The 1916 Tariff Commission:
Democrats' Use Of Expert Information
to Constrain Republican Tariff Protection
Karen E. Schnietz •
CarnegieMellon University
In 1916, Congresscreatedthe Tariff Commissionto collect expert
informationon the "administrative,fiscal and industrialeffectsof U.S. customs
laws"for the ExecutiveandCongress
[45]. The Commission
wasa significant
innovationin the regulationof tariff policy. For the first time in U.S. trade
history, Congressestablishedan administrativelyseparateinstitution to
supplement
its owntariff information-gathering.
Moreover,thecreationof the
Tariff Commissionmarks the beginningof ever-greaterdelegationsof
congressional
authorityof tradepolicymaking
authorityto otherpoliticalactors
and institutions.
2 Todaythe Tariff Commission
is the International
Trade
Commission,
primarilyresponsible
for technicaldeterminations
in trade-injury
claims.
This paperasksthe following: Why, after more than a centuryof
gatheringtariff-relatedinformationduringlegislativecommitteehearingson
proposed
tariff acts,did Congress
decideto supplement
its datagatheringwith
the Tariff Commission?Moreover,why not undertakethisfunction"in-house"
or delegate
it to anestablished
agencysuchastheCommerce
Department?
What
was the advantage
to legislators
of delegating
this task to an independent,
fact-findingcommission?
I interprettheTariff Commission
asaninstitutiondesigned
by Democrats
to settle the long-standingpartisan debate on the economiceffects of
protectionism.
Republicans
historically
arguedthattariffprotection
stimulated
industrialgrowth, promotedemploymentand was costlessto consumers;
•Financial
support
forthispapercamefroma Bradley
post-doctoral
fellowship
atCarnegie
Mellon
University'sGraduateSchoolof IndustrialAdministration.I wouldlike to thankAllan Meltzer,
David Mowcry, JoanneOxley, Keith Poole,EmersonTiller, WernerTroesken,Oliver Williamson
andLarryZacharias
for theirhelpfulcomments
on earlierdral•ts
of thispaper. All errorsaremy
own.
2TheCommission's
mandate
wasexpanded
bytheflexibletariffprovisions
of the1922FordneyMcCumberTariff. In 1934,Congress
delegated
tariff-setting
authorityto the President
throughthe
ReciprocalTrade AgreementsAct, the institutionalfoundationof current Executive-led,
bureaucratically-administered
policy.
BUSINESS AND ECONOMIC HISTORY, VolumeTwenty-three,
no. 1, Fall 1994.
Copyright¸ 1994by theBusiness
HistoryConference.ISSN 0849-6825.
176
177
Democrats
arguedtheopposite.Between1861and 1912,Republicans
werethe
winnersof this debate.Duringthishalf century,Democrats
settariff ratesonly
onceand thoserateswere overturned
within threeyearswhenRepublicans
regainedpoliticalcontrol. WhenDemocrats
returnedto powerin 1913, they
soughta mechanism
to givetheirpreferredlowertariffsdurability,evenduring
futureRepublican
controlof the federalgovernment.The Tariff Commission
was this extra-legislative
attemptto institutionalize
lower tariffs. Democrats
expected
theCommission's
studiesto identifyandadvertisethewelfarecostsof
tariff protection
andtherebylowerthetariffpreferences
of theelectorate.Only
information
released
byanindependent
institution
mightbeconsidered
politically
unbiased
andthusinfluencevoters'perceptions
of the tariff'swelfarecosts.
This paper is organizedas follows. Section1 summarizesexisting
explanations
for theCommission.Section2 reviewsU.S. tariff historyandthe
partisandebateoverthe tariff. Section3 advances
the thesisof thispaperthat
informationreleasedby the Tariff Commissionwas expectedto credibly
communicate
the consumer
costsof tariffsandtherebylessenelectoralsupport
for protectionism.
Section4 providessupportfor thisthesisby reviewingearly
Commission
studies,anddebateandtariffsunderthe Republicans'
1922Tariff.
Section 5 concludes.
