Why the Protective Tariff Was Republican Gospel From Morrill to McKinley

If you had stopped a Republican on a street corner in 1888 and asked what the party stood for, you would not have gotten a lecture on the Constitution or a speech about the budget. You would have gotten two words. Protect labor. The protective tariff was not one plank among many in the Republican platform. For half a century it was the creed, the hymn and the rallying cry, and a candidate who doubted it was treated the way a preacher who doubts the Resurrection would be treated.

That is worth knowing for a plain reason. Tariffs are older than any current argument about them, and the party that is now accused of "inventing" the idea did not invent it at all. It inherited it, built a coalition around it, ran the country on it, and then spent a generation learning what it cost. A conservative who knows that history can argue about trade without the embarrassment of thinking it all started yesterday. So let me walk you through it, give the free traders their best shot, and tell you where I think the record lands.

A creed older than the party

The idea that a young country should shelter its factories behind a tax on imports goes back to Alexander Hamilton. In his Report on Manufactures in 1791, Hamilton argued that a nation that only farms and buys its manufactured goods abroad is at the mercy of whoever sells to it. Henry Clay carried the idea into the next generation under the name of the "American System," a bundle of protective tariffs, a national bank and spending on roads and canals. The Whigs, Clay's party, were the party of protection, and when the Whigs fell apart in the 1850s (the story is in How the Kansas-Nebraska Act Killed the Whigs and Gave Birth to a New Party), a great many of their voters moved into the new Republican Party and brought their economics with them.

The Democrats of the same era pulled the other way. They favored lower duties, with the Southern planters leading the charge, since they sold cotton on a world market and bought manufactured goods and did not want to pay extra for them. Congress cut the tariff in 1846 and cut it again in 1857. Then came the Panic of 1857, and the argument that followed shaped the election of 1860. Iron and coal men in Pennsylvania, a state the Republicans had to win, blamed low duties for their troubles. The Republican platform of 1860 answered them. It called for an adjustment of duties that would encourage the industrial interests of the whole country. You can compare it with the Democratic platform in What the 1860 Republican Platform Promised Compared With What Democrats Offered. Plenty of historians think the Pennsylvania vote that year turned, in part, on that promise.

The Morrill Tariff and the war

The first big move came from a Vermont congressman, Justin Morrill. His tariff bill passed the House in 1860, but it stalled in a Senate where Southern members could block it. Once the Southern states began to secede, those senators left their seats, and the Senate passed the bill in early 1861. President James Buchanan, a Democrat, signed the Morrill Tariff on March 2, 1861, two days before Abraham Lincoln took office. It raised duties on a wide range of imports, and it is the starting line for the Republican tariff era.

The Civil War then took the tariff in two directions at once. The government needed money, and customs duties were the easiest tax to collect. Congress raised rates again in 1862 and 1864. It also created, for the first time that really worked, a federal income tax and a set of internal taxes on domestic goods, and the Republican answer to the question "won't those taxes hurt American manufacturers?" was to raise the import duties by enough to offset them. This is the logic behind the saying that the war made protection permanent: the duties went up to cover the new taxes, and when the war ended the taxes were repealed far faster than the duties were. The income tax itself lapsed in 1872. For the next forty years, the tariff was the main source of money for the federal government. If you want a feel for the sweep of what that Congress built, read Six Laws Passed in 1862 by a Republican Congress That Still Shape America.

The case, in four premises

Let me do this the way I would argue it on a stage. Here is the Republican protectionist case at its strongest, in numbered steps.

