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Title: The Tariff in our Times
Author: Tarbell, Ida M. (Ida Minerva)
Language: English
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THE TARIFF IN OUR TIMES
[Illustration]
THE MACMILLAN COMPANY
NEW YORK · BOSTON · CHICAGO
SAN FRANCISCO
MACMILLAN & CO., LIMITED
LONDON · BOMBAY · CALCUTTA
MELBOURNE
THE MACMILLAN CO. OF CANADA, LTD.
TORONTO
THE TARIFF IN OUR TIMES
BY
IDA M. TARBELL
AUTHOR OF
“THE LIFE OF ABRAHAM LINCOLN,” “THE HISTORY OF THE STANDARD OIL
COMPANY,” “MADAME ROLAND,” ETC.
New York
THE MACMILLAN COMPANY
1911
_All rights reserved_
COPYRIGHT, 1906, 1907, 1909, 1910, 1911,
BY THE PHILLIPS PUBLISHING CO.
COPYRIGHT, 1911,
BY THE MACMILLAN COMPANY.
Set up and electrotyped. Published October, 1911.
Norwood Press
J. S. Cushing Co.—Berwick & Smith Co.
Norwood, Mass., U.S.A.
TO
W. W. T.
------------------------------------------------------------------------
PREFACE
It takes no extended examination of any period in the last fifty
years—the term covered by the phrase “Our Times” in the title of this
book—to convince an unprejudiced student that as far as the tariff is
concerned public opinion has never been fairly embodied in the bills
adopted. If the popular understanding of protection as expressed in our
elections had been conscientiously followed, there would be to-day no
duties on iron and steel products, on cheap cottons and cotton mixtures,
and, certainly none on a great variety of raw materials probably
including raw wool. That is, in these cases and in multitudes of similar
ones, the purposes of protection had been realized, or it had been
proved that they never could be realized; and in either case the dogma
required the duty to be withdrawn. This volume is an attempt to tell in
narrative form the story of this defeat of the popular will.
The major part of the material in the volume has appeared at intervals
in the last five years in the _American Magazine_. So many persons
concerned in the making of our tariffs in the period covered have aided
me directly or indirectly by documents, personal reminiscences, and
explanations of points of view that I find it out of the question to
attempt to enumerate them. In one case, however, my debt is so great
that I must acknowledge it specifically, and that is to Mr. Horace
White, who has read, either in manuscript or proofs, the bulk of this
volume and who has been generous in his suggestions and criticisms.
CONTENTS
PAGE
PREFACE vii
CHAPTER
I. THE TARIFF AS A WAR TAX 1
II. AN OUTBREAK OF PROTECTIONISM 28
III. WAR TARIFFS CONTINUED 53
IV. THE BUSINESS MAN TAKES CHARGE 81
V. THE MONGREL BILL OF 1883 109
VI. GROVER CLEVELAND AND THE TARIFF 133
VII. THE MILLS AND ALLISON BILLS 155
VIII. THE MCKINLEY BILL 181
IX. THE WILSON BILL 209
X. THE DINGLEY BILL 237
XI. WHERE EVERY PENNY COUNTS 258
XII. THE MAKING OF THE BILL OF 1909 297
XIII. SOME INTELLECTUAL AND MORAL ASPECTS OF OUR TARIFF-MAKING 331
THE TARIFF IN OUR TIMES
CHAPTER I
THE TARIFF AS A WAR TAX
If there was any public question on which the minds of the people of the
United States were made up fifty years ago, it was that of the tariff.
They had not been made up in a day. On the contrary, it had taken nearly
seventy years of experimenting to bring them where they were—seventy
years in which all forms of taxation on imported goods had been tried,
from the supposed 8½ per cent of the first Congress to the 43 per cent
of the “tariff of abominations” in 1828. Some of their experiments had
been good and some bad, but out of them all they had struck a mean which
was something like this: As a nation we intend to raise money to carry
on our business by putting a duty on certain raw and manufactured goods
brought from foreign countries. If we find we are getting too large a
revenue we will cut down the duty, if too small we will raise it. In
placing these duties we will do as Alexander Hamilton advised—that is,
if there is a young industry in the country trying to produce something
which is _essential_ to war or on which our daily living depends, we
will protect it from foreign competition until it is established—_but no
longer_.
For ten years the country had been working on this tariff platform, and
so satisfied were they with it that when they found in 1857 they were
taking in more money than they needed for expenses, they promptly passed
a bill cutting the duties down to an average of 20 per cent—the lowest
they had been since 1816. The duty on many articles they removed
entirely—thus, cheap raw wool was allowed to come in free. Nobody,
except the Pennsylvanians, and a few New Englanders, objected strongly
to the bill; even the majority of manufacturers and old Henry Clay
tariff men agreed. Henry Clay had told them that protective duties were
never meant to be perpetual, and they looked upon this lowering of taxes
as a natural step in the process of gradual extinction which they had
been taught to expect.
Not only was the mind of the country satisfied with lower duties and an
increasing list of free goods, but it had accepted the idea that a
Christian nation should establish as rapidly as possible reciprocal
trade relations with its neighbors. For three years a reciprocity treaty
between ourselves and Canada had been working. It was not as good a
treaty as might be, and the Canadians were getting greater advantages
from it than we; but it could be improved, and there was much pride in
the country over the advance it was felt this treaty showed in national
broad-mindedness and generosity.
That was fifty years ago. To-day the average tax on dutiable goods
imported into the United States is nearer 50 per cent than 20. Instead
of reciprocity with Canada we have had for fifty years in many cases
prohibitive protection. Why is this? What has become of the theories and
practices of fifty years ago?
The answer lies in a curious story—a story of a panic and a war and the
natural penalties which panics and wars impose. The panic came first—in
1857, just after Congress had lowered duties to prevent the collection
of more money than we needed for actual expenses. It was a logical
enough panic—panics always are logical. For several years the country
had been making money. It had lost its head over its growing wealth—had
speculated, had built railroads faster than they were needed, had spent
lavishly. Its expenses finally outran its income and a crash naturally
came.
The tariff had nothing whatever to do with the disturbance, but the
effect of the panic on the national income was soon evident; straitened
for money the country bought less abroad, buying less the revenue was
less. In 1857 it had been $64,000,000, but the year after it was but 42
millions, and the year after that (1859) but 48 millions. Instead of too
much money, Congress saw itself with too little. Its credit was sadly
disturbed, not only or chiefly because of this falling revenue, but
because of the agitation of the slavery question and the increasing
contention between North and South.
It was natural enough, of course, that when the revenues from imports
continued to be too little to pay the government’s bills, there should
be a demand for higher duties. This demand was headed by a member of the
House of Representatives from Vermont, Mr. Justin S. Morrill.
Mr. Morrill was an able and honest man, who had been sent to Congress by
the “Conscience Whigs” of his district—not because he had sought the
office, but purely because they believed from what they had seen of him
as a merchant in their community, they could trust him to represent them
on the slavery question. Now, Mr. Morrill was one of the Whigs who had
not been satisfied to see duties lowered in 1857, and who strenuously
objected to letting in raw products free of duty. He wanted all wool
protected. He wanted his Vermont marble protected. He wanted maple sugar
protected. He was one of the few New England representatives who had
spoken, as well as voted, against the bill of 1857, and his speech at
that time had been very able. Indeed it made him the acknowledged head
of the active protectionist sentiment left in the country, for he made
no bones about declaring his faith. “Such articles of primary
necessity,” he said, “as there is any hope of successfully producing
should be waked into life, nursed into perennial vigor by moderate and
steady discrimination in their favor, so long as their condition makes
it proper, so long as there is a probable chance of ultimate success.”
Mr. Morrill saw the opportunity for reviving protection in 1858 when the
revenues were insufficient, and he determined to prepare a new bill
which should represent his views. But the interest in the subject at
that moment was so little that he could not get a hearing from the
House. The next session, however, gave him a rare chance. In the fall of
1859 a Congress largely Republican took its seat. After a fierce fight
this Congress elected a Republican speaker, and this speaker put a young
man destined to play a large part in National finances at the head of
the Ways and Means Committee—John Sherman of Ohio. Mr. Sherman was just
37 years old, and as shrewd, as active, and as experienced a politician
as the Republicans had in the House. He had begun his political life
when about 21 years old with but two political tenets—hatred of the
Democratic party and belief in protection of American industries.
Political conscience had been unstirred within him until the repeal of
the Missouri Compromise. That turned him into a Crusader. Sherman had
been fighting solely against slavery extension for six years, when his
appointment to the head of the Ways and Means Committee suddenly made it
his duty to consider finances. At once his old faith in protection
asserted itself, and he gave full support to Mr. Morrill, who was
instructed by the Committee of Ways and Means to prepare a new tariff
bill.
Mr. Morrill worked out his bill with great care and patience, and when
it came out of committee early in 1860 it represented very nearly what
he believed. Mr. Sherman, who from this time on had much to do with
tariff bills, says in his autobiography that the Morrill Bill at the
start was nearer meeting the double requirement of revenue and
protection than any bill he was ever familiar with.
But good as the bill may have been when it came from the committee, it
was soon assaulted right and left by those who had something to protect
or those who were affected by what it protected. Much of the pressure,
Mr. Morrill found, was impossible to resist. What can you do when a
Senator of the United States, one so famous as Charles Sumner, “calls
your attention” to letting cocoa in free (though according to the
principle on which you are working it should pay a slight duty) because
his friend, the head of an “eminent house” (the friend was Henry L.
Pierce and the “eminent house” was his chocolate factory), wants his
cocoa free? What are you to do when Pennsylvania iron men and Rhode
Island manufacturers, who according to your theory of protection are
established and whose duties should gradually be lowered, come down on
you for higher rates, and your party colleagues tell you that if you
refuse their requests the election may be lost and the cause of human
freedom be retarded? Amendment after amendment was tacked on the bill,
many of them in direct contradiction of Mr. Morrill’s principles. They
destroyed the justice and the consistency of the measure, and he became
so disgusted that he was ready to abandon it. Inconsistency was less
troublesome to Mr. Sherman, however. He was a “practical politician,”
something Mr. Morrill never was. He believed more revenue to be
necessary; he believed in protection; he believed in winning votes for
the party wherever and however he could. This bill contributed to all
these ends, and he himself undertook to engineer it through the House.
Mr. Sherman’s task was made the easier because in May, when the
Republicans had met in Chicago to nominate their candidate for
president, they had put into their platform a plank which pledged the
party to support protection, though they did not have the courage to use
the word. This plank was plainly a bid for the vote of communities which
could be held to the party only by protection, preëminently the state of
Pennsylvania. The great leaders of the party, Mr. Lincoln, Mr. Chase,
and Mr. Seward, did not believe that the tariff should be taken up at
all at this time. Indeed, only a few days before he was nominated as
president Mr. Lincoln wrote to a correspondent that “the tariff question
ought not to be agitated in the Chicago Convention.” Mr. Chase had
always stood with the Democrats on the matter, and Seward had expressed
his view in the Senate in 1857 when the tariff bill was up: “It is not
wise, it is not just, to draw from the pockets of the people into the
Treasury of the country an amount of money greater than the current
expenses of the Treasury require.”
The Morrill Bill passed the House in May, 1860, but the Senate would
have none of it. That body was still Democratic and the South still led.
Not only was the South strongly free trade in its opinions, but at that
moment no bill originating with the Republicans had a ghost of a chance,
such was the bitterness of the feeling. The bill went over to the next
session, and the next session brought a tragic change in the Senate. By
the time Mr. Morrill’s bill had a hearing six states had withdrawn from
the Union, and their Senators had left Washington. The withdrawal of the
Southern Senators left the control to the Republicans, and it soon
became evident that the bill would probably pass. The result was a
fierce onslaught by all sorts of interests. Almost everybody got what he
wanted. Some of the items which went into the schedule were long
subjects of mirth and scandal to the opposition. Such was the protection
of 20 per cent accorded to wood-screws. At that time there was but one
small factory for wood-screws in the country. It was situated in
Providence, Rhode Island, and Senator Simmons, who secured its
protection, and who was popularly supposed to be interested in the
concern, was long known as “Wood-Screw” Simmons. The bill also carried a
generous basket clause into which all raw materials and all manufactured
articles “not otherwise provided for” were dumped.
It was little wonder that jobbery found an easy way into the bill. The
country was in an uproar over secession and in a state of doubt and
unrest about Mr. Lincoln—what would he do? Was he the man for a crisis?
A poor time indeed to consider deliberately so serious a matter as new
tariff schedules! There was an imperative need of money and it looked as
if this bill would give it, so the Morrill Bill finally went through,
and 48 hours before his term ended President Buchanan gave it his
signature.
The immediate effect of the Morrill Bill was something quite unlooked
for. The increased tariffs made Europe deeply indignant. England and
France were particularly hard hit; for instance, the duties on cheap
clothes, of which they sent us great quantities, were largely raised.
Besides the growing free trade sentiment abroad, the sentiment of the
liberal party everywhere was shocked that the new Republican party,
which had arisen against human slavery, should take the narrower view of
commerce. To make the matter worse for the Republicans, the seceders, in
session at Montgomery, adopted a tariff for revenue only. Thus, before
Sumter was fired on, Europe had turned to the Confederacy as the more
liberal in commercial policy. It is probable that if the Morrill Bill
had been simply a revenue measure the cause of the North would have met
a very different reception in Europe from what it did.
The London _Times_ clearly stated the foreign point of view:
“It will not be our fault if the inopportune legislation of the
North combined with the reciprocity of wants between ourselves and
the South should bring about considerable modification in our
relations with America. No one after the recent debate on the slave
trade can doubt that England is still in earnest on this point, and
will never buy commercial advantage at the cost of her honor. We
should infinitely prefer dealing with a single responsible
government to maintaining two embassies and running the risk of
misunderstandings with two highly sensitive democracies. But the
tendencies of trade are inexorable, and our manufactures will
infallibly find their way to the best market with the regularity of
a mechanical law.... It may be the Southern population will become
our best customers.... Granted that a permanent secession can be
effected by a ‘peaceful appeal to the ballot-box,’ and that the
moral and economical evils of slavery do not prove fatal to a
society based on it, material prosperity will not fail to follow
unrestricted intercourse, and the free States will long repent an
act which brings needless discredit on the intrinsic merits of their
cause.”
This “discredit” to the cause grew in Europe as the days went on. Not
only did the bill hurt Northern trade and alienate European sympathy, it
was the chief reason the Confederates had for thinking their new
government would succeed. It was driving trade to their ports, thus
giving them money. It was making Europe their friend, thus giving them
position. And nothing could be done. On all sides the Morrill tariff was
denounced as a stupidity, a blunder, an outrage. There were even many
demands for an extra session to repeal it. Too late the Republicans saw
that their first measure as a party had been a mistake. And then
suddenly the whole situation of the unhappy bill was changed by the
breaking out of war between the North and South.
The first and most imperative necessity in war is money, for money means
everything else—men, guns, ammunition. Mr. Lincoln and his cabinet when
they found in the spring of 1861 that they were in for a war of more
than 90 days, at once called an extra session of Congress to provide the
means for carrying it on. It fell to Mr. Chase, the new Secretary of the
Treasury, to suggest what could be done. Practically our whole income
came at that time from duties on imported goods. How could they be made
to yield more? What other sources of revenue could be tapped? Mr. Chase
had various suggestions to make, but it is with only one of them that we
have to do here—the raising of the tariff on imported goods.
Under other circumstances it would not have been agreeable for Mr. Chase
to suggest increased duties. All his life he had been what the Whigs
called a free trader—that is, he had preached Democratic doctrines on
the tariff. He was one of a large number of leaders in the Republican
party who had originally been Democrats and who had joined the new
organization solely because of its anti-slavery sentiments, and who had
reluctantly swallowed the new party’s leanings towards protection,
hoping always, no doubt, to uproot them finally. Mr. Chase had probably
been the less inclined to make any show of objection to the
protectionist program of the new organization because he had hoped to be
its choice for president. But Mr. Chase had not been his party’s choice
for president. On the contrary, he had been obliged to accept from his
successful rival a portfolio for which he had no love and no
training—that of Secretary of the Treasury. Disappointed as he was,
badly used as he felt himself to be, he undertook manfully the hard task
of raising money for the war. From the first his determination and
confidence were the firmest. The money was in the country. It must come
into the National Treasury, if not by one means, then by another. “The
war must go on,” he told the bankers who hesitated to take his loans, in
July, 1861, “until this rebellion is put down, if we have to put out
paper until it takes a thousand dollars to buy a breakfast.” And when
they gave him their terms with a “this-is-our-ultimatum,” he replied,
“It is for me to make ultimatums; not you.” Higher tariffs then instead
of lower Mr. Chase naturally advised, and he asked Congress to amend the
Morrill Bill to this end. Many of its duties he raised, articles which
it placed on the free list he took off. On many articles he arranged for
a double duty, that is, duty on both value and quantity, and he tacked
to the bill a direct tax of $20,000,000 to be divided among the states
and a tax on all incomes of over $800. Mr. Chase expected from this
measure as amended to get something like $80,000,000 of the $318,000,000
he calculated he would need in the next year (ending June 30, 1862).
There was no delay in the adoption of the bill. Its worst enemies were
for it. Even the New York _Evening Post_, which had fought the Morrill
Bill with teeth and claws, which had called it a “booby of a bill,” the
“blunder of the age,” now said resignedly that in the situation the best
thing to do was to “patch it up.” “The great object we have in view
during the continuance of the war by financial regulations,” said the
_Post_, “is to raise, in the easiest and least burdensome manner, the
largest possible amount of revenue. To further this object, free traders
can readily work with protectionists. War is an exceptional state and
demands extraordinary measures. For this reason we are prepared to
support a scale of duties at present which we should oppose if the
nation were at peace.”
Thus, in less than five months after its passage the Morrill Bill, a
protectionist measure, framed when there was but little protectionist
sentiment in the country and made a law by the signature of a Democratic
president elected on a platform of free trade throughout the world, a
bill so changed from its first condition that its author had been
inclined to abandon it, loaded with jobs, the cause of serious business
disturbances in the North, of the alienation of European sympathy, of
great gain and satisfaction to the South, had been accepted with
resignation by its most intelligent enemies. Almost without knowing it
the country had returned to a policy which nearly 20 years before it had
abandoned. It is not too much to call the measure the foundation of a
revolution in our commercial life. Henry C. Cary, the economist, did not
greatly exaggerate its importance when he wrote Mr. Morrill: “You have
connected your name with what is destined, I think, to prove the most
important measure ever adopted”; nor did Mr. Blaine when he said, in his
Recollections, that if the Morrill Bill had been passed under other
circumstances, it would have been regarded as an “era in the history of
the government.”
Mr. Chase had calculated that the receipts from the amended Morrill Bill
would amount to about $80,000,000 a year, but they fell far short—only
about 51 millions, of which the customs yielded 49 millions. The
expenses of the war increased at a frightful rate, and it was soon
evident that the struggle was to be longer than had been expected. Early
in 1862 new schemes of taxation began to be considered. The result was
that the Ways and Means Committee decided to ask Congress to pass an
internal revenue bill, and still further to add to the duties provided
for in the Morrill Bill. It was in June when the two new measures came
from the committee. Taken together they were calculated to make the
country gasp. The tax bill touched almost every article of daily life.
It provided for licenses on a man’s business whatever it was—running a
bowling alley, a hotel, or an attorney’s office; for taxes on his income
and his inheritances, on his carriages, his gold watch, his silver
plate; for revenue stamps on the documents he signed, the telegrams he
sent, the matches he struck; nothing that he ate or drank or made
escaped. The direct taxation on manufactured articles was so high that
in many cases it would have acted as a bonus to foreigners to bring in
their goods if the Ways and Means Committee had not foreseen this, and
aimed to amend the tariff law so that increased duties would compensate
for the internal taxes. As might have been expected from the hurried way
in which the bill had been prepared, the duties intended as
compensations were not always exact. Sometimes, as in the case of books
and umbrellas, they were insufficient, and the foreigner could bring
over his wares and undersell the overtaxed domestic producer. Again, the
duties were in excess of the direct taxes and served only to protect the
home manufacturer in extortionate prices. Thaddeus Stevens, the chairman
of the Committee, and Mr. Morrill both explained to the House with great
care that the whole scheme of the changes was to make the additional
duty cover as nearly as possible the internal taxes. “If we bleed
manufacturers we must see that the proper tonic is administered at the
same time,” said Mr. Morrill. Any duty not compensatory was placed
purely for revenue reasons. In no case, they said, were the new duties
for protective purposes—the whole change must be regarded as
“temporary”—a war measure, and nothing else.
It was a foregone conclusion that the bills whatever their provisions
would pass, for the people were actually demanding taxation, that the
war might be properly waged. Nevertheless, there was much bitter
remonstrance at the duplication of taxes, which in certain cases was
excessive and unjust. Take the newspaper business, for instance. Almost
everything a printing house used was taxed—paper paid 3 per cent; a duty
was put also on rags imported for paper making, which still further
raised the price; the advertising income was taxed. Revenue stamps were
required on every telegram a member of the staff sent, on every check
made out, on every official paper signed. When the bill was under
consideration, the New York _Herald_ computed that it would add from
thirty to forty thousand dollars a year to its expenses. The _Herald_
got great joy out of the situation. _It_ could afford the expense, but
in its judgment no other New York newspaper could, and in a long and
interesting editorial (July 1, 1862) it said, jubilantly: “Many papers
will be killed, but the _Tribune_ and the _Evening Post_ will die first.
They have no advertising patronage and but very little circulation, and
so by a just retribution of Providence they will be the first victims of
the taxation which they have brought upon us by causing our Civil War.”
The comforting assurance of the destruction of his two hated
contemporaries, combined with the disgust and anger of England over the
increased duties, gave Mr. Bennett such satisfaction at this time that
he became almost benevolent towards the Lincoln administration.
Mr. Greeley did not share Mr. Bennett’s conviction that the _Tribune_
would be destroyed by the new taxes, for he wrote Mr. Morrill:
“If newspapers are to be taxed at all, their advertising can bear it
best, as it is a source of profit which circulation is not. We can
stand 2 mills per pound on paper—though that will be a pretty
productive tax. I think that item alone will cost the _Tribune_
establishment $7000 per annum, all to come out of profits that can’t
be made in these times. Still taxes must be put on—only do give us
some substantial retrenchment—especially of mileage—to go to the
people on.”
The House passed the new bill promptly. Even if it had felt more
seriously than it did the objections to it there would have been little
chance of delay, for the chairman of the Ways and Means Committee,
Thaddeus Stevens of Pennsylvania, was a dictator who tolerated little
interference with any measure he approved. Mr. Stevens at this time was
a man of 70, sombre and gaunt, with rugged features, deep-set eyes, and
a splendid brow. He was lame, a club foot, and his health was
permanently broken. But never had his wit been keener, his sarcasm more
biting, his eloquence greater, his will more indomitable. He understood
Congressional tactics as few men ever have, and he was a filibuster of
first order. He was frequently unscrupulous in getting what he wanted.
If _he_ wanted it, it must be right and the means were a secondary
consideration. Stevens always stood by his own, right or wrong, not that
he entertained illusions about his Republican colleagues. “Which one is
our d——d rascal?” he asked one day when called upon to vote in a
contested election case, and “our d——d rascal” got his vote. The last
thing Stevens would allow was delay over revenue bills. If a member took
to questions he considered immaterial in the debate he hauled him back
sharply to his muttons, and it was a rash man indeed who offended a
second time. Only one thing would send him off on a tangent, and that
was an effort to secure some advantage over a man of another race or
color. In the debate on the present bill, for instance, he broke out in
a fiery denunciation of California because the representatives were
trying to secure a high duty on cleaned rice, which the Chinese used
almost exclusively. The Californians frankly avowed that the duty was
intended as a discrimination against the Chinaman. Stevens was at them
in an instant, the engineering of the bill quite forgotten, in a hot
speech against the injustice of their attitude.
That there was discrimination possible against your white fellow-man in
applying a protective tariff, Stevens seems never to have understood.
Duties were never too high for him, particularly on iron, for he was an
iron manufacturer as well as a lawyer, and it was often said in
Pennsylvania that the duties he advocated in no way represented the
large iron interests of the state, but were hoisted to cover the needs
of his own small and badly managed works. He was as unsound on all
financial matters as he was on protection. He wanted to pay the war debt
in greenbacks, had a horror of gold going out of the country, and once
proposed a law forbidding it to be bought and sold. But taken all in
all, Thaddeus Stevens was probably what the House needed in the crisis,
a prejudiced, violent dictator, with a holy passion for the Union cause.
Such men get things done if the after-cost of their work is heavy.
Stevens soon sent the tax and tariff bills to the Senate, where, if not
greatly improved, they were passed with promptness. Considerable
suspicion was popularly attached to many of the Senate changes in the
excise bill, particularly because of the close connection with it of
Senator Simmons of Rhode Island. The Senator’s connection with the
Morrill Bill which had won him the sobriquet of “Wood-Screw” Simmons has
been referred to above. It was fresh in public mind then. He still
further distinguished himself at the time he was engineering the tax
bill by a gun contract so unsavory that it had to be investigated. It
was shown beyond quibble that he had been promised $50,000 for getting a
contract for one of his constituents and that he had already received
some thousands of the money. The Senator did not pretend to deny the
fact, but he declared his transaction to be “strictly legal.” The
committee was severe on him. He had no more right to sell his influence,
they said, than his vote, both were “the property of the country”; but
they intimated that as he was really no worse than many of his
colleagues, it was better to let him off, and let off he was, though he
soon resigned. The affair did not raise the tax bill in the estimation
of the public, nor increase public confidence in the merits of the
compensating tariffs which accompanied it.
The passing of the bill went almost unnoticed by the press, so engrossed
were the people in war. (It was the summer of McClellan’s Virginia
campaign.) A few newspapers of free-trade principles tried to make an
issue of it, but without success. Mr. Greeley came out in the _Tribune_
declaring that he would not be drawn into a discussion on protection as
long as the war lasted. Indeed there was room for little on the
wonderful editorial page of the _Tribune_, where Horace Greeley stripped
bare his agonized heart, but the war and the emancipation of the slave.
Greeley, too, was satisfied enough to let protection reëstablish itself
through a revenue bill, for if there was anything which he held almost
as sacred as human liberty, it was the doctrine of protection to
American industries. Greeley saw protection as an actual wealthproducer,
and when the Morrill Bill was up in 1860, he declared: “We have as
undoubting faith that this bill if passed would add at least
$100,000,000 per annum to the earnings and wages of labor throughout the
country as we have that the sun will rise to-morrow.” He was one of a
very few men in public life whose belief was something more than an
inheritance from Henry Clay. In one of his Institute talks he once told
how he became a protectionist:
“From early boyhood I had sat at the feet of Hezekiah Niles, Henry
Clay and Walter Forward and Rollin C. Mallary, and other champions
of this doctrine, and I had attained from a perusal of theirs and
kindred writings and speeches a most undoubting conviction that the
policy they commended was eminently calculated to impel our country
swiftly and surely onward through activity and prosperity to
greatness and well-assured well-being. I had studied the question
dispassionately, for the journals accessible to my boyhood were
mainly those of Boston, then almost if not quite unanimously hostile
to protection; but the arguments they combated seemed to me far
stronger than those they advanced, and I early became an earnest and
ardent disciple of the schools of Niles and Carey, and could not
doubt that the policy they commended was that best calculated to
lead a country of vast and undeveloped resources like ours up from
rude poverty and dependence to skilled efficiency, wealth, and
power.”
It is undoubtedly true that the mantle of the early protectionist
advocates Niles and Carey fell on Horace Greeley, and that what the one
did in the “Register” and the other in his pamphlets, Greeley continued
in the _Tribune_.
There was much calculating on all sides of the amount the new tax bills
would yield. _Harper’s Weekly_ at the start estimated that it would be
$185,000,000, and in November (1862) it said the amount would be nearer
$275,000,000, but it was far too sanguine. At the end of the year (June,
1863) it was found that the customs had yielded less than $64,000,000
and the excise only about $41,000,000, and the country had been spending
in the last two years an average of over one and one-half millions a
day. The funds raised by taxation were a bagatelle beside the enormous
loans which had to be made, the legal tender which had to be issued. By
the beginning of 1864 it became evident to Mr. Lincoln and his cabinet
that more money must be raised by taxation. It was not a popular thing
to do, for the slow progress of the war, the awful cost in life and
money, had raised a strong party against Lincoln. It looked as if he
might not be reëlected. The opportunists around him advised against any
measures which would increase dissatisfaction, but Mr. Lincoln wanted no
misunderstanding about his intentions in regard to the war. It had got
to be finished at all cost, and he wanted the people to understand what
his reëlection meant. He asked them for more men and more money, another
draft, higher taxes, higher tariffs. The raising of the tariff was as a
method much less disturbing to Lincoln than imposing direct taxes. He
had the old Whig’s horror of the tax-collector, and indeed had pictured
effectively in his early campaigning “assessors and collectors going
forth like swarms of Egyptian locusts, devouring every blade of grass
and other green thing.” In 1859, when there was a general curiosity as
to what he believed, a correspondent asked him as to his tariff views,
and he replied:
“I was an old Henry Clay-Tariff-Whig in old times, and made more
speeches on that subject than any other. I have not since changed
my views. I believe yet, if we could have a moderate,
carefully-adjusted protective tariff, so far acquiesced in as not
to be a perpetual subject of political strife, squabbles, changes
and uncertainties, it would be better for us. Still it is my
opinion that just now the revival of that question will not
advance the cause itself or the man who revives it.... We, the old
Whigs, have been entirely beaten out on the tariff question, and
we shall not be able to reëstablish the policy until the absence
of it shall have demonstrated the necessity for it in the minds of
men heretofore opposed to it.”
In May, 1860, he was still of the same opinion on making the tariff an
issue. “I now think,” he wrote the same correspondent, “that the tariff
question ought not to be agitated in the Chicago Convention, but that
all should be satisfied on that point with a presidential candidate
whose antecedents give assurance that he would neither seek to force a
tariff law by executive influence nor yet to arrest a reasonable one by
a veto or otherwise.” After his nomination and election he steadily
refused to say anything on the question. It was not, in fact, until
February 15 (1861), when he reached Pittsburg on his way to his
inauguration, that he uttered a word. In Pennsylvania, however, some
expression was unavoidable. The tariff had played a greater part in that
state in electing Mr. Lincoln than had slavery and unionism. Indeed, Mr.
Blaine does not hesitate to say that if Governor Curtin had not spent
most of his time in the campaign advocating protection, the state would
have gone Democratic, and if Pennsylvania had gone Democratic, Mr.
Lincoln would probably have been defeated. An expression of opinion then
was unavoidable, and he gave it;—certainly it was moderate enough. After
quoting the tariff plank of the party platform he said modestly: “I have
by no means a thoroughly matured judgment upon this subject, especially
as to details.... I have long thought it would be to our advantage to
produce any necessary article at home which can be made of as good
quality and with as little labor at home as abroad. At least by the
difference of the carrying from abroad. In such cases the carrying is
demonstrably a dead loss of labor....” After developing this argument,
which was one of his strongest early ones and the only one of which full
notes have been saved to us, he added: “The condition of the Treasury
would seem to render an early revision of the tariff indispensable,” and
he went on to advise “every gentleman who knows he is to be a member of
the next Congress to take an enlarged view and post himself thoroughly
so as to contribute his part to such an adjustment of the tariff as
shall produce a sufficient revenue, and in its other bearings, so far as
possible, be just and equal to all sections of the country and classes
of the people.”
There is nothing to show that after he reached Washington Mr. Lincoln
ever considered the tariff other than as one of the several methods by
which money could be raised. If he saw, as he probably did, that there
were many injustices in the measures passed, that some duties were too
high for revenue and beneficial only to the special interests which had
fought for them, that others were trades outright, he still knew that,
all things considered, the bills were as good as could be expected. It
is probable indeed that none of the important legislation of the war
received less attention from the president than the tariff bills.
Congress was with the president in 1864 in his insistence on means for
finishing the war, and in June a new tariff bill went to the Senate. It
had been out of committee just eight days when it was adopted by the
House and the debate on it lasted less than two days. The Senate was
even more expeditious, for it was reported there on the 14th, taken up
on the 16th, and passed on the 17th. That it was possible so to push the
bill through was due to the wonderful generalship of the chairman of the
Senate Committee on Finance, William Pitt Fessenden of Maine, a man whom
Charles Sumner once declared to have been in the financial field what
all our best generals were in arms. Fessenden was at this time about 58
years old, and he had been in the Senate for nearly ten years. Before
the slavery question called him into public life, he had stood at the
head of the Maine bar, a position his father had occupied for forty
years before him. He was an untiring student, a clear thinker, and a
forcible and convincing speaker. He had great dignity—“the dignity of a
Cato,” one of his acquaintances has said, but he combined with it “the
bitterness of a Junius.” Certain things were sure to arouse
him—buncombe, misrepresentation, jobbery, and—_Charles Sumner_. His
propensity to quarrel with Sumner was chronic. He seemed to take as a
personal insult Sumner’s untiring fight in war times to keep a tariff
off books, rags for paper making, magazines, philosophical apparatus for
schools and works of art. Sumner never lost a chance to declare these
tariffs “barbaric,” “taxes on knowledge.” “Why should not knowledge pay
as well as everything else?” Fessenden would ask. This is war, and these
tariffs are justified by the circumstances. Why should not rags pay? and
he intimated that he knew well the gentleman in Boston who made paper
and who had stirred Sumner up to make an attack on the rag duty.
Besides, why should not American ragpickers be protected as well as
American wool-growers? It was an industry to be cultivated.
But while Fessenden’s antagonism to Sumner coupled with his dyspepsia
might make him often irascible, it never interfered with getting things
done. The bill in question was put through with only two days’ debate,
purely from his ability to whip the members into prompt action—to his
quick wit, his fine tact in steering them away from unprofitable side
issues and from subjects which precipitated heated and time-taking
discussion. For instance, in the present bill the higher duty proposed
on railroad iron caused great anxiety to railroad interests, especially
in the West, where much building was going on. The duty on railroad iron
in the bill of 1861 had been $12.00 per ton; it was proposed now to make
it 70 cents per 100 pounds. The whole West rose in arms. Kansas and
Minnesota were particularly disturbed, since they were laying track as
rapidly as possible. It cost from two to three thousand dollars a mile
for rails now, and nobody knew what it would cost if duties were raised.
It looked very much as if railroad building would be stopped. “The
development of the country was something even in war times,” urged the
Senator from Minnesota. This tariff meant less revenue, Senator Pomeroy
of Kansas declared, for importation would cease. It simply meant that
the iron men who were demanding it would put up their prices. They were
paying 50 per cent dividends now and watering their stock. The entire
iron business was rapidly becoming a monopoly. We could better afford to
import all our iron from England than let this happen. But the
suggestion of importing anything from England at that moment was like
fire to powder. An explosion always followed. Mr. Pomeroy’s suggestion
brought Zach Chandler of Michigan roaring to his feet. “If I had my
way,” he shouted, “I would raise a wall of fire between this nation and
Great Britain. I would not only not allow her iron to come here, but I
would not let a single pound of any article she manufactured come here
during this war.... Let the railroad interest suffer and any other
interest suffer. It is nothing to me, I am for the tax and the highest
tax.” Mr. Fessenden well understood the danger in allowing an outbreak
against England to start, and he quietly and firmly insisted that the
discussion be confined to the duty on rails.
The new bill was signed on June 30, and went into effect at once. Under
it duties rose from the 37 per cent of the bill of 1862 to over 47 per
cent. The effect on prices was appalling. The cost of living, already
enormous, increased, until it looked as if the “thousand-dollar
breakfast” Secretary Chase had threatened was to come; even goods
unembarrassed by taxes or tariffs, like butter and eggs, rose with the
rest—sympathy and speculation the causes. In some cases the hoisting of
prices almost caused riot. In New York and Brooklyn there was great
excitement over the attempts of the gas companies and the street
railroads to take their taxes out of the public, although it had been
expressly stipulated that they were to pay them themselves. In August
after the bill went into force, the Manhattan Gas Company notified
customers that they must pay $3.25 per thousand instead of $2.50; the
Brooklyn Gas Light Company and several others did the same. Higher fares
on the street car lines were announced. There was a great uproar in the
press and on the street, for it was well known that the companies were
already making enormous profits. The Manhattan Gas stock at this time
was quoted at $1.90 (50 being par) and New York Gas Light at $2.85¼ (50
par). Confiscation of franchises and the establishment of municipal
plants were advocated generally. In Philadelphia there was an agitation
at the same time in favor of coöperative coal companies, the price of
coal, which it was estimated cost $6.00 per ton delivered, being put at
$10.00. If the indignant cities had carried out their threats they would
probably by this time have been free of their most arrogant
task-masters.
Hard as the situation was made for common folks, they endured it
patiently, grimly, convinced that there was no other way to end the war.
There has never been seen, indeed, in the world’s history, a more
splendid courage in bearing burdens than the people of the United
States—North and South—showed in the Civil War. It is an inspiring thing
to study. If it had had no reverse! But it is one of the curious and
puzzling phenomena of human nature that the situation which inspires
some to their highest endeavor arouses others to their lowest. That the
same cause makes martyrs of some men, cormorants of others. If a war for
a great cause brings out the nobler qualities of human nature, it brings
out at the same time the vicious. If fine fellows march in the line and
go bravely into battle, mean ones hang on their flanks and rob the
battlefield. If the mass of people pay the cost by the sweat of their
brow, a minority trades on their necessity. Never have we had this
violent contrast more marked than in the Civil War. Take the attitude of
the people towards the taxes and tariff. The mass bore the burdens
imposed without a whimper, yet from the first there was a large number
whose sole aim was to manipulate taxes and tariff to serve their
interests. They ignored the principles the makers of the bills laid down
clearly, that everything was to have a duty put on it which could be
made to yield revenue. The consumers of raw materials fought fiercely
for free wool, free cocoa, free everything, and they fought as hard for
increased duties on their products; not satisfied that these duties
compensate for internal taxes, they wanted them higher than the taxes.
The government was the best patron of importers and manufacturers, and
it was a customer not too careful that it got what it bargained for,
such was the stress of its situation, and these manufacturers and
importers cheated their great patron at every turn. They gave shoddy for
wool, adulterated the food they sold, undercounted and underweighed.
Frequently what they sold had been smuggled in, for smuggling flourished
abundantly under the high duties. All that free traders had ever said of
the inducement the protective system gave for cheating the government
was more than proved true. An organized system of smuggling from Canada
was in operation before the end of 1862, and it grew steadily throughout
the war until it was an open secret that the markets of Boston
particularly were full of smuggled goods. The closest watch had to be
kept for this reason, on every attempt to put a duty on an article
hitherto free. Thus in 1864 Mr. Fessenden stopped a proposed tariff on
spices. He had discovered, he said, that the gentlemen who imported
spices had already on hand in warehouses a great quantity held for the
higher prices which the duty would cause, and that full preparations had
been made to keep up this supply by smuggling from Canada—an easy thing
to do, since anybody could fill his pockets with nutmegs and walk in
unnoticed. The cost of guarding the border became enormous, three times
the ordinary number of revenue cutters were on the Lakes, and a cordon
of officers extended from Maine to the Pacific coast. Besides, the
management of the custom houses throughout the war was notoriously bad,
the service being sprinkled with the incompetent and dishonest. In New
York alone it was estimated that the government lost from 12 to 25
millions annually through fraud—then as now false invoices being the
favorite method of cheating.
But the adherents of free trade and direct taxation could not boast that
their system gave no opportunity for like abuses. The men who fought for
higher duties fought against excise. They made false returns of income
and property in the same way that importers made false invoices. If
importers brought in great quantities of unprotected goods and then
organized a campaign for protection, manufacturers in anticipation of
taxes piled up huge stocks; 40 millions of gallons of distilled spirits
and nearly 80 millions of cigars were made and stored in anticipation of
the tax of 1864. When it was seen that matches were to be taxed, stocks
were so piled up that the first year the government collected only a
small proportion of its estimate. After the stock was exhausted the
return from the tax on matches increased 216 per cent in five months;
then the manufacturers devised a new trick; they put 100 instead of 50
matches in a box. The law required only one stamp on a box—thus the tax
was cut in two. Factories were transported across the Canadian border;
and as the reciprocity treaty let matches in free, it began to look
before the close of the war as if the match tax would be null.
On the whole, it is probable that the collection of the direct tax was
accompanied by less fraud than the collection of the customs, but the
service made up in inefficiency what it may have lacked in dishonesty.
The taxed were on the alert to escape, and the collectors were too
inexperienced to circumvent them.
There certainly never has been in this country so admirable an
opportunity to compare these two systems of raising revenue as we had at
this period. The amount each yielded, the expense and difficulty of
collection, the effect on the loyalty of the people and the opportunity
for greed and dishonesty—all can be placed in parallel columns for
comparison. If anything is proven by the comparison it is that no system
of organization and administration does away with human selfishness;
that whatever the system, the men who have it in their hearts to cheat
their fellows, are going to find a way. Regeneration lies deeper than
system: it lies in the nature of the men who use the system.
On March 31, 1865, the last tariff bill of the Civil War was passed, an
amendment raising many duties, among others that on railroad iron. Nine
days after it was passed Lee surrendered, and almost as soon as the news
reached Washington orders went forth to stop many of the extraordinary
measures which war had made imperative. It had been declared from the
first that the high tariff and the direct taxes were simply and only
measures for war revenue. In framing the tariff bill of 1862 the
committee entitled it a bill to increase duties “_temporarily_.” Mr.
Morrill, Mr. Stevens, and Mr. Fessenden all explained again and again
that the increased duties were to compensate for excise taxes. There are
repeated passages from their speeches of the same tenor as this from Mr.
Fessenden in 1864: “The tariff is adjusted and was adjusted upon the
simple principle with reference to the internal tax.” Sumner reiterated
the idea whenever he had the chance. “I regard all our present
legislation as temporary or provisional in its character,” he said in
1864, when an irate fellow Senator pointed out the growing hardihood of
manufacturers in demanding protection and the danger of fastening high
duties irrevocably on the country. “It is to meet the exigency of the
hour.”
Nothing is clearer indeed than that in the minds of the men who devised
them—in the minds of the people who paid them, the tariffs with which
the country found itself in 1865 were temporary, just as the army was
temporary, the internal taxes temporary, that with the end of the war
they would come off. But a war does not “end” with the laying down of
the musket. That is but the turning point in the fever. The consequences
are left to take care of—tens of thousands of men to detach from army
life and reassimilate into civilian life; thousands of maimed and
weakened soldiers to find occupation and homes for; thousands of widows
and orphans to care for. It is over forty years since Lee surrendered to
Grant, but the army of the Civil War is still with us.
Nor does the laying down of the musket put an end to the cost. War means
debt. It is fought on a nation’s credit—not wholly on its income—not on
its surplus, and the debt remains. When the government at Washington
came to consider its financial condition in 1865 after the so-called
“end of the war,” it found itself with the colossal debt of over
_twenty-eight hundred million dollars_ ($2,808,549,437.55 to be exact).
Interest on this must be paid. The principal must be paid. Tariffs and
taxes might be “temporary,” but it was evident that they must be
adjusted to take care of the war debt. How was it to be done? It was
evident that between redeeming its pledge to make the taxes temporary
and meeting its obligations the government of the United States had a
very pretty financial problem on its hands.
CHAPTER II
AN OUTBREAK OF PROTECTIONISM
The Civil War wrought many changes in the people of the United States,
and none more amazing than that in their attitude toward money—the
amount they could spend—the methods by which it could be raised. Here
was a people who in 1859 had looked with dismay on a debt of $58,000,000
facing confidently one of $2,800,000,000; a people to whom in 1860
raising an income of $62,000,000 had seemed difficult, actually provided
in 1866 one of $559,000,000; a people to whom direct taxes had always
been abhorrent and who had repudiated high tariffs, submitting patiently
to both as one of the dire necessities of war. The war was over, but the
debt and the extraordinary expenses remained, and to meet them harsh and
sweeping taxation must be continued.
This was plain to everybody, but it was equally plain to those who
studied the balance sheet of the treasury that many things could be done
to equalize and reduce the taxation. The debt itself could be readjusted
to be much less burdensome. As it stood it was made up of some twenty
different kinds of paper;—bonds, treasury notes, certificates of
indebtedness of all kinds due at nearly twenty different dates, and
drawing almost as many different rates of interest. The paper currency
which kept the money market in a constant state of unrest could be
redeemed. Great economies could be made in the administration of the
government. These things done and a careful estimate of essential
expenses computed, nobody had any doubt but that the people would
consent to the taxation required with as little grumbling as human
nature usually meets taxes.
That the revision of the revenue was work for experts, not for
politicians, had been realized before Mr. Lincoln’s death, and in March,
1865, a commission had been appointed to look into the whole subject and
report. The head of this commission was a man who was to wield a big
influence in the country in the next few years, and one to whom we owe
more credit than he has ever received, David A. Wells. Mr. Wells was a
New England man, who had first attracted attention by planning and
constructing in the printing office of the Springfield _Republican_,
where he wrote editorials, the first machine ever made for folding
newspapers. He made money from his invention, and used some of it in
giving himself a scientific training at Harvard as a special pupil of
Louis Agassiz. In 1864 Mr. Wells, who had become interested in economic
problems, wrote a pamphlet, called “Our Burden and Our Strength,” which
attracted general attention, both here and abroad, and led naturally
enough to his choice as one of the revenue commission referred to above.
There were two other members on the commission, but from the beginning
Mr. Wells dominated it, and his first report, made January 1, 1866,
showed in a very clear way what was before the country.
By his calculations the taxes and tariffs then in force ought to yield
in the year ending June 30, 1867, $435,000,000. Now the Secretary of the
Treasury had estimated that we could get along that year on
$284,000,000. Let us say three hundred millions, proposed Mr. Wells, and
then let us set aside fifty millions a year for reducing the debt—that
still leaves $85,000,000 to be taken off the taxes. Where should it be
applied? To the internal taxes or to the custom duties? Mr. Wells knew
the feeling of the people. They hated direct taxation, they preferred
duties on imports, and he worked out a plan for taking the $85,000,000
off the former, but at the same time he called attention to various
inequalities in the tariff which should be corrected. They came mainly
from the lack of equalization between the two systems of taxation. The
duties on imports were supposed to be arranged so as to compensate for
the internal taxation; not infrequently, however, the tariffs were
placed without proper consideration, and grave inequalities had
resulted. These were of two kinds: either the tariff was less than the
taxes, so that the manufacturer could not compete with foreign goods
imported, or it was considerably higher than the taxes, so that he could
put up his prices until they practically prohibited importation, thus
cutting off revenue and heavily burdening the consumer. Certain cases of
the first kind became familiar at the time from the fact that they
touched everybody, and were explained clearly and in detail in Mr.
Wells’s report. There was the matter of book-making. Everything which
went to make a book was _separately_ taxed,—paper, cloth, boards, glue,
thread, gold-leaf, leather, and type,—and when the book was complete it
was taxed 5 per cent on the selling price. It cost 59½ cents to make a
book requiring a pound of paper. The same book could be made in England
and delivered in New York, including duty (the duty on books was 25% on
the value) for 26¼ cents. Little wonder that American book publishers
sent their work abroad to be done or that the boys and girls of the time
were using Webster’s Spelling Books made in England. The umbrella was
another common article over which there was much trouble. Each item
which went into the making of the umbrella—sticks, rods, handles, tips,
bands, tassels, buttons, cover—was produced by a different
establishment, and each paid its own tax. The cover usually was
imported, and silk paid a duty of 60 per cent. The finished parasol paid
a 6 per cent tax. Now the duty on an imported umbrella was 35 per cent
on its value. Naturally umbrellas were imported in quantities and sold
at a price lower than they could be made for at home.
But while there were cases where the tariff did not compensate for the
tax there were more where it had been forced far beyond it. If these
tariffs had increased the revenue, they might, under the circumstances,
have been justified, but they did not do that. They limited importation
and enabled the home manufacturer to put up his prices, and it was he,
not the government, who got the extra money. At the same time it cost
the government a great deal to collect the small sums realized on these
over-protected articles, often more than the sum itself.
If the government could get on with $85,000,000 less than it could
collect, it seemed obvious that it ought to begin cutting down those
internal taxes which were so much too high for the tariffs. It seemed
obvious, too, that unremunerative tariffs ought to be cut off. But no
sooner did the talk of reducing tariffs on any article begin than there
came a loud outburst from many manufacturing centres against any
reduction. The internal taxes must come off at once—that they demanded,
but no tariffs should be lowered. The cry to preserve the tariffs soon
turned in many mouths to one to raise them. Copper (in blocks), which
under the bill of 1864 had had a duty of 2½ cents a pound, now asked for
double that. Iron rails which already were carrying a duty of 70 cents a
hundred pounds and selling in New York for over $80 a ton, while they
cost only about $32 in Wales, asked a higher duty. The salt miners of
Michigan and New York, whose profits at the moment were enormous,
demanded still greater protection. As soon as the House Committee of
Ways and Means got to work on a tariff bill, which was early in 1866, an
army of determined tariff lobbyists poured into Washington, declaring
they must have more protection or they would perish.
That there were grave embarrassments in the business of the country
could not be denied. Five hundred thousand men, young men at that, had
been taken permanently from the ranks of breadwinners by the war—and
those dependent upon them were now the country’s wards. Immigration to
which the government had looked for reënforcements for labor was falling
off. The tremendous demand which a great army makes upon manufactures of
all kinds was at an end. Particularly did the iron mills, the woollen
factories, the railroads, the produce merchants, feel this sudden
cessation of trade. Prices were probably 90 per cent higher than before
the war, although wages were not over 60 per cent higher. But these
embarrassments were the inevitable results of war—as logical as the debt
or the disabled soldier. Somehow the transition from the abnormal
condition of war to the normal one of peace had to be made; somehow for
the artificial demand and cost the natural must be substituted. It meant
economy, curtailment, lower prices, lessened output; hard times, in
short, for a period. There was no class in the country from whom patient
endurance of the difficulties of the situation could be more fairly
asked than the manufacturers. They had for the most part enjoyed four as
fat years as ever fell to the lot of man. It is doubtful indeed if any
industry at any period of the world’s history had reaped so great
rewards in so short a time as that of iron in the Civil War.
The difficulty now was that these manufacturers were not willing to pay
their share of the cost of the war. They demanded higher protection that
they might make their prices higher, and thus ease as much as possible
the necessarily hard transition state. Congress was to do for them what
economy and patience should have done.
As it happened the demands for a higher protection were made on a
Congress under the dictatorship of a man for whom no tariff could ever
be too high—that was Thaddeus Stevens. When the first tariff bill was
presented to the House in June, 1866, by Mr. Morrill, everybody knew
Stevens was near his end, but emaciated, white, and suffering as he was,
his nerve was still superb. Too weak to walk up the Capitol steps, two
stalwart negroes carried him. “Who will carry me when you are dead,
boys?” he said to them one day with a chuckle. The fight between
Congress and President Johnson over Reconstruction had developed, and
Johnson had already singled out Stevens as his chief enemy. He was soon
to begin to ask as he “swung around the circle,” “Why not hang Thad
Stevens?” Johnson was not mistaken in placing the responsibility.
Stevens had always disliked him. “Can’t you find a candidate for
vice-president of the United States without going down to one of those
damned rebel provinces to pick up one?” he had asked Colonel McClure in
1864. His dislike had grown to open opposition, and he was now leading
the Congressional fight with spirit, ability, and bitterness. Yet weak
as he was, and absorbed as he was in the undoing of the sullen suffering
man at the other end of Pennsylvania Avenue, no measure escaped his
dictation, least of all a measure which touched a doctrine so dear to
his heart as the protection of American industry.
The bill was not in before it was evident Stevens was dissatisfied with
it. It was, he declared vehemently, a free-trade measure. As a matter of
fact no bill the United States Congress had seen up to this date had
less consolation for the free-trader in it than the one Mr. Morrill now
introduced. Although just before the bill was reported $75,000,000 had
been taken from the internal revenue taxes, no compensating reduction
had been made in the tariff. Not only did it preserve the average of 47
per cent, which the bill of 1864 imposed, but it increased many duties,
notably those on copper, iron, steel rails, wool and woollen goods,
salt, all articles which touched the mass of consumers. Many purely
protective duties which could yield no revenue were added—such were the
duties proposed on grindstones and on nickel. So inconsistent was the
bill with the former professions of the party, so evident was it that it
was going to make the price of many essential articles higher, that Mr.
Morrill, candid gentleman that he was, apologized rather pathetically
for it. He had hoped, he said in course of debate, that at the close of
the war the tariff had reached its maximum, and that the earliest
business of Congress after taking off internal taxes on manufactures
would be to reduce duties by the full compensating amount. That this
could not be done with safety was due in his mind entirely to the
failure of Congress to redeem the currency. As long as there was
$917,000,000 of paper money in circulation Mr. Morrill thought the
tariff could not be lowered, but ought rather to be raised. His argument
was not particularly clear or convincing, but it was obvious that he
believed what he said, and that he was greatly worried over the
situation.
Mr. Morrill’s doleful apology for raising duties was entirely misplaced
as far as the dominant factor in Congress was concerned. It was not the
higher duties which stirred that body to protest against the bill, it
was the lower; it was not the extravagant increases, it was the moderate
ones; it was not the articles added, it was those omitted. Thus, among
other items in the schedule was one making the duty on Nova Scotia coal
50 cents a ton, although the duty on coal from other points was $1.25 a
ton. This discrimination was, of course, for the sake of New England
manufacturers, who were cut off from using native coal by the freight
charges of the long haul. Again, scrap iron was not protected at all and
shoddy had a duty only _four_ times what it had been formerly! These and
other similar changes in the bill were not fairly before the House when
Stevens broke out in anger at the moderation of the measure. “I look
upon this bill as a free trade bill from beginning to end,” he stormed.
Nova Scotia coal should pay the full tariff of $1.25, and that was not
enough. There was not a word about scrap iron in the bill, shoddy should
pay more. “It is a most extraordinary imposition upon the protective
tariff of the country.” But Stevens was physically too weak to do
justice to his indignation—more than once when he tried to address the
House he sank back into his seat, exclaiming, “I am too exhausted,” but
if he could not defend his doctrine, he had a Pennsylvania colleague who
could, and far more cunningly, with far more knowledge and fairness than
Stevens. This was William D. Kelley of Philadelphia. Kelley at once took
hold of the debate on the bill, his whole weight being thrown in favor
of the highest protection of any article which could be made or grown in
the United States. His knowledge of the articles on which he spoke, and
his eloquence, clearness, and conviction in presentation, were such as
to mark him at once as the probable future leader of the high
protectionists.
But bold, able, and determined as the protectionist sentiment in the
House showed itself, it was not to go unchallenged. A species of
three-cornered fight developed within the party. There was Mr. Morrill
defending while deploring the bill, on the ground that paper currency
made it necessary,—there were the high protectionists led by Mr. Stevens
in spirit and Mr. Kelley in speech, and there was a most interesting
body of moderate protectionists, led by three representatives from Iowa,
John A. Kasson, James F. Wilson, and William B. Allison. These men were
ably seconded by Frederick A. Pike of Maine (“tax-fight-emancipate
Pike”) and Henry Raymond of New York. Ridicule, protest, argument, were
in turn tried by this group. “It is well understood that there are many
very worthy manufacturers of coffee in this country,” Mr. Pike said in
disgust one day; “they make it of chicory, beans, peas, rye, wheat,
dandelion root, and many other things. So there is reason for retaining
a small duty on coffee in order to protect that worthy class of our
manufacturers.”
Mr. Raymond, who was indignant over the increased duty on railroad
iron—a duty which he declared would increase the annual expenses of the
two roads in his state, the Erie and the Central, at least
$2,000,000—exclaimed: “If the bill of 1865 is not sufficient protection,
what in Heaven’s name will be? We were told at the beginning if we
protected this infant industry it would soon stand alone. We have been
doing it for thirty or forty years, and yet every session of Congress
witnesses new demands for increased protection.”
It was Mr. Kasson who did perhaps the most effective service against the
measure. He wished simply “to foster the incipient industries of America
until they were able to take care of themselves without help, in fair
competition with the industries of foreign countries.” To make the
duties so high that foreign competition was removed, was, in Mr.
Kasson’s judgment, to encourage monopoly. This was a bill “to prevent
the diffused blessings of Providence from being enjoyed by the people of
the United States,” he declared. Who were the handful of wool-growers in
the country that 34,000,000 consumers should be taxed to support them?
Mr. Kasson was especially bitter against the higher prices the bill
would undoubtedly make for farmers. “What does this bill do?” he asked.
“It raises the tariff on lumber, which is so necessary to the Western
prairie farmer; on nails, without which he cannot drive his boards on
his house or build his fence; on salt, without which he cannot preserve
his beef and pork. There is hardly a thing he consumes which this bill
forgets to raise the duty upon. Every prominent necessity of life, food,
fuel, shelter, and clothing, is embraced and made more expensive to the
consumer throughout the country. Even on boys’ pocket-knives the duty is
increased about three times—600 per cent—one member of the committee
tells me. And yet it is said this is a tariff for mere protection. Why,
sir, you are protecting the American people until they will not be able
to buy one solitary thing that is protected if this goes on.” It was
unjust to the consumers, and, said Mr. Kasson, “_Consumption represents
millions, capital only thousands._”
The majority of the Western representatives were with him in the feeling
that the bill was unjust to the farmer. “Long John” Wentworth of
Illinois, a Republican of Democratic antecedents, did some sensible,
pointed arguing against the higher duties on the ground that they were
against the very men (the farmers) “who do most of the tax-paying in
peace and most of the fighting in war.” He warned emphatically that not
only was the bill a discrimination, but that it was certain to encourage
interstate combinations—a warning which was repeatedly dropped during
the debate, and to which the tendency to combination in the salt, iron,
and copper industries gave particular force.
When Wentworth and the Westerners found that there was little chance of
defeating the bill they declared that it must be made just all
around—there must be protection for the farmer and they asked for 30 per
cent on cattle, 50 per cent on fruit, more on grain, duties which raised
strong protests from Pennsylvania and other manufacturing centres. This
would take the necessaries of life from the reach of “their poor toiling
millions.” Yes, said the Westerners, but you are taking the necessaries
of labor from _our_ “poor toiling millions.”
That members of the Republican party should dare in his presence to talk
such doctrine was gall and wormwood to Mr. Stevens, and he flung at
them, and at Mr. Kasson particularly, an epithet which in his mouth was
only one degree less opprobrious than that of “slave-holder” and
“rebel”—“free trader,” and he could prove it, for here was Mr. Kasson’s
name on one of the circulars of the Free Trade League. Mr. Kasson did
not deny the charge: “I have the distinguished honor,” he replied, “of
being a councillor-elect to it, and I am giving my counsel to it (the
League), and to all the people of the United States.”
The bill passed the House by a large majority—the high duties on farm
products which the Westerners asked tacked to it. It was evident that
Congress, as a whole, had broken with the avowed tariff policy of the
past 20 years.
It was the middle of July, 1866, when the bill reached the Senate—too
hot for tariffs, the Senators decided. It was several months indeed
before it came before them. Along with it came a bill prepared by Mr.
Wells, who had been greatly disturbed by the outbreak of high
protectionism. A moderate protectionist himself—he appreciated the
injustice and the dangers in recklessly and generally increasing duties.
He had carefully studied the schedules, and he knew how inevitably
disaster must follow to some interests from the sweeping changes
proposed. He accordingly prepared a bill much more moderate in its
duties, which he claimed would give the necessary revenue and at the
same time protect as far as was just. It met the hearty approval of the
Senate, where there had been much sarcasm spent on the House bill,
principally by the Republicans themselves. “The idea has seemed to
prevail of late,” said Mr. Fessenden, “that if anybody choose to start a
new manufacture by way of experiment, thinking he can succeed in it, the
duty of this country, whatever the effect on commerce, or whatever the
taxation on individuals, is to place duties which will prevent the
importation of that article if it interferes with the manufacture
started.... Is it worth while,” he asked, “to prohibit the importation
of all articles and end our relations with foreign countries?”
Mr. Wells’s bill was made an amendment to the revised House bill, and
sent back. Mr. Morrill advised its acceptance, and promptly. The time
had come when, in his opinion, it was “reasonable to have an
unreasonable tariff.” But there were few of the members, particularly of
the Western members, who agreed with Mr. Morrill. The bitter feeling
that the East was legislating for itself to the injury of the farmer
broke out hotly. A genuine struggle of sections followed, to the disgust
and alarm of Stevens, who knew that if the Westerners could not or would
not accept the “home market” argument, high protection was a lost cause.
That his own side should imperil the bill was particularly trying to
him. “If the gentlemen who are in favor of a tariff bill hold their
tongues and vote,” he snarled, “letting the other side do the talking,
they may get a tariff, but they never will if they keep up their
debate.” But they would not hold their tongues, and they did not get the
bill. In the general dissatisfaction it failed. But high protection did
not end with it. The failure to pass the bill was the signal for a move
of far-reaching consequences.
The morning after the House dropped the bill Mr. John Sherman asked the
Senate to consider a measure for raising revenue by putting up the
duties on wool and woollen goods. There was a general outcry. Where did
such a bill come from—who had ever heard of it—how could Mr. Sherman
expect a measure plainly in the interest of a single industry to be
properly considered, when Congress was to expire “day after to-morrow,”
and more and more of the same kind, including some caustic remarks about
the influence a private industry must have to force such a measure
before the Senate at such a time.
As a matter of fact the bill now so suddenly sprung on the Senate had
been lying in wait for some seven months for just such a contingency as
the failure of the tariff bill—a fine example of business foresight!
This was its history: In July, 1866, when the Senate postponed taking up
the tariff Judge Bingham of Ohio had brought into the House a bill
providing for higher duties on wool and woollens. It was evidently
framed to take care of the wool-growers of his state. Certain woollen
manufacturers, who had known nothing of his intention, saw the danger of
the bill antagonizing both Congress and those manufacturers who were
advocating free wool, and persuaded Judge Bingham to allow it to be
sidetracked until the fate of the general tariff was decided. This was
done, the bill being quietly passed on to the Senate, where nobody but
Mr. Sherman seems to have known or remembered anything about it. When
the tariff bill dropped, the wool interests immediately asked that their
special measure be presented, and Mr. Sherman agreed. Part of the dismay
that the Senate showed at the presentation of the measure was no doubt
due to its familiarity with the solid organization and effective
lobbying of the wool manufacturing interests of that day as well as with
their reputation for unsavory lobbying in the past. It was not yet
forgotten how in the forties and fifties the wool interests had combined
with the Pennsylvania iron men to force Western representatives, who at
that time were all working for land grants for railroads, to vote for
their tariffs. The scandal of 1857 in the fight for free raw wool was
not yet forgotten. The charge of corruption at that time had even forced
a Congressional investigation in which it was shown that one Boston wool
firm had spent some $87,000 of its own money besides some thousands of
other people’s. These sums they charged frankly on their books “to
expenses in securing the passage of the tariff of 1857.” The
investigation showed that the agent of the manufacturers confiscated
most of the money intrusted to him; that none of it, as far as shown,
ever reached a Congressman, though a considerable sum did go to editors
and “influential persons”—such was $5000 to Mr. Thurlow Weed, for
collecting statistics and using arguments!
The insistent demands of the wool men, for years, had been such, that
even good Mr. Morrill had grown tired of them. “Their evils somehow
never disappear,” he said, querulously, when he presented his bill in
’66, and he went on then to say that never since he had been in Congress
had so large a number of petitions for help been received as had been
coming from the wool interests East and West. The wool men, as a matter
of fact, were organized then as probably no interest in the country had
ever been before. The chief organization was the National Association of
Wool Manufacturers, having at its head as able a lobbyist and promoter
as the country has ever produced—this was John L. Hayes—a New
Englander—a graduate of Dartmouth and of the Harvard Law School, a man
of wide and varied experience. He had been counsel for Canada when the
reciprocity treaty of 1854 was framed. He had founded iron works in
Maine and promoted a railroad in Mexico. He had been in politics. He had
held office in Washington. He was a natural scientist of no mean order—a
man versatile, knowing, engaging, and energetic. Mr. Hayes took charge
of the interests of the wool manufactures in 1865, and he carried on a
splendid campaign for higher tariffs. The only hitch in it had been the
necessity of combining with the wool-growers. The decline in the price
of wool after the war had lead the latter to conceive the idea that if
all foreign wool could be shut out of the country, the domestic grower
would be able to monopolize the market—at his own price. To accomplish
this they had organized to fight for a duty which they meant should be
prohibitive. The disadvantage at which the manufacturer would find
himself, should such a measure pass, was obvious, but to fight for free
wool was to antagonize a group of unusual political power. Ohio was the
chief centre of this group, but it could count on the support of New
York, Pennsylvania, and Michigan. Mr. Hayes realized that if the wool
manufacturers should succeed in keeping their raw material free, the
wool-growers in retaliation might force low duties on woollens. It
seemed to him and to the association he directed better policy to work
with rather than against their opponents, and largely through his
influence the two conflicting interests were brought together at a
convention held in Syracuse, New York, early in 1866. There was an
attempt to convince the sheep men that free raw wool would benefit them
more than any tariff, but they refused the argument. They must have real
protection. The two interests succeeded finally in working out an
agreement which satisfied each. The basis of this agreement was, as
afterwards stated by Commissioner Wells, “that the duty on raw or
unwashed wools and hair, other than wools adapted for carpets, should be
fixed at rates varying from ten to twelve cents per pound, and from ten
to eleven per cent ad valorem. In order, then, to compensate the
manufacturer for such a prospective enhancement of the price of his raw
material, it was agreed that, in consideration of the fact that _four_
pounds of the cheapest imported wool (mestiza), paying an aggregate duty
of forty-six cents, were _sometimes_ employed in the fabrication of a
pound of finished cloth, the duty on cloth should be fifty cents per
pound, and on other fabrics of wool of varying weight a duty in like
proportion. In order, next, to give the manufacturer protection against
his foreign competitors, 25 per cent ad valorem was added; and in order
to further compensate for the payment of an internal revenue tax of 6
per cent, _which tax was repealed in the succeeding year_, 10 per cent
more was added, thus making the aggregate duty on shawls, cloths, and
woollen goods generally, fifty cents per pound and thirty-five per cent
ad valorem. It will thus be seen that if the manufacturers, as is often
alleged, did not enter into the arrangement for an increase in duty
through their own seeking, they nevertheless managed to secure full
compensation for all that was granted to the wool-growers; and in
addition to that, through force of subsequent circumstances, an
additional protection in excess of what, according to their showing,
they considered necessary.”
This was the basis of the wool schedule which had been embodied in Mr.
Morrill’s bill and also of the bill which Mr. Sherman had sprung on the
Senate. That the Senate did not like the wool bill was evident. On all
sides there was strenuous opposition to protecting one industry and not
another, and yet the bill went through. It is worth nothing in view of
the support of the scandalous wool schedule of 1909 by both the Senators
from Massachusetts, that both Senators Summer and Wilson of
Massachusetts voted against the wool bill of 1867 and that Senators
Morrill and Fessenden absented themselves. A few hours before the end of
the session the wool bill was received by the House and passed. But its
fate was by no means decided. It still must have the President’s
signature, and the President was Andrew Johnson. Johnson was in poor
temper to favor any measure sanctioned by “Thad Stevens and his gang.”
He had just vetoed one of Stevens’s pet measures, and it was very likely
he would veto any bill favoring a special interest, for his traditions
and sympathies were all with a liberal commercial policy. Mr. Hayes knew
this, and he and his friends collected outside the door of the Capitol
chamber, where, as the custom is, the President signs bills on the last
night of a session. Late in the evening it was rumored that the bill
would be vetoed. Hayes hurriedly summoned aid,—Bingham of Ohio, the
framer of the bill, the Secretary of the Treasury, and the
Attorney-General. What pressure this force brought to bear on Mr.
Johnson is unknown, but at a minute before twelve, according to Mr.
Hayes’s story, the President put his name to the wool bill. It was a
great triumph for Mr. Hayes. “The wool bill of 1867 and its enactment
into law,” says one of the protectionist organs, “were chiefly due to
his personal influence with leading members of both branches of
Congress.”
The passage of the wool bill proved that an industry, if strongly enough
organized and headed by a sufficiently able and respectable lobbyist,
could secure from the Congress of the United States protective favors
which could not be secured for the whole mass of industries. The lesson
had immediate effect. The next year (1868) Congress was asked to pass a
similar bill, favoring the Lake Superior copper industry. The rich mines
in that section had been in operation for several years, and in the last
two or three years their output had been increasing rapidly. As was
natural, there had been a great amount of speculation in copper mining
stocks. The public had subscribed almost as much to wildcat and bogus
copper schemes in this period as to the same kind of oil schemes.
Probably something like $20,000,000 had been actually invested in the
region, there were forty or fifty thousand persons settled in the
district, and there was a considerable fleet on the Lakes in the
copper-carrying trade. It was the beginning of a great industry. Now for
many years there had been in Maryland, Connecticut, and Massachusetts
copper-smelting works which used ores from Chile and Cuba mixed with
ores from the Eastern states. Since 1864 the Eastern concerns had paid a
duty of 5 per cent on foreign copper ore. The Lake Superior interests
had been suffering for several months from decreased prices, due largely
to a great increase in the world’s copper output. They had asked relief
in 1866, and a higher duty had been accorded them in the bill that
failed. They now concluded, as the wool men had, that if they could not
get what they wanted in one way they would in another, and in July,
1868, brought in a bill asking for a duty equal to about 25 per cent on
copper ore. It was a rate which, if granted, was bound to put the New
England and Baltimore works out of commission, put an end to the
carrying trade with Chile and Cuba, raise the price of copper so that
American-built ships could not get their copper bottoms in our ports,
and drive many industries then using copper to cheaper substitutes, like
galvanized iron, sheet tin, zinc, or lead, and put still others to an
expense which, as they would have no compensating tariffs to protect
them, would greatly cripple them. Excited debate followed the bill
everywhere, especially in the Senate, where Zach Chandler fought for it.
The time had come, he declared, when the manufacturers were not going to
have all the protection; miners and farmers were going to have it now.
There was not an article made in Connecticut, which was opposing this
bill, which was not protected, “not an article from a wooden button to a
brass clock or from carpetings to Jew’s harps.” If you don’t give
protection to us this way (through special bills), we’ll take a
horizontal tariff for our copper and lumber and wheat and wool, and then
if “your clocks will not run, let them stop.” His picture of the
suffering of the miners following the closing of the mines no doubt won
many to the measure. It was because of that, said Mr. Morrill, that he
should vote for it, though he believed it would help speculation in
copper stocks more than the suffering miners of Michigan, and that it
was a blow to ship-building and commerce. Would it not be better,
suggested Mr. Grimes of Iowa, to organize a branch of the Freedman’s
Bureau and send it to Michigan to take care of the miners?