Explanationsfor the 1916 Tariff Commission
Scholars claim that the Tariff Commission was established to "take the
tariff outof politics"by generating
unbiased
analyses
of theeconomic
effects
of tariffs [11; 22; 42; 56]. Althoughthey note that the impartialityof
Commission
analyses
needed
to beguaranteed,
theydonotexplainwhy thiswas
particularlyimportantto Democrats. In short, this explanationoverlooks
partisanship.
The political economyliteraturelargely overlooksthe 1916 Tariff
Commission
despitenumerous
studiesof its descendant,
the International
Trade
Commission
[17; 19; 30]. Manyhistories
of theearlyU.S. administrative
state
do not mentionthe Commission,
althoughtheyexamineotherearlyregulatory
agencies,
suchastheFederalReserveandtheInterstate
Commerce
Commission
[2; 16; 37]. Economicandbusiness
historiesof this periodalsooftendo not
accountfor the Commission[6; 38]. This is a shortcomingbecausethe Tariff
Commission
is oneof theearliest
examples
of a fact-finding
institution
• anda
milestonein U.S. traderegulation.
3I definefact-finding
institutions
as agencies
mandated
onlyto gatherinformation
andconduct
analysis; they have no policymakingauthority. Moreover,I refer stcictlyto agenciesthat are
administcatively
separate
fromCongress
andExecutive
branchagencies.Otherexamples
includethe
GeneralAccountingOffice, the Office of TechnologyAssessment,
and the NationalBureauof
Standards[35].
178
Tariff History and Partisan Debate on the Tariff
Throughoutthe nineteenthcentury,tariff policy was one of the most
Republicans,the party of
protectionist tariffs, primarily representednortheasternmanufacturers.
Democrats,the party of low tariffs, primarily representedlower-income
agricultural
southern
and midwestern
states.Until the Civil War, tariff rates
see-sawedas controlof the federalgovernmentregularlyalternatedbetween
parties.WhenRepublicans
controlled
thegovernment,
tariffrateswererelatively
high; whenDemocrats
controlled
the government,
tariffswererelativelylow
(Figure 1).
After the Civil War, Republicansenteredthe long period of political
contentiousissues in U.S. national politics.
dominance that continued until the election of Woodrow
Wilson
in 1912.
Between1867 and 1912, Democratswieldedunified political controlover the
federalgovernment
(controlling
bothhouses
of Congress
andthePresidency)
in
only oneof twenty-three
Congresses;
Republicans,
in contrast,
wieldedunified
politicalcontrolthirteentimes[44]. Sincetariff policy dependedon unified
politicalcontrolof the federalgovernment,
Democrats
controlledtariff policy
duringjustthreeof fifty-twoyearsbetween
theonsetof theCivil Warand1912:
from 1894-96underthe Wilson-GormanTariff. Thus,Democratswerehighly
unsuccessful
in prevailingon tariff policy,oneof the mostimportantpolitical
issues
of theday.4
Figure 1: Tariff Rates from 1824 to 1920
50
dO
•0
10
0
...;.;......•;.;.;.;;.;.;?;.;.;•.;....;.;.;.;•.;?;?;...•...i:.i;:.•.:.;.;?;.........•.:.;.;•.;.•?;.;.;.;.;.;ii:.;;.;.;.?;.?;.;.;.;;.:.:;.;.;.;.;.;.;•......•;.;•.;.;..
1524
15•.
L$40
154•
155•
L$6•
1571.
1879
1887
159•
lg03
1911
Source:[44]
4Tariffswerethe principalrevenuesourcefor the federalgovernment
at thistime.
tgt9
179
After winningthe 1912 election,Democratscut tariffs to their lowest
levelssincethe Civil War throughthe 1913Underwood
Tariff (Figure1).s
However, Democratscould guaranteetheselow rates only as long as they
retainedpoliticalpowerandno "coalitional
drift" occurred[28]. The threatof
futureRepublican
unifiedpoliticalcontrolandits inevitabletariff increases
was
the motivation behind the Commission.
TheTariff Commission
wasestablished
bythe 1916Revenue
Act. Earlier
in 1916, Congressauthorizedappropriations
to ensurethe U.S. military's
preparedness
in light of theEuropeanWar, soonto be WorldWar I. Although
theappropriations
passed
with a bipartisan
majority,votingon theRevenueAct
continuedthe longtraditionof partisanvotingon tariff matters,with Democrats
unanimously
supporting
thebill andRepublicans
opposing
themeasure
by 82%
in theHouseand81% in theSenate.
