The only
cause common to all was overtrading to such an extent that neither
credit nor money were to be had, so that a forced liquidation or panic
inevitably ensued.
The above table effectually does away with the theory that new tariffs
are directly productive of panics. For most certainly new tariffs did
not occur in England, France, and the United States just before or
during all the panic years enumerated, and yet, practically
simultaneously in free-trade England, high-protection France, and
sometimes low-tariff, sometimes high-protection United States have
panics occurred for eighty years.
But, as I have shown in a note attached to this Introduction, a new
tariff or a general change of duties is apt to precipitate a panic, on
account of the unsettling of business, and that the consequent shaking
of credit adds its quota to the forces finally culminating in a panic
cannot be doubted. As a matter of history with us, substantially new
tariffs have always happened to be the immediate forerunners of a panic,
and this I believe to be true in the case of other countries.
Why is this? Is it not because the people instinctively turn to
tinkering at and changing their chief tax--the tariff--whenever they as
a whole need financial relief; and have we not shown that such relief is
needed almost every ten years, when the overtrading, inseparable from
the development of all thriving communities has made the call for credit
impossible to grant?
A new tariff may defer, or hurry, or, occurring simultaneously, will
intensify a panic, but it may not hope to avert one when due: yet if its
changes be very gradual, fixed and long predicted, and of a nature to
bring about or confirm a judicious tariff for revenue only, they will
materially help to put business on so firm and sound a basis that
recovery from the inevitable, and approximately decennial panics, will
be wonderfully expedited.
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