The bill finally passed and by large majorities, and in February, 1869,
went to President Johnson. Whatever the influences which had induced
Johnson to sign a bill which must have been so repugnant to him as the
wool bill, there was little chance that they would have any effect upon
him now. His term was almost over. In a few days he was to yield the
White House to “that little fellow Grant,” as he called him, and go back
to his Tennessee home to hoe potatoes and discuss politics with his
neighbors in his son-in-law’s village store.
He was going out in a sense victorious, for he had not been convicted,
and his arch-enemy Stevens was dead, and yet it is doubtful if the end
of his terrific fight with Congress gave him much happiness, if indeed
anything could give him real happiness. Certainly Johnson suffered
throughout his four years as President as few people at the time
realized. One of his secretaries once said that in the two years he was
with him in the White House he never saw him smile but once. Ill
himself, his beloved wife a bed-ridden invalid, unfitted for
companionship, suspicious of his associates, narrow in mind, bitter and
resentful in heart, there was little reason indeed why Andrew Johnson
should smile. Yet unquestionably he got a grim pleasure from his vetoes,
even out of his impeachment trial. He believed he would be convicted,
and his secretary tells of the satisfaction he got from the idea that
his persecutors would all come to bad ends. He learned Addison’s Cato by
heart, and went about the White House rooms delivering it. He studied
the trial of Charles I of England, and ordered the names of those who
signed the death warrant and the terrible ends to which they all came
tabulated. His secretary says he believes Johnson was not a little
disappointed when he was acquitted. It took from him the bitterest of
the many bitter cuds he incessantly chewed.
Throughout his administration Johnson had fought with little effect the
horde of lobbyists, speculators, land grant agents, and other suppliants
for government aid, whom the war had brought together and Congress had
rather encouraged than discouraged. The bills granting tariffs to
special interests belonged to this category unquestionably, however
respectable their supporters, and it was to be expected that Johnson
would veto the copper bill, and he did, sending with his veto the
following message—not his own, however. The letter was written by Mr.
Wells.
_Feb. 23, 1869._
_To the House of Representatives_: The accompanying bill, entitled
“An Act regulating the duties on imported copper and copper ores,”
is, for the following reasons, returned, without my approval, to the
House of Representatives, in which branch of Congress it originated.
Its immediate effect will be to diminish the public receipts, for
the object of the bill cannot be accomplished without seriously
affecting the importation of copper and copper ores, from which a
considerable revenue is at present derived. While thus impairing the
resources of the government, it imposes an additional tax upon an
already overburdened people, who should not be further impoverished
that monopolies may be fostered and corporations enriched.
It is represented, and the declaration seems to be sustained by
evidence, that the duties for which this bill provides are nearly or
quite sufficient to prohibit the importation of certain foreign ores
of copper. Its enactments, therefore, will prove detrimental to the
shipping interests of the nation, and at the same time destroy the
business, for many years successively established, of smelting home
ores in connection with a smaller amount of the imported articles.
This business, it is credibly asserted, has heretofore yielded the
larger share of the copper production of the country, and thus the
industry which this legislation is designed to encourage is actually
less than that which will be destroyed by the passage of the bill.
It seems also to be evident that the effect of this measure will be
to enhance by 70 per cent the cost of blue vitriol—an article
extensively used in dyeing and in the manufacture of printed and
colored cloths. To produce such an augmentation in the price of this
commodity will be to discriminate against other great branches of
domestic industry, and by increasing their cost expose them most
unfairly to the effects of foreign competition. Legislation can be
neither wise nor just which seeks the welfare of a single interest
at the expense and to the injury of many and varied interests at
least equally important and equally deserving the consideration of
Congress.
The enactment of such a law is urged as necessary for the relief of
certain mining interests upon Lake Superior, which, it is alleged,
are in a greatly depressed condition, and can only be sustained by
an enhancement of the price of copper. If this result should follow
the passage of the bill, a tax for the exclusive benefit of a single
class would be imposed upon the consumers of copper throughout the
entire country not warranted by any need of the government, and the
avails of which would not in any degree find their way into the
treasury of the nation. If the miners of Lake Superior are in a
condition of want, it cannot be justly affirmed that the government
should extend charity to them in preference to those of its citizens
who in other portions of the country suffer in like manner from
destitution. Least of all should endeavor to aid them be based upon
a method so uncertain and indirect as that contemplated by the bill,
and which, moreover, proposes to continue the exercise of its
benefactions through an indefinite period of years. It is, besides,
reasonable to hope that positive suffering from want, if it really
exists, will prove but temporary in a region where agricultural
labor is so much in demand and so well compensated. A careful
examination of the subject appears to show that the present low
price of copper, which alone has induced any depression the mining
interests of Lake Superior may have recently experienced, is due to
causes which it is wholly unpolitic, if not impracticable, to
contravene by legislation. These causes are in the main an increase
in the general supply of copper, owing to the discovery and working
of remarkably productive mines and to a coincident restriction in
the consumption and use of copper by the substitution of other and
cheaper metals for industrial purposes.
Although providing for an increase of duties, the proposed law does
not even come within the range of protection in the fair acceptance
of the term. It does not look to the fostering of a young and feeble
interest, with a view to the ultimate attainment of strength and the
capacity of self-support. It appears to assume that the present
inability for successful production is inherent and permanent, and
is more likely to increase than to be gradually overcome; yet in
spite of this it proposes by the exercise of the law-making power to
sustain that interest and to impose it in hopeless perpetuity as a
tax upon the competent and beneficent industries of the country.
The true method for the mining interests of Lake Superior to obtain
relief, if relief is needed, is to endeavor to make their great
natural resources fully available by reducing the cost of
production. Special or class legislation cannot remedy the evils
which this bill is designed to meet. They can only be overcome by
laws which will effect a wise, honest, and economical administration
of the government, a reestablishment of the special standard of
values and an early adjustment of our system of state, municipal,
and national taxation (especially the latter) upon the fundamental
principle that all taxes, whether collected under the internal
revenue or under a tariff, shall interfere as little as possible
with the productive energies of the people.
The bill is therefore returned, in the belief that the true interest
of the government and of the people require it should not become a
law.
ANDREW JOHNSON.
Of course Congress passed the bill over Johnson’s veto. Mr. Pike of
Maine, who regarded the bill as “class legislation of the worst kind,”
and knew the feeling that one of the President’s vetoes inspired, begged
his colleagues “to vote on the measure and not on Andrew Johnson,” but
no remonstrance or argument had any effect. The bill was passed over the
veto by a large majority.
It was again demonstrated that any private interest which could secure
the backing of a powerful Senator or Representative like Sherman of
Ohio, Chandler of Michigan, Kelley of Pennsylvania, could obtain what it
wanted from the Congress of the United States, though that favor might
raise prices to consumers without giving them compensation in other
directions, might destroy established industries, and injure an
established commerce.
The demonstration was not lost. By 1870 the tariff was a conglomeration
of special favors. The duties were not for revenue—many of them, like
copper, cut down the revenue. They had no relation any longer to the
excise, for while that had been steadily decreased the promise to
decrease the tariff at the same time had been broken. The duties had no
relation to each other; that is, the cost of manufacturing an article
might be materially increased by the duty on copper or iron or soda ash,
but it received no compensating help—not until it had organized a lobby
and laid siege to Congress.
These unjust and unscientific duties had not been laid without protest.
Men like Morrill, Garfield, Fessenden, Allison, Kasson, Raymond, and
Sumner had warned against the outbreak. “It smells of monopoly,” they
said again and again, and yet most of them when it came to the test
voted with their party. Many of the ablest Republican newspapers,
especially those in the West, harangued incessantly against the
unfairness of the legislation. But remonstrance, even an attempt at
discussion, only aroused the angry cry of “free-trader” from the
dominant faction in Congress. “It has become impossible,” said Mr.
Wells, in his report of December, 1869, for one “to suggest any
reduction or modification whatever looking to the abatement of prices
artificially maintained in the interest of special industries without
being immoderately assailed with accusations of corrupt and unpatriotic
motives.”
The tariff legislation was but a part of the deplorable and general
attempt which followed the war to make Congress do for the individual
what it was his business to do for himself. Men seemed to believe that
their futures depended on legislation—to have forgotten or never
realized that legislation can do nothing more than distribute wealth—it
cannot produce it, and that the only way you can get money to legislate
into the pocket of one individual is by taking it out of the pocket of
another. Washington had come to be filled with as fine a band of
plunderers as ever besieged a National Congress: tax swindlers,
smugglers, speculators in land grants, railroad lobbyists, agents of
ship companies, mingled with the representatives of industries seeking
protection, until it seemed as if Congress was little more than a Relief
Bureau. At one time in 1869 there were 41 railroads or would-be
railroads seeking aid in the House, and 37 in the Senate. What was to be
the effect of this outbreak of protectionism? Many sober people asked
themselves the question in dismay. But at the moment everybody was
looking to Grant. The new President would certainly help the
situation—bring back Congress and the party to candid discussion,
institute economies, clear Washington of the self-seekers.
CHAPTER III
THE WAR TARIFFS CONTINUED
Whatever hope moderate protectionists in Congress may have had that the
new President would be influenced by their arguments in favor of tariff
reform, was soon scattered. General Grant was of uncertain political
antecedents. It is doubtful if he ever had any particular interest in
the tariff question, and it is certain that he did not at that moment
consider it a question for his administration to meddle with. In his
first message he advised postponement of revision and against the
renewal of the reciprocity treaty between the British Provinces and the
United States. The one financial duty which he saw at his inauguration
was the resumption of specie payment, and on that his voice was firm.
But even more important than the attitude of the new President on the
tariff was the attitude of the new leader of the House. Who that would
be was still uncertain. Thaddeus Stevens, who for fully eight years had
driven the House like a flock of sheep, had died in August, 1868. There
is no doubt that a sigh of relief went up from all the younger element
in Congress. “The death of Thaddeus Stevens is the emancipation of the
Republicans. He kept the party under his heel,” said James G. Blaine one
day soon after, as he walked in the rotunda of the Capitol with a
friend. “Whom have you got for leaders?” asked the friend. “There are
three young men coming forward,” Blaine replied. “Allison will be heard
from, so will James A. Garfield,” and then he paused. “Who is the
third?” “I don’t see the third,” Blaine replied, gazing up into the
dome. The third appeared a little later when Mr. Blaine was elected
Speaker of the Forty-first Congress.
Blaine’s attitude on the tariff was well known. He believed in high
protection, but he was a politician before he was an advocate, and could
be depended upon to give full hearing to anybody in his party who could
muster votes. That he did not consider the tariff reformers strong
enough to receive much consideration on the Ways and Means Committee was
shown by his appointment of the chairman—Robert C. Schenck of Ohio.
General Schenck’s tariff position had been well characterized by himself
when the bill of 1866 was up. “Sitting here a friend of protective
tariff for eight years,” he said, “_I have voted aye or nay as those who
got up the tariff bills have told me._” “But,” he went on to say, “we
begin to find something like fair play is proper in these things: We
claim that what we do and can produce shall have the same protection
which is given to the industry of the country, applied to the business
of manufacturers.” And henceforth Mr. Schenck worked for duties for the
farmer, for anybody in fact that asked one. It is clear that the House
thus organized could be depended upon to support the doctrine of high
protection.
The vitality of the opposition within the party made itself evident,
however, almost at once. Republican district conventions, particularly
in the West, showed themselves restive, and at Mansfield, Ohio, in June,
1869, General Roeliff Brinkerhoff actually succeeded in getting into a
Republican platform the following resolution:
“_Resolved_, That we are opposed to all class legislation,
government subsidies and grinding monopolies of every kind, and,
therefore, we heartily favor a revision of the present oppressive
tariff, so as to adjust it purely to a revenue standard.”
The way the press took up General Brinkerhoff’s resolution showed how
popular his theory was. Murat Halstead published in full the speech the
General had made in presenting the resolution—and it was copied and
commented on all over the country. The Free Trade League of New York
City, a very energetic organization, sent for the General, and with him
planned a lecture campaign. This plan was carried out; General
Brinkerhoff and Professor Arthur L. Perry, of Williams College, the
author of a book generally used at the time, “Elements of Political
Economy,” spending much of the fall and winter in discussing the need of
tariff reform. At the same time a group of strong Republican newspapers,
including the Portland _Advertiser_, the St. Louis _Democrat_, the
Pittsburg _Commercial_, the Cincinnati _Gazette_, and the Chicago
_Tribune_, one of the very ablest papers in the country, turned their
batteries on the tariff. The last-named led in the campaign and led
well. The _Tribune_ was edited, at that time, by Horace White, and under
his direction had attracted general attention and respect for its sound
and authoritative economic discussion. Mr. White was a zealous student
of economics, and he poured into the _Tribune_ all the results of his
careful work.
The chief opponents of Perry and Brinkerhoff and White in the
discussion, were Horace Greeley and Henry C. Carey. Greeley was an
extremist. “If I had my way—if I were king of this country,” he told
Garfield once, “I would put a duty of $100 a ton on pig-iron and a
proportionate duty on everything else that can be produced in America.
The result would be that our people would be obliged to supply their own
wants, manufactures would spring up, competition would finally reduce
prices, and we should live wholly within ourselves.” And to prove the
wisdom of this belief he began the publication in the New York _Tribune_
of a series of Essays on Political Economy.
At the same time Henry Carey threw himself into the debate, writing a
long series of letters to public men. Carey was at this time over 75
years old—and a more fierce and dogmatic championship of a cause could
not be conceived than his of high protection and of paper money.
Originally a free-trader Carey had early concluded that society was too
undeveloped to practise it, and that a long period of protection must
precede. His views on social and economic subjects he had elaborated in
many volumes, the first of which had been published in 1835. The chief
of his works are his “Principles of Political Economy” and his
“Principles of Social Science.” Both of these have been translated into
a half dozen European languages, and they certainly must be reckoned
with largely in tracing the influences which have made for protection in
our time. Carey in spite of all his hard labor saw the people recede
from his views in 1846, and the return to protection in 1860 had given
him unbounded joy. He wrote Morrill frequent letters of counsel and
instruction when he was at work on the bill of 1861, urging him always
to more arbitrary action than his just and reasonable mind relished.
“Nothing less than a dictator is required for making a really good
tariff,” Carey once said to him. So convinced was he of his position, so
sure that he had solved finally the economic problem that any discussion
or criticism spurred him to the most intolerant opposition. After
Richard Cobden’s death in 1865, Carey said in a public gathering in
Philadelphia that he regarded it as one of those instances of special
providence for which the United States had especial reason to be
thankful; for, said Carey, it was the intention of Mr. Cobden if he had
lived to have again visited the United States; if he had done so he
might have lectured, and so have done great harm to the cause of
protection.
David Wells was a particular abomination to Carey. His reports pointing
out the unjust discrimination caused by certain tariffs, and the fact
that wages were not increasing in the ratio of expenses Carey charged to
be untrue—juggling of figures paid for with “British gold.” One of his
pamphlets answering Wells he headed with this quotation from the New
Testament: _Then one of the twelve called Judas Iscariot went unto the
chief priests and said unto them “what will ye give me, and I will
deliver him unto you?” And they covenanted with him for thirty pieces of
silver and from that time he sought opportunity to betray him ... and
forthwith he came to Jesus and said “Hail Master,” and kissed him._
As a matter of fact Wells was doing serious injury to the schedules then
in force by pointing out what they were and were not doing. For instance
there was the wool bill of 1867. It had been in operation for nearly two
years, and according to Mr. Wells wool was in a more depressed state
than before its passage. His summary of conditions was startling:
1st. Wool to the agriculturalist at a lower price in gold than has
almost ever before been experienced.
2d. A decrease in the number of sheep in the United States, estimated by
the Commissioner of Agriculture at four millions for the single year of
1868, while other authorities place the total decrease as high as 25 per
cent since the passage of the wool tariff.
3d. A condition of the woollen manufacture characterized by a greater
depression than that of any other branch of industry in the country,
with the exception of ship-building; small profit accruing to a few,
heavy losses to the many, with numerous and constantly recurring
failures.
4th. An increase in the importations of foreign fabrics of wool; the
imports of the fiscal year 1868 being returned at $32,458,884, and for
1869 at $34,620,943.
5th. Encouragement of smuggling and its apparent reduction to a system.
“In short,” concluded Mr. Wells after a full discussion of these points,
“what is now needed to restore prosperity to the woollen industry, is a
removal of all duties on the importation of foreign wools and dyestuffs,
and a general reduction of the duties on manufactured woollen fabrics of
every description to 25 per cent ad valorem. On this basis the most
experienced woollen manufacturers in the country assure the commissioner
that they can at once extend, diversify, and secure prosperity in their
business. On this basis the cost of domestic fabrics will be so far
reduced as to give great relief to the consumer, and lead to an
immediate and largely increased consumption. And on this basis only can
the wool-growers expect any immediate increased demand for his staple
product of merino fleece; while in respect to the combing and the finer
wools it is sufficient to say that the supply of these wools has not for
the last few years increased in proportion to their consumption, and
that the extension of their use in the American industry, which would
inevitably follow a remission of the duties upon their import, would so
far increase their demand as to give to the domestic producer all the
encouragement that would prove necessary.”
Among the many cases which Mr. Wells analyzed in his reports none
excited more interest than that of salt. Salt was so widely diffused in
the United States, and its production in various sections had been so
cheap and simple, that the price before the war was very low. The
efforts of the states where it was found, particularly of New York
State, had always been to keep it abundant and cheap. But so many
persons had gone into the business in that state that there had been at
times over-production and serious price-cutting, and as early as 1860
the New York salt men formed a company to put a stop to this sort of
thing. By a clever manipulation of the State Assembly, which was the
guardian of the salt-wells, they secured a law which permitted them to
prevent the starting of any new salt-works. They then went to work to
get control by buying or leasing all existing works. Succeeding in this
they promptly shut down many of them and began to limit the output. The
next year after the combination was formed came on the war, and the
tariff on salt was raised to 12 cents a bushel (it had been 1½ cents in
1857). A year later it was raised to 18 cents, a duty equivalent to from
100 to 150 per cent of its value. This high rate practically put an end
to foreign competition, and the exigencies of war taking the salt of
Virginia and Louisiana out of the market, the Northern works had things
pretty much their own way. Salt, which had sold at 20 cents a bushel in
1860, was selling five years later at 66 cents, and in 1869 at 48.
The Syracuse company made extraordinary profits under these
circumstances. In 1861, the year after their first combination, 7 per
cent. In 1862 they paid _six_ dividends, one of them 12½ per cent. They
soon issued a stock dividend of 100 per cent, and paid the same large
cash dividends on this. In the first six years after the combination was
formed it paid out $2,000,000 in dividends on a paid up capital of
$160,000, and had a surplus of $600,000 on hand.
In the meantime the Michigan salt-works were growing rapidly. Their
output which in 1860 had been but 4000 barrels became over a half
million in 1864! But the same thing happened there as in Syracuse—too
many companies. Sixty-six were operating there by 1866, and combination
was applied, and the Michigan companies were soon consolidated into two.
But the end of the war loosened the Southern works and competition was
in danger of being restored. The New York and Michigan companies
hastened to prevent such a disaster. They entered into negotiations with
the Ohio River Company to limit the output, and the latter to make
itself firmer leased the Kanawha, Virginia, Salt Springs for $75,000 a
year and shut them down. Simultaneously with this campaign for making
salt scarce at home, the industry began one to make it still dearer, an
agitation for more duty—18 and 24 cents a hundred pounds were not
enough, they wanted 30 and 42 cents, and this in spite of the fact that
the internal revenue tax had been removed from salt. If the copper and
wool men could get special bills through, why not they? There seemed no
good reason to the House of Representatives—and they actually passed the
measure—though the Senate did not concur, for lack of time, and the bill
never became a law.
This interesting combination had not only succeeded through the tariff
in making salt scarce and dear, but they had, as all such combinations
do, given the lie to their claim that they could not produce it at a
cost which would enable them to sell it cheaper, by exporting in 1868
some 500,000 bushels, which they had sold in competition with foreign
salt, and by offering the New England fishermen who were allowed to
import salt without duty, prices as low as those abroad; that is, they
had one price for the land and another for the sea, one for Canada and
another for the United States.
Mr. Wells’s evidence on the salt monopoly was complete—it had made a
necessity of life dear through a tariff much higher than the internal
tax and the higher wage of American labor called for. The greater part
of the extra price the consumers were paying was going not into the
pockets of the laborers, but into those of the operators.
After salt the portion of the reports which attracted the most attention
dealt with the tariff on iron. Pig-iron was still enjoying the
protection of $9.00 a ton, given it in the spring of 1865, and this,
though practically all internal revenue taxes on it had been removed.
Its price had risen from $22.70 a ton in 1860 to an average in 1869 of
$40.61. The cost of producing this iron in the United States, including
interest, repairs, and incidentals, was from $24.00 to $26.00 a ton, and
it could be bought in England at $27.12. Mr. Wells’s conclusion, after
examining all the elements in the problem, was that the cost of pig-iron
to the American consumers was from $8.00 to $10.00 per ton more than was
necessary to pay the American laborer his higher wage, and give the
American manufacturer a fair profit; that is, the iron men were
receiving a bonus of from $8.00 to $10.00 a ton from the country. Of
course, this high price of pig-iron affected the cost of production in
all sorts of industries. The most telling illustration of its effect was
that of ship-building. The year the Civil War broke out the tonnage of
the merchant marine of the United States was 5,539,813. Twice as many
American vessels entered British ports as British entered American
ports. The _American Clipper_ was famous all seas over. We were building
vessels for the foreigners, and everybody was quoting with pride a
remark of John Bright in the House of Commons that the finest vessels
sailing between England and Australia were built in the United States.
Iron vessels were at this time beginning to replace wooden. England had
taken the lead in their building, but we were beginning the industry,
and our success in all related industries made it certain that we should
succeed here. The war, of course, interrupted trade sadly. But the
alarming thing was, that the war over, there was no recovery of the
loss. On the contrary, it increased. In 1869 the tonnage had fallen to
4,246,507. Instead of American vessels filling British ports, British
filled ours. A trade between the United States and Brazil carried on in
1860 in 345 American and 178 foreign vessels was almost exactly
reversed. Shipyards all along the coast were shutting down. Why was it?
The ship-builders did not hesitate to say: “The day of the iron ship has
come, but it cannot be built in America. The ship that costs $88,000 in
Scotland, costs $138,000 here.” It is not the superior cost of labor the
ship-builders contended. The advantage the Scotch and English
ship-builders have in cheap labor is compensated for with us by superior
efficiency and by labor-saving devices. It is the cost of materials that
cripples us. Just as the increased cost of copper, through a high duty,
had put an end to copper bottoming and repairing of wooden ships in
American ports, so the high tariff on iron and lumber was putting an end
to ship-building.
Mr. Wells included many other similar illustrations in his report, but
it was wool, salt, iron, and ship-building which demonstrated his points
most clearly: that tariffs, which were so high that they were
practically prohibitive, as in these cases, could not restore a
depressed industry, they raised prices unnaturally high to the consumer,
gave unnatural profits to the few manufacturers as in the case of
pig-iron, led inevitably to monopolies as in the case of salt, and
destroyed related industries as in the case of ship-building.
The report created a great noise and played a big part in the debate on
the tariff bill, which General Schenck introduced into the House in
February, 1870. That any bill attempted at this juncture should follow
the pledges the leaders had given in ’62 and ’64 to reduce the tariffs
as the internal taxes were reduced, would seem evident. But there was no
proof that General Schenck and his committee had given more than a
passing glance at these pledges. That the tariffs, whose unjust and
dangerous excess had been demonstrated, should be corrected, seemed
evident—but they were either ignored or only partially readjusted. Thus
pig-iron, which undoubtedly would have been amply protected by a duty of
$3.00 a ton, was allowed $7.00. The revenue was reduced, as it was
imperative it should be, by lowering the duties on sugar, tea, and
coffee—a “free breakfast table” being the committee’s slogan. An
animated wrangle followed the introduction of the bill. The leaders on
the extreme wings were William D. Kelley of Pennsylvania for the high
protectionists, and S. S. Cox of New York for the free traders; while
Messrs. Allison of Iowa and Garfield of Ohio led the moderates.
Mr. Kelley was at this time at the height of his power, and a more
passionate and convinced supporter of the doctrine of protection has
never sat in the Congress of the United States. He had not always been a
protectionist. “In 1847,” he wrote once, “I had seen with gratification
the protective tariff of 1842 succeeded by the revenue or free-trade
tariff of 1846. To promote this change I had labored not only with zeal
and industry, but with undoubting faith that experience would prove its
benefits. For ten years all went well, and then came the panic of 1857.”
To Mr. Kelley it was a knockout blow. He seems not to have considered
the natural causes of the disturbance, but to have concluded the trouble
lay entirely in the tariff, and for two years he went through the agony
of a man losing his faith. Then in 1859 he sought Henry C. Carey for
help. His conversion to protection was complete. As he himself said he
came to regard the doctrine as an “exquisite harmony.” Everything which
we could produce or manufacture should be so protected that the
foreigner could not enter the market. By diversifying and expanding our
industries we would draw greater and greater numbers to our country,
thus giving larger and larger markets to our farmers. The manufacturers
were to supply all the tools of the farmers and miners. Encouraged by
prosperity production would multiply, and competition would reduce
prices at home lower than abroad. It was a perfect circle.
There is no doubt that the basis of Kelley’s devotion to protection was
his belief that it was for the interest of the American working classes.
The improvement of their condition was the passion of his life.
Apprenticed as a boy to a Boston printer he had refused to be sent to
college lest it might wean him from his class. He wanted to taste with
them all the experiences of poverty—to know what it cost for a day
laborer to live and rise in America. He had studied law at night, had
sought the society of Channing and Emerson, had become a man of
influence, but his motive had remained unchanged. The misery he saw in
1857 he charged entirely to the free-trade system. He could not rest
until he had found a substitute. He believed he had found it in the
“exquisite harmony” of protection.
Having adopted a formula he believed competent to solve all problems,
Kelley could support no criticism of its operations. Mr. Wells’s
demonstration that high tariffs had not restored wool to its old vigor,
had been the determining factor in building up the salt monopoly, that
the iron men were getting the lion’s share of the duty on iron, that we
could not build ships if we kept the price of materials so much higher
than in other countries, was to him little better than blasphemy. Wells
became his pet abomination—a detestation soon after extended to
Professor Sumner of Yale, a man and an institution existing, he used to
say angrily, for “the stupefaction of the youth of this country!”
In the debate on the Schenck Bill Mr. Kelley’s defence of the high
tariffs was impassioned and angry. Monopoly, what did he care for
monopoly, he cried, when Mr. Allison called his attention to the fact
that a certain iron manufacturer whose scale of wages Kelley was
praising, had, with the only three other of his kind in the country,
agreed upon a list of prices made by adding to the price abroad the duty
and a profit on the cost at home. “I do not care what they agreed to do
if they are thereby enabling workingmen to keep their children at
school, well-fed and comfortably clad, to maintain their seats in church
and to lay something up for old age and a rainy day.”
Kelley’s refusal to consider any argument for lowering duties,
particularly on iron, led to a charge that he was in the pay of the iron
manufacturers. No proof of this accusation was ever offered. The New
York _Nation_, which repeated it in 1872, made the _amende honorable_
soon after, saying that Mr. Kelley and his friends had convinced them
that he had no interest which would justify this charge. Kelley’s case
was different from that of Thaddeus Stevens, who did own an iron
foundry. The cause of the charge was due no doubt to Kelley’s
unwillingness to admit that there could be evils in applying his
favorite doctrine. For corruption _outside_ of the tariff he had a just
indignation—as for the whiskey frauds. He looked with horror on Simon
Cameron; and in 1872, when office-seeking was causing great scandal, he
refused to accept renomination to Congress, except on condition that
hereafter he should not be regarded as a “patronage broker.” His defeat
was generally prophesied, but he kept his word and won.
At the other end of the scale from Kelley was Samuel Sullivan Cox, by
far the most eloquent, witty, and well-informed debater the Democrats
had. Cox was an uncompromising free-trader, and one of the most
interesting figures in Congress. He was still a young man, forty-four at
this time, but an experienced one. A graduate of Brown, he had first
taken part in public life as the editor of the _Statesman_ of Columbus,
Ohio. Here at the very start he earned his sobriquet of “Sunset Cox” by
an editorial, which went all over the country; “A Great Old Sunset,” it
was called. It opened, “What a stormful sunset was that of last night!
How glorious the storm, and how splendid the setting of the sun.”
His popularity sent him to Congress in 1857, where, although a Democrat,
he immediately put himself in opposition to the Buchanan administration
by voting against the Lecompton Constitution. In 1866 he removed to New
York City, which promptly sent him back to Congress as one of its
representatives. The spirit and wit Cox could infuse into a tariff
debate can only be understood by reading the _Congressional Record_. His
irreverent interpretations of extreme protectionism kept poor Mr. Kelley
in a constant tumult. Kelley’s sense of humor, which seems not to have
been strong at any time, was utterly swamped by the serious view he took
of his favorite doctrine, and Cox gibed him unmercifully. “Pig-Iron
Kelley” he called him, and his resolutions “pig-iron resolutions.”
Perhaps his most successful sally at his opponents in this Congress was
his resolution against free sunshine—a resolution adapted from
Bastiat—made when there was a fight on against lowering the duty on
coal:
“_Resolved_, That all windows, skylights, inside and outside
shutters, curtains and blinds shall be permanently closed, as also
all openings, holes, chinks, clefts, and fissures through which the
light and heat of the sun have been allowed to enter houses to the
prejudice and injury of meritorious miners and dealers in gas-coal
to protect domestic industry.”
“For the sun is a ‘foreigner,’” explained Mr. Cox. “He comes from
abroad, and we must shut out the light of the sun in order to gratify
these Pennsylvania gentlemen who have a monopoly of this article of
coal.”
The real fight on the Schenck Bill was not, as already said, between
Republicans and Democrats; it was as it had been in 1866 and 1867, in
the party, between Mr. Kelley and his friends and the moderate
protectionists, led by Allison and Garfield. Almost without exception
the speakers on this middle ground opened by disclaiming that it was a
question of protection or of free trade. It was a question of revenue,
of moderate temporary protection, and of keeping promises made in the
war. And nearly all of them having thus defined their positions attacked
the bill, because it did not summarily cut down the tariffs on salt,
iron, leather, coal, lumber, and other articles, where it could be
conclusively shown that they were working chiefly for the benefit of the
few.
Mr. Allison, who was particularly hard on the excessive duty on iron,
wanted a reduction of at least 20 per cent on all leading articles. He
knew he differed from the majority of the Ways and Means Committee on
this, he said, but—
“It is not a question of political partnership. It is a question of
affecting every interest in this country and every class, and
because of the great interests involved should receive careful
consideration at our hands irrespective of partisanship.... I warn
those who insist so pertinaciously upon a retention of these high
duties upon necessary articles of consumption that they only hasten
the time when a more radical change will be made in our tariff laws.
What manufacturers need most of all is stability in legislation,
avoiding sudden and sweeping changes. The changes which I have
proposed would reduce the revenue only a few million dollars, while
to the consumers of manufactures produced they would reduce the cost
of those products many million dollars. In my judgment such a policy
would revive many industries now languishing, and not interfere with
the great industries already established, and which under any change
we are likely to make will still be largely protected. Our policy
should be so to cheapen manufactured products that we can revive our
export trade, now swept away, because we cannot compete with other
nations in the markets of the world. If we could restore what we
have lost, and in addition greatly enlarge our exportations of
manufactures, we should then have an enlarged home market for our
agricultural products, which would then be exported in a
concentrated form in exchange for other commodities which we do not
now and cannot produce.”
The debate on the bill occupied the House much of the time from the
middle of March until the 6th of June, when it was passed. The Senate
took it up at once, and the debate there followed very much the same
lines as in the House:—protestation that it was not an academic
question—pleas from Mr. Morrill and his friends to remember the war time
pledges—warnings against the “smell of monopoly”—plans for removing the
causes of the decline of ship-building. In short, the Republicans
themselves rehearsed fully and forcibly the injustice in certain tariffs
then in force, and asked the party to correct them. All of the
correction they got was $2.00 a ton off pig-iron. Salt, leather, lumber,
wool, copper, and other articles were not touched. The relief demanded
for the consumer came in the breakfast table. Thus the bill, which the
President signed on July 14, reduced the duties on tea about 40 per
cent; on coffee, 40 per cent; on sugar of the lower grades, 33⅓ per
cent; on clarified sugars, 21-3/7 and 12½ per cent; on spices from 33⅓
to 75 per cent. On brandy the reduction was $3.00 to $2.00 per gallon,
or 33⅓ per cent; on spirits from grain, 20 per cent. The free list was
largely increased, certain important materials for manufacturing, ivory,
India rubber, and rags for paper making, being included in a far greater
number of unimportant items.
Mr. Kelley and his sympathizers had saved the doctrine of high
protection, and they accompanied their victory by a manœuvre which they
evidently hoped would preserve them in the future from the necessity of
considering such troublesome arrays of facts about the effects of
particular tariffs as those forced upon them in the last four years by
Mr. Wells’s reports. They persuaded the President to refuse to continue
the office of special commissioner of revenue, which Mr. Wells had
filled since his appointment by President Lincoln in March, 1865. The
majority of Congress deeply deplored this move, and joined in signing a
letter to him expressing their appreciation of his services. The wise
men of the party realized only too well how they would be crippled
without Mr. Wells. It was a loss which time has only intensified. It is
not too much to say, that if he had continued to study and expound
officially the revenue system for the next twenty years with the same
dispassionate thoroughness and clearness that characterized the five
years’ work he did do, the problem of the equitable distribution of
wealth in this country would be much nearer an intelligent solution than
it is to-day.
The passage of the Schenck Bill and the removal of Mr. Wells only
intensified the sentiment of the tariff reformers. A most interesting
movement had sprung up in that year (1870) in Missouri. It was a new
organization, called the Liberal party, headed by Colonel William M.
Grosvenor, the editor of the St. Louis _Democrat_, Carl Schurz, United
States Senator from Missouri, and Gustavus Finkelnburg, a Representative
from that State. The Liberal Republicans asked for several things which
they felt they were not getting under Grant: general amnesty, revenue
reforms, resumption of specie payment, and civil service reform. They
had put up a ticket in Missouri, and elected it. Sympathy with their
aims was widely diffused, and all over the country Republican
conventions began to put tariff planks into their platforms similar to
theirs, or to the one General Brinkerhoff had slipped into the Ohio
platform in 1869, while party organs, like the Portland (Me.)
_Advertiser_, the Chicago _Tribune_, the St. Louis _Democrat_, redoubled
their efforts. In the fall the Free Trade League again sent out General
Brinkerhoff and Professor Perry on a lecture tour. General Brinkerhoff
made a stir with a lecture, which he called “The Tyrants of Syracuse.”
It was a scientific dissection of the Salt Trust, which surpassed in
completeness and convincingness anything which had been achieved in any
one of the many analyses which had been given in Congress. The
cumulative effect of the agitation began to stir the rulers of Congress,
particularly Mr. Blaine, who was a candidate for re-election as Speaker.
Unless he could make a compromise with the tariff reformers he saw there
was danger of their uniting with the Democrats and thereby defeating
him. He went to Chicago and sought Horace White “for the sole purpose of
talking over the situation.” A little later he asked the four whom he
evidently considered the most influential in the movement to meet him
secretly in New York. The four were William B. Allison, Horace White,
Charles Nordhoff, and General Brinkerhoff. There was a long discussion,
ending in a proposition from Mr. Blaine that if the reformers would
permit him to be re-elected Speaker he would permit them to name the
chairman of the Ways and Means Committee, and give them a majority on it
of their way of thinking. The proposition was accepted, and Mr. Blaine
was asked to appoint Mr. Garfield.
There was no reason to suppose that Mr. Blaine would not keep his
promise, nevertheless the suspicion that he was “slippery” in politics
was not uncommon, and the Free Trade League concluded to send General
Brinkerhoff to Washington to see that the arrangement was carried out.
The new Congress—the Forty-second—opened on March 4, 1871. General
Brinkerhoff had made a careful study of the tariff record of the members
of the new House and felt sure of a majority, but it was resolved to
test the tariff sentiment by a surprise resolution. Bills were prepared
putting coal and salt on the free list, and Eugene Hale of Maine was
asked to introduce them, under the Monday morning rule. Mr. Hale
consented, and Mr. Blaine promised to recognize him. The bills were
introduced suddenly as arranged, brought immediately to vote, and, after
some skirmishing, passed, to the despair of Mr. Kelley, who, as Mr. Cox
said, wailed now like Jeremiah, though in the last session he had talked
like Isaiah. “I was in the majority then,” said Mr. Kelley, ruefully.
Sure of the House, there now remained only to make sure of Mr. Blaine.
As the days went on and the appointments promised were not made, General
Brinkerhoff felt more and more uneasy, but said nothing. Finally one day
as he was on the floor of the House, Mr. Blaine sent a page to him
asking him for an interview:
“He then called someone to the chair,” says General Brinkerhoff in
his Recollections, “and as he went out of the south door I went out
of the north door, and went around and met him. He took me down to
the basement and into a room he called his den. He then locked the
door and went to a cupboard and brought out some refreshments, and
we sat down at a little table.
“After awhile he told me he wanted to talk with me about the Ways
and Means Committee, and to ask my opinion in regard to a cast of a
committee that was in his mind. He took a pencil and a slip of paper
from a drawer and wrote down nine names and then turned it around
for me to read. I saw that he kept his finger on the paper, and that
he did not intend to let me take it away, and so I took a little
time to study its make-up, and get it clearly in my memory. I saw at
a glance that he was not carrying out his agreement, because Dawes
was at the head as chairman, and not Garfield. I saw also as I
looked over the list that a majority of the committee were not
revenue reform men, although it was a combination calculated to
deceive any one not fully posted on individual records.
“That a breach of faith was meditated was evident enough, but just
what to do about it was not so evident, and so I asked questions to
gain time as well as information. I asked him why Dawes instead of
Garfield was at the head. ‘That is what I want to talk about
especially, for I find it will make trouble to give Garfield the
chairmanship, and it seems to me that Dawes is sufficiently in
harmony with you people to be satisfactory, and the very fact that
he is not an extreme man will be an advantage to you in the House.’
He said Garfield had not had sufficient service on the committee to
entitle him to promotion over old members like Kelley and Dawes.
‘Why,’ he said, ‘Kelley would take a fit if I put Garfield ahead of
him.’ ‘Possibly, that may be so,’ I said, ‘but you knew that just as
well when we were in New York as you do now, and I am very sure our
people would not be willing to substitute Dawes for Garfield in any
event, for at heart he is not with us any more than Kelley.’
“The fact was there were only four men on his list who were not
protectionists, and after discussing the matter awhile, he said,
‘This is not a finality by any means, it is simply tentative and I
will make the committee so that it will be satisfactory.’ He
repeated the word ‘tentative’ two or three times, but I made up my
mind at once that a Ways and Means Committee satisfactory to the
revenue reform people would never be made by Mr. Blaine, and so we
parted after an hour’s talk with the understanding that he would see
me again soon.”
That evening General Brinkerhoff met Garfield by appointment. “You are
not to be chairman of the Ways and Means Committee,” he told him. “The
protectionists will be in a majority on it.”
“You are wrong,” Garfield said; “Mr. Blaine has already written me
assuring me of my appointment.”
“Let me see the letter,” said the General. Garfield’s face fell. He had
not the letter. Mr. Blaine had asked that it be returned because life
was uncertain. “You will not be appointed,” General Brinkerhoff
reiterated. Garfield walked the floor for a few minutes, and then
stopping, said: “General Brinkerhoff, if Mr. Blaine does not appoint me
chairman of the Ways and Means Committee, he is the basest of men.” He
was not appointed, but a few days later Mr. Dawes was.
No move could have been made which would have crystallized so
effectually the tariff sentiment of the reformers and sent them so
surely toward the Democrats as this. All over the country signs of
dissatisfaction multiplied. They were only strengthened by other causes
of complaint with the party—the failure to secure civil service reform
and the awful need of it; the treatment of the South, which had led to a
strong movement, headed by Greeley, in favor of general amnesty; the
delay in resuming specie payment. These specific causes were intensified
by the feeling about Grant. He had utterly disappointed the hopes of
those who had looked to him to put an end to the open corruption and
raiding which prevailed in Washington at the time of his election, and
he had become almost the tool of some of the very worst elements in the
party. Dissatisfaction had become abuse, and every evil in the country
was laid at his door, an exaggeration Mr. Cox ridiculed in the next
campaign by declaring, “I lay the horse distemper to Grant. Run me as an
anti-epizoötic candidate at large.”
Between the real issues and the dissatisfaction with Grant there seemed
reason enough for revolt, particularly to the Liberal Republicans of
Missouri, who had succeeded in their bolt; and accordingly in January,
1872, they called a meeting of leading reformers in St. Louis. Here it
was decided to put forth a declaration of principle and call a national
convention in Cincinnati, Ohio, in May, 1872, of all those who felt that
the issues were sufficiently important to justify independent action.
Among contributing causes to this movement was the revolt in the
Republican party, growing out of the impeachment of Andrew Johnson in
1868, and the attempt to read out of the party the seven Republican
Senators who had voted Not Guilty. The continuing proscription of the
“seven traitors” offended all persons who upheld the right of private
judgment and they naturally rebelled against such party tyranny.
The hope of the leaders in the Liberal movement was to organize an
entirely new party and to put forth a platform and candidates which
would secure the support of the Democrats. The time between the St.
Louis and the Cincinnati meetings was used in an energetic canvass of
the country. The result was that a convention of some seven hundred
people met in Cincinnati in May, but it was not seven hundred people
united on issues. While the Missouri Liberals and their friends led in
its organization, and expected to secure a platform and candidates to
their liking, the convention by a series of fine manœuvres was captured,
for the last man in the United States whom the tariff reform element
would have chosen—and that was Horace Greeley! Almost before they knew
what had happened to them, the men active in securing the convention
found themselves with the most devoted high protectionist in the country
on their hands, and a meaningless tariff plank in their platform! A more
ironical ending to a great movement could not be imagined. To be sure,
on one great issue to which the convention was committed, Horace Greeley
had been a leader, and that was amnesty for the South. He had turned the
New York _Tribune’s_ full strength against the policy of revenge and
humiliation, which the Republican party so blindly inaugurated, and he
had suffered their severest punishment in consequence. But in no other
particular was he in harmony with them, and a more unfit man to cope
with the ruling corruption could not be imagined. As the _Nation_ well
said, he was a man not more remarkable for generosity and
kind-heartedness than for the facility with which he could be duped, and
not more remarkable for his hatred of knavery than for the difficulty he
had in telling whether a man was a knave or not.
The tariff reformers left Cincinnati in despair and uncertainty—what
should they do? A meeting was called at the Fifth Avenue Hotel in New
York and the situation discussed. It was a “bad job,” all agreed, but on
one point they could meet, that of amnesty. It was worth making a fight
for. The Democrats would probably endorse Greeley if they stood by the
Cincinnati convention. The meeting wavered and halted until finally late
at night Carl Schurz in a speech, which those who heard it declare to
have been one of the most eloquent he ever made, turned them to Greeley.
The majority decided to waive tariff reform for the time being and join
the movement to beat Grant.
The strength and the respectability of the faction which had seceded
from the Republican party on tariff reform and kindred issues, alarmed
the leaders who had been backing the iron and wool and copper and salt
people in their demands. They appreciated that they must do something
toward reform or the party would suffer still more seriously. All
through the early months of 1872 a struggle went on to get a bill which
should cut down the surplus without antagonizing any politically strong
special interest. It could not be done. Senator Sherman finally said
frankly to the lobbyists who were besieging the committee that it was to
their interest to have a reduction made. “In my deliberate judgment,” he
said, “it is better for the protected industries of the country that
this slight reduction of duties (it was the question of a general 10 per
cent reduction) should be made rather than to invite a contest which
will endanger the whole system.”
After much struggle Mr. Dawes reported a bill in April, which he hoped
Congress could unite on. Mr. Finkelnburg of Missouri spoke for the bill.
It was not what he wanted, he said, but it should be supported, because
it was a step in the right direction:
“Its chief merit,” said Mr. Finkelnburg, “lies in this, that after
six years of peace it is the first bill reported to the House by a
regular standing committee which proposes to make a substantial and
general, though moderate reduction, in the war duties imposed upon
the leading necessaries of life, the staple articles of consumption
used by the people of the United States. It is the first step in the
scaling downward, the inauguration of a policy of reduction, and as
such I bespeak for it the support of all friends of revenue reform.
“It is true the reductions proposed in the bill are very moderate;
so much so that the bill may, with apparent justice, be criticised
for not going far enough. It is not what I would like to see, and
far from my ideas of true revenue reform; but I gave it my support
firstly, because I want to accomplish something practical, and I
felt that if we asked the House to do more it would result in
nothing being done; and secondly, because I recognize a fact which
should govern all legislation of this kind, namely, that changes in
a tariff schedule, which more or less affect business relations and
values throughout a country, ought to be made slowly and gradually,
step by step, leaving to the next year what remains undone in this,
until we arrive at that normal point where the duties may once more
assume a permanent character as they did before the war.”
It was indeed a reasonable bill to the reasonable man, but those
interests which considered only themselves fought fiercely to save what
the urgencies of war had given them. Many a member, it is plain from the
debate, would have willingly supported a more radical lowering of
duties, but he had important constituents goading him to look after
them, and he dared not speak his mind freely. In many cases about the
only argument these gentlemen offered was that they would willingly
enough give up the duty on their coal or salt or lumber if Pennsylvania
would on her iron, Michigan on her copper, Connecticut on her clocks.
There was a pretty general frank admission that the high tariffs were a
bad business, but “if you get it for your constituents you must give it
to me for mine.” It was a phase which gave great joy to Mr. Cox, and he
mocked at it in a speech long remembered:
“Let us be to each other instruments of reciprocal rapine,” said Mr.
Cox. “Michigan steals on copper; Maine on lumber; Pennsylvania on
iron; North Carolina on peanuts; Massachusetts on cotton goods;
Connecticut on hair pins; New Jersey on spool thread; Louisiana on
sugar, and so on. Why not let the gentleman from Maryland steal coal
from them? True, but a comparative few get the benefit, and it comes
out of the body of the people; true, it tends to high prices, but
does not stealing encourage industry? Let us as moralists, if not as
politicians, rewrite the eighth commandment: Thou shalt steal;
because stealing is right when common.
“As I am a Representative of New York, and Onondaga, with the aid of
the foreign solar artisan, evaporates salt, ought I not also to
steal to help Onondaga? Stealing by tariffs, Mr. Chairman, is, as De
Quincey proved of murder, a fine art. If everybody stole from
everybody, is there any reproach to anybody? If everybody is a
burglar, is there any need for anybody to lock up houses?
“How happy we shall be when we can all look each other in the face
here, as now I look into the face of the gentleman from
Massachusetts, clasp hands, and say: God bless you, my brother; you
have stolen from me, and I from you; let us love one another. Then
the little unprotected pigs, who are crowded by the big pigs quietly
eating out of the trough, will squeal no more to be let in, for on
this idea all shall be fed by swallowing each other’s food; and when
all are fed, no one loses and we shall be happy.”
There was another significant feature to the debate, and that was the
way it got on the nerves of Congress. Before the session was over there
was an almost open admission that they did not know nor care much
whether certain tariffs which were causing trouble, were just or not.
For instance, Senator Logan of Illinois was greatly disturbed because
the tariff on printed books was only 25 per cent, and that on the paper
which made them was 31½ per cent. He argued long and earnestly over the
matter, but finally was snapped off summarily by Senator Sherman. “It is
like trying to row a flatboat up the Mississippi River to argue against
the Committee on Finance in the Senate,” wailed poor Mr. Logan. We mean
no disrespect to the gentleman, Mr. Morrill hastened to assure him, but
is it any wonder we are weary of the subject and want to drop it after
hearing delegations and representatives of all the parties in the
business, and after having argued it out twice in committee? “No,” said
Mr. Bayard of Delaware, “it is not; it only shows the folly of
attempting to adjust duties in this way.” And as a matter of fact, the
debate in the spring of 1872 showed, as most tariff debates have, what
probably every candid member of Congress has always admitted after a few
years of experience, that it is impossible for a Congress subject to the
continual political and commercial pressure of private interest to make
a just tariff bill.
The Dawes Bill was signed formally on June 6th by President Grant. As it
stood its most important features were a 10 per cent reduction on
articles manufactured from cotton, wool, iron, paper, glass, and
leather, and an increase of the free list by such articles as hides,
jute, and paper stock, and a reduction on coal, salt, lumber, and
several other articles. All materials to be used in the construction of
vessels built in the United States for the foreign trade were admitted
free. At the same time a bill was passed removing entirely the duty on
tea and coffee.
It had been a hard battle to get the bill through, but it was certainly
a step toward more equable taxation. If the country had remained
prosperous it is probable that in the next Congress the revenue
reformers would have continued the work of equalization and
distribution, but the country did not remain prosperous. The year 1873
saw a panic of wide extent, a panic caused by gigantic speculations in
railways, in land securities, in booming schemes of every kind. Men
spent everything they owned in roseate ventures and then borrowed all
their hopeful neighbors would lend, and this madness followed only seven
years after a war, which had cost the country perhaps 4000 millions of
dollars! It was not a quick, sharp panic with easy recovery. Its shocks
recurred again and again, and the desolation it spread dragged itself
over several years. No time indeed for reform. But not so bad a time for
those who had objected to the lowering of the duties in the bill of
1872. The falling off of revenue due to decreased importation was reason
enough to them to make an effort to replace its provisions. They hurried
on to this more rapidly than they would have done perhaps if in 1874 the
general dissatisfaction with the Grant Administration intensified by the
hard times had not caused the election of a majority of Democrats to the
House. The protectionists, having only a short term of power left them,
hastened to take advantage of it. We must have more revenue, they urged.
The surplus of 1873 and 1874 is but $2,000,000. We shall have nothing
for the sinking funds—we must put more taxes on tobacco and spirits,
more duties on molasses and sugar, and we must restore the 10 per cent
reduction on manufactured goods. It was urged by the tariff reformers
that if revenue was wanted the repeal of the 10 per cent reduction would
help but little—that the restoration of the duty on tea and coffee was
the simplest and fairest—but the protectionists were determined to get
back their 10 per cent, and they did it, though only after a hard fight
and a close vote. And thus it happened that when the Republicans
resigned to the Democrats in 1875, the majority in the House of
Representatives, which they had held for fifteen years, they left behind
them tariff schedules devised for war needs and enacted by them under a
definite pledge of reduction when the war should be over and internal
taxes removed.
CHAPTER IV
THE BUSINESS MAN TAKES CHARGE
The bill of 1875 took away from the tariff reformers of the Republican
party practically all they had won in an eight years’ fight. The duties
were again on a war basis, and while the need of revenue had been the
plea for putting them back, everybody knew that the real victory was to
the high protectionists. What could the Republican revenue-reformers do?
The question came home with force now, for they were on the eve of a
presidential campaign. It became still more difficult to answer with the
appearance of the platform of the Democratic party, which for the first
time in twenty years came out boldly on the tariff question. That it did
so was due largely to the sagacity and fire of a young Southerner who
was to play a large part in the coming struggles on the question—Henry
Watterson, editor of the Louisville (Ky.) _Courier-Journal_.
Mr. Watterson was what may properly be called a “born journalist.” His
father before him had been an active newspaper man and almost constantly
since he was sixteen, when he had edited a juvenile sheet whose
political editorials had been copied all over Tennessee, he had been
connected in one way or another with a newspaper. At eighteen he had
written for _Harper’s Weekly_ and _The Times_ in New York. At twenty he
was serving under Roger A. Pryor in Washington. After the war broke out
he had not been able to resist the army, but even there he broke ranks
once to establish at Chattanooga a semi-military daily which he called
_The Rebel_, and which for a year he made the delight of the Confederate
army. At the close of the war Mr. Watterson started a paper in
Nashville, but in 1868 he was asked to take a position on the Louisville
_Journal_—a paper made famous by George D. Prentice. He did so, and from
the start his influence was magnetic. The paper grew in popularity and
power until its editor, with good reason, was called the Dictator not
only of his state but of his party. Politics was his element, and he
fought for whatever cause he championed with a vigor, a wit, an
eloquence that were the terror of his opponents. His opinions on the
tariff were uncompromising. He had no patience with anything but “tariff
for revenue only,” and he went to the Convention of 1876 resolved to
have his way on that point, and he had it by writing in the plank
himself. It was a very characteristic bit of Wattersonian literature:
Reform is necessary in the sum and modes of Federal taxation to the
end that capital may be set free from distrust and labor lightly
burdened. We denounce the present tariff levied upon nearly 4000
articles as a masterpiece of injustice, inequality, and false
pretence. It yields a dwindling and not a yearly rising revenue.
It has impoverished many industries to subsidize a few.
It prohibits imports that might purchase the products of American
labor.
It has degraded American commerce from the first to an inferior rank
on the high seas.
It has cut down the sales of American manufacture at home and
abroad, and depleted the returns of American agriculture—an industry
followed by half our people.
It costs the people five times more than it produces to the
treasury, obstructs the processes of production, and wastes the
fruit of labor.
It promotes fraud, fosters smuggling, enriches dishonest officials,
and bankrupts honest merchants. We demand that all custom-house
taxation shall be only for revenue.
It is evident from what we have seen of the record of the Republican
tariff-reformers that no great number of them would follow the Democrats
in any such radical program as Mr. Watterson’s. Wells and Brinkerhoff,
in fact, were about the only prominent tariff leaders of 1872 who turned
to the Democrats in 1876. Carl Schurz, Murat Halstead, and Horace White
all stayed with the party. But there was an even more important question
than what the Republicans would do. It was what the Democrats themselves
would do. Were they ready as a party to stand by “tariff for revenue
only”? The question of Mr. Hayes’s election was no sooner settled than
it became evident that they were not. The Democrats in the House divided
completely on the question, the wing following the party platform being
led by Colonel W. R. Morrison of Illinois and Roger Q. Mills of
Texas—the protectionist wing being led by Samuel J. Randall of
Pennsylvania.
Mr. Randall was an avowed protectionist-Democrat, and a man who, his
colleagues had learned, usually was able to get his way. Randall had
first entered Congress in 1862. He was a quiet, persistent, hard-working
person who attracted little attention for several years; then the
Republicans, sure of their majority and wishing to expedite business,
undertook to adopt rules which would prevent obstruction. The quiet Mr.
Randall set himself against the attempt. He led the small Democratic
minority with a skill so unusual that more than once he blocked the
Republicans’ way until it was too late to pass the measure. His
endurance seemed unlimited. From one session lasting 46 hours and 25
minutes where Randall had forced the roll to be called seventy-five
times, he came out as fresh as he went in. At another time in the fight
over the “Force Bill” he was on the floor for seventy-two consecutive
hours. After his party secured the House in 1874, Randall was put at the
head of the Committee on Appropriations, where he cut down
appropriations some $30,000,000. He came to the Speaker’s chair in time
to preside through one of the most critical episodes in the history of
Congress—the dispute over the Tilden-Hayes election. His conduct at this
time was eminently cool, wise, and fair, and greatly strengthened his
position in the country. It was not alone his parliamentary skill which
won him followers. His presence counted for much. Randall was one of the
handsomest men of his day—with a face chiselled like an old Roman’s and
lit by a pair of large dark eyes of amazing fire and softness. Speak of
Sam Randall to-day to one of his old colleagues and it will not be long
before he will tell you with softened voice of “those wonderful eyes,”
“that classic face.” Randall’s force and charm were such that they
overcame a lack of studious habits, of reflection, and of broad views.
But as has been said, Randall was a protectionist, and he put now at the
head of the Ways and Means Committee a man of moderate protectionist
leanings, an old-time shipping merchant of New York City, Fernando Wood.
Wood was a picturesque character, who had made a name for himself
politically as the mayor of New York from 1854 to 1858, when the town
needed reform quite as badly as it ever has since. He succeeded in
getting himself reëlected mayor again in 1861, when he stirred up the
ire of the North by proposing seriously that New York City secede and
set up as a free town! Wood at once went to work on a tariff bill, but
he took few of his party into his confidence, and he ignored those who,
like Wells, were considered experts. Indeed, he went his way so
arrogantly that the opposing wing of his party broke out in
expostulation in December, 1877, Roger Q. Mills introducing the
following resolution:
“That the Committee of Ways and Means be instructed so to revise the
tariff as to make it purely a tariff for revenue, and not for
protecting one class of citizens by plundering another.”
The resolution stirred up Mr. Wood considerably. It was “nonsense,” he
said. The Committee of Ways and Means would discharge its duty
faithfully, irrespective of the resolution. It would in due time report
the results of its deliberations to the House, and in the meantime it
required no instructions of any kind in the matter. A more menacing sign
of unrest over the Wood Bill than Mr. Mills’s resolution, came about the
same time—a flood of petitions against any revision of the tariff not
made by its friends. By actual count 177 petitions were introduced. They
came from twenty-nine different States: from New York 22, from
Pennsylvania 28, from Massachusetts 17, from Maine 15. That they
originated with a protective steering committee somewhere in the
background—that is, that they were not spontaneous outbreaks—was evident
from the fact that the phrasing of the whole 177 was practically
identical. Whether they came from Alabama or Maine, Pennsylvania or
Kansas, whether they pleaded for iron, or lumber, or cotton, or copper,
or paper, or silk, they nearly all plead in identical terms that
Congress would take no action concerning a revision of tariff duties
“until after it shall have ascertained by an official inquiry the
condition of the industries of the country and the nature of such tariff
legislation _as in the opinion of practical business men_ would best
promote the restoration of general prosperity.”
Whether it was known to Congressmen generally or not where this flood of
petitions originated, it must have been to many. As a matter of fact the
“steering committee” behind it was the most powerful protective
organization the country had seen at that time—the Industrial League of
Pennsylvania. Formed about 1867, the League was intended to be national
in extent and to represent all protected industries. Its first president
was Peter Cooper, and its executive committee was made up of the
foremost manufacturers of the day. From the beginning the Pennsylvania
branch dominated in the League largely because of the energy of its
president, the Hon. Daniel J. Morrell, and of its secretary, Cyrus
Elder, and of the ability and far-sightedness of its Executive Council,
including Mr. Joseph Wharton and Mr. Henry C. Lea of Philadelphia.
At once on its organization the League had become a power in Washington.
The rapid removal of the internal war taxes had been due to its
pressure. The Schenck Bill of 1870 had been practically written by the
chairman of its Executive Council, Mr. Joseph Wharton. The League’s
latest achievement had been the restoration of the 10 per cent reduction
of duties made in 1872. It thus came to its new attack—a tariff made by
“practical business men”—with all the prestige of an important victory.
The methods used by the League in carrying on campaigns were simple
enough. It had secured, after much careful selection, a body of
correspondents in manufacturing centres, chiefly laboring men. These
correspondents circulated the League’s literature and secured names to
its petitions. The petitions once filled out were returned to the
headquarters of the League, and from there forwarded to the proper
Congressman, who, so far as any printed sign went, might have supposed
the document spontaneous in his district. The petitions were then
followed up by personal letters from individual workingmen, sent direct
to the Congressmen, and by personal visits from manufacturers. It was
one of the most extensive and thorough organizations for bringing
apparently spontaneous pressure to bear on Congressmen which the country
has ever seen. It goes without saying that the political power of the
organization was enormous—particularly in Pennsylvania, where it
practically dictated who should be elected. Already Mr. Blaine himself
had recognized the influence of the Pennsylvania branch by consulting
the head of the Executive Council of Pennsylvania, Mr. Joseph Wharton,
about whom he should make chairman of the Ways and Means Committee in
1871. It was this powerful association which now came out for no
revision until after the “opinions of practical business men” had been
secured.
It was not until March (1878) that Mr. Wood brought in his bill. He
tabulated interestingly his objections to the tariff in operation. They
were: Too many articles mentioned (2172); compound duties; ambiguity;
the articles for the rich less highly taxed than those of the poor;
encouragement of fraud; prohibitory duties, causing loss of revenue and
enhanced prices to consumers; cumbersome machinery of operation;
expensive collections. He confessed that the bill he presented did not
deal with these demerits as they deserved, that he would cut the duties
50 per cent, if he could, instead of 15 per cent, as he had, but he had
done the best he could.
The features of the Wood Bill were novel and interesting. It had but one
list—the dutiable; any article not mentioned there was supposed to be
free. It reduced the number of dutiable articles from 1524 to 575. It
put duties on many raw materials. It imposed but _one_ kind of duty on
an article—ad valorem or specific as seemed to him best. It levied a
retaliatory duty of 10 per cent on goods coming from countries which
discriminated against the United States. It allowed a drawback on all
exported goods containing foreign materials. It allowed the purchase of
foreign-built ships by Americans and the free importation of
ship-building materials. The general object of the bill Mr. Wood said
was to revive commerce without materially affecting manufacturing
interests whose right to protection for a still longer time Mr. Wood
recognized. He considered his bill merely a beginning of a new policy in
tariffs, looking toward the final complete withdrawal of the system of
taxing consumers for the good of private individuals.
From the first the Wood Bill was cursed by the indifference of a large
number of his own party,—men like S. S. Cox and Morrison, who did not
speak at all on it,—by the open opposition of the moderate Republican
tariff men like Garfield and Kasson, and by the bitter condemnation of
the Industrial League, which called it “blundering,” “ignorant,” “an
attempt to overthrow the industrial system of the country.” Naturally,
under these circumstances the debate upon it languished. Indeed, the
only personal incident in the debate which is interesting from this
range is that at this time William McKinley of Ohio made his first
speech in support of protection of American industry. It was a strictly
orthodox speech calculated to give comfort to Mr. Kelley, and it was
used as an opportunity for presenting a petition which the Democrats had
been trying to keep out signed by over 100,000 laboring men of seventeen
different States, praying for a 10 per cent _increase_ of duties.
The character of the bill as well as the lukewarm attitude of the House
toward it made a fine opening for Mr. Kelley, and he thoroughly enjoyed
himself riddling it. He was an impressive speaker with a sonorous voice
which had been carefully trained, for Kelley once had thought of going
on the stage, and in preparation had studied with both Booth and
Barrett. He now went at the measure with joy, and in the course of his
speech gibed Wood unmercifully for yielding to a rhetorical temptation
which seems to beset every writer who speaks on taxation; that is,
imitating Sydney Smith’s famous paragraph on the overtaxed English
farmer.
In introducing his bill Wood had said:
“The farmer in the West, where lumber is scarce, pays a tax of 20
per cent on the lumber his house is built of; a tax of 35 per cent
on the paint it is painted with; of 60 per cent on his window glass;
of 35 per cent on the nails; of 53 per cent on the screws; of 30 per
cent on the door-locks; of from 35 to 40 per cent on the hinges; of
35 per cent on the wallpaper; of from 60 to 70 per cent on his
carpet; of 40 per cent on his crockery; of 38 per cent on his iron
hollowware; of 35 per cent on his cutlery; 40 per cent on his
glassware; of from 35 per cent to 40 per cent on the linen he uses
in his household; of 51 per cent on the common castile soap he uses;
48 per cent on the starch—”
And so on, ending up:
“Suffice it to say that the furnishings of his child’s cradle and
the coffin in which he is finally buried pay a direct tax or one
enhanced in price by our tariff system.”
Kelley sat smiling through the passage, and when he came to discuss the
bill said:
“I was amused by the chairman’s expression of sympathy with the
overtaxed farmer.... It was so amusing to note the gravity and
pathos with which he started his poor farmer out to buy taxed
hardware, shoes, etc., for himself and clothes and medicine for his
wife. When I first read that gem of his speech in my youth, or
earliest manhood, just after Sydney Smith had produced it, it made
an impression on my mind that still lingers. But I have become so
used to hearing it that when he commenced its delivery with such
fine effect I found myself in the condition of Diggory in ‘She
stoops to Conquer’: ‘Diggory, you talk too much,’ the squire said;
‘you must neither talk nor laugh while attending on this party,’
‘Ecod, Squire, then you must not tell that story of old Grouse in
the gun-room, because I have been so used to laughing at that story
for the last twenty years that I am afraid I can’t hold myself.’
“Sir, for the last twenty years I have been so in the habit of
laughing, at least in my sleeve, when hearing gentlemen reproduce
that admirable novelty that I could not help doing so when the
chairman of my committee startled me by reciting it. I have it
before me as uttered by the gentleman, then from Ohio, but who was
carpet-bagged to New York, and who is sometimes known by the
_sobriquet_ of ‘Sunset,’ as he delivered it in 1864.... It was
quoted the other evening by the gentleman from Mississippi....
Subsequently I heard it from my friend, the late James Brooks. Then
from our friend, S. S. Marshall, of Illinois, and there has never
been a tariff bill under discussion that I have not heard it three
or four times; and I repeat I could not help laughing when the
chairman of the committee got it off with such solemnity.”
The Wood Bill never got out of the House, but it was not because
interest in the tariff was abating. There was a deep unrest in the
country on the subject, and it was stirred by a band of tariff-reformers
of great ability. It is doubtful, indeed, if we have ever had as able a
group of teachers as those who kept up their hammering in the ’80’s,
undismayed by the disaster of ’72. To Perry and Wells and Horace White,
whom we have already met, should be added two in particular, William G.
Sumner and Joseph S. Moore.
Mr. Sumner, who since 1872 had held the chair of history and economics
in Yale University, was a young man educated at Geneva, Göttingen, and
Oxford. He had begun his career as a clergyman of the Protestant
Episcopal Church, but had left it for academic work. A few years ago at
a dinner in New York, Mr. Sumner explained how he became interested in
the tariff question: “Thirty-five or forty years ago,” he said, “I
became a free trader for two great reasons as far as I can now remember.
One was because as a student of political economy my whole mind revolted
against the notion of magic that is involved in the notion of a
protective tariff.... The other reason was because it seemed to me that
the protective tariff system nourished erroneous ideas of success in
business and produced immoral results in the minds and hopes of the
people.”
Mr. Sumner did not add at this time another interesting fact—that he was
first aroused to active public efforts against protection by Grant’s
suspension of the office of Special Commissioner of Revenue in order to
get rid of the reports of David A. Wells. It was a very good
illustration of the effect of trying to silence honest speech on a
question of public interest. The high protectionists, in ridding
themselves of Wells in Congress, turned him into the public forum, where
he was immediately reënforced by Mr. Sumner. Two voices were raised
where there had been one.
In journalism the most effective writer at this time was the “Parsee
Merchant,” Joseph S. Moore. Moore was a clever German-Hebrew, who had
come to New York from Bombay and had secured a place in the New York
Custom House. He had first attracted attention in 1869 by a series of
letters to the New York _World_, signed “Adhersey Curiosibhoy.” These
letters, addressed to “Sahib Greeley,” told of the adventures of a
Parsee merchant who came to New York from India to buy goods. His theory
in coming, he said, was that as the United States was the land where
certain things his firm traded in were raised they ought to be cheaper
there; and as the United States bought jute, seeds, gums, etc., from
India, he could establish a direct trade instead of the indirect through
London. He wanted copper, but copper he found cost five cents more a
pound in New York than in London. He wanted cotton prints, but they were
25 per cent dearer here than in England. He wanted enamelled hides, but
they cost 25 per cent more than in England. He went to New Haven to buy
carriages, but the price was $1100 in currency against 90 guineas in
London. He wanted iron; it cost 80 cents more than in England, 60 per
cent more than in Bombay. He wanted wood-screws, but the “wood screw
sahib” laughed and told him he had a better market at home than any the
Parsee could bring him and in it he could sell all he could make at from
70 to 100 per cent more than the foreigner paid. Discouraged, the Parsee
wrote a series of over forty letters to “Sahib Greeley,” begging him to
reflect and weigh the facts in his “great political economical mind” and
explain to him why a policy which produced such prices for the people of
America and made trade with foreigners impossible, was not stupid.
So effective was the Parsee that he greatly incensed the Industrial
League. The Executive Council declared him to be subsidized by British
gold and attributed to him much for which he was in no way responsible;
for instance, the Wood Bill, of which Moore really disapproved, they
characterized as a “crazy structure contrived by a foreigner who has
been so long tolerated in the New York Custom House that he has grown to
imagine himself an authority.” The opposition to the Parsee was so
strong that Secretary Sherman finally removed him.
The only effective bit of tariff legislation in this period, 1876 to
1882, was due largely to the Parsee Merchant—the removal of the duty on
quinine. The wholesale price of this medicine, enormous quantities of
which were consumed, particularly in the Middle West, had risen in 1877
and 1878 as high as $4.75 an ounce, the highest point recorded in the
history of the business. The Parsee merchant took up the matter in the
press. The duty on quinine—40 per cent—was, he declared, “a sickening,
disgraceful blood tax.” It was made by only four houses in the United
States, all of them manufacturing chemists who were growing enormously
rich—which was true. They brought in their bark free, and they were able
to make their own price for the product. The press took up the cry.
Frightened by the popular indignation, one firm of quinine manufacturers
offered Moore $100,000 to withdraw his opposition. Several young
Congressmen saw the chance, and in rapid succession ten different bills
repealing the duty on quinine were brought into the House. The one
brought to vote was introduced by James McKenzie, a young Kentuckian. It
went through without debate, a victory which earned for Mr. McKenzie a
name by which he is called to-day in Kentucky—“Quinine Jim!”
The Senate was less in a hurry about the quinine bill, for there it met
the opposition of Mr. Morrill, who on principle had always fought
against legislating a duty off or on a single article without
considering those related to it. He pointed out now that the makers of
quinine used several articles on which they had to pay duty—fusel-oil,
distilled spirits, soda ash, East India bark (if they used that variety,
which few of them did). To compel the manufacturers to pay these duties
and give them no compensating duty on their product was unfair. But the
tide was against him. “Raise a cry of ‘mad dog,’” Mr. Morrill commented,
“and the dog is sure to die.” And he did—the bill passed.
As a matter of fact the effect of the removal of the duty was magical.
In five years from the date the bill became a law—July, 1879—quinine had
fallen from $3.40 per ounce to $1.23, and in ten years, July, 1889, to
35 cents, in 1905 to 21 cents. The quinine manufacturers were
thunderstruck. They declared that they were ruined, and very likely they
believed so. At all events, they discharged their hands and closed their
works. As the country was not moved to tears by the spectacle, they
gradually reopened their factories and resumed business, and eventually
became more prosperous on a free-trade basis than they had been before.
They remain a bright and shining example of the ability of Americans to
compete with foreigners in a fair field and without favor in any
industry not forbidden by our soil and climate. The quinine bill was the
one tariff result the Democrats had to show for the four years they had
held the House!