6 Republicans
opposed
theRevenue
Act
becauseit raisedmostof the requiredrevenuewith incometax increases,
rather
than with tariff increases.
During the nineteenthcenturytariff incidencewas hotly contested.
Congressional
debateon the RevenueAct echoedthat of previousrevenue
legislation.Republicans
maintained
thattariffswerepaidby foreigners
[1; 54;
29; 10; 7, pp. 10604, 10618, 10659,A1475, A1496, A1499, A1501, 12972,
13044,13063]. Theyclaimedprotectionist
tariffs"compelthe foreignerto pay
for theprivilegeof enteringourmarkets,sustainourmanufacturers,
broadenthe
opportunityfor labor, and maintain a high standardof wages for the
workingman"[7, p. 10586]. On the otherhand,Democratsattackedprotective
tariffsas an indirecttax, paidfor by consumers
of dutiedproductsin the form
of higherpricesandbomedisproportionately
by theworkingpoor[7, pp. 10525,
10532, 10582, 10595, 10613-5,A1536, A1771, A1869, A2025, 12957, 13045].
The followingexchange
wastypical:
MR. GOODWIN (D-AK): Doesthe gentlemanprefera [tariff]
tax uponthe necessities
of life ratherthanuponthe greatwealth
of this country[throughan increasein incometaxes]?
MR. CAMPBELL (R-KS): I preferto makeforeignnationspay
for the privilegeof sellingtheirproductsin ourmarketthanto let
themselltheirproducts
herefreeof [tariff]tax,andthen[income]
tax our ownpeopleto makeup thenecessary
revenueto pay the
expenses
of the government.[7, p. 10510].
Also contested
wasthe relationship
betweenthetariff andeconomicprosperity.
Democratsclaimedlow tariffs loweredthe cost-of-livingbecausepriceson
dutiableproductsdeclinedand helpedlabor becauseefficiencyincreasesby
•Themagnitude
of thecutwasmadepossible
partlybythefederalincome
tax.
6Evenif all Republicans
votedagainst
thebillit wouldhavepassed
in theSenate
by42-32andin
the Houseby 210-188 [7, pp. 10768-9, 13872-3].
180
domesticfirmsensured
thatjobsremainedin the U.S. In contrast,
Republicans
predicted
U.S. industryandlaborwouldcollapse
againstcheap-labor
imports[7,
pp. 10604,10619,10647,10659,A1450,A1472,13116-22,13834-42].
7 The
mediadid not clarify the debate. Somepublications
claimedthat Democratic
tariff policywasresponsible
for economic
prosperity
[32; 50]. Otherssupported
Republican
tariffsandurgedthatprotection
berestored
to guardU.S. laborand
industryagainstthe daywhenthe Europeanwar ended[40; 33]. The average
voter couldnot help but be confused.
Economistsoffered little help. Althoughthey had reachedgeneral
consensus
that protectionist
tariffs were not responsible
for U.S. economic
prosperity
[5; 41] andwerehighlyregressive,
especially
compared
to anincome
tax [3; 4], economists
disagreed
abouttariff incidence.Somesaidtariffswere
paid by consumers
[27; 34; 41], while othersarguedthatprotection
wasnot
borneby consumers
and was associated
with greaterwelfaregainsthan losses
[13; 52]. Also, someeconomists
arguedthat tariff-associated
price increases
were so small as to havealmostno effecton consumerprices[12; 15], while
othersmaintainedthat high tariffs had been a primary causeof the rising
cost-of-living[36; 55]. And many economicstexts, while discussingthe
argumentsfor and againstprotection,did not specificallysay where tariff
incidencelay [9; 14]. In general,turn-of-the-century
economistsdevoted
relativelylittle attentionto international
trade and tariff analysis. Many
influentialeconomics
texts of the era ignoredthe economicsof foreigntrade
[20], or paidscantattentionto it [27].
