October 1, 1890

After 1887, the tariff became the central issue in American politics. Democrats, led by Grover Cleveland, charged that the tariff raised prices, enriched the wealthy, and fostered inefficiency. Republicans argued that tariffs promoted infant industries, protected established industries, raised workers’ wages and protected them against low-wage competition, and fostered a rich home market for farm goods. In fact, the tariff was not especially important for manufacturers. European manufacturers could not compete with the American advantages of large efficient factories, vast internal markets, ample raw materials, sophisticated advertising, and a highly efficient distribution system. By 1885, the United States had become the world’s low-cost, high-volume manufacturer. In October 1890, the McKinley Tariff was passed. Named for one of its authors—future president William McKinley—it increased tariff rates, making it the highest protective tariff ever adopted. It also provided for reciprocal trade agreements. The actual beneficiaries from a high tariff were sugar growers and producers of wool, leather hides, coal, timber, and iron ore. The McKinley Tariff was unpopular with American consumers and labor and inflicted substantial political damage on the Republican Party in the election of 1892.

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