The presidential campaign of 1880 did not change the attitude of the two
parties at all on the question. The Democrats repeated their “tariff for
revenue only” plank, the Republicans their declaration that “duties
levied for the purpose of revenue should discriminate so as to favor
American labor.” It is doubtful if either party expected at the time of
their conventions that the tariff would cut much of a figure in the
campaign. Garfield, from whom if from any Republican of good party
standing, sound counsel on the question should be expected, kept
suspiciously silent. He knew as well as anybody, since Greeley had long
ago told him, that the only objection the dominant faction of the party
had against him was that he was not “sufficiently protective.”
By instinct and training indeed Garfield was a free trader. He was a
Williams College man, and there had come under the influence of
Professor Perry’s vigorous and clear reasoning. He came out of college
committed to Perry’s ideas. From the beginning of his public life
finance interested him, and he lost no chance to familiarize himself
with the subject. In 1862, being called to Washington from the field to
sit in a courtmartial for some weeks, he spent all his leisure with
Secretary Chase studying the Treasury Department. In 1863 he was sent to
Congress, where he was put on the military committee, but two years
later, at his own request, he was transferred to the Committee of Ways
and Means. Here he attacked all problems with resolution and industry.
He pored over Tooke’s “History of Prices,” mastered thoroughly the
history of tariffs in England and the United States, and acquainted
himself with all the intricacies of the schedules. From the first he set
himself against the efforts of Stevens and Kelley to place protection
before revenue as an object of the tariff. Commerce and the consumers
were quite as important as manufacturers, he insisted. He took a middle
ground in argument, which he summed up in 1866 as follows:
“Duties should be so high that our manufacturers can fairly compete
with the foreign product, but not so high as to enable them to drive
out the foreign article, enjoy a monopoly of the trade, and regulate
the price as they please. To this extent I am a protectionist. If
our government pursues this line of policy steadily, we shall, year
by year, approach more nearly to the basis of free trade, because we
shall be more nearly able to compete with other nations on equal
terms. I am for a protection which leads to ultimate free trade. I
am for that free trade which can be achieved only through
protection.”
One excellent feature of Garfield’s tariff work was his willingness to
consider all the facts. When the attack began in Congress on David
Wells, one of the first manœuvres was an attempt to prevent the printing
of his reports. Mr. Garfield protested forcibly:
“I confess my great surprise,” he said, “at the opposition of the
gentleman from Pennsylvania to the printing of this report of the
Special Commissioner of the Revenue.... He admits, in the first
place, that the facts stated are generally correct—that the
statistics collected and arranged in tables are true and correctly
stated, but declares that the marshalling of the facts is
dangerous—that they are put together in such a way, and such
inferences are drawn from them, that the report is dangerous to
Congress, and to the enlightened people of the country. The
gentleman asks this House to make a humiliating confession in which
I, for one, am not ready to join. If any theories or opinions of
mine can be damaged by facts, so much the worse for my theories. An
officer who has served the country so ably and faithfully as the
Special Commissioner of the Revenue deserves well of the country. I
trust the motion to print will prevail.”
As we have seen, the tariff reformers of 1870–72 really numbered
Garfield as one of them and wanted him as the head of the Ways and Means
Committee—a position he would have had had it not been for Mr. Blaine’s
slipperiness. The events that followed—the panic of 1873, the outspoken
plank of the Democrats in 1876 in favor of tariff for revenue only, the
effort of his party to keep quiet on the tariff—did not change
Garfield’s views, though they did make him a shade more cautious in
expressing them.
When he came to face a campaign for the presidency in 1880, he must have
realized that whatever he thought about the tariff would count for
little if a struggle were precipitated. He had nineteen iron foundries
in blast in his Ohio district, and the watch their owners kept of him
creeps out more than once in his speeches. He must have known that in
case it should be needed these gentlemen were ready to make the biggest
fight they had ever made for high protection. Indeed, only a few months
before the nomination the ablest one among the organized metal workers,
Mr. Joseph Wharton, had openly served notice of their intention on the
coming administration. Mr. Wharton was speaking in Pittsburg on “The
American Ironmaster,” and said: “_It is meet that we should declare to
the country that we will support no party and no candidate who cannot be
depended upon by something better than election-day promises to protect
and defend home labor. It is fitting for us to call ‘hands off’ to those
who are itching to tear our tariff laws to shreds; to call upon the
President in advance to refrain from meddling with commercial
treaty-making and to veto, as he doubtless would, any measure injurious
to home industry which a hostile majority in Congress may pass_; to call
upon the representatives of all other American industries to stand by us
as we will stand by them in resisting all changes in the tariff laws and
all tariff-making by treaty until these laws can be carefully and
prudently revised by a Congress or a commission known to be devoted to
the interests of the nation.”
That Garfield knew of this speech is certain, for a copy of it bearing
his stamp was turned over to the Congressional Library when he left
Congress in the spring of 1880. Altogether it was enough to make a man
cautious, and it was certainly a mark of political sagacity on his part
that he said nothing in his letter of acceptance about the tariff issue.
But it was not to be downed. The Republicans, failing at the opening of
the campaign to excite anybody about the South, suddenly attacked the
Democratic phrase, “tariff for revenue only.” What did it mean? Why,
nothing if not the destruction of the “home market,” the consequent
shutting down of all American manufactories, the idleness of all
American laboring men, a reign of “pauper labor,” the end of
“prosperity.” Unfortunately for the Democrats, their candidate, General
W. S. Hancock, a splendid soldier and gentleman, apparently was not
certain that the phrase “tariff for revenue only” meant anything in
particular. He tried to parry lightly with his famous remark that the
tariff was only “a local affair.” The more he and his supporters talked,
the more of a tangle they made of it. It was quite apparent if the
tariff was to be a live issue they were too uncertain and too divided on
it to handle it. The Republicans, on the contrary, came out boldly for
protection to American industry, and on this they won. They won—but the
victory seemed only to make more insistent the demand for revision. “I
suppose,” said Mr. Morrill, regretfully, “that if the Bible has to be
revised from time to time the tariff may have to be.”
If there had been no other reason at this time, the piling up of the
surplus would in itself have forced a revision. The return of good times
which began to be perceptible in 1878–79 had of course stimulated
imports. In 1878–79 nearly $215,000,000 in duties had been collected; in
1879–80, $386,000,000. In these two years the national debt was reduced
by a hundred million dollars, and there was more money left in the
Treasury than they knew what to do with. Of course a stop had to be put
to this. But more imperative than the surplus was public opinion. It was
suspicious of high protection. The results of the census of 1880 had
begun to filter through the country, and accordingly people began to
compare the last decade—1870–80, which had been lived under a tariff of
about 42 per cent (on dutiable goods)—with the one from 1850–60, lived
under a tariff of about 20 per cent. In each had occurred a disastrous
panic. In each there had been, in spite of panics, a great growth in
agriculture, in population, in manufacturing. Taken on the whole, which
had been the more normal growth?
To start with, it was evident that one claim of the high protectionists
was a humbug—that is, given protection you had prosperity. Mr. Kelley,
as we have seen, had become a high protectionist in 1859, because low
tariff—he called it free trade—had not prevented a panic in 1857. But
neither had a high tariff prevented the panic of 1873. “Where,”
exclaimed the Parsee merchant, “was the Baal of protection all this
time? Why did he not come to the relief of this distress? Alas, he was
as lame, as impotent, and as false as the Baal in the Bible. The one was
unable to strike a lucifer match in the plains of Judea three thousand
years ago, and the other could not light a blast furnace in
Pennsylvania.”
The census showed, too, that the general growth between 1850 and 1860
was _greater_ than between 1870 and 1880. Capital had increased in the
first decade about 90 per cent, in the second but 32 per cent; hands
employed 37 per cent in the first, 33 per cent in the second; wages 60
per cent in the first, 22 per cent in the second; materials used 86 per
cent in the first, 36 per cent in the second; products of manufacture 85
per cent in the first, 27 per cent in the second. The increase of the
second decade over the first had been amazing in certain specific cases,
as in iron and steel. In 1860 the iron production had been but 821,223
tons; in 1880 it was 3,835,191. In 1860 it was 60 pounds per capita; in
1880, 171 pounds. It was protection that had done this, said the Iron
and Steel Association, but why had it not done as much for wool? As we
have seen, the wool interests had secured the passage of a special bill
in 1867 giving them the highest protection they had ever had, but in
spite of it the industry had lagged. Evidently protection was not
infallible. There were other elements in the problem of prosperity—what
were they? Again, what about the prosperity it claimed to produce—that
of iron and steel, for instance—was that prosperity equally divided? Was
a high tariff as good a distributor as it was a generator?
All of these questions had to be answered, but how was it to be done?
Not by a Congress in which “tariff for revenue only” Democrats and
“revenue-reform” Republicans were at large, decided the Industrial
League. Their notion of revision was to have it done by their own
representatives, and at once they began an active campaign for a
commission, such as was hinted at in the petitions of 1877 and in Mr.
Wharton’s Pittsburg speech in 1879, quoted above. In November, 1881, a
great tariff convention was called in New York by the manufacturers, and
this body committed itself to the idea of a Tariff Commission.
Naturally, all this agitation had stirred Congress. Early in 1880 the
Senate had passed a bill providing for a commission, but the House,
jealous of its rights in the matter of devising revenue bills, did not
agree. Now, however, the Secretary of the Treasury asked for a
commission, President Arthur in his first message asked for one, the
Industrial League kept up the pressure, and finally in the spring of
1882 the House consented. The idea of Senator Eaton of Connecticut, with
whom the bill for the commission originated, was that it should be
composed of nine members—six experts, one for each of the six great
industries of the country; two statisticians such as “David A. Wells of
Connecticut and R. M. T. Hunter of Virginia,” and as chairman “one of
the great governing heads of the country, not an expert in anything
except in all that makes men great.”
Mr. Wharton’s idea, as given at the Tariff Convention, was that “each of
the chief groups of industry should be represented by one man.... For
president, a man of high standing, preferably one known to his
fellow-citizens as having acceptably performed important public service,
and of really exalted character and intelligence, should be chosen. For
secretary, a man well versed in the working of our existing laws, in
Treasury rulings and judicial decisions, and in the ways of custom
houses and the tricks or evasions of unscrupulous importers, would be
most valuable.
“It might be necessary that what is loosely called the Free Trade
element should be represented on the commission; both political parties
should certainly be. Seeing that the appointments would be made by a
Republican President, and that the Republican party is firmly committed
to the principle of Protection to home industry, it would obviously be
right that a majority of the commission should be Republicans and that a
majority also should be distinctly Protectionists, but extremists of
every kind are to be avoided.”
President Arthur evidently had both of these views in mind in appointing
the commission, which he did as soon as the House gave its consent, but
his own notion was somewhat more liberal. He cut the representatives of
special industries down to four: wool manufacturers, wool growers,
sugar, and iron and steel. John L. Hayes, the efficient manager and
lobbyist of the Wool Manufacturers’ Association, was made chairman of
the body—a choice probably obligatory on Arthur, such was Hayes’s
influence among high protectionists in the country. The suspicion the
wool growers had of the wool manufacturers (the latter wanting free
wool) made it necessary to give them a special representative, and
Austin M. Garland of Illinois was appointed—a fair-minded man willing to
consider that there were other interests than wool in the country. Sugar
was looked after by Duncan F. Kenner of Louisiana. He had been a member
of the Ways and Means Committee of the Confederate Congress, and since
the close of the war had been active in the reconstruction of his state.
Kenner’s interest in a protective tariff centred around sugar entirely.
The one really broad-minded man among the representatives of industries
was Henry W. Oliver, Jr., of Pennsylvania, an iron manufacturer. Oliver
was a man of large experience and foresight, and a keen judge of men,
and from the start he threw his influence on the commission to the
consideration of the general interest as well as of iron and steel—which
he by no means neglected!
An excellent appointment, made at the suggestion of Mr. McKinley, was
Judge Jacob A. Ambler of Ohio. Judge Ambler was an old-fashioned country
lawyer, able, learned, and honest—a man jealous of the honor of any
office he held or trust he handled, full of contempt for greed,
extravagance, and grafting, shrewd in detecting them, and relentless in
punishing them. His influence on the commission was most healthy. It was
due to President Arthur’s knowledge of the Custom House administration
(Arthur was Collector of the Port of New York from 1871 to 1878, when he
was suspended by Hayes) that William H. McMahon, for twenty years an
officer of the New York Custom House, was put on the board. McMahon had
no interest in any phase of the question except administration, but that
he knew from top to bottom, and his knowledge was invaluable to the
commission. In order that there might be a statistician in the number,
Arthur appointed a young man from the Census Bureau, Robert P. Porter.
Porter was an Englishman and a free trader, who had found his way to
America at sixteen, and had become a journalist in Chicago. In 1877 he
had published an article in the _Princeton Review_ which attracted the
attention of President Hayes, and from which the latter quoted fully in
one of the speeches made on his Western journey in 1878. When Hayes
reached Chicago on this trip, Porter was presented to him, and the
President at once claimed him for the Census Bureau. Here he made many
friends, among them Judge Kelley, who lost no time in converting him to
protection and gladly backed him for the commission.
The remaining members were John W. H. Underwood of Georgia and Alexander
R. Boteler of West Virginia, two gentlemen who were appointed chiefly
that their respective sections might be represented.
The announcement of the commission awakened no great enthusiasm
anywhere. It was not sufficiently strong in business representation to
make the Industrial League feel secure, and the appointment of Mr. Hayes
as chairman naturally aroused the suspicion of moderate tariff men. Nor
did that portion of its work obvious to the public increase confidence.
Its first business, of course, was to get information about the actual
industrial condition of the country. It set out to do this chiefly by
means of public hearings in various cities. Starting out in July at Long
Branch for three months it junketed about from Long Branch to New York,
from New York to Boston, from Boston to Rochester, from Rochester to
Buffalo, then in turn to Cleveland, Detroit, Indianapolis, Cincinnati,
Louisville, Chicago, Milwaukee, St. Paul, Des Moines, St. Louis,
Nashville, Chattanooga, Atlanta, Wilmington, North Carolina, Richmond,
Baltimore, New York again, then Pittsburg, Wheeling, Philadelphia, and
finally back to Long Branch.
In this time 604 witnesses were listened to, and many of them questioned
at length. They were of all shades of opinion, from the uncompromising
free trader, like Professor W. G. Sumner, to the equally uncompromising
higher protectionist, like the Iron and Steel Association. They were of
all shades of selfishness, from the petty selfishness of a man who
refused to consider what effect the duty he wanted would have on a
related industry on the ground that he “had no interest in that
business,” to the enlightened selfishness of the big iron man who
advised lower tariff on iron and steel in order to placate public
opinion and so save the system. A great number of witnesses wanted
_more_ protection. The chemists pleaded for a restoration of the duty on
quinine. Mr. Joseph Wharton pointed proudly to his great nickel and
steel works as proofs of what protection could do for infant industries,
and urged that it be applied next to tin plate. Mr. John Roach of
Chester, Pennsylvania, farmer, iron manufacturer, ship-builder and
ship-owner, employer of 3000 workingmen with a weekly pay roll of
$33,000, gave his experience as a proof that upon protection depended
the prosperity and the future of the country. In Mr. Roach’s judgment
all business irregularities came from a failure to carry out the
doctrine to its logical results, which logical results were prohibitive
tariffs for all raw and manufactured products possible to our country,
and subsidies for all industries which could not be reached by duties,
such as ship-building.
While praises of the results of protection and pleas for more of it were
in the majority, there was considerable complaint of its damages and
demands for freer trade. It is true, said the German silver makers in
answer to Mr. Wharton, that _you_ are making money, but how about us? We
have to pay so much for nickel that we cannot sell in foreign markets,
and it was pointed out that the Meriden Britannia Company had been
obliged to establish a factory in Canada in order to keep a foreign
market for its goods—a factory it still operates. What of that? said Mr.
Wharton. “There is no market in the world that is comparable to this
country as a market of manufactured goods.” All very well, retorted the
people who used nickel, if you have a nickel monopoly and the market
wants more than you can supply!
There were others that complained in the same way that the higher cost
of materials cut them off from a foreign market. Colonel Albert A. Pope,
the great bicycle manufacturer of the day, said that he was shut out of
South America by English makers. He could offset the extra wage cost
here by his more efficient machinery and methods, but his materials were
so much dearer that he could not compete. A manufacturer of neckwear and
trimmings complained that he could not sell his goods in foreign markets
because his imported materials cost too much. The carriage-builders
claimed that previous to the Morrill tariff they had a market in Cuba
and South America, but they had been run out entirely by France, who
could put goods there at half the American price. The oil cloth
manufacturer pleaded for free trade. “If you give us free trade, we can
send goods to any part of the world and do an enormous business.”
Consumers of copper complained that they paid, in 1875, 23 cents in New
York for copper which cost 18 in London; in 1879, 17.5 for what cost
12.2 in London; in 1880, 20 for what cost 13.5 in London. Indeed,
importers and manufacturers had at times been able to buy American
copper in London so much cheaper than at home that it had paid them to
buy it there and send it here. (It came in duty-free if proved to be an
American product.)
Nor were the high protectionists even in steel and iron without
opposition from men who, like them, profited from the growth of iron and
steel industries. Mr. Abram S. Hewitt of New York, for instance,
declared that from his point of view the duties were altogether too
high, profits unfairly large. In speaking of steel profits he said: “I
have never known any such profits in connection with anything with which
I have had anything to do;” a statement which confirmed everything which
could be learned about the carefully concealed profits of that
industry—for instance, not long before this in a law-suit involving the
estate of J. Edgar Thompson, the fact had been brought out that he had
received as high as 77 per cent per annum as dividends on his steel
holdings.
A sinister phase of the testimony was the recurrence of the word
monopoly. The theory of Mr. Kelley and his kind had been, of course,
that when in consequence of high protection the manufacturing of an
article became profitable, capital rushed in to take advantage, and such
competition resulted that prices eventually fell lower than they were
abroad. But it was not working that way. In the steel and iron business,
for instance, as soon as prices began to go down from interior
competition a combination to keep them up resulted. It was even shown in
the hearings that in 1878 the Vulcan Works of St. Louis had been paid to
shut down.
It was October when the commission terminated its public hearings and
settled down to prepare its reports. The scrappiness of the testimony,
the evident absorption of the majority of the witnesses in their own
interests and not those of the country, the little attention given to
commerce and the consumer, the failure to get anything like exact
statistics, created the impression that nothing important would result.
A bad impression was made on the public, too, by the flock of
individuals which everywhere hovered around the commission apparently to
say to it privately what they did not care to say on the witness stand.
These persons beset the members as they dined, walked, rode across
country in their special train. They invited them to dinner and to the
theatres—a horde of hungry duty-hunters who did more to demonstrate to
the fair-minded members of the commission the peculiar evils inherent in
any protective system than reams of the ablest theoretical teaching
could have done.
The report was submitted to Congress in December, and its publication
was a surprise all around. It was far more intelligent, far-reaching,
and disinterested than a cynical public had expected. Poor Mr. Henry
Carey Baird, the quinine-makers, the whole band of duty-grabbers, were
in dismay. They had been betrayed, they said, and it was young Mr.
Porter who had done it. He was an Englishman. It was evident he was an
emissary of British free traders, sent over by them as a boy to be
educated for the task of undermining American prosperity.
No tariff reformer indeed could have asked a better platform than that
on which the Commissioners claimed they had worked. Early in their
deliberations, they said, they had come to the conclusion that a
substantial reduction was demanded—that it was necessary for general
industrial prosperity. “_No rates of defensive duties_,” declared the
commission, “_except for the establishment of new industries which more
than equalize the conditions of labor and capital with those of foreign
competitors, can be justified._ Excessive duties, or those above such
standard of equalization, are positively injurious to the interest which
they are supposed to benefit.” They encourage “rash and unskilled
speculation” to go into business, they “discredit our whole national
economic system,” they cause “uncertainty,” destroy the “sense of
stability required for extended undertakings.” No such “extraordinary
stimulus” as the war taxes gave was now necessary. The great
improvements in machinery and processes made in twenty years “would
permit our manufacturers to compete with their foreign rivals under a
substantial reduction of existing duties.” Twenty per cent was the
general reduction which they had decided manufacturing could support,
and they estimated that the changes they proposed would produce a
reduction of fully 25 per cent.
When one came to examine in detail the schedules proposed by the
commission, it was apparent that, however good their platform, they had
by no means lived up to it. The changes were marked by many
inconsistencies. The duty on chemicals was cut down with rigor, and
quinine was left on the free list, but the duty on crockery and glass
was raised without presenting any satisfactory proof that the conditions
of labor and capital required an advance. The duty on steel rails was
dropped from $28.00 to $18.00—which was still prohibitive—and raised on
steel blooms. The copper duty was reduced 20 per cent; nickel 16⅔ per
cent; pig iron _4 per cent_. The duty on iron rods, cotton-ties, and
many manufactures of iron were raised 50 and more per cent.
The singular inconsistencies apart, however, there was enough of what
was practical, sound, and helpful in the report to make it an admirable
basis to work on. The most serious question seemed to be whether those
who had created the commission would stand by its findings. Would the
Industrial League consent to a 25 per cent reduction? Would the horde of
individuals who had beset the commission during its labors keep their
hands off? Would Congress accept and act upon it in the same spirit and
with the same intelligence as had been bestowed on its preparation? That
it intended to act upon it was obvious. The report was immediately
referred to the proper committees in both House and Senate, with orders
to prepare bills. Haste was necessary. The last election had gone
against the Republicans, the House after March 4th would be Democratic.
If the tariff was to be revised by its friends, they must act quickly.
CHAPTER V
THE MONGREL BILL OF 1883
In a message sent to Congress in December, 1882, President Arthur said:
“_The present tariff system is in many ways unjust. It makes unequal
distributions both of its burdens and benefits.... I recommend an
enlargement of the free list so as to include within it the numerous
articles which yield inconsiderable revenue, a simplification of the
complex and inconsistent schedule of duties upon certain manufactures,
particularly those of cotton, iron, and steel and a substantial
reduction of the duties upon those articles and upon sugar, molasses,
silk, wool, and woollen goods._”
The words had unusual weight, for Arthur was the only President we have
had who could speak from a practical experience in administering the
customs. For seven years (1871 to 1878) he had been Collector of the
Port of New York. It was at a time when the Custom House was undergoing
a series of rude shocks, the combined results of the ambiguities of the
tariff laws, the greed of importers, the dishonesty of some of its
officials, and the “pernicious activity” in politics of others. Arthur
had been obliged to fight for the honor of his own administration, and
he had finally been suspended by President Hayes. That is, President
Arthur knew much from close contact of the ambiguities, the frauds, the
injustice of the duties then in force, so that any expression of his had
the merit of being “practical.” It had additional force, because nobody
could doubt Arthur’s devotion to protection. He had been from boyhood a
“Henry Clay Whig.” Everybody recognized that nothing but a profound
conviction that the country demanded lower duties would have driven him
to ask for them. The country indeed had not long before this given the
Republicans a stern rebuke on its tariff policy by electing a good-sized
Democratic majority to the House in the next Congress—the forty-eighth,
meeting in December, 1883.
Spurred to action by Arthur’s message, the report of the Tariff
Commission, and by their own defeat, the Republicans lost no time in
getting to work. The report of the Tariff Commission was sent at once to
the Committee of Ways and Means in the House and to the Finance
Committee in the Senate, and both bodies began to frame bills. Under
ordinary circumstances, the Senate would have been obliged to wait for a
bill from the House before expressing itself,—the House alone having the
right to originate revenue bills,—but the circumstances were not
“ordinary.” The Senate at this moment had before it a bill for reducing
the internal revenue. This bill had come from the House in the preceding
session and had only been kept from becoming a law by the filibustering
of certain Democratic Senators. It was somebody’s bright idea now to
tack to this internal revenue bill, as an amendment, a tariff bill of
the Senate’s own making. It was, of course, an adventure of uncertain
issue. The House was notoriously jealous of its constitutional rights.
Would it recognize a measure proposed by the Senate? The Senate thought
it worth the trial at least, and fell to work.
The two committees which at opposite ends of the Capitol now began to
sit daily over the tariff were remarkable bodies. At the head of the
Senate committee was Mr. Morrill, who twenty-three years before had
introduced into the House of Representatives the bill with which this
narrative opened. Since 1867 he had been a member of the Senate, giving
the bulk of his time to revenue questions. He was seventy-two years old
now, and in spite of over twenty years’ labor on tariff schedules was
still dignified and courteous!
John Sherman was next to Morrill on the Committee—a place he held with
bad grace. Sherman had lost his rank on the Committee of Finance, of
which he had formerly been chairman, by his appointment to Mr. Hayes’s
cabinet in 1876, it being an invariable rule that a member returning to
the Senate after an interregnum should go to the foot of his party
colleagues on committee. When Sherman returned in 1881 he thought he
should be an exception to the rule. He had up to this time outranked Mr.
Morrill in both House and Senate. His services as Secretary of the
Treasury had given him special skill in dealing with revenue questions.
But Mr. Morrill declined to yield. It looked as if Mr. Sherman would sit
at the foot of the table, when Mr. Allison, who was a member of the
Committee, appreciating the strain, quietly suggested to his Republican
colleagues that Mr. Sherman be moved up next to Morrill. This was done,
but from the beginning of the work on the bill the effect of his defeat
was most noticeable on Sherman’s temper and attitude. He was arrogant in
committee and out. He says in his “Recollections” that he was “piqued”
by Morrill’s failure to yield to him. The word is mild.
It began to be noticed soon after the Committee went to work that Mr.
Sherman was getting much help from the member at the foot—a new Senator,
the Senator from Rhode Island—Nelson W. Aldrich. People who watched the
hearings said he seemed to have at his tongue’s end all the facts which
bore on the high tariff side. It was said on the inside, too, that he
was the man who had written the cotton schedule for the report of the
Tariff Commission. He had certainly done well for his constituents. He
had secured an increase on that class of cotton goods which was chiefly
imported, and a decrease on those of which little or nothing could be
imported.
The leading Democrat on the Committee was James B. Beck of Lexington,
Kentucky. Beck was a Scotchman by birth and a Democrat of eighteen
years’ Congressional experience. Powerful in body and mind, brave,
honest, and combative, he led his party in the Senate with great
effectiveness. It was on the tariff that Beck was at his best. Let him
get after a rate he regarded as iniquitous and he was like an avalanche.
“His mighty arms swing like hammers,” wrote an English correspondent who
heard him once on that theme. “His Scotch tongue, which some call harsh
and rasping, thunders out the shortest and simplest Anglo-Saxon words
that can be found to compose his terse sentences. Now and then the
clinched fist comes down on his desk with telling force. The whole
speech is made up of facts and statistics. If a flower of rhetoric
should spring up in his path he would crush it with his ponderous foot.
If a trope should get into his throat, he would swallow it. Adjectives,
metaphors, and similes find no place in his oratory. Like Joseph Hume,
he is a man of figures, and like him he speaks like a problem in
mathematics.”
The House Committee was strong on both sides. The chairman was “Pig
Iron” Kelley, who, in spite of twenty-five years’ experience with
protection, still found it an “exquisite harmony.” He had as supporters
the experienced Mr. Kasson of Iowa and the devoted young Mr. McKinley of
Ohio, but it was on neither of them he was depending chiefly. There had
been put on the Committee in the previous session a man from Kansas,
Dudley C. Haskell, who was now to take about the same relation to Kelley
as Kelley had taken to Thaddeus Stevens in the tariff debate of 1866 and
1867. The Democrats of the Committee were four of the strongest that
Congress has seen since the war—Carlisle of Kentucky, Randall of
Pennyslvania, Morrison of Illinois, and Tucker of Virginia.
Here, then, were two able committees giving their entire time to tariff
bills. They were under instructions from a Republican country and a
Republican President to lower the duties, and they had as a guide a
report of a Republican commission of their own creation advising its
reduction. They had Republican majorities to back them. Their duty
seemed plain. It seemed clear, too, that they should be free from
outside pressure. All of those individuals whose interests were affected
had had ample opportunities to lay their cases before a commission
constituted for the purpose. To keep away from Washington would seem to
be their obvious business. But they saw it differently. Indeed, the two
committees had scarcely gone to work before a “third house” was in
session—a house of lobbyists come to Washington for the express purpose
of preventing the recommendations of the Tariff Commission from becoming
law. The wool-growers, disgusted that Mr. Garland, representing them on
the commission, had consented to nearly 20 per cent reduction, held
public meetings in Ohio denouncing him, and sent down what scoffers
called the “wool trinity”—Columbus Delano, one-time Secretary of the
Interior under Grant, William Lawrence, afterward a Comptroller of the
Treasury, and David Harpster—all wool-growers and all from Ohio.
Mr. John L. Hayes, chairman of the Tariff Commission, whose duties
naturally would be supposed to be over, took rooms in Washington and as
agent of the woollen manufacturers began a campaign to get more for them
than as commissioner he had consented to. The makers of chemicals and
drugs—and quinine particularly—instituted a siege. Agents of iron and
steel, sugar, mineral water, wood pulp, of everything which had suffered
a reduction, appeared in the corridors of the Capitol at Washington. “No
such lobby has been seen here for years,” the correspondents began to
write to their newspapers. These agents, attorneys, manufacturers, did
not hesitate to say loudly that no bill should pass unsatisfactory to
them. They were far from standing together, however, in their demands.
Indeed, they were in incessant conflict, for they all wanted what they
purchased—that is, their raw material—free; while what they sold—their
product—they wanted protected! In every industry came this clash, though
it was more acute between the wool and woollen men than elsewhere.
The first bill to come out of committee was that of the Senate. It was
at once seen that the duties proposed were in many cases _lower_ than
those proposed by the Tariff Commission. For instance: the Tariff
Commission had laid $6.72 duty on pig iron, a reduction of only 4 per
cent. The Senate Committee, after going over the whole ground, had cut
the rate to $6.00. Mr. Sherman had fought the decrease in the committee;
he continued to fight it on the floor. He tried for $6.72 and was voted
down overwhelmingly. He tried for $6.50 and again was beaten. He argued,
threatened, cajoled. He read telegrams from the iron men of his state,
brought in letters and testimony, worked day and night, but it took him
over a month to succeed, and then it was only, as Beck said, after “he
had threatened the Senate with the defeat of the whole bill if they did
not give him at least $6.50 on pig iron, and after he had drawn the
party whip over the heads of his followers with an audacity I have never
seen equalled in any public assembly, by threats and every other means
that a great bold parliamentary leader can assert over the men who look
up to him.” Beck was none too hard on Sherman. He beat his party into
submission, but it should not be forgotten that the lash was on his own
shoulder—the lash of Henry B. Payne of Cleveland, of the ironmasters of
the Mahoning Valley, of all the highly organized iron interests of his
state. He knew only too well what failure to accede to their demand
meant for the party in Ohio, for they did not hesitate to tell him
privately and publicly.
Sherman fought for an increased rate on wool as he did for one on pig
iron. He was as hard pressed in one case as the other. The fight caused
more than one hard and open tilt between him and his Republican
colleagues, particularly with Allison, who disapproved a higher tariff
on wool. Sherman was determined, however, and again and again returned
to the attack with threats of defeating the entire bill if he could not
have his way.
But Mr. Sherman was not the only Senator who openly held up the party
for duties higher than the majority of his colleagues approved of. The
Senators of Maine, Michigan, and Wisconsin fought for duty on lumber in
the same way. The Tariff Commission had not changed the duties on
lumber. It left them as they were without a word of explanation. Better
so; for a more indefensible tax than that on lumber could not be
conceived. It had already helped work a destruction which a hundred
years could not repair, and its continuance seemed little less than
crime. The duty on sawed boards was $1.00 and $2.00 per one thousand
feet, according to variety. Under this protection, combined with the
enormous demand which the growth of the country had created, the cutting
of timber had been carried on recklessly and lawlessly, particularly in
Wisconsin and Michigan. Ten years before, in 1873, the danger of
exhausting the forests beyond repair had been shown and Congress had
passed the Timber Culture Act to encourage planting; but while it gave a
bonus for planting on one hand, it continued the bonus for cutting on
the other. Pine in particular was being stripped off. A Federal
Commission had just issued a report showing that there was only about
81,000,000,000 feet of white pine standing in the three principal
states—enough for ten years only. The duty, combined with the knowledge
that the supply was limited, kept prices so high that in the “treeless
states,” like Nebraska and Kansas, new settlers were in great distress.
From all over the West, indeed, came the cry for relief. People were
living in dugouts, because of this tax, the Western Senators and
Representatives told Congress. Their cattle had no shelter, their fodder
was covered only with a thatch. What made the tax more vicious was the
well known fact that the forests were largely in the hands of the
“lumber barons,” men who had in one way or another secured vast tracts
of land at from $1.25 to $2.50 an acre and who now were gathering in
$8.00 or more an acre by unrestricted cutting of the timber. The Senate
of the United States numbered one of the greatest of these
barons—Philetus Sawyer, Esq., of Wisconsin.
Naturally it was not the interests of Mr. Sawyer which the timber
Senators pleaded! It was the cause of the lumbermen and of the millmen.
The tariff must be kept up in order to give them their higher wage. They
must not be put into competition with the pauper wages of Canada! As a
large percentage of the laborers who received this higher wage were
Canadians who came over for the season only, the argument had little
effect. It was not argument indeed that saved the lumber duty. It was
saved because the Southern Representatives who threatened to defeat it
were told they could not have a duty on sugar unless they consented to
one on lumber, and they made the trade.
Such barter went on openly in many other items. One of the most
determined efforts to force a duty was made by Senator Mahone of
Virginia, who wanted $2.00 a ton on iron ore. The Tariff Commission had
allowed 50 cents—the Senate Committee had allowed 50 cents, but Mahone
made a fierce fight for more. He tried for $2.00, for $1.00, for 85
cents, for 75 cents, for 60 cents. He brought up the point at every
opportunity, but again and again was voted down overwhelmingly. “I’ll
defeat the bill if this duty is not raised,” he is reported as saying,
and Sherman backed him in his threat.
His attitude was the attitude of the representatives of various other
interests, big and little; that is, it developed almost as soon as the
debate began that leading Republican Senators were determined to keep up
duties in which certain of their constituents were interested and that
to do this they were ready to trade and dicker with fellow Senators.
That this determination of Sherman, Mahone, and others was clearly
demonstrated was due largely to the quick wit and the daring of Mr.
Beck. He filibustered so adroitly from the beginning of the contest over
the schedules that again and again he forced Republicans committed to
tariff reform to go on record against a proposed reduction or for a
proposed increase. In Sherman’s struggle for the increased duty on pig
iron, Senators like Morrill, Allison, Dawes, Frye, Hoar, Hale, Hawley,
all voted against an increase at first, but finally were whipped into
line, Allison being the last to yield. Mr. Beck gloated over them,
loudly pointing out how different ones had solemnly declared on the
floor they would not support the increase, yet had yielded at last.
Nothing could stop him. An effort was made to limit the debate to ten
days. “Never!” shouted Beck, “not to ten weeks.” Not even the effort of
his party to put an end to his obstruction availed. He gloried in his
insubordination.
It was the 20th of February before the Senate Bill was passed. Two weeks
before this the bill had taken on an importance quite unexpected. This
change was due to the growing certainty that the House was not going to
be able to finish its bill and that if a tariff bill was passed this
session, it would be the measure on which the Senate was working. No
sooner did this rumor go out than the whole body of lobbyists, whose
work up to this time had been concentrated on the House, rushed
pell-mell to the corridors of the Senate to see what they could do to
make the measure “satisfactory” before it was reported. Some of the
things they helped to do have already been alluded to.
The House Bill was having a hard time. The Committee, instead of
following the Tariff Commission report and reducing duties 20 per cent,
had reduced them less than 10 per cent. Now there was no doubt but that
a majority of the Republicans in the House were in favor of real reform.
Most of them declared they dared not go home without a reduction of
taxes. But there was a powerful Republican minority who believed with
Senator Sherman that it was more essential to satisfy the combined
industrial organizations besieging the Capitol than it was to satisfy
public opinion. This minority was determined no bill which gave anything
like a 20 per cent reduction should pass. It is not unfair to say that
it wanted a bill, but _a bill which gave the appearance of reduction,
not actual reduction_.
The Democrats, too, were divided. John G. Carlisle, who led the
majority, was what may be called a constructive free trader; that is, he
believed in scaling down duties as rapidly as industries enjoying them
could support it, until a ‘tariff-for-revenue only’ basis was reached.
He declared now that if the Republicans had presented a bill which
sincerely attempted to embody the reduction of 20 per cent suggested by
their commission and demanded by public opinion, he would favor its
passage, but Kelley’s bill he would not support. Randall, who led the
Democratic minority, was a high protectionist, but Randall was really
willing to support any bill which promised to get the tariff out of the
way. He expected to be a candidate for Speaker at the opening of the
next Congress and did not want to divide his party by supporting
protection in opposition to the Democratic majority.
From the very beginning of the debate on the bill it became evident that
each faction was ready to fight strenuously to carry out its program.
The Carlisle Democrats began by bringing to issue almost every item as
it was read. They made amendments, debated them, forced them to vote by
voice, by rising divisions, and by tellers, and they openly declared
that they would keep this up until the Fourth of March rather than allow
Mr. Kelley’s bill to come to vote. Their tactics indeed were very like
those Mr. Beck was using in the Senate and their effect was identical;
that is, they constantly forced the Republicans to put themselves on
record against lowering duties. Not infrequently they were aided in
their work of obstruction by revenue reform Republicans, particularly
from the West, where the tariff on lumber and an increased duty on
barbed wire were causing indignation.
So strong a program of opposition was developed that in ten days after
the discussion opened it became evident that if any bill was passed it
would be because the high protection faction yielded to the demands of
the majority of the party for a reduction or that they carried their
program by superior parliamentary tactics. That they were in strong
position for the latter everybody saw. As a fact they held all the
strategic positions: the speakership, the chairmanship, and a majority
of the Ways and Means Committee, and of the Committee on Rules. For the
moment, however, the work was all in the hands of Chairman Kelley and
his lieutenants. Mr. Kelley had been ill from the beginning of the
session and he had asked Mr. Haskell to take charge of the bill on the
floor. A more sympathetic and vigorous understudy than Haskell, Kelley
could not have had. He was a man only forty years old, a powerful
individual, over six feet high, with a voice as big as his body, and
with the face and eyes of an evangelist. His earnestness for a cause he
had espoused was almost tragic in its intensity, and forced him to work
and fight for it passionately and untiringly. Two subjects had occupied
him so far in the six years he had been in Congress, polygamy and
protection. He hated the first as he revered the second. Indeed, for
Haskell protection was as complete a solution of all economic
difficulties as it was for Kelley, and he had the same fanatical
devotion to the doctrine. The only question he asked himself in making a
tariff bill was whether an article could or could not be raised in this
country. If it could not, he would put it on the free list. If it could,
he would protect it beyond the possibility of foreign competition. Of
course, this reduced his labor to finding out how much each article
needed to be put beyond competition. This was a matter of fact. As soon
as he was put on the Committee of Ways and Means, which was at the
opening of the 47th Congress, he went to work with unparalleled industry
to master the conditions of each article. He became a veritable
encyclopædia of information on the “needs” of industries. When the work
on the bill of 1883 began, he doubled his efforts. His days he spent in
committee and in the House, his nights receiving representatives of all
sorts of industries. The facts and figures they gave him he attached in
long festoons to copies of the bills which he was making ready for the
debate.
Convinced as Kelley and Haskell were of the perfection of their
doctrine, it was not to be wondered at that they looked on the
Democratic opposition to the duties they were trying to carry through as
outright filibustering or that they were willing to lend themselves to
almost any manœuvres which would thwart it. Their first move was to try
to stop debate. The attempt threw the Democrats into violent excitement,
for so far only two out of sixteen schedules had been considered. It was
an effort to gag the House, they declared. “Such a proposition,” said
Mr. Carlisle, “has never been heard of in the parliamentary history of
this country, a proposition to destroy the freedom of debate on a bill
to raise revenue.” “Stop your filibustering then,” was the gist of Mr.
Haskell’s retort. “Never under gag rule,” retorted Mr. Carlisle.
The failure of this attempt to get his bill to vote discouraged Kelley,
and it began to be rumored that he and his colleagues were going to drop
it and go to the country with the charge that the Democrats had killed
it by obstruction. The rumor reached the White House and Arthur let it
be known that if Congress failed to pass a bill he should call them in
extra session.
The dilemma was a serious one for Mr. Kelley. It was evident that the
Democrats would never allow his bill to come to vote unless its duties
were materially reduced. He could never consent to that. But the
President demanded a bill of some kind, would call an extra session to
get it if necessary. The only hope seemed in the Senate bill, which was
already fairly advanced and which Kelley knew would soon be reported.
But this Senate bill did not suit him at all. Its duties he saw were
bound to be considerably lower than those recommended by the Tariff
Commission. Supposing that he waived the constitutional objection to a
revenue bill originating in the Senate and let it come before the House,
was there any method by which he could make it suit his notion before it
came to vote? The question was a difficult one, and for the moment there
seemed no answer.
As day by day passed and nothing was done, irritation and uncertainty
grew on both sides. Only the lobby rejoiced. There would be no reduction
after all! But they did not reduce their pressure. Indeed it increased
rather. The iron and steel men called down Commissioner Oliver. The
mineral water men stirred up their attorney, Roscoe Conkling. Every
interest engaged the highest-sounding names it could secure for a final
day and night attack.
The effect of all this on the two chambers was deplorable. Particularly
in the House did the debate lose all semblance of sincerity and order.
Again and again it was broken up by charges and counter-charges—by
contradictions, appeals to the Speaker, cries of “Hear, hear!” “Order,
order!” “Rule, rule!” The Democrats, gloating over the apparent
predicament of the Republicans, taunted them repeatedly with not
intending to pass a bill—charges which maddened Mr. Haskell especially.
One day when these taunts were unusually sharp, Haskell lost control of
himself. Towering like a giant, his face white as a sheet, he shouted,
“We will see who wants reduction! We will see who are the
obstructionists. I move that the committee rise”—a motion intended to
close debate on the bill. The Democrats almost as a body were on their
feet at once, rushing down the aisles, dragging in members from
committee rooms, haranguing on gag rule. A long and acrimonious debate
followed, but as before, the attempt to close debate failed.
Another day, when both sides were heated and bitter, Townshend of
Illinois declared that the bill of the Ways and Means Committee did not
originate in Congress at all, but was “sired by a lobby of hired agents
of monopoly and was brought forth in a secret conclave unknown to the
rules of the House.” Mr. Haskell’s wrath was terrible. “Every word of
his declaration is a scandalous falsehood,” he thundered. There was
confusion on both sides for a moment but the friends of the two calmed
them down. The next morning, however, Mr. Morrison waited on Mr. Haskell
at his boarding house on Eighth Street with a peremptory demand that Mr.
Haskell make public retraction of his offensive utterance or he, Mr.
Morrison, would feel obliged to request Mr. Haskell to name some
gentleman to confer concerning further remedies for his friend’s wounded
honor. Mr. Haskell laughed at the idea of a duel, but he assured Mr.
Morrison that so long as Mr. Townshend’s statement stood on record, his
assertion of its falsehood would stand against it. And there the matter
remained.
Such was the temper of the House when the Senate bill reached it on
February 20—a poor temper indeed for candid legislation. Nevertheless,
the bill could probably have been passed promptly if Mr. Kelley had been
willing. The Carlisle Democrats criticised it, but they declared it too
good to obstruct. As for the majority of Republicans, they were in favor
of it. But Mr. Kelley was not willing. His first business then was to
block any attempt to get the bill off the Speaker’s table and pass it by
a regular procedure; a thing not difficult to do, for Speaker Keifer was
playing perfectly into his hands and could be depended upon not to
recognize anybody whom Kelley and Haskell were unwilling should get a
hearing. Indeed, the Democrats had been saying for days that nobody
could catch the Speaker’s eye unless Kelley first gave the wink. In this
matter of keeping back the bill so small a matter as a misplaced
semicolon aided Kelley materially. In looking over the engrossed copy
sent to the House from the Senate, Mr. Haskell had discovered one which
considerably changed duties on iron. He would not consider a bill so
“ragged, ill-considered, and half made,” he declared. The poor little
semicolon held up the House and gave half the papers in the country a
subject for editorials. The Senate clerk hastened over to correct the
error. It was only a slip. He could easily remedy it, he urged. “No,”
said Speaker Keifer sternly. He was not going to allow a Senate clerk to
make a tariff bill for them. The bill had to be taken back to the Senate
and corrected by proper procedure.
While the semicolon and other small matters were taking up time the
Republican leaders were closeted with the Committee on Rules, which they
controlled, in an effort to find a way out of their dilemma. If they
could get the bill into a conference of their own kind and revise it and
then pass it, they would be satisfied. It all amounted, as a matter of
fact, to finding a way to defeat a bill which the majority would accept
and to make and pass one which the minority wanted.
Now in anticipation of the difficulty in which they expected to be when
the Senate bill reached them, Mr. Kasson had some days before this
proposed a revision of the House rules which would allow a majority to
take the Senate bill from the table to concur in, or to non-concur in,
and send to a conference. If Mr. Kelley could have been sure of a
majority for nonconcurrence he would have risked this procedure, but he
found he could not. In caucus and out he canvassed the Republicans and
always with the result that he feared a vote would result in
concurrence. He was afraid of the Kasson rule.
It was certainly not an easy problem, but it was solved, and the man to
solve it was a member of the Committee on Rules, Thomas B. Reed of
Maine. Reed had been six years in the House and in this time had shown
himself an excellent debater and parliamentarian. On the tariff he was
sound enough to suit Mr. Kelley and “practical” enough to suit Mr.
Sherman. From his point of view it was idle to discuss the matter.
Protection, he said, was the accepted doctrine of the country—a closed
question. His business was to get what his constituents wanted. His
remarks on the lumber tariff and its relation to forest preservation
show his general attitude. “I want to know why this country should
preserve my forest for the benefit of some other gentleman? I should
like to know why the principal industry of the State of Maine should be
destroyed because the gentleman from Illinois thinks that his state
needs a more humid atmosphere? Why, sir, the very purpose of forests in
the course of nature is to be cut down and have houses built of them....
I tell you each generation can take care of itself, each generation is
sufficient unto itself.”
The rule Mr. Reed now proposed for extracting the high protectionists
was an admirable introduction to his later career as a parliamentarian.
It ran as follows:
“That during the remainder of this session it shall be in order at
any time to move to suspend the rules, which motion shall be decided
by a majority vote, to take from the Speaker’s table House Bill No.
5538, with the Senate amendment thereto, entitled a bill to Reduce
Internal Revenue Taxation, and to declare a disagreement with the
Senate amendment to the same, and to ask for a committee of
conference thereon, to be composed of five members on the part of
the House. If such motion shall fail, the bill shall remain on the
Speaker’s table unaffected by the decision of the House on said
motion.”
It was a rule which allowed the House to declare a disagreement but not
an agreement. It allowed a majority to non-concur, but forbade it to
concur! A New York _Herald_ correspondent characterized Mr. Reed’s rule
perfectly when he declared that it realized the Irishman’s dream of a
gun which should fire so as to hit the object if it was a deer and miss
it if it was a cow! It was on Saturday, the 24th of February, that Mr.
Reed reported his rule, and on Monday it was taken up. Only seven days
then remained of the session. The storm which burst over the rule when
it was read on Monday was quite worthy of its audacity. It was a
“monstrous proposition,” said Mr. Carlisle. “It is a fraud on
parliamentary law; a fraud on all that is just and fair in our politics;
it is revolutionary,” said Mr. Cox. Mr. Reed listened placidly to it all
and finally closed the discussion by declaring coolly that he himself
considered the procedure he was introducing as “forcible,” that he
should never be in favor of such a rule save in a “great emergency,” but
that such an emergency he considered to be at hand. The country demanded
a revision. The Democrats had defeated the House bill by a systematic
course of obstruction. The Senate bill was not satisfactory to business
men; it was unconstitutional to adopt it, but something must be done to
relieve distress. There was nothing to do but revise the Senate bill “in
the quiet of a conference committee.” The rule was adopted after nearly
a day’s debate by a vote of 129 to 22.
But the Democrats were not through yet. They raised the constitutional
question—was the House of Representatives to waive its right to
originate revenue measures? Never. The discussion precipitated lacked
sincerity, for leading Democrats had already testified to their
willingness to let the Senate bill go through as it stood. Mr. Haskell
finally stopped debates by a resolution which was carried. It turned the
constitutional question over to the Tariff Conference for decision. The
manœuvre was adroit. It simply meant that if the Tariff Conference did
not result satisfactorily to the high protectionist members, they had
the plea of unconstitutionality to fall back on, or as somebody put it,
“If pig-iron goes up, the amendment of the Senate will be
constitutional; if pig-iron goes down, it will be unconstitutional.”
It was late on Tuesday, the 28th day of February, before finally things
were adjusted, and the conferees appointed by both House and Senate. The
appointments precipitated another tangle. As was to have been expected,
Speaker Keifer appointed a high protectionist committee—packed it,
moderate Republicans, who were not represented at all, said. Mr.
Randall, who was one of the two Democratic appointments, felt so badly
about the make-up that he refused to serve. This tangle was straightened
out, and finally on the evening of the 28th the conferees had their
first meeting. Among those from the Senate were Beck and Bayard. They
were disturbed by the idea that the conference might not be “full and
free,”—that is, that the constitutional question might be raised,—and
when they found they could get no assurance to the contrary they
withdrew. Ten different Senators were appointed before two could be
found to accept! These were Mahone and McDill, both Republicans!
When the Committee was finally under way it made quick work of
revision—as indeed it could do, having a powerful high protection
majority. There were sharp contests—more than once rumors ran up and
down the Capitol, where for the last few days all Washington had
congregated, watching developments, that the conference would fail
because Sherman was not getting his desired increase on wool or because
Morrill was failing in his efforts to keep down the rate on pig-iron.
The tension the uncertainty caused was broken at noon on March 2, when
Mr. Morrill entered the Senate and said: “I desire to ask unanimous
consent for the printing of the report of the Conference Committee.” It
was granted and at nine o’clock that evening the printed report was
before the Senate. Of course everybody turned at once to the items over
which the great struggles had come. Had Sherman secured his rate on
pig-iron and wool, Mahone on iron ore, Kelley on steel and quinine and
nickel, the Louisiana planters on sugar?
The most cursory examination showed that the high protectionists had got
much that they asked. Iron ore had been raised to 75 cents a ton after
having been given 50 by tariff commission, by House, and by Senate.
Pig-iron was restored to $6.72; steel rails, after having been given
$15.68 in the Senate and $15.00 in House, were raised to $17.00. Mr.
Beck attacked the bill violently, making a most imposing array of duties
raised, but of course saying nothing of those lowered! At the same time
he attacked Sherman for his part in raising duties. Sherman was not
jubilant, however, over what he had done. Indeed, he was almost in
despair. For if he had succeeded in the metal schedule, he had failed in
the wool. The wool bill of 1867 had put compound duties on wool—10 cents
a pound and 11 per cent ad valorem on all wools costing 32 or less cents
a pound; 12 cents a pound and 10 per cent ad valorem on all costing over
32 cents. The ad valorems were dropped in the bill of ’83. The rate on
carpet wool was also lowered. The duties on manufactured goods were
lowered less on the whole than those on raw wool. In the bill of ’67 the
manufacturer had been allowed a specific duty of 50 cents to compensate
him for the duty on wool and dyestuffs; this was dropped to 35 cents in
the bill of ’83; but on several grades of woollens the ad valorem duty
was raised. It was raised indeed in every case where importations were
large. On cheap goods the duties were so high there could be no
competition; indeed they could have been lowered considerably and the
situation remained unchanged. But wool-growers and wool manufacturers
were both incensed at the bill. Senator Sherman took his failure much to
heart and he refused to sign the conference report. It was a question if
he would vote for the bill. But when the matter came to a test, as it
did about midnight of Saturday, March 3, he voted yea.
“I have always regretted,” Mr. Sherman wrote twelve years later, “that I
did not defeat the bill, which I could have readily done by voting with
the Democrats against the adoption of the conference report, which
passed the Senate by the vote of yeas 32, nays 30. However, the
propriety and necessity of a reduction of internal taxes proposed by the
bill were so urgent that I did not feel justified in denying relief from
burdensome and unnecessary taxes on account of provisions in the bill
that I did not approve. With great reluctance I voted for it.”
It was not until about noon of Saturday that Mr. Kelley, pale from
fatigue and suffering, presented the report. The House was in a state of
the greatest confusion at the time, the galleries crowded with visitors,
many of whom were women, the corridors alive with excited lobbyists, the
floor in disorder from the running to and fro of Democrats, still bent
on obstruction, and of moderate Republicans anxious but hardly daring to
defeat the report. Such was the din that Mr. Kelley could not be heard
when he tried to read a statement showing the changes the conference had
made. The Democrats would have none of his statements—they wanted the
whole report, schedules and all, and so the worn-out clerk was called to
read the entire document.
Two hours were then allowed for debate. Mr. Carlisle criticised the bill
in sober and dignified language, his chief point being that the bill did
not, could not produce the decrease Mr. Kelley claimed for it—that it
was for that reason a deception. Others of his side were violent over
the increases; many sarcastic over the acceptance of a Senate measure.
“They have swapped the Constitution for a high tariff,” declared Mr.
Tucker. But the criticism of Mr. Carlisle and his friends was not so
severe as that of those high protectionists who had failed to get the
increase they asked, particularly of the supporters of higher duties on
wool. “I have voted with the protectionists of Pennsylvania and with the
protectionists of New England,” complained Mr. Robison of Ohio, “with
the assurance—the most positive assurance—that this great interest I
represent should be taken care of, ... and you have stricken us down.”
There is no doubt but that on the morning of the 3d there was very real
doubt about the report being adopted. The moderate protectionists on the
Republican side were against it, and all conservative Republicans were
disgusted with the jugglery which had brought it through. A strong high
protectionist element, too, including Speaker Keifer, was against it—but
before four in the afternoon, when the debate was to close, the tide
turned. It was the pressure of the country which did it. From one ocean
to the other business men commanded and implored over the wires that the
bill pass—good or bad. So many telegrams, it was said, had never before
been received in Washington. And so the bill passed. And a few minutes
before Congress adjourned it was signed by President Arthur.
At the time of its passage nobody knew what was in the bill of 1883,
such had been the juggling. But this was certain, everybody but the
persons who had saved their duties was disgusted with it. Mr. Sherman
went home to meet a political storm such as he had never met before—a
storm which forced him to explain and defend himself. It was raised by
the dissatisfied wool-growers. The Democrats went out with the story of
the barter and trickery which had attended the measure. The Republicans
everywhere were obliged to defend themselves for doing or not doing.
Dissatisfaction was increased with the testing of the bill. It did not
produce the reduction promised either in internal revenue or in customs.
The bill went into operation July 1, 1883. In the first year of its
operation it reduced duties only about $20,000,000 (from $210,637,293 to
$190,282,836). The average reduction on iron and steel proved to be only
4.54 per cent; on clothing wool 10.73 per cent; on woollen goods 1.01
per cent. On many articles there was an increase: 13.11 per cent on
earthenware; 1.48 per cent on glassware; 2.54 per cent on cotton goods.
But there were more serious features still. Mr. Sherman says in his
“Recollections” that the “Tariff law of 1883 laid the foundation of all
the Tariff complications since that time.” The lack of “harmony” in
duties, the failure to protect all interests equally—wool and woollens,
iron ore and pig-iron, and their products—was what disturbed Mr.
Sherman. If we are to have protection, his view was, all must be
protected. “The dogma of free raw material is more dangerous to the
protective policy than the opposition of free-traders.”
There was something more serious than the failure to admit the claims of
all to protection. It was the semi-official recognition of the organized
business man in the making of tariff schedules. True, they had been more
or less active in every bill since the war, but never before had their
right to stand day and night at the doors of Senate and House, to sit in
committee, to be closeted in every leisure hour with their
representatives in Congress, been conceded. It was recognition they were
not likely to forget. Moreover it was demonstrated clearly in 1883 that
the size of the duty is according to the size of the organization. The
quinine-makers, even with Mr. Kelley’s help, were unable to get their
product off the free list where it had been put in 1879, but they were a
feeble folk—only four of them in the country! The pottery people, on the
contrary, received an advance of some 13 per cent on their wares, for
they were strong in Ohio and New Jersey. Mr. Joseph Wharton, standing
alone, had to submit to a reduction of 50 per cent on his nickel;
standing with iron men he suffered a reduction of only 4 per cent on his
pig-iron. It was a great lesson in the value of organization and
numbers.
CHAPTER VI
GROVER CLEVELAND AND THE TARIFF
The most conspicuous political figures in the United States in the fall
of 1883 were two Democrats—John G. Carlisle of Kentucky and Samuel J.
Randall of Pennsylvania, rival candidates for the Speakership of the
House of Representatives. Their contest was something more than a
struggle for leadership. A grave question was at stake. Should or should
not the Democrats open the tariff question? The Republicans had passed a
bill violating their own promises. It was the second time in twenty-two
years that they had broken faith on the question. Mr. Carlisle claimed
that the Democrats should now make it their duty to effect the reforms
so long promised and every day more needed. Mr. Randall claimed that the
tariff should be left to the Republicans.
Two men could scarcely have offered a greater contrast in training, in
methods, and in ideals than the two thus thrown into prominence. Sam
Randall was the older and by far the more experienced in national
affairs. For several years he had been the leader of his party. He had
accomplished this mainly by the coolness and the skill with which he led
a weak minority so that it frequently was able to frustrate the plans of
a big majority. To play the parliamentarian game successfully against
such odds as Randall faced had aroused enthusiasm and devotion and given
him supreme power. The first serious shock to Randall’s leadership came
in the early ’80’s. Then the issue of tariff-for-revenue only became
acute with his party and he could not follow, for Randall was a
protectionist of the Kelley brand. In youth he had been a Whig, but in
1856 he and his family went over to Buchanan, largely on the ground of
personal liking, it seems. In Congress he had always supported the high
tariff arguments and bills, without ever bringing much light to the
question, for he was not at all well equipped for tariff discussion.
Indeed, as late as the bill of 1883 he went about the House studying a
little handbook on the tariff—for the first time posting himself on the
vocabulary and the schedules. As it became more evident that the
Democratic issue was to be tariff revision, Randall’s place became more
difficult, for it was a Republican district which was sending him to
Congress and it was no secret that they sent him on condition that he
support protection. To an outsider it seems now as if the natural thing
would have been for Randall to have gone over to the Republicans at this
juncture, but he believed, honestly enough no doubt, that he could force
the Democrats back from the position they had taken, that he could in
fact _protectionize_ the _Democratic Party_.
But Randall was dealing with a bigger force and a bigger man in 1883
than he realized. John G. Carlisle, his opponent, was probably the
nearest approach to a statesman then in the United States Congress. Born
on a Kentucky farm, he had spent the days of his early youth at farm
work, the nights over books. He had become a school teacher and in his
leisure had read law. Admitted to the bar, he had continued to study
until he was called the ablest lawyer in the state. Admitted to the
state legislature, he had become a leader of his party by force of
knowledge and intellectual vigor. Carlisle had first entered the House
in 1877, fourteen years after Randall, and he immediately made a deep
impression on the country by his thorough mastery of subjects, his
clearness of statement, his gravity and candor in argument, and his
freedom from the trickery and deceits of partisan politics. In the
spring of 1882 he made a speech against a Tariff Commission which, as an
argument for thorough tariff reform, was one of the ablest of the
period. It really framed a strong logical position for the Democrats.
His speech in 1883 when the Kelley Bill was under consideration gave his
position in the tariff:
“In the broad and sweeping sense which the term usually implies I am
not a free-trader,” he said. “I will add that in my judgment it will
be years yet before anything in the nature of free trade would be
wise or practicable in the United States. When we speak of this
subject we refer to approximate free trade which has no idea of
cutting the growth of home industries, but simply of scaling down
the inequalities of the tariff schedules where they are utterly out
of proportion to the demands of that growth. After we have calmly
stood up and allowed monopolists to grow fat we should not be asked
to make them bloated. Our enormous surplus revenues are illogical
and oppressive. It is entirely undemocratic to continue these
burdens on the people for years and years after the requirements of
protection have been met and the representatives of these industries
have become incrusted with wealth.”
That is, Carlisle saw clearly that certain evils inherent in high
protection, evils against which Garfield and all the Republican tariff
reformers had so often warned, were becoming realities. The word
monopoly was already in everybody’s mouth, for at this time the
impossibility of preventing the over-production and consequent
depressions which are the logical results of an artificial stimulus like
a high tariff, except by some artificial check like a combination to
limit output and hold up prices, had been completely demonstrated.
Mr. Randall, however, saw no danger in the building up of monopolies and
combinations to limit production which counterbalanced the advantage
there was in shutting out foreign competition and keeping the home
market inviolate. The danger he claimed to see was unsettling capital.
“There is nothing in life so sensitive to adverse criticism and which
takes alarm so quickly,” he said, “as capital invested in large
industrial enterprises.... Shall we unsettle business interests by
constant tinkering with the tariff? Shall no law last longer than the
meeting of the next Congress?”
The contest between the two men had begun in the summer and had been
followed with keen interest in political circles. Early in November the
candidates opened headquarters in Washington and soon the town was full
of “Randall men” and “Carlisle men,” each ready to prove his candidate a
sure winner! All of the big newspapers had correspondents on hand,
foretelling confidently the success of the candidate favored by their
readers. But there was little to indicate the result. It all depended,
it was seen, upon how deep and how general a belief there was in the
Democratic party that high tariffs were dangerous.
The only really significant feature of the fall contest in Washington
was the activity of the protected interests in Randall’s behalf. The
iron men and steel men, the wool men, the New Jersey potters, the
Standard Oil Company, the Pennsylvania Railroad, were all said to be on
hand. There were many hints of the use of money. Mr. Barnum of
Connecticut, former United States Senator and now chairman of the
National Democratic Committee, was said to be in town “buying mules” for
Randall, as the slang of the day went. How much truth there was in the
charges of bribery the writer does not know; but this is certain, an
alliance of business interests in support of Mr. Randall was plainly
evident in the fall of 1883. The protectionists were most active, but
they had with them the railroads and the Standard Oil crowd, who at that
moment were fighting hard to prevent threatened regulation of interstate
commerce; that is, all of the interests which were thriving on special
privileges were combined into a league for the continuation of those
privileges.
Up to this time these allied interests had supported the Republican
party. It was in power and it had granted the privileges they enjoyed,
but they were quite willing to support a man of any political faith who
agreed with them. Naturally their great desire was that both parties
should agree to protection as the American system, that the question
should practically be taken out of politics. This would result if Mr.
Randall’s effort to protectionize the Democrats succeeded. Naturally,
then, they were eager to do their utmost to support him in his contest
with Mr. Carlisle. But to their surprise and unquestionably to the
surprise of Mr. Randall, Mr. Carlisle was elected speaker by a large
majority. The tariff question was to be opened again. The man whom Mr.
Carlisle selected to open it was William R. Morrison of Illinois, who
had worked shoulder to shoulder with him the winter before in
obstructing the Kelley Bill.
Mr. Morrison was an experienced man at tariff reform; indeed, the first
Democratic tariff bill presented after the war originated with him. That
was in 1875 and 1876, when the Democrats first obtained possession of
the House. The speaker, Michael C. Kerr, had asked Colonel Morrison to
take the chairmanship of the Ways and Means Committee. Mr. Morrison had
brought in a good and reasonable measure, one nearer in accord with
sound tariff principles than those which he presented later, but even
then the Randall faction of Protectionist-Democrats were too strong for
him, and his bill had been speedily dropped. A little later Mr. Randall
had succeeded Kerr as speaker and he had dropped Morrison from the
Committee. He was not restored until 1879. But Mr. Morrison was too
aggressively honest and outspoken ever to keep silence on a question
which interested him. He had fought for reform in Congress, in caucus,
in national conventions, everywhere he could get a hearing, and now that
he had a chance to make a bill he went at it with great zest, and in
March he had it ready—“a bill to reduce import duties and war-tariff
taxes”—he called it. The bill was clever, for it really asked nothing
more than what the Republicans themselves were already committed to.
Thus he proposed a general 20 per cent reduction. The Republican Tariff
Commission had advised from 20 to 25 per cent in 1882—Congress in 1883
had granted only a little over 4 per cent. So, declared Mr. Morrison, I
am only asking what your own experts have advised. This 20 per cent
reduction was to be applied horizontally to all duties on manufactured
articles. Here again Mr. Morrison was following Republican precedent:
their reduction in 1872 being a 10 per cent horizontal, and their
increase in 1875 a restoration of the same. In order to forestall the
objection that this reduction might bring certain duties back to the
detested rates of 1857, Mr. Morrison put in the proviso that no duty
should be lower than that provided by the Morrill tariff of 1861. That
is, he was willing to give the Republicans the protection they
themselves had devised before the war and which they had increased with
a distinct understanding that as soon as the war was over the old rates
should be restored. Even in putting salt and coal on the free list, Mr.
Morrison followed a not very old Republican precedent, Mr. Hale backed
by Mr. Blaine having introduced bills to that effect into the House in
1871.
From the day of the introduction of Mr. Morrison’s bill into the House,
it was certain that Mr. Randall would oppose it. Randall indeed was
working day and night to rally a strong Democratic opposition. His
success was apparent when, after three weeks of general debate, Mr.
Converse, an Ohio Democrat, suddenly moved that the enacting clause of
the bill be struck out and the motion was carried by a vote of 159 to
155. That is, in a House having a majority of 80 Democrats a bill which
was a moderate expression of a policy to which the party had always been
committed could not be passed. Forty-one Democrats voted against the
bill; twelve of them from Pennsylvania, ten from Ohio, six from New
York, four from California, three from New Jersey, and four from the
South. It was a powerful vote, for when boiled down it represented iron
and steel, wool and sugar, and the hold they had on the Democrats.
The defeat of the Morrison Bill only aggravated the feeling between the
two factions and made it certain that there would be a great fight over
the tariff plank of the platform in Chicago in July, when the National
Convention met to nominate a presidential candidate, and there was—one
of the most stubborn and prolonged in the history of conventions. Henry
Watterson was first on the ground with the plank “tariff-for-revenue
only,” which he had placed in the platforms of 1876 and of 1880, and
which he was determined should go in again. Ben Butler, a candidate for
the presidency, followed him with a compromise plank, and after him came
Abram S. Hewitt and Manton Marble, also with compromise expressions. Mr.
Randall’s friends talked free whiskey and free tobacco for the plank.
When the Committee on Resolutions finally was formed it included all
these gentlemen. The session began with a deadlock over the chairman—18
being for Morrison, 18 for Converse of Ohio, Randall’s man. From that
time until the end nothing but rumors of dead-locks came behind the
closed door. The sub-committee to which the framing of the tariff plank
was finally confided sat for _fifty-one_ consecutive hours, and the
session ended in what the disgusted Mr. Watterson called a “straddle,”—a
plank calling for revision in “a spirit of fairness to all
interests”—one which would “injure no domestic industry and would not
deprive American labor of the ability to compete successfully with
foreign labor.” It was an expression carefully arranged to back all
shades of opinion between Mr. Carlisle and Mr. Randall—a platform which
gave standing room to both factions, and it really compared very well
with the Republican pledge to “correct the irregularities of the tariff
and to reduce the surplus—so as to relieve the taxpayers without
injuring the laborers or the great productive interests of the country.”
If anybody was ahead in the platform contest it was Mr. Carlisle, and
this from the fact that Mr. Morrison was selected to present the report
to the Convention.
At the time of the National Convention it looked as if the tariff would
be the chief issue of the campaign, but as it turned out the Republican
candidate, Mr. Blaine, was the issue, and he had not the vitality for
the strain. His opponent, Grover Cleveland—a man unheard of in public
affairs until three years before, but whose short record as mayor of the
city of Buffalo and governor of the State of New York had been of such
courage and patriotism that it had made him available for the nomination
to the presidency, was elected in November by an electoral vote of 219
to 182. The tariff issue was in Mr. Cleveland’s hands.
It has been frequently said that when Grover Cleveland became the
President of the United States he knew nothing of the tariff. At least
one tariff expert of that day has recorded a very different opinion. In
an interesting unpublished manuscript of reminiscences by the late
Professor Perry of Williams College there is an account of a talk the
professor had with Mr. Cleveland in the fall of 1883 in Albany.
Professor Perry had gone to Albany at the request of Thomas G. Shearman,
of Brooklyn, to speak in behalf of free trade at a public meeting the
Democratic leaders had organized, and the afternoon before the lecture
he had been taken to the Capitol to meet the governor. “He and I stood
in the corridor for half an hour talking on the subject which had
brought me to Albany,” Professor Perry writes. “The governor, as was
proper, did most of the talking, and his interlocutor was surprised and
gratified at the clearness and strength of his views on the whole tariff
question and began to think he had this time brought coals to New
Castle, since the first official in the state apparently knew as much
about tariffs as he did, and could express himself even better. The
governor said he was glad I came to Albany, thought he had better not
attend the meeting himself, but hoped everybody else would go, and on
parting gave me his best wishes for the efforts made and making in
behalf of the good cause, with which efforts he seemed to be familiar.
He impressed me as few other men ever did on first acquaintance, as a
strong man, a frank man, and a man every way to be trusted.”
But in any case Mr. Cleveland was too wise a man to take radical action
on a subject at the outset of a first presidential term, particularly
when that subject was sharply dividing his followers. The election had
by no means healed the breach between the Carlisle and Randall factions.
If anything, indeed, it was widened, for Randall had by a clever
manœuvre apparently strengthened his side from the South. He had done
this by campaigning in aid of Southern Democratic candidates for
Congress who favored protection. Together with his first lieutenant,
William McAdoo of New Jersey, Randall went in the fall of ’84 to
Louisville, Kentucky, and spoke under the very nose of his enemy,
Watterson. From Kentucky he continued his work into Tennessee and
Alabama. He did not meet with a cold reception. Everywhere he had large
audiences and proofs of sympathy, everywhere he found newspapers to
support him. To those on the inside it was apparent that Pennsylvania
had been busy in the Southern manufacturing centres, and that its money
and influence accounted largely for the candidates and the interest. But
it was not a sign to be lightly regarded, and Mr. Randall took care that
its full strength be known to Mr. Cleveland.
But however cautious Mr. Cleveland meant to be, his first message showed
that he stood with Mr. Carlisle and not with Mr. Randall. He was for
revision at once. “The fact that our revenues are in excess of the
actual needs of an economical administration of the government justifies
a reduction in the amount exacted from the people for its support,” he
wrote. “The proposition with which we have to deal is the reduction of
the revenue received by the government and indirectly paid by the people
from the customs duties. The amount of such reduction having been
determined, the inquiry follows, where can it best be remitted and what
articles can best be released from duty in the interests of our
citizens? I think the reduction should be made in the revenue derived
from a tax upon the imported necessaries of life.” “The question of free
trade,” Mr. Cleveland said, “is not involved, nor is there any occasion
for the general discussion of the wisdom or experience of a protective
system.” He also interpolated a paragraph assuring the protected
industries and their working-men that there was no intention in his mind
of any ruthless changes which would hurt their interests.
