Last modified: 2018-06-20
Abstract
The paper examines (1) monetary and economic thought at the time of the Reconstruction (1865-1877) in the United States and (2) the sustainability and coherency of the money and tariff policy. During the period of the Reconstruction, the federal government of the United States progressively put into place the gold specie regime and the convertibility of the paper money issued during the Civil War and. In addition, the instauration of the hard money was combined with protectionism, with high tariffs that aimed at protecting infant industry and labor.
Notwithstanding, the literature on this issue has not significantly explored the combination between the monetary policy and the tariff policy. To fill this void, the paper presents the economic representations of the different sections and it analyses the political coalitions and the ensuing money-tariff combination of the Reconstruction. The paper builds a matrix that rests upon a double dichotomy, at a monetary level (hard money versus soft money), and at the tariff level (protectionism versus free trade). It then deduces an original analysis in terms of monetary and tariff policy mix (hard money and protectionism, soft money and free trade), which contributes to pondering the conditions and coherency of the monetary regime and the industrialization policy implemented by the Republican government.
In so doing, the paper examines the economists’ and practitioners’ works that corresponded to the different cases of the money-tariff matrix, and especially the work of Henry Carey (1858, 1866, 1877), John Sherman (1877, 1895) and Hugh McCulloch (1877, 1888).