Credible Communication
of Protectionism's
Welfare
Costs
It has been argued that "legislationis so often drafted with a
public-regarding
glossbecause
this glossraisesthe coststo the publicandto
rival groupsof discovering
the true effect of the legislation" [25]. Tariff
Commission
analyses
wereintended
to removeRepublican
"gloss"
fromthetariff
debateby revealingconsumer
costsof protection.I developthisthesisin two
ways. First, I examineRepublicanclaimsaboutthe tariffs economicbenefits
in light of contemporary
knowledgeaboutthe welfarecostsof protectionism.
Second,I explain why the fact-findinginstitutionalform of the Tariff
Commissionwas expectedto better accomplishthe goal of credibly
communicating
the costsof protectionism
thanotherinstitutional
alternatives.
Tariff
Protection's
Welfare
Costs
Recall that in 1916 there was no broad consensus on the net benefit of
tariff protection.However, considerthe tariWs net benefit accordingto
Republicanassertions:(1) increased
jobs andwagesfor labor,denotedby L;
(2) increased
survivalratesandprofitsfor Americanfirms,denotedby K; and
?Notice
howsimilarthesearguments
aretothoserecenfiy
heardontheNorthAmerican
FreeTrade
Agreement.
181
(3) tariff revenues
paid for by foreignexporters,
denotedby T. Republicans'
claimsthuscanbe represented
by the followingequation: Republican
B(t) =
L + K + T. Notethataccording
to Republicans,
therewereno costcomponents
in the tariff's net benefitequation,only benefits.
Figure 2: Partial Equilibrium Welfare Effects of a Tariff
Price
DomesticSupply
World Supply
with Teziff
P
!
1• r
World
Supply
without Teriff
Domestic Deramud
Y2
Y4
Y3
Y1
Consumption
+ Production
Source: [57, p. 188]
In reality,however,the net nationalbenefitof a tariff, B(t), is the tariffs'
benefits,b(t) minusits costs,c(t), andcanbe expressed
as: B(t) = b(t) - c(t).
The actualwelfareeffectsof a tariff are dividedinto transfersand deadweight
losses.Figure2 illustrates.Two kindsof transfersareassociated
with a tariff.
Areaj represents
the redistributioneffect,or transferof consumersurplusto
protecteddomesticproducers,
in the form of the higherprice, P+t, paid by
consumers
to domestic
producers
in thepresence
of thetariff. Arean represents
the revenueeffect,or transferof consumersurplusto the domesticgovernment
in the form of the tariff duty.
8 Additionally,
two deadweight
lossesare
associated
with a tariff. Area m represents
the productioneffect,or consumer
surpluslostthroughinefficientdomestic
production.After the impositionof the
tariff, units Y2 throughY4 of the good are produceddomesticallyratherthan
imported.Arear represents
theconsumption
effect,or consumer
lossassociated
with havinga lowersupplyof the dutiedproductat a higherpricethanexisted
SArea
n alsorepresents
thefocus
ofrent-seeking
andredistributive
behavior.
Politicians
compete
to
redistribute
a largershareof thisrevenuebackto theirdistrictthanwaspaidin by it. Redistribufive
behaviorcan be considered
a "secondorder"effect of a tariff, after the "firstorder"equilibrium
welfare effects.
182
underfree trade. Under the tariff, consumers
can no longerobtainunits Y3
through
Y1 of thegoodat thefreetradepriceof
Consider
againRepublicans'
netbenefitequation
forthetariffin lightof
this discussion:RepublicanB(t) = L + K + T. Areaj in Figure2 is roughly
analogous
to the benefitsto industry,K, andlabor,L, impliedby Republicans'
netbenefitequation.Indeed,thetariff did provideprotected
industryandlabor
with a surplus,but at the expenseof consumers,
something
that Republicans
failedto acknowledge.
Moreover,thetariffrevenue
T thatRepublicans'
claimed
waspaidby foreignexporters
is actuallyarean, thetransferfromconsumers
to
the domesticgovernment.Lastly,the tariWsdeadweight
costs,represented
by
areasm andr, wereignoredby Republicans.
