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Thursday, April 9, 2009

This Day in Wall Street History 1909: Congress passes Payne-Aldrich Act

William Howard Taft rode into the Oval Office on a platform that included an anti-protectionist pledge to slash tariff rates. On April 9, 1909, Congress seemingly helped the new president make good on his promise by passing the "Payne-Aldrich Tariff Act." In its initial form, the tariff called for a list of free goods, to go along with lower rates -- provisions that readily appealed to Progressives, importers and exporters. On paper, the tariff promised to help pry open foreign markets to American goods, as well as to provide U.S. industrialists with a steady flow of cheap raw materials. But the legislation was far less palatable to protectionist forces in the Senate, who did their best to reshape the tariff. When it finally hit the law books, the Payne-Aldrich bill lacked the free list of goods and only lowered rates on a select set of items. The modified tariff also hiked the duties on a number of goods. Taft, who was admittedly uncomfortable in the political arena, did little to mollify Progressives and the business community. Indeed, later that spring, the president raised the hackles of his putative allies by praising Payne-Aldrich as the finest tariff ever to be passed by Congress.

Source: History.com

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