Exactly 100 years ago, Joe Fordney, who would become Michigans most powerful congressman, was first elected to the House of Representatives from Saginaw. His career is worth noting because it is a classic example of how supporting tariffs can win votes in the short run, but cost consumersand the countryin the long run.
The story of Fordneys meteoric rise from illiterate farm boy to chairman of the House Ways and Means Committee is fascinating. Born in 1853, he grew up on a farm in Indiana and had only three months of formal education. When he was fifteen, his family moved to the booming lumber town of Saginaw, Michigan. Fordney, with a strong body and willing spirit, started as a chore boy and cook in Saginaws lumber camps and moved up from there to investor and entrepreneur in timber all over the U. S.
With a fortune in hand, Fordney, after his fortieth birthday, turned to politics as his next world to conquer. He served two terms as alderman in Saginaw and, in 1898, made the big decision to run for Congress as a Republican in Michigans eighth congressional district, one that often elected Democrats. That year he won the first of twelve straight elections that would eventually take him to the pinnacle of power in the House as chairman of the Ways and Means Committee, the body responsible for writing the nations tax laws.
Fordney made his wealth in the free market, but he made his political career using government to dole out favors for special interests in Saginaw. Right from the start he supported a high protective tariff on imported lumber and sugartwo products dear to mid-Michigan voters. Lumber was Saginaws leading industry, but by the late 1890s that city was beginning to diversify into beet sugar.
With high protective tariffs on foreign lumber and sugar, Saginaws local businessmen could charge higher-than-market prices for the wood and sweetener they produced. As a result, consumers in the rest of the United States had to pay more to build their houses, make their apple pies, or do anything else that required lumber or sugar.
Fordney was soon nicknamed "Sugar Beet Joe" because he eagerly defended his strategy of using government to help protect the key industries in his home town. "All legislation," he rationalized, "must be the results of compromise. . . . [A] concession here and sacrifice there [means] that the whole country may enjoy an average of happy and prosperous living."
On the contrary, Fordneys tariff meddling encouraged more congressmen to bring subsidies to their districts and impose higher costs on everyone else. Whats more, the tariff sometimes backfired on Fordney. The tariff on lumber, for example, became a bounty for the speedy harvest of Michigans forests. Soon Saginaw had no more pine trees, but the tariff remainedso Saginaw had to buy wood from Oregon instead of cheaper and closer lumber from Canada.
In 1922, with Fordney in charge of the powerful House Ways and Means Committee, Congress passed what was then the highest tariff in U. S. history: the Fordney-McCumber Tariff. Duties on sugar almost doubled and Fordney added a high tariff on imported German chemicals to help nearby Dow Chemical Company.
Other congressmen were astonished at the steep tariff walls Fordney was erecting. Claude Kitchin, also a member of the Ways and Means Committee, asked Fordney, "Is it not true that if you had your way you would build a tariff wall around this country so high that it would be practically insurmountable?" Fordney at first denied it, then he hesitated, turned, and said, "But you know, that wouldnt be such a darned bad idea."
But it was a bad ideaespecially for all the Europeans trying to recover from World War I. The U. S., these Europeans discovered, would not buy their goods because of tariff barriers, so they often retaliated and refused to buy American products. Americas high tariff strategy continued into the 1930s and many historians have argued that these tariffs prolonged and deepened the Great Depression. Car and truck sales, for example, plunged from 5.3 million in 1929 to 1.8 million four years laterif Americans wouldnt buy Canadian lumber, Cuban sugar, and a host of other foreign products, then why should other nations buy anything from the U. S.?
The best answer to high tariffs was given by another Michiganian, J. Sterling Morton, born in Monroe, Michigan, educated at the University of Michigan, and the Secretary of Agriculture in the 1890s under Grover Cleveland. "It is the business of Government," Morton said, "to give to each citizen an equal chance for life, liberty, and the acquisition and enjoyment of property; but those who raise corn should not be taxed to encourage those who desire to raise beets."