As was to be expected, Mr. Carlisle and Mr. Morrison returned to the
charge as soon as Congress opened. Four months were spent in preparing a
new bill and on it the very best brains of the party were engaged. Abram
Hewitt, who had in the previous session presented a bill embodying his
ideas, now went to work with Morrison. David Wells and J. S. Moore, the
“Parsee Merchant,” came to Washington to give their help. The greatest
care was taken to meet the just objections to the previous measure, and
when the bill was reported in April, 1886, it was found to be more
moderate than its predecessor. The objectionable horizontal levelling
had been given up. Duties had been studied in relation to labor cost.
The free list was larger, including coal, salt, and iron, copper and
lead ores. It was a bill for which both Republicans and Democrats might
have voted without violating party platforms, but there was no hope for
it. The Randall faction again joined the Republicans when Mr. Morrison
asked the House to go into a Committee of the Whole to consider his
bill, and voted him down by a vote of 157 to 140. Four Republicans voted
with Morrison, 35 Democrats against him.
Mr. Morrison might be defeated, but tariff revision could not be.
Indeed, the situation was becoming more complicated every day. For four
years a serious business depression had harassed the country. Mr.
Carroll D. Wright, who, as commissioner of labor, investigated the
condition and reported a little later, found that in the year ending
July, 1885, there had been fully 1,000,000 persons out of employment. He
estimated that year of idleness meant a loss of $300,000,000 to the
country. Strikes were incessant, and in 1884 and 1885 over 20,000
failures had occurred, many of them being in highly protected
industries. Indeed, some of the chief advocates of the system had gone
down in the general distress, among them John Roach, whose panegyric on
protection as the source of prosperity was one of the choice pieces
collected by the Tariff Commission of 1882, and Henry Oliver, the
representative on the Commission of the iron and steel industries. The
piling up of the surplus, too, was causing more and more uneasiness. In
the year ending just after Mr. Morrison’s second bill was denied
consideration, the surplus was found to be nearly ninety-four million
dollars, with no profitable provision for spending. Even Mr. Randall was
willing to admit that this was serious, and to remedy it he now prepared
a bill. The gist of it was the reduction of the surplus by _increasing_
the duties; that is, making them prohibitory. If nothing was imported,
nothing would be collected. Of course, there was no hope for Mr.
Randall’s proposition, though the Ways and Means Committee gave
prominence to it by an adverse report and it was discussed fully in the
public press, particularly in the New York _Times_, where the “Parsee
Merchant” dissected it mercilessly.
This, in substance, was the condition of things when it came time for
Mr. Cleveland to send in his second message. His first year in office
had certainly given him large opportunity to study the tariff question.
It had not been wasted. His notions had evidently been enlarged and
intensified and in his message he urged at length upon Congress the
“pressing importance” of revision. He made a strong argument against the
system which had produced the surplus he was laboring with and at the
same time caused “abnormal and exceptional business profits,” “without
corresponding benefit to the people at large,” and it ended with a plain
warning to Congress that nothing could be accomplished “unless the
subject was approached in a patriotic spirit of devotion to the
interests of the entire country and with a willingness to yield
something to the public good.” This message is particularly interesting
in comparison with the famous one of a year later. Indeed, it contains
nearly all the points elaborated there. But it fell on deaf ears. Mr.
Morrison proved this when, a few days later, he tried again to get his
second bill reported, and was defeated. Not only did Congress refuse to
consider Mr. Morrison’s bill, it adjourned in March, 1887, without any
action of any kind in regard to revenue.
And while the members of Congress sullenly refused to consider the needs
of the country lest in so doing they might sacrifice party advantage,
Mr. Cleveland and his cabinet were spending anxious days trying to find
means to unclog the treasury and avert panic. In the first six months
after the message of December, 1886, nearly $80,000,000 were applied to
taking up 3 per cent bonds. Financial uneasiness continuing, some
eighteen to nineteen millions more were spent on the same bonds, and
twenty-seven and one-half millions in taking up bonds not yet due and in
anticipating interest. Even after this Mr. Cleveland and Mr. Fairchild,
his Secretary of the Treasury, did not feel at all certain that trouble
would not return, and as the hot weather came on and the cabinet members
prepared to leave for their summer homes, the President arranged that
they keep him informed of all their movements. He wanted to be able to
reach them, he told them, for he had made up his mind that if there was
a recurrence of trouble he would call an extra session of Congress and
lay matters before the members in such a way that they would be forced
to act.
But the summer passed and business grew better rather than worse. In
September Mr. Cleveland went to Philadelphia to the centenary of the
Constitution and there he met Mr. Fairchild. The two talked matters over
and agreed that no extra session would be needed. “I was almost sorry,”
Mr. Cleveland once told the writer “—not sorry that the trouble was
over, but that my opportunity was lost.” But the _cause_ of the trouble
remained and continued to worry the President. It continued, too, to
worry the country. Ugly evidences of this were continually coming from
press and people. Mr. Cleveland was accused of not realizing the
situation, of fearing the Randall faction of his party, of doing nothing
because he was playing for a second term,—the old-time charges against
the man who in a difficult situation with a divided party behind him,
studies his case and waits for a favorable moment to act. Later in
September, something happened which set everybody agog. Secretary
Fairchild and Speaker Carlisle were reported to be at Oak View in
consultation with the President and Mr. Randall was not present. It was
taken as a sign that the President had concluded to ignore the Randall
faction. But Mr. Cleveland did nothing more at the September council
than to get the opinion of his colleagues on the situation; he did not
reveal his plan of campaign, though at that moment he had it in mind,
indeed had practically decided upon it, and a bold, original plan it
was.
Mr. Cleveland had come to the conclusion that the country must be forced
to think about the tariff and its relation to the business disorders,
and that the only way open to him to force this attention was to devote
his entire forthcoming message to Congress to that subject. No such
thing had ever been done by a President of the United States. But there
was no constitutional objection to the idea. Nothing but precedent was
against it and Mr. Cleveland concluded that here was a case where the
breaking of a precedent was more useful than the observance. For weeks
he turned the matter over in his mind, taking nobody into his
confidence, until finally early in November he told his cabinet what he
had determined upon. He regretted, he said, not to use their several
reports as was the custom, particularly when everybody had made so good
a showing, but in his judgment the situation justified the action. There
was not an objector to the suggestion; on the contrary, there was hearty
and unanimous approval. Every member of the cabinet seems to have
realized that the President had hit on a move of undoubted wisdom.
The writing of the message was a serious task for Mr. Cleveland. He
realized that its effect depended upon the completeness of his argument
and his making himself clear and convincing to plain people. It was
really a literary task, and Mr. Cleveland was not a literary man. He was
a lawyer, accustomed to presenting what he had to say in the forcible
and exact but more or less technical and ponderous terms of the law. He
had a taste, too, for sonorous and unusual words and phrases, but now he
wanted to be simple,—as simple as he could be, and still be dignified.
For weeks he kept his message within reach in the drawer of his White
House work-table, whenever he had a moment, taking it out to add to and
to correct. Finally he had the structure worked out to his satisfaction.
He would begin at the end of the story with what the high tariff had
done, the dangers and hardships it had brought on the country, and he
would tell Congress plainly, this is your work and you alone can remedy
it. With dignity and clearness he worked out the situation:
“You are confronted at the threshold of your legislative duties,” he
wrote Congress, “with a condition of the national finances which
imperatively demands immediate and careful consideration. The amount of
money annually exacted through the operation of present laws, from the
industries and necessities of the people, largely exceeds the sum
necessary to meet the expenses of the Government.... This condition of
our Treasury is not altogether new; and it has more than once of late
been submitted to the people’s representatives in the Congress, who
alone can apply a remedy. And yet the situation still continues with
aggravated incidents, more than ever presaging financial convulsion and
widespread disaster.... If disaster results from the continued inaction
of Congress, the responsibility must rest where it belongs.”
He set down the income, the expenses, the unusual efforts made to
dispose of the surplus, and after all was done, he told them another
June would probably see $140,000,000 more in the Treasury than was
needed, “with no clear and undoubted executive power of relief.” All of
the suggestions before him for getting rid of the surplus: that is,
purchasing at a premium bonds not yet due; refunding the public debt;
depositing the money in banks throughout the country for use, he
believed to be unwise and extravagant. What was needed was something
deeper than expedients for spending money, it was stopping the inflow by
removing the cause. What was the cause? Why, unnecessary taxation, of
course. “Our scheme of taxation by means of which this needless surplus
is taken from the people and put into the public treasury,” Mr.
Cleveland wrote, “consists of a tariff or duty levied upon importations
from abroad, and internal-revenue taxes levied upon the consumption of
tobacco and spirituous and malt liquors. It must be conceded that none
of the things subjected to internal-revenue taxation are, strictly
speaking, necessaries. There appears to be no just complaint of this
taxation by the consumers of these articles, and there seems to be
nothing so well able to bear the burden without hardship to any portion
of the people. But our present tariff laws, the vicious, inequitable,
and illogical source of unnecessary taxation ought to be at once revised
and amended.”
And Mr. Cleveland set out to explain clearly to the people why, in his
opinion, the adjectives he applied to the tariff were not too strong.
The argument is important. It was the reason of an honest and candid man
for the faith within him and it was destined to convince masses of
people and to be the accepted argument of a majority of his party in
years of future struggling on the question. The gist of it was that the
tariff is really a tax,—that is, the price of the imported article one
buys is higher by the amount of the duty, and this duty makes it
possible for people who are manufacturers of the same kind of articles
as those imported to sell them for a price approximately equal to that
demanded for the imported goods. In the first case the tax or duty goes
to the government, in the other case to the domestic manufacturer. “It
is said that the increase in the price of domestic manufactures
resulting from the present tariff is necessary in order that higher
wages may be paid to our working-men employed in manufactories, than are
paid for what is called the pauper labor of Europe.” Now out of a
population of 50,155,783, 2,623,089 persons are employed in such
manufacturing industries as are claimed to be benefited by a high
tariff. “To these the appeal is made to save their employment and
maintain their wages by resisting a change.... Yet with slight
reflection they will not overlook the fact that they are consumers with
the rest.... Nor can the worker in manufactures fail to understand that
while a high tariff is claimed to be necessary to allow the payment of
remunerative wages it certainly results in a very large increase in the
price of nearly all sorts of manufactures, which in almost countless
forms he needs for the use of himself and his family. He receives at the
desk of his employer his wages, and perhaps before he reaches his home
is obliged, in a purchase for family use of an article which embraces
his own labor, to return in the payment of the increase in price which
the tariff permits, the hard-earned compensation of many days of toil.”
Mr. Cleveland felt strongly that it was to the 7,670,493 farmers in the
country that the tariff worked particular injustice. Seeking an
illustration of his idea he went back to his boyhood in New York State,
when every farmer he knew had a few sheep; when he himself wore a suit
of homespun wool—the very odor of which he said he remembered! What good
were these farmers getting from the wool tariff?
“I think it may be fairly assumed,” he wrote, “that a large
proportion of the sheep owned by the farmers throughout the country
are found in small flocks numbering from twenty-five to fifty. The
duty on the grade of imported wool which these sheep yield is ten
cents each pound if of the value of thirty cents or less, and twelve
cents if of the value of more than thirty cents. If the liberal
estimate of six pounds be allowed for each fleece, the duty thereon
would be sixty or seventy-two cents, and this may be taken as the
utmost enhancement of its price to the farmer by reason of this
duty. Eighteen dollars would thus represent the increased price of
the wool from twenty-five sheep, and thirty-six dollars that from
the wool of fifty sheep; and at present values this addition would
amount to about one-third of its price. If upon its sale the farmer
receives this or a less tariff profit, the wool leaves his hands
charged with precisely that sum, which in all its changes will
adhere to it, until it reaches the consumer. When manufactured into
cloth and other goods and material for use, its cost is not only
increased to the extent of the farmer’s tariff profit, but a further
sum has been added for the benefit of the manufacturer under the
operation of other tariff laws. In the meantime the day arrives when
the farmer finds it necessary to purchase woollen goods and material
to clothe himself and family for the winter. When he faces the
tradesman for that purpose he discovers that he is obliged not only
to return, in the way of increased prices, his tariff profit on the
wool he sold, and which then perhaps lies before him in manufactured
form, but that he must add a considerable sum thereto to meet a
further increase in cost caused by a tariff duty on the manufacture.
Thus in the end he is roused to the fact that he has paid upon a
moderate purchase, as a result of the tariff scheme which when he
sold his wool seemed so profitable, an increase in price more than
sufficient to sweep away all the tariff profit he received upon the
wool he produced and sold.
“When the number of farmers engaged in wool-raising is compared with
all the farmers in the country, and the small proportion they bear
to our population is considered; when it is made apparent that, in
the case of a large part of those who own sheep, the benefit of the
present tariff on wool is illusory; and, above all, when it must be
conceded that the increase of the cost of living caused by such
tariff becomes a burden upon those with moderate means and the poor,
the employed and unemployed, the sick and well, and the young and
old, and that it constitutes a tax which, with relentless grasp, is
fastened upon the clothing of every man, woman, and child in the
land, reasons are suggested why the removal or reduction of this
duty should be included in a revision of our tariff laws.”
One of the most significant parts of Mr. Cleveland’s message from the
point of view of present-day developments is that in which he pointed
out the relation of the tariff to the trusts. By this time (1887) the
movement to prevent any lowering of domestic prices of the protected
articles by natural-competition was already strong and alarming. The
sugar trust, the National Lead Trust Company, the National Linseed Oil
Trust, the Copper Syndicate, the association of steel men, the
combinations in wax, rubber goods, oil cloth, and dozens of other highly
protected articles, were worrying the whole country. “It is notorious,”
Mr. Cleveland wrote, “that competition is too often strangled by
combinations quite prevalent at this time, and frequently called trusts,
which have for their object the regulation of the supply and price of
commodities made and sold by members of the combination. The people can
hardly hope for any consideration in the operation of these selfish
schemes.... _The necessity of combination to maintain the price of any
commodity to the tariff point, furnishes proof that some one is willing
to accept lower prices for such commodity, and that such prices are
remunerative._”
Mr. Cleveland did not neglect either to touch upon another feature of
the protective trust which was causing uneasiness and of which he was
soon to learn much more than he knew then, that was, the measures being
taken to prevent any revision at all. “So stubbornly have all efforts to
reform the present condition been resisted by those of our
fellow-citizens thus engaged (in protected industries) that they can
hardly complain of the suspicion entertained to a certain extent that
there exists an organized combination all along the line to maintain
their advantage.”
Little by little with care and pains the message was beaten out. The
greatest caution was taken to have it exact. For example, after the
illustration on the farmer and his wool was written, Mr. Cleveland
became concerned for his figures. He knew twenty-five to fifty was the
right average for a farmer’s sheep in New York State, but how about
Ohio? He called in a member of the bureau of statistics, and was told
the average Ohio flock was between twenty and forty. And as he verified
figures he qualified statements, reiterating his assurance that no
revision which would destroy any business was contemplated—none which
would throw labor out of work or lower its wages, that no doctrinal
discussion was sought. “_It is a condition which confronts us—not a
theory_,” was his famous phrase. And most solemnly did he beg Congress
to approach the question “in a spirit higher than partisanship, to
consider it in the light of that regard for patriotic duty which should
characterize the action of those intrusted with the weal of a confiding
people.”
Throughout the whole period of composition of the message Mr. Cleveland
took no one into his confidence. Finally, one day after it was complete,
Mr. Carlisle called on some business. When he had finished Mr. Cleveland
said: “Carlisle, I want to read you something.” It was his message. He
had decided to present it practically as it was, he said, but he was
afraid he had made it too simple. He wanted it perfectly dignified.
Would Mr. Carlisle listen to it and make any suggestions he might have?
Walking up and down, Mr. Carlisle listened attentively. Once or twice he
broke in, correcting what he believed to be a too general statement.
Thus Mr. Cleveland had written, “The majority of our citizens who buy
domestic articles of the same class (as imported articles) pay a sum
_equal_ to the duty to the home manufacturer.” Mr. Carlisle did not
think they paid the full amount of the duty. He believed usually it was
a little less. Mr. Cleveland had better say “substantially equal.” Mr.
Cleveland wrote finally, “at least approximately equal.” Beyond a few
suggestions of this kind Mr. Carlisle had nothing but hearty approval
for the message.
On the 6th of December it went to Congress. The effect was
instantaneous. All over the country thinking people cried out that not
since the Emancipation Proclamation had a President of the United States
shown equal courage and wisdom. The patience with which Mr. Cleveland
had waited for Congress to take the action needed and to which he had in
both his previous messages urged it, the deliberation and caution with
which he had worked out _his_ duty when Congress failed to do _its_
duty; the courage with which he acted when he felt the time had come for
his interference, the high patriotism with which he had swept away all
thought of the result to himself and the party for what he believed to
be the general good—all these features appealed to the thoughtful and
led many to draw a parallel between Abraham Lincoln in 1862 and Grover
Cleveland in 1887.
The immediate important political result of the message was that it
crystallized tariff sentiment in both parties. The Democrats who had
been trying to mix enough protection with their “ultimate free-trade” or
“tariff-for-revenue only” principles to ease the fears of protected
industries, and win over Mr. Randall, turned exclusive attention to
revision without compromise. As for Mr. Randall, it was plain his day
was over—if his fight was not.
At first the message caused something like a panic among Republicans.
The _Tribune_ appealed to Mr. Blaine for help and he sent from Paris a
famous interview. If anything was needed to emphasize the worth of Mr.
Cleveland’s message, it was supplied by Mr. Blaine’s interview. The
combination of the two documents caused something like a split in
Republican ranks. The Chicago _Tribune_ and a number of other Western
papers came out with as strong a commendation of Mr. Cleveland as the
New York _Nation_, and in Minnesota, Nebraska, and Iowa particularly,
many leading Republicans publicly approved it. Nevertheless, the final
effect on the party was to solidify the varying degrees of
protectionists into one body. Cost what it might the Democrats must not
be allowed to reform the tariff. Nothing was better campaign capital for
Republicans than the charge of “free-trade.” If Mr. Cleveland’s will
prevailed, the value of the epithet might be materially lessened.
Protection must be preserved. If its operations were to be corrected,
this must be done by its friends, not its enemies. Whatever their
differences about the degree and extent of duties, all good Republicans
must now stand together.
CHAPTER VII
THE MILLS AND ALLISON BILLS
It is one of the ironies of the political history of this period that
the Democrat who for many years had been among the most devoted to a
reform bill, William R. Morrison of Illinois, should not have been in
Congress now that the tide had turned to lead in its making. Mr.
Morrison had been defeated in the fall of 1886 and it was necessary to
have a new chairman for the Ways and Means Committee. Roger Q. Mills of
Texas was chosen. The appointment was a red rag to the high
protectionists, for Mr. Mills was an out-and-out free-trader. After Mr.
Carlisle he was the ablest and best informed man in Congress on the
tariff. There are two classes of Congressmen, those who study their
subjects and those who do not. While three-fourths of Mr. Mills’s
colleagues visited with constituents, dined with their fellows, looked
after their fences, held their ears to the ground, he was poring over
tables and reports. He had entered Congress in 1873, an ex-confederate
officer thrice wounded during the war but still as handsome a man as
there was in the body—one of the few Congressmen who never allowed Ben.
Perley Poore to put his biography into the Congressional Directory! Mr.
Mills was the soul of chivalry, and more than once exasperated his
Democratic colleague by his generosity to his opponents. He had refused
in 1883 to join the Democrats in their opposition to the admission of
the colored members from South Carolina. They had been elected, they
must be admitted. In 1884 McKinley’s seat was contested. Mr. Mills
became convinced that McKinley had really been elected and he voted
accordingly. Poor “Pig Iron” Kelley, ill and distracted over the attack
on his favorite doctrine of protection as well as over the corruption in
his own party which had at last become too general and high-colored to
escape even his blind eyes, had angered the House and it had moved to
reprimand him. Mr. Mills protested: he was old, he had faithfully served
his country, he would have no part in so cruel and unjust a measure.
Mr. Mills had been brought up in the fine old school of Democracy. Free
speech, free trade, independent action, self-reliance were cardinal
virtues to him. He took his principles as he found them in Thomas
Jefferson, and he literally followed Jefferson’s advice to go back
frequently to the ideas on which the government had been founded for
encouragement and advice. The interpretation of protection which he had
found in force when he entered Congress and the growing combinations of
business men to support it, he despised, and from the first all his
fighting blood had been up against them. He had been on the Ways and
Means Committee continually since his first appointment and had
contributed some of the strongest arguments and sayings to be found in
the various debates. “Free poker and a taxed Gospel” was his phrase; his
way of characterizing the failure to get Bibles on the free list and
playing cards off.
Naturally Mr. Mills brought to his chairmanship some positive ideas. One
of the most positive was that there should be no hearings given to
manufacturers. If he had denied the right to life, liberty, and
happiness, no louder wail would have arisen. With every tariff bill the
“hearings” had been growing longer and more futile, declared Mr. Mills,
and one who undertakes to read them, even to look over them, cannot deny
that he was right. Admitting all that any candid protectionists could
claim for the value of the hearings there was already an accumulation of
recent ones as great as any committee could digest. There were the two
big volumes of the tariff commission dated 1883, perhaps on the whole
the best which had been taken; there were several volumes from Mr.
Morrison’s committee and from the Senate Finance Committee. This was
enough in Mr. Mills’s opinion and he set his foot down about taking
further testimony of this kind. He even held out against meeting
socially the gentlemen who haunted Washington for the purpose of keeping
their representatives in mind of what might happen “back home” if what
they had asked was not given. Several amusing incidents resulted from
his obstinate stand on the matter. One came through the determination of
the “Parsee Merchant” to force Mr. Mills to talk with some of the
manufacturers. The “Parsee” was as devoted a free-trader as Mr. Mills,
but he did not share Mr. Mills’s antipathy to lobbyists. He was a man of
the world, a great diner-out, a brilliant talker. At his own dinners in
Washington he brought together people of the most varied tastes. One
night he entertained the Ways and Means Committee, including the
Chairman. The dinner was under way when a card was brought in. With
assumed surprise Mr. Moore exclaimed, “Why, it’s my friend Mr.
Havemeyer, bring him in.” Now for some time Mr. Mills had been besought
to meet Mr. Havemeyer, and he had persistently refused. He did not
propose to be trapped into a meeting. The great sugar man came in one
door; Mr. Mills went out the other.
Mr. Mills had of course decided notions about the principles to be
embodied in the bill. He stood for free raw materials, and consequently
increased the free list considerably; wool, salt, lumber, wood pulp,
flax, hemp, and jute were the important additions. Tin plates and
cotton-ties were the leading manufactured items he made free. His chief
hobby, however, was no specific duties. As the schedules then stood both
specific and ad valorem were assessed on a great variety of articles. As
an illustration, take dress goods, which started with a division into
part wool and all wool. The former class was then divided according to
value, those goods worth 20 cents or less per square yard carrying a
specific duty of 5 cents per square yard and 35 cents ad valorem; those
worth more than 20 cents, 7 cents and 40 per cent ad valorem. All-wool
goods were divided according to weight: those weighing 4 ounces or less
per square yard carried 9 cents per square yard, and 40 per cent ad
valorem; those over 4 ounces, 35 cents per pound and 40 per cent ad
valorem. The confusion resulting from this complexity was constant and
opportunity for fraud increased with each variation. The scandals
through the ’70’s and ’80’s charged by the Republicans solely to ad
valorem duties were largely due to the irritating classifications
according to value and the mixture of ad valorem and specific duties.
When Mr. Mills went to work on the bill he had before him a trial
measure on which he had spent six months at home before his appointment
and which for his own satisfaction he had had printed. He had attempted
in his bill to avoid all specific duties; thus in the case of dress
goods he wiped out all classifications and put a straight 40 per cent on
the value, but as he afterwards said: “When I got to work with my
brethren on the bill I found it would not go and I had to abandon my ad
valorem tariff bill. The schoolmaster had not been sufficiently around
to bring our people back to the Democratic principle of taxation as to
value.” Mr. Mills simplified the complicated cotton schedule in the same
way that he had the woollen schedule, by sweeping away the confusing
classifications and assessing a straight 40 per cent on their value. The
duties were reduced less drastically on iron and steel, and sugar
suffered a reduction of only 18 per cent. The failure to apply the same
rule to iron and steel and sugar as to wool and cotton was probably
“geographic,” as Tom Reed charged. “This bill, far from being
philosophical, is political from one end to the other,” Mr. Reed said in
debate. “Is it not singular that this great principle of labor cost
somehow or other seems to be strictly geographical—that it strikes the
Canadian line with cyclonic force and that the Southern states seem to
be so far removed from the storm centre as not to be in the slightest
degree even ruffled?” Mr. Mills’s committee was made up largely of
Southerners; iron and sugar interests were strong in their districts,
both claimed special protection and both received it.
The Mills Bill aroused a tremendous discussion. The “Great Debate,” as
it is called in tariff annals, lasted for over a month. One hundred and
fifty-one speeches were made, those of Mr. Mills, McMillin of Tennessee,
Wilson of West Virginia, Scott of Pennsylvania, Cox of New York, and
Carlisle of Kentucky were the most important on the Democratic side:
those of Reed of Maine, McKinley of Ohio, Burrows of Michigan,
Butterworth of Ohio, and Kelley of Pennsylvania, the leading ones on the
Republican side. The Democratic attack was along the lines of Mr.
Cleveland’s message with particular emphasis on the small per cent of
wages directly affected by the tariff and the large amount of the duty
which went elsewhere than to labor. A large body of expert calculations
on these points were at their service. The first point had been recently
solved by three able statisticians, each working independent of the
other. They were Worthington Ford, E. B. Elliot, and Simon Newcomb. The
results at which they arrived were bad for the claim that high wages
depended on protection. They showed that as a fact the duties affected
but a small amount of labor; according to Mr. Ford 4.07 per cent,
according to Mr. Elliot 4.34 per cent, to Mr. Newcomb 5½. That is, there
was 94 per cent of the wages of the community which were not affected by
tariffs, although the earners of these wages were paying higher prices
for many of the necessities of life because of these tariffs.
On the second point Mr. Mills and his colleague had the completest
official study of the cost of production in the United States which had
been made up to that time. This study was in the first report ever
published by the Bureau of Labor,[1] and was made by our first
Commissioner, Carroll D. Wright. Mr. Wright showed conclusively how much
less a part muscular labor played in the cost of a great bulk of
protected articles than was supposed. Since the Civil War machines had
displaced men in the making of agricultural implements, until 600 men
did what formerly had required 2100; in boots and shoes 100 were doing
what had formerly required 500; in carpet making, in cotton weaving, in
the lumber business, in the production of metals, in the manufacture of
paper, of woollen goods, of tobacco, of silk, of practically everything,
indeed, a sweeping displacement of hand labor had taken place and always
with a resulting increase of quantity and decrease of labor cost. This
was in 1886, and what was then a comparatively new development is to-day
an old story, but one far more wonderful. Machines have multiplied and
improved in practically every industry, with a resulting decrease in
labor cost.
Footnote 1:
The Bureau was established by Congress in 1884, President Arthur
approving. Mr. Cleveland made the first appointment in January, 1885.
Mr. Mills made an effective argument from Mr. Wright’s report by
comparing the labor cost in the manufacture of many leading necessities
of life with the duties which the manufacturers were fighting for in the
name of labor.
“I find in this report,” said Mr. Mills, “one pair of 5–pound
blankets. The whole cost as stated by the manufacturer is $2.51. The
labor cost is 35 cents. The tariff is $1.90. Now here is $1.55 in
this tariff over and above the entire labor cost of these
blankets.... Here is one yard of flannel weighing 4 ounces; it cost
18 cents, of which the laborer got 3 cents, the tariff on it is 8
cents. How is it that the whole 8 cents did not get into the hands
of the laborer?... One yard of cashmere, weighing 16 ounces costs
$1.38. The labor cost is 29 cents; the tariff duty is 80 cents. One
pound of sewing silk costs $5.66; the cost for labor is 85 cents;
the tariff is $1.69. One gallon of linseed oil costs 46 cents; the
labor cost is 2 cents; the tariff cost is 25 cents. One ton of bar
iron costs $31.00. The labor cost is $10.00. The tariff fixes
several rates for bar-iron and gives the lowest rate $17.92. One ton
of foundry iron costs $11.00; the labor costs $1.64; the tariff is
$6.72. None of these tariffs go to the laborer. The road is blocked
up. They cannot pass the pocket of the manufacturers. This “great
American” system that is intended to secure high wages for our
laborers is so perverted that all its beneficence intended for the
poor workingman stops in the pockets of his employer and the laborer
only gets what he can command in the open market for his work.”
Now admitting that Mr. Mills was too sweeping in his conclusion, there
is no escaping the truth or the meaning of the figures. The price of all
sorts of necessary manufactured articles was increased by the duties,
rarely to their full amount to be sure, but yet much beyond what was
necessary to put the domestic manufacturer on an equal footing with the
foreigner. Somebody got the extra profit, and it was not the workingman.
But the workingman paid the extra price. Mr. Mills illustrated it in
this way. “Suppose,” he said, “that a laborer who is earning a dollar a
day by his work finds a suit of woollen clothes he can buy for $10.00
without the tariff. Then the suit can be procured for 10 days’ work, but
the manufacturer goes to Congress and says, ‘I must be protected against
the man buying this cheap suit of clothes,’ And Congress protects him by
putting on a duty of 100 per cent, or $10.00. Now it will require the
laborer to work twenty days to get this suit of clothes. Now tell me if
10 days of his labor have not been annihilated?”
It fell to William McKinley of Ohio, who for the first time in the Great
Debate showed his skill in tariff matters, to answer Mr. Mills. “It is
an old story,” he said lightly. “It is found in Adam Smith, but it is
not true”; and to prove it was not true Mr. McKinley awakened the House
by dragging from his desk a full suit of ready-made clothes. Holding
them up triumphantly in one hand, he showed in the other a bill for
them. They cost just $10.00. “So you see,” went on Mr. McKinley, “the
poor fellow did not have to work 10 days more to get that suit of
clothes.” There was “great applause and laughter” on the Republican side
and there was talk of having the suit photographed to show in the
campaign.
Mr. Mills said nothing, but he began an investigation. He sent to the
shop where, according to the bill read by Mr. McKinley, and printed in
the Congressional Record, the suit had been bought, and secured one like
it. He then traced it to the manufacturer and from him secured an exact
analysis of its cost. The result pleased him and he decided to save it
for his speech closing the debate, but when the day came Mr. Mills was
so full of facts and figures that he was forgetting the suit. His son,
Mr. Charles H. Mills, was in the gallery, and realizing the situation
passed down a note reading, “Don’t forget McKinley’s suit of clothes.” A
smile passed over the Colonel’s face and taking a fresh start he
presented the result of his investigation. The gist of his entertaining
remarks was that the suit had actually cost to manufacture, tariff
aside, just $4.98. The labor cost was $1.65. The tariff on the wool used
in the suit was $1.70. Adding this to the $4.98, gave $6.68 and on this
sum the manufacturer was allowed a duty of 40 per cent to compensate for
the wool tax and also of 35 per cent to protect him against the imported
article. The whole cost, plus the three tariffs was $10.71. “Of course,”
said Mr. Mills, “the manufacturer had to undersell the foreign suit and
to do so he dropped under him 71 cents and sold his $4.98 suit for
$10.00 with the help of the tariffs.”
As for Mr. McKinley’s comment that the illustration came from Adam
Smith, Mr. Mills had a story to tell. It reminded him, he said, of the
small boy who was caught thieving and whose mother in chiding him, said,
“Don’t you know it is wrong to steal? Don’t you know what the Bible
says?” “Oh, now, mother,” the youngster replied, “that’s an old story.
Moses told it 4000 years ago.”
As a matter of fact, Mr. McKinley’s answer to Mr. Mills had been a
trick. Mr. Mills had not said that a man could not buy a suit of clothes
for $10.00 in the United States; he said that if a tariff of 100 per
cent was put on a suit which could be sold for $10.00 without the
tariff, a man would pay $20.00 for his suit. Mr. McKinley had diverted
attention from the real point simply by holding up a ten-dollar suit in
the Halls of Congress. It was characteristic of the way in which the
taxation element of the tariff was beginning to be handled that after
Mr. Mills’s answer the suit disappeared entirely from the debate; that
is, there began at this time a concerted effort on the part of
supporters of protection to evade or deny the fact that the tariff was a
tax the effect of which was to increase the cost of living. In all the
early years this point was met with fairness. The tariff was a tax
consented to by a majority of the people because of what they believed
to be good and sufficient reasons. Henry Clay called it a tax,—the
protectionists who advocated raising the duties in the Civil War called
them taxes. The Republican party as a whole admitted them to be taxes in
1872. The tariff Commission of 1883, made up of protectionists, approved
by a Republican administration, called them taxes—taxes which had become
largely unnecessary for the purposes for which they were laid and
therefore unjust.
All through the Great Debate the necessity of stopping the use of the
word grew on the Republicans. They sought to replace the obnoxious term
which was unquestionably influencing the country by something alluring.
The tariff a tax, they cried; why, the tariff is the _cause_ of
prosperity; and they set out to force the argument away from the
practical questions which Mr. Cleveland’s message had raised,—the
question of who, after all, got the profit, the question of the relation
of high duties to panics and trusts, to depressions and high prices.
“We have now spent twenty days in the discussion of the Mills Bill,”
said Mr. Reed, when he made his leading speech. “Have you noticed what
has been the most utterly insignificant thing in the discussion? The
most utterly insignificant thing in the discussion has been the Mills
Bill.” It was true, and Mr. Reed’s party was responsible. It was engaged
in a shrewd struggle to divert attention from damaging evidence and to
establish a superstitious reverence for the doctrine of protection which
would put it out of the reach of attack by facts and logic.
Seven months after Mr. Cleveland’s message, July 21, the House passed
the Mills Bill—passed it by a very decent majority—162 to 114. Mr.
Randall’s followers, who in May, 1884, had been 41 strong against Mr.
Morrison’s original bill, and in June, 1886, 35 strong against his
second bill, had dwindled to three or four. They had not given up
without a fight. Randall had prepared a second bill to introduce, but
even the most devoted of his followers realized the hopelessness at that
moment of any bill which advocated reduction as his did by free tobacco
and free whiskey and prohibitory tariffs. Randall, too, was away from
the House much of the spring of 1888, suffering from the disease which
two years later was to end his life; and his group, left without the
stimulus of his magnetic presence, subject to the pressure of the
majority and to the rising popular approval of Mr. Cleveland, dwindled
away one by one. They left him with heavy hearts. Indeed, for more than
one of them the most painful experience of his political life was “going
back on Sam Randall,”—not, let it be noted, on the doctrine of
protection.
Four days after the House bill was passed it was turned over to a
sub-committee of the Senate Finance Committee, appointed two months
before to prepare for its reception. The chairman of this sub-committee
was Senator William B. Allison of Iowa. It could not have been a better
man. Allison was at the time nearly sixty years old and he had been in
Congress constantly for over twenty-five years. Most of the time he had
served on the House or Senate Committees in charge of the tariff. He had
begun his career as a very moderate protectionist of the Garfield type.
In all of the early years of the Republican struggle to keep the
war-time promises as to high duties, _i.e._ to reduce them as the
internal taxes came off, Allison had been a leader. In March of 1870,
when the Schenck Bill was under consideration, he made one of the ablest
tariff reform speeches of the period; a speech which dogged his later
life. But Allison was a strong party man. As the tariff became gradually
a matter of politics rather than of principle he adapted his views to
the needs of the campaigns, striving diligently for duties which would
win the most supporters and do the least harm to consumers. By
temperament he was admirably adapted to compromise. They used to say in
Iowa that he could walk on eggs from Des Moines to Washington and not
break one. Senator Dolliver admirably characterized Senator Allison’s
gift of getting on with men in his eulogy delivered in the Senate in
1905: “He avoided dogmatism even in its most attractive forms and made
room in the expression of his opinion for those differences which he
knew would be encountered sooner or later, giving leeway for composing
those disagreements which he knew must be composed before anything could
be actually done.” Senator Allison was peculiarly ready for making a
tariff bill at this time, for he had been the head of a sub-committee
which only a few months before had finished an important new measure for
reforming the Administration of the Customs. This had already passed the
Senate and at the time Allison and his colleagues took up revision, was
before the Committee of Ways and Means.
By way of emphasizing its sympathy with the protected as well as to show
its disapproval of Mr. Mills’s attitude, the Senate Committee began
hearings in May of 1888 which were continued at intervals until the
first of the next year. They make four big volumes and altogether are an
illuminating compilation for the student. Much more important than the
hearings was a piece of work going on quietly at the same time at
Senator Allison’s request: this was the actual preparation by an expert
of a bill which was to serve as a guide and model to the Committee. The
expert chosen was Colonel George C. Tichenor, a man who knew more about
the administration of our customs and had more authoritative notions of
what duties should be to meet a moderate protectionist program than
anybody then living. Colonel Tichenor had first come into touch with the
tariff in 1877 when he had been appointed by John Sherman, then
Secretary of the Treasury, a special agent of the Department. Here he
was so impressed with the importance of the question and possibly also
with the rarity of men who really knew anything about it, that he
determined to master all its intricacies. In 1881 he was sent abroad by
the Secretary to study undervaluations and the cost of production.
Colonel Tichenor spent some four years in different parts of Europe
seriously examining various sides of the tariff question. His studies
had led him to one conclusion which was of particular influence at the
moment, and that was that specific duties should replace ad valorem
wherever possible, the exact opposite to Mr. Mills’s conclusion. Colonel
Tichenor believed the ad valorem duty more equitable, but that human
ingenuity and dishonesty would always find ways of evading it, and that
as a result both the honest importers and the government would suffer.
It was to be expected that the administration should feel strongly about
undervaluations and be ready to accept almost any system which promised
to make them more difficult. The scandals arising from them had been
flagrant for years. These undervaluations were by no means due alone to
dishonest importers, they were due quite as much to dishonest and
incompetent customs-house officials, to bungling and tricky schedules,
and to a general belief in Europe that our tariffs _ought_ to be evaded.
Many of Tichenor’s recommendations had a value which time has
emphasized, such was his warning that specific duties could not be
placed arbitrarily without grave injustice; it would require time and
preparation to arrange them; such was his protest against “ambiguous
phrases, vague description, loose and uncertain definitions,
contradictory terms” in a tariff law, and his appeal for “plain, simple,
and definite terms.”
Colonel Tichenor had been continued in the Treasury Department after Mr.
Sherman left it by President Cleveland. He had been used indeed almost
as much by the Democrats as by the Republicans. The Randall Bill
referred to above was done largely by Tichenor and into it he had
introduced many of his favorite ideas. While he was working on the
Randall Bill, Mr. Allison had sought his help on the Customs
Administration bill; indeed, the latter was much more Colonel Tichenor’s
bill than any one else’s.
It will be seen then that the man to whom Senator Allison turned in the
spring of 1888 was thoroughly equipped to make a bill—that he did not
even have to begin at the bottom. He had one in hand, the Randall Bill
introduced in March but which had never been heard from since its
reference to the Ways and Means Committee. By readjusting the rates of
this bill to meet more perfectly Senator Allison’s ideas, Colonel
Tichenor soon turned over the document on which the sub-committee went
to work. It became apparent almost at once to those who knew what was
doing in the Committee that the rates in Colonel Tichenor’s bill were
being decidedly increased—a fact which seems to have caused Allison some
concern, for we find him writing to Tichenor in August, “You have seen
that the constant tendency here is to increase rates. How would this
suit our people in the West?”
In October (the 3d) Mr. Allison reported his bill to the Senate as a
substitute for the Mills Bill. The latter was so bad, he said, that it
could not be amended. There was nothing to do but prepare an entirely
new measure. What this measure was, _not_ Mr. Allison, but Nelson W.
Aldrich of Rhode Island, explained. This report is the first important
evidence we have of the powerful influence Mr. Aldrich had already come
to exercise in the Senate on tariff matters. It is also a complete
statement of the interpretation of protection which he had adopted and
to which he has been ever since faithful. Mr. Aldrich had been in the
Senate since 1881. In the making of the bill of 1883 his work for his
wool, cotton, and sugar constituents had been marked by those who
studied the debates and votes. From that time on business men interested
in tariffs had come to count on him more and more. By 1888 he had indeed
become more influential than either Sherman or Allison. The report he
now made shows that he had none of their leanings towards moderation,
none of their anxieties over the evils in protection which both had at
one time or another admitted, none of their dislike of complicated
schedules and classifications. Mr. Aldrich rejected every principle on
which Mr. Mills had worked. He was particularly hard on the attempt to
substitute ad valorem for specific duties. The most important work
Congress had in hand after taking care of the surplus was stopping
undervaluations, he declared; nothing but specific duties would
accomplish this. No expert knowledge was required for the enforcement of
specific duties by customs officials, “as the articles upon which they
are levied have only to be counted, weighed, or measured”; an
extraordinary statement when one remembers the scandals in those years
over specific duties on sugar; extraordinary also when one finds that
many of the schedules in the new bill, as in the law then in force, were
subdivided according to the value of the articles, and that in addition
to the specific duties on these classes were ad valorem duties. Thus Mr.
Aldrich, after denouncing ad valorem duties, presented a bill filled
with ad valorems laid on ad valorems! Sharp issue was of course taken
with Mr. Mills’s free list. Mr. Aldrich declared it destructive. The
Republicans had indeed pretty generally given up the idea of admitting
free any raw materials which were produced in this country. The notion
that if you gave to one you must to all had been steadily making
converts since the early ’70’s, and it was laid down emphatically now by
Mr. Aldrich as one of the tariff principles of the party. No free raw
materials where there is competition, but a long free list. Mr. Aldrich
called attention to the growth of the free list as a proof of the
party’s generosity. In 1847, he said, 88 per cent of the articles
imported were dutiable. This had been cut down in 1887 to 66 per cent.
This was a deceptive statement, for in that period the variety of things
imported had enormously increased, and besides the free list was made up
largely of articles so rare and unimportant that the ordinary person had
to consult the dictionary to know for what many of them were used. In
the nature of the case, it could matter little to consumers whether they
carried a duty or not. But increasing the free list had become a
favorite pastime with enthusiasts like Mr. Kelley. It was presented as a
proof of the interest that the protectionist had in the consumer!
The general reduction by the Mills Bill of rates on the articles where
the tariff affects the multitude, that is, on iron and steel and woollen
and cotton goods, was resented bitterly by Mr. Aldrich. He represented
the class of Republicans that had come to feel that protection had
created these industries and professed to believe that duties low enough
to admit foreign goods in free competition with them would be ruinous.
The Senate bill raised many of the rates considerably above what they
were in the bill of ’83, and in other cases lowered them, but still kept
them at a prohibitive point. Structural steel is a case in point. It had
begun to show the future which was before it as a building material
replacing wood, particularly in larger buildings and in bridges. Under
the bill of ’83 the duty had been 102¾ per cent. The Mills Bill made it
49.32. The Allison Bill now put it up to something over 91 per cent.
There was no possible justification for so high a duty. Steel beams of
foreign manufacture could be put down in the United States at that date
at about $27.00 a ton exclusive of the tariff. But steel beams were
selling in the United States at $66.00 a ton. The argument which raged
over this particular article was typical of the way the two parties were
handling the question. Senator Vest, in declaring the rate in the Senate
bill excessive, quoted an agreement between Mr. Carnegie and the Knights
of Labor as his authority for saying that the cost of turning a ton of
pig-iron into steel rails was $4.09, and that steel beams cost 30 per
cent more, or $5.32 a ton. In reply to this showing, Senator Aldrich
said that $4.09 was not a fair estimate of the cost of steel rails, that
it represented only the cost of turning pig-iron into steel rails. That
on fixing the duty on rails one should go back to the mines and take the
cost of the iron as it comes from the earth and the cost of changing it
into pig-iron. To which argument Senator Vest replied: “It seems to me,
with the greatest respect to the Senators from Iowa and Rhode Island
that the proposition is entirely absurd and without the shadow of
logical foundation. The pig-iron comes to the manufacture of steel rails
a finished product. The cost of the pig-iron had paid all the antecedent
cost of manufacture, and it would be just as forcible an argument to say
that if the tailor who makes my coat is to be protected, we are not to
take as a basis of calculation the cost of the cloth as it came to the
tailor’s shop, but we are to go back to the wool of the sheep, to the
cost of shearing, to the cost of washing, to the cost of carting, and
all this is to be added to the cost of the cloth, although the tailor
has already paid it.”
The opponents of the rates on steel products were loud in their trust
alarm. They certainly had an effective example to hold up. Mr. Carnegie
had begun to come into his own, as an illustration of what combined
transportation and tariff privileges can do for an able manufacturer. He
and his profits and his castle at Skibo figure in every debate on iron
and steel products at this period. Even Senator Aldrich had grudgingly
to admit a trust in steel beams, but he hopefully declared that if the
prohibitive duty was retained, domestic competition would destroy the
monopoly. Senator Sherman was not quite so hopeful as Senator Aldrich.
He was at last beginning to feel some doubt about the infallibility of
domestic competition.
The reduction of the revenue which both parties recognized as of chief
importance, the Senate bill sought to effect by the repeal or reduction
of direct taxes on whiskey, tobacco, and alcohol used in the arts, and
by reducing lower than the Mills Bill had the duty on sugar. An
important principle which Mr. Aldrich adopted in his report was Mr.
Kelley’s favorite argument that the way to reduce was to raise rates so
high that people could not afford to import: that is, reduction by
increasing taxation. Another significant feature of the document was the
complete repudiation of the old promise to reduce rates when the
extraordinary expenses of the Civil War had been fully met. “The
practical question which we have to solve,” said Mr. Aldrich, “is not
the date when duties were established or the circumstances or promises
under which they were levied; but, the desirability of protection being
conceded, it is what rates are proper and adequate under existing
circumstances.” Equally significant was the almost exclusive attention
Mr. Aldrich’s report gave to the manufacturer and his laborer. To hear
him one would have gathered that the interests of the consumers could
not be served except through protection. The almost exclusive attention
given to the manufacturer by the Senate bill was only an expression of
the appeal which the Republican party was making in the campaign for the
presidency. The platform of the party had declared, “The protection
system must be maintained”; such a revision must be made as would “check
imports of such articles as are produced by our people, the production
of which gives employment to our labor, and releases from import duties
those articles of foreign production, except luxuries, the like of which
cannot be produced at home. If there still remains a larger revenue than
is required for the wants of the government, we favor the entire repeal
of internal taxes rather than the surrender of any part of our
protective system, at the joint behest of the whiskey trust and the
agents of foreign manufacturers.” It was practically a declaration for
prohibitive tariff, nothing else indeed would “check imports of such
articles as are made by our people.”
There is no doubt that the party was driven to this extreme position on
protection by its own political difficulties. The Mugwump movement out
of the party in the early ’80’s, due partly to the failure of the
leaders to keep faith on the tariff, and more to the general corruption
in its service and its methods, had cost them the election of 1884. Mr.
Cleveland had stolen their thunder as revisionists when he put boldly to
the country a doctrine very like that which they had publicly proclaimed
in 1872 and 1880. The only element in the country they could rely upon
in 1888 was the manufacturers, and they could only rely upon them when
they gave them what they asked. Particularly necessary was it that they
produce a bill which should in principle and practice satisfy the Iron
and Steel Association. This organization had come to take the same
political relation to the tariff that the Industrial League had held
earlier. Like its predecessor, it aspired to choose chairmen for the
Ways and Means Committee, to name presidents, and to write tariff bills.
Its position in the Republican party in 1888, which was close to that of
a dictator, was due almost as much to the recognition it had received
from Mr. Blaine as to its own energy and efficiency. As we have seen,
Mr. Blaine in the ’70’s had thought it good politics to serve the
Industrial League in any way he could. When the Iron and Steel
Association gradually replaced that organization he followed the same
practice and in 1884, took one of its leading members, B. F. Jones of
Pittsburg, as chairman of the Republican National Convention. Mr.
Cleveland’s election, and the popular revolt against the high tariff
attitude, had only quickened the determination of the Iron and Steel
Association to protectionize the country, to get out of the way all
pestiferous Republican tariff reformers, all free-trade and
tariff-for-revenue only Democrats. They began on the Congressional
districts and did some most effective work. Their most brilliant stroke
was defeating William R. Morrison of Illinois in 1886. For years Mr.
Morrison had represented his District in Congress. He had won the
hostility of the Iron and Steel Association by his aggressive fight on
protection, and it decided he must go. In the fall of 1886 John Jarrett
of Pittsburg, a former president of the Amalgamated Iron and Steel
Association and at the time president of the Tin Plate Association, went
into Mr. Morrison’s district, and by free use of money, “$3.00 a day and
all necessary expenses” according to his own published letters, had
organized a large body of laborers to work for protection. There were
some bitter charges made against Jarrett’s methods; whatever they were,
and it seems from the evidence that they were “bribery and hiring,” they
were successful. Mr. Morrison’s majority was changed to a substantial
minority.
When it came to the campaign of 1888 the Iron and Steel Association
decided that the most critical point was the chairman of the National
Republican Committee. Jones had made a fiasco of the campaign of 1884—no
more practical business men were wanted. The one man the Association did
want was Senator Quay of Pennsylvania. But Mr. Quay had a record behind
him that he was none too anxious to have aired, and he did not want the
work. The Iron and Steel Association, however, had determined that he
must serve, and in July, a few days before the National Committee met,
James M. Swank, who had been secretary of the Association since 1873 and
its general manager since 1885, a position he still holds, and who for
many years has managed every tariff campaign in which his Association
has been interested, took matters into his own hands and telegraphed
General Harrison’s managers that it was Senator Quay alone who would
meet the approval of the financial interests of the East. Without his
knowledge Senator Quay was appointed. He had not been in favor of
Harrison’s nomination, had only consented to it when he found John
Sherman, his own candidate, could not be named, and even then not until
he had assurances from Indianapolis that Pennsylvania should have a seat
in the cabinet. Nominated by the committee, he finally accepted. The
first person Mr. Quay consulted was John Wanamaker (who afterwards
received the seat in the cabinet which Mr. Harrison had promised
Pennsylvania), who saw to the funds. As to Mr. Quay, he saw to using
them to oil and fire the remarkable campaign he set in force—a campaign
for protection backed by the protected. The highest Republican political
authorities have declared repeatedly that only Quay could have won the
campaign of 1888.
It is doubtful if there has ever been a political campaign in the United
States where the appeal for money was so frank—the acknowledgment that
success depended upon it so open. For several years the party had been
relying more and more on the use of money and had also been less and
less nice about how it used it. It was an open secret that Indiana had
been carried in 1880 by the “bright new crisp two-dollar bills” of
Stephen W. Dorsey, secretary of the National Republican Executive
Committee. The dominant faction of the party seemed indeed to think
Dorsey’s work nothing more than a clever trick; no less a person than
General Arthur, soon to be inaugurated as Vice-President of the United
States, boasting of it at a dinner at Delmonico’s in February, 1881,
said, “Indiana was really, I suppose, a Democratic state. It had been
put down in the books always as a state that might be carried by close
and perfect organization and a great deal of ——” General Arthur
hesitated, while everybody laughed. “I see the reporters are present,”
he continued; “therefore I will simply say that everybody showed a great
deal of interest in the occasion and distributed tracts and political
documents all through the state.”
The struggle for money in 1884 had been almost pathetic. Mr. Jones had
of course the richest group in the country to draw from—the iron and
steel manufacturers, and he gave liberally himself,—$87,000, it was
reported at the time. He did not get enough, and a few days before the
election, October 29, a dinner was given in New York for the express
purpose of raising funds: a millionnaires’ dinner, at which were
represented all the various “special interests” of the day, not tariff
interests alone, but the railroads, the Standard Oil Company, monopolies
and privileges generally. Large sums of money were pledged at this
“Belshazzar’s Feast,” as the newspapers dubbed it. Who gave, and how
much, were of course not recorded. David Wells said that he had it on
the best authority that Jay Gould and John Wanamaker each contributed
$100,000, but what his authority was the author does not know. Campaign
contributions were not in as bad order in 1884 as they are to-day, but
there was still a certain sense that contributions of $100,000 to
campaign expenses, made on the eve of an election, were suspicious, and
there is no doubt that the “monopoly dinner” helped defeat Blaine.
Another practice carried to the scandal point in the campaign of ’84 was
that of extracting contributions from government officials. In Indiana a
political manager informed the Federal employees that a list of the
names and amounts given by each person would be carefully made out and
the same reported to the National Committee, and a list would also be
made of all persons who did not contribute. Quarters were set up in
Washington purposely to work the government employees. In 1888 these
proceedings were not repeated by the Republicans, and rumor that the
Democrats in Chicago were attempting them caused a violent discussion in
Congress.
The money precedent was well established then in the party and in 1888
the managers began as early as May, before the Convention nominated
Harrison, to gather it in. The Mills Bill, with its free list, ad
valorem duties, and reduced schedules, was still in debate, and
naturally the money-getters appealed to the protected. James P. Foster,
President of the Republican League of the United States sounded the
slogan for the campaign in a letter which stated with amazing frankness
the feeling the Republicans themselves had about who was getting the
benefit of the “bulwark of prosperity.” It was the manufacturers,
particularly the manufacturers of Pennsylvania, who being the most
highly protected, ought to be “put over the fire and all the fat fried
out of them.” Throughout his campaign Mr. Foster kept up this cry for
“fat.” Another organization as active in money raising as Mr. Foster’s
Republican League was the Tariff League founded in 1884 by Robert
Porter, one of the members of the Tariff Commission of 1883. This League
took itself with great seriousness and taught the doctrine pure and
undefiled without qualification or hesitation. It divided none of the
glory of prosperity with the energy and the thrift or the natural
resources of the country. We were what we were because of protection and
protection alone. The officers of the League undoubtedly believed in
what they said, and they raised money as men would to spread the Gospel.
It was impossible that money raised from men interested as beneficiaries
of protection were, should be all used without scandal. The one implies
the other. Perhaps the most notorious incident of misused funds occurred
in General Harrison’s own state.
But quite apart from the corruption which went on, a great debate
characterized the campaign,—a debate which followed the line of the
House arguments on the Mills Bill, of the Senate’s on the Allison Bill.
The speeches in the two Houses were indeed campaign speeches, addresses
not to a deliberating body, but to a balloting constituency. The
Democrats depended mainly on the cry of excessive taxation. Their
platform had rung the changes on the word until it almost lost its
effect from over-repetition. The Republicans seized the opening and
answered them with jeers. In New York City they even carried parrots in
their processions taught to cry “tariff is a tax.” The high prices of
certain necessities like woollen garments due to the tariff was another
effective Democratic argument. General Harrison dismissed it lightly. “I
have an impression,” he said, “that some things may be too cheap” “cheap
coats involve cheap men.” There could have been no better epigram for
those bent on keeping up prices. Argue as the Democrats would that the
man who had to pay $20.00 here for a suit that would cost him but $10.00
abroad, would be better off if he could put his extra money to other
uses, the Republicans could cry “But without the tariff he would have no
twenty dollars, he would have no ten, for he would have no work!” The
fallacy that there would be nothing to do in the country if protection
did not enable men to manufacture was insisted on continually. Moreover,
the Republicans would not admit what was, and still is, true, that the
great body of wages in protected industries is less than in the
unprotected. The trusts figured repeatedly in the attack on the
Republican position, only to be waved aside, as by Mr. Blaine. “Trusts,”
he declared, “are state issues,” “they have no place in a national
campaign.”
The Republicans were not without good ammunition. The Democratic
revision was full of inconsistencies as any revision made as ours are,
is bound to be. It did show geographic bias. Moreover, the Democratic
position had the disadvantage of being an attempt to meet a condition
and one not of their making. They might be free traders as a few of them
were; they might be tariff-for-revenue only men, as most of them were,
but when it came to making a tariff bill they felt themselves obliged to
fix duties not only with revenue and reform in mind, but with protection
as well. The Republicans could taunt them with inconsistency and
cowardice and describe their revenue duties as disguised protection to
their own friends. And in the same breath that they accused them of
protecting their friends they anathematized them as “free-traders,”
friends of England, enemies of their own countrymen.
The Republicans won the election, though not overwhelmingly. As a matter
of fact, Grover Cleveland had a majority of 100,000 of the popular vote.
It was not the tariff which gave them the victory. Their victory would
have been a defeat if it had not been for the Democratic split which
gave them New York, and the return to their fold of a certain Mugwump
Republican element which had revolted in 1884 and now came back because
dissatisfied with Mr. Cleveland’s civil service work.
CHAPTER VIII
THE McKINLEY BILL
There has not been a presidential election in our time when the tariff
positions of the two great parties were as perfectly defined as in 1888.
Each had a bill practically complete to offer the country. The
Republicans had elected a president and the majority of the House of
Representatives. It was natural that they should now demand that their
bill be at once adopted. Although the Allison Bill had been practically
finished before the election, it had not been sent to the House, because
it was claimed that the Democrats were malicious enough and Mr.
Cleveland clever enough to pass it in order to have a completed reform
to go to the country on. The Senate bill being what we have seen, and
Mr. Carlisle and Mr. Mills being the leaders of the House, such action
was of course unthinkable, but it was an excuse as good as another for
not sending in the bill, and no doubt was accepted by the devout.
As soon as Congress met in December the Allison Bill was taken up, again
compared with the Mills Bill, and finally on January 22 passed as an
amendment to the latter. In sending the bill over to the House the
Senate suggested that it be referred to a Conference Committee of the
two Houses. This was to avoid the objection the Democrats were sure to
raise, that the Allison Bill was a violation of the Constitutional
provision that all revenue measures must originate with the House. Mr.
Reed and Mr. McKinley both urged the Conference. To Mr. Reed it was an
absurdity that the rules in force could prevent prompt action. At least
if the Democrats did refuse to allow a conference on the bill, he wanted
to make sure that the country understood that it was not the Republicans
who were delaying action in the all-important matter of reducing the
revenue; it was the Democrats, the very gentlemen who had so long and so
loudly urged the necessity of action!
Mr. McKinley’s proposition sounded reasonable. “The House,” he said,
“has given to the country one bill framed upon one principle and based
upon the line of party policy with which the majority is in accord. The
Senate has given to the country another bill resting upon an entirely
different principle and following out an entirely different line of
public and party policy. The Senate has asked the House to consent to a
committee of conference to consider the disagreement so presented, that
they may see if in some manner this great difference between the two
Houses cannot be reconciled.
“Now, what do we want to do as practical men? What does the country
expect of us? We want to reduce the public revenues and we can reduce
them without my friend from Texas being called upon to surrender one jot
of his free-trade principles or this side surrendering one jot of its
protection principles. If the House of Representatives meets the Senate
in free and open conference and those provisions are adopted where the
two bills meet on common ground, we can reduce the revenues from
thirty-five to forty millions of dollars and still preserve for future
settlement the general policy of taxation respectively adhered to by the
two parties.
“All we have to do, Mr. Speaker, is to take up these two bills and look
at the duties and changes in rates which are common to both. First, the
abolition of the tax upon tobacco—$30,000,000; that is common to both
bills. Then you take the free list; that is common to both bills. Then
you take the administrative features of both bills. Both seek the same
purpose; both look to an honest collection of the revenue and an honest
administration of the customs laws.
“This administrative bill has nothing to do with politics; it has
nothing to do with free trade; it has nothing to do with protection; it
has nothing to do with party principles or policies. It is above
politics and should be divorced from party. But it has everything to do
with an honest administration of the customs laws, whether they are
based upon the principle of protection or upon the principle of free
trade.
“Now, why not, as practical men, seeking to relieve the Treasury of the
United States of its congestion, as described by the President of the
United States, meet this condition and relieve the Treasury of its
accumulating surplus and leave this vast sum of money with the people,
where it belongs? ‘It is not a theory; it is a condition.’ Shall we run
away from the condition which we can in part relieve, or waste our
valuable time now upon theory?”
The answers of Mr. Mills and his supporters to these arguments were as
indignant as to be expected. “Mr. Speaker,” said Mr. Mills, “we have
sent to the Senate a bill to reduce taxation. They had originated in
that Chamber, or were preparing before we sent this bill to them, in
defiance of the Constitution, a bill increasing taxation on the people
of this country, an act which they were prohibited by the great charter
of our fathers from doing. They have sent that bill so prepared here in
defiance of the rules of this House, and it is now proposed that we
accept their invitation to appoint a committee of conference and pass
this extraordinary measure, and that, too, at a time when the coffers of
this Government are loaded with the excess of revenue, at a time when
the people of this country are groaning with unnecessary taxation; a
bill to reduce the revenues by destroying the commerce of the country
and increasing the load of taxation upon the people for private
purposes.”
Mr. McMillan was equally severe: “The gentleman from Ohio (Mr. McKinley)
has not even pretended that this Senate bill is an ‘amendment’ to the
House bill. He could not. He is too intelligent to believe it and too
candid to assert it. It is, as he describes it, an entirely different
bill; a distinct proposition framed on a different ‘theory.’ As a matter
of fact, the Senate does not assume to amend the House bill. The Senate
struck out every section of our bill or threw it aside and framed one of
their own. In doing so they violated the Constitution, and they now ask
us to meet them in conference and concur in this demolition.
“What I want to know of the members of this House is, are you ready to
do this in the face of that declaration of the gentleman from Ohio that
this is a different and new bill? Have you so far degenerated from those
principles that your sires held of adherence to the Constitution as to
be willing at the request of the gentleman from Ohio to give up the
people’s right to frame a bill in accordance with the people’s
principles, and give it over to the Senate, not elected by the people
directly, but by the states? Others may do as they please, but for me, I
will never, never consent to such a cowardly and ignoble degradation of
the rights of the people and the privileges of the House.”
The Allison Bill went to the Ways and Means Committee and that was the
last of it under the name of the gentleman who had led in its making.
It was not until a year after its election that the new House got a
chance at the tariff. In his first message to Congress President
Harrison had recommended a revision of both the schedules and the
administrative features of the tariff. He feared, he said, that some
disturbance of business might result from the consideration of the
subject, but he was certain that this would be reduced to the minimum by
“the assurance which the country already enjoys that any necessary
changes will be so made as not to impair the just and reasonable
protection of our home industries.”
The new organization of the House and of the Ways and Means Committee
was admirably adapted to put through a bill satisfactory to the dominant
faction of the party—also a bill in which the manufacturer would get
what he asked. The chairman of the Committee was no longer William
Kelley. Mr. Kelley was in his last illness and the man who for nearly
six years had been his chief lieutenant had taken his place. This was
William McKinley of Ohio. In 1883, it will be remembered, Mr. Kelley
thought he had found his successor in William D. Haskell of Kansas. Mr.
Haskell had shown unusual ability both as a parliamentarian and a
debater, but the work of the session had been too much for him. He did
not recuperate from the strain through the summer, and twelve days after
Congress opened in December, he died in Washington. Kelley wept like a
child when he heard of Haskell’s death. “Why could not I have gone in
his place,” he said; “my work is nearly done, his was only begun.” But
Kelley was not alone. Close to Haskell throughout the winter of
1882–1883 had been another young protectionist, one in whom Kelley had
great and affectionate confidence. This was William McKinley. Indeed, it
had been uncertain at the beginning of the movement for tariff reform in
1880, whether Haskell or McKinley would become Kelley’s first
lieutenant. The former had won by his superior energy and superior
intellect and it is altogether probable that he would have kept his
place if he had lived. At his death McKinley naturally succeeded him. At
that time he was about forty-five years old. He had been in Congress
since 1876, and from the first the tariff had been his chief interest.
His amiability, his earnestness, his almost devout attitude towards the
dogma of protection, endeared him greatly to Kelley, and by the time the
debate on the Mills Bill came on he was firmly in place. His speeches in
that debate and the campaign which followed were among the most popular
made. McKinley had an advantage at that time which few of his colleagues
enjoyed,—that of believing with childlike faith that all he claimed for
protection was true. Moreover, he had no tariff reform record behind him
as the best of them had; no speech like Allison’s of March, 1870, could
be thrown up at him. Moreover, McKinley was one of those amiable persons
who likes to agree with everybody, and even when President, rarely sent
away a visitor without making him feel that they agreed more than they
differed. He was friendly with many of the Democrats, particularly
Colonel Mills, and often consulted him at vexing points. Believing, as
McKinley did, in the infallibility of protection, there could not be too
much of it; he could with clear conscience give all that the
manufacturer asked, and then add a little, confident that he was really
fostering prosperity.
But at this particular moment it needed something more than an ardent
and amiable chairman to put through the House of Representatives such a
bill as it was obvious would be reported. There was a majority of but
twenty-one, and with the rules as they were, almost endless obstruction
was possible. The probability was, too, that the Democrats would see
that all the obstruction possible was applied. The speaker the
Republicans had chosen could be counted to take care of this situation.
This was Thomas B. Reed of Maine. Mr. Reed was, like McKinley, a
protectionist, but he never regarded the dogma as inspired. His
well-developed humor, his cynicism, and his large practical sense all
helped him to view it for about what it was worth. But that made him no
less strenuous a supporter. Indeed, it made him a more adroit and
effective one. You could tell beforehand about what phraseology Kelley
or McKinley would offer in defence of a schedule. Reed could be counted
on for the unexpected. He had no patience with delaying the tariff bill.
He believed in doing what the majority wanted done,—when he agreed with
the majority,—and he laid down at the start in defiance of precedent a
set of orders which enabled him to force rapid action.
When Mr. McKinley called the Committee on Ways and Means, it had before
it two bills carefully prepared by members of his own party, providing
for what President Harrison had pointed out in his message should be
done. These were Mr. Allison’s Customs Administrative Bill, which after
passing the Senate had been referred to the Committee nearly two years
earlier (March, 1888), and the same Senator’s Tariff bill which in
January of 1889 had been referred to the House as an amendment to the
Mills Bill. Both of these measures were thoroughly familiar to Congress
and the country. McKinley seems to have had the idea at first of making
a tariff bill which would include administration as well as duties, but
Colonel Tichenor, who had been appointed Assistant Secretary of the
Treasury in charge of customs and internal revenue, urged so hard for
immediate action on the Administrative Bill that McKinley finally
introduced it separately and it was promptly passed and signed by the
President. This is practically the law under which our customs are still
administered. It is usually credited to Mr. McKinley, but with its
framing he had, as we have seen, very little to do.
Hearings on the tariff were at once begun. They perhaps were never less
justifiable. The Committee had as a guide a great mass of recent
testimony which further hearings could do little more than duplicate.
But Mr. McKinley took the whole matter too devoutly to omit any of the
ceremony. Hearings were a good Republican tradition, and hearings he
would have. His was to be no “Dark Lantern bill,” as the opposition
delighted in calling the Mills Bill.
The Allison Bill was accepted as a foundation by Mr. McKinley for the
new measure which was first reported on April 16. In reporting the bill
Mr. McKinley gave notice that general debate would be limited to four
days. “I have interpreted the victory to mean, and the majority in the
House and Senate to mean,” he said, “that a revision of the tariff was
not only demanded by the votes of the people but that such revision
should be on the line and in full recognition of the principle and
purposes of protection. The people have spoken and want their will
registered and their decrees embodied in public legislation.”
Mr. Mills and his colleagues were eloquent in their remonstrances
against the limit on the debate, but the program was in too firm hands
to be modified by arguments or tactics. The bill passed the House on May
21. The Senate Committee on Finance added hundreds of amendments to it,
and the Senate spent some seven weeks debating it. On the 10th of
September it passed the upper House and was referred to a Conference
Committee. Both Houses agreed to the report of this Committee, and the
President signed the bill and it became a law on October 1, 1890.
The matter of first moment in the new bill was of course the method
taken for reducing the surplus, which had been piling up in an alarming
fashion throughout the three years’ struggle. When Mr. Cleveland made
his demand in 1887 for general tariff reduction in order to bring this
overtaxation down to a normal figure, the Republicans had offered as a
counter proposition—“spend it.” Mr. Blaine started the cry in his letter
from Paris suggesting one of the most dubious schemes for handling
revenues ever proposed by an American public man of any weight. It was
to appropriate the whiskey tax (the internal revenue tax on distilled
spirits amounted in 1888 to over $69,000,000) to coast fortifications.
If there was something over after this was done and the National
government had no use for the money, he would divide it among the
Federal Union, with the specific object of lightening the tax on real
estate. Mr. Blaine evidently had forgotten for the moment that the
Constitution in defining the taxing powers of Congress does not include
that of “lightening the tax on real estate.”
There had been various other plans offered. Mr. Aldrich would apply the
surplus to the purchase of United States bonds, or as a prepayment of
interest on the National debt. One Congressman wanted it applied in
bounties to wheatgrowers, another wished it loaned, another would devote
it to building the Ead’s ship railway, several proposed using it in
elaborate educational schemes. The general consent that the best way to
get rid of it was to spend it, of course made Congress reckless in
appropriations, particularly of pensions. They jumped from $87,500,000
to about $107,000,000 in Harrison’s first year, and in his fourth year,
they had risen to $159,000,000. But spending it was not enough. The
taxes must come down some $60,000,000 a year and the Republican
suggestion had been, “cut down the internal revenue.” The Republican
platform declared, “We favor the entire repeal of internal taxes rather
than the surrender of any part of our protective system.” Mr. Allison
and his committee considered many suggestions for the repeal of all
internal revenue taxes but stopped after taking them off tobacco. Mr.
McKinley announced that he had not been compelled to abolish the
internal revenue though he was ready to do so if it was necessary to
save the protective system. He estimated that the taxes on tobacco and
alcohol used in the arts, which his bill did abolish, would amount to
$10,000,000. The other $50,000,000 of reductions he proposed to meet in
two ways. The first was by so increasing duties that importations would
fall off, _i.e._ Mr. McKinley accepted the principle of Mr. Kelley and
Mr. Aldrich that the way to reduce revenue from customs is to make
foreign goods which might compete with domestic products too dear to
buy. When the Democrats attacked his increase with the assertion that he
would increase taxation and so revenue, he answered: “That statement is
entirely misleading. It can only be accepted upon the assumption that
the importation of the present year under this bill, if it becomes a
law, will be equal to the importations of like articles under the
existing law; and there is not a member of the Committee of Ways and
Means, there is not a member of the minority of that Committee, there is
not a member of the House on either side, who does not know that the
very instant that you have increased the duties to a fair protective
point, putting them above the highest revenue point, that very instant
you diminish importations and to that extent diminish the revenue.”
The chief articles which he hoped to make too dear to import were
woollens and higher grade cottons, cotton knit goods, stockings, linens,
and all iron and steel and metal products, the articles, it will be
noted, which are essential to everybody. It was not necessary to raise
the rates on all these products to make them too dear to import. Not a
few rates then in force could be lowered and still be prohibitive. Thus
in the case of structural steel and steel rails, the McKinley bill
reduced the existing rate slightly without in the least disturbing the
situation.
