Emergency Tariff of 1921

Emergency Tariff of 1921

Long title	An Act Imposing temporary duties upon certain agricultural products to meet present emergencies, and to provide revenue; to regulate commerce with foreign countries; to prevent dumping of foreign merchandise on the markets of the United States; to regulate the value of foreign money; and for other purposes.
Enacted by	the 67th United States Congress
Effective	May 27, 1921
Citations
Public law	Pub.L. 67–10
Statutes at Large	Sess I, ch. 14, 42 Stat. 9–19
Legislative history
Introduced in the House as H.R. 2435 by ? on ? Committee consideration by ? Passed the House on April 15, 1921 (269–111) Passed the Senate on May 11, 1921 (63–28) Reported by the joint conference committee on May ?, 1921; agreed to by the Senate on May 20, 1921 (53–25) and by the House on May 23, 1921 (246–98) Signed into law by President Warren G. Harding on May 27, 1921

The Emergency Tariff of 1921 of the United States was enacted on May 27, 1921. Due to the Underwood Tariff passed during the administration of President Woodrow Wilson, 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 Warren G. 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.^[1] 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.^[2] The Emergency Tariff raised duties on most imported agricultural products, such as corn, wheat, sugar, wool, meat and more.^[1]

Effect

The Emergency Tariff increased rates on wheat, 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.^[3] 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.^[4]

When the emergency tariff was first discussed in January, 1921, the records of commerce revealed that the United States 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.^[5]

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.^[6]

List of taxed items

Wheat: wheat flour and semolina; flaxseed: corn; beans; peanuts or ground beans; potatoes, onions, rice, rice flour, and rice meal; lemons; peanut, cottonseed, coconut, soya bean, and olive oil; cattle, sheep, fresh and frozen beef, veal, mutton, lamb, and pork; meats of all kinds of prepared or preserved, not specifically provided for; cotton having a staple of one and three-eighths inches or more in length; manufactures of such cotton; wool, other than carpet wool; such wool when advanced in manufacture; sugars and molasses; butter and substitutes therefor; cheese and substitutes therefor; fresh, preserved, and condensed milk; sugar of milk; cream; wrapper tobacco; apples; cherries; and olives.^[7]

References

External links

• US History.Com. 4 May 2007