Democrats
hopedTariff Commission
information
wouldconvincevoters
to subtract
a costcomponent,
X, fromtheRepublicans'
benefitequation
to reflect
consumerprice increasesassociated
with a tariWs transfersand allocation
distortions:
•ø "ForyearsI havewondered
howit waspossible
fortheRepublican
partyto makethemasses
believethat[itsprotective
tariff]wasbeingpaidby the
foreignproducers.Thatthis[Tariff Commission]
legislation
will put an endto
suchfoolishcontentions
ismy wish"[7, p. A1873]." Democrats
hopedvoters'
net benefitequationwouldeventuallyresembleequation(1), whereX denotes
the consumerpricesincreases
associated
with tariff protection. Notice how
differentthis equationis from Republicans'
costless
net benefitequation(2).
DemocraticB(t) = (L + K)•2'- X
(1)
RepublicanB(t) -- L + K + T
(2)
9Underrestrictiveassumptions,
ownersandintenseusersof relativelyscarcefactorsof production
arenetbeneficiaries
of tariff protection;ownersandintenseusersof relativelyabundantfactorsare
netpayers[39]. Underlessrestrictive
assumptions,
capital
owners
andworkers
inimport-competitive
industries
are net beneficiaries;capitalownersand workersin export-dependent
industries
and
intenseconsumers
of dutiablegoodsarenet payers[26,48].
•øTariffCommission
analyses
werenotintended
to illuminate
theshapes
of thesedistortions
(areas
j, n, m, andr): thatwasstillbeyondthetechnicalabilityof economics.
However,manyeconomists
believedtariffswereresponsible
for resource
allocationdistortions,
eventhoughtheywereunable
toformallyarticulate
thesehunches.Widespread
consensus
ontheprecise
welfarecostsof protection
was reachedwith the Stolper-Samuelson
theorem[39].
"ep. Sabath,
D-IL
UAssume
voterscontinue
to believeclaimsthatprotection
increases
returns
to all laborandcapital,
notjust thatemployedin protected
industries.Theirpreference
is still likelyto shifttowardat least
slightlylower tariffsbecauseof the additionof consumer
coststo the Republicans'
previously
costlessnet benefitequation.
183
Because
thetariffwasanindirecttax,paidforthroughnonobvious
higher
priceson protected
products
andthroughthe entirelyinvisibleefficiencylosses
associated
with tariff distortions,
it waseasyfor Republicans
to disguisetariff
incidence.
•3 Democratic
legislators
knewthisbutmanyvoters
didnot: "Atariff
is a tax on consumption
... andwouldneverhavebeentoleratedif theAmerican
peoplecouldhaveseenit whentheypaid it" (emphasisadded)[7, p. 10525].
House Ways and Means CommitteeChair Underwoodsaid the Tariff
Commission
"tested
accurately
thedegreeof protection
affordedby a tariff tax
in a way thattheconsuming
publiccanbothunderstand
andfully realize" [43,
p. 230].
Democraticlegislators
potentiallycouldbenefitfrom Tariff Commission
analyses
in threeways. First,"proof'thattariffsarepaidfor by consumers,
not
foreigners,
couldremoveoneof theRepublicans'
mosteffectivearguments
for
protectionismfrom future tariff debate. Second,Democratscould benefit
electorally
by winningtheupcoming1918elections.Or, lowertariffpreferences
might erodelonger-termpoliticalsupportfor Republicans.
Third, Democrats
couldbenefitby havingfutureRepublican
tariff increases
constrained
by the
loweredtariff preferences
of the "reeducated"
electorate.
Institutional
Form
and Alternatives
The form chosenfor the Tariff Commission--a
legislativelyseparate
fact-findinginstitution--is
explainedby the extremepoliticizationof the tariff
debate. Democratsfacedthe politicalhazardthat informationregardingthe
tariff'swelfarecostswouldbe considered
unreliable
if comingfromeitherparty
or government
agencies
seenas influencedby partisanpolitics.The "correct"
answerto thetariWscostswouldbe accepted
by the electorate
only if it were
madeby persons
considered
unswayed
by partisanideologyon tariff matters.
Congressional
Democrats
thoughtan expertCommission
wouldbe sufficiently
elevatedabovetariff politicsto influencethe debate:
... mostSenators
areableto getstatistics
to proveanything
theywant,
on any side of a question. I believethat if we have a permanent
boardcomposed
of menwhowill usediscretion,
talentandexperience
in theinvestigation
of thesesubjects,
theywill be abletofurnishdata
whichwill receivemorecreditthan any that we haveheretoforehad
(emphasis
added)[7, p. 13804].