Mr. McKinley’s pet duty in the metal schedule, and indeed in the bill,
was that on tin plate. There had been a duty of a cent a pound on tin
plate for some years and throughout much of this period there had been a
steady pressure to raise it to 2½ or 2½ cents. In the early ’70’s there
had been a little tin plate manufactured in the country. The price at
the time had been abnormally high on account of the Franco-Prussian War
and the premium on gold. When things dropped back to normal, the
industry lagged. But the would-be manufacturers—and many makers of iron
plates naturally wanted to turn them into tin plates—for ten years at
least had kept up an agitation. The tariff commission of ’82, through
Commissioner Oliver’s influence probably, had advised 2½ cents, but
Congress refused to raise the duty in the Bill of 1883. The Tin Plate
Association and the Iron and Steel Association continued their work. An
increased duty on tin plate became, in a way, in the ’80’s, a test of a
Republican’s soundness in the minds of the big interest which had put
themselves behind the party. If he hesitated, recalled that we had
developed no tin mines, that inevitably the price would be higher for a
long term, that such a duty would be a blow to an industry many times
greater than tin plate could ever be,—that of canning,—that the burden
would fall directly on the poor, they being the chief consumers of tin
buckets, and cups, of canned fish, meat, and vegetables—the answer was
the answer of “Pig Iron” Kelley!—“In God’s name do not let the gentleman
lead us to declare that the people of this country shall never
manufacture tin plate!”
With the Iron and Steel Association taking the important place it did in
the campaign of 1888, it was of course inevitable that the Allison Bill
should recognize its demand for an advance on tin plate. Mr. McKinley
found the duty then in the bill he inherited and Mr. Allison, who
believed sincerely that the tariff on tin plate had justified itself,
was sore to the day of his death because Mr. McKinley never credited it
to the Allison Bill. It is doubtful if an important duty was ever laid
on facts so distorted and in answer to pressure so questionable. The
chief advocate was the American Tin Plate Association. Their circulars
went out broadcast as appeals to patriotism. “If this little circular
should fall into the hands of a patriotic lady or gentleman,” wrote the
Secretary in a circular which was printed in 1888, “we ask that you
kindly give this matter some study; it is a patriotic feeling and
nothing else that instigates the members of this association.” The
patriotic lady or gentleman who had given the circular study would have
found it started with a statement so absurd that he would have only
continued because of the amusement he might get from it. According to
this circular we consumed about $35,000,000 worth of tin plate a year
(the figure was greatly exaggerated), and “if it were made in this
country several hundred thousand residents of the United States would
gain a livelihood thereby.” If the value of the tin plate consumed were
$35,000,000 and the sum was divided into one-third for materials and
two-thirds for wages and the “several hundred thousands” were reckoned
as 300,000, their annual wages would have been about $78.00 a year!
Mr. McKinley saw a wonderful future for the industry—23,000 men employed
directly in the business (in 1900 there were 4000; in 1905, 5000),
$30,000,000 of capital invested (in 1905 it was $10,000,000). He did not
seem to think there was any impropriety in a part of the capital ready
to go into tin plate making, being that of a member of the House long a
supporter of the duty, F. G. Niedringhaus, of Missouri. This gentleman
wrote on November 27 a letter read in Congress by Mr. McKinley, saying
one of his mills had been arranged for tin plate work and in case of a
“proper duty,” he could turn out tin plate on short order, and “if the
fact as I believe it to be can be generally established in the minds of
the people, _that the Republicans will continue to govern this country
in the future_, there will be plenty of money forthcoming to embark in
the manufacture of tin and terne plate.”
The violent attack upon this duty and the very plausible reasons for
believing that the industry could never be selfsupporting, led to the
adopting of an ingenious provision, limiting the time that manufacturers
might have to establish the business. Tin plate was to be admitted free
of duty after October 1, 1897, unless in some one of the years between
1891 (when the duty was to go into effect) and 1897, one-third as much
tin plate was produced here as was imported in any one of the other six
years. This clever device originated with Senator Spooner of Wisconsin.
The Tin Plate and Iron and Steel Associations practically wrote their
own schedules in the McKinley Bill. The wool growers and woollen
manufacturers did the same. A series of poor years in wool occurred in
the ’80’s. There were legitimate causes outside of the tariff for the
depression, but a large and influential part of the industry believed or
professed to believe the trouble to come solely from reductions in
duties made in 1883. These reductions had disturbed the “harmony” in
wool which they claimed the growers and manufacturers had established in
1867, and which they now loudly affirmed must be restored if the two
branches of the industry were again to be prosperous. There were long
petitions presented by manufacturers asking for free wool, arguing that
the industry could never hope to compete until it was on an equal
footing with other nations in the matter of raw materials; but this
point of view was not supported by the National Association of Wool
Manufacturers, which by this time had become one of the most powerful
political organizations in American industry. It held that the
manufacturer must support the duty on wool if he did not wish to set the
growers against the duty on woollens. It had been established in 1867
“almost as economic law,” Mr. Whitman, the president of the organization
claimed, that the wool-grower was to have his duty, and that the wool
manufacturer was to be given two kinds of duties, one which would
compensate him fully for the tariffs on his raw materials, not only wool
but dyestuffs, and that after that, he was to have the same measure of
protection that other industries received. Mr. Whitman claimed that the
lowering of the compensating duty in 1883 had particularly disturbed the
“economic law.” As we have seen, this duty had been dropped from 50 to
35 cents. In making this drop the Committee had decided that it was a
mistake to count 4 pounds of grease wool to one pound of cloth as had
been done in 1867, since 4 pounds were rarely used. It had said that 3½
pounds was a generous allowance—as it was. Mr. Whitman remonstrated
against this decreased compensation. He wanted the duty based on the 4
pounds and he wanted other upward revisions. The program proposed by the
Association was practically adopted. It contained one curious provision
new to the wool schedule and important in the later history of the
tariff; that was a duty on tops and all wools and hair advanced beyond a
washed condition. Tops are wool in one of the early stages on the way to
yarn. Mr. Whitman, asked how the cost of making tops compared with that
of making yarn, said it was about one-half. In the same examination Mr.
Whitman also said the principle which he wished applied in the fixing of
the duties was that there should be a higher duty on cloth than yarn, on
clothing than cloth, and he suggested that the relative per cent of the
three should be 40 per cent for yarn, 50 per cent for cloth, and 60 per
cent for clothing. As to tops, which could be made according to Mr.
Whitman at one-half the expense of yarn, he suggested for them a duty
_not_ lower, as one would expect from the “principle” he had himself
laid down, nor indeed did he fix a direct duty. Mr. Whitman suggested
that the rate on tops be that fixed for the basket or catch-all clause
of the schedule. Turning to that clause we find it to be not _less_ than
the rate on yarn, but considerably _more_. The suggestion was embodied
in the McKinley Bill apparently without anybody except Mr. Whitman
understanding its motive. Other suggestions of the manufacturers were
also adopted, resulting in increased protection on those classes of
goods where there was any amount of importation. Generally speaking, the
efforts of the manufacturers was to secure advances in both the wool and
cotton schedules where competition still persisted.
The wool growers were equally successful. The duties were raised on the
various classes of wool. Moreover, the duty on shoddy, mungo, and wool
wastes which had been low were raised so high that importation became
impossible. This change was made on the imperative demand of the Ohio
“Wool Trinity,” who declared these substances were taking the place of
pure wool and so injuring the wool-grower. The same argument was largely
responsible for an increased duty on carpet wool. We grow no carpet wool
in this country and probably can never afford to do so, our land and
labor being too valuable. The wool-growers contended, however, that the
manufacturer was using carpet wool in making cloth and that they must be
protected against this injustice. It is probable that considerable
carpet wool does find its way into some grades of cloth, but not enough
to have any effect on domestic wool production.
The largest lump of reduction provided for in the new bill came by
making raw sugar free and by reducing the duty on refined sugar to
one-half a cent a pound. The revenue from sugar was so great, about
$55,000,000 annually in this period, that the schedule had been a
favorite point of attack for years, when reduction was necessary. There
were two difficulties in the way of the Republican protectionist in
reducing the duty on raw sugar. The American sugar cane and American
sugar beet growers under the high duty which they had been enjoying had
come in 1890 to produce about one-seventh of the sugar we used. This
amounted to something like 220,000 tons. Of this amount only a little
over 3000 tons were made from beets and sorghum. Small as was the
amount, the beet and sorghum advocates were as insistent in their
demands for protection as the tin plate people. The Kansas (sorghum) and
California (beet sugar) Congressmen were certain that, properly
protected, these states would produce great quantities of sugar, and it
is pretty certain that they were ready to fight the tin plate, wool,
cotton, or any other duty if their demands were not granted. Take care
of them and they would soon grow all the sugar the United States could
eat, they said. Their product, small as it was, caused high
protectionists like Kelley, Haskell, and McKinley to rejoice. It was
proof of what they claimed—protection did diversify industry, and
Kelley, at least, always carried in his pocket a sample of beet sugar
raised in this country to show to the doubting. At the same time even
Kelley and McKinley found it hard to defend a tax of $55,000,000 a year,
to protect an industry which after a century’s experience had been able
to supply no more than one-seventh of our wants. The sugar bill was
really staggering when it came to be counted up for the century as one
advocate of free sugar did; he estimated we had paid $1,400,000,000 in
the period. To cut down this tax and at the same time to satisfy the
growers, Mr. McKinley proposed that raw sugar should be free and that
the sugar-growers should receive a bounty. The idea did not originate
with his committee. It had been a provision of the Allison Bill to which
Mr. Allison confessed he came slowly, but which he had consented to try
“as an experiment.” It had been a hobby of various members for years.
John Sherman had long believed in sugar bounties and had often advocated
them. In 1888 Joseph Cannon of Illinois had proposed a bill providing
for free sugar and bounties for growers. There were many Republicans who
baulked at the idea, declaring it unconstitutional. They might not
object to an indirect tax like a custom duty, being so applied as to
subsidize the man’s business, but when it came to appropriating
undisguisedly to this purpose funds raised by taxation they could not
consent. It was a case of a distinction without a difference, however,
and as they became familiar with the idea the scruples of many of them,
enough of them at least, to pass the bill, seem to have disappeared.
The bounty provision gave a fine opportunity to Mr. Mills. According to
his way of thinking it was a “bribe,” an “extortion,” a violation of the
Constitution, and where might it not lead? Why should not everybody have
it? Why should not the “people who are raising corn, cotton, wheat,
oats, hogs, and beeves, all slip up the counter and say ‘we will take
sugar in ours, too.’” It is difficult to believe that the sugar bounty
could have survived a test before the Supreme Court. The Constitution is
quite clear in the definition of the taxing powers it gives to Congress.
It is for the “general welfare.” If this means anything, it means that
the tax shall be for a public purpose; or, as Richard Olney has defined
it, “It is the power to raise money from the public for the public.” No
stretch of the Constitution could include in this definition the power
of raising money to help a few farmers raise sugar beets and sorghum,
any more than it could to pension an artist while he learned to paint.
The duty fixed on refined sugar in the McKinley Bill was intended as an
attack on the monopolistic powers of the so-called “Sugar Trust.” The
official name of the sugar trust in 1890 was the Sugar Refineries
Company. It had been formed in 1887, but the operations of the leading
concerns which organized it had long been a scandal. In those years, as
now, these beneficiaries of the nation’s tariff policy had worked in
every conceivable way to avoid paying the duty on their imported raw
sugar. False weighing, under-classification, over rebate duties for
drawbacks on exports, adulterations, were methods they practised boldly
and repeatedly in the ’70’s and ’80’s in their effort to cheat the
government. The sugar schedule had lent itself admirably to the
manipulation. The aim of the trust was, of course, to keep out all sugar
which was eatable, _i.e._ they aimed to supply the country. Now the line
between refined and unrefined sugar is difficult to draw strictly. There
are high grade clean raw sugars, and partially refined sugars which may
be used without further treatment. These sugars are of course cheap and
bought by the poor. The refiners aim to keep the duty on this class of
sugars, known in the schedule as Nos. 13 to 16, Dutch Standard (the
Dutch Standard is a color test) so high that it will not pay to put them
on the market. In the bill of 1883 they had succeeded in doing this. The
sugar refiners had not only manipulated the duty on this class of sugar
until it was too dear to eat, but they had practised some of their most
successful frauds in this region of the sugar schedule. A sample of
their operations had been presented to the Senate only a short time
before by Secretary Fairchild. It related to a cargo of sugar brought
into San Francisco by the American Sugar Refinery (the Spreckles
concern). In this case the enterprising importers caused the sugar to be
artificially colored in order to reduce the grade below No. 13, Dutch
Standard. They had also caused it to be invoiced at 88 degrees, but its
actual strength was found to be from 96 to 98 degrees. The attempted
fraud made a difference of $61,000 in the duty. The American Sugar
Refinery was caught in this instance, but there is no doubt that tricks
of this sort had been frequently successful. To take away the duty on
these grades then would not only serve the poor, but it would also go
far towards breaking up the monopoly. The independent refiners
themselves had in the recent hearings advised this. “The remedy for the
monopoly in sugar is in your hands absolutely,” one of the independents
told the Ways and Means Committee; “that is by putting just so much duty
and no more on refined sugar, that if we undertake to get more profit
than we ought, England, Germany, and France can send in their refined
sugars. The remedy is entirely with you and we expect you to apply it.”
The way in which Mr. McKinley proposed to reach the abuses was to make
all sugar below No. 16, Dutch Standard free. Here again the provision
was not original. It had been in the first drafts of both the Mills and
Allison Bills, but had been so strenuously fought by the sugar interests
that it had been dropped in both cases. When this provision of the
McKinley Bill reached the Senate it met the opposition of the same
gentleman who had been most influential in raising the rates in the
Allison Bill, Nelson W. Aldrich. Mr. Aldrich moved that Nos. 13 to 16 be
made dutiable. Senators Sherman and Allison both fought him, but Aldrich
carried the day. His power at that time, however, was not great enough
to rule the conference to which the bill was finally submitted, and the
original House arrangement was adopted and became the law.
There was no industrial development related to the tariff which gave the
Republicans deeper concern at this period than the trusts. Mr. Cleveland
in his message of 1887 had called attention to the aid a high duty gave
to combinations struggling for the entire control of a commodity, and
the country could not but see that he was right. There was a type of
protectionist who refused to admit the connection. According to Mr.
Kelley and Mr. Aldrich there could be no monopoly in a protected
article. Domestic competition would prevent it. Nevertheless the trusts
multiplied and the majority of them were in highly protected industries.
Moreover, it was obvious that if there was no duty, the industry would
have to sustain a competition which would make monopoly very difficult
if not impossible. It was not the Democrats alone who saw this. Senator
Sherman, who felt particular anxiety over the question, which he
realized might easily defeat the party if it were not settled, thought
and said frequently before 1889 that the trust could only be reached
through the revenue laws. He had been ready to take all duty from
refined sugar in order to destroy the sugar trust, but the majority of
his party did not agree with him. They hesitated at admitting a
connection between anything so unpopular as a trust and anything so
sacred and infallible as protection. An effort was made to dismiss the
troublesome phenomenon as of no consequence. Mr. Blaine tried this.
“Trusts,” he said, “were state issues.” “They have no place in a
national campaign.” In mentioning them he would put in the proviso,
“_If_ they are evils,” etc. But this was no more effective than the
similar attempt to make people believe that the surplus was a good
thing, a proof of prosperity. The unrest increased rather than
diminished, and numerous bills were introduced into Congress between
1887 and 1890, aimed at defining, regulating, or suppressing
combinations. Bills to tax, to take the tariff from, to investigate and
to forbid trusts, pepper the proceedings. Among these bills was a
measure of Senator Sherman’s making a combination in restraint of trade
a crime punishable by fine or imprisonment. This was first introduced in
1888. It was repeatedly discussed and amended, and now that the tariff
revision was on, it was felt that it should be passed. The Democrats did
not hesitate to declare that the Republicans’ sudden zeal for the bill
was due to their desire to have an answer for those who might criticise
their tariff bill as a trust-breeder. At all events, the measure was
passed ahead of the tariff bill. Thus an answer was ready for the
critics. As Senator Morgan said, “The bill was a good preface to an
argument upon the protective tariff.”
More difficult to meet than any other criticism on high protection had
always been the fact of the burden it put upon the farmer. Practically
everything he had to buy was made dearer by the import duties. His
domestic market was undoubtedly enlarged by the stimulus the tariff gave
to manufacturers. There were more buyers at home for his products, but
they paid the prices of the open-world market. There was no protection
for his corn or wheat or barley or potatoes, nor was it generally of an
advantage to him that there should be. He was the great exporter of the
United States. He produced more than we could consume, and sold abroad.
His prices were generally not made here but in the London market. In the
cases where we did import agricultural products, high duties had not
been levied for the good reason that they would make the necessities of
life dearer. It would be a tax on food, and there had always been a
reluctance to imposing that. If we did not raise potatoes enough for our
people and must import, should we penalize the consumer because the
farmer had failed to take advantage of the market at his door? Should we
penalize him for the crop failure which might occur at any time? But,
argued the protectionist of 1890, we are buying too much food abroad.
What are we building up the home market for unless that it may supply
all its needs from the home farmer, and it is not doing so. In 1889,
said Mr. McKinley, we bought $256,000,000 worth of agricultural products
abroad. This should be stopped. It was unjust to the farmer. When the
figures Mr. McKinley quoted are analyzed they are less impressive, for
upward of $200,000,000 of the importations were sugar, tea, coffee, and
articles which we did not produce or in very small quantities, _i.e._
they were articles which the American farmer as well as factory hand
must import if he uses them at all. This fact was slurred over in the
argument. We were buying $256,000,000 worth of agricultural products
abroad. The domestic market was not doing its duty by the farmer; that
duty was to supply all its needs at home. The only reason it was not
doing this was because there was too low a duty on the farmer’s
products. The factory hands must be forced to buy home-grown potatoes,
eggs, and meats. It was as logical, of course, to force the public at
large to eat only home-grown food as it was to force the farmer to buy
only home-made iron and steel. So in the interests of the farmer the
McKinley bill for the first time in our tariff history taxed food
generally and heavily. Eggs which had been free, 5 cents a dozen;
potatoes, 25 cents a bushel; bacon, 5 cents a pound; barley, 30 cents a
bushel. With this program the Republicans hoped to quiet the farmer’s
discontent.
It was a political manœuvre pure and simple. No tariffs can protect the
farmer’s products save locally and sporadically. His is the basic world
industry. The inhabitants of the earth, _all_ the earth, not a corner of
it, are his market. The most imperious cry of men, that for food, calls
him. Laws as all-powerful as gravitation govern him. Petty and temporary
interferences like tariffs may hinder his labors for a season, but the
word of the Almighty is his guarantee that the little schemes of men to
keep the fulness of the earth from its creatures are bound to end in
confusion. Already the farmers had striking proof that the radical
interference with the laws of supply and demand, which had been forced
upon the country by the Civil War and which had been kept alive since by
a combination of greed, superstition, politics, and loose thinking, were
telling on his industry. The entire agricultural production of 1890 was
worth only about ten per cent more than that of 1890, but the population
had increased some twenty-five per cent. That which had been repeatedly
prophesied had happened. The privileges granted to manufacturers had
enticed capital from the farms and men from the soil. It was natural
that this should be so. Effort will go where the way is made easiest and
the results are quickest. There was sound reason in the charge of the
free trader. You have ruined our commerce on the high seas, now you are
injuring our agriculture.
Moreover, nations will not buy freely of nations that close their doors.
The country was beginning to feel this fact. We were antagonizing the
foreign market. The member of the Harrison Administration who saw this
fact most clearly was James G. Blaine, Secretary of State. Mr. Blaine
had been guilty of some curious quakery in the campaign for tariff
reform, which Mr. Cleveland had forced. His treatment of the surplus and
the trust in their relation to the tariff had been superficial. But to
the question of our foreign trade he had given serious thought. He saw
clearly enough that increased duties would injure trade and that
limiting our trade would hurt the Republican party. There was no
mistaking the sentiment of the country on the need of extending foreign
markets. Mr. Blaine feared above all things to excite further suspicion
that the new bill would be to decrease rather than to increase them.
Before the measure had even been reported he made at least one strong
protest against a proposed duty on an article heretofore free. This was
the duty on hides. For over twenty-five years hides had been free and we
had been importing large quantities from South America. The demand for a
duty came from the cattle-growers of the West and Mr. McKinley proposed
to grant it. When Mr. Blaine heard of this he wrote a letter to Mr.
McKinley so sound that one can hardly believe it to be from the same man
who had proposed to perpetuate an exorbitant surplus and use it to
fortify American cities.
“DEAR MR. MCKINLEY:—It is a great mistake to take hides from the
free list, where they have been for so many years. It is a slap in
the face of the South Americans, with whom we are trying to enlarge
our trade. It will benefit the farmer by adding five to eight per
cent to the price of his children’s shoes.
“It will yield a profit to the butcher (Beef Trust) only, the last
man that needs it. The movement is injudicious from beginning to
end—in every form and phase.
“Please stop it before it sees light. Such movements as this for
protection will protect the Republican party only into speedy
retirement.
“Very hastily,
“JAMES G. BLAINE.”
This letter was dated April 10, six days before Mr. McKinley reported
his bill. It was effective. Hides were kept on the free list in 1890.
As the debate on the bill went on, Mr. Blaine appears to have become
more and more uneasy as to its effect on foreign trade, and to meet the
difficulty he proposed a system of what might be called forced
reciprocity with the countries of the American Hemisphere. So long as
they admitted free to their ports all the products of the United States
our market should be open and free to their products; but if they
applied their tariffs to our goods or put export duty on their own, they
should not enjoy the advantages of our free list. This proposition was
made in a report to President Harrison and by him sent to Congress. It
caused much discussion and Mr. Blaine was obliged to explain himself
repeatedly. On July 11, he wrote Senator Frye, saying:
“The charge against the protective policy which has injured it most
is that its benefits go wholly to the manufacturer and the
capitalist and not at all to the farmer. Here is an opportunity
where the farmer may be benefited—primarily, undeniably, richly
benefited. Here is an opportunity for a Republican Congress to open
the markets of forty millions of people to the products of American
farms. Shall we seize the opportunity, or shall we throw it away?
“I do not doubt that the tariff bill pending in the Senate is a just
measure, and that most of its provisions are in accordance with the
wise policy of protection. But there is not a section or a line in
the entire bill that will open the market for another bushel of
wheat or another barrel of pork.”
Mr. Blaine in another letter said:
“If, in the pending tariff, sugar is placed upon the free list, we
give to certain countries a free market for $95,000,000 of their
products, while they are not asked to open their markets to the free
admission of a single dollar of American products. We ought to have,
in exchange for free sugar from certain countries, a free market for
breadstuffs and provisions, besides various fabrics from all parts
of our country. In short, we ought to secure, in return for free
sugar, a market for $60,000,000 or $70,000,000 of our own products.
It will not require reciprocity treaties to secure this boon. The
tariff bill can contain all the necessary conditions. The
legislative power is able to secure the desired end. Within the last
twenty years we have given the countries south of us free admission
for nearly $60,000,000 worth of their products without receiving a
penny’s advantage in exchange. If sugar be now made unconditionally
free, we shall have given to the Latin-American countries free
admission for $150,000,000 of their products. It is time, I think,
to look out for some reciprocal advantages. We are a very rich
nation, but not rich enough to trade on this equal basis.”
Although Mr. Blaine’s idea was not adopted as he had presented it, a
reciprocity clause based on it was embodied in the Tariff Act of 1890.
This clause gave the President power to impose duties on sugar,
molasses, tea and coffee and hides, all free in the McKinley Bill, if he
found that a country which was exporting any of these articles into the
United States was levying duties on the products of the United States
which seemed to him unjust. There was of course a lively skirmish over
giving the President this power. The Democrats declared it
unconstitutional and in this view they were supported by Republican
Senators as able as Mr. Edmunds and Mr. Evarts; however, it became a
law.
As finally passed, the McKinley Bill was a complete victory for that
group of protectionists who had been struggling for twenty-five years to
force the Republican party to break the pledges repeatedly given during
and after the war to lower the customs as rapidly as the financial
condition of the country would permit, to repudiate its long accepted
moderate interpretation of the doctrine, and to substitute for it the
teaching, that the wealth of this country had been produced by
protection and that its stability depended upon protection being
accepted as a permanent national economic policy. It was equally a
victory for the theorist like Kelley to whom protection was sacred
because he saw in it a panacea for poverty, and for William Whitman and
Joseph Wharton who saw fortunes for themselves in wool, nickel, iron,
and steel if they could secure the duties they asked. For John Sherman
and Morrill and Allison it was a half-victory only. They had held
moderate protection as the only wise and safe policy, but they had been
overruled.
The most significant side to the victory was that it established firmly
the politico-industrial alliance which organizations like the Industrial
League, the Iron and Steel Association, and the National Association of
Wool Manufacturers had worked so indefatigably ever since the war to
build up. Moreover, in the making of this bill, that alliance had found
the Congressional leader it needed—a man who was willing to accept its
dictates as to classifications and rates, to fight for them with skill,
energy, and technical knowledge, and who took it as a matter of course
that he and his party should receive in exchange what financial and
organizing aid they required. This man was Nelson W. Aldrich. The part
he had played in the Senate in the making of the Allison and McKinley
Bills had proved him the first entirely able and what was quite as
important, entirely cynical leader, the high protectionists had
developed. Those whom he had served so well were not ungrateful.
Particularly jubilant was the National Association of Wool
Manufacturers. It publicly acknowledged its “great obligations to
Senator W. Aldrich of Rhode Island for the masterly manner in which he
advocated its cause in the Senate.” “Indeed,” the Bulletin went on to
say, “it is proper that we should bear testimony in this connection to
the remarkable familiarity with all branches of industry displayed by
Senator Aldrich in his management of the tariff bill. Every detail of
the most complicated of the schedules was present in his mind for
instant response to any criticism or inquiry. Day after day he stood at
his post, alert and watchful, rarely speaking except when a response was
required, but armed cap-à-pie for attack from any quarter. Rarely in the
history of tariff legislation in this country has the whole burden of so
protracted a debate fallen upon one man, and certainly no representative
in Congress ever acquitted himself more admirably of so great a
responsibility.”
The best reason for believing that the methods and principles embodied
in the bill would have more than a brief life, that the revolt already
begun against its excesses and makeshifts would not weaken it, lay in
the fact that the ideal leader for the measure had developed in the
Senator from Rhode Island.
CHAPTER IX
THE WILSON BILL
“Gentlemen, you can pass your bill. You can pass it when you please,”
Colonel Roger Q. Mills told the Republicans in Congress at the outset of
the debate on the McKinley Bill; “but whenever it does pass it will have
a Hell Gate to go through after it leaves the House and Senate. There is
a whirlpool with sunken rocks beneath the surface of the water through
which your little craft will have to sail.
“You say that this question was settled at the last presidential
election. Yes, Grover Cleveland had a majority of one hundred thousand
votes of the American people. If there is anything in the signs of the
times, they indicate that that majority will be greatly increased in the
near future. I want you to pass your bill and go with it out West; take
it with hair, hide, and wool all over it, and discuss it there; I want
you to meet the people whom you have ‘not hesitated’ to tax from 1 to
200 per cent on the necessaries of life.
“Mr. Chairman, we promise our friends that we will examine their bill.
It needs discussion, and will get whatever we are permitted to give it;
and then when we have done that you will pass it, and when you leave
this House and Senate with this enormous load of guilt upon your heads
and appear before the great tribunal for trial, may ‘the Lord have mercy
upon your souls.’”
This was in May of 1890. The bill became a law in October. In the
interval, wise Republicans like John Sherman and James G. Blaine were
doing their utmost to prepare for the passage of the “Hell Gate,” which
Colonel Mills had prophesied and the roar of which became louder with
each week’s approach to the fall elections. While his party granted the
duties which bolstered the trusts, Mr. Sherman hurried through his bill
making trusts a crime. While his party raised higher the wall which shut
trade both in and out, Mr. Blaine worked for free trade between
ourselves and our neighbors on the American hemisphere. But these were
palliatives, not cures, and sensible people recognized their character.
The storm was on the party almost as the measure went through. In the
Congress which passed the McKinley Bill, the Republicans and Democrats
stood 166 to 159. In the House of Representatives elected a little over
a month after the passage of the McKinley Bill the proportion was 88 to
236: they had lost 78 votes. No such avalanche as overwhelmed the party
in the fall of 1890 is loosened by one cause. It is always a number, but
in this case it was a number of which the prohibitive duty and the
political methods it had required to force it through Congress was the
centre and strength. The other causes were kindred in their nature. The
overthrow of the party at bottom was a plain revolt against the
political immorality, the intellectual humbug, and the unholy greed
which had produced the bill. At the heart of the Democratic victory was
the inspiration of a real cause. The defeat of ’88 had left the party
determined rather than cast down. They knew they were fighting for a
right principle. Their joy in the conflict grew rather than diminished
as the months passed.
The Democrats had won the House and Senate and all the indications were
that they would win the presidency in 1892. The first fifteen months’
trial of the new measure admirably served their ambition, for that
happened which, lack of work aside, makes life hardest for the world in
general,—the price of food went steadily up. The fact that a dollar
would buy more sugar did not compensate for the fact that it bought less
flour, less corn-meal, less meat, and fewer potatoes. Moreover, there
were other advances which irritated the world in general,—advances in
the prices of coal, lumber, and particularly tin ware and canned goods.
Tin plates which sold for $4.79 a box in 1890 sold for $5.33 in 1891,
and by the time the tin found its way into a milk pan or a dinner pail
or a tomato can there was a still greater per cent of increase. It was
so palpably a higher cost because of the duty, it was so generally and
correctly believed that the increase would not for many years benefit
more than a few, that irritation increased with every purchase. Among
manufactured goods it was tin plates almost alone which advanced.
Manufactured goods generally fell in price in 1891. Some of the high
grade cottons and woollens advanced, but these were exceptions. The fact
of a decided increase in a common article like tin plate, the fact that
coal and lumber were dearer, quite overshadowed the fall in the prices
of goods generally.
There was no hesitation in the minds of the Democrats about what they
should do with their power when they took possession of Congress in
December, 1891. They proposed to begin at once to reform the McKinley
Bill. The history of their efforts in the ’80’s being what we have seen,
and Roger Q. Mills being still a member of the House of Representatives,
it was to be expected that he would be elected speaker of the House.
Mills was a candidate, so were Charles F. Crisp of Georgia and William
M. Springer of Illinois. On the Tuesday before the Democratic caucus,
Colonel Mills had one hundred and twenty votes pledged. When the first
vote was taken, Mr. Crisp was in the lead. On the thirtieth ballot Mills
was defeated by one vote. After the contest, he took the Congressional
Directory and checked off the names of twenty-four men who had asked him
for committee assignments, promising to support him in return; the
doughty Colonel had refused. Once in the contest Springer sent him word
that he would withdraw if Colonel Mills would make him chairman of the
Ways and Means Committee. Colonel Mills asked to have the proposition
submitted in writing! Tom Johnson, who was devoted to Mills, came to him
once when the balloting was going on, and said, “I do wish you wouldn’t
be a fool; give me two chairmanships and ask me no questions and I will
elect you on the next ballot.” The Colonel only shook his head. There is
no doubt that if he had withdrawn with his followers from the caucus and
thrown the election into the House, the Republicans would have elected
him. Indeed, they so sent him word.
Mr. Crisp was elected, and he appointed Mr. Springer chairman of the
Ways and Means Committee. To Colonel Mills he offered the second place
on the Committee; this Mills refused, “Having been a member of the
committee of the Ways and Means for ten years, and chairman in the
fiftieth Congress,” he wrote Mr. Springer, “the reasons which have in
your judgment rendered my appointment as chairman unwise would
disqualify me for service on any other part of that Committee, and it
would not be sincere to say that it would be agreeable to accept your
tender.
“I leave to you, without suggestion from me, to make such other
arrangements as you, in the discharge of official duty, may determine.”
There was no possibility of any legislation passing beyond the House in
that session of Congress. A Republican Senate and President stood in the
way, but agitation for political and educational purposes was possible
and it was carried on. Fully 150 petitions were presented the first
session of the new Congress, the 52d, December, 1891 to August, 1892,
asking for the repeal of the whole or some part of the McKinley Bill.
More than 100 bills were introduced, providing for its repeal or
amendment. The Democrats undertook only the reform of especially
obnoxious duties. Five bills were brought in: (1) a bill to place wool
on the free list and to reduce the duty on woollen goods; (2) a bill to
admit free of duty bagging for cotton, machinery for manufacturing
bagging, cotton-ties and cotton-gins; (3) a bill to place binding twine
on the free list; (4) a bill to reduce and ultimately to abolish the
duty on tin and terne plates; and (5) to reduced the duty on lead ores.
These bills were all passed by the House after thorough discussion; as
good material as the party could have for the presidential campaign
which was on the country before the “pop-gun” bills, as the Republicans
called them, were out of the way.
In the face of an almost certain victory in the impending election,
serious Democrats began to ask themselves what, after all, should they
do? What did they mean by tariff reform? To the majority there is no
doubt that it meant simply a combination of tariff for revenue and of
moderate protection of those industries already established, which it
was believed could not yet compete with foreign goods. They professed to
believe in free raw material—and did unless the raw material happened to
be a leading product of their constituents. They were not generally in
favor of drastic cutting, but preferred it to gradual.
This in the main was the position of Mr. Cleveland. It certainly was a
little more radical than some of Mr. Cleveland’s advisors, Mr. Whitney
and Mr. Vilas, for instance. But it was a position which filled men like
Colonel Mills and Henry Watterson and Tom Johnson with disgust. They
determined that it was time that the party stopped its coquetting with
protection and followed a single-hearted tariff-for-revenue only policy,
and it was such a policy which Mr. Watterson in particular determined
should be adopted by the Democratic convention. He had succeeded in
getting a tariff-for-revenue only plank into the platforms of 1876 and
1880. In 1884 he had seen his party, “with General Butler astride its
back and Mr. Randall on its flanks,” as he described it, obliged to
straddle. In 1888 this straddle had been repeated. Mr. Cleveland, seeing
a “condition and not a theory,” could not sanction a plank which
promised to reform the tariff with revenue only in mind. He knew the
effects of duties on industries ought to and would be considered. Mr.
Watterson went to Cincinnati in 1892 prepared for the fight of his life.
He won. They called him a platform-smasher afterwards; he corrected
them: he was a platform-maker; and that was true. Henry Watterson by his
tactics and eloquence led the Democratic convention of 1892 to declare
for tariff-for-revenue only, and Mr. Watterson meant just that.
“How would I make a tariff bill?” he said, later, in one of the most
notable political speeches of the period.
“By the aid of all the best experts and authorities I would get
together all the needful statistical data. I would then find a clean
sheet of paper. I would lay this on the table—not the little round
one, but the big oblong table—in the Ways and Means Committee Room.
Then I would open the cupboard containing, among other perishable
contents, the McKinley Bill. I would take this out none too
gently—and pitch it into the fire. Then I would draw upon my clean
piece of paper three lines. Thus:
ARTICLES DUTY REVENUE
I I I
I I I
I I I
I I I
I I I
I I I
I would begin at the top of the first column with sugar. Then the
duty, say one cent a pound. Then the estimated revenue—say
$35,000,000. Then I would abolish the sugar bounty, making a
difference of $45,000,000 in the revenue. I would follow with tea
and coffee. I would continue, giving precedence as far as possible
to revenue-yielding commodities not produced in this country, down
through the largest revenue-yielding domestic products—without the
least regard to protection, incidental or otherwise—and when I got
$200,000,000 I would stop. Then I would take another bit of white
paper, and I would frame an Internal Revenue Act, raising
$175,000,000 on spirits and tobacco-making, $375,000,000 in all—and
the rest, $50,000,000 or $75,000,000, as the estimate might require,
I would raise by a tax, first on inheritance and dividends, and
then, if needs required, on big incomes.
“Then I would call the Committee—the Democratic members of the
Committee, I mean—and, when any one of them proposed to confuse the
simplicity of this perfectly plain Tariff-for-Revenue-only Act by
the old cant about the danger of being too precipitate and extreme,
I would knock him out—not down—by saying: “Read the National
Democratic Platform.””
How far from this uncompromising sort of revision Mr. Cleveland was, his
letter of acceptance in 1892 shows:
“Tariff reform is still our purpose. Though we oppose the theory
that tariff laws may be passed having for their object the granting
of discriminating and unfair governmental aid to private ventures,
we wage no exterminating war against any American interests. We
believe a readjustment can be accomplished, in accordance with the
principles we profess, without disaster or demolition. We believe
that the advantages of freer raw material should be accorded to our
manufacturers, and we contemplate a fair and careful distribution of
necessary tariff burdens rather than the precipitation of free
trade.
“We anticipate with calmness the misrepresentation of our motives
and purposes, instigated by a selfishness which seeks to hold in
unrelenting grasp its unfair advantage under existing laws. We will
rely upon the intelligence of our fellow-countrymen to reject the
charge that a party comprising a majority of our people is planning
the destruction or injury of American interests; and we know they
cannot be frightened by the spectre of impossible free trade.”
Mr. Cleveland was inaugurated in March of 1893, but tariff reform was
not the first work before him. The Silver Question was the more
pressing, and the extra session he called for August had as its business
the repeal of the purchasing clause of the Silver Bill which the
Republicans had adopted in 1890, and by which they had bought a part of
the votes for the McKinley Bill. The extra time of this session was
utilized to begin work on the tariff. More loudly than ever the public
demanded its reform. Nothing that had been promised that the McKinley
Bill would do had been done, nothing but reducing the surplus—and that
had been overdone. The combination of free sugar, prohibitive tariffs,
and reckless spending with purchasing bonds not yet due at a premium,
had reduced it to over $105,000,000 in the year the bill was adopted, to
$2,500,000 in the year Mr. Cleveland was elected and a deficit was
ahead; in fact, Mr. Cleveland inherited a deficit which the fiscal year
after his inauguration had reached nearly $70,000,000. He also had
inherited a business depression, the culmination of which came in the
first summer of his administration, and along with the deficit and panic
a series of labor troubles equal to those of the ’80’s. The McKinley
Bill had failed utterly to do the two things which its makers had
oftenest declared it would do, preserve prosperity and satisfy labor.
Steadily after its passage depression grew. In 1892 the labor troubles
of our country were as acute as in any year of our history, and these
troubles were in the highly protected industries, in iron, steel, wool,
and cotton. The McKinley Bill was not the cause of the depression, as
the Democrats argued. The world was in panic. One of those periodic
disturbances which sweeps the globe, a logical result of man’s bungling
with the laws of trade, had started. That we did not feel the acute
pangs of this disturbance as soon as Europe was due to the stimulants we
had been taking in the way of high tariffs and cheap money. When they
wore off, as they quickly did, our condition was the worse for the
delay. A few months after Mr. Cleveland’s election the depression and
unrest culminated in the panic of ’93. There has always been an effort
to shift the responsibility of this disturbance on the Democrats. The
panic of ’93 was caused, so Republican orators have repeated for
eighteen years, by alarm at the prospect of a Democratic revision of the
tariff. There was never a serious charge with less foundation. That
panic was headed directly towards us long before Mr. Cleveland’s
nomination. A McKinley bill could not stop it; but it did make it the
more acute when it came, by the very fact that it had helped free silver
to hold it back.
By utilizing the extra session, the Ways and Means Committee had a bill
ready for the regular session which began in December, 1893. The
chairman now at the head of the Committee was James Lyne Wilson of West
Virginia. His appointment to succeed Mr. Springer, who had engineered
the “pop-gun” bills, had been particularly satisfactory to the
tariff-for-revenue only Democrats. Mr. Wilson was a man of fifty, an
educated gentleman, who had been, in turn, a Confederate soldier, a
practising lawyer, and a college president. Through it all he had kept
alive a disposition to politics. He had written and spoken on whatever
public question was uppermost. He had attended conventions, and served
as a delegate, a “scholar in politics.” Finally, this interest and
activity took him to Congress, where his sound economic ideas and his
skill in presenting them had recommended him to the best element in his
party, Cleveland, Carlisle, and Mills. In 1884 he aided Carlisle in his
fight against the Randall faction. In 1888 he was put on the Ways and
Means Committee, where he served Mr. Mills excellently. It has been
customary to speak of Mr. Wilson as impractical and academic, but the
bill he brought in in December, 1893, far from being a schoolmaster’s
application of his own theories, was distinctly practical. The bill was
not what he had hoped to make it. Mr. Wilson said in his report: “With
the tariff, as with every other long-standing abuse that has interwoven
itself with our social and industrial system, the legislator must always
remember that in the beginning temperate reform is safest, having in
itself the principle of growth.” The first step he had had in mind was
to take taxes from the materials of industry. In Mr. Wilson’s judgment
it was the higher cost of raw materials rather than higher wages which
hampered American manufacturers. Therefore the Wilson Bill made wool,
coal, iron-ore, hemp, and flax free. To “help the farmers” duties were
taken from agricultural machinery, from cotton bagging, from salt, and
from binding twine. An effort was made to do away with all specific
duties. On manufactured goods there was no severe reduction: from
one-third to one-half on window glass; 25 per cent on steel rails; lower
rates on what Mr. Wilson called the “bogus industry” of making American
tin plate; one-fourth cent per pound on refined sugar instead of
one-half.
The bill was a grave disappointment to the tariff-for-revenue only
Democrats. It did not go far enough, complained Mr. Mills in an article
in the _North American Review_ for February, 1894. It was only “a
Sabbath Day’s journey on the way to reform.” He would have put every
item in the chemical schedule on the free list. He would not only have
made ores free, but pigs, bars, bloomers, slabs, ingots, sheets, and
plates, that is, all materials which had been advanced to a first or
second stage towards manufacture. On the same principle he would have
made not only wool and hemp free, but yarns and fibres. Mr. Mills was
particularly disturbed because Mr. Wilson had not equalized the import
duty and the internal taxes on beer, whiskey, and tobacco. He believed
these three should bear the brunt of taxation. As it was then, the
internal tax was low and the duties very high. The brewers, distillers,
and cigar-makers paid low taxes, and, cut off from foreign competition
by high duties, kept up prices. Colonel Mills reckoned that under the
McKinley Bill the duty on imported cigars amounted to $70.44 a thousand,
the internal tax was $3.00 per thousand. He wished to make each $6.00.
This would give revenue and cheaper cigars at once. At the same time it
would check the tendency to combine.
A more severe critic than Colonel Mills was Mr. Watterson. In a speech
in Louisville in January, he said:
“I have read with exceeding care and great concern, the reports
accompanying the newly-introduced measure, of Tariff revision. The
Democratic report begins by a masterly declaration of
Tariff-for-revenue only logic, to end in an actual exposition of
Protectionist practice. For the Chairman of the Ways and Means
Committee I entertain the very greatest respect. He is an able,
conscientious, patriotic Democrat. He has encountered difficulties
and made sacrifices, and endured disappointments, which should earn
him the sympathy, rather than the criticism, of his party
associates. But, with submission, I think he has been forced by
pressure, and not by his own consent, to bring in a measure that
strikes a blow at the cause of genuine Tariff Reform, and may set
the policy of revenue only back for many years to come. It is far,
very far, from a measure that can be truthfully described as
embodying the idea of ‘a Tariff-for-revenue only.’ It is merely
better than the McKinley Bill in degree, not in kind, and if
Protectionism is ever to be dislodged, I doubt the Trojan-horse
stratagem to which it seems to incline. We live in the age of
Carnegies and Goulds, not in that of Priam and Æneas.”
But the bill Mr. Wilson reported was better from a Democratic point of
view than the one sent to the Senate early in February. The chief
difficulty encountered in the passage through the House he hinted at in
an anecdote he told just before the bill was voted on.
“When Sir Robert Peel was just entering upon his work of tariff
reform in England,” said Mr. Wilson, “he read to the House of
Commons a letter that had been sent him by a canny Scotch fisherman.
The writer protested against lowering the duty on herrings, for
fear, as he said, that the Norwegian fisherman might undersell him;
but he assured Sir Robert, in closing the letter, that in every
respect except herrings he was a thoroughgoing free-trader. I trust
that no Democrat to-day will be thinking more about his herrings
than the cause of the people.”
It was not the “herrings” which had found their way into the bill,
however, which caused the largest number of Democrats to hesitate over
it. They were all accustomed to them. It was a greater innovation, an
amendment providing for a tax on all incomes of over $4000. Mr. Wilson
had not approved of it, he had believed it inexpedient; but when the
committee decided otherwise, he threw in his fortunes loyally with them.
“I have never been hostile to the idea of an income tax,” he said. “It
has been opposed here as class legislation; it is nothing of the kind,
Mr. Speaker; it is simply an effort, an honest first effort, to balance
the weight of taxation on the poor consumers of the country who have
heretofore borne it all. Gentlemen who complain of it as class
legislation forget that during the fifty years of its existence in
England it has been the strongest force in preventing or allaying those
class distinctions that have harassed the governments of the Old World.”
The bill was passed, “herrings,” income tax, and all, on February 1,
1894, and was at once sent to the Senate. So sharp had the criticism of
the bill been that the Democratic caucus appointed a sub-committee of
three to go over it and make a more representative Democratic measure,
before it should be reported. This committee was made up of Jones of
Arkansas, Vest of Missouri, and Mills of Texas. Colonel Mills had been
elected to the Senate the fall before. Although not a member of the
Finance Committee, he was placed on the sub-committee. After three
weeks’ hard and incessant work, the bill was reported to the Democratic
caucus, and here a strong opposition at once developed, an opposition so
obstinate that it was obvious it would defeat the bill if it could not
be satisfied. The leaders of this faction were Senators Arthur P. Gorman
of Maryland and Calvin S. Brice of Ohio. These gentlemen had organized
so solidly a small number of their party colleagues, dissatisfied with
the reductions the bill made on articles in which they were interested,
that they were able to say to the Committee that unless their demands
were satisfied no bill should pass. A look at the make-up of the Senate
shows how easily they could carry out their threat. There were in the
body thirty-eight Republicans, forty-four Democrats, and four Populists,
the latter voting on the tariff with the Democrats. Five votes diverted
from the forty-four would, if the Republicans voted solidly, as they
were expected to do, give a majority of one against the bill. Messrs.
Gorman and Brice could show the five votes. One of these was that of
David J. Hill of New York, who had given notice that he would in no case
support a measure carrying an income tax. The result of this alignment
was that the bill was revised under the direction of Senators Gorman and
Brice and reported to the Senate with some 634 amendments.
As an illustration of the kind of reconstruction which went on, take the
sugar schedule. It is an illuminating example of tariff-making as
practised by the Senate of the United States, both then and now. We have
seen what the McKinley Bill did for raw sugar,—made it free, but gave
bounties to the home sugar-growers equivalent to two cents a pound. As
for refined sugar, all grades from No. 16, Dutch Standard, upward, were
allowed one-half cent a pound, which was undoubtedly a pure gratuity to
the sugar trust. Formed in 1887, with a capital of $50,000,000, the
stock of this organization had not been listed on the New York stock
exchange until February of 1889. When the McKinley Bill was first
brought into the House in January of 1890, sugar certificates were worth
fifty cents on the dollar. Their rise between that date, when it looked
as if refined sugar would be given no duty, and the date in May, when
the one-half cent was fixed, was told three years later on the witness
stand by a Senator of the United States who was familiar with operations
of this sort, Calvin S. Brice of Ohio:
“During the month of January,” said Mr. Brice, “sugar stock
fluctuated between 50 and 60, with as wide or wider fluctuations in
each of the four following months. So then when the bill had passed
the House of Representatives and had been favorably considered and
settled in the Senate Finance Committee in May, the sugar trust
certificates had advanced to 95, an advance of 45 points or
$22,500,000 computed on the capital of the sugar trust, or
$33,750,000 if the other $25,000,000 which were added a few months
afterwards as representing the Spreckels, Harrison, and Knight
refineries are taken into account. During the fall of 1890 the
Baring panic temporarily depressed sugar trust certificates, as well
as other securities in the New York Stock Exchange, but as soon as
that had gone by, the sugar trust certificates went above par, and
eventually under the operations of the McKinley Act reached 134 or
135; an advance from January, 1890, when the McKinley Bill was
introduced, of 85 points, or $42,500,000 on the sugar trust
certificates, and an advance of $63,750,000 on the American Sugar
Refining Company’s Stock, the Company which in 1891 succeeded the
original trust.”
The dealings in the certificates on the New York Stock Exchange in 1890
Senator Brice declared to have amounted to 8,000,000 shares,
$800,000,000. As for profits, the trust’s president, Mr. H. O.
Havemeyer, said on the witness stand in 1894 that he reckoned them at
close to $25,000,000 for the three years, or, as he put it,
“three-eighths of a cent more on every pound they (the consumers) ate.”
Without the McKinley Bill this would have been impossible, and, said Mr.
Havemeyer, “as long as the McKinley Bill is there we will exact that
profit.”
This episode had scandalized the country and intensified the disgust
with the sugar refiners which their open swindling in the preceding
fifteen years had aroused. When the Democrats in the House came to make
their bill they at first proposed a duty of one-fourth cent a pound on
refined sugar, half of what McKinley had given. This was undoubtedly
one-fourth of a cent too much. With free raw sugar the refiners could
carry on their business at a profit. This was demonstrated to Mr.
Wilson’s satisfaction while the bill was still in the House, and when it
left, refined sugar as well as raw was free.
As said above, the bill was referred to a sub-committee of which Colonel
Roger Q. Mills was a member. Now Mr. Mills, like most tariff-for-revenue
only Democrats, had always held that a tax on raw sugar was one of the
least obnoxious that could be placed. It yielded a large and steady
revenue. It was true that it was a tax falling more heavily on the poor
than on the rich, but unhappily most taxes are unjust in this respect.
Holding this opinion, and believing that the bill did not provide
sufficient revenue, Mr. Mills, as he later related, said to his
colleagues:
“We have got to have more money than the Wilson Bill makes, and we
have to have a duty on sugar. I do not want it. I do not like to go
backwards. I would not have taken sugar off the dutiable list and
put it on the free list. It has been done, and I do not like to put
anything back on the dutiable list, but we have got to do it, and
you may as well make up your minds about it. We have to have more
money.”
Senators Vest and Jones held out for several days against him, but
finally they reluctantly agreed to a duty on raw sugar. On refined they
proposed only enough to make up to the refiners for the extra cost of
their raw material—that is, a compensatory, not a protective, duty.
But this plan never reached the public. The House bill had aroused the
Sugar Trust to wrath, and all through the winter and spring of 1894 one
or more of its chief officers was in Washington, besieging the Senate
and the Administration. Mr. H. O. Havemeyer, the president, Theodore
Havemeyer, the vice-president, and John O. Searles, secretary and
treasurer, armed with samples and statistics and proofs of political
influence, urged upon a worried and reluctant committee a scheme of
duties which would give them at least as large a benefit as they had
under the McKinley Bill. The gentlemen seem to have been able to secure
the attention of all the Senators whom they thought it worth while to
approach, excepting Senator Mills. Mr. Havemeyer made repeated efforts
to get to him, but always failed. Finally he asked Secretary Carlisle to
give him a note of introduction. He knew Senator Mills, he told the
secretary, but he was a busy man and peculiar, and it was difficult to
see him. Mr. Carlisle gave the note, and one evening Mr. Havemeyer
presented it at the Senator’s door with his own card and that of Mr. J.
R. Rickey, the inventer of the famous “gin-Rickey.” Was the Senator in,
and would he see them? The answer came back. “Senator Mills is in, but
he will _not_ see the gentlemen.” Nor did Mr. Havemeyer ever succeed in
presenting his ideas of a sugar schedule to Senator Mills.
The activities of the sugar people caused all sorts of rumors to run
rife through the press, and finally when the bill was reported on the
20th of March providing a rate of about one cent a pound on raw sugar
with an additional one-eighth of a cent per pound on refined, there was
an immediate outcry. When later further changes were made in the
schedule, making it more intricate and more advantageous to the
refiners, dissatisfaction grew. “It would have been quite as appropriate
and edifying,” said the _Nation_, “and quite as good policy, to have
enacted that the Standard Oil Trust should receive $30,000,000 out of
the public treasury during the next six months as a reward of merit, and
two and one-eighth cents per gallon for all the oil they might hereafter
sell in this country, as to do what is done for the sugar trust.” The
ugliest rumors were afloat, talk of bribes, deals, and threats. They
finally culminated in an article published in the _Philadelphia Press_
and signed “Holland” (E. J. Edwards), in which in a most circumstantial
way the author declared that $500,000 had been contributed to the
Democratic campaign fund by the Sugar Trust. In return pledges had been
given that the Trust would be taken care of. When the House removed the
duty, the Trust had reminded the Administration of its pledges. Mr.
Carlisle, by Mr. Cleveland’s directions, had appeared before the
sub-committee and had told them that the party was bound to satisfy the
sugar interests. There were detailed descriptions of interviews between
sugar men and Senators, and of directions sent from the White House. One
of the shameful features of the story was that a number of Senators had
taken advantage of secret information on the sugar schedule to speculate
in sugar stock. This amazing story of political barter would have raised
a chorus of jeers, had there not been before the country’s eye so much
corroborating evidence. The clamor was so loud over the article that in
May an investigation was made. Many of the details of the story were
discredited. Mr. Cleveland, Mr. Carlisle, and Mr. Mills were certainly
cleared, but a substantial scandal remained. By the frank admission of
Mr. Havemeyer, it was proved that the trust was in the habit of making
contributions to both parties, that is, each party got something, if the
result was doubtful. If not, the contribution went to the dominant side,
that being the one to which the trust would look for favors. This
conclusion is clinched by the following bit of a dialogue which occurred
in the course of the investigation:
“_Mr. Havemeyer._—The American Sugar Refining Company has no
politics of any kind.
“_Senator Allen._—Only the politics of business?
“_Mr. Havemeyer._—Only the politics of business.”
Whatever the Democrats received in 1892 from the Sugar Trust,—and it is
probably as certain that they received, not $500,000, but a good sum, as
it is certain that Mr. Quay received something like $100,000 from the
same source in the campaign of 1888,—it was the sugar refiners who
succeeded in getting the rates they wanted into the Wilson Bill, not the
sugar-producers. So strong was their position with the faction
remodelling the bill, that is, with Mr. Gorman and Mr. Brice, that they
were able to overpower even the Louisiana Senators, on whom the victory
of the insurgents was supposed to depend, and to replace the specific
duty which these interests wanted and which raw sugar long had had, by
an ad valorem rate, a form which was believed to work and probably did
work decidedly to the advantage of the trust.
The charge in the _Press_ article that many Senators had speculated in
sugar stock, was investigated. Men like Cushman K. Davis, George Gray,
George F. Hoar, Roger Q. Mills, John M. Palmer, John Sherman, and John
P. Morgan had to suffer along with Quay and Brice, Smith of New Jersey
and Murphy of New York, the humiliation of an examination. Senators
McPherson and Quay acknowledged that they had been dealing in sugar
while the schedule was in the Senate. In no other cases was the fact
established, but the suspicion remained in spite of denials that other
Senators were equally guilty. This popular belief was more strongly
entrenched around Senator Aldrich than any other member of the body. He
had been the chief advocate of the refiners in the Senate for a number
of years. He was a friend of John O. Searles, and the two had been much
together while the schedule of 1894 was making. His fortunes apparently
expanded rapidly about this time. The suspicion crystallized in a
nickname for his country home which still clings to it,—“the sugar
house,”—but there was never a vestige of proof, so far as the author
knows, that sugar had anything to do with Senator Aldrich’s fortune.
Of course, it would have been impossible for the sugar Senators to have
received the favors they did if they had not acquiesced in similar gifts
to other interests. They paid for their advantages by consenting to a
duty on iron-ore, on silverore containing lead, and on coal, all of
which should have been free under Democratic doctrine. They paid by
consenting to scores of increased duties on manufactured articles, which
in some cases raised rates to the McKinley level. A typical transaction
was the duty on collars and cuffs. It had been cut by the House. Senator
Murphy of New York wanted it raised to oblige certain constituents. He
threatened to vote against the bill if he was denied. He, of course, got
what he wanted.
Nor was it the Democrats alone who raided the Wilson Bill. The revolt of
Senators Gorman and Brice was an invitation to the Republicans to see
what they could do for their constituents. When the news of what was
going on spread through the country, Washington rapidly filled up with
the agents and counsel of the protected industries, and under the
leadership of Senator Quay a campaign of obstruction was carried on.
Unless you give us what we ask, you shall have no bill at all, said
Senator Quay; I will talk it to death. He began to execute his threat on
April 14, and ended on June 16. Day after day, the _Congressional
Record_ states laconically, “Senator Quay resumed the floor in
continuance of the speech begun on the 14th of April,” and occasionally
it adds, “speech will be printed when finished.” Senator Quay occupied
twelve days of the period in his filibustering. He ceased because he had
assurance that the duties he sought would be granted. His speech covers
some 235 pages of the _Congressional Record_, an exhibit of legislation
by violence which happily has few parallels in our history. James M.
Swank, the manager of the Iron and Steel Association, says that Senator
Quay secured higher rates of duties in “hundreds” of cases by his
filibuster. He and Senator Aldrich seem to have turned their advantage
mainly to saving their own chief industries,—iron and steel and
cotton,—for both schedules were written by the manufacturers.
The chief industry which did not get about what it wanted was wool. The
House had provided for free wool and a 35 per cent duty on all
manufactured goods. This was 5 per cent less than Mr. Mills had proposed
to put on woollens in 1888. Of course the Republicans prophesied the
most terrible disasters from this change. The industry had been sharing
in the general depression of the country, that is, the McKinley Bill had
not been able to make it prosperous. The National Association of Wool
Manufacturers, confronted by this fact, pleaded that the bill be given a
longer test. They declared that there was a “universal agreement between
manufacturers” that the “tariff was now scientifically adjusted.” Nobody
was going to suffer from the rates, they said, and in time they would
insure permanent prosperity. The Association, of course, overlooked the
fact that the rates they were then enjoying had, with only slight
decreases in 1883, been in force since 1867, and that they had not
prevented periodical depressions. They overlooked the fact, too, that,
far from being united, as they declared, a very large body of the ablest
woollen manufacturers in the country were at that moment petitioning for
free wool and advising lower duties on their own products. All of this
had little effect on the Democrats. The schedule went to the Senate as
it had been prepared by Mr. Wilson’s committee; and when the
sub-committee took hold of it, the duty on woollens was made 30 per cent
instead of 35 per cent. This schedule was reported to the Senate on
March 20, and soon after that the wool-growers and wool manufacturers
learned of the Democratic insurgent movement for higher duties led by
Gorman and Brice.
“As soon as it became known that all the schedules were being
written up to or towards protective rates,” one of their leading
historians wrote afterwards in the Bulletin of the Association, “the
woollen manufacturers began to gather in Washington with a view to
discovering what could be done to save their own industry from
destruction. The first efforts to this end were directed towards
securing compound duties. Many variations in the compound rates
originally suggested were made, finally resulting in a schedule in
which all manufacturers acquiesced.
“The compound schedule was thrown out of court almost immediately,
coupled with the information that under no circumstances would the
suggestion of compound duties on woollen goods be considered. If at
this juncture the woollen manufacturers had been so fortunate as to
possess among the Democratic Senators a single friend, so earnestly
and honestly their friend as to do for them what certain Senators
did for certain other industries (notably several branches of the
iron and steel industry), this compound schedule could have been
forced into the bill, as other specific duties were forced into it
everywhere else, as the condition precedent to its passage. But they
had no such friend, none at least who was willing to go as far as
other Senators went for other industries. Thus it happens that the
wool schedule is almost the only one in the Senate bill which was
not dictated by some one powerful enough to make its terms fairly
satisfactory to the industries concerned.”
The Wilson Bill was returned to the House Committee with 634 amendments
attached. The Committee refused to accept the amendments and a
conference was arranged. Nothing came of this. The Senate conferrees
held to the amendments, the House conferrees to disagreement. In
reporting the disagreement to the House, Mr. Wilson read a letter from
President Cleveland protesting against the bill. It voiced his pain and
disgust at the outcome of the long fight he had led and counselled
resistance to the miserable compromises which filled the bill:
“My public life has been so closely related to the subject” (tariff
reform), Mr. Cleveland wrote, “I have so longed for its
accomplishment, and I have so often promised its realization to my
fellow-countrymen as a result of their trust and confidence in the
Democratic party, that I hope no excuse is necessary for my earnest
appeal to you that in this crisis you strenuously insist upon party
honesty and good faith and a sturdy adherence to Democratic
principles.
“I believe these are absolutely necessary conditions to the
continuation of Democratic existence.
“I cannot rid myself of the feeling that this conference will
present the best, if not the only, hope of true Democracy.
Indications point to its action as the reliance of those who desire
the genuine fruition of Democratic effort, the fulfilment of
Democratic pledges, and the redemption of Democratic promises to the
people. To reconcile differences in the details comprised within the
fixed and well-defined lines of principle will not be the sole task
of the conference, but as it seems to me its members will also have
in charge the question whether Democratic principles themselves are
to be saved or abandoned.
“There is no excuse for mistaking or misapprehending the feeling and
temper of the rank and file of the Democracy. They are downcast
under the assertion that their party fails in ability to manage the
government, and they are apprehensive that efforts to bring about
tariff reform may fail; but they are much more downcast and
apprehensive in their fear that Democratic principles may be
surrendered. In these circumstances they cannot do otherwise than to
look with confidence to you and those who with you have
patriotically and sincerely championed the cause of tariff reform
within Democratic lines and guided by Democratic principles. This
confidence is vastly augmented by the action under your leadership
of the House of Representatives upon the bill now pending.
“Every true Democrat and every sincere tariff reformer knows that
this bill in its present form and as it will be submitted to the
conference falls far short of the consummation for which we have
long labored, for which we have suffered defeat without
discouragement, which in its anticipation gave us a rallying cry in
our day of triumph, and which in its promise of accomplishment is so
interwoven with Democratic pledges and Democratic success, that our
abandonment of the cause or the principles upon which it rests means
party perfidy and party dishonor.
“One topic will be submitted to the conference which embodies
Democratic principle so directly that it cannot be compromised. We
have in our platforms and in every way possible declared in favor of
the free importation of raw materials. We have again and again
promised that this should be accorded to our people and our
manufacturers as soon as the Democratic party was invested with the
power to determine the tariff policy of the country.
“The party now has that power. We are as certain to-day as we have
ever been of the great benefit that would accrue to the country from
the inauguration of this policy, and nothing has occurred to release
us from our obligation to secure this advantage to our people. It
must be admitted that no tariff measure can accord with Democratic
principles and promises or bear a genuine Democratic badge that does
not provide for free raw materials. In these circumstances, it may
well excite our wonder that Democrats are willing to depart from
this, the most Democratic of all tariff principles, and that the
inconsistent absurdity of such a proposed departure should be
emphasized by the suggestion that the wool of the farmer be put on
the free fist and the protection of tariff taxation be placed around
the iron-ore and coal of corporations and capitalists.
“How can we face the people after indulging in such outrageous
discriminations and violations of principles?
“It is quite apparent that this question of free raw materials does
not admit of adjustment on any middle ground, since their subjection
to any rate of tariff taxation, great or small, is alike violative
of Democratic principle and Democratic good faith.
“I hope you will not consider it intrusive if I say something in
relation to another subject which can hardly fail to be troublesome
to the conference. I refer to the adjustment of tariff taxation on
sugar. Under our party platform and in accordance with our declared
party purposes, sugar is a legitimate and logical article of revenue
taxation. Unfortunately, however, incidents have accompanied certain
stages of the legislation which will be submitted to the conference,
that have aroused in connection with this subject a national
Democratic animosity to the methods and manipulations of trusts and
combinations.
“I confess to sharing in this feeling, and yet it seems to me we
ought, if possible, to sufficiently free ourselves from prejudice to
enable us coolly to weigh the considerations which in formulating
tariff legislation ought to guide our treatment of sugar as a
taxable article. While no tenderness should be entertained for
trusts, and while I am decidedly opposed to granting them, under the
guise of tariff taxation, any opportunity to further their peculiar
methods, I suggest that we ought not to be driven away from the
Democratic principle and policy which lead to the taxation of sugar
by the fear, quite likely exaggerated, that in carrying out this
principle and policy, we may indirectly and inordinately encourage a
combination of sugar refining interests. I know that in present
conditions this is a delicate subject, and I appreciate the depth
and strength of the feeling which its treatment has aroused.
“I do not believe that we should do evil that good may come, but it
seems to me that we should not forget that our aim is the completion
of a tariff bill, and that in taxing sugar for proper purposes and
within reasonable bounds, whatever else may be said of our action,
we are in no danger of running counter to Democratic principle. With
all there is at stake, there must be in the treatment of this
article some ground upon which we are all willing to stand, where
toleration and conciliation may be allowed to solve the problem
without demanding the entire surrender of fixed and conscientious
convictions.”
It was on July 19th that Mr. Wilson read this letter to the House.
Following it a bitter attack was made upon Mr. Cleveland by Mr. Gorman
and others in the Senate. They declared they had kept the President
fully informed of the changes which were being made in the bill; that
they had told him that it would be impossible to pass a bill which did
not embody them. Mr. Cleveland had insisted that a bill must be passed,
and he had urged them to go ahead and do the best they could. This is no
doubt true. But no one who knew Grover Cleveland can accept their
contention that he had practically assured them that he would accept any
bill that they could pass. It was not like him to make such a promise,
nor was he a man to mislead. Moreover, Mr. Cleveland would have been
false to his own great sense of responsibility if, for the sake of
party, he had let the repudiation of principle, and the juggling and
trading the bill represented, go without public reproof. There was a
chance, too, that his remonstrance might force from the Senate certain
concessions, such as the free iron-ore and coal which he so much wanted.
Mr. Cleveland took the chance. His letter failed to do what its author
sought. Indeed, it made the dominant faction in the Senate so angry that
it flatly refused to recede from any of the amendments to which the
House had declined to assent. The upshot of the matter was that on
August 13th the House gave in. Mr. Wilson’s brief closing remarks show
his disappointment. Until the last he had hoped and believed, he said,
that some form of honorable compromise would be achieved. “But,” said
he, “we have simply realized in this great fight the fact so well stated
by the great leader of the tariff reform fight in Great Britain—that
when the people have gained a victory at the polls they must have a
further stand-up and knock-down fight with their own representatives.
And we have realized if nothing else the warning lesson of the
intrenchment of the protective tariff in this country under thirty years
of class legislation until the mere matter of tariff schedules is a
matter of insignificance and the great question presents itself,—is this
to be a government by a self-taxing people or a Government of taxation
by trust and monopolies? The question is now, whether this is a
government by the American people for the American people, or a
government of the sugar trust for the benefit of the sugar trust.”
But he advised voting for the bill. It was with most of its rates as it
was with the sugar duty.
“Vicious as it may be, burdensome to the people as it may be,
favorable to the trust as it may be, it is less vicious, less
favorable to the trust, less burdensome to the people than is the
McKinley law, under which this trust (sugar) has grown so great as
to overshadow with its power the American people.”
Never had an opposition a more substantial reason for taunting a
majority than had the Republicans when it was finally seen that the
Senate had won. Mr. Reed had been spokesman for the Republicans
throughout the making of the bill and he had used his power in as
sheerly and consistently brutal a fashion as is to be found in the
records of Congress. But what he now said had a ring of honest
indignation and it was entirely justified by the facts.
“The adoption of the Senate bill,” said Mr. Reed, “is a complete
abandonment of the fundamental principles of tariff reform. The
Senate bill has been constructed upon entirely different lines. It
was framed upon the broad bedrock foundation of the necessity of
securing 43 votes, and all minor considerations had to give way to
this great underlying principle.
“Coal is taxed in order to secure the necessary votes of the
selfstyled ambassador from the sovereign state of Maryland;
protection is accorded to the industries of the state of Maryland as
the price of her votes; seventy-five millions of people are to be
burdened with a tax on sugar in order to hold the votes of the
sugar-producing state of Louisiana, and the sugar trust had to have
its demands satisfied in order to insure liberal contributions to
the Democratic campaign fund; while Republican Senators had but to
threaten interminable debate to secure full protection to the
industries of their state.
“In this way the Gorman Bill was constructed and passed, and it is
this measure, so framed, you now propose without amendment or debate
to indorse and approve. How you are able to do this with any sense
of self-respect, it is difficult to understand. You voted for the
Wilson Bill under protest, declaring you did so because, it was a
movement in the right direction, a step towards free trade; and now
you accept the Gorman Bill without regard to the principles upon
which it was constructed and without knowing whether it leads
towards protection or free trade in the face of an acknowledged
abandonment of all principle. Such unexampled party stultification
cannot be too severely condemned.
“What will be the fate of this bill at the other end of the avenue,
it is impossible to forecast, but the President of the United States
will belie his reputation for courage and tenacity of purpose if he
does not promptly stamp it with his veto.
“When this bill is laid before the President for Executive approval
and he has sufficiently examined it to be assured of its identity as
the very measure which he himself has already publicly repudiated, I
can imagine him taking the Wilson letter in one hand and reading his
own words, ‘This is an act of party perfidy and party dishonor,’ and
then dropping his pen from the other, exclaiming with ineffable
scorn, ‘Is thy servant a dog that he should do this thing?’”
Mr. Reed was right. The bill, which was passed by a vote of 182 to 106,
12 Democrats only voting against it, was never signed by Grover
Cleveland. It became a law without his name on August 27, 1894.
CHAPTER X
THE DINGLEY BILL
Two months after the Wilson Bill became a law, the Democratic majority
in the House of Representatives suffered as thorough a reverse as had
the Republicans in 1892. The House stood, after the election, 246
Republicans, 104 Democrats, and 7 Populists. The South returned 33
Republicans. The painful failure of Congress to make the honest and
thorough revision of the tariff which the country had expected was
certainly one cause of the party’s overthrow. Honorable men could not
sanction the scandal and barter which had attended the making of the new
law. But there were other and powerful causes for the defeat. There was
the silver question. With every month it became more certain that silver
was to be the issue in the next campaign. There was a possibility at
least that the Republicans would continue to make the issue their own.
The group of Western Republican Senators who in 1890 had voted for a
tariff bill of which they did not approve in order to get votes for a
silver bill of which the voters did not approve, were more hotly devoted
to free silver than ever,—more determined to make it a party measure.
Already several Republican State Conventions had declared for it. Among
the New England Congressmen there seems to have been a willingness to
prepare the way for some kind of action, at least to consider free
silver, for in the spring of 1894 Henry Cabot Lodge made a conciliatory
and ambiguous speech on the subject in the Senate and there were others,
who like him seemed to be ready to go either way. On the other hand,
free silver had no hope with the then dominant faction of the Democratic
party. Mr. Cleveland and his supporters were willing to go down to
defeat rather than even seem to encourage the fallacy. Free silver then
carried many voters to the Republicans in the fall of 1894.
