3. PANICS OF CAPITAL, as in 1847, when capital was so locked up in
internal improvements as to prove largely useless.

4. GENERAL TARIFF CHANGES. To the three causes given above the
translator adds a fourth and most important one: Any change in our
tariff laws general enough to rise to the dignity of a new tariff has
with one exception in our history precipitated a panic. This exception
is the tariff of 1846, which was for revenue only, and introduced after
long notice and upon a graduated scale. This had put the nation at large
in such good condition that when the apparently inevitable Decennial
Panic occurred in 1848 recovery from it was very speedy.

The reason for this general effect of new tariffs is obvious. Usual
prices and confidence are so disturbed that buyers either hold off,
keeping their money available, or else draw unusually large amounts so
as to buy stock before adverse tariff changes, thus tightening money in
both ways by interfering with its accustomed circulation. This tendency
towards contraction spreads and induces further withdrawal of deposits,
thus requiring the banks to reduce their loans; and so runs on and on to
increasing discomfort and uneasiness until panic is speedily produced.
The practical coincidence and significance of our tariff changes and
panics is shown by an extract below from an article written by the
translator in October-November, 1890, predicting the recent panic which
was hastened somewhat by the Baring collapse. [Footnote:
_Inter-relations of Tariffs, Panics, and the Condition of Agriculture,
as Developed in the History of the United States of America_.

This brief sketch of our economic history in the United States seeks to
show that Protective Tariffs have always impoverished a majority of our