TM
In short,Democratscreatedthe Tariff Commission
as a way to credibly
communicatethe costsof high tariffs to voters.
•A contemporary
analogis foundin volunlary
resa'aint
agreements.
Theyappear
to be"paid"by
foreignproducers
who limit exportsto theU.S., butareactuallypaidfor by U.S. consumers
through
higherprices[21].
•4gep.Pomerene,
D-OH.
184
Structural features of the Tariff Commission were intended to neutralize the
influenceof politics. Most importantwas the requirementof equalpartisan
representation:
three commissioners
from eachparty were appointedby the
President.Democratsexpectedthis "nonpartisanship"
to give the Commission
a reputation for impartiality. No active businessperson
could serve.
Quasi-judicialpowerswere conferredupon the Commission,allowingit to
conducthearings,summonwitnessesand require productionof relevant
documents
to carryoutits investigations.
Salariesof $7,500(thesameasfederal
judgesandmembers
of Congress
werepaidatthetime)wereexpected
to insulate
commissioners
from outsidefinancialinfluences.Overlapping12-yearterms
were intended to ensure that no one Presidentwould ever appoint all
commissioners
(after the initial appointments),
and thus keepthe Commission
frombecoming
associated
withoneadministration
or politicalparty.
ns
Congressional
Democrats
chose
theindependent,
fact-finding
institution
for
the Tariff Commissionbecauseit was best suitedto producingseemingly
unbiasedtariff analyses.Significantly,three institutionalalternativeswere
rejected. Democratscouldhavehad legislativestaff preparestudies,but such
informationprobablywould not havebeenregardedas crediblebecauseof its
intimate connectionto Congress. Democratsalso did not pursuea second
alternative to broaden the Federal Trade Commission's mandate to include tariff
analyses.The FTC wasempowered
to investigate
tradeconditions
with foreign
countries,
butitsprimaryfocuswasdomestic
anticompetitive
industrialbehavior.
Requiringit to explorethe tariff issuewould dilute the FTC's attentionto
anticompetitive
industrialpracticesand likely would not providethe in-depth
scrutinyof the tariff's welfarecoststhatDemocrats
desired.
A third institutional
alternative,expanding
the mandateof the Bureauof
ForeignandDomesticCommerce
in theCommerceDepartment,
wasrejectedfor
thesamereasonasexpanding
theFTC'smandate.TheBureauwascharged
with
a widearrayof informationgatheringandanalysis,someof whichwaspertinent
to thetariff issuebut muchof whichwasnot. Congress
transferred
theportions
of the Bureau'semployees
andrecordspertaining
to tariff analysis
to theTariff
Commission.If Congress
had expandedthe Bureau'smandate,tariff analysis
wouldhavebeenbut one of many functionsthe agencyperformed. Several
legislatorsnoted,"... [the tariff] subjectis of suchvery graveimportancethat
thereoughtto bea specialcommission
whosesoledutyit wouldbeto studyand
investigatethis subject" [7, pp. 13804, 13820]. Moreover,sinceRepublican
Presidents
werethe normin the post-CivilWar era,Democratsavoidedlodging
the tariff analysisfunctionin an agencyanswerable
to the WhiteHouse.
Finally,tariff studiesneededto be "advertised"
to alterthetariff preferences
of theelectorate.Indeed,Congress
mandated
thattheCommission
supplyannual
•sOther
institutions
havebeenstructured
similarlyto minimizepoliticization.The General
Accounting
Office comptroller
generalis appointed
for a i 5-yearterm. An equalnumberof the
members
of the governing
boardof the Officeof Technology
Assessment
arenominated
by the
Congressional
party leadershipto ensureequal partisanrepresentation
on OTA studies. Both
institutions
havereputations
for neutralityandcredibility[31,49]. The FederalReserveis perhaps
the mostcelebratedinstitutionin whichpoliticalneutralityhasbeen"hard-wired"[28].
185
summariesof its studiesandpublishall studies. Legislatorsnotedthat studies
of a separateTariff Commissionwould likely receivebroaderpublicitythan
thoseundertakenby congressional
staff, an expandedBureauof Foreignand
Domestic
Commeme,
ortheFederal
TradeCommission
[7, pp. 10611,13820].