The strongest reason for the overthrow was the least sound. It was an
unreasoning revolt against the party because of the panic of 1893 and
the long period of hard times which had followed it. The panic happened
after Mr. Cleveland was nominated, and therefore his election and his
policy caused it! The public overlooked entirely the fact that hard
times, failures, falling prices, and labor troubles had begun soon after
the passing of the McKinley Bill and had steadily become graver with
every month of its life. Between 1890 and 1894, the period the McKinley
Bill was in force, Ohio-scoured wool fell from 71½ cents to 44½ cents, a
drop of 27 cents. In 1896, under the Wilson Bill, wool began to revive.
Bessamer pig-iron fell off from $18.00 to $12.00 per ton between 1890
and 1894. These same tendencies were shown in nearly all prices where
the articles carried prohibitive tariffs. Almost, if not quite as great
a fall in prices occurred in 1890, 1891, 1892, and 1893 under the
McKinley Bill, as after the Wilson Bill went into effect and a lower
duty had been added to the general depression. The tariff considered the
fall was greater under the McKinley Bill on many important articles.
Take steel rails; under the McKinley Bill of 1890, they bore a duty of
$13.44 per ton. In 1890 they sold at an average price of $31.77. In 1891
the price fell to $29.91; in 1893 to $28.12½. The Wilson Bill reduced
the duty on rails to $7.84. The average price the first two years after
the bill went into operation was $24.00, and in the third year the price
rose to $28.00. The lowest price at which steel rails have ever been
sold in this country was in the first year of the Dingley Bill, $17.00
per ton. After the duty was put on barley for the farmer by the McKinley
Bill, the price went up for one year, 1891, but in 1892 it fell off 10
cents, and in 1893, 14 cents. Free barley and the continued depression
did little worse.
Hides had no duty under either the McKinley or the Wilson bills. The
price began to fall in 1892, reached its lowest level in 1894, and in
1895 rose higher than it had been in many years. All woollen goods fell
under the McKinley Bill and began to recover in 1896. Measured by
business failures and labor troubles, the period of the McKinley tariff
was as disastrous as that of the Wilson. Indeed, there is quite as much
reason for laying the panic of 1893 to one bill as to the other, but
neither was responsible.
The new Congress, which was elected in the fall of 1894, first met in
December, 1895. Mr. Reed was elected speaker of the House and Nelson
Dingley, also of Maine, was appointed chairman of the Ways and Means
Committee. Mr. Dingley was a man over sixty years old, a hard-working,
conscientious, experienced politician. He had been born and educated in
Maine. He had been one of the state’s best newspaper editors and had
filled, one after another, nearly all her offices, that of governor
included. In 1881 Mr. Dingley was sent to Congress, where he had soon
become invaluable because of his extraordinary fund of information on
all sorts of subjects, particularly on all things relating to American
history and American industry. He held the doctrine of protection in
much the same pious regard as did Mr. McKinley. For him it was a settled
dogma—the only question was the amount of a duty, and to the estimating
of that he brought an amazing patience in calculation and in
investigation. His colleague, Mr. Boutelle, once said that he had for
years lived in the same hotel with Mr. Dingley and that he had never
entered his room that he did not find him surrounded by documents, a pad
on his knee, laboriously digesting them for his purposes. Facts alone
stirred his mind. No man was ever witty enough or wise enough to impress
Nelson Dingley, but no fact was too unimportant to receive his
attention. It is obvious that any tariff bill he directed would be
carefully made.
The first business of the new Congress was to provide revenue. Mr.
Cleveland’s administration had inherited, as already pointed out, a
deficit of nearly $70,000,000. The tariff bill which had been revised to
increase the revenue had failed. The sugar refiners, finding that a duty
was to be put on raw sugar, had brought in enormous quantities, free, to
hold for their needs. Thus, by their foresight, the treasury in Mr.
Cleveland’s first year was despoiled of revenues it had a right to count
on. Again, the income tax on which they depended for a large sum was
declared unconstitutional. Something had to be done to bring in more
money. The Republicans had decided to use their power to put back the
tariff on wool and to increase that on a variety of manufactured
articles, and on December 26, 1895, Mr. Dingley reported a bill
providing for these increases. The bill was passed at once by the House.
Its fate in the Senate shows how thoroughly the tariff had already been
replaced by free silver. The Finance Committee did not report it, but
recommended to the Senate that the needed revenue be raised not by the
House bill, but by the free coinage of silver; and pathetically enough,
poor Mr. Morrill, who for forty years had struggled for sound money, was
obliged, as chairman of the committee, to report the measure.
This putting of the tariff in second place was the more evident as the
time approached for the National Convention of 1896. Silver was the
question in which the real interest lay, not the tariff. Nevertheless,
the wool-growers and woollen manufacturers, the Iron and Steel
Association, the high protectionists everywhere, began, months before
the Convention, a determined campaign to commit the Republicans to
tariff revision as a leading issue, and to name William McKinley for
President. “Bill McKinley and the McKinley Bill” seemed to them a slogan
sufficient in itself to win an election. They had their way. The
platform declared protection to be the “bulwark of American industrial
independence and the foundation of American development and prosperity.”
It also declared with evident reluctance its opposition to the free
coinage of silver except by international agreement with the leading
commercial nations of the world.
The intention of the wool and the iron and steel interests and their
allies to force the tariff to the front in the campaign, was frustrated
at once by the extraordinary sweep to silver in the Democratic
Convention and the revolt to that party of a large body of leading
Republicans. If the election was to be won at all, it had got to be won
by an unequivocal and whole-hearted stand for the gold standard and to
that Mr. McKinley was forced, half-silverite as he was, after a few flat
efforts to arouse enthusiasm for the bill of 1890. It was McKinley and
the gold standard, not Mr. McKinley and prohibitive tariffs, which was
opposed to Bryan and free silver, and in 1896, Mr. McKinley won by the
votes of the Gold Democrats. It is probably true that many of them were
given to understand that the Republicans would let the tariff alone or
at least would not be in a hurry to revise it: at least that claim was
made by men of character and intelligence. It was hardly Mark Hanna who
could have made such a promise. Mr. Hanna knew too well what his backers
in iron and steel and wool expected, and would demand for their
contributions. That these contributions were large, there can be no
doubt. James M. Swank, the general manager of the Iron and Steel
Association, has said that more money was spent to elect Mr. McKinley
than had been spent to elect Mr. Harrison, and certainly Mr. Swank was
in a position to know.
At all events, the work to which Mr. McKinley called Congress in extra
session immediately after his inauguration, on March 4, 1897, was not
establishing sound money; it was raising more revenue by duties “so
levied upon foreign products as to preserve the home market as far as
possible to our producers; to revive and increase manufacturers; to
relieve and encourage agriculture; to increase our domestic and foreign
commerce; to aid and develop mining and building; and to render labor in
every field of useful occupation the liberal wages and adequate rewards
to which skill and industry are justly entitled.” Why Mr. McKinley
expected a new bill to do what his own had not been able to do, he did
not explain.
The new bill was almost ready to report when the extra session was
called, for Mr. Dingley and his committee had been at work all of the
preceding winter preparing it. A sincere effort was made to give a good
bill according to Republican lights. “We expect,” Mr. Dingley wrote
Colonel George C. Tichenor, who was assisting him, “to cut nearly all
our duties considerably below those of the act of 1890.” In not a few
cases, Mr. Dingley accepted the Wilson rates practically as they stood.
This was true of the metal and cotton schedules. He felt safe in doing
this, because, as he said, they were “really made by the manufacturers.”
Throughout the schedules the committee aimed to replace the Wilson
specifics by ad valorems and, of course, this caused more or less
uncertainty as to whether or not by the change those rates had not been
raised more than the committee acknowledged. The Democrats charged that
they had, but the fact seems to be that Mr. Dingley sincerely aimed to
keep duties nearer, if possible, to the Wilson Bill than to the McKinley
Bill. The committee particularly desired to escape the charge of fixing
prohibitive duties. This had been done in 1894, professedly to cut down
the revenue, and the mischief it had worked the party was not yet
forgotten. In spite of the repeated assurances of Mr. Dingley that the
extremes of the bill of 1890 were to be avoided, the committee did
report many rates as high and a few even higher; for instance, the
duties on flax and linen were advanced. A number of the unimportant
articles which the old bill had put on the free list were put back in
the dutiable list, as were nearly all the important articles made free
by the Wilson Bill,—wool, salt, lumber, cotton bagging, cotton-ties, and
burlaps.
Works of art had been made free by the Democrats; the Dingley Bill
restored the duty. One reason given was that “many objects having no
artistic quality or merit whatever, and calculated rather to corrupt
than encourage art or culture” were being imported! Foreign books, that
is, “books in language other than English,” over twenty years old,
engravings, etchings, music, maps, scientific books and periodicals and
supplies of all kinds for colleges, libraries, galleries, and
laboratories had been allowed to come in untaxed by the Wilson Bill; all
these duties were restored by the Dingley Bill. Travellers were again
subjected to the irritation of having their luggage overhauled, and the
amount of purchases allowed them was reduced to $100.00. This
exasperating tax first appeared in the McKinley Bill; here the limit
fixed was $500.00. The Democrats dropped the clause but it was now
restored. But in spite of these mediæval provisions, the Dingley Bill,
when presented to the House on March 19, 1897, was a fairly good
protectionist measure, certainly a real improvement on the McKinley
Bill. There were fewer prohibitive rates, less contradiction, and less
quakery.
In introducing the bill, the Republicans had laid down a program for
rushing it through the House by March 31, and this was carried out,
under protest, of course. The bill did not come to the Senate from the
Finance Committee until May, and it came back with many changes. Mr.
Aldrich, the chairman of the committee, claimed that on the whole these
changes were downward. He was emphatic in his assertions that moderate
duties were expected by the country. It was “thoroughly understood in
the last political campaign,” said Mr. Aldrich, “that if the Republican
party should be again intrusted with power, no extreme tariff
legislation would follow. It was believed, in the changed condition of
the country, a return to the duties imposed by the act of 1890 would not
be necessary even from a protective standpoint.
“Industrial conditions in this country, with very few exceptions, do not
demand a return to the rates imposed by the act of 1890. The bitter
contest which is going on among the leading nations of the world for
industrial supremacy has brought about improvements in methods and
economies in production to an extent which was not thought possible a
few years ago. These new conditions must be taken into account in
considering the rates to be imposed.”
When the Finance Committee had believed the House rates extreme, Mr.
Aldrich said that they had lowered them. A comparison of the bills shows
that this was the fact in the case of the chemical, the earthen ware,
and the glass and metal schedules. There were also reductions on certain
parts of the wool schedule. While the Senate amendments, on the whole,
aimed at lowering rates, they also aimed, like the House bill, to
protect everything which asked protection. The sugar schedule had
undergone material changes and mysterious ones. The rates on all but the
lowest raw sugars were higher than they were in the Dingley Bill, and
there was a gap between sugars of 87° and 88° polariscope test much
wider than between any other two grades. This exceptional differential
was effected by such indirection that there was an immediate cry that
Mr. Aldrich was trying to play into the hands of the sugar trust. The
schedule was twice changed in the Senate, but when the bill came into
conference Mr. Dingley succeeded in having the House rates restored.
The political make-up in the Senate in 1897 was such that it created for
the Republicans a situation not unlike that of the Democrats in 1894.
Their Republican majority was considerable, but there was a group of
this majority interested in free silver and not in the tariff, and it
could not be counted on. If they supported the bill, it would be in
return for concessions which they might ask. Almost at once it developed
that this group was going to use its power to raise the duties on all
grades of wool higher than the House or Senate had proposed to do. Wool
had been free under the Wilson Bill. To cut a duty on an important
product like wool 11 and 12 cents a pound without giving time for
adjustment, of course causes a severe strain on a business even in
prosperous times; to do it at a moment when all business is depressed
and when the particular product, as in the case of wool in 1894, has
been suffering ups and downs for many years, is to increase the strain
dangerously near the breaking point. Free wool did intensify an existing
distress but that the sheep growers would not have rallied from it and
adjusted themselves in a very few years, no disinterested person can for
a moment believe. If they had been willing to do this, there is no doubt
that the business of wool-growing would be on a more solid basis to-day
than it has ever been in this country. It would be conducted according
to those laws of supply and demand which govern trade, and not be
subjected, as it is now, to periodical excitations and depressions as
public opinion forces duties up or down. The wool-growers had no
thought, however, of accepting the situation as long as they had
political power. Judge William Lawrence, the president of the National
Wool-Growers Association, kept up a clamor throughout the campaign, and
when the new bill was under consideration, demanded rates higher than
wool had ever received. He was sternly rebuked by strong protectionists
for his greed. “Any revision of the tariff,” one influential interest
allied to him, said, “which carried such rates of duty on this raw
material, would not only fatally hamper the American wool manufacturer,
but would excite on the part of the people such natural opposition, by
reason of their prohibitory character, that their enactment would
necessarily be followed by agitation for their repeal, an agitation
which would grow and gather and continue until it finally resulted in
still another tariff revision, perhaps at the end of four years. To
insure any degree of permanence to the tariff law about to be enacted it
is necessary that, in so important a schedule as this, it shall commend
itself to the popular judgment as one constructed on fairly conservative
lines. The schedule proposed by Judge Lawrence far exceeds in its
proposed rates of duty any schedule ever before demanded with reference
to any article, either raw or manufactured, in connection with any
revision of the tariff ever undertaken in the United States.
“It is not necessary in this connection to undertake any analysis of
these proposals. Their significance will at once be apparent to every
wool manufacturer. Their enactment would be tantamount to a blanket
provision in the law to the effect that ‘the importation of wools of
foreign growth is prohibited, on and after the passage of this act.’
Such a wool schedule would not only be fatal to the wool manufacturer,
but equally fatal to the wool-grower; for it would enormously restrict
the use of domestic wool, which would be superseded by foreign wool
imported in the manufactured form.”
But Judge Lawrence and his Association, as had been proved in 1883 and
again in 1890, held moderate protection as little better than free
trade. They wished to shut out all foreign wool. They refused to modify
their demands now, and when both House and Senate Committees put the
rates down, they turned on their representatives with a demand that
their wants be satisfied. That they could rally a group strong enough to
defeat the bill was plain. The Western silver Senators were also wool
Senators. They took no interest in the bill as a party measure; they
would gladly defeat it if it did not give them what they wanted.
Moreover, the demand for a duty on wool was supported by a group of
Eastern woollen manufacturers who had always exercised great political
power. This was the group known as the National Association of Wool
Manufacturers. Although they deplored Judge Lawrence’s extreme demands,
they stood for a duty on wool. In the judgment of this Association, they
must either support the wool duty or be prepared to abandon their own
protection; accordingly they now resolved that “an impartial application
of the principle of protection is essential to a complete and uniform
development of the industrial resources of the nation,” and they
“earnestly” seconded the appeal for a duty on wool. This resolution they
sent to the wool-growers, who naturally had always been suspicious of
the support of men willing to work for a law which made their own
materials dearer, with a private note, assuring them that “a spirit of
sympathy and fellowship” towards all wool-growers animated the
Association. That his spirit was far from animating all in the business,
the loud protests against taxing wool which came from many leading but
non-political woollen manufacturers at this time is evidence. So strong
was the vote the wool interest mustered that the Senate finally yielded
in its fight for the lower duty. Eight and 9 cents a pound on clothing
and combing wool were what it had been struggling for; 10 and 11 cents
were granted: but when the bill went into conference these rates were
advanced to 11 and 12 cents, making the duties exactly what they were in
the McKinley Bill. The duty on wool of the third class, that is, on
carpet wool, was raised higher than in the bill of 1890, an entirely
indefensible increase. We did not then and do not now raise carpet wool
in this country. Our land is too valuable. But the Western growers of
coarse wool had been told that carpet wool was being imported free for
use in cloth-making, that it was “deplacing” American wool, and they had
demanded that it should be taxed. It is probable that a small amount of
carpet wool did and still does find its way into certain clothes, but it
is a negligible amount, and to put a tax upon the raw material of an
entire industry, making every yard of domestic carpet dearer for the
sake of protecting the scared wool-growers of the West against a purely
imaginary competition was as silly as it was unjust.
The demand of the wool-growers that the prohibitive duties on all kinds
of wool substitutes be restored, was imperative. By raising the cry of
“shoddy” they could wrest a duty from Congress on any material, no
matter how valuable to the manufacturer. Perhaps no word has been more
unjustly degraded in the history of industry in this country. The world
has never produced enough raw wool to meet the demand for woollens. It
has always been necessary and probably always will be necessary, to use
wool waste and wool rags. Ingenious machines have been devised for
preparing all this material for the manufacturer. It is a legitimate
part of the business, and one that helps to provide warm, cheap clothing
for the poor. “It would be as unreasonable,” says one authority, “to
despise paper makers because they use up linen rags, or to despise dyers
who use colors made from coal tar, as to despise manufacturers who use
up waste woollen rags as shoddy. It is said that 125,000,000 pounds of
shoddy, mungo, etc., are manufactured into wool every year in England
alone. If this immense quantity were wasted, it is difficult to estimate
the increase which would take place in the price of wool and the
consequent dearness of cloth; but the result would be that countless
persons would be unable to afford proper clothing.” The wool-growers cut
off all importations of shoddy in the new schedule. It would displace
American wool. As we shall see, it drove the manufacturers, not to use
more wool, but to find a substitute for wool.
Of course, the McKinley rates on raw wool meant the McKinley rates on
woollen goods, that is, if the National Association could get them. In
principle, they were those of the compact of 1867, between the two wings
of the wool industry, which rates have already been explained. They
provided for compound duties; that is, one set of duties which made up
to the manufacturer for the tax he paid on his raw material—the aim
being, of course, to put him on the same basis as his foreign rival—and
a second set which was purely protective. In estimating the first class
of duties, the National Association demanded that four pounds of wool
should be reckoned to a pound of cloth. It had been shown again and
again that it was only “sometimes” that this amount of wool was required
for a pound of cloth, that the effect of the ratio was to make all of
the heavy-shrinking wools for which four or more pounds were needed too
dear to be imported, and at the same to give an entirely unnecessary
compensation to cloth goods made from wools which shrink but slightly.
When the point was made, the National Association raised a hue and cry,
and Congress was warned to respect its influence as it had been in 1890.
When it came to the duties for protection the Association which had
protested against the greed of the wool-growers in demanding high duties
showed themselves equally greedy and more successful; for the
wool-growers, except in the case of carpet wools, which we do not
produce, had to content themselves with the McKinley rates, while the
woollen manufacturers were able to raise the duty on the goods which are
chiefly imported to the highest point it had ever touched, 55 per cent.
It is interesting to note that in the compact of 1867, to which the
Association constantly appealed in the making of the Dingley Bill as it
had in earlier bills, 25 per cent was considered a proper protection for
the goods on which the Association now asked and received 55 per cent.
When the bill finally passed the Conference it carried the same puzzling
provision for a duty on wool tops as had been put into the McKinley Bill
on the suggestion of the then president of the National Association of
Wool Manufacturers, Mr. William Whitman. As we have seen, this was not a
clearly stated figure: tops were to carry the duty of the basket clause
of the schedule. Figured out, this amounted to a higher duty on tops
than the bill provided for yarn, which is the more advanced stage of
wool on its way to cloth. There was opposition to this duty and
grumblings of manipulation, but it was many years before the truth about
it became public property.
The success of the National Association in getting into the bill exactly
what it wanted was generally believed by those who knew what was going
on in Washington at this time to be due to the confidential relations
with the Finance Committee of the secretary of the Association, S. N. D.
North. During the making of the Wilson Bill, Mr. North was known to have
had a desk in the office of Senator Aldrich, and from that vantage
ground to have made a desperate but unsuccessful attempt to secure for
the industry he represented something of the favor which other lobbyists
were wresting from the Democrats. During the making of the Dingley Bill
he occupied the same inside position. To all appearances he was a
confidential clerk of Mr. Aldrich’s; as a matter of fact, he was a paid
representative of the woollen manufacturers, looking after their
interests while apparently aiding the Finance Committee as he could.
That Mr. Aldrich, himself, did not understand the real nature of the
wool schedule finally adopted, one can hardly doubt, for he told Mr.
North at the time, according to a letter the latter gentleman wrote to
Mr. Whitman: “I don’t suppose this tariff is going to last long, because
the rates are so high; but I am perfectly willing that the wool
manufacturers should have all that there is in it and that the tail
should go with the hide.”
The influence on the bill of this despotic power of the wool interests
was similar to that of sugar on the Wilson Bill, but it did not make
itself clear in the Senate as it had in the earlier bill. It came out in
the conference of the two Houses which followed the passage of the bill
by the Senate on July 7. Some 872 amendments had been tacked to the
measure and the conference spent nearly a fortnight over them. When
finally reported, the rates were generally higher than either the House
or Senate had advised. It was impossible to give to wool all it demanded
on a threat of defeating the bill, unless other interests were favored,
and so it happened that when the Dingley Bill was finally passed, it
was, on the whole, a more oppressive measure than the McKinley Bill.
Moreover, it was made more oppressive by a House and Senate whose
leaders had declared from the beginning of their work that the country
asked and had been promised moderate duties. It was as real a breaking
of promises as the Wilson Bill was a surrender of principles.
And there was a general feeling among those who had made it, and in the
Administration itself, that as Mr. Aldrich told Mr. North, duties were
too high and would have to come down. What would have happened if the
public mind had continued to be occupied with the tariff as it had in
1890 and in 1894, it is difficult to say. It is not probable that there
would have been any such revolt as the McKinley Bill caused. The
disillusion the country had suffered over the ability of the Democrats
to carry out consistent reforms was too keen. Moreover, what industry
wanted and needed more than anything else was to be let alone; even the
most irreconcilable of tariff-for-revenue only men could have hardly
counselled another revision at this juncture. The Dingley Bill, bad as
it was, did not stir the popular mind. Silver occupied it, and silver
was soon displaced by the most absorbing interest which a country can
have—a war—and the war was followed by the question of imperialism, and
imperialism was not settled before the country had entered on a period
of such magnificent and bewildering prosperity as it had never before
dreamed. The heavy decline in prices which had begun in 1891 reached its
lowest point for raw materials at the end of 1896, for manufactured
goods in 1897. It was not until 1904 that the prices which manufacturers
had received in 1890 were reëstablished, but after they were once
reached, they soared rapidly far beyond. As for raw materials, they
regained the ground they had lost much more quickly.
Wealth of all descriptions began to increase in an unheard of way. In
1897 the gold and silver produced in the United States was worth
something over $89,000,000; in 1900 this had risen to $115,000,000, and
in 1905, to over $122,000,000. While in 1897 we produced over 8,500,000
tons of pig-iron, in 1905 it was 16,500,000, and we were consuming about
all we produced. Of bituminous coal in these three years we produced
respectively 131,000,000, 189,000,000, and 281,000,000 tons. Of wheat we
grew in 1897 over 530,000,000 bushels, about the same in 1900, and in
1905 nearly 700,000,000 bushels. The cotton crop in 1897 was valued at
$319,500,000; in 1900 at $511,000,000, and in 1905 at $632,000,000. Our
hay averaged an annual value in this period of over $500,000,000; our
potato crop something like $150,000,000. The value of our farm animals
in 1897 was about $1,655,000,000; in 1900 it was $2,280,000,000; and in
1905 over $3,000,000,000. And so one might go on recording phenominal
growths of almost everything which the earth yields in return for man’s
labor. And never before had there been so rapid an increase in the
number of laborers available. We could bring in labor free and in this
period we used the privileges as never before. Immigration which in 1897
was but 230,000 rose in 1900 to 448,500; and in 1905 to over 1,000,000.
The great bulk of these newcomers were men of a working age, that is,
over fifteen and under forty. These great numbers were added annually to
those who already were at work in the country until in 1900 nearly
30,000,000 people were busy in this country, drawing from the earth the
materials of wealth, moulding them to men’s uses, and transporting them
to the markets where they were wanted, and these markets were not those
of the United States alone. Our home consumption was enormous, but we
bought and sold with all the nations of the earth in constantly
increasing quantities, selling always many millions more than we bought.
How much had the Dingley Bill to do with this great outpouring of
wealth? It certainly did not cause it. A wave of prosperity was sweeping
around the globe, as one of depression had from 1891 to 1897; England,
Germany, France, and the Orient, shared in the blessings. The Dingley
Bill could neither retard nor accelerate this. It could not and did not
grow a potato or produce a gold nugget, but it no doubt did cause more
of the materials we were producing to be manufactured at home than would
have been done under the Wilson Bill. Without it much of the capital and
labor given to manufacturing would have gone to agricultural uses and
commerce. Sheltered from competition, men aimed to make in the country
all that a highly prosperous home market would consume of necessaries,
of novelties, of ingenious conveniences, and of luxuries. The Dingley
Bill relieved the manufacturer of the necessity of considering what was
doing in his trade in other nations. This enormous advantage enticed
more capital proportionally than into other lines of industry. And as
the industry expanded, immigration was excited. Manufacturing as
conducted to-day requires much cheap labor. Save in the skilled work
where comparatively few are needed, American labor—naturalized foreign
labor, will not stay long. Immigration was necessary in order to supply
the cheap labor the textile and the steel and iron industries needed.
That is, the Dingley Bill may be credited with adding two or three
hundred thousand consumers yearly to our domestic market. The value of
this addition is doubtful when we examine the standard of living of the
immigrants, the amount of their earnings sent home, and the large
proportion of those who are transient, that is, who return to their
native land to end their days: just what this proportion is, it is
impossible to say, but something of its size may be judged from the
steerage passengers sailing annually from the ports of the United
States. In 1900, for instance, 448,572 persons came in by steerage, and
293,404 went out. In 1905 1,026,494 came in, and 536,151 went out. The
value of the increase in the size of the domestic market, which may
fairly be credited to the Dingley Bill, is less impressive also when it
is compared with the value of the markets of many millions we might have
been conquering at this time if we had had the shipping on the seas
which we once had, and which, as already has been seen, we have
destroyed by prohibitive tariffs on iron and steel and lumber, and by
hampering navigation laws.
The first uneasiness over the bill which its authors felt was along the
line of foreign markets. We were not conquering them as rapidly as we
ought, or as we must, if our tremendous production was to be disposed
of. That which the thoughtful had been warning against was happening. In
our zeal to produce, we had not intelligently arranged what we were to
do with our products. The Dingley Bill had, it is true, provided a
scheme of reciprocity. The really important provision in the scheme gave
the President power to negotiate trade treaties with any country,
subject to ratifications by the Senate. Mr. McKinley soon after his
inauguration appointed a special plenipotentiary to negotiate these
treaties,—John H. Kasson, who had always been a moderate protectionist,
and who had seen the capitulation of the party to the manufacturers of
the country with disgust and dread. Mr. Kasson undertook the work with
enthusiasm. By 1900 he had several treaties signed and before the
Senate. The most important one was with France. By this treaty we could
import into her territory a very large number of articles at a minimum
duty, and we in return were to give her a reduced duty on many of her
products. Not only Mr. Kasson, but Mr. McKinley himself urged the
ratification of these treaties. There was no doubt but that the public
generally favored them. But there had appeared in opposition the same
forces which had made the McKinley Bill, the Wilson Bill, and Dingley
Bill what they were,—political measures, trading contracts, by which for
so much influence, so much duty was given. These nervous, superstitious,
and greedy forces decided against reciprocity. The nature of their
opposition was very well summarized in one of the hearings on the
subject by a manufacturer who was himself in favor of the French treaty.
“We have striven to know, both before coming to Washington and since
our arrival here, what are the objections to the treaty. We have
been informed that the knit-goods manufacturers have been opposed to
the ratification of the treaty. We are now informed that of the
$100,000,000 worth of knit-goods consumed in the country last year,
only $240,000 came from France. We have been informed that the
manufacturers of pottery and silks were opposed to the ratification
of the treaty. We are now told that both industries have admitted
that no injury would be suffered by them. We have learned that the
manufacturers of spectacles have believed that they would suffer
injury, but they were shown that there would still remain to them
eighty-eight per cent of the present tariff; they have been
satisfied to believe that no injury would come to them. We have been
informed that the manufacturers of imitation jewellery object to the
ratification of the treaty. We understand that the treaty proposed
to reduce the duty from 60 to 57 per cent. We are further informed
that the probabilities are that the result of the treaty will
increase far more largely the exports of this class of manufacturers
from the United States to France than they import from France to the
United States.
“We have heard that opposition to the ratification of the treaty has
been based upon the proposed reduction in our tariff on prunes. We
find that our exports of prunes to France amount to $260,000, while
the imports of prunes from France to the United States amount to
$14,000. We have understood that manufacturers of chemicals, gloves,
and braids have stated that they will be injured by the ratification
of the treaty. After an honest effort to learn the facts in the
case, we are reduced to the conclusion that in actual working of
this treaty the injuries suffered by them would be problematical in
every case, and imaginary in most cases.”
Treaty after treaty was negotiated, but in spite of urgency from the
most respectable sources, Congress refused to act on them, and finally
in March, 1901, Mr. Kasson resigned. His chief did not give up the
cause, however, for in the memorable Buffalo speech of September 5,
1901, Mr. McKinley said:
“The period of exclusiveness is past. The expansion of our trade and
commerce is the pressing problem. Reciprocity treaties are in
harmony with the spirit of the times; measures of retaliation are
not. If, perchance, some of our tariffs are no longer needed for
revenue, or to encourage and protect our industries at home, why
should they not be employed to expand and promote our markets
abroad?”
The very essence of all this opposition to free or freer exchange on the
part of the manufacturers was the fear of lower prices and cheaper
goods. They held as a part of their narrow economic philosophy, the
theory that the cheap coat makes a cheap man, that prosperity means
limited production and high prices. At bottom, the manufacturer
eliminates from his calculations all consideration of the consumer. But
the consumer exists, and finally, in spite of the enormous prosperity of
the country, the consumer was heard from. The Dingley Bill about 1900
began to hit the rocks for which it had from the start been headed.
CHAPTER XI
WHERE EVERY PENNY COUNTS
The last man to be heard from in the making of the Dingley Bill, as
indeed of its predecessors, was the man who was to buy the goods. In
1896, when the tariff hearings were going on, Mr. Louis Brandeis of
Boston, at that time unknown outside of his own professional circle,
appeared “for the consumers” as he told the Committee. He was laughed at
for his pains. “What’s the use?” was Mr. Dalzell’s protest; “Oh, let him
run down,” his sneer, when Mr. Brandeis insisted that it was his right
to say what he thought about duties which made his necessaries dearer. A
recurring note in the hearings held in Washington, before the
Payne-Aldrich Bill, was contempt for the suggestion that this or that
duty made an article cost a cent or two more at retail. What was a cent
to a consumer! This was particularly noticeable in the argument of the
wool interests. What if the tariff did make the cloth for a suit of
clothes a few cents dearer a yard—it did not add a large amount to the
price of the cheap suit. It was not worth considering.
What is a cent to a consumer? Are there a considerable number of people
in this country living on incomes so small that a rise of a cent or two
in the price of necessary articles of food and clothing can make a
material difference to them? To most Americans “the poor” in the United
States are a negligible quantity. We think of them as the frayed and
falling fringe on our great fabric of “comfortable off”
population—largely what they are by their own indolence or inefficiency.
But is this true? Is it not true, on the contrary, that the great
majority of the inhabitants of the country, the great mass of
hard-working, industrious men and women are poor? The statistics of the
distribution of wealth should be often set before those hopeful souls,
who, prosperous themselves, love to insist that, in this country at
least, “all is for the best in the best possible of worlds.”
We have 92,000,000 people in the United States. Perhaps there are a few
thousand millionnaires among us, perhaps a few hundred thousand having
an income of ten thousand dollars or more. But in contrast to them there
are millions of individuals whose wage is _under_ a thousand. Look over
the average yearly wages in our best-paid industries. Take the one which
boasts of paying the highest wage—the United States Steel Trust.
According to its last report the average wage of its 195,500 employees,
_including_ its foremen and clerks and managers, whose salaries in some
cases are $10,000 even $25,000 a year, was but $775. In 1905 the average
yearly earnings of the men in the cotton industry was but $416. In 1907
the mule spinners in the Massachusetts woollen factories averaged $13.16
a week, the dyers averaged $8.58, the weavers $11.60. There are probably
several millions of white families in the United States whose average
wage is not over $500 a year. When one comes to examine industries
generally, the surprise is not how _much_, but how _little_ the great
body of wage-earners receive. People must live on small earnings in this
country, as everywhere. In order to accumulate enough to provide against
sickness and old age they are obliged to practise a thrift which
frequently is hateful, it is so cruel. Moreover, genuine thrift requires
so much training, intelligence, and self-denial that comparatively few
are prepared to practise it, even with the best of intentions. This is
the hard fact, and yet the Congress of the United States for fifty years
has fixed taxes on the food and clothing and shelter of these people
with no apparent consciousness of their condition. They were the
“ultimate consumers”—terms in a problem—not suffering, struggling men
and women.
If one would know with something like scientific precision what it means
for a family to live on $500 or less a year in a city like New York, for
instance, if he would realize the relation of a rise of even a cent in
the cost of a necessity to the comfort of the multitude of working girls
in this country on $6.00 and $8.00 a week, he should study the various
investigations recently made into the budgets of these two classes. They
demonstrate that if one is to take care of a family of five persons in
New York City on $500 a year, or of himself on a wage of $6.00 or $8.00
a week, he must think before he buys a penny newspaper, and he must save
and plan for months to get a yearly holiday for the family at Coney
Island; that there is practically no possibility of a nest egg or of
schooling for the children beyond fourteen years of age, that sickness
means debt or charity, and that the accumulation of those things which
make for comfort and beauty in a home is out of the question. To these
families an increase of a cent in the price of a quart of milk is
something like a catastrophe. To these girls, every penny added to the
cost of food, of coal, of common articles of clothing, means simply less
food, less warmth, less covering, when at the best they never can have
enough of any one of these necessaries. These budgets are a powerful
demonstration that the rapid rise in the cost of living under the
Dingley Bill was to a vast number of people of this country nothing less
than a tragedy, for what is true in New York City is equally true in
Chicago, in Pittsburg, and in many factory towns. The statistics, which
show the rise in prices from 1897 onward, are as sensational as those
which show the increase in national wealth. For instance, take what the
bulletin of the Labor Bureau calls the “annual per capita cost of the
necessaries of daily consumption.” It rose from $74.31 in 1896 to
$107.26 in 1906. Coal which cost $3.50 a ton in 1896 cost $4.50 in 1906.
Manufactured commodities were 32 per cent higher in 1906 than ten years
before, raw commodities, 50 per cent higher. “All commodities” averaged
35.4 per cent higher. Rents soared everywhere. That wages increased
largely in many industries in this decade is equally true, but that they
increased correspondingly in any but the most favored industries—those
where either the Unions exercised compelling power or those where the
managers were unusually enlightened—is doubtful. A government
investigation of the wages in about 4000 establishments, employing
334,000 persons, engaged in manufacturing and mechanical industries, the
kind of establishments where, of course, the forces which raise wages
act most freely and successfully, shows that in 1906 the weekly wages of
the 334,000 were 19.1 per cent higher than in 1896, while, as said, the
cost of all commodities was 35 per cent higher. Wages increased 3.9 per
cent in 1906 over 1905, while the cost of the commodities increased 5.9
per cent. Now what does this mean? Why, simply this, that at a time when
wealth was rolling up as never before (this country increased its wealth
between 1900 and 1904 by about twenty billions of dollars), a vast
number of hard-working people in this country were really having a more
difficult time making ends meet than they have ever had before. It also
means that in a great number of other hard-working families the increase
in wages had been so little in excess of the increase in the cost of
living that it may be almost said to have been a discouragement instead
of a comfort, by intensifying the common conviction of the working-man
that no matter how much he earns he will still have to spend it all in
the same hard struggle to get on, that there is no such thing for him as
getting ahead.
There is no escaping the seriousness of such a situation. The only
chance of peace and of permanency in this country lies in securing for
the laboring classes an increasing share of increasing wealth. It is
not enough that the wages of men keep up with their forced
expenditures,—they must go beyond. There must be a _growing_ margin
between the two—a margin wide enough for the laborer to see it, and to
be able to draw hope and encouragement from it. When the margin has
shrunk or not visibly increased, unrest and discouragement must
follow. There is no doubt that a great number of employers in this
country recognize this principle, and thousands of them are struggling
to meet it by increasing wages. But there is another duty for us, and
that is to keep down the cost of living. And it is this duty which the
makers of tariff bills have always refused to face squarely and, as
far as the tariff had any relation to it, honestly to discharge. That
the Dingley Bill had not been the only cause of the increasing burden
which the consumer bore is true, but it was a real cause, and in the
case of certain essential common articles, almost the only cause. Take
for illustration the case of the tariff and spool cotton. Spool cotton
is as necessary an article of daily consumption in the household as
fuel or cloth. Many women with families, on $500 a year, many shop and
factory girls on $6.00 or $8.00 a week, make their own clothes. Not
infrequently these women in their work are obliged, when not protected
by a Union, to furnish their own thread. For many years the price of
the ordinary 200–yard spool cotton was 5 cents, twelve spools for 50
cents, when suddenly in 1900 it was advanced to 6 cents, about double
the price it was selling for in England. The cause of the advance
offers one of the nicest studies we have of the beneficent effects on
prices of a tariff combined with a trust.
The leading brand of thread which was sold in 1900 at 6 cents in New
York and about half that in England, is made by J. & P. Coats, Limited,
of Paisley, Scotland, and by the Coats thread combination in this
country. The Coats House is the oldest and most progressive thread house
in the world. It early saw the advantage of establishing a factory in
the United States and competing for the American trade under the
protection of the tariff. Other English firms also saw the advantage,
chief among them the Clarke Mile End Spool Cotton Company of Newark, New
Jersey. A few years ago the Coatses realized that a combination of the
English concerns doing business here would be profitable, and one was
brought about, the products of the amalgamation being handled by the
Spool Cotton Company of New York City. In 1897 some sixteen of the
English competitors of the Coats’s concern combined in a $10,000,000
trust, called the English Sewing Cotton Trust. The J. & P. Coats Company
took $1,000,000 of the stock, and at least once since has helped the
organization out of trouble by lending it $2,000,000. Thus the two
concerns are working together. The next year, after the English
combination was formed—1898—an American Thread Trust Company was formed.
It was made up of the thirteen leading American concerns,—all, indeed,
but one of the large domestic companies went into it. No sooner was this
done than the English Trust bought the majority of the American Trust’s
stock. Here, then, was an English Trust owning and controlling the
American Trust and dictating its policy from the other side of the
water. And this British Trust was affiliated and partly owned by the
still larger concern, the J. & P. Coats Company. It comes down to this,
that the $48,000,000 Coats concern controls practically the thread
business of England and America. No sooner was the English control
complete here than the price of thread was advanced.
Mr. Archibald Coats, the head of the Paisley concern, when twitted with
using his monopoly to put up the price of thread, insisted that the
advance was due entirely to the higher costs of materials. Moreover, he
said, the concern was not a monopoly, that there were in the world 180
thread concerns outside of those in which he was interested. Mr. Coats’s
materials were higher—cotton, fuel, spool-wood, had advanced, but on the
other hand, Mr. Coats himself called attention to the savings he and his
colleagues effected by their combination, both in manufacturing and in
selling. These economies the representatives of the American end of the
Trust told the Industrial Commission in 1900 were “immense,”
“tremendous.” Mr. Coats stated in his report of 1906 that the profits of
his concern in the second five years of the combination—that is, after
the price of thread went up, and also after the price of materials had
gone up—were nearly a third greater than in the first five years. They
certainly were highly satisfactory,—a profit of $12,636,000 a year on a
capital of $48,600,000 is doing well! The fact seems to be that through
a monopoly in this country which it was possible to perfect only because
of the high tariff on spool cotton which had cut off all competition
from the 180 concerns which in free-trade England might affect him
somewhat, Mr. Coats was able to sell his thread here at a higher price
than he did in England and to increase his profits in five years by some
33½ per cent, and this in a time when his materials had largely
advanced. That is, Mr. Coats and his friends had been able to make the
millions of this and other lands bear all the fluctuations and
vicissitudes of the thread trade. Whatever happens, he could protect
himself and his favored workmen from sharing any of the losses of his
business; he could even increase his profits.
One of the necessary articles which steadily advanced in price after the
Dingley Bill passed, was shoes. It was an advance which was particularly
hard on the poor, for shoes are one of the heaviest expenses in clothing
a family. One of the budgets reported in a recent investigation of
living expenses in New York City was that of a family of four persons,
respectable, hard-working, and anxious to get ahead. Their total income
was $600. These four persons kept themselves “neat and clean” on $40.00
a year. Out of this $40.00, $11.81, _or over one-fourth of the total,
went for shoes and mending shoes_. In another budget of a larger amount
($895) $61.90 was spent for clothing in a family of eight persons, and
out of this $8.00 went for shoes for the father, $1.25 for the mother,
$8.33 for the six children, or $17.58 of the entire appropriation for
clothes and shoes. In the budget of a shop girl there is perhaps no one
item which costs more anxiety than that of shoes, none more important.
She _must_ have them. They should be strong and weather-proof, for she
must go and come in pouring rains and drifting snows. They should be
well fitting, for she must often stand in them all day. The amounts
spent in keeping themselves shod vary greatly, of course, according to
the care of the girls, the distance they walk, the quality of the
article bought; but when compared with the total allowance for clothes,
the result is something appalling. Among the budgets of a recent
investigation, was one of a woman forty years old, who had worked
sixteen years at $6.00 a week in a well-managed New York factory. She
sat at her work. She could have earned $8.00 a week by taking a place at
the counter, but argued that the better clothes required and the wear
and tear of standing would be really more expensive, so kept the $6.00
place. By limiting food she could save $1.00 a week. This gave her
$53.00 a year for doctor, dentist, amusements, clothing, and “extras.”
She spent $22.05 for clothes the year her budget was examined, and of
this $7.16 went for shoes and rubbers. This woman was an especially
careful person. Usually the sum credited to shoes is larger. They range
from this one of $7.16 up to $26.60 spent by a girl who said she could
not keep her feet dry on less than a pair of $2 shoes per month—$24.00 a
year—with one pair for dress at $2.60; $26 for shoes on an income of
$9.00 a week, cut down the year of the investigation to an average of
$7.50 by illness!
It was hard enough for the poor to buy shoes before the Dingley tariff,
but with every year since it has been harder. In woman’s ordinary shoes
there was an increase of something like 25 per cent in the years from
1890 to 1899. There was a corresponding increase in all varieties of
boots and shoes. Say that it has been 20 per cent and see what that
means to your family of four which can spend but $40.00 a year on
clothes and must put $11.81 of it on shoes.
But why should the price of shoes have increased? Under the
extraordinary advance in shoe machinery, it should have decreased. The
shoe was pinched by a combination of tariffs and trusts which can hardly
be matched in any other industry in the country. First, there was the
tariff laid on hides in 1897. For twenty-five years hides had been free
and cheap, for South America sent us large quantities. The shoe dealers
were taking all both markets offered. But the cattle-growers of the West
raised a cry that they should have more money for their hides, that
Congress should pass a law which would compel the people to give it to
them. In 1890 a strong appeal was made to Mr. McKinley for such a duty
and it is probable that he would have granted it, so great was his
reverence for the doctrine, had not Mr. Blaine interfered. The duty was
not granted in 1890, but in 1897 it was given. The effect was
immediately to raise the price of sole leather. In June, 1906, W. L.
Douglas, ex-Governor of Massachusetts, a shoe manufacturer, said in a
public speech that since 1897 the increase to his company in the price
of sole leather in a single pair of shoes had amounted to 17½ cents. Mr.
Douglas figured that the tariff on hides and soles caused the people of
this country to pay $30,000,000 a year more for shoes than they
otherwise would. They paid this tax that perhaps 85,000 stock-raisers,
herders, and drovers might get more for their cattle. It was argued that
with the duty they could monopolize the domestic trade and cut off the
South American trader, but that gentleman sent us more hides in 1906
than in any year since the duty was imposed! Moreover, it was not the
cattle raiser who was chiefly or proportionately profited by the higher
price. It was the Beef Trust, as Mr. Blaine said it would be. The
cattleman received no such increase in the price of his steers as the
beef men did in the price of hides. In November, 1907, the _Hide and
Leather Journal_, commenting on the good thing the Trust had always made
out of this particular duty, declared it was paying stock-raisers $12.50
apiece for cows, and selling the hides alone for $9.00 apiece!
But it takes something besides leather to make shoes. For one thing it
takes thread—and thread, linen thread particularly, so advanced in price
that it added perceptibly to the cost of making a pair of shoes. But why
had thread advanced? It is a pretty study of combined tariff and trust
manipulation. To begin with, we do not and never have raised in this
country any flax suitable for making linen thread. In spite of this fact
the Dingley Bill put a duty of $22.40 a ton on flax not dressed, and of
$67.20 per ton on that which had been dressed. These were the rates of
the McKinley Bill. Of course the avowed purpose of this duty was to
protect the “infant industry” of raising flax for use in manufacturing.
We have a good flax acreage in this country—though it has decreased by
over 1,000,000 acres since 1902. But this flax is grown not for the
fibre, but for the seed, being used for making linseed oil. It is the
custom not to harvest it until the seeds are fully ripe, and when that
time comes the straw is too old for fibre. It is true that in the
Northwest a few tons of flax are used annually for making twine,
upholstering tow, and insulating boards, but practically none of this is
fit for making thread,—that is, _in spite of the fact that we have been
steadily paying from $20.00 to $22.00 a ton on undressed flax for many
years, we have scarcely ever produced a ton fit for thread_.
Of course the thread itself is protected, and this protection has worked
in the linen thread industry very much as that on cotton thread. Seeing
the tariff trend here, the great linen thread manufacturers of Great
Britain followed the example of the Coats’s and Clarke’s cotton thread
makers, and came here many years ago to produce under the protection of
the tariff the thread they had been exporting. This went on until the
Barbours of Lisburn, Ireland, had a branch at Paterson, New Jersey; the
Finlaysons of Johnstone, Scotland, at Grafton, Massachusetts; the Dunbar
Co. of Gilford, Ireland, at Greenwich, New York; the Marshals of Leeds,
England, at Newark, New Jersey—all of the great British companies were
here to preserve the market for themselves. Most efficient masters of
their business—the Barbours were a century-old house—they grew rapidly
under the high protection they enjoyed. The logic of their privilege was
of course what it has been in all our highly protected industries—a
trust. This came about a few years ago—the Linen Thread Company of which
the president is Mr. William Barbour, and the vice-president A. R.
Turner. The formation of the trust did wonders for the linen thread
business. They were able to make large economies. Instead of separate
mills making all the products each mill was assigned to do the work it
could best do. At the same time the marketing expenses were reduced. In
one of the communications to the tariff hearings of 1908–1909, a writer
familiar with the industry says of these economies:
“One mill which, while independent, used to make $400,000 worth of
thread per annum now makes $600,000, and another which made $250,000 now
makes $400,000, an increased turnoff of about fifty per cent, and this
without hiring an additional hand. This, of course, lessens the cost of
manufacturing considerably. When the four mills were selling
independently on this side, each of them carried stock in New York,
Boston, Chicago, St. Louis, and San Francisco, and each had travelling
men going over the territory. But with the advent of the combination all
the stores in the various cities were turned into one, and a much
smaller force is used to sell the products of the various mills.”
Now of course if the theory of the trust is sound, we should get some
benefit from this combination on shoe thread, the only one of its
products which we consider here. But what happened to shoe thread? In
the last few years every variety has advanced rapidly. Increase in cost
of materials—increase in rents—rapacious dealers—the trust people tell
you. But the facts are these according to an expert authority: the linen
thread trust were selling their shoe threads in 1909 for at least 50 per
cent more on an average than they cost them, and they were able to do
this almost entirely because of the duty which protected them from
foreign competition. The cost of producing in Ireland a shoe thread
known in the trade as No. 1 is 40 cents a pound. In the United States it
is 47 cents. The duty on this thread was 19¾ cents a pound—12¾ cents
more than was necessary to cover difference in cost—and the trust sold
the thread 71 _cents net_ a pound! No. 4 shoe thread cost 53 cents to
make in Ireland. It cost 64 cents here. There was a duty of 25 cents a
pound on it, and it sold at $1.20 a pound, nearly _twice what it cost!_
In two years (1907–1908) its price jumped _three_ times.
And what is the attitude of the Linen Thread Trust toward the protective
tariff? Its members signed a petition to the Ways and Means Committee in
1909 in which they prayed that the duty be kept on flax. They wished to
“encourage the fibre-producing industry,” they said—although they knew,
nobody better, that no flax fibre for thread has ever been grown here,
in spite of more than thirty years of tax-paying. Of course they asked
that the duty on thread be untouched!
But a high protection tariff and a trust agreement are not the only
advantages the Linen Thread Company enjoys. It has an alliance which
gives it a commanding strategic position in the business, and that is
with the organization popularly known as the “shoe-machinery trust.”
This company began its life twelve years ago in New Jersey like so many
of its kind. At that time, 1899, it was capitalized at $25,000,000,
divided into preferred and common stock, the first at six per cent, the
second at eight per cent. Six years after its organization the company
underwent a reorganization. This reorganization seems to have been a way
of getting rid of its extra earnings, for it presented its stockholders
with comfortable extra cash dividends as well as a fifty per cent common
stock dividend. According to the last report to which the writer has had
access, 1907–1908, the capital of the company had in eight years
increased from $17,250,000 to nearly $32,000,000, its surplus from
$1,355,914 to over $13,500,000, and the net earnings from $1,770,110 to
over $4,500,000.
One may fairly ask how they did it. It is clear enough when one looks at
what they have had to go on. In the first place, the shoes of this
country are now made almost entirely by machines. The first practical
machine invented was the famous McKay sewing machine. It was followed
rapidly by others: machines for welting, lasting, heeling, pegging, more
than a score for performing the many complicated operations by which the
modern “ready-made” shoe is built up. Up to 1899 these various machines
were handled by different companies. But in that year the twelve most
important concerns were combined into the trust named above, officially
the United Shoe Machinery Company. Now there prevails and has since the
days of McKay—who, by the way, was not the inventor but the promoter of
the first shoe machine—a system of handling its output peculiar in
manufacturing industries. It never sells, it always _rents_ its
machines. That is, a maker of shoes cannot buy for his factory the
machines to do his work, as the ship-builder, the miller, the woollen
manufacturer, can. He rents the machines for a term of years, paying a
royalty on each shoe made. When the shoe machinery company was formed in
1899, it inherited this curious method. It took hold of its various
acquisitions with rare energy and ability, its aim being to produce what
it calls a system of shoe manufacturing. To accomplish this it proposed
to “tie” together the machines it controls in such a way as to give a
practical continuity of service. That is, each machine was to be so
adjusted to the others that the shoe could be passed from one to another
without loss of time or waste of effort. To do this effectually meant
improving the old machines as well as adding new ones. The results of
the combination of machines and of the improvement are extraordinary. It
is a practically continuous service enabling the manufacturer to
increase his product, and the laborer, who in the shoe industry is paid
by the piece, to increase his earnings.
The management of the new organization proposed at the start not to
raise the royalties paid at the time the combination was formed for the
use of the various machines, and it has never done so. It proposed also
to take off what had been a custom in the business—the initial charges
for installing machines. Indeed, the company claims that while before
the combination the initial charge for fitting out a factory was
$12,000, it now is but $1700. In the case of many of the metallic
machines, as they are called, the practice was to charge no rent, but to
require the manufacturer to take from the companies certain findings,
like tacks, wire nails, and eyelets; the company charged its own price,
not the current one, and in this way got its pay. These prices probably
were always high, but the company claims it has never raised them. That
is, the new organization proposed to make no changes in what the
manufacturer had been paying, but to increase its profits through the
greater continuity and perfection of the service of its system.
But this of course meant that the manufacturer should use all the
machines in its system; that is, all those that it had tied together.
And to make sure that he did this, the company prepared a remarkable
lease, requiring that all the machines it made pertaining to the
bottoming of shoes beginning with the lasting of the uppers should be
kept together; that is, that no outside machines for any of these
processes could be used, and if an attempt was made to introduce one,
the company had the right to take out the remaining machines of the
system.
In addition to the regular bottoming and lasting machinery the company
handled a large number of general machines, and it was specifically
provided in the leases of each of these that it should not be used on
shoes that had been lasted and welt-stitched, or turn-stitched on other
machines than those put out by the company. The penalty for using the
leased machine with outside machines was the forfeiture of all leases in
all departments—also the breach made the lessees liable to an action for
damages.
The New England Shoe and Leather Association considered certain features
of the leases for the metallic fastening machines so objectionable that
a long series of conferences was held in 1901 with the company, and
certain modifications were obtained. Thus an alternative was secured for
the ironclad lease covering the metallic fasteners by which the shoe
manufacturer could use them with foreign machines by paying ten per cent
more for his materials. (The rent of these machines, it will be
remembered, was included in the price charged for the materials.) The
penalty for disobedience was also lightened, and other concessions were
obtained. Thus it is possible now to buy the general machines outright.
The committee said quite frankly in its report that it was clear that
the company intended to make such contracts as would give it a monopoly
of the manufacture and renting of all shoe machinery, but it added it
was patent that to do this it must continue to serve the shoe
manufacturers better than they could be served elsewhere.
The monopoly the committee foresaw was of course inevitable. To-day the
United Shoe Machinery Company owns more than ninety per cent of the shoe
machinery of the country. Its profits are enormous, as the expansion
noted above shows. The royalty on a pair of woman’s shoes is about three
cents. On a pair of man’s shoes it is from four to five cents. In a
factory turning out a thousand pairs a day of the former there is a
royalty of $30.00 a day. The writer has talked with one shoe
manufacturer who claimed he had paid $165,000 a year in royalties to the
trust and upward of $100,000 for materials. Many would-be independent
manufacturers claim they could reduce the cost of manufacture two cents
a pair if allowed to own their machines. It is a common assertion among
them that the royalties for the first year pay a reasonable price for
the machines; that as the life of a machine is ten years, there are nine
years of “unholy profits to the trust!” While discontent at the
“benevolent despotism” which rules the business breaks out all over the
country in spots, and a few energetic attempts are working to build up
independent systems, the shoe manufacturers as a body have accepted the
combination. Certainly they are getting from it such a service as they
never had before, whatever the oppression. The shoe manufacturer can by
the use of the “system” increase his product and the piece-paid laborer
his wages. At the same time without raising royalties the company
profits enormously. The person who gets no advantage is the man who buys
the shoes. The royalty paid on each pair is just what it was when the
trust was formed.
And what has the United Shoe Machinery Company to do with the Linen
Thread Company? The president and the vice-president of the latter, Mr.
William Barbour and Mr. A. R. Turner, are both directors in the former.
Mr. Barbour, who is reputed to be the largest owner of the linen thread
stock, is also a large individual stock-holder of United Shoe Machinery.
Can any one doubt that such a relation has not been of importance to the
Linen Thread Company in securing the 80 per cent of the linen thread
business which it controls? Or would it be surprising, the power, the
protection, and the surpluses of the two being given, if there soon was
nobody outside of their fold making either linen thread or shoe
machinery?
Moreover, is not the logical and almost inevitable result of the
practical monopoly of these two interwoven concerns the rapid absorption
of the shoe manufacturers themselves? Why, when they own and control all
machinery and linen thread, and furnish a rapidly increasing list of the
findings, should they stop there? Does not the strategy of the
situation, do not the same arguments, the same laws which have led to
the monopoly of each and the alliance of the two, force them into shoe
manufacturing? This is no new alarm. In 1901, when the New England Shoe
and Leather Association made the report referred to above, it said:
“The fear has been expressed that should one company control all the
machinery in use in the production of shoes it would be quite easy and
enormously profitable to create a trust which would be a monopoly in the
shoe manufacturing business. The committee has not discovered the
remotest indication of such intention. The present managers of the
United Shoe Machinery Company are unusually able, experienced men, and
they know that their profits are to come from coöperation with shoe
manufacturers rather than competition with them.”
That was true of the profits then; it is true now, but with recalcitrant
manufacturers refusing to coöperate—wanting to work out their own
salvation—and with funds piling up for expansion, the “good of the shoe
business,” which led to the first monopoly, will probably some day point
strongly to a second.
There is but one force to hinder the final absorption of the shoe
business by the combinations we have been considering, and it must be
admitted that this is a powerful one—there is a rival trust with as
rapacious a maw and as brutal a strength as any the country has produced
on the trail of the shoe—that is the Beef Trust.
Twenty years ago when the amiable Mr. McKinley was disposed to give the
duty on hides, Mr. Blaine wrote him, “_It will yield a profit to the
butcher (Beef Trust) only, the last man that needs it._” Mr. Blaine
prevented the duty then—but Mr. Dingley gave it, and certainly the Beef
Trust has profited as much as the shoe has suffered.
But while the cost of the leather steadily increased under the duty on
hides, there was going on in the Beef Trust the inevitable combination
which special privileges breed. Buying practically all the cattle on the
hoof, the packers owned all the hides. Hides go to tanners to be
prepared for sole leather. It has always been a prosperous and widely
spread business in the country. But the dream of the Beef Trust is to
allow nobody to do anything directly or indirectly connected with the
steer which it can do. It owned the hides; why should it not tan them?
And promptly it began to “acquire” tanneries. There is no space here to
go into the history of the steady absorption by the packers of this
great American industry which has been going on in the last few years.
All that is essential here is the fact that to-day the united packers,
Armour, Swift, and Morris control fully thirty of the largest tanneries
in the country. And the next step? Signs of what it will be are already
abroad. Repeated rumors have come that the Armours were going into the
shoe business. In the reports of the tariff hearings of 1908–1909, is a
letter from the president of the Wholesale Saddlery Association of the
United States protesting against the duty on hides. In this letter he
writes:
“The statement that follows may appear to you very far fetched, but it
is my confident personal opinion that if the condition which confronts
leather manufacturers and the manufacturers of leather articles
continues and advances with the same strides during the next ten years
that it has during the past five, not only will the beef packers control
the manufacture of the leather, but they will likewise _control by
ownership the shoe, harness, belting, and other leather industries_.”
And this is only one of the several such intimations to be found in the
reports. There is nothing surprising in it. That the packers should
absorb the manufacturing from leather is quite as logical as that they
should make leather. It was these facts and possibilities that forced
the duty off hides in the Payne-Aldrich Bill, but it was only
accomplished after a fight of the most unusual character.
The duty on thread was lowered in 1909, but there is no rational
interpretation of the doctrine of protection which can defend that which
it still carries. All that the suppliants pretend to ask is enough to
cover the difference in wage cost here and abroad—enough to defend Mr.
Barbour in the United States from Mr. Barbour in Ireland! According to
the calculations of a practical independent thread man doing business in
both countries, the actual difference in 1909 in the cost of production
in Ireland and the United States in well-managed factories was not over
six cents a pound. But the Payne Bill fixes the protection of the three
linen threads most used in shoe-making at 15½ cents, 18¾ cents, and 20
cents. It is doubtful that this reduction is sufficient, now that the
linen thread maker gets his raw material free, to produce any effect at
all on the price to the trade. The duty is still grotesquely
prohibitive.
When one goes over less important but still essential articles of the
household, he finds numbers of them where the price advanced in the
first decade after the Dingley Bill through a tariff-supported trust.
Take the item of starch. From whatever product made it carried under the
bill of 1897 a duty of 1½ cents a pound. Starch and its related products
made from corn are now largely controlled by the Glucose Trust, as it is
called—the Corn Products Company. The Glucose Trust is popularly known
as a Standard Oil concern. That company has, to be sure, issued “A
Protest and a Warning” against the association of the name of the two
concerns. But so long as the headquarters of the Corn Products Company
are 26 Broadway, its president a director of the Standard Oil Company
and four of its directors on the Board of Directors of the Standard Oil
Company, the protest and warning will have little influence on a cynical
public. In a statement presented at the recent tariff hearings a
complainant said that since the formation of the Glucose Trust in 1902,
in spite of many improvements, chemical and mechanical, corn starch
which for years had sold at $1.00 to $1.50 per 100 pounds in New York
sold in car-load lots at $2.65 per 100 pounds! Without the tariff, this
combination could not last a day for both England and Germany could
compete with them. Not only compete in price, but outstrip them in
quality, for naturally enough concerns like the Glucose Trust
controlling a market are indifferent to quality. Quality is a thing
which men are driven to by the fear of a rival taking their market. Take
this fear away and you get inferior goods—that is, the poor are not only
obliged under the protective tariff to _pay_ more, but to _buy_ more.
Our potato starch factories also do not pretend to compete in quality
with the German concerns in spite of the higher prices they get. They
are not obliged to make the best goods. Their market is secure without
it.
Tin plate is another household necessity of which the price was sharply
advanced after the Dingley Bill and the formation of the tin plate
trust. Domestic tin plate which was sold for $3.43 per 100 pounds in
1896, sold in 1900, under the Dingley tariff, for $4.67. While in 1906
we were paying $3.86 for our tin plate in New York, the Englishman was
getting his about a dollar cheaper. The Englishman and the Standard Oil
Company! The Standard Oil Company has been, for many years, probably the
largest single consumer of tin plate in the country—practically all of
the oil it sends to the Orient being put into tin cans which it
manufactures itself from imported plate. One of the many curious
features of our tariff laws is the system of drawbacks by which the duty
on imported materials made into goods for export is rebated. These
rebates or drawbacks are paid on many things, but the amount is
insignificant excepting in two or three cases. Out of drawbacks
aggregating something like five and a quarter millions in 1900 and five
and three-quarters in 1906 by far the largest item was tin
plate—$1,848,792 in the former year, $2,252,381.82 in the latter. That
is, the man who in 1906 manufactured tin cans to sell to his countrymen
paid about 20 per cent more for his material than the Standard Oil
Company paid for what it manufactured to sell to the foreigner. Of
course the home consumer of tin pails and milk pans paid the higher
cost. As a result of taxing ourselves we have a tin plate industry in
the United States. In 1900, as a result of the high prices of the decade
preceding, 57 tin plate establishments had grown up where ten years
before there were none. These 57 establishments employed about 4000
people and turned out nearly $32,000,000 worth of goods. In 1905 the
industry had grown to a product of something over $35,000,000, and
employed about 5000 people. In order to build up this industry, secure
this product, provide places for these workmen, it has been estimated
that we taxed ourselves between 1890 and 1900 fully $90,000,000. Taxed
ourselves $90,000,000 and let off our largest single consumer scot free.
We also have been selling abroad the tin plate we manufacture here at
considerably less price than at home. And now observe how in the case of
tin plate the protected American manufacturer gets even on this lower
price to the foreigner. He takes it out of the laborer—_that is the
wages of tin plate workers are reduced 25 per cent on tin plate made for
export_. The Standard Oil trust gets its duties rebated on export work
and the tin plate workers get their wages cut!
The contrast in results to the consumer between putting on and taking
off a duty are strikingly illustrated by a comparison of the tin plate
experiment with the quinine experiment. In 1879 the duty of 40 per cent
on this favorite American medicine was removed by a special act of
Congress. The extortion practised under the duty had been outrageous,
quinine selling in 1878 as high as $4.75 an ounce. Five years after the
quinine bill passed the price had fallen to $1.23 an ounce, ten years
after to 35 cents, and in 1906 to 16½ cents! Far from destroying the
quinine industry in this country as the manufacturer tearfully declared
it would, the business goes on prosperously. Whether gains or losses
come to the manufacturer the people share with him. He cannot gobble the
lion’s share of the one or shift the lion’s share of the other as the
thread and starch and tin plate and dozens of other manufacturers can.
Where prices increase faster than incomes, as they did with the great
majority in the period we have under consideration, one of two things
must happen,—the amount and quality of necessaries are cut, or
substitutes are found. Both have happened in a rather startling way in
the last twenty years in one of the materials most essential to human
health and comfort, woollens. Wool, the world over, has always been
accepted as the poor man’s special friend. It protects against cold and
damp. It wears well; it looks well. The tradition of woollen garments as
a lasting household possession, one of the things which belongs to the
outfit of even the humblest, is very strong in every country. “All wool”
is the housewife’s boast of her blankets and shawl, the young girl of
her winter coat and gown, the laborer of his shirt. It is the assurance
on which salesmen depend for winning customers. It is a standard
material of clothing as general and as necessary in our climate as wheat
is an article of food. But for twenty years this valuable standard
material has been every day receding farther from the reach of the great
mass of Americans. Many housewives the country over have ceased buying
woollen blankets, substituting the cotton-filled puff or “comfort.”
Settlement workers and district nurses say that they rarely see a
woollen blanket in the houses they visit. Knit cotton undergarments and
heavy knit cotton stockings are generally substituted for wool. Many
thousands know they cannot think of wool, and dismiss the idea. But so
strong is the tradition of wool among the people of cool climates, among
Russians, Germans, etc., that a salesman in the shops of the tenement
house district declares his slimsiest imitations “all wool.”
A curious person can easily satisfy himself as to the quality of these
“all wool” garments by boiling them in caustic alkali. The experiment is
very simple and quite conclusive of the amount of wool in the article.
If it is “all wool” the alkali makes short work of it, no residue is
left after the boiling. Silk will also disappear. Cotton is untouched.
Take a baby’s shirt for which you pay 50 cents with the solemn assurance
that it is “every stitch wool.” It is well-shaped, finished with a neat
shell edge apparently of silk, a ribbon down the front for the buttons,
three rows of “silk” stitching around the sleeves. Cut the garment into
two pieces and boil one for twenty minutes in a strong solution of
alkali. The pieces treated compare now very favorably, fleecy lining
shell edge and all, with the piece untouched. The ribbon alone has
disappeared. There is not a thread of wool in it.
Try another experiment with a girl’s sleeveless vest for wearing over
the gown under the coat. This garment will cost $1.25 in an East Side
shop. It feels like wool and is sold for wool, but it comes out of the
pot intact, a strong, durable cotton yarn vest which could have had but
a small fraction of wool in it in the first place if, indeed, it had
any. Its real worth is not over 25 cents.
This same experiment will show similar adulteration in many of the
blankets and much of the dress goods and suitings sold to the unknowing
as all wool. Vast quantities of so-called “cotton worsteds” are
manufactured annually. The amount of wool in these goods has been
steadily decreasing in the last few years, falling from 50 per cent to
25 per cent, and from there to practically all cotton, immense
quantities of the last being manufactured for boys’ and men’s wear. It
is from cotton worsteds and cheap shoddies that the $8.00 and $10.00
suits for women, the $10.00 and $12.00 suits for men, are generally
made. The goods may be sold by the manufacturer for what they are, but
at the counter the purchaser receives the express or implied assurance
that they are all wool. To such lengths has the adulteration gone that
it may be laid down as a fact that people on small incomes to-day rarely
if ever wear anything but cotton and shoddy mixtures.
Now, that things have changed is not proof that they are worse. Because
a great number of us in the United States cannot get the woollen
blankets, shawls, and clothes which we once had and which are still
accessible at low prices to the European laborer and peasant is not
proof that we have not a better substitute. May it not be that woollen
garments, blankets, and suits are a superstition? Are we not just as
well off clothed in cotton substitutes?
There is no doubt cotton knit goods are admirably cheap underclothing,
most of them are well fitting, and some of them are durable. Where light
clothing is sufficient—and with the general heating of houses,
factories, and shops and cars, there is no longer the same need, for
many people, of heavy clothing as in the old days—they are adequate.
There is no doubt the young girl’s cotton worsted gown looks well at the
start. The cotton warp “all wool” suit of the laboring man has a correct
finish, color, and style, better perhaps than of old, for finish and cut
are demanded by the poorest and are achieved remarkably by the cheapest
clothiers. But in two particulars the cotton substitute fails. It has
not the warmth, and it does not keep its appearance. True, if a man puts
on enough cotton garments he can get the same warmth. But he cannot get
from cotton the same protection against storm and wet, the same
safeguard where his labor subjects him to excessive perspiration. He
cannot get the same comfort at night. Moreover, his garment becomes
shabby, loses its shape, in much shorter time. Women can no longer make
over with satisfaction the gowns they once wore a series of winters. The
man’s suit is no longer respectable as “long as it holds together.”
Those of us who must buy cheap clothes can find them at the long
established popular prices, but we no longer get the warmth or the
satisfaction from them.
During the discussion of the Payne-Aldrich tariff bill, evidence enough
of this was laid before Congress. Mr. Nicholas Longworth, for instance,
read to the Committee on Ways and Means a letter from a clothier in his
congressional bailiwick in which the man declared: “_I never handled
cloth of so inferior a quality as I do now. Laborers, mechanics, and
farmers who use ready-made clothing are receiving practically no value
for their money._” The National Association of Clothiers were strong in
their protest to Congress. “Standard winter worsteds,” their committee
said, “which twelve years ago ranged from twenty-one to twenty-four
ounces in weight per yard, have gradually been decreased in weight, so
that they now range from fourteen to sixteen ounces per yard; standard
spring worsteds which ranged from fourteen to sixteen ounces in weight
per yard have gradually been decreased, so that they now range from nine
to twelve ounces per yard. In consequence, a deterioration of fully
thirty-three and one-third per cent in weight has taken place, in
addition to the establishment of a much higher range of prices for the
same qualities of goods. The clothing manufacturer, therefore, through
the inability of the cloth to stand ordinary wear, is largely deprived
of the opportunity to produce garments upon which a good reputation can
be based.”
But why should the materials which are used in our cheap clothing be
unsatisfactory—why can we not get durable cheap goods, as it is certain
we once could? The answer is not contained in a word. There is always
more than one reason for sweeping changes in standard articles like
woollen goods. However, the chief reason, the one which is more powerful
than all the rest, is to be found in the complicated wool schedule which
has been in operation in this country since 1867, the three years of the
Wilson tariff excepted. This schedule rests upon two arbitrary and
utterly unjust duties. The first of these is that on wool “in the
grease,” as wool is called when it is sheared from the sheep. To prepare
this wool for manufacturing it is first scoured until clean, an
operation which causes a shrinkage of from twenty to eighty per cent in
the weight of the wool. In turning this clean wool into cloth there is a
still further shrinkage. Indeed, the total shrinkage from wool to cloth
is such that it sometimes requires as much as five or six pounds to make
a pound of cloth; and again it requires as little as two pounds. Of
course the value of the wool varies according to the shrinkage, _i.e._
according to the amount of cloth a manufacturer can get from a given
lot. It also varies according to the _kind_ of cloth the wool will make,
_i.e._ whether it will make a fine or coarse cloth. Now all imported
“grease wool,” suited for clothing regardless of its value, of the
amount of dirt and grease there is in it, the amount it shrinks, the
amount and quality of cloth you can get from it, has to pay a duty of
eleven or twelve cents a pound. If the American wool-growers who secured
this duty, to begin with, on the supposition that they would soon be
able to produce enough wool to supply the home demand had been able to
keep their promises, it would not have been necessary to import wool,
and competition might have kept the home prices down. But the
wool-growers have not for many years, if ever, produced even half of
what we use. It is customary to figure the amount as much larger.
