Sunday, January 09, 2011

Tariffs and the sugar trust

A great example of how protectionism and corporate power go hand in hand:
American sugar refiners had lobbied hard for the McKinley tariff of 1890 and its freeing of imported sugar; their success encouraged them to think bigger, in terms of a monopoly. In 1892 the American Sugar Refining Company, the market leader, acquired four Pennsylvania firms, with the result being a combination that refined 98 percent of America's sugar. Henry Havemeyer, the president of the trust, frankly credited the McKinley tariff with giving him and his collaborators the courage to combine. 

"Without the tariff I doubt if we should have dared to take the risk of forming the trust," Havemeyer said. "It could have been done, but I certainly should not have risked all I had, which was embarked in the sugar business, in a trust unless the business had been protected as it was by the tariff."
Sadly the sugar lobby has been able to maintain protectionist trade measures to this day.

Excerpted from American Colossus.

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