•6
Tariff Commission Work and Effects, 1917-1923
Woodrow Wilson appointedthree Democratsand three Progressive
Republicansto the first Tariff Commission. Compilationof the Tariff
InformationCatalogue
wastheearlyCommission's
mostimportant
function[46,
p. 5]. This catalogue
eventuallycontained
studies
of eachproduct(dutiableand
on the free list) in the 1913 Tariff Act. By 1918, the Tariff Commissionhad
completed158 studies,morethanhalf of consumer
products,a focusconsistent
with the thesis that Commission studies were intended to illustrate consumer
costsof tariff protection[46].
Theseproductstudiescontained
the informationonprotectionism's
effects
that Democratshad hopedthe Tariff Commissionwould disseminate. For
example,the cottonglove study'spricedatastronglysuggested
tariff increases
were entirelypassedthroughto consumers.Beforethe Republicans'1909
Payne-Aldrich
Tariff, the averageretailpriceof a pair of gloveswas 10½;after
a 5½per pair dutywas imposed,the averagepriceroseto 15½. Whenthe duty
waseliminatedby the Democrats'1913UnderwoodTariff, the pricefell back
to 10½[46, p. 65]. Similarly,the studyon bleaching
powder(whichhadboth
consumerand industrialuses)notedthat a poundcost$1.50 in 1912 underthe
Payne-Aldrich
Tariff butonly$1.20 in 1914aftertheUnderwood
Tariff cutthe
dutyin half [46, p. 54]. Also includedin thisreportwerepredictions
madeby
protectionists
duringcongressional
hearingsontheproposed
tariff reduction:"A
reductionin the duty...wouldarresttheprogress
madein cheapening
thepriceto
the consumer"[46, p. 58]. Juxtaposing
suchpredictionsagainstactualretail
pricesunder varioustariff acts was clearly a political act that discredited
Republican
claimsabouttariff incidence
beingborneby foreignproducers.
Duringitsfirsttwo years,theCommission
alsopublished
ExtendedIndustry
Reports,primarilyof consumer
goodssuchas books,silk, buttons,sugarand
cotton(the exceptions
were industriesheavilyrelied upon duringthe war).
Generalreportsfocusingon topicsassociated
with tradeliberalization,
suchas
reciprocityand free zones,were alsoreleasedby the Commission[46]. The
Tariff Commission
operated
for onlytwo yearsunderDemocraticcontrol.When
Republicansregainedcontrolof Congressin May 1919, they crippledthe
Commission
by slashingappropriations
andrenderingit incapable
of completing
most of the reportsin progress.Republicans
clearlydid not want Wilson's
low-tariff
oriented
Commission
to undertake
studies that
would
further
undermine
protectionist
principles.Disciplining
anagencyby cuttingitsfunding
•61nformation
dissemination
is alsoan important
featureof otherfact-finding
institutions.
For
example,GAO reportsreachthe mediaregularlyand influencepolicydebate[31]. The most
commonuse of OTA reportsis illuslxatingcostsof unwantedpolicy optionsand providing
justification
for desiredpolicyduringcongressional
hearings
[49,51,53].
186
is a commontool of congressional
oversight[28]. Financialconstraints
also
prevented
the Commission
from automatically
publishingits studiesthatyear;
instead,
manuscripts
weretransmitted
to theHouseWaysandMeanscommittee
which decidedwhetherto print the study. The only report clearedby the
Republican
WaysandMeanscommittee
anddisseminated
to the generalpublic
in 1919concerned
dumpingandunfaircompetition,
a reportthatcouldbe used
to bolsterthe casefor increasing
tariff protection[47].
Personnel changesfurther altered the Tariff Commission. When
RepublicanPresidentHardingtook officein 1921,he replacedtwo vacancies
with activeprotectionists.
The Tariff Commission
studiesundertaken
in 1921
and 1922reflectRepublican
oversightin theirfocuson industrialgoods,suchas
acidsandchemicals
ratherthanconsumer
products,
unfairtradepractices,
and
domesticversusforeigncostsof production
in specificindustries.