“Seventy per cent of the wool we use is produced at home,” the wool
boomers cry, but they do their figuring on grease wool and omit
altogether the wool which comes in manufactured! There is only one fair
way to estimate the amount we grow, and that is to find out what we get
from it after it is cleaned of grease and dirt and compare it with the
clean wool, raw and manufactured, we import. Do this and we find that we
really produce nearer 40 per cent than 70 per cent of what we use. In
1890—in 1895—in 1900—this was the approximate proportion. One of the
leading wool authorities of the country makes the relative proportion
the same in 1906, _i.e._ 40 per cent domestic to 60 per cent foreign.
For 1909, he figured it 37 per cent domestic to 63 per cent foreign.
Now, as said above, all of the wool imported must pay a duty of eleven
or twelve cents a pound when it is “in the grease.” The American
wool-grower in normal and prosperous times can charge more for his wool
because of this duty. He may not be able to add the full amount to his
price—in fact, it is probable that he rarely does, but he certainly gets
considerably more than he could if he were not protected.
The way the duty works is clearly illustrated by a personal experience
in wool-buying related by Robert Bleakie, of Boston, a manufacturer who
has been making woollen goods in this country _continuously_ since 1848.
Mr. Bleakie’s account is of a purchase of wool he made in 1897 just
before the Dingley Bill went into effect, that is, when we had free
wool. He had bought in Africa 223,684 pounds of wool at 9-9/10 cents a
pound. By the time he got it to Boston it cost him 13-2/10 cents a pound
($29,565.83 for the lot). Now, let us suppose Mr. Bleakie’s wool had not
reached Boston until _after_ the Dingley Bill had gone into effect, that
is, until after the eleven cents a pound had been placed on grease wool.
To get his wool out of the custom-house Mr. Bleakie would have had to
pay the tidy sum of $24,605.22; _i.e._ eleven cents on each pound. This
would have made the wool cost him, instead of twenty-nine thousand
dollars, over fifty-four thousand dollars. But it was fine wool,
shrinking heavily in cleaning. As a matter of fact, he got out of the
223,684 pounds he imported only 85,000 pounds which he could use. But
note that he would have had to pay duty on the _entire_ lot, that is, to
pay it on 138,684 pounds of grease and dirt as well as on the 85,000
pounds of clean wool! Of course the duty simply shut him off from
importing heavy-shrinking wool, and at the same time made domestic wool
of this kind too dear to buy.
Now, there are two classes of wool manufacturers, known as carded
woollen and worsted. The former, to which class Mr. Bleakie belongs,
finds a large proportion of the wool they need to be heavy-shrinking—the
latter use mainly the light-shrinking wool. It is the carded woollen
manufacturer who makes our heavy woollen clothes—flannels and blankets,
the warm and durable “all wool” goods of the poor man. Mr. Bleakie’s
experience just quoted shows what the eleven-cent duty on grease wool
does to his business. It takes the raw material away from it—“starves”
it, as the manufacturers say. At the same time it gives his
competitor—the worsted maker—a decisive advantage, for he uses mainly
light-shrinking wool. It is obvious that if two manufacturers each
import one hundred pounds of wool in the grease, and each pay $11.00
duty on his lot, the one which gets the larger number of pounds of clean
wool will have the other at a disadvantage. Yet each will pay the same
duty, $11.00 on a hundred-pound lot.
What this discrimination against those who use the heavy-shrinking wool
amounts to is making wool too dear to be put into the common grades of
flannels, blankets, and clothing materials. The manufacturer is forced
to find substitutes. Forty-four years ago, when the duties on the coarse
grades of wool were first made prohibitive, and the manufacturers were
forced to find substitutes in order to make clothes that the average man
could afford to buy, wool rags, wool waste, and carpet wools were
resorted to. They were wool, at least, and warm. Between 1867 and 1890
the annual importation of shoddy rose from about 500,000 to 9,000,000
pounds. Then the cry went up that it was displacing wool. Prohibitive
duties were placed upon all kinds of wool substitutes. By 1890 duties so
high were put on all the wool substitutes that they could not be
imported; that is, after taxing wool off our backs—the wool substitutes
were taken away. Deprived of the advantages which the inventions for
using waste gave, there was nothing left but cotton for the bulk of the
substitutes used in inexpensive goods, and cotton it has been ever
since. The rapid absorption by cotton of the wool field has indeed been
one of the most significant changes in American industry since the
McKinley Bill of 1890. The tables of 1905 show that while from 1890 to
1905 cotton increased in the manufacturing of clothing materials about
100 per cent, wool increased only about 25 per cent. One whole
department of manufacturing formerly classed under wool, is now placed
with cotton hosiery and knit underwear. The decrease in the per capita
consumption of wool shows still more strikingly the passing of wool. In
1890 we were consuming 8.75 pounds apiece; in 1904, 6.22 pounds,—_less_
than we used in 1860!
This astonishing change in the relative use of the two materials is not
all due to the tariff on raw wool. Cotton is gaining the world over. The
general tendency to lighter clothing, the demand for a larger number of
garments, and so cheaper prices, the failure of the world’s wool
production to increase and consequently its higher price—all have
encouraged the change, but it is certain that the great determining
factor in the United States had been this duty combined with a second
mischief-maker—the ratio used in estimating the compensatory duty on all
products of wool imported.
If the maker of woollens had a sufficient supply of free wool—that is,
if the price of his raw material was not raised by a duty—all the
protection he could rightfully ask against his foreign rival would be
the difference in the cost of production here and abroad. But his wool
costs him more than his foreign rival’s. If he is to meet him on a
level, he must be protected against wool as well as production; that is,
there must be two duties on cloth which is imported—one a duty to make
up for the higher price he has had to pay for his raw material, the
other for the higher price of manufacturing.
These two duties vary with different grades of woollens. The schedule is
highly complex—a matter for experts only. Its results, however, are
simple—and hard—enough, for what they amount to is that the cheaper the
blanket or the dress goods, the HIGHER the duty! On many materials and
articles suitable for the slender purse these duties are so high that
none of the goods can be imported. On cloth, for instance, worth not
more than forty cents a pound, the duty averages over 140 per cent; on
cloth worth more than seventy cents a pound, it averages about 95 per
cent.
We shall notice here but one item of the taxes which bring about this
unjust discrimination, and that is the duty allowed to make up for the
higher cost of the raw wool. This duty is reckoned on the number of
pounds of wool in the grease supposed to be used in making a pound of
cloth. Where the goods are worth less than forty cents a pound three
pounds are allowed; where they are worth more, four pounds. As the duty
on this wool is eleven cents, the compensatory duty on a pound of cloth
is thirty-three or forty-four cents. Take the latter as an illustration,
it applying to the only grades imported in any quantity. This is an out
and out swindle, for the simple reason that few of them contain this
amount of grease wool.
When the discussion of the wool schedule was going on in Congress in
1909, the _Textile World Record_, a remarkably able, and fair-minded
Boston trade journal, published the result of a series of analyses of
cloth which its editor, Samuel S. Dale, had made personally, in order to
discover the actual protection each was getting under the Dingley law.
The estimate in each case was based on a large quantity, 10,000 yards.
Here are samples of the results. The first fabric was a worsted serge,
weighing 11,500 pounds. Mr. Dale found that 21,941 pounds of grease wool
had been used in this piece of cloth. Now, according to a rational and
honest application of the protective principle, one would expect the
compensatory duty, in case such a piece of cloth was presented for
import, to be eleven cents on each 21,941 pounds, or $2413.51; but as a
matter of fact, it would be $5060! That is, forty-four cents would be
charged on each pound of cloth; as if four pounds of wool had been
required to make it, while as a matter of fact, less than two pounds had
gone into it.
A cotton-warp dress goods was analyzed in which but a trifle over one
pound of grease wool had been used for each pound of cloth. Mr. Dale
calculated the compensatory duty on the 10,000 yards should be $496.65.
But that cloth actually receives $2595.63! In the case of a piece of
cotton warp casket cloth made of cotton, wool, and shoddy, the
compensatory duty under the law is reckoned at $4262.72, while actually
it should be $2238.15, and so it went. But two of the eleven fabrics
contained over half of the four pounds on which the duty would be
reckoned.
In addition to the compensatory duty of forty-four cents is the duty to
protect from difference in the cost of production, which is 50 or 55 per
cent of the value of the cloth. There is probably no doubt but this duty
is all out of proportion to the actual difference. Forty-four years ago,
when practically the same duties now in force on wool were wrested from
an unwilling Congress by a combination of wool-growers and woollen
manufacturers, all that the latter asked was 25 per cent to cover
difference in the cost of production. American labor has advanced, but
so has European labor—and still more has machinery increased the output.
Of course these high duties make imported cloth very expensive, and
enable American manufacturers to hold up their prices. As a matter of
fact, the duty makes the American consumer of woollen goods pay just
about double what his English cousin pays. In 1908 I was shown by a
gentleman who has for years been at the head of one of the best of the
wholesale cloth houses of New York, a bundle of matched samples of
woollen goods—American and English—with carefully worked out statements
of cost here and abroad. The goods had been matched by one of the
leading woollen experts of England. I was unable to detect any
difference in quality, and only the slightest in finish. There was
practically no choice, so slight was the difference. But note the price.
For an American serge costing $1.37½ a yard the price of the matched
English goods in Bradford was 67 cents. The English equivalent of an
American fabric costing $1.50 was 78.05 cents. Beautiful blue
light-weight serges, such as are used for men’s summer suits, cost in
America $1.80, in Bradford 81.2 cents. The mohair which is used so much
in this country for women’s summer travelling suits can be bought in
Bradford for 27¼ cents; here it is wholesaled at 70 cents and costs at
retail $1.00. This was the showing over a large range of goods. It
amounted to this, that the English price was only about half the
American.
An example of the difference in cost of woollen goods was given in 1909
in Boston, where the cost of living was being investigated. Mr. Dale, of
the _Textile World Record_, was being questioned on the comparative
costs of American and European goods. “You can make comparisons in two
ways,” Mr. Dale answered; “first, by comparing prices at which the same
grades are sold, and, second, by comparing the grades that are sold at
the same price. For example, here are two fabrics, one made and sold in
this country, and the other made and sold in England. The English fabric
is sold at 3_s._ 6_d._ (84 cents) a yard, 55 inches wide. The American
cloth is sold for 77½ cents per yard, 55 inches wide. So that the two
are sold at approximately the same price. The difference is represented
by the difference in the two fabrics. The English cloth is a fine
worsted weighing 10¼ ounces per yard, 55 inches wide; the American
fabric is made with a cotton warp and a mixed cotton and wool filling.
The cloth consists of 30 per cent wool, 70 per cent cotton. It weighs
9.6 ounces per yard, 55 inches wide.”
In addition to this increase in prices, a most exasperating practice
developed after the passage of the Dingley Bill in many protected
industries—selling goods abroad at prices from 10 to 70 per cent lower
than they were sold at home. The Dingley Bill had not been long in
operation before the administration itself warned the iron and steel
people officially that they were in danger of giving the game away if
they continued to sell steel rails, for months together, to foreigners
for $22.00 a ton, while they charged their compatriots $35.00. But the
warning seems to have had little effect. Frank manufacturers like Mr.
Schwab said, Of course we sell cheaper to foreigners; not only that, but
we sell materials to our fellow manufacturers cheaper when they are to
be turned into goods for foreigners than we do when they are to be
turned into goods for our own people! Mr. McKinley’s Industrial
Commission of 1900 found considerable evidence of discriminating export
prices. The contention of the corporations which admitted the practice
was that it was necessary to work off surplus, and to keep factories
going on full time. Mr. Thomas W. Phillips of the Commission, in
commenting on this explanation in a minority report, said, “This
argument overlooks the fact that their surplus product could also be
worked off by lower prices at home, and that it is the tariff which
encourages them to create a domestic surplus by restricting domestic
consumption through high prices.”
The best detailed evidence of the difference between home and foreign
prices which we have, comes in the price lists which are prepared for
foreign trade-lists, which are not circulated in this country, of
course. In 1906 the Tariff Reform Committee of New York City issued a
pamphlet made up from discount sheets by Byron W. Holt. It is a
beautiful study in gratitude! Mr. Holt names over 250 different articles
on which at that date discounts of from 10 to 66 per cent lower were
quoted to foreign than to home buyers! An American dealer paid $5.50 for
potato hoes which a foreigner could get for $4.75. All farm tools,
indeed, were sold abroad far lower than at home, thanks to the Farm
Tools Trust. He paid $16.00 a dozen for wooden wheelbarrows for which
the foreigner paid $14.50. He paid $20.00 for the incubator which to the
dealer over the border was quoted at $15.00. He paid $30.24 per gross
for soap which the foreign dealer bought for $20.48, and so one might go
on with scores of articles of daily use in farming, in housekeeping, in
all sorts of trades. In 1909 the same committee published a similar
exhibit showing that equal advantages were still regularly offered on a
great variety of articles. It sometimes seems as if the great American
system for making the foreigner pay the duty had resulted in presenting
it to the foreigner. He buys our goods cheaper than we can buy them,
and, like Mr. Coats, establishes his factory here, and, protected from
world competition, drives our own manufacturers into his combination,
runs the business from the other side of the waters, and charges us
twice as much as he can his countrymen!
The protected manufacturer does not always export at a discount. Very
often he follows Mr. Coats’s lead and establishes himself abroad. He
finds it more advantageous to do this because in most civilized lands
the materials of industry are free. Many years ago the duty on nickel
drove the Meriden Britannia Company to build in Canada and there they
still manufacture for export. In 1906 Mr. James J. Hill, commenting on
the rapid multiplication of American industrial plants in Canada, said:
“A few years ago there was not a smelter on Canadian soil west of the
Rocky Mountains. To-day there are six in British Columbia and these are
largely occupied with the reduction of American ores. Commerce will go
her own way even though she must walk in leg irons.” Curious and
unnatural alliances have already begun to arise from this effort of
industry to escape her leg irons. Take the case of the International
Harvester Company, which has been much abused, and unjustly, for selling
abroad at prices lower than at home. Whatever may have been its practice
in earlier years, it has been well established by the recent
investigation of a government agent that the prices of its machines are
_lower_ in this country than they are abroad. The reason seems to be a
rather nice little combination of tariffs and price fixing. For
instance, the binder which in the United States sells for $125.00 at
retail sells in France for $173.70. The reapers, mowers, and rakes are
proportionately dearer. There are two reasons for this: In the first
place France has been applying her maximum tariff to our exports, by way
of meeting our high duties on her products. But after the harvesting
machines get into the country, they meet another hindrance to a natural
price; the importers of agricultural machines in France are organized
into a general syndicate, which consists of French, German, Canadian,
and American firms. These gentlemen have combined to prevent price
cutting. Judging by the comparative prices of the machines here and in
France, they have succeeded admirably. The Americans, in spite of the
large advance they get on their goods, have not been satisfied, and the
International Harvester Company has erected factories at Croix. If the
reciprocity agreement with France negotiated in 1898 had been put into
effect, the company claims that it would not have taken this slice of
its capital and product out of this country.
Again, it is the tariff which has induced this same company to construct
factories in Canada, Sweden, Germany, and Russia. In Germany, the
binders which they sell here for $125.00 are selling, according to
consular reports, for $203.00. The German tariff on a binder of this
kind is about $12.00. It would seem that the company ought to be able to
manufacture in the United States, pay this duty, and still make good
profits on the $125.00 binder. If tariffs did not have the tendency to
increase rather than decrease, this might be so. Experience seems to
prove that where tariff exists the manufacturer is safer on the _inside_
of the wall, even though it may be that it costs him as much or more to
manufacture there than it does at home. The Harvester claims that _in
spite of the difference of wages, it has no hope of being able to
manufacture more cheaply abroad than at home_. This is no doubt due to a
factor which protectionists unite in ignoring,—the greater productivity
of the American workman.
The whole situation is an excellent example of the unnatural and
uncertain relations into which tariffs thrust industry. Moreover, it is
an illustration of the way tariffs in the long run defeat their own
purpose. The International Harvester Company did a business of
$90,000,000 in 1910, _over one-third_ of which was _outside_ of the
United States. Its future depends largely on the development of this
outside market, and tariff conditions are such, thanks mainly to our own
policy, that they find it advantageous to establish factories in the
very countries which are our best customers!
With each year that passed after the Dingley Bill became a law, the
burden of increased prices became heavier, the restraint on commerce
more unendurable. There were other causes at work besides prohibitive
duties, but in certain cases these very causes could be weakened by
revising the tariff. It was an obvious way of easing a bad situation,
though by no means a cure-all. Through the whole citizen mass irritation
at the reluctance of politicians to touch the subject, existed, and with
time found varied expression. Unfortunately the leader of neither party
had ever really sensed the enormity of the protective system, and
consequently he could not sense the strength of the revolt which had
begun. Neither Mr. Bryan nor Mr. Roosevelt had ever found in the tariff
a sufficient cause of the evils they attacked so valiantly to arouse
their indignation. Neither of them had ever been genuinely stirred by
the unsoundness of the doctrine or by the vicious practices for which it
was responsible, or by the heavy burdens it laid “where every penny
counts.” By all the signs Theodore Roosevelt should have been the
Richard Cobden of our tariff reform, but he did not see it as a dragon
worthy of his steel.
But the issue was there deep in men’s minds; something oppressive,
puzzling, and complicated, but not to be avoided for that reason. So
strong and genuine was this popular conviction that the Republican party
was forced in 1908 to declare for a downward revision of the tariff, and
because of that declaration chiefly, it was able to elect its candidate
for the presidency, William H. Taft.
CHAPTER XII
THE MAKING OF THE BILL OF 1909
No one can study the drift of public opinion in each of the great
agitations of the tariff question in the last fifty years without
realizing that at least nine-tenths of the people have stood only for
such duties as would produce needed revenue and would give industries
which were trying to prove their ability to exist in the United States,
protection through a limited period. But when it came to the point the
people have never had such duties. To those familiar with the methods of
tariff-making which have prevailed over this half-century, it was
obvious that the bill of 1909 would result as had the bills of 1883, of
1890, of 1894, and of 1897. There were optimists who said that this
could not be. This time the “voice of the people” was too clear, this
time the game was too apparent. But the game was no more clear and “the
voice of the people” no louder than in other years. The preparatory work
for the bill was preceded as always by long months of “Hearings.” The
absurdity of this method of seeking facts on which to frame a bill would
be obvious enough if the country had not grown so accustomed to it. The
reports published of the hearings before the Ways and Means Committee
for the last bill cover something over 8725 pages. It is unbelievable
that any serious body of men would consent to sit day after day to
listen to such a conglomeration of narrow and selfish notions of what
the witnesses’ personal enterprises need to help them along—much less
consent to print them at public expense. White-haired men came to repeat
the pleas that we heard in war times—sons repeated the jargon they had
learned from their fathers. And never has the “infant industry” argument
been more alive. All sorts of little trades sought help; for instance,
from New York State came a cry for duty on basket willows; the suppliant
(a woman) complained that she was obliged to compete with foreign-grown
willows sent into the country by the shipload and sold far below what
willows can be grown for in this country. From Virginia came a cry that
mountain ivy root for making pipes be protected from the competition of
brier wood. There were many more industries like these which in the
nature of the case could affect but a small number of people that asked
that the whole country be taxed that they be taken care of. There has
never been a completer demonstration of how general the notion has
become that no matter how few are benefited by a duty, it is fair to ask
the whole mass to subscribe to the fund. Hundreds of pages of testimony
are given to requests not to disturb the present schedules unless it be
to _increase_ the duty, and when sifted down the reason of the requests
is not protection, but prohibition. How ridiculously lacking the
testimony was in anything like satisfactory proof of the cost of
production here and abroad, one has only to read to see. It was evident
that almost none of the manufacturers knew the facts the committee
needed. All that the great majority could offer were the phrases they
had learned in their youth or had been taught by their predecessors in
business. They were men influenced by a superstition, and it is probable
few, if any of them, will escape from its influence until, like Mr.
Carnegie, they retire from business. Then we may expect some of them to
come, as Mr. Carnegie has done, with ridicule and derision for the whole
system,—to say, as he did, of the duty seekers:
_They are incapable of judging. No judge should be permitted to sit in a
cause in which he is interested; you make the greatest mistake in your
life if you attach importance to an interested witness._
But it was not the character of the information presented which was the
most sinister phase of the “Hearings”; it was the pressure which one
felt the informer could exercise on Congress when the time came. These
hundreds of witnesses, organized or unorganized, all possessed more or
less political importance. They had it in their power to upset local
machines, displace local bosses, defeat Congressmen, hold back campaign
contributions, make endless mischief. They had been trained for years to
expect reward for political support in the shape of duties. They were
not going to give it up in a day. They had behind them bodies of favored
workmen trained to believe that high wages depended on protection, and
these favored workmen were not going to give up their creed in a night.
Congressmen knew this well enough. They knew in 1909, when they began
work on the Payne-Aldrich Bill, that they were in the position they had
been for forty years and more—forced to make a bill with a divided
mind—to fix duties with an eye to what effect it was going to have on
the fall elections in their districts—on campaign funds for the next
presidential election.
The absurdity, even criminality, of these methods, which have persisted
so long, was completely demonstrated in the course of the Payne-Aldrich
Bill in the making of the schedule which for twenty years has been the
most important in our tariff, from a doctrinal and a political point of
view, and that is K, the wool schedule. When the late revision was
undertaken duties were in operation which had been forced from a
reluctant Congress in 1897, solely by the political power of the
combined Wool-Growers Association and the National Association of Wool
Manufacturers. In the decade following the adoption of the Dingley Bill
the power of the former organization waned. The members of the “wool
trinity” who had held so strong a whip over Congress were dead. Ohio,
which had been their headquarters, no longer felt the life-and-death
interest it once had in prohibitive wool duties. But the second
association was as alive and ready for action as ever, and in the fall
of 1908, when Mr. Taft’s promises of tariff revision became reasonably
convincing, the head of the Association, Mr. William Whitman of Boston,
called together those in the business whose interests were identical
with his, and they sought counsel with the growers of wool in the far
West. In October of 1908 the two interests met in Chicago. Mr. Whitman
says that this conference was called at the suggestion of the
wool-growers. For people who had taken an initiative the wool-growers
were very modest. They said frankly they were not prepared to talk
extensively on tariff questions, that they had come to listen. Mr.
Whitman did the talking, and to such good effect that the conference
decided: “it is the sense of this meeting that in the coming revision of
the tariff the present duties on wool and woollen goods be maintained
without reduction.”
Some two months later Mr. Whitman appeared before the Ways and Means
Committee with an elaborate argument for preserving the wool duties. He
made a particular point of defending the duty on raw wool. “Fair Play
for All Interests” is the subhead under which Mr. Whitman asked that the
tax on his raw material be continued. The Bulletin of the Wool
Association puts the principle this way: “The traditions of the
association all condense themselves into the Golden Rule”—“Do unto
others as you would have others do to you; between grower and
manufacturer and as between one manufacturer and another, that has
always been the guiding principle.”
Before Mr. Whitman was excused from cross-examination, however, a
serious questioning of his interpretation of the Golden Rule was
introduced into the testimony. It came from a maker of carded woollens
as distinguished from worsteds, Mr. Edward Moir, of Marcellus, New York.
The carded woollen manufacturers, like many other innocent Americans,
took the results of the presidential election of 1908 as evidence that
the tariff was to be thoroughly revised. “At last,” said they, “we shall
get relief.” Accordingly, soon after the election, Mr. Moir, learning
that there was to be a meeting of the National Association of Wool
Manufacturers, and supposing that the revision of the wool schedule was
to be discussed, presented himself at the gathering. To his surprise he
found that some weeks before the election, about the time, indeed, that
Mr. Taft’s promises of downward revision were most definite and
vigorous, representatives of this association had met representatives of
the wool-growers of the far West, and the two had made what they called
a “solemn compact” to _resist all changes in the wool schedule_! The
inequalities were to stand. The carded woollen mills were to be fed
carpet wool and cotton if they could get them, the man on small income
was to continue to wear cotton worsteds and sleep under cotton blankets,
the well-to-do were to continue to pay $1.50 for cloth they could buy in
England for seventy-five cents. When Mr. Moir protested, he found he
stood alone; _i.e._ he found that the _National Association of Wool
Manufacturers apparently represented the worsted industry_. A little
later, when the Ways and Means Committee began its hearings, Mr. Moir
found that this same association was giving information on what the wool
schedule needed, and that it did not include help for him. Outraged, he
went to work to organize the carded woollen men. Over one hundred were
soon in line, and this body carried its grievance to the Ways and Means
Committee. The reports of the tariff hearings contain some very
interesting explanations from Mr. Whitman of the points of which the
carded woollen men complained. Take the matter discussed in the last
chapter, of collecting 11 cents on every pound of grease wool imported
into the country, regardless of quality or value, or whether it shrinks
15 or 80 per cent. How did Mr. Whitman defend this duty, which is, as
one can see, the very foundation of his advantage over his competitors?
He defended it almost hysterically by the claim that it is only a
specific duty, which will prevent undervaluation at the customs. Mr.
Whitman buys his wool according to its value. He does not insist upon
paying a fixed price through fear of misrepresentation. Wool is a
standard like wheat and corn. Centuries of experience have made men
expert in judging its value. Undoubtedly there would be efforts at
undervaluation if the duty were according to value. But a specific duty
does not prevent fraud—witness the Sugar Trust. Everybody knows that
such cheating is dangerous work. Even the Sugar Trust, with all its
cunning, has not escaped entirely. There would be little chance for the
regular importer to do much cheating, and if there was a percentage of
fraud, what could it amount to compared with a _duty which is always
unfair_, which is actually a _legalized fraud_?
Mr. Whitman’s defence of the amount of compensation allowed
manufacturers for the duty on grease wool was interesting also. It will
be remembered that this duty on wool worth over 40 cents a pound is 44
cents; that is, it is reckoned as if four pounds of grease wool were
used in making a pound of cloth. Mr. Whitman defends this ratio, so
rarely correct, by using the same argument with which Mr. Aldrich met
the attack upon it in 1890 when the McKinley Bill was making.
“It is true that certain wools do not shrink so much, but _whether
they do or not is not the point_. The American manufacturer must be
reimbursed on the basis of the shrinkage of wools used by his
foreign competitors or _available for the latter’s use_.”
This is as hard to follow as the long-standing consolation offered to
the complaining consumer that “_the foreigner pays the tax_.” However,
it is hardly more away from the point than Mr. Whitman’s second defence
of the 4 to 1 ratio, which, in essence, is that it must be right because
it was so fixed in 1867! Curiously enough, while Mr. Whitman defends the
4 to 1 ratio because it was decided on by the compact of ’67, he insists
that 55 per cent ad valorem on cloth is none too much, although in 1867
the manufacturer considered 25 per cent sufficient!
But the carded wool men were not the only branch of the industry which
disputed the soundness of Mr. Whitman’s “fair play for all” schedule. A
few weeks after his hearing, it came out that one great branch of the
woollen industry, the carpet manufacturers, had left the National
Association in a body. They had wakened up to the fact that for some
twenty years or so they had been serving largely as cat’spaws for the
worsted makers’ chestnuts. They had refused to contribute further to the
organization, and frankly bolted Schedule K, asking for a common-sense
adjustment of the duty on carpet wools.
The most sensational and serious attack on Mr. Whitman’s testimony was
made, on the very day he appeared, in a pamphlet distributed to the
committee. It bore an ugly title, “How an exorbitant duty on wool tops
was concealed in the Dingley law by the cunning manipulation of S. N. D.
North and William Whitman.” The name attached to the pamphlet as author
was that of a man well known in wool circles, the editor of the
_American Cotton and Wool Reporter_, Frank P. Bennett. In proof of the
charges he made, Mr. Bennett offered documentary proof of the first
order. Nothing less than extracts from letters which had passed between
Mr. North and Mr. Whitman at the time of the “cunning manipulation.”
To those familiar with the personal relations of the three gentlemen the
substance of the charges was not new. They had been first made by Mr.
Bennett the year after the passage of the Dingley Bill (1898) and in
very precise form. What they amounted to then was that Mr. North,
although the paid secretary of the National Association of Wool
Manufacturers, had worked on Mr. Aldrich’s Finance Committee while it
was busy with the Dingley Bill, as “the paid lobbyist of William Whitman
and one other manufacturer,”—that he had secured benefits for them
“regardless of other interests,” and that “these gentlemen now (1898)
aimed at the control of the United States Census, which they proposed to
secure by having Mr. North (their agent) made director of the Census!”
It was an ugly looking accusation, and naturally the association
appointed a committee to look into the matter. Both Mr. North and Mr.
Whitman made statements. They amounted to a complete denial of all the
charges, and particularly of any tampering with the top duty. Mr.
Whitman showed by the documents he presented that the duty on tops as it
finally appeared in the Dingley Bill was the same as that fixed by the
McKinley Bill. He also showed it had been retained at the request of the
wool-growers. He said that when he discovered this duty was in the
Dingley wool schedule he wrote a letter of protest to Mr. Dingley, in
which he said:
“As tops now stand in the proposed tariff bill, the duty is
absolutely prohibitory.... This places me in a very awkward position
before the community. Nearly everybody in this part of the country
is aware of the fact that the Arlington Mills, of which I am the
treasurer, has just completed an enormous plant for the manufacture
of tops, and everybody will say that, through my influence, there
has been secured upon tops prohibitory duties. Yarn spinners and
weavers will complain, although they may not be directly affected;
but everybody who is at all jealous or envious will charge that this
duty has been imposed at my solicitation.... The objections, then,
that I have to the top rates as now incorporated in the bill are:
“1st. That they are unnecessarily high and will do nobody any good.
“2d. They are so high on the article our mills manufacture as to
create unfavorable criticism.”
This letter and the strong and definite denials of Mr. North and Mr.
Whitman were considered satisfactory by the investigating committee,
which announced that in its judgment the statements of Mr. Bennett were
“malicious and unwarranted,” and that he had forfeited his right to
membership in the association.
The matter probably would have ended there if four years later, 1902,
Mr. Bennett had not sued a Lynn, Massachusetts, newspaper for libel.
When the case was tried the newspaper summoned various witnesses to
prove that Mr. Bennett’s newspaper, the _United States Investor_, made a
practice of blackmailing concerns which did not advertise in it. Among
those witnesses was Mr. Whitman. In the course of his testimony, Mr.
Bennett’s lawyer, Moorfield Storey, saw an opportunity to demand Mr.
Whitman’s correspondence over the years of the making of the Dingley
Bill. The court upheld him, and all of Mr. Whitman’s political letters
of that period—“_My entire private correspondence, embracing
correspondence with every member I have relations with, private and
public_,” Mr. Whitman said of the letters—were turned over to Mr.
Bennett, who at once took copies of those which interested him. It was
nearly seven years before Mr. Bennett found a sufficiently dramatic
moment in which to use the letters he took from Mr. Whitman’s file. It
came finally—the day when Mr. Whitman was explaining to the Ways and
Means Committee why a wool schedule made in 1867 should be preserved in
1909.
As related above, Mr. Whitman had cleared himself in 1898 from Mr.
Bennett’s charge of manipulating the top duty in the Dingley Bill by
publishing a letter he had written to Mr. Dingley protesting _against_
the duty. He had also related that Mr. Dingley had accepted his
suggestion and had put it into the bill, and that the reason it had not
appeared finally was that the wool-growers had objected so strenuously
that the committee had given in to them. This looked all right, but
there was a chapter of which Mr. Whitman and Mr. North said nothing, and
of which Mr. Bennett had no proof until he got hold of the
correspondence, and this chapter was published in the little pamphlet
distributed by Mr. Bennett to the Ways and Means Committee on December
2, 1908.
It seems that when the top duty suggested by Mr. Whitman came to the
Senate Committee in 1897 it struck a snag at once. It was
_prohibitive_—just as the higher one for which it had been
substituted—_the figures were different, but not their effect_. Mr.
North was summoned to explain—the Finance Committee having apparently
accepted him as its wool expert. Mr. North consulted Mr. Whitman and an
agitated correspondence followed. The letters to Mr. North show that Mr.
Whitman was in great alarm lest the duty he had suggested be lowered:
“No possible legislation in connection with the woollen schedule would
be so dangerous to the woollen industry as legislation which would
_favor the importation of tops_.” “You know how important it is, not
only to me, but to the whole wool industry of the United States, that
such rates of duty should be imposed upon tops as will enable them to be
made here _and not to be imported_ from foreign countries.” “The
prosperity of the woollen industry in this country depends wholly upon
the _ability of the domestic manufacturers to manufacture the tops
here_.” “It is of the greatest importance that the Arlington Mills
products (tops and yarns) have the _full measure_ of protection accorded
to associated industries.” These extracts and the context show
conclusively that though Mr. Whitman may not have wanted a rate so high
that it would be suspicious, he was after a duty which would be
prohibitive, and that he was depending upon the confidential relations
of the paid secretary of the wool association with members of the United
States Senate in charge of the tariff bill to secure what he wanted.
Mr. Whitman’s second defence—that it was the wool-growers, not he, that
kept the high duty on tops in the Dingley Bill—loses its weight also
when one looks into the origin of that duty. It first appeared in the
McKinley Bill of 1890, and so far as the writer has been able to
discover from an extended examination of the debates and hearings, the
top duty was _devised_ for the McKinley Bill by Mr. Whitman. Nobody else
ever seems to have had anything to do with it. He advocated it in 1889
before the Senate Finance Committee. He presented it in January, 1890,
to the Ways and Means Committee, explaining and defending it. Mr.
Whitman was the father of the obnoxious top duty. He found it was
suspicious. He revised it so that it would “look better,” but do the
same work!
In spite of ample proof of gross unfairness and trickery in the Dingley
wool schedule, Mr. Payne reported it practically unchanged. As it passed
the House it still gave to Mr. Whitman a prohibitive duty on his tops.
The Finance Committee was equally complaisant, for, as Mr. Aldrich, its
chairman, said later, the schedule as he reported it to the Senate
“followed precisely the act of 1897 in every word.” But when the wool
schedule reached the Senate for debate, its smooth passage was over, for
there on May 5, 1909, it was treated to one of the most searching
analyses of duties which has ever been made in Congress. The significant
fact was that it came from a Republican who had been for twenty years in
Congress, and who had served on the Dingley Ways and Means
Committee,—Senator Dolliver of Iowa, one of a group who, when they had
discovered by the character of the bill reported from the House and by
the attitude of the majority of the party in the Senate towards it that
there was no intention of treating seriously the campaign promises of
revising the tariff downward, had revolted: insurgents, they were
called. These men all believed in the doctrine of protection, and most
of them had been all their political lives under the spell of the notion
that it had created American prosperity. But they were honest men, and
slowly they had awakened to a consciousness that the sacred dogma had
been stretched and twisted in the last fifty years until it had been
made literally to cover a multitude of sins. They saw how its meaning
had been manipulated to justify unscrupulous duties whose only
contribution to prosperity was turning the profits of labor and natural
wealth into some private pocket. They all seem to have taken without
reserve the latest strain put upon the protective formula in order that
it might cover whatever a manufacturer wanted, the form in which it had
appeared in the Republican platform of 1908, insuring the person lucky
enough to have a business which could be protected that he should have a
duty which would not only cover the difference in the cost of his
production, but insure him a profit. The insurgents did not object to
this interpretation, but they saw at once that Mr. Aldrich in reporting
his bill had no intention, in cases where duties had been advanced, of
giving the Senate evidence that the difference in the cost of production
here and abroad made an advance necessary, that the facts he had he
refused to make public. I asked Senator Bristow of Kansas, whom I knew
to be a strong and convinced protectionist, what started his revolt
against the bill? “Red paint,” he replied promptly. “I was interested in
that. We paint our barns with it in Kansas. I saw them putting up duties
which I believed would affect its cost. I wanted to know why. I could
find no reason—no proof that it was necessary. I insisted, and I soon
made up my mind that they had no intention of considering the difference
in the cost of production, that they sneered at the idea, that they were
simply intent on giving their political supporters what they wanted.
Moreover, they intended to force us to be a party to the business. It
was the most dishonest and corrupt work I have ever seen, and I
revolted.”
The insurgents determined to demonstrate to the country the utter
unscrupulousness of the leaders of their own party, and to do this
effectively they divided among themselves the schedules which they knew
to be most important politically and therefore to be most open to
suspicion, the intention being thoroughly to master their intricacies.
Schedule K fell to Senator Dolliver. Now Senator Dolliver had always
been what one may call a McKinley protectionist or prohibitionist. He
had followed that leader with the unquestioning fidelity which the man
had the ability to inspire in many who knew him. His speeches in the
’90’s are brilliant and witty defences of the new interpretation of
protection which the party for political reasons was trying to force on
the country. They are thoroughly orthodox and thoroughly unsound. In
1897 Mr. Dolliver was a member of the Dingley Ways and Means Committee,
which seriously tried to lower the rates in all the schedules, and
particularly in wool. He had seen the effort frustrated by the very
group whom he knew now to be behind the wool bill which Mr. Aldrich
reported. He determined to master the history and the operation of the
schedule in so thorough a fashion that he could go on to the floor of
the Senate or on to any platform and make clear to a popular audience
its tricks and its injustices. He believed that such an exposure must in
the long run kill it. Now the wool schedule is one of the most difficult
in our tariff laws to understand and to explain. It is really the
accumulation of fifty years of active superstition and greed. An ocular
demonstration of the change in its character and its intelligibility may
be had by comparing the wool schedule of fifty years ago and that of
to-day as printed in the official collection of United States tariff
bills. Fifty years ago wool was disposed of in perhaps fifty words,
which anybody could understand; to-day it takes some three thousand, and
as for intelligibility, nobody but an expert versed in the different
grades of wools, of yarns, and of woollen articles could tell what the
duty really is. It is a mistake to suppose that because a man has been
twenty years in Congress and has served for a portion of that time on
the Ways and Means Committee, he therefore understands the tariff
schedules. As a rule, it is safe to say that a Congressman understands
rarely the real meaning of the rates he votes for. What he understands
is that the Committee has made the bill for what it considers sound
party reasons, and that if he does not accept the rate, he or some
colleague is in danger of defeat, and he accepts it without too much
scrutiny. It is a case where it is just as well not to know too much.
Moreover, it takes an amount of hard time-taking study to master a
schedule, which only an occasional man has the will to give. Senator
Dolliver knew that neither he nor any other insurgent understood enough
of wool-growing and wool manufacturing to cope with the schedule. Later
in the course of the debate he illustrated the difficulties he
encountered in spite of his twenty years in Congress. He was told that a
certain paragraph was worded to conceal a trick.
“I had to read it four or five times before I could see the point where
the proposition emerged,” Senator Dolliver said. “I handed it to
intelligent men and asked them if they saw any distinction in that
language between clothing wools and combing wools, and, one after
another, bright men said, ‘I cannot see any distinction.’ If you will
get the paragraph and read it yourself, you will notice with what
delicacy of phrase, worthy of poets and artists, this distinction has
been wrought into the very foundation of the wool tariff.” Now it was
this aggregation of tricks, evasions, and discriminations that Senator
Dolliver determined to master, and master it he did, by months of the
severest night-work. He poured over statistics and technical treatises.
He visited mills and importing houses and retail shops. He sought the
aid of experts, and in the end he knew his subject so well that he went
on to the floor of the Senate without a manuscript and literally played
with Schedule K, and incidentally also with Senator Aldrich and several
other stand-patters whose long experience in juggling with untruths had
destroyed their agility in handling truths.
When he had finished his clean, competent dissection, Schedule K lay
before the Senate a law without principles or morals; and yet, just as
it was, the Senate of the United States passed it, and the President of
the United States signed it, and it went on the statute books, even to
Mr. Whitman’s prohibitive duty on tops.
What made Mr. Whitman so powerful? Probably we shall not go far astray
if we assert that the real reason is that for many years he and his
worsted friends have been one of the main financial reserves of the high
protective wing of the Republican party in New England, and that in
return they have got what they asked for. That is political ethics—or
etiquette. Ever since 1888 it has been a settled and openly expressed
principle in political circles that your protection shall be in
proportion to your campaign contribution. In that year it was laid down
officially that as the manufacturers of the United States got
“practically the sole benefit of the tariff” and in prosperous years
“made millions” out of it, therefore it was entirely justifiable that
those who granted the tariff should, when their time of need came, put
these manufacturers “over the fire” and “fry the fat out of them.”
Mr. Whitman’s individual support is not to be despised, but with it has
always gone the support of his association. It means the support of the
great “wool trust” with William M. Wood at its head, and it means also,
as we have seen, the support of the wool-growers of the far West—not, be
it noted, of _all_ the wool-growers of the country, but of those who,
like the worsted manufacturers, are getting more out of the present
duties than their competitors, and are therefore most anxious to keep
them. These are the men who produce a wool which on an average will
yield only about 44 pounds of clean wool in every 100 pounds sheared
from the sheep. Yet their protection on this 100 pounds is the same as
that of the farmer of the South whose wool yields 60 pounds to every
100, or the Eastern and Middle state farmers whose wool yields 52 out of
every 100 pounds. The protests of these Eastern, Southern, and Middle
West farmers that they are not fairly treated were no more heeded by the
makers of the Payne-Aldrich Bill than the protests of the carded woollen
and carpet manufacturers. The reason is obvious enough. The Western
wool-growers are as loyal and generous in their support of their
Senators as are Mr. Whitman and Mr. Wood of theirs. Each group—the
wool-growers of the far West and the worsted manufacturers of the
East—controls a good-sized block of votes. By uniting these blocks they
control probably the largest and most dependable vote of any
tariff-protected interest in the country. It is a vote which for over
forty years has never bolted. It is a vote which always gets what it
asks, for the simple reason that it is powerful enough to defeat any
duty in a tariff bill if the backer of that duty is hostile, and nobody
doubts it will exercise the power if tried. It is the size and
solidarity of the vote which explains why when, through the boldness of
the insurgents, the most odious features in the wool business had been
laid before the Senate and a motion was made to send Schedule K back to
the committee for revision, it was lost by 8 yeas and 59 nays. It is Mr.
Taft’s reason—given frankly enough after he found the odium of allowing
the schedule to stand was not going to pass. “_The interests of the
wool-growers in the far West_,” said Mr. Taft, “_and the interests of
the wool manufacturers in the Eastern states, and in other states,
reflected through their Representatives in Congress, were sufficiently
strong to defeat any attempt to change the wool tariff, and had it been
attempted it would have beaten the bill reported from either
committee._” Apparently the same combine was strong enough to prevent
the presidential veto the country had a right to expect from Mr. Taft.
Not less significant than the experience of wool in the Payne-Aldrich
Bill was that of cotton.
When Mr. Aldrich reported the bill of 1909 to the Senate on April 12,
there was lively curiosity in many quarters about what the cotton
schedule would contain. Rumors were general that it had been cleverly
manipulated in its passage through the Ways and Means Committee. It was
said that Mr. Payne had declared “in language somewhat exaggerated by
impiety,” as Senator Dolliver afterward put it, that he had been
_fooled_ by the gentleman who had presented the needs of the schedule to
him. It was known that he was so certain of the odium of a certain
paragraph which he had reported that he had risen in the House and
withdrawn it. It was certain that the first publication of the schedule
had drawn down an avalanche of criticism and charges of bad faith, many
of them from the most respectable and best informed trade sources. So
vigorous and authoritative had the attack been that many believed that
Mr. Aldrich would not venture to report the schedule which the House had
sent him.
Schedule I, as the cotton schedule is known, is one of first importance.
In 1905 there were over six hundred and thirteen million dollars
invested in cotton manufactures in this country. The product was
something over four hundred and forty-two million dollars—a big
proposition from every point of view, not one to be lightly or
dogmatically treated. A question of humanity, too, as well as of
economics, for there were over 310,000 persons employed, 125,000 of whom
were women, and 40,000 children under sixteen years of age.
It was not against the entire schedule that charges had been brought,
but against that which concerns itself with woven goods—that is,
sheetings, shirtings, muslins, calicoes. A very large proportion of the
product in cottons comes under this head. Fully three hundred and eight
of the four hundred and forty-two millions of dollars of cotton products
produced in 1905 was in woven goods. Now all woven goods have been
protected for many years, and so well protected that the importations in
1905 were only about eight millions of dollars—or about 2⅔ per cent of
the product. These importations were not scattered over the whole group
of cotton goods—they were concentrated on the higher grades. Of the
cheaper cotton goods there is almost no importation; on the contrary, we
exported over forty million dollars’ worth of them in 1905. What that
means, of course, is that we have come to a point in making the cheap
grades of cottons where we do not need much, if any, protection, since
we can afford to export and sell them in competition with English-made
goods.
With the higher grades of goods it is another story. We cannot make them
as cheap as they are made abroad. We are turning out many really
beautiful cotton fabrics, and our qualities and designs are continually
improving, but they cost us more. The protection given all these better
grade fabrics, however, has been sufficient to permit a great expansion
in this part of the industry, and while it has not prevented
importation, it has probably allowed no more than was a healthy stimulus
to the industry. At least this was the opinion given to the Ways and
Means Committee by the most important witness that appeared before it on
cotton—Henry F. Lippitt, the general manager of the important group of
Rhode Island mills in the Manville Company. Mr. Lippitt is a member of
one of the half dozen or so families in whose hands the textile
industries of Rhode Island are largely concentrated. His father,
grandfather, and great-grandfather were cotton manufacturers. They were
able men at their trade, as he is. They were also, as he is, stiff
protectionists and active Republican politicians. Mr. Lippitt’s father
and one of his brothers have been governors of Rhode Island. He has
always been one of the main stays of the party in the state—a support of
the blind Boss Brayton and one of Mr. Aldrich’s stanchest friends. Since
the passage of the Payne-Aldrich Bill Mr. Lippitt has succeeded to Mr.
Aldrich’s seat in the Senate. Mr. Lippitt’s expression about what was
needed in the cotton schedule was accepted as authoritative, and this is
what he said on December 1, 1908, when he appeared as a representative
of the Arkwright Club of Boston:
“We are going to ask you to leave the duty as it is on the cloth
schedule with the exception of _some very minor points_.
“We ask that the present schedule shall not be materially changed and
that cotton manufacturers be allowed to continue the operation and
further development of this important industry _upon the same tariff
conditions that now prevail_.
“_The importations are not so large that we feel justified in asking
that the duties be increased, but we would not like to see them
decreased._”
Upon this representation of the “wants” of the manufacturers the trade
rested. If Mr. Lippitt asked that the schedule be left as it was, there
was general confidence that it would be done. There seems to have been
little or no curiosity about “the very minor points” to which Mr.
Lippitt referred. He did not make these known to the Committee itself
until some six weeks later. Then in a letter written for the Arkwright
Club of Boston, the leading organization of cotton manufacturers in the
country, Mr. Lippitt and a fellow manufacturer, Mr. J. R. MacColl, the
manager of the Lorraine Mills of Pawtucket, Rhode Island, made certain
suggestions to Mr. Payne. This letter was not read at the public
hearings; it was not published until the Appendix to the hearings came
out. The first the public knew of it was when Mr. Payne reported his
bill to the House on March 17, 1909; and then an uproar began. Far from
“minor” changes having been made, it was declared that radical and
complicated ones sure to bring great confusion had been introduced. To
make the cotton schedule any more complicated than it has been for fifty
years is in itself a severe criticism. Under the Dingley Bill cotton
cloth was subject to _four_ distinct classifications in fixing duties.
These were based upon the number of threads to a square inch, the
weight, color, and value. Duties were graded also according to the
varying fineness, weight, and value, so that there were scores of
combinations in duties possible. If, after all this, the cloth had a
figure worked in it, as so many of the finer goods do, there was an
extra duty per square yard for that.
It would seem difficult to add anything to this complication, but Mr.
Payne’s bill did it. It began by upsetting an established definition in
the cotton trade—a definition accepted the world over as to what the
word “thread” means in appraising cloth. A thread has been a thread,
regardless of how many filaments or ply were twisted together to make
it. This was no longer to be so. The poor appraiser could no longer
apply his magnifying glass to a square inch of cotton cloth and count
the threads: he must untwist a thread and compute the number of ply! Of
course this immediately threw the fabric into a higher classification
than under the old law, and increased the duty on it. A cloth which
counted fifty threads carried under the old law a duty of say one cent
per square yard, but if these threads were three ply—and each ply must
be counted by the new paragraph—then it was at once boosted into the one
hundred and fifty thread class, where the duty is one and one-half cents
per square yard! This was the first of Mr. Lippitt’s “very minor
points.” But this did not end the counting business. There is a great
variety of cotton cloths which have figures worked on to the body. The
swisses and curtain madras are common examples of these. These figures,
of course, increase the value of the goods, and the Dingley Bill
provided for them by giving them an extra one or two cents per square
yard, according as they cost seven or over seven cents a square yard.
But Mr. Payne’s bill went this duty one better by arranging that when
the threads of a cloth were counted not the threads in the body alone
should be considered, but also the _threads in the figure worked on the
body_. Here again the number of threads in a square inch would be so
increased as to throw the fabric into a higher class and so raise the
duty. Another increase came in the matter of color. Heretofore the body
of the cloth had been all that was considered in estimating color, but
the new law proposed that cloth into which colored figures or threads
had been introduced should be called colored. A single colored thread
introduced into a white piece was enough to throw it into the colored
class. One entirely new duty was added, and that was a cent a yard for
cloth which had been mercerized—and a single mercerized thread was
enough to put a piece into this class.
Besides all this reclassification, the duties which in the Dingley Bill
had been added for the value of the cloth were increased and complicated
in a most irritating fashion—by dividing the values into several
classes. There was one duty for cloths worth 12½ to 15 cents, another
for those worth 15 to 17½, another for those worth from 17½ to 20. But
who was to fix the value when the margins were so narrow? It was a
temptation to fraud,—the importer naturally trying to prove that the
cloth worth 13 cents was worth but 12½; his opponent, the domestic
manufacturer, trying to prove that the cloth really worth 12½ was worth
13.
Mr. Payne reported a schedule then which not only raised duties on many
kinds of cotton goods, but multiplied the opportunities for fraud and
added seriously to the work of appraising. Mr. Payne claimed to have
been entirely misled about what the new rates would do—at least about
the changes in counting threads—for when the schedule came up he rose in
the House and asked that the old methods of counting be restored, and he
said with an emphasis which showed his disgust at the way he felt he had
been tricked:
“The committee has not sought to increase the duty by that method. If
they wanted to increase the duty, they _would go in the open to do it_.”
The cotton schedule came to Mr. Aldrich, therefore, under
suspicion—suspicion of having been cleverly and slyly revised upwards by
the advice of one of his strongest and most generous political
supporters, the man who had the credit of managing his last senatorial
campaign and collecting the large sums of money which it required to
reëlect him. Naturally the curiosity was keen about what Mr. Aldrich
would report. What he reported was, with one exception, just what Mr.
Lippitt and Mr. MacColl had asked for. He did not stand for the new
definition of thread which they had invented, but he did provide that
the number of threads and the color should no longer depend on the body
of a cloth, but should be estimated by the figure wrought into it. He
practically asked that if a single colored thread was woven in or
applied to a piece of shirting, it should take the added duty which was
given to colored goods. He also stood by the clause which put an
additional cent on all which had even one mercerized thread in them, and
by the complicated specific duties which had been invented for all goods
costing over 12½ cents per square yard.
Now if Mr. Aldrich believed that the rates on these particular cotton
goods should be raised and complicated in this way, he was justified in
raising them; but there has never been a time in the history of
protection in this country when it was more imperative for a new and
increased duty to be clearly explained. There was never a time when it
was more necessary that all rates should be measured by the fundamental
principles of protection. It was Mr. Aldrich’s business to prove to the
Senate that the new rates were justifiable. But Mr. Aldrich made no
attempt to do anything of the kind. On the contrary, when the charges
were taken sharply to account by Senator Dolliver in an analysis which
must stand as a model of the kind of criticism which every schedule in
the tariff bill needs _from Protectionists_, Mr. Aldrich met him by
asserting that the rates on cotton goods _had not been raised_. That all
that had been done was to readjust duties in such a way as to restore
the “_intent_” of the Dingley Bill, which, he said, had been largely
destroyed by certain court decisions. It is easy to show how far from
the fact Mr. Aldrich was in his statement. The fabrics which had been
referred to the courts were few in number, including the goods known as
etamine and Madras curtain goods. There had been no court decision
whatever affecting the great bulk of plain cotton goods, white or
colored; and yet the tables estimating duties which are to-day in use by
one of the largest and most respected importing houses in this country
show that the increase in duties on colored cotton cloths of from 100 to
150 threads per square inch are all the way from about 2 to 42 per cent,
and as usually happens the 2 per cent increase is on the _highest
priced_ goods. If these same goods were mercerized, the increase in
duties is from about 12 to 56 per cent. In the next higher grade of
fineness (over 150 and not over 200 threads) the duties have increased
from 2 to 24 per cent—if mercerized, from 14 to 38 per cent. White goods
of the ordinary weaves of the same grades of fineness as those above
have like increases. Not one of these cloths _was touched or could be
touched by the court decisions Mr. Aldrich hid behind_.
It was inevitable that when the effect of the changes was made clear
there should have been at once a cry raised that Mr. Aldrich, in
allowing these increases of duties, was rewarding Mr. Lippitt for the
able work it was known that he had done in the last senatorial campaign.
It was pointed out that the goods affected were not common coarse goods.
They were the higher grades which are made in the Manville Mills, and
well made. It was also said that Mr. Lippitt was adding to his mills a
big mercerizing plant. “He expects to pay for it out of that extra
cent,” the cynical said. It was certainly natural and necessary that Mr.
Aldrich should resent these charges, but Mr. Aldrich went a little too
far in his denials, and, taken _seriatim_, they look queer, at least.
“No manufacturer has been before the Committee on Finance in regard to
this schedule. Every change that was made in it was made upon the
recommendation of the government experts and nobody else.”
But later Mr. Aldrich said: “They (the new rates) are the creation of
the _committee itself_, and no man was consulted either on the Board of
Appraisers or anywhere else with reference to these provisions until the
committee had decided what they should be”; and again—“The _committee_
having decided what to do, they turned the matter of _regulating_ the
schedules to the experts of the government, and never to any
manufacturer at any time.”
It is probably true that Mr. Lippitt was not before the Senate
committee. It was not necessary. His suggestion made to the Ways and
Means Committee had been used by Mr. Aldrich almost intact. Moreover,
the work of the “experts” to which Mr. Aldrich referred had been done
with Mr. Lippitt. It was an open secret in Washington that Mr. Lippitt
spent weeks with Messrs. Sharretts and De Vries, the government experts,
whom Mr. Aldrich said first had made every change in the cotton schedule
and whom, a little later, he said had done nothing of the kind, but
simply _regulated_ them.
Moreover, reference to “experts,” coming from Mr. Aldrich at that point
in the making of the bill of 1909 did not inspire confidence. Something
of the character of the work “experts” had done for him in 1897 had been
sufficiently demonstrated by Frank P. Bennett, in the matter of William
Whitman and his top duty. If that was what Mr. Aldrich understood by
experts, then it was certain it was the kind of tariff-making which the
country had set out to correct—a species of jugglery in the interests of
some good campaign contributor made by a specialist willing to turn his
knowledge to adroit manipulation. That there was a general suspicion
around Washington that one of the “experts” who aided Mr. Lippitt, and
was now aiding Mr. Aldrich, had done something of the same kind of work
for the Senator in regard to sugar in 1897, only added to the severity
of the criticism which greeted his effort to unload the cotton duties.
However, in falling back on “experts” Mr. Aldrich was only taking us at
our word. We have all talked more or less volubly about “tariffs made by
experts.” Mr. Aldrich gave us an example of what it may be in the cotton
schedule. It turns out that it can easily be something like the familiar
“business administration” of municipalities—administrations ably
conducted to give the conductors what they want.
In defending the charges against the cotton schedule Mr. Aldrich made
the following statements:
“The existing law, by a series of undervaluations on the part of
importers and of erroneous construction on the part of the general
appraisers and the courts, has been so emasculated that the interests of
the cotton manufacturers of the United States have been largely
destroyed in some lines. This is shown by the fact that the importation
of cotton manufactures increased from $23,000,000 in 1898 to $73,000,000
in 1907.” Mr. Aldrich was mistaken in his figures. The cotton
importations in 1898 were over $27,000,000, and 1898 was an “off-year.”
The average importations in the decade 1896–1905 were over $40,000,000.
Moreover, nobody knows better than Mr. Aldrich that not over $12,000,000
of the $73,000,000 imported in 1907 referred to cotton cloths—the only
thing in dispute. The other $61,000,000 was duty on our large
importations of cotton laces, embroideries, and small goods like
handkerchiefs and hosiery. It was a misleading statement, not unlike the
statements by which the duty on mercerized goods was defended. The task
of defending this fell to Mr. Lodge in the main,—the senior Senator from
Massachusetts, and Mr. Smoot from Utah, being the senatorial team which
backed up Mr. Aldrich in the tariff debate. Mr. Lodge’s speech was most
interesting. He had been admirably coached on mercerization, and he had
his samples with him. He told how it had become a general process since
the Dingley Bill was made—that it required new and expensive machinery
and skilled labor—hence for labor’s sake and the honor of our cotton
trade we should give it a special duty. What Mr. Lodge did not say was
that this process, in so far as it adds anything to the value of a
cloth, was already provided for in the Dingley Bill. That under the
protection there provided, it had become in some ten years firmly and
successfully established in the United States. The latest textile
directory gives a list of fifty-seven concerns which do some form of
mercerizing. Some of these are on a large scale. When Mr. Lippitt
appeared before the Ways and Means Committee one of the strong reasons
he gave for not changing the Dingley duty was that under it the trade
had been able to develop on artistic lines and to employ new processes,
such as mercerization. He repeated that the Dingley duty was sufficient.
Mr. Lodge’s speech would lead one to believe that we had been unable to
mercerize goods, that it was an infant needing protection, whereas
fifty-seven establishments announce that they do the work! Moreover, Mr.
Lodge failed to prove that a cent a square yard was necessary to protect
the process. As a matter of fact, it was shown by Senator Dolliver that
the process costs nothing of the kind. Bills for mercerizing were shown
in which the charge was but ⅛ of a cent a square yard. Other figures
were quoted, but none higher than ¾ of a cent. It is probable that the
process is actually cheaper here than in England or Germany, though we
do not as yet do work of as high grade. All the evidence, indeed, leads
one to believe that there was no sound protectionist defence of the
extra duty on mercerized goods, that it was an abuse of power from start
to finish.
The duties on cotton cloth in the Payne-Aldrich Bill were adopted not
for lack of ample information of their nature, but in spite of it. The
members of the responsible committees, the members of Congress and the
Administration, not only had the debates to guide them; they had laid
before them repeatedly, by the Wholesale Dry Goods Association of New
York, graphic “object lessons” of what the new rates would do.
Discovering that Congress was unmoved by its showings, as a last resort
the Association appealed to the President for a hearing. They believed
that if they could prove to him the effect of the duties on common
goods, he would not permit the wrong. But the President would not see
them. It is probable that Mr. Taft, knowing that it was futile to oppose
the cotton duties, spared himself the ordeal of having to say to
gentlemen who had a just grievance, “I can do nothing for you.” It was
what he had done in the case of the carded woollen men. And if Mr. Taft
had offered any explanation of his inactivity, as he did in the case of
the wool schedule, he would probably have said:
_The interests of the cotton manufacturers of New England, New York, and
Pennsylvania, reflected through their representatives in Congress, were
sufficiently strong to defeat any attempt to change the cotton tariff,
and had it been attempted it would have beaten the bill reported from
either committee._
What made the cotton manufacturers so strong? Their alliance in tariff
matters with the worsted manufacturers—nothing else. Side by side with
worsted in New England and New York and Pennsylvania, in all the textile
centres, is cotton. The worsted manufacturers use larger and larger
quantities of cotton in their cheap goods. Worsted manufacturers are
also frequently cotton manufacturers. The tariff interests of cotton and
of worsted manufacturers are identical. Everywhere we find them
supporting the same political combinations. Senator Aldrich has always
been as liberal in supporting what the wool men wanted as he was in 1909
in carrying out Mr. Lippitt’s suggestions. So loyal is he to the wool
schedule that in 1909, when the attack was made by his own party
colleagues on its inequalities, he made the following extraordinary
statement:
“_There is no Senator sitting upon this side of the Chamber, there is no
person who is acquainted with the tariffs of this or any other country,
who does not know that an assault upon the wool and woollen schedule of
this bill is an attack upon the very citadel of protection and the lines
of defence for American industries and American labor. If the Senate
destroys the relation in that schedule or destroys the schedule itself,
you demoralize the whole protective system; and you destroy every line
of defence which the people of this country have who believe in the
protective policy._”
Now what does this mean? We have seen that the “assault” on the wool
schedule was merely the demand that its discriminations be adjusted:
_there was no demand for lowering duties_; but Mr. Aldrich declared if
this readjustment should be made, it would “demoralize the whole
protective system”—destroy the “citadel” and the “lines of defence for
American industries.” Can this mean anything at all but that it would
break up the wool “bulwark,” the combination of politicians and favored
wool-growers and worsted manufacturers fattening off the competing
branch of the industry? It can mean nothing else. Destroy the
combination which has kept the old wool schedule in vogue so long, and
you destroy a chief financial support of many congressmen. Break down
this combination in Congress, and what would happen to cotton? It has no
such wide power as wool. It could not count on getting what it wanted
quietly and unostentatiously as it has always done. Allied with wool,
its case has always been easy. And it was a good alliance for wool,
although not a vital one, for cotton is rich, and when it comes to funds
to return high tariff Senators, it is generous.
The fact is that this great politico-industrial alliance of cotton and
worsted has been the backbone of protection. Not of protection as the
country understood it, but of _protection as Mr. Aldrich understood it_.
To Mr. Aldrich protection never has been a set of principles to be
applied with care and candor. It has always been a trading system. I
think it is entirely fair to Mr. Aldrich to say that from his first
connection with Congress he saw that the tariff, properly worked, was
the surest road to power and to wealth that this country offered to a
politician. He saw the trading possibilities in it, and he intelligently
and persistently gave his great ability to developing them. The backbone
of the system he worked out was this alliance between cotton and
worsted. In that alliance he had a dependable block of votes with which
he could carry to success almost any duty which would strengthen the
party, oblige a friend, or help his own pocket. This block of votes was
behind practically every increase, and manipulation in the bill of 1909.
To Mr. Aldrich’s credit let it be said that he has made as little
pretence that he was not carrying on a traffic in duties as any man in
the business. On the whole, he may be said to have been frank about it,
especially in private.
The tariff bill of which these schedules were the backbone became a law
on August 5, 1909. There was something distinctly tragic in the
reception the country gave the new law. Depressed, cynical, sneering
comments were heard on all sides. Congress went home anything but proud
of itself. Here was a piece of legislation which had cost the entire
time of a large body of legislators for more than a year, to which an
extra five months’ session of Congress had been given, and from it
nobody carried away enthusiasm, pride, a sense of triumph,—nothing but a
disagreeable coppery taste of barter and jugglery, the depressing
feeling that he who has gets, as a rule, in the Congress of the United
States. The only satisfaction was the negative one that at least it was
over.
The pity of it was that they had had so fine a chance to do a real
thing. It was a task for statesmen. The nature of it was clear enough.
Nobody was for upsetting a reasonable protection. But practically
everybody but the beneficiaries were for cleaning up the tariff. The
evils inherent in it—and nobody of intelligence ever denied that they
were many—were big, easily seen:
Enormous profits to the few; steadily increasing prices to the many;
one-sided development of the country; factories growing like gourds and
no ships of our own to carry the goods in; the country sacrificed to the
city, the peace of God to the blare and the roar of the steel furnace.
These ungrateful children of protection had grown until they threatened
to crush us. And then the political enormity—the support given to a
great number of over-high duties in order to secure in return the
campaign funds and local influence of those who profited. These things
stared us in the face on every side, and had become hateful to the
people. It looked, in fact, as if they were coming to be about all there
was of the protective system. There could be, and there was, no quarrel
among honest men about the necessity of doing a fair housecleaning job.
The method seemed as clear as the task. The definition of protection
accepted by the majority in this country was a reasonable one. There is
scarcely a doubt that every intelligent voter knew about what it
was—that it included tariff for revenue and tariff for moderate
protection, until such time as an essential industry was on its feet.
Now the application of such a definition ought not to be—and would not
be—puzzling, if it had not become tangled with the proposition of tariff
for politics only. It requires, to be sure, a large amount of exact
information, but such information is obtainable through experts. It
requires, too, firm and consistent rating through all the schedules. The
work obviously demands to be done by disinterested persons, those who
have no object except to do an honest task. That this was the only way
to get a satisfactory revision everybody knew. And in the face of this
perfectly clear proposition, we got a bill perpetuating all of the old
abuses and made in the same old way.
This is not saying that there was not some very good tinkering in the
bill of 1909. It should not be forgotten that hides and petroleum were
made free, that the duties were lowered on rough lumber and print paper,
and on coal and iron ore, that a temporary tariff commission was
secured; but at no point did Congress or the President show a real
understanding of the human cry that was at the heart of the movement
which had driven them to undertake the revision.
_There was a great human cause—easing the burden of our vast laboring
class—knocking at the door of Congress, and it was not heeded—if,
indeed, it was heard._ True, there was talk of an “ultimate consumer”—a
kind of economic manikin introduced for convenience in demonstration.
But that this ultimate consumer was a flesh and blood person there was
no recognition.
Mr. Taft seems no more to have understood his great chance than did
Congress. The only case in which he used his executive power to force
Congress to correct a duty which was obviously an abuse was hides. Mr.
Taft withstood a fierce attack for this duty from the forces to which he
yielded in the far more important matter of wool and cotton. But it was
not high-class bargaining, in which, by virtue of his office and his
power of veto, he was able to wrest a few concessions, that the country
had a right to ask from Mr. Taft. Leadership was his business. It was
for him to make clear the great need, to inspire the great action, to
create the atmosphere for high endeavor. One big ringing appeal from Mr.
Taft, showing that he felt for the masses of this country and meant, if
possible, that there should be a fairer division of burdens, that he saw
the shame of bartering legislation for political support and meant to
break the practice if he could, would have been worth many times the
concessions obtained. It was the spirit of tariff reform, the zeal for
honest schedules, the determination that discriminations should be done
away with, indignation at the wretched and shameless alliances back of
the bills, that it was for Mr. Taft to feel and to foster. But it is
evident that he did not feel these things, and so could not foster them.
He had an opportunity to lead in a great moral awakening on the most
serious matter since the days of slavery. He did not understand the
issue. He saw merely the chance of doing some tinkering, which he did
manfully and effectively.
Tariff reform calls for more than lowering a duty here and there, more
than appointing a Tariff Board, more than negotiating a Reciprocity
Treaty, good as all these may be. It calls for an intellectual and moral
revolt against the entire system of protection as we know it. No leader
can accomplish the work needed who does not go to the fight hot with
indignation at the intellectual jugglery which has swamped the
protective principle and weakened the country’s capacity for sound
political thinking and its keenness for distinguishing moral values.
Never until such a revolt comes will the clutch of the greedy
beneficiaries of the system be wrenched loose. The wrong done to mind
and morals is a far more serious matter than any damming up of trade the
policy produces. That at most can endure but a few generations. The laws
of trade are too powerful to be long interrupted by unnatural barriers
like prohibitive tariffs. They finally flow over them as a river over a
dam, and eventually toss them aside like the drift they are. That is,
all tampering with liberty and truth comes sooner or later to naught.
True, in the meantime the people bear the burden. True, the end of all
industrial progress, that is, the fair distribution of a production
sufficient to keep in health and happiness the people of all the earth,
is put off; but that is less serious than the deterioration of
intellectual and moral integrity which it has required to build up our
dishonest and inhuman tariff laws.
CHAPTER XIII
SOME INTELLECTUAL AND MORAL ASPECTS OF OUR TARIFF-MAKING
Difficult as it would be for one to realize it who took up for the first
time the present tariffs of the United States, they rest on a formula
which as it always has been understood by the majority of the people of
the country is not especially intricate or confusing. Put yourself back
a hundred years or so, when the country was busy with agriculture and
commerce and mining. We had an enormous advantage in these pursuits. We
were at a disadvantage in manufacturing. To be sure, from the start we
did a little. In the nature of things we would gradually do more, and
what we did would be on a solid basis. But, obviously, only the born
iron-master, potter, weaver, was going to practise his trade in the new
country with the foreigner importing goods cheaper than he as a rule
could make them. And so we decided to encourage manufacturing by taxing
ourselves.
The amount of the tax decided on was to be only enough to put our
would-be manufacturers on an even basis with the foreigner. This meant
what? By general consent, it meant giving our people enough to cover the
difference in the cost of labor. Plainly, Americans were not going to
work for the same wages that Europeans did. There were too many ways in
which they could earn more. The country was new, and men could have land
of their own on easy terms. Commerce called them; for, having land, we
were raising foods, and Europe and the Orient, worn and old and
privilege-ridden, were crying for food. They could make everything we
wanted, cheap as dirt. They were eager to exchange. If we were to do our
own manufacturing, we were obliged to devise a scheme which would make
the wages of operatives approximately equal to those which could be
earned in our natural occupations. _Thus protection was not adopted for
the sake of producing generous wages for labor. It was adopted because
the rewards to labor in the new country were already generous and
promised to be more so._
There is another equally important point to remember, and that is that
it was expressly understood that the duty was never to be prohibitive.
It was to be one that would permit the man at home to compete with the
man from abroad; no more. Sensible people have always agreed that we
would injure ourselves if we allowed prohibitive duties, since they
would _cut us off from the stimulus of competition and also from
models_.
The old countries had been for centuries making the goods we wanted.
_They knew how to do it. We needed constantly before us in our markets
the educational effect of their work._
There were few, if any, at the start to deny that this taxing of
ourselves to establish industries was dangerous business, undemocratic,
of course—probably unconstitutional—and an obvious bait to the greedy;
but they comforted themselves with the gains which they believed would
speedily result. The list was tempting:
1. We were to build up industries which would supply our own needs.
2. The laborers attracted into these industries were to make a larger
home market.
3. We were soon to out-rival the foreigner in cost of production, giving
the people in return for the tax they had borne cheaper goods than ever
the Old World could give.
4. We were to outstrip the Old World in quality and variety—another
reward for taxation patiently borne.
5. We were to over-produce and with our surplus enter the markets of the
world.
Nobody pretended to deny that if it was found on fair experiment that
these results were impossible in a particular industry the protection
must be withdrawn. Otherwise it amounted to supporting an industry at
public expense—an unbusinesslike, unfair, and certainly undemocratic
performance.