1. A nation that makes things is stronger than one that only buys them. Steel, iron, rails, guns and cloth are the sinews of a country. In a war, or a blockade, a nation that cannot produce them is helpless. This is Hamilton's point, and the Civil War seemed to prove it to a whole generation of Northerners who watched the Union's factories out-produce the South's.
2. American wages are higher than the wages of the countries we compete with, and open competition would drag them down. A Pennsylvania ironworker supported a family on pay that a European ironworker could only dream about. If the owner could replace the American's product with an imported one made by low-wage labor, the wage would have to fall, or the job would disappear. The tariff, on this view, was a wage floor in the form of a tax on imports.
3. Revenue had to come from somewhere, and a tax on imports was the least painful place. Before the income tax, Washington needed money to pay for the army, the pensions and the debt, and a tax on imports was collected at a few ports rather than at ten million kitchen tables. Republicans argued that it was better to put that burden on foreign goods than on American farms and homes.
4. New industries need time. A factory that will make tinplate, or steel rails, or woolens, cannot compete on day one against the established mills of Britain. The "infant industry" argument says to give it a few years of shelter, and it will grow to the point where it can stand without one.

The conclusion: a protective tariff builds a country where ordinary people can earn a decent living making real things, and it pays for the government in the bargain.

Notice something in premises 1 and 3 that the platform speeches never admitted. A tariff that is high enough to keep foreign goods out collects no revenue on the goods it keeps out. The more it protects, the less it raises. Those two Republican goals pulled in opposite directions, and the party never fully solved the puzzle. When the surplus built up in the 1880s, with the Treasury piling up cash from customs duties, it became a crisis of its own. Grover Cleveland, a Democrat, used his entire annual message to Congress in December 1887 to demand lower duties. That message is part of why 1888 became a campaign about nothing but the tariff.

McKinley, Harrison and the high-water mark

Benjamin Harrison, a Republican, beat Cleveland in the Electoral College in 1888 on a protectionist platform even though Cleveland won the most popular votes. (Our piece on Four Elections That Tested the Electoral College, From 1800 to 1888 tells that story.) Congress then passed the McKinley Tariff, signed in October 1890, named for Ohio congressman William McKinley, chair of the House Ways and Means Committee. It raised duties on many manufactured goods. It put raw sugar on the free list and paid a bounty to domestic sugar growers. And it added a feature that mattered later: a reciprocity provision, pushed by Secretary of State James Blaine, that let the president reimpose duties on certain goods from countries that did not give American products fair terms. Hold on to that last point. The idea of using the tariff as a bargaining tool, not just a wall, was in the law already.

The voters were not grateful. In the elections of 1890, the Republicans lost the House by a landslide, and McKinley himself lost his seat. Prices had gone up on some goods, Democrats blamed the tariff, and the voters took it out on the party. That same year's fight over federal election law, covered in The 1890 Lodge Force Bill and the Elections Law Republicans Could Not Pass, was part of the same bad season.

The lesson that McKinley drew from this matters. After Cleveland returned and the Democrats' Wilson-Gorman Tariff of 1894 passed (it became law without Cleveland's signature), the Republicans came back, and in 1896 they won the White House with McKinley, whose campaign you can read about in McKinley and Bryan in 1896 Compared as Two Ways to Run for President. In July 1897 the Dingley Tariff became law, with rates among the highest in the nation's history to that time. And yet the same William McKinley, in his last speech in Buffalo on September 5, 1901, said the day of exclusive protection was passing and called for reciprocity treaties. He was shot the next day. The man who gave the tariff its name had begun to think it should be a tool and not a creed. That change of mind is the subject of William McKinley was the tariff king until his last speech changed his mind.

The free-trade critique at its strongest

I promised the other side its best day in court, so here it is.

The classical economists, from Adam Smith in 1776 on, argued that trade makes both sides richer, and that a tariff is a tax on your own citizens. The American free traders, from the Democrats to Republican reformers, added three arguments of their own.

Who actually pays. A tariff raises the price of the imported good, and it also lets domestic makers of the same good raise theirs. The family buying a coat, a stove or a plow pays the difference. The cost to the consumer, the critics said, was far greater than the number of jobs protected. (The mechanics of that are laid out in who really pays a tariff, following the dollar from dock to shelf.)

