Emergency Tariff of 1921
Encyclopedia
The Emergency Tariff of 1921 of the United States
was enacted on May 27, 1921. Due to the Underwood Tariff passed during the Wilson Administration
, Republican
leaders in the United States Congress
rushed to create a temporary measure to ease the plight of farmers until a better solution could be put into place. With growing unrest in the American public, President Harding and Congress passed the tariff.
The Emergency Tariff raised duties on most imported agricultural products, such as corn, wheat, sugar, wool, and meat and granted the president power to raise existing tariffs by as much as 50 percent if he deemed foreign competition unfair.
, sugar
, meat
, wool
and other agricultural products (see all in List of taxed items) brought into the United States
from foreign nations, which provided protection for domestic producers of those items. Farm state representatives saw the tariff as only the first step in a campaign for permanent protection and more government aid. Although the tariff was enacted in order to protect American products and attempt the diffuse the post-war recession, this type of protectionist legislation ultimately created an imbalance in international commerce by heightening economic nationalism.
When the emergency tariff was first discussed in January, 1921, the records of commerce revealed that we exported in the month of January, of cottonseed oil, over 60,000,000 pounds to the countries of Europe. Six months after the passage of the emergency act we find out exports to Europe reduced to somewhere between 5,000,000 and 10,000,000 pounds monthly.
This measure remained in effect until the enactment of the Fordney-McCumber Tariff
in 1922, one year after the Emergency Tariff was passed. This act was a permanent bill that imposed even higher tariff rates. Additionally, in 1922, the administration passed the Capper-Volstead Act
, designed to protect farm cooperatives by exempting them from antitrust laws.
The Report on the Emergency Tariff states that the effects of the emergency duties had been obscured by the great change in prices of all commodities in the past 18 months (since it went into effect). At the time when the Act became effective, the US and the rest of the world was in the midst of the greatest price decline that had occurred in many years. In the fall and winter of 1921 a revival set in though and the price index went up about 20 points. This rise in the price index must be considered when studying the effect of the emergency tariff. The Report states that after the passage of the act, there were practically no cases where prices rose immediately. It is also noted that in some cases a decrease of imports, as well as a continued decline in agricultural prices in the US, preceded the enactment of the emergency law.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
was enacted on May 27, 1921. Due to the Underwood Tariff passed during the Wilson Administration
Wilson Administration
Wilson Administration may refer to the administration of:*Woodrow Wilson*Harold Wilson...
, Republican
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
leaders in the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
rushed to create a temporary measure to ease the plight of farmers until a better solution could be put into place. With growing unrest in the American public, President Harding and Congress passed the tariff.
Causes
In the 1920s, the most disconcerting economic issue was declining farm profits. From 1900-1920, American farmers had prospered while European agriculture suffered serious disruption due to World War I, therefore prices soared. Beginning in 1919, Europeans closed their markets by implementing tariff barriers. This period of American agricultural prosperity due to rising demand concluded by the early 1920s. While American farms continued to grow due to previous wartime price and technological advances, European demand for American farm products declined and prices plummeted. Wheat price fell from $2.50 to under a dollar a bushel by late 1921. Many farmers found themselves unable to meet their loan repayments. Additionally, overproduction was depressing the profitability of the agriculture industry. With falling prices (due to low demand) and overproduction, farmers faced a serious problem.The Emergency Tariff raised duties on most imported agricultural products, such as corn, wheat, sugar, wool, and meat and granted the president power to raise existing tariffs by as much as 50 percent if he deemed foreign competition unfair.
Effect
The Emergency Tariff increased rates on wheatWheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
, sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
, meat
Meat
Meat is animal flesh that is used as food. Most often, this means the skeletal muscle and associated fat and other tissues, but it may also describe other edible tissues such as organs and offal...
, wool
Wool
Wool is the textile fiber obtained from sheep and certain other animals, including cashmere from goats, mohair from goats, qiviut from muskoxen, vicuña, alpaca, camel from animals in the camel family, and angora from rabbits....
and other agricultural products (see all in List of taxed items) brought into the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
from foreign nations, which provided protection for domestic producers of those items. Farm state representatives saw the tariff as only the first step in a campaign for permanent protection and more government aid. Although the tariff was enacted in order to protect American products and attempt the diffuse the post-war recession, this type of protectionist legislation ultimately created an imbalance in international commerce by heightening economic nationalism.
When the emergency tariff was first discussed in January, 1921, the records of commerce revealed that we exported in the month of January, of cottonseed oil, over 60,000,000 pounds to the countries of Europe. Six months after the passage of the emergency act we find out exports to Europe reduced to somewhere between 5,000,000 and 10,000,000 pounds monthly.
This measure remained in effect until the enactment of the Fordney-McCumber Tariff
Fordney-McCumber Tariff
The Fordney–McCumber Tariff of 1922 raised American tariffs in order to protect factories and farms. Congress displayed a pro-business attitude in passing the ad valorem tariff and in promoting foreign trade through providing huge loans to Europe, which in turn bought more American goods...
in 1922, one year after the Emergency Tariff was passed. This act was a permanent bill that imposed even higher tariff rates. Additionally, in 1922, the administration passed the Capper-Volstead Act
Capper-Volstead Act
Capper-Volstead Act , the Co-operative Marketing Associations Act was adopted by the United States Congress on February 18, 1922. It gave “associations” of persons producing agricultural products certain exemptions from antitrust laws...
, designed to protect farm cooperatives by exempting them from antitrust laws.
The Report on the Emergency Tariff states that the effects of the emergency duties had been obscured by the great change in prices of all commodities in the past 18 months (since it went into effect). At the time when the Act became effective, the US and the rest of the world was in the midst of the greatest price decline that had occurred in many years. In the fall and winter of 1921 a revival set in though and the price index went up about 20 points. This rise in the price index must be considered when studying the effect of the emergency tariff. The Report states that after the passage of the act, there were practically no cases where prices rose immediately. It is also noted that in some cases a decrease of imports, as well as a continued decline in agricultural prices in the US, preceded the enactment of the emergency law.