewis and W. Culbertson to Tariff Commission, and 18 July 1918 letter from Taussig to Wilson container 45 Culbertson Papers.
93 Second Annual Report (1918), 5, and box 1, Minutes of Commission Hearings and Meetings, USITC Records. Only William Culbertson did not consider this the Commission's most important report. 15 Feb. 1918, 18 Mar. 1918 and 3 Apr. 1918 memos from Culbertson to Tariff Commission, container 45, Culbertson Papers.
94 For example, the Commission voted at its 15 June 1917 meeting to investigate the glass, pottery, sugar, textile and chemical industries. On 14 Nov. 1917, it voted to study cutlery, paper, and leather. And on 16 Jan. 1918, it voted to investigate brushes, files, needles, and pins. Other than the dyestuff investigation ordered during this period, not one investigation ordered by the Tariff Commission during the first year-and-a-half was of an industrial product. Box 1, Minutes of Commission Hearings and Meetings, USITC Records.
95 Second Annual Report (1918), 65, 73.
96 Second Annual Report (1918), 54, 58. For additional examples, see also pages 104 and 113.
97 U..S. Tariff Commission, Tariff Information Series Miscellaneous Report: Dumping and Unfair Competition in the U.S. (1919). See also Third Annual Report (1919), 6.
98 To better see the crippling effects of slashed appropriations and two vacant Commissioner positions, compare the kind and volume of work accomplished by the Commission in 1918 with that in 1920, Minutes of Commission Hearings and Minutes, USITC Records.
99 Compare the letters written by the Democratic-appointed Commission, such as 14 Oct. 1917 from the Tariff Commission to Gentlemen informing business owners that "the object of the Tariff Information Catalog is to bring together data concerning the effect of the tariff laws upon the industries of this country," with those of the Republican-appointed Commission, such as a 15 Apr. 1920 letter from the Tariff Commission to Gentlemen requesting for inclusion in the Tariff Information Catalogue "information on wages at home and abroad, other cost-of-production differences, and suggested tariff changes." General Correspondence, USITC Records.
100 U.S. Tariff Commission, Survey of British Wool-Manufacturing Industry (Washington, D.C., 1920); The Foreign Exchange Situation (1921).
101 A similar fate awaited the Federal Trade Commission in the 1920s. G. Cullom Davis, "The Transformation of the Federal Trade Commission, 1914-1929," Mississippi Valley Historical Review 48 (Dec. 1962): 437-455.
102 Sen. McCumber (R-N.D.), CR 62 (1922): 11110, 8716, 9299, 11402. See also CR 61 (1921): 3479, 3513, 3704.
103 Houston, Eight Years II, 187. Regarding Houston's and other politicians' naivete, recall that this was the era of great hope and optimism in scientific analysis and progressive reform of most major social institutions.
104 The 1922 Fordney-McCumber Tariff Act created the flexible tariff, under which a petitioning firm could ask the Tariff Commission to study production-cost differences on a product and, based on the Commission's assessment of whether production-cost differences existed, the President was authorized to raise the tariff duty to equalize production costs. Of the thirty-eight flexible tariff cases fully investigated by the Tariff Commission between 1922 and 1929, thirty-five resulted in tariff increases (Thirteenth Annual Report , Tables I and II). This system allowed even more protectionism than before, in that firms could now obtain tariff increases between major omnibus tariff revisions. Karen Schnietz, "To Delegate or Not to Delegate: Congressional Institutional Choices in the Regulation of Foreign Trade, 1916-1934" (Ph.D. diss., U. of California, Berkeley, 1994), chap. 5.
KAREN SCHNIETZ is an assistant professor of business at the Jones Graduate School of Management at Rice University.
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|Date:||Mar 22, 1998|
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