The farmer's bind. The American farmer sold his wheat, corn, cotton and pork into world markets at world prices, but bought his tools, cloth and kerosene at prices that the tariff had propped up. He paid for the wall and got none of the shelter. The Grange movement and, later, the Populists made this the center of their complaint. Foreign governments, meanwhile, could answer American tariffs with duties of their own on American farm exports.

The trusts. Critics argued that protection let big manufacturers form combinations with no foreign competitor to discipline them. The tariff, in the phrase of the day, was "the mother of trusts." That was an exaggeration, because trusts existed in industries with no tariff at all. But it was a political punch that landed, because people believed it.

I think these are serious arguments, and I think some of them were right for specific industries at specific times.

What the record shows

Now the verdict, and I want you to see the difference between a fact and a judgment.

Fact: during the long Republican tariff era, the American economy industrialized at tremendous speed. By the end of the century the United States had become the world's largest manufacturing economy. Steel, rail, coal, oil, meatpacking and machinery boomed.

Fact: economists have never agreed that the tariff caused that boom. Frank Taussig of Harvard studied the tariff in the nineteenth century in his long work on its history and found that some industries did take root behind the wall while others were simply taxed. In our own time, Douglas Irwin, in his history of American trade policy, Clashing over Commerce, argues that the tariff mattered less for growth than its defenders and critics claimed. The country had enormous advantages that did not depend on duties: a huge internal market with no barriers between states, cheap land, abundant coal and iron, immigrants who wanted to work, and a legal system that protected property and contracts.

Fact: the costs were real. Consumers paid more for some goods. Farmers sold into world markets and bought in a protected one. And a political system built around tariff schedules invites logrolling, where every member adds a favor for the factory in his district until the bill is a monument to special pleading.

Judgment, and this one is mine: Republicans of that era were right that a country should care where its steel and its jobs come from, and wrong to turn a tool into a gospel. The party did best when it treated the tariff as a means (revenue, a bargaining chip, a shelter for one industry for a defined time) and worst when it treated it as a promise that no schedule should ever be touched. Smoot-Hawley, the subject of a later piece in this series, Smoot-Hawley in 1930 and the Tariff Lesson Republicans Should Know Well, is what happens when the gospel gets the better of the judgment.

What a conservative can take from this

Three plain lessons.

One: the history is on your side if you want to argue that trade policy is about more than price. Republicans from Lincoln to McKinley thought that a nation's workshops, wages and defense mattered alongside the lowest sticker price. That is not an un-American thought. It is the founding generation's thought. The honest version asks what we are protecting, for how long and at what cost, and then checks whether it worked.

Two: the history is not on your side if you claim tariffs are free. The family at the register paid. Honest advocates should say so and argue that the benefit is worth the price, instead of pretending the price does not exist. If you want the three main theories of trade laid side by side, with their strongest and weakest points, read free trade, tariffs or managed trade, three theories side by side.

Three: the greatest Republican tariff presidents were pragmatists. McKinley moved toward reciprocity, and Ronald Reagan, whose record is covered in Ronald Reagan was no free-trade purist, and his record proves it, used trade restrictions in specific cases while arguing for open markets. A gospel does not bend. A good policy does.

The bottom line

• Protection was the Republican creed from the Morrill Tariff of 1861 to the Dingley Tariff of 1897, and the party built its wage-earner coalition on it. That is history, not a talking point.
• The case for it rested on four things: national strength, high American wages, revenue before the income tax, and shelter for young industries. The last two have weakened as the income tax and the factories matured.
• The case against it, from consumers and farmers, was strong. Prices rose, exports suffered, and economists to this day argue about how much the tariff really did for growth.
• Tariffs are a tool. Ask any politician who proposes one what it is meant to protect, for how long, what it will cost your family, and how we will know it worked.
• When someone tells you the Republican position on trade has always been one thing, hand them a copy of this history, and ask which decade they mean.