The shiftfrom
Democratic
to Republican
oversight
of theTariff Commission
demonstrates
that
the informationreleased
wasinfluenced
by thetariff ideologies
of the President,
Congress,and the tariff commissioners.Clearly,the Commissionwas not
elevatedabovepartisanpolitics.
Democrats
hopedto gainthe politicalupperhandin the tariff debateby
educating
votersaboutthecostsof protection."Takingthetariff out of politics"
by delegating
analysis
to theTariff Commission
facilitatedthis goal; it wasnot
the primaryreasonfor the delegation,
however,asthe existingexplanation
for
the Tariff Commission
claims. Tariff politicsinformedby a publicconsensus
that consumers
paid tariffs was likely to resultin lower tariffs. Democratic
legislatorsexpectedthe Tariff Commission's
analysesto have suchelectoral
influence,in part,becauseof the Progressive
era'sfaith in expertanalysis[18;
23; 24].
Suppo•
Did the Tariff Commissionlower voters'tariff preferences
as this paper
arguesit was intendedto? A comparison
of Republicantariff ratesbeforeand
afterthecreationof theTariff Commission
suggests
thattheinformation
released
by the Commission
may havemodestlyconstrained
the 1922 Republicantariff
increases.The averagetariff rate underRepublicans
in the five yearsafter
passage
of their 1909 Payne-Aldrich
Tariff was41.3 percent; in the five years
followingpassage
of the 1922Fordney-McCumber
Tariff the averagewas35.6
percent,or almost14 percentlower than beforethe Tariff Commission
was
created[44].
The Tariff Commission
appears
to havebeensuccessful
in stoppingmost
Republican
falseclaimsabouttariff incidence.
WhenRepublicans
debatedtheir
1922 Fordney-McCumber
Tariff, theyrarelyclaimedthattariff protection
was
paidfor by foreignexporters,
unlikedebatesixyearsearlierontheRevenue
Act.
Indeed,in 1922,Republicans
regularlyconceded
that"thetariff is an imposition
uponthepublic,whohaveto paythetariffin someform"[8, pp. 11110,11078,
11125]? Additionally,
although
Republicans
opposed
theTariffCommission,
•7Rep.
McCumber,
R-ND.
187
they referredto its studiesdozensof timesduringdebateon their 1922 Tariff,
albeittypicallyto provide"scientific"
justificationfor specifictariffrates[8, pp.
5879, 5987, 5999, 6188, 6250, 6311, 6438, 6476, 6513, 6559, 6642, 11062,
11133]?
Conclusion
Duringthe longperiodof Republican
politicalhegemony
thatfollowedthe
Civil War, Democrats
wereunableto gainandmaintaincontrolof tariff-setting
via standardtariff legislation. Democratsset tariff ratesonly onceunderthe
1894 Wilson-Gorman
Tariff Act, andthoserateswerepromptlyoverturned
by
Republicans
just threeyearslater. When Democratsfinally regainedpolitical
controlin 1913, they soughta mechanism
to give their preferredlower tariffs
durability,evenduringfutureperiodsof Republican
politicalcontrol.TheTariff
Commission
is an extra-legislative
attemptto institutionalize
lowertariffsby
crediblycommunicating
thewelfarecostsof protectionism.Democrats
expected
the Commission'sstudiesto illustratethe consumercostsof tariff protection,
therebyloweringthetariff preferences
of the electorate.
The 1916 Tariff Commissionfailed to spark a groundswellof electoral
supportfor lower tariffs. But it alsoencountered
the "worstcase"scenarioof
Republicanunified political controlless than three years after its creation.
Moreover,theTariff Commission
didnotfail entirely.First,Republicans
did not
raise tariffs to pre-1913 levels under the 1922 Fordney-McCumber
Tariff,
suggesting
thatTariff Commission
information
mayhavemodestlyconstrained
Republicantariff increases. Second,Republicansrarely argued during
congressional
debateonthe 1922Fordney-McCumber
Act thatthetariff waspaid
for by foreignproducers;increasingly,
eventhestaunchest
protectionists
publicly
admittedthat tariffs were borneby consumers.This suggests
that Tariff
Commission
information
largelycurtailedRepublicans'
falseclaimsabouttariff
incidence.
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