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Tariffs in American History

When Alexander Hamilton became the nation’s first Secretary of the Treasury, he immediately began to prepare a schedule of tariffs, along with excise taxes on such commodities as alcohol and tobacco. The Constitution forbids taxing the exports of any state, and so American tariffs have always been laid only on imports.

In America’s colonial period, the east coast of the United States, with its many rivers and inlets that the small ships of those days could utilize, lent itself to smuggling, and the American colonists evaded British tariffs on a grand scale. Samuel Slater, who had apprenticed in the cloth industry and had a marked talent for mechanics, carefully memorized the needed plans for spinning and weaving machinery and sailed to America, having listed himself as a farmhand on the ship’s manifest. Congress’s Smoot-Hawley Tariff, the Federal Reserve’s keeping interest rates high in order to protect the gold standard, and the Hoover administration’s attempt to balance the budget in 1932 with sharply higher taxes, were the three huge public-policy mistakes that converted an ordinary stock market crash and recession into the Great Depression.

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