But what has happened when the formula has not worked? Take the failure
after decades of costly experiments to grow all the wool we use, to make
woollens of as high a quality and at a price equal to those of the
English. Fully sixty per cent of the raw wool used in the United States
is brought from other lands, and a tax of 11 or 12 cents is collected on
every pound of it. Our high grade woollens cost on an average twice what
they do in Europe. The fact is, the protective dogma has not, and
probably never can, make good in wools and woollens. It is one of those
cases where we can use land, time, labor, and money to better advantage.
The doctrine of protection as well as common humanity and common-sense
orders the gradual but steady wiping out of all duties on everything
necessary to the health and comfort of the people unless in a reasonable
time these duties can supply us better and cheaper goods than we can buy
in the world market. That time was passed at least twenty years ago in
wool, but Schedule K still stands. It is supported by an interpretation
of the formula of protection, which, as one picks it out to-day, from
the explanations and practices of the wool-growers and wool
manufacturers, is only a battered wreck of its old self. It ignores
utterly the time limit, the “reasonable” period in which an industry was
to make good. It ignores the condition that the duty should not destroy
fair competition. Moreover, it stretches the function of the duty from
that of temporarily protecting the cost of production to one of
permanently insuring profits. The chief appeal of those who employ this
distorted notion is not to reason at all, but to sympathy—sympathy for
the American working-man. Call their attention to the inequalities of
the duties on raw wool, and they will tell you of the difference in the
labor cost of dress goods here and in England. Tell them the quality of
our goods is deteriorating, and they will draw you a picture of the
blessings of the American working-man. Tell them that the wool schedule
has taken blankets and woollen garments from the sufferers from
tuberculosis, who certainly need them, and they will tell you that “the
American people are better clothed than any other people in the world
and their clothes are better made.” The chief capital of the stand-pat
protectionist is some variation of this appeal. The hearings preparatory
to the Payne-Aldrich Bill were stuffed with them, and they were used in
reply to every conceivable argument. For instance, the head of what is
called the “file trust” was on the stand. It had been shown that the
gentleman was selling files abroad much cheaper than at home, that he
had a practically prohibitive duty, one which had reduced imports to
about one per cent of the file consumption in the United States. It was
also certain from his testimony that his laborers could not be getting a
very large share of the duty. “Do you not think,” the chairman asked
him, “that if the tariff is laid in the name of labor, labor ought to
get the tariff?” Here is the answer he received:
“_If you will pardon me for expressing one little thought, I will say
that I walked down this morning from the Willard, and saw a pair of
horses, a beautiful cart all equipped with fruit, vegetables, and one
thing and another. I can close my eyes and see that condition over on
the continent of Europe, with barefooted women in rags, with a few
Newfoundland dogs, or some other kind of dogs, hitched up with a string
harness to the cart, and a few vegetables, that they are pulling
around._”
There is no reason to doubt that the gentleman saw on Pennsylvania
Avenue the prosperous cart he described. There is no doubt he might have
found on the continent of Europe his “barefooted woman in rags.” But if
he had crossed over to the Washington market, he would have found on its
outskirts numbers of men and women, some of them white-haired, who have
brought in that morning from great distances out of Washington on their
backs or behind tottering mules, pitiful handfuls of field flowers, wild
roots, and perhaps a bunch or two of garden stuff, quite as pathetic a
spectacle as the pathetic one with which he was trying to befuddle the
Ways and Means Committee. All over Europe he will find as prosperous
vegetable carts as those he saw in Washington—all over the United States
on the outskirts of the cities he will find, if he will look, women
picking up coal and bits of wood along the tracks of railroads and in
the yards of factories, and see them carrying their pickings home on
their backs. The gentleman indeed will rarely enter or leave an American
city on a railroad that he will not see something of this kind.
Any one who has observed the life of the working-man on both sides of
the Atlantic knows that wages, conditions, opportunities, are vastly
superior as a whole in the United States. It is a New World, with a New
World’s hopes. But it is only the blind and deaf who do not realize that
the same forces of allied greed and privilege which have made life so
hard for so many in the Old World are at work, seeking to repeat here
what they have done there. The favorite device of those who are engaged
in this attempt is picturing the contrast between the most favored labor
of the United States, and the least favored of Europe. It is a device
which “Pig Iron” Kelley used throughout his career with utter disregard
of facts. Mr. McKinley followed him. In the course of his defence of the
tin plate duty he read, with that incredible satisfaction which the
prohibitive protectionist takes in the thought that his policy may
cripple the industry of another nation, an English view of the effect
the proposed duty would have in Wales. “The great obstacle to tin plate
making on a large scale in the states,” said the article, “is the entire
absence of cheap female labor.” Mr. McKinley paused and said
impressively, “We do not have cheap female labor here under the
protective system, I thank God for that.” And yet at that moment in the
textile mills of New England, of New York, and of Pennsylvania, not only
were thousands of women working ten, eleven, and more hours a day,
because their labor was cheap, but thousands of children under twelve
years of age were doing the same.
The “American working-man” has long been the final argument in every
tariff defence, the last word which routed both statistics and
common-sense. This was Mr. Aldrich’s clincher when he worked so hard in
1909 to continue or to increase the duties of the Dingley Bill.
“_Protective duties are levied for the benefit of giving employment to
the industries of Americans, to our people in the United States and not
to foreigners_,” he said, and reiterated in a variety of ways. But take
Mr. Aldrich’s own tariff-made state and examine in detail the
experiences of its laborers. Rhode Island is one of the most perfect
object lessons in the effects of high tariffs in this or any land. An
object-lesson should not be overlarge. It should be something you can
see, can walk over if you will. Rhode Island satisfies this condition
perfectly. In the matter of the protective tariff Rhode Island is the
more useful as an object-lesson because she was a well-developed state
when the system was applied to her. She had at the beginning of the
nineteenth century flourishing farms and some 40,000 sheep. She was
exporting annually between two and three millions of agricultural
products. She was building many ships, and from her fine ports carrying
on a varied and lively trade with other lands. She was well advanced for
the time in manufacturing. Long before the Revolution, Rhode Island’s
iron foundries turned out cannon and firearms, anchors and bells and all
sorts of small wares. When the cotton factory came—and she had the first
in the country, the Slater factory of Pawtucket, she was able to make
her own cotton machinery. In the manufacture of woollen cloth, she took
a prominent place from the start.
It was then to an all-around development that our policy of high
protection was applied in this particular state. Under its stimulus her
manufactories have multiplied and enlarged in a truly magnificent
fashion. The story of this development cannot be told here, but like all
stories of rapid growth it excites and dazzles. The results are
sufficient for the present purpose. In 1909 the manufacturing plants of
Rhode Island turned out goods worth $279,438,000—about $375 for each
man, woman, and child in the state. But while she has been making things
to sell at this prodigious rate, she has ceased entirely to build ships
and send men to sea to trade. That is, while high duties were
stimulating mightily the making of all that went into ships, they were
making the ships so costly to buy that nobody could afford them. Rhode
Island had her factories, and part of the price paid was her ships—her
ships and her farms, for her farms steadily and surely went to pieces.
To-day she has not over 4000 sheep, one-tenth of what she raised fifty
years ago. Between 1880 and 1900 the improved land decreased by 17 per
cent. She is practically dependent on the world outside for food. She
buys her apples on the Pacific coast, her flour in the Mississippi
Valley, and her meat from the Beef Trust.
But what has the tariff to do with the neglect of the Rhode Island farm?
Everything. A farm is a family affair as no other industry is. It yields
its best only when it passes down from generation to generation.
Tenants, however faithful, are not sufficient. It demands its own, and
in Rhode Island its own has deserted the farm for the factory. Quick
fortunes seemed to lie that way. It seemed to demand neither the
patience nor the drudgery; it was ready money at least, and the young
men and women left the farms to the old people, and the old people died.
Those who followed them were but dregs of the old communities—the
shiftless, the weak, the ignorant, and the unambitious. The farm yearly
dropped back and it lies to-day a forlorn and unkempt relic of its old
self.
All Rhode Island then flocked to manufacturing, until to-day the one
thing in the state which sticks out above everything else is the
factory. It is the factory in which capital is invested and from which
dividends are drawn. It is the factory which employs the population. It
has been estimated that three-fourths of the people are dependent upon
the textile mills alone. The great body of breadwinners in Rhode Island
not directly connected with the textile trades is busy administering to
the wants of the textile workers. Further, that portion of the
population which does not belong to these industries is dependent upon
other highly protected industries: on rubber, with its duty of 35 per
cent, on machinery (45 per cent), on cheap jewellery (87 per cent), on
silver and gold wares (60 per cent). That is, Rhode Island to-day is a
tariff-made state, and as such should offer us ample material for an
easy analysis of what the American system of protection, given full
encouragement, does for a community.
As we have seen, it concentrates effort on one line, putting an end to
agriculture and commerce. But this may not be a bad thing. If a state
grows richer by specialization, is it not wiser to specialize? That of
course depends upon how generally the fruits of the process are
distributed, how greatly the condition of the mass is elevated, how much
its happiness and health are improved. In a tariff-made state as in
another the success of the system depends upon what the people at large
are getting out of it; that is, what does it do for the American
working-man? The first feature of the textile industry in Rhode Island
which strikes even a casual observer is that the operatives are not
Americans; they are distinctly foreigners—new-come foreigners. Less than
16 per cent of them, as a matter of fact, are born of what the
industrial authority of the state calls “United States fathers,” the
other 85 per cent are in percentages decreasing in order of their naming
here: French Canadians, Irish, English, Italians, Germans, Scotch,
Portuguese, Poles, and Russians, besides a considerable number classed
under “other countries.” We have the surprising fact then that, as far
as the benefits of the textile tariffs are concerned in Rhode Island, if
the laborer gets them, it is a foreign laborer.
A second surprise awaits the student of these Rhode Island laborers
blessed by protection. They are an unstable quantity. They must be
constantly replaced. The “benefits” do not hold them. The success of the
overseer in the textile factory has come to be judged largely by his
ability to “hold labor.” One of the interesting proofs of the
restlessness of the operatives is the small percentage of people in the
state who own their own homes. A recent careful investigation into the
housing conditions of the state shows that farm-houses aside, 75 per
cent of Rhode Island’s population live in rented houses. That is, in one
of the first settled states of the Union, one of the most advantageously
situated, one offering the best opportunities for diversified
occupations, one of the richest in its per capita product and bank
deposits, only a fourth of the people live in houses which they own.
But why should the laborers in an industry which the people of the
United States pay so handsomely to support be restless? Why in these
seventy years and more of continued and constantly increasing protection
have they not become a stable, settled, home-owning body of American
workmen? Surely that is what we have been taught to believe the tariff
would do. The answer to a question of this nature is always complicated.
Nevertheless, in this case it is answered fairly well by a review of the
conditions under which the textile operative works, the wages he
receives, and the money he must expend to live.
Under the most perfect conditions yet devised the making of cotton and
woollen cloth is hard and wearing labor. Under the conditions too
general in Rhode Island it is exhausting and dangerous. The very
atmosphere in which the work goes on is against the operative. The
temperature throughout the factory runs high—80°, 90°, 100°, even, is
not unusual. The work does not require this; the factory laws of England
forbid the excessive temperature in which much of Rhode Island’s
spinning and weaving is done. Worse than the high temperature is the
degree of humidity which prevails. Without a certain moisture in the air
the “work does not go well.” The result is a good deal of the time an
atmosphere as oppressive as that which Washington and Philadelphia
suffer in summer time. The ventilation in most of the factories is
insufficient, and as any draft is bad for the work the windows are
usually closed from end to end of the great barracks. A half hour in the
atmosphere of a factory is sufficient to throw one unaccustomed to it
into a steaming perspiration. The operative usually ends the day’s work
in wet clothes.
Then there is the cotton lint, or “fly,” as it is called, which
literally fills the air. It is no unusual thing to find the air around
the factory for a hundred or more feet literally alive with cotton
shreds. There are contrivances for carrying off a certain amount of this
dust, but there are few Rhode Island factories which have installed
them, and there is no one in which, so far as I know, any energetic and
scientific efforts are making to solve the terrible problem. For
terrible it is. Breathe a cotton-saturated air, a damp, hot air at that,
for ten hours a day and consider the condition in which lungs and throat
will be.
Now these are conditions natural to the making of cotton and woollen
cloths, conditions which can never be entirely corrected. They are hard
and wearing, but they become dangerous in the extreme when combined with
certain other conditions not incident to the industry, due entirely to
the ignorance or the greed or the indifference of factory owners.
It is hard to believe that men who ask other men and women and children
to labor ten hours a day in a dripping heat and an atmosphere alive with
cotton and wool particles will be slow to furnish them abundant supplies
of pure flowing drinking water; but a bucket or barrel filled from some
outside source is frequently all that is furnished a floor of workers.
It is difficult to believe that factory owners would not be eager to see
that these workers of theirs were furnished with comfortably heated
toilet rooms, with every sanitary appliance; but all up and down the
Pawtucket River one finds factories with toilets that cannot by any
stretch of words be called respectable.
When the day’s work is done the textile operative rarely has a
comfortable cloak or dressing room in which to prepare for the street.
If it were merely the matter of putting on a hat and coat, this would
not be serious. But part at least of the clothes ought to be changed
before going out. The heat, moisture, and dust under which he has worked
for ten hours make it unsafe to go suddenly into the open air without
dry garments. In cold weather a chill or shock is almost inevitable. But
it is rare that the factory provides a dressing room. The result is that
bronchitis and pneumonia are always attacking textile operatives,
weakening lungs and throat and fitting the system for the white plague,
which hangs like a perpetual shadow over a textile community.
Now for fifty-eight hours of labor a week under these conditions what do
they earn? How well equipped are their pockets to fight the exhaustion,
the threatening diseases which are incident to their labor? To avoid
exaggeration accept the figures for 1907, one of the occasional boom
years which cotton and woollen manufacturers have enjoyed in this
country. The average weekly earnings for 58 hours in cotton factories in
that year were: For the carding room $7.80, for mule spinners $12.92,
for speeders $10.62, for weavers $10.38. In the woollen industry the
picker received $8.00, the woman spinner $7.25, the man spinner $12.91,
the weavers $15.34.
If a man could make these wages for fifty-two weeks a year throughout
his working life, if he had a thrifty wife and healthy children, his
lot, if not altogether rosy, would be far from hopeless; he might even
be able to realize the dream of a little home and garden of his own
which lurks in the mind of every normal man, and which in the case of
the textile operative is almost imperative if he is to have a decent and
independent old age. For this man, however husky he may be at the start,
however skilful a laborer, has always a short working life. There are
few old men and women in textile factories. By 55 they are unfit for the
labor. The terrible strain on brain and nerve and muscle has so
destroyed the agility and power of attention necessary that they must
give up the factory, where, indeed, for several years their output has
probably been gradually decreasing. As almost all textile operatives are
paid by the piece the wage will gradually fall off as dexterity
declines. By 55, then, if not earlier, he drops out, picking up
thereafter any odd job he may.
It is this short working life of the father, with the declining wage for
years before it actually ends, that makes child labor an essential
factor in the solving of the problem of the textile family. Without the
help of the child the father cannot support the family and lay aside
enough to insure his own and his wife’s future. His wage, and the wear
and tear he suffers, make it impossible. The child must help.
If the children prove healthy, if they “turn out well,” if work is
continuous, the little home may be secured and the modest little dream
may come true. But suppose that a weaver, rushing into the cold air at
the end of his ten-hour day, is chilled and has pneumonia—it happens
often enough. Suppose an uncovered gear or belt catches him in an
incautious moment and crushes a limb or takes his scalp, or a carelessly
handled machine nips off a finger—it happens all the time. Carelessness?
More often it is that the limit of human endurance has been passed.
Fatigue has ceased to be normal and has become abnormal—his mind is
dulled—his nerve deadened—his muscles do not respond. The wonder is that
in the shrieking, devilish uproar of the factory, a tired man can keep
up his habit of caution as steadily as most of them do. Suppose that,
standing through the hot summer in the poisoned air of a dry closet, he
falls ill of a fever. Or, if he escapes all these things, suppose that
the factory goes on short time—thousands of operatives all over New
England have had their weekly wages cut in half in the last three years
by short time. Or, suppose that, which has happened repeatedly in Rhode
Island, he is obliged by some intolerable condition to strike and have
no wage—what happens then? That happens which is more disastrous to the
family than even child labor—the wife must go into the factory. So
narrow is the margin in the best of times that an illness, a shut down,
disturbs the budget so that only the combined exertion of all the
members of the family can save it. The mothers go into the factory, and
the homes gradually go to pieces. After her ten hours at spindle or loom
the woman hurries to a cold, unkempt house, which she must make
comfortable and cheerful if it is to be so. Is it strange that the homes
of the factory mothers are generally untidy, the food poor, the children
neglected? How can it be otherwise? Her limit of endurance, of ambition,
of joy, even of desire of life, has been passed. More appalling, she
sees her ability to work falling off. Almost universally, women who have
worked ten years in a factory have the patent-medicine habit—they are
“so tired” they “take something.” Is it surprising that a few of them
finally discover that they can get from beer or whiskey the same
temporary strength at less cost? The surprise is not that many drink,
but that more do not.
Now the hope of this factory mother lies in her child, since she, like
her husband, is bound to wear out at a comparatively early age. And what
chance has she to bear a healthy child? They give you heartbreaking
figures of infant mortality in Rhode Island, and everywhere one goes
what one sees and hears confirms their truthfulness. The district nurses
talk to you of “bottle babies,” the factory mother being, as a rule, so
poorly nourished and so overworked that she cannot nurse her child.
Moreover, she cannot care for it. She must return as soon as possible to
the factory. The doctor’s bill is heavy. “He” is having a hard time, the
mill is running short. The baby is left to an older child if there be
one, or, if there is none, it perhaps goes to one of the human
institutions of the factory town—the “old woman.” The old woman may not
be over 50, but the factory has got all it can out of her and the
factory community utilizes her by giving her its young children to care
for, paying perhaps $2.00 a week. The old woman may have borne children,
but she has never had an opportunity to learn to care for them properly.
She is often so deaf she cannot hear them cry and she is too poor to buy
them proper food, and to boot, she may be a tippler. Unless husky beyond
all probability, or saved by some lucky chance—a district nurse or a
sister or some other good angel—the baby dies. One should go to the
cemetery to see how many die. There is nothing more pitiful in all this
beautiful world than the interminable rows of little graves in the
cemeteries of the factory towns.
In recent years the problems of the operative have been complicated by
the soaring cost of living. Almost everything he buys is higher in
price, or if he insists on a standard price, the article is poorer in
quality. Take the very protected articles from which Rhode Island draws
her wealth. All these 68,000 textile workers must have clothes. The
price of women’s all-wool dress goods increased in Providence, the
centre of the industry between 1891 and 1907, over 33 per cent. There
was an increase in practically all the cotton-warp goods varying from 4
to 40 per cent. Underwear in which there was any mixture of wool cost a
fourth more in 1907 than sixteen years before. Cotton underwear was
reported as stationary in price, though since 1907 it has risen.
Bleached muslin used for shirtings was 34 per cent dearer in 1907 than
in 1891. Cotton thread was 10 per cent dearer. All linens were higher,
though of course the textile operatives cannot buy much linen. That is,
their own industries are taking out of them the increase in wages which
this same period has seen!
Are not the conditions so hastily sketched a fairly satisfactory answer
to the question with which we started out: Why should not Rhode Island
have a stable, settled, home-owning body of American workmen? The
hazards are so great, the wage so low, the work so uncertain, that the
American workman or the foreigner, after a few years of experience here,
will not remain if he can get out. He realizes that the chances are
against the operative getting on in the world. What this means is that
_it is not he who is getting the benefits of the protective duties which
Mr. Aldrich says are laid for “our people in the United States.”_ He is
barely getting a living, and getting it under conditions which make life
to himself, his wife, and children a constant menace. The tax we pay on
textiles never gets beyond the stockholders, who in Rhode Island are
usually a family that for generations have run their mills and absorbed
the profits—absorbed them so quietly, too, that one knows nothing of
what they are save by the deceiving outward signs.
Not only has the average factory owner absorbed the lion’s share of the
profits, but he set his face like a flint against spending a cent of the
protection he enjoys in humane efforts to make the industry more
tolerable. This man, who periodically appears as a suppliant before
Congress, praying for a continuation of benefits which cost this whole
people dearly, will not, unless driven to it by law and outraged public
opinion, protect even the children who work in his mills. It took the
hard-fought labor wars of the ’80’s to force from the legislature of the
state (then as now held in the hollow of the hands of men who live by
the beneficence of this people) a ten-hour law for children, a
twelve-year age limit, and proper truant laws. But, the laws passed, no
authorities were ever found to enforce them, for the very sufficient
reason that all authorities in Rhode Island lived by permission of the
mill owners. A Bureau of Industrial Statistics for gathering information
and a factory inspector to report on the observance of the laws which
labor unions and social agencies had forced from the legislature were
finally secured. The first set of inquiries sent out by the Industrial
Bureau was treated with contempt by the manufacturers, the Slater Club
deciding what questions it would and would not answer!
According to the first of the reports issued only one corporation in the
state had its sinks properly trapped, and fever was epidemic. The
factories almost invariably were fire-traps, wooden structures with low
ceilings, no escapes, and often with heavy wire screens _nailed_ over
the windows. The laws governing child labor were generally ignored. And
all this was only about twenty years ago. Many improvements have been
made since then, but they have been made too often in the face of the
open or badly concealed opposition of the average manufacturer, rarely
with his sympathetic coöperation. When men refuse coöperation with laws
which concern the health and happiness of those whose labor makes their
wealth possible, it is because of a stunted social sense. There are
other shocking proofs of this defective development in the average Rhode
Island textile manufacturer than his attitude toward humane legislation.
One of them is the housing of operatives.
Stories of foul, neglected tenements in Rhode Island factory towns,
drawn from recent investigation, could be multiplied. They are another
of the many good reasons why the textile manufacturer finds it hard to
hold labor together. They are another of the many proofs of their
unwillingness to pass on to their working-men the protection granted in
the name of labor. Take them to task for housing conditions and the
general attitude is one of indignation at what they call an invasion of
their individual freedom. Why should they build houses for their
operatives unless it pays to do so? Why should they protect their
operatives from grasping landlords? And if the landlord can make more
from a poor tenement than a well kept one, whose business is it? It is
_his_ property.
Again these mill owners practically take no responsibility for
accidents. They are insured against the claims the injured may make.
_All that they do is to render first aid._ After that the man or woman
must look after himself unless fortunate enough to get free hospital
treatment. If he gets an indemnity, he must either settle with the
insurance company or go to court, where he is almost certain to fair
badly. For instance, here are cases taken at random from the records for
the September, 1905, session of the Providence County Courts. One is of
a girl, “incapable of speaking the language,” who in 1901 lost a hand
from unprotected gears and cog wheels, five years later nonsuited with
_costs to plaintiff_!
Here is a boy _under_ fourteen who after two weeks in a mill was ordered
to clean the iron cylinder of a carding machine and lost his hand. Four
years later he was awarded $1100 and $12.58 costs.
Here is a case of a young Polish girl new to the mills who in cleaning a
loom while it was in operation lost parts of two fingers. She did not
know it was unsafe or forbidden. She saw others doing it. The court
promptly gave the company costs! One might go on for pages with these
cruel wrongs.
The heartbreaking part of it is that it takes but a little imagination,
but a little knowledge, of what can and is being done to ease hard
industrial conditions in the world, and in a scattered way in this very
state, to show one how easily unselfishness could redeem Rhode Island.
If the textile manufacturers were, as a body, men of enlightened minds,
if they had caught even a glimpse of that vision of a new and nobler
industrial society which has convinced so many men and women in this
country not only of the brutality and wastefulness of our present
system, but of the entire practicability of something better, they might
easily make of their state as perfect an example of what an industrial
society should be as it now is of what it should not be.
This, then, is high protection’s most perfect work—a state of a half
million people turning out an annual product worth $279,438,000, the
laborers in the chief industry underpaid, unstable, and bent with
disease, the average employers rich, self-satisfied, and as indifferent
to social obligation as so many robber barons. It is an industrial
oligarchy made by a nation’s beneficence under the mistaken notion that
it was working out a labor’s paradise. Not only is it a travesty of the
principles of protection, it is a mockery of that very individualism
behind which it takes refuge. Individualism does not thrive at the
expense of its fellows: it appreciates that the very kernel of its own
existence lies in respecting and defending the rights of others. As for
democracy, what vestige of it is left in either the political or
industrial machine which controls the state of Rhode Island?
Certainly the time has come when the pretence that high duties “protect”
the American working-man can deceive nobody. The American working-man is
not getting the duty. He pays for his higher wages by his higher
productivity. It is an old and established law of industry drawn from
the experience of all nations that low wages mean high cost. “The
highest paid labor,” says Francis A. Walker, “is that which costs the
employer the least.” The cotton spinner in India gets 20 pence a
week—the cotton spinner in England 20 shillings, but English cottons
flood India. The iron worker in Russia gets 3 roubles a week, in England
four or five times as much, but it is the Englishman who supplies the
markets of Europe. The cotton labor of Egypt and India receives not over
one-tenth of what the Southern labor does, but it is our cotton which
supplies the world. The wheat hands of the Eastern world are paid from a
twentieth to a fifth of what the laborers in the United States receive,
but we export vast quantities in competition with the world.
The protectionist who answers every criticism of his rates by conjuring
a picture of “pauper labor” is equally conscienceless in his attitude
towards the relation of protection to the two most disquieting
industrial phenomena of our day, the increase in the cost of living and
the multiplicity of corporations which aim to become and often are
monopolies. For instance, Mr. Whitman, whose forty years of garrulous
and successful defence of the present wool schedule has made him the
perfect type of the lay stand-patter, does not admit that there is such
a problem as the increased cost of living. He speaks of it as “alleged.”
According to Mr. Whitman, the newspapers have talked so much about the
subject that people have been deluded into believing that the condition
is actual. If there is an increased cost in living, however, the tariff
has nothing to do with it. It is due to the cost of the second-class
mail! “I believe it to be absolutely true,” says Mr. Whitman, “that the
entire cost of publishing and distributing the newspapers of the United
States and the magazines is one of the great contributory causes to the
cost of merchandise, and is borne by the consumer.”
Senator Lodge who, in his way, is as typical as Mr. Whitman, denies that
the tariff is materially related to this problem. In 1910 Mr. Lodge was
chairman of a Senate committee investigating the cost of living. He did
not go quite as far as Mr. Whitman—that is, he did not dismiss the
subject by declaring it merely a newspaper yarn. But he did find that
“the tariff was no material factor.” His chief reason for this
conclusion amounted to this: The increased cost of living is world-wide.
There are several causes, therefore the tariff is not a material factor.
It is much like saying that because a log jam is made up of several logs
no one log has anything to do with the jam.
Another curious bit of reasoning in Mr. Lodge’s report was this: He had
offered a list of 257 articles—almost all of them protected to some
extent—the prices of which he had shown to have increased between 1900
and 1909 by 14.5 per cent. Out of this list Mr. Lodge selected fourteen
articles on which the duty was highest. He found that the average
increase on these fourteen articles was only 13.1 per cent. Therefore,
he concluded, the tariff is no material factor in the increased cost of
living!
Still another reason for exonerating the tariff from any guilt in the
matter was this: The increase of cost in all kinds of farm products
between 1900 and 1909 has been much greater than the increase of
manufactured products. Now, says Mr. Lodge, there has been practically
no change in the tariffs on farm products in this period, therefore the
tariff has nothing to do with increased prices.
This same quality of argument is used in regard to the trust. There are
several causes, therefore the tariff is not a cause. The tariff
contributed nothing to the foundation of the Standard Oil Company,
therefore it has had nothing to do with the foundation of any other
trust. Frequently the stand-patter is so unfamiliar with his own
formula, or so indifferent to it that he will insist that the trust is
an industrial surprise—a species of highwaymen of whose presence on the
road he had no warning and for whose ravages he consequently cannot be
held accountable. If he knew his own formula, or, knowing, was willing
to regard it, he would be ashamed of this sort of pleading. No evil
concealed in the doctrine of protection was ever more thoroughly
advertised than monopoly. At every stage, since Hamilton’s time, we have
been warned that it waited us just around the turn. For the last
twenty-five years, especially, we have seen it pour down upon us,—an
army whose ranks yearly grew thicker, stronger, and more cruel. This is
the very army which we have been cautioned for decades to be waiting in
ambush. There was a counter force provided, of course, for this waiting
enemy—domestic competition. Now, we know what has happened to domestic
competition in the last thirty years in this country. Freed from foreign
competition—something which the doctrine never intended should
happen—the home manufacturers have by a succession of guerilla
campaigns, often as ruthless and lawless as those of wild Indians or
Spanish freebooters, coralled industry after industry so completely that
they could control its output, and at once cheapen the quality and
increase the price.
Any one who wants to know more than he already does of the power and
extent of industrial monopolies in this country should read the vigorous
report of Attorney-General Wickersham presented to Congress in December,
1910. Consider the relations to the vicious combinations Mr. Wickersham
enumerates, of the protection so many of them enjoy. Take away the
protection of the window-glass trust, and does any one believe its
high-handedness would not be gradually checked? If the tobacco trust and
sugar trust and paper trust and powder trust and beef trust, all of
which Mr. Wickersham attacks for extortions and brigandage, had to meet
world competition, does anybody doubt that they would not find many of
their present methods impractical? Protection is so obvious an aid to
them that it seems like insisting that two and two make four even to
refer to it. But put this up to a stand-patter who knows his formula,
and what do you get? Why, the answer that protection was never intended
to foster trusts, and therefore it cannot be that it is doing so!
Protection, he will tell you, provides for domestic competition, and,
since it provides for it, his idea seems to be we must have it! Whatever
is in the formula is in practice! It is no backwoods member from a
remote Pennsylvania iron-and-steel district who asserts this. It is the
ablest man of them all—Senator Aldrich himself. “I cannot conceive of
such a thing as a monopoly under protection” was the substance of
Senator Aldrich’s argument on the point in the last tariff debate, as it
had been for twenty-five years.
Curiously enough, the same intellect which declares that monopoly cannot
exist under protection will under stress argue: Take the duty from those
who have formed trusts, but give it to us who have not. “In order that
you may?” one feels like asking. This was a link in the argument of the
gentlemen who pleaded in 1909 that Schedules I and K (cotton and wool)
should remain undisturbed. There is no “cotton trust”; therefore
continue duties long unnecessary and wink at those which trickery forces
through! True, there is no cotton trust—as yet. But how are trusts bred?
Does our experience show us a more fruitful father of them than cutting
off foreign competition, as the new duties on the higher grade of
cottons seem to have done?
How are trusts bred? Is there any one left who does not know that when
such privileges as prohibitive tariffs are dangled before men’s eyes
they rush to seize them, build and build again, regardless of all laws
of trade? Is there any one left who does not know that over-stimulated
production pays a penalty in half-time and shut-downs as truly as a
man’s intemperance pays one in physical and mental exhaustion? And in
the period of depression the new and weak fall into the hands of the
rich and long-established. This has been the history of many a cotton
factory. Why should it not all end as it has in scores of other
industries?
But there are other breeders of trusts. What else are the supposed
agreements as to output and prices of which rumors come from the great
cotton organization, the Arkwright Club? What else was the attempt of
that club in 1909 to unite with European cotton manufacturers to
restrict the consumption of cotton in order to lower its price?
But should we expect that in an industry which boasts so many men of
great ability, daring, and ambition as cotton manufacturing, and in
which the rewards are so tremendous, no man will ever be found strong
enough to take advantage of the tendencies to combination which already
show themselves and to work out a trust? Why should there not be a
Rockefeller or a Carnegie in cotton as well as in oil or steel?
The woollen industry, like cotton, pleads to be allowed to retain its
high protection because it is still unshackled by combination. That is
partially but not entirely true. As a matter of fact, there does exist a
strong combination in this industry—the American Woollen Company, which
has earned the popular title of “woollen trust” largely because of its
trust-like methods. The woollen trust is far from being a monopoly,
though it is certainly a good nucleus for one. It already controls about
one-third of our domestic production of woollens and worsteds for men’s
wear. Its annual product is about $48,000,000. Its capital is
$69,000,000. All things considered, there seems to be no reason why
eventually the American Woollen Company, if it finds a Rockefeller or a
Carnegie, should not follow in the steps of steel and sugar and oil and
turpentine and bath tubs.
Juggling the formula under which he pretends to work, denying facts or
shying from them, this is your typical stand-patter. Press your attack
on his position, however, and you will find something more than
negation. You will find an angry, alert opponent, threatening in fact,
if not in so many words, to attack your position if you do not let him
alone. Threats have been the very essence of the power the unholy wool
alliance has had for so many decades, as Mr. Aldrich more than once
admitted in the making of the tariff of 1909.
“_I say to the Senator_ (Mr. Aldrich was addressing Senator Dolliver)
_that this wool and woollen schedule is the crucial schedule in this
bill ... if by insidious or any other means he can induce the Senate to
break down this schedule, that is the end of protection, for the present
anyway, in this country._”
Mr. Aldrich was not defending the wool duties because they were fair. He
was defending them because they have back of them the solidest vote in
the Senate. Those to whom he talked knew it, and they knew that he was
warning them that if they did not support these duties they could not
expect to get what they wanted, however just from the protectionist
standpoint that might be.
There has always been a fraction of Mr. Aldrich’s party in the Senate
that could not be moved by threats—who if they had known enough about
the tariff on which they were voting to realize that a threat was being
held over them would have resented it. It is that fraction which openly
confesses that they have “always voted as they were told.” The
_Congressional Record_ is full of such admissions. Mr. Aldrich could not
sway them by appeals to their cupidity. He could, however, by an appeal
to their loyalty to the doctrine, to their hatred of their political
opponents. For years he has silenced those who had qualms about a duty
by a sneering allusion to “Democratic talk.” “We heard all of that from
Mr. Vest in 1890,” was his answer to Senator Dolliver’s criticism of the
wool schedule. When it came to revising the duties on tin plate the
stand-patters tried the same argument—“false to protection.” The shame
of it finally drew from Senator Dolliver this outraged protest:
“_Is it possible_,” he said, “_that a man, because he voted for the
Allison tin-plate rate of 1889 and heard poor McKinley dedicate the
first tin-plate mill in America, can be convicted in this Chamber of
treachery to the protective tariff system, if he desires that schedule
reëxamined, after seeing the feeble enterprise of 1890 grown within a
single decade to the full measure of this market-place, organized into
great corporations, overcapitalized into a speculative trust, and at
length unloaded on the United States Steel Company, with a rake-off to
the promoters sufficient to buy the Rock Island system? If a transaction
like that has made no impression upon the mind of Congress, I expose no
secret in saying that it has made a very profound impression on the
thought and purpose of the American people._”
In this outburst of Senator Dolliver we have the heart of the insurgent
revolt against stand-patism. In essence it is a revolt against years of
betrayal of the principles the stand-patters were pretending to uphold,
of solemn-faced defence of things which are not so, of silencing critics
by sneers and threats. And for what? That those who support them by
votes and campaign donations may monopolize the great industries of this
land and pile increasing burdens on the backs of its humble toilers.
Is it any wonder that as men understand the real meaning of the system
they declare, as did Senator Dolliver:
“_So far as I am concerned, I am through with it. I intend to fight
it.... I intend to fight without fear—I do not care what may be my
political fate. I have had a burdensome and toilsome experience in
public life now these twenty-five years. I am beginning to feel the
pressure of that burden. I do not propose that the remaining years of my
life, whether they be in public affairs or in my private business, shall
be given up to a dull consent to the success of all these conspiracies,
which do not hesitate before our very eyes to use the law-making power
of the United States to multiply their own profits and to fill the
market-places with witnesses of their avarice and of their greed._”
But there is more than what Senator Dolliver, even, saw wrapped up in
the question of protection as we are applying it. Deeper than the wrongs
it is doing the poor, deeper than its warping of the intellect, is the
question of the morals which underlie its operations. Simmered down to
its final essence the tariff question as it stands in this country
to-day is a question of national morals, a question of the kind of men
it is making.
The happiness and stability of the peoples of this earth have always
been in strict accord with their morality—not a morality made up of
rules and traditions, of do’s and don’t’s, but that living force which
pervades the world of men like an ether, the only atmosphere in which
self-respect can flourish, and in which the rights and happiness of the
other man are as sacred as your own. Emerson saw this force everywhere,
“like children, like grass”; yet, sadly enough, “like children, like
grass,” its essentiality is often ignored. Men try to construct systems
and work out plans in defiance of it, only to see them destroyed; they
try to live without it, only to die. Activities that ask toll of our
inner honor and crowd our fellow-men, that do not contribute to the
general goodness and soundness of life and things, cannot endure. Every
practice, law, system of religion, government or society must be finally
sifted down to this: Are men better or worse for it? What does it make
for, in the main, callousness or gentleness, greed or unselfishness? Are
men because of it more eager for freedom of mind and joy of heart, or
are they more eager for gain and material comfort?
The troubled face of to-day is chiefly due to the realization that so
much of our achievement does not stand the morality test—does not make
the right kind of men. Here is where the trust fails. A Standard Oil
Company violates a man’s self-respect and outrages the rights of the
other man. The harsh judgment of the world is due to that. The gathering
into a few hands of what nature made for all, weakens equally the sense
of justice in the individual and limits the natural freedom of his
fellow, and doing so must cease. Here, too, is the final case against
the doctrine of protection. As we know it, it operates in defiance, and
often in contempt, of the imperative moral demand that all human
activities improve, not injure, those concerned, that men be better, not
worse, for them. The history of protection in this country is one long
story of injured manhood. Tap it at any point, and you find it
encouraging the base human traits—greed, self-deception, indifference to
the claims of others. Take the class chiefly involved in making a tariff
bill—the suppliants for protection. We have seen in previous chapters
the ends they seek, the methods they employ. What kind of men does this
make? It makes men deficient in self-respect, indifferent to the dignity
and inviolability of Congress, weak in self-reliance, willing to bribe,
barter, and juggle to secure their ends. All this is on the face of the
activities of men who run their business through Congress.
There is another moral angle of this matter which must be faced. These
men who tremble at the idea of unprotected business, what kind of
producers does it make of them? _Quality is a moral issue._ A man’s
handicraft is the final test of his integrity: let it be slovenly and
unfinished, let it be showy but unsound, let it never get beyond a first
stage of value, let it be turned to quantity, not value, and you have a
measure of the man’s character. Moreover, you have a contaminating
thing. People forced by conditions to use dishonest goods, who find
their shoes quickly falling to pieces, their coats quickly threadbare,
their food adulterated, their rented rooms out of repair, who are forced
to pay for things without virtue, quickly lose all sense of quality.
They never give it because they never see it. Can an employee who knows
that his employer adulterates his fabrics and covers up imperfections
regardless of the interests of the consumers, be expected to continue to
care for the quality of his own work? There is a universal outcry
against the poor workmanship the day laborer gives—the lack of interest
in the work—but can he be expected to care if his employer does not? At
the very basis of the laborer’s general indifference as to whether he
gives a full day of honest work or not lies a widespread indifference
among business men as to the quality of the output of their factories
and shops.
If there were no other case to-day against protection, as we apply it,
it ought to fall in more than one industry, on the deterioration of
quality it has encouraged, in the ambition it excites to turn out
quantity, not give value. Moreover, this vicious result hits the poor
man. We can make as good woollen textiles in the United States as are
made anywhere in the world; we do make many of them—at double the price
that they cost abroad; but cutting off all competition in cheap goods as
our tariff does, enables the domestic manufacturer to ignore the quality
of these goods as he could not do if he were subjected to proper foreign
competition. He knows he can sell what he turns out. There are no other
goods for the poor man to buy; the cheaper he can make them the better;
they will have to be replenished the oftener, and so trade will be
encouraged! So flagrant has this offence against sound morals become in
cloth manufacturing that in the last two years there has developed an
organized revolt against it among manufacturers of clothing. And this
attack has been based by certain of them on the sound ground that it is
unethical.
It is but a step from indifference to the quality of goods, to
indifference to the lot of those who make the goods. The tariff is laid
to help and protect the working-man. According to the protectionist
argument a tariff-made state like Rhode Island, a tariff-made city like
Pittsburg, should produce the happiest, most prosperous, best
conditioned working-men and women in the country. We have seen something
of what the tariff has done in Rhode Island. In Pittsburg it has worked
contrasts between labor and capital still more violent. It has produced
on one hand an absentee landlord, the “Pittsburg Millionnaire,” and on
the other a laborer, whose life as pictured by one of the most careful
investigations into living conditions ever made in this or any country,
the Pittsburg Survey, is made intolerable by a twelve-hour day, Sunday
work, cruel speeding, and cheerless and unsanitary homes. This Pittsburg
Survey is the most awful arraignment of an American institution and its
resulting class pronounced since the days of slavery. It puts upon the
Pittsburg millionnaire the stamp of greed, stupidity, and heartless
pride. But what should we expect of him? He is the creature of a special
privilege which for years he has not needed. He has fought for it
because he fattened on it. He must have it for labor. But look at him
and look at his laborer and believe him if you can.
This, then, is the kind of man the protective system as we practise it
encourages: a man unwilling to take his chances in a free
world-struggle; a man whose sense of propriety and loyalty has been so
perverted that he is willing to treat the Congress of the United States
as an adjunct to his business; one who regards freedom of speech as a
menace and the quality of his product of less importance than the
quantity; one whose whole duty toward his working-man is covered by a
pay envelope. This man at every point is a contradiction to the
democratic ideal of manhood. The sturdy self-reliance, the quick
response to the ideals of free self-government, the unwillingness to
restrain the other man, to hamper his opportunity or sap his resources,
all of these fine things have gone out of him. He is an unsound
democratic product, a very good type of the creature that privilege has
always produced.
_But this man would be impossible were it not that he has the backing of
politicians and law-makers._ Behind and allied with every successful
high tariff group is a political group. That is, under our operation of
the protective doctrine we have developed a politician who encourages
the most dangerous kind of citizenship a democracy can know—the panicky,
grasping, idealless kind. This is the most serious charge that can be
made against the man who holds or seeks office, that he injures the
quality of the citizen.
The man who is a candidate for Congress in any district, city or
country, has two courses open to him: He can appeal to greed or to the
ideal. He has the opportunity to discuss with his constituents the
questions and measures of his day and to win them by the enthusiasm he
awakens for ideals. He has equally the opportunity to win them by the
promises he makes—the promises of individual local benefits, like
pensions and public buildings, or the promise of securing protection for
local industries. Take the case of “Pig Iron,” Kelley—a man who clung to
protection with the passionate faith of a fanatic, who saw in it the
great panacea for the country’s poverty, who believed himself an
incorruptible man, and yet who allowed the protectionists of both
parties in his own Philadelphia district to return him without effort on
his part, because they knew he would get for them what they wanted. Mr.
Kelley, honest man as he thought himself to be, educated his
constituents in the pernicious notion that a Congressman’s first
business is to look after their business. The hopelessly sordid mental
and moral attitude of Pennsylvania toward politics is due chiefly to the
training in selfishness which for sixty years her Congressmen have given
her. Throughout this period those who sought her suffrage have held up
the promise of protecting taxes. Vote for us and we will take care of
you. One of the most immoral of the many immoral trades which belong to
the period of our Civil War was the bargain the state made with the
Republican party to support the Union in return for the duties they
wanted on their manufactures. For years almost the sole appeal made by
candidates to the people of the state has been selfish. They have had a
steady education in the notion that government is something from which
to get a personal advantage. Is it strange that the Pennsylvanian should
come to regard all public undertakings, even the building of a state
capitol, as legitimate prey? It is a logical enough chain from the
instructions of Thaddeus Stevens and “Pig Iron” Kelley to a tariff-made
Pittsburg, blind to the appalling inhumanity of her mills, or to the
shameless looting of a great state building. Once the appeal to men’s
greed is the established rule of a state’s politics, the inevitable
outcome is every degree and species of baseness. On the other hand, a
people trained by its leaders to think of the general good, to consider
principles and ideals as of first importance to national life, to feel
that our fundamentals must be preserved before everything else—such a
people will rise to any height of enthusiasm and sacrifice.
The legislator who is so indifferent to the moral effect of his appeal
on the country’s citizenship, who refuses to see the connection between
the appeal to selfishness and corruption such as that which in 1884,
1892, and partially in 1910 swept the Republican party from power, can
hardly be expected to be nice about the methods he employs to get the
things he has promised. Indeed, there is political necessity for just
such methods as have been discussed in the previous chapters of this
book. They are a part of the whole, perfectly consistent with the
appeal, not a whit more immoral. If Mr. Aldrich promises the cotton
manufacturers of New England to support their demands, allowing them to
raise the money and do the work to reëlect him, can you expect him to do
less than he did in the Payne-Aldrich Bill—allow a tricky revision of
the cotton schedule to go through?
Let us admit that reasonable people must not expect in a popular
government to arrive at results save by a series of compromises. As long
as men disagree as to what is desirable to accomplish, as well as on the
methods which are to be employed in getting what they all agree to be
desirable, each successive step comes by one side agreeing to take less
than it believes should be given, and the other yielding more than it
believes wise. No reasonable person can expect the protective system to
be handled without compromises, backsets, and errors of judgment, but
_he can expect it to be handled as a principle and not as a commodity_.
The shock and disgust come in the discovery that our tariffs are not
good and bad applications of the principles of protection, but that they
are good or bad bargains. Dip into the story of the tariff at any point
since the Civil War and you will find wholesale proofs of this
bargaining in duties; rates fixed with no more relation to the doctrine
of protection than they have to the law of precession of the equinoxes.
The actual work of carrying out these bargains is of a nature that would
revolt any legislator whose sensitiveness to the moral quality of his
acts has not been blunted—who had not entirely eliminated ethical
considerations from the business of fixing duties. And this is what the
high protectionist lawgiver has come to—a complete repudiation of the
idea that right and wrong are involved in tariff bills. There is no man
more dangerous, in a position of power, than he who refuses to accept as
a working truth the idea that all a man does should make for rightness
and soundness, that even the fixing of a tariff rate must be moral. But
this is the man the doctrine of protection, as we know it, produces, and
therein lies the final case against it,—men are worse, not better, for
its practice.
INDEX
Agriculture, 203.
Aldrich, Nelson W.:
ability of, 111, 112.
influence of, 168, 169.
protection policy of, 170.
position of, with regard to McKinley Bill, 199.
leadership of, 207.
and the “Interests,” 208.
as leader for McKinley Bill measure, 208.
and sugar stock speculation, 227.
on Dingley Bill, 244.
and sugar trust, 245.
and wood interests, 251.
report on wool schedule of, 308.
and cotton manufacturers, 319, 320.
relation of, with Lippitt, 320, 321, 322.
loyalty of, to wool schedule, 325.
traffic in duties of, 326.
threats of, 355.
political methods of, 363.
Alliance of wool and cotton, 325, 326.
Allison, Wm. B., 36, 51, 53, 63.
debate of, on Schenck Bill, 67, 68.
and wool tariff, 115.
chairman of sub-committee, 165.
position on tariff of, 166.
preparation of bill of, 166.
report of bill to Senate, 168.
and tin plate, 192.
Allison Bill:
discussion of, 168–172.
passed by Senate, 181.
goes to Ways and Means Committee, 184.
Ambler, Judge Jacob A., 102.
American Cotton and Wool Reporter, 303.
American industries in Canada, 294.
American Ironmaster, 96.
American Thread Trust Co., 263.
American Tin Plate Association:
questionable methods of, 192.
American Woollen Co., 354.
product of, 354.
capital of, 354.
“American working-man,” 336.
Amnesty, 75.
Anti-trust Bill, 200, 201.
Arkwright Club, 316.
attempts union with European manufacturers, 356.
Arthur, President:
appoints commission, 101.
message to Congress, of, 109.
as protectionist, 110.
and Dorsey, 176.
Attack on Whitman, 303, 304, 305.
Attorney-General, 44.
Average earnings, 259.
Baird, Henry C., 106.
Barbour, Wm., 268.
Basket willows, 298.
Bayard, 127.
Beck, James B.:
character of, 112.
filibustering of, 117.
insubordination of, 118.
as member of tariff conference, 127.
Beef Trust:
benefited by duty on hides, 267.
strength of, 275.
effect of Dingley Bill on, 276.
“Belshazzar’s Feast,” 176, 177.
Bennett, Frank P., 13.
and Whitman, 303, 304, 305, 306.
Bingham, Judge, 40, 44.
Blaine, James G., 11, 19.
speaker of Congress, 54.
and tariff reformers, 70.
slipperiness of, 96.
republican candidate, 140.
and Industrial League, 174.
and “monopoly” dinner, 177.
suggestions of, regarding surplus, 188.
and the trusts, 200.
and foreign trade, 203, 204.
and “Hell Gate,” 210.
Bleakie, Robert:
personal experience of, 286.
Bombay, 91.
Book-making, 30.
Boteler, Alexander R., 102.
Brandeis:
appears for consumers, 258.
Brice, 221, 222, 223.
Brinkerhoff, Gen. R.:
resolution of, in Republican platform, 54.
and Greeley and Carey, 55.
lecture campaign of, 70.
recollections of, 71, 72.
and Democrats, 83.
Bristow, 309.
Brooklyn Gas Light Co., 23.
Bryan, Wm. J., 241.
Budget:
of one family of four, 265.
of one woman, 265, 266.
Business depression, 143.
Business embarrassments, 32.
Butler, Ben:
compromise plank of, 139.
Cameron, Senior, 65.
Campaign of 1884:
scandal of, 177.
Campaign of 1888, 175, 176, 177, 178, 179.
Canada, 2, 24.
American industries in, 294.
Cannon, Joseph, 197.
Carlisle, John G.:
on House Committee, 113.
principles of, 118, 119.
candidate for speakership, 133.
ability of, 134, 135.
early life of, 134.
elected speaker, 137.
Carlisle and Randall factions, 141, 142.
Carnegie:
as illustration, 172.
testimony of, 298, 299.
Cary, Henry C., II.
as high tariff champion, 56.
as author, 56.
intolerance of, 56, 57.
Census of 1880, 98, 99.
Chandler, Zach, 22.
fights for copper bill, 46.
Chase:
attitude on tariff, 6.
as free-trader, 9.
Secretary of Treasury, 10.
arranges amendments to Morrill Bill, 10.
Chicago _Tribune_, 55.
Child labor, 343.
Cincinnati _Gazette_, 55.
Civil War:
changes wrought by, 28.
Clarke Mile End Spool Cotton Co., 263.
Clay, Henry, 2, 17.
Cleveland, Grover:
record of, 140.
reminiscences regarding, 141.
caution of, 141.
and tariff revision, 142.
second message of, 144.
message of 1887, 147–153.
effect of message on Republicans, 154.
popular vote for, 179.
warning of, 200.
position of, on tariff, 213.
inauguration of, 216.
letter of, on Wilson Bill, 231–233.
and Gorman, 234.
and Gorman Bill, 236.
and panic of 1893, 238.
Cloth analyses, 289, 290.
Coal duties, 34, 35.
Coats, Archibald, 264.
Coats, J. & P., 263, 264.
Cobden, Richard:
death of, 56.
Compact of 1867, 249, 250, 303.
Congress, 145, 299.
Congressional investigation, 41.
Conkling, Roscoe, 122.
Conscience Whigs, 3.
Cooper, Peter, 86.
Copper Bill of 1868:
reasons for, 44, 45.
and Chandler, 43, 46.
and President Johnson, 47–50.
passed over veto, 50.
lesson from, 50, 51.
Corn Products Co., 277.
Corn Products and Standard Oil:
associated, 277, 278.
Cost of living, 22.
Cotton:
as substitute, 283, 288.
exportation of woven cotton, 315.
importations of woven cotton, 314, 315, 322, 333.
investments in manufactories, 314.
strength of manufacturers, 324, 325.
conditions in making of cloth, 341–344.
Cotton schedule, 313, 314, 316, 317, 318.
Cox, S. S.:
as free-trader, 63.
as debater, 65.
sobriquet of, 66.
and Wood Bill, 88.
on exaggeration, 73.
on tariff, 77, 78.
Crisp, Charles F., 212.
Curiosibhoy, Adhersey, public letters to Greeley of, 91, 92.
Custom houses, 25.
Customs Administrative Bill, 187.
Dale, Samuel S., 289, 291.
Dawes:
appointed Chairman of Ways and Means, 73.
Dawes Bill:
debate on, 76, 77, 78.
reasonableness of, 76.
signed by Grant, 78.
features of, 78, 79.
Delano, Columbus, 113.
Democrats:
position on tariff, 83.
1880 tariff plank of, 94.
get majority in Congress, 110.
division among, 118.
tactics of, 119.
raise Constitutional question, 126.
gloating of, 122.
cry of excessive taxation, 178.
disadvantages of, 179.
split among, 180.
continue tariff agitation, 212, 213.
reverses of, 237.
inspiration of, 210.
Deterioration in clothing, 283, 284, 285.
Difference in home and foreign prices, 292, 293.
Dingley, Nelson:
Chairman of Ways and Means Committee, 239.
ability of, 239, 240.
Dingley Bill:
House passes, 240.
fate of, in Senate, 244.
compared with Wilson and McKinley Bills, 242, 243, 244.
changes made by Senate in, 244, 245.
influence of wool interests on, 251.
amendments to, 251.
passage of, 252.
effect of, 254, 255, 265, 267, 276, 277, 278.
practice developed by, 292.
makes burdens heavier yearly, 295.
Direct tax, 26.
Doctrine of protection:
final case against, 358, 359, 360.
kind of man encouraged by, 360, 361.
Dolliver:
Schedule K falls to, 309.
McKinley follows, 309.
member of Dingley Ways and Means, 310.
masters wool schedule, 311.
shows schedule K a law without morals, 311.
analyzes cotton schedule, 320, 324.
expresses revolt, 356, 357.
Dorsey, Stephen W., 176.
Douglas, W. L., 267.
Dunbar Co., 268.
Eaton, Senator, 100.
Elder, Cyrus, 86.
Elliot, E. B., 159.
England, 7.
anger over increased duties, 13.
feeling against, 22.
English Serving Cotton Trust, 263.
Evils of Tariff, 327.
“Experts,” 321, 322.
Factory employers:
life of, 342, 343, 344, 345, 346.
Factory owners:
greed of, 346, 347, 348.
Farmers:
relation of, to import duties, 201, 202.
protest of, 312.
Federal Commission report, 116.
Fessenden, Wm. Pitt:
description of, 20, 21.
and tariff on spices, 24, 25.
favors moderate protection, 39.
absent when wool bill is voted upon, 43.
File trust, 334.
Financial uneasiness, 145, 146.
Finkelnburg, 69.
speaks for tariff bill, 76.
Finlaysons, 268.
Flax, 267, 268.
Ford, Worthington, 159.
Forward, Walter, 17.
Foster, James P., 177
France, 7.
Fraud, 24, 25.
Free Poker and taxed Gospel, 156.
Free Trade, 6, 7.
Free Trade League, 55.
Garfield, James A., 53.
Blaine’s treatment of, 70, 71, 72, 73.
position on tariff, of, 94, 95, 96.
caution of, 97.
Garland, Austin M., 101, 113.
Glucose Trust, 277.
Gold Democrats, 241.
Golden Rule, 300, 301.
Gorman, 221.
Gorman Bill, 235, 236.
Grant, President:
hope of people, 52, 53.
advises postponement of tariff question, 53.
against Reciprocity treaty, 53.
dissatisfaction with, 73, 79.
Great Debate, 159–164.
Greeley, Horace, 13.
as protectionist, 16, 17.
extremist, 55.
heads movement in favor of general amnesty, 73.
nomination of, 74.
character of, 75.
Grosvenor, Col. Wm. M., 69.
Hale, Eugene, 71.
Halstead, Murat, 83.
Hamilton, Alexander, 1.
Hancock, Gen. W. S., 97, 98.
Hanna, Mark, 241.
_Harper’s Weekly_, 17.
Harpster, David, 113.
Harrison, recommendations of, 184, 185.
Haskell, Dudley C.:
and Kelley, 112.
description of, 120, 121.
trouble with Townshend, 123.
resolution of, 127.
death of, 185.
Hayes, John L., 41, 42.
as chairman of tariff commission, 101.
campaign of, for wool interests, 113.
“Hearings,” 297–299.
Hewitt, Abram S.:
before tariff commission, 105.
compromise plank of, 139.
Hides:
proposed duty on, 204.
High protection, result of, 349.
High protectionists, 120.
High tariff, 62, 135, 136.
Hill, David J., 222.
Hill, James J., 293.
Holt, Byron W., 293.
Immigration, 254, 255.
Immorality of tariff system, 357, 358, 359, 360, 363, 364.
Imperialism, 252.
Income tax, 220, 221.
declared unconstitutional, 240.
Increased cost of living, 350, 351.
Industrial commission, 292.
Industrial League of Pa.:
object of, 86.
first president of, 86.
methods of, 86, 87.
power of, 86, 87.
recognized by Blaine, 87.
opposes Parsee, 92.
campaign of, 100.
demands tariff commission, 100.
incensed, 92.
Infant industries, 298.
Insurgents, 308.
reasons for revolt of, 309.
determinations of, 309.
“Interests,” 7.
leaders alarmed, 75.
fight reasonable bill, 76, 77.
barter of, 117.
continue pressure, 122.
unite own schedules, 193.
campaign, 241.
frustrated, 241.
oppose reciprocity, 256, 257.
narrowness of, 257.
Internal Revenue:
inequalities of, 12.
remonstrance against, 13.
Internal revenue bill, 110.
International Harvester Co., 294, 295.
Investigations in budgets of poor, 260.
Iron and Steel Association:
as dictator, 173, 174.
recognized by Blaine, 174.
energy and efficiency of, 174.
defeats Morrison, 174.
demands Quay head of Republican Committee, 175.
Jarrett, John, 174.
Jobbery, 7.
Johnson, Tom L., 213.
Johnson, President:
opposes Stevens, 44.
unhappiness of, 46, 47.
message regarding copper bill, 47, 48, 49, 50.
Jones, B. F., 174.
Kansas, 21.
Kasson, John A.:
service of, 36, 37, 38.
a supporter of Kelley, 112.
proposes revision of House Rules, 124.
appointed special plenipotentiary, 255.
resigns, 257.
Keifer, Speaker, 127.
Kelley, Wm. D. (“Pig Iron”):
favors highest protection, 35.
as protectionist leader, 63, 64.
dislike of Wells and Sumner, 64.
defends high tariff, 65.
accused of iron interests, 65.
and Cox, 66.
and Wood Bill, 88, 89, 90.
as chairman of House Committee, 112.
and Haskell, 120.
and Kasson rule, 124.
last illness of, 185.
pernicious teaching of, 362.
Kenner, Duncan F., 101.
Labor troubles, 216, 217.
Lawrence, Wm., 113, 246, 247.
Lea, Henry C., 86.
Legislation by violence, 228, 229.
Liberal Party, 69.
Lincoln, Abraham:
attitude on tariff, 6, 7.
calls extra session, 9.
asks for more men and more money, 18.
tariff views of, 18, 19, 20.
Lippitt, Henry F., 315, 316, 321.
Lobbyists, 113, 114, 118, 122.
Lodge, Henry Cabot, 237, 323, 350, 351.
Logan, Senator, 78.
London _Times_, 8.
Longworth, Nicholas, 283.
Louisville _Courier-Journal_, 81.
Lumber, duties on, 115.
danger of exhausting, 115, 116.
arguments for duty, 116.
Lumber barons, 116.
McAdoo, Col., 141.
MacColl, J. R., 316.
McDill, 127.
McKay sewing machine, 271.
McKenzie, James, 93.
McKinley, Wm.:
protection speech of, 88.
supports Kelley, 112.
argues with suit of clothes, 162.
succeeds Haskell, 185.
amiability of, 186.
introduces Customs Administrative Bill, 187.
as presidential candidate, 241.
McKinley Bill:
foundation for, 188.
points of, 191, 193, 198, 199, 208, 209.
effect of, 210, 211.
failure of, 216.
as compared with Wilson Bill, 238, 239.
McMahon, Wm. H., 102.
McMillan, 184.
McPherson, 227.
Mahone, 117, 127.
Mallary, Rollin C., 17.
Manhattan Gas Co., 23.
Manufacturers, unreasonableness of, 32, 33.
Marble, Manton, 137.
Marshals, 268.
Meriden Britannia Co., 293.
Mills, Roger Q., 83, 85.
chairman of Ways and Means, 155.
principles of, 156, 157.
chief hobby of, 158.
prepares bill, 158, 159.
argues from Wright’s report, 160, 161.
analyzes cost of suit, 162, 163.
opposes conference, 183, 184.
opposes bounty for sugar-growers, 197.
on McKinley Bill, 209.
candidate for House Speakership, 211.
refuses to serve on Ways and Means, 212.
position of, 213.
advises duty on sugar, 224.
Mills Bill, 158, 159, 164, 170.
Minnesota, 21.
Missouri Compromise, 4.
Missouri Liberal Republicans, 73, 74.
Moderate protectionists, 36, 37, 38, 39.
Moir, Edward, 301.
Monopolies, 352.
Montgomery, 8.
Moore, Joseph S., 90, 91, 92.
Morrell, Hon. Daniel J., 86.
Morrill, Justin S.:
character of, 3.
theory of, 4.
apologizes for bill of 1866, 34.
advises acceptance of Wells’s amendment, 39.
absent when wool bill is voted upon, 43.
votes for copper bill, 46.
debates on tariff, 68.
opposes quinine bill, 93.
head of the Senate committee, 110, 111.
reports on free silver, 240.
Bill of 1860, 5–11.
Bill of 1866, 34, 37, 38.
Morrison, Col. W. R., 83.
on House Committee, 113.
selected to prepare tariff bill, 137.
cleverness of bill, 138.
provisions of bill of, 138.
defeated for Congress, 155.
Mountain ivy root, 298.
Mugwumps:
return of, 180.
National Association of Clothiers, 283.
National Association of Wool Manufacturers, 41.
political strength of, 193.
claims of, 194.
pleads against reduction, 229.
supports wool duty, 247.
demands of, 249.
greed of, 250.
success of, 251.
makes compact, 301.
agreement with wool-growers of, 41.
National Treasury, 6, 10.
Newcomb, Simon, 159.
N. E. Shoe and Leather Association, 273, 275.
Newspapers:
Taxes on, 13, 14.
oppose copper legislation, 51.
New York Custom House, 91.
N. Y. _Evening Post_, 13.
New York Gas Light, 23.
N. Y. _Herald_, 13.
N. Y. _Tribune_, 13, 16, 17.
Niedringhaus, F. G., 192, 193.
Niles, Hezekiah, 17.
North, S. D. N.:
position of, 251.
accused, 304.
denials of, 304, 305.
summoned by Finance Committee, 306.
corresponds with Whitman, 306.
Oliver, Henry W., Jr., 101, 122.
Organization, value of, 132.
Overproduction, 31.
Panics, 3, 79, 217.
Parsee, 137.
Payne:
reports wool schedule, 307.
tricked, 318, 319.
Payne-Aldrich Bill:
criminality of methods in, 299.
removes duty on hides, 277.
lowers duty on thread, 277.
becomes law, 327.
reception given, 327.
Pennsylvania, 6, 362.
Pensions, 189.
Perry:
lecturer and author, 55.
reminiscences regarding Cleveland, of, 141.
Philadelphia, 23.
Phillips, Thomas W., 292.
Pierce, Henry L., 4.
Pig-iron, 60, 61.
Pike, F. A., 36, 50.
Pittsburg, 360.
Pittsburg _Commercial_, 55.
Pittsburg Survey, 360.
Politico-industrial alliance, 207.
Pomeroy, Senator, 22.
Pope, Col. A. A., 104.
Porter, R. P., 102, 106.
Portland _Advertiser_, 55.
Prentice, George D., 82.
Prosperity, 252, 253, 254.
Protection, 1, 4, 5, 6.
faults of, 24, 51, 52.
opposition to, 54.
doctrine saved, 68.
effects of, 98, 99.
early reasons for, 331.
never to be prohibitive, 332.
Protective steering committee, 85, 86.
Providence, 7.
Public opinion, 297.
Quay:
record of, 175.
chairman National Rep. Committee, 175.
secures funds from Wanamaker, 175.
acknowledges sugar speculation, 227.
long speech of, 228.
Quinine Bill:
introduced by McKenzie, 93.
passes House, 93.
opposed by Senator Morrill, 93.
passes Senate, 93.
effect of passage of, 93, 94.
“Quinine Jim,” 93.
Railroad iron, 21, 26.
Randall, Samuel J.:
skill and endurance of, 83, 84.
on House Committee, 113.
principles of, 119.
refuses to serve on committee, 127.
candidate for speakership, 133.
opposes Morrill Bill, 139.
prepares bill, 144.
Randall Bill, 144.
Raymond, Henry, 36.
Reciprocity, 2, 255.
clause in tariff of 1890, 206.
opposed by interests, 256, 257.
favored by McKinley, 257.
Recognition of organized business man, 131, 132.
Reed, Thomas B.:
as parliamentarian, 125.
views on tariff of, 125.
rule of, 126.
on Mills Bill, 164.
asks conference with House, 182.
as protectionist, 186, 187.
on Gorman Bill, 235, 236.
elected speaker of House, 239.
Register, 17.
Republicans, 67, 69.
dissatisfaction with party, 73, 74, 75.
tariff plank of 1880 of, 94.
attack tariff for revenue only, 97.
demand tariff revision, 98.
rebuked on policy, 110.
majority of, favor reform, 118.
platform of, 173.
free use of money of, 175, 176, 177.
carry parrots in parades, 178.
win election, 179.
heavy losses of, 210.
causes of overthrow of, 210.
platform of 1896 of, 241.
declare for downward revision of tariff, 296.
Resolutions’ Committee, 139, 140.
Revenue:
system for raising, 26.
revision of, 29.
bill framed by House, 110.
Revenue cutters, 25.
Revolt against protective system, 296.
Rhode Island:
as an object-lesson, 336–346.
manufactories in, 337, 338.
desertion of farms in, 337, 338.
a tariff-made state, 338.
foreigners of, 339.
restlessness of laborers in, 340.
housing in factory towns, 347, 348.
Rhode Island factories:
temperature of, 340.
ventilation of, 340.
lint in air, 341.
scarcity of water in, 341.
lack of toilet conveniences, 341.
lack of dressing rooms, 342.
earnings in, 342.
unsanitary, 347.
without fire escapes, 347.
improvements in, 347.
Rise in cost of living, 260, 261.
Roosevelt, Theodore:
unstirred by tariff evils, 296.
St. Louis Democrat, 55.
Salt Interests, 58, 59, 60.
Sawyer, Philetus, 116.
Schenck, Robert C., 54, 62.
Schenck Bill, 62, 64, 65, 67, 68.
Schurz, Carl, 69, 75, 83.
Schwab, 292.
Scrapiron duties, 35.
Seceders, 7.
Secession, 6, 7.
Secretary of Treasury, 29.
Section Struggle, 39.
Semicolon, 124.
Senate:
frames revenue bill, 110.
passes Senate Bill, 118.
hearings before, 166.
examination of, regarding sugar stock speculation, 227.
make-up of Senate of 1897, 245.
analysis of duties of, 308.
Settlers, 116.
Seward, 6.
Sherman, John, 4, 5.
asks Senate to raise wool duties, 39.
advises lobbyists, 75, 76.
removes Parsee from Custom House, 91.
arrogance of, 111.
fights reduction of iron, 114.
fights for wool, 115.
dissatisfaction of wool-growers with, 131.
“Recollections” of, 131.
appoints Tichenor special agent, 167.
introduces anti-trust measure, 201.
prepares for “Hell Gate,” 210.
Ship-building, 61, 62.
Shoddy, 248, 249.
Shoe-making trust:
formation of, 270.
inheritance of, 271.
aim of, 271.
prepares lease, 272, 273.
monopoly of, 273.
Shoes:
cost of, 265, 266.
reasons for increased cost, 266, 267.
royalty on, 273, 274.
Silver Question, 216, 237, 238, 240, 241.
Simmons, “Wood-Screw,” 7.
connection with new tax and tariff bills, 15.
secures gun contract, 15.
Sinister phase of Hearings, 299.
Slavery Agitation, 3, 7.
Smoot, 323.
Smuggling, 24, 25.
Specie Payment, 53.
Specific duty, 302.
Spool cotton, 262, 263, 264.
Spooner, 193.
Springer, Wm., 211.
Standard Oil Co., 278, 279, 288.
Stand-patter, 353.
Starch, 277, 278.
States petition Congress, 85.
Stevens, Thaddeus, 12.
description of, 14, 15.
as dictator, 33.
opposes Morrill Bill of 1866, 33, 35.
alarmed at struggle of sections, 39.
death of, 53.
owner of foundry, 65.
Storey, Moorfield, 305.
Sugar, 195, 196, 197.
“Sugar House,” 227.
Sugar Refineries Company, 198, 199.
Sugar Trusts, 222–227.
Sumner, Charles, 4, 20, 21.
Sumner, Wm. G., 90, 91.
Surplus, 98.
oiling up of, 144.
methods to reduce, 188, 189.
reduction of, overdone, 216.
Surprise resolution, 71.
Swank, James W., 242.
Taft, Wm. H., 296, 300, 313, 324.
Tariff:
fifty years ago, 1.
to-day, 2.
bill of 1862, 14, 15, 16.
bill of 1864, 20.
bill of 1865, 26, 30, 31.
bill of 1875, 81.
“For Revenue only,” 82, 83.
Reformers, 90.
bill of 1883, 128, 129, 130, 131.
bill of 1886, 142, 143.
as a tax, 163, 164.
league, 178.
Act of 1890, 206.
Reform Committee of N. Y., 293.
self-defeating, 295.
as bargains, 363, 364.
a question of national morals, 357, 358.
Tariff Commission, 100.
personnel of, 101, 102.
reception of, 102, 103.
hearings before, 103–106.
platform of, 107.
inconsistencies of, 107, 108.
Tariff Conference, 127.
“Tariff of Abominations,” 1.
Textile World Record, 289, 291.
“The poor,” 258, 259.
“Thousand-dollar breakfast,” 10, 22.
Thread (linen):
advance in, 267, 269.
formation of trust, 268, 269.
duty on, 269, 270.
price jumps, 270.
Payne Bill lowers duty on, 277.
Thread Trust, 269, 270.
Thrift, 259.
Tichenor, Geo. C., 166, 167, 168.
Timber Culture Act, 116.
Tin plate, 278, 279, 280.
Tooke’s “History of Prices,” 95.
Top duty, 304, 305, 306, 307.
Townshend, 123.
Trusts:
development of, 200.
arguments about, 351.
breeding of, 353, 354.
Turner, A. R., 268.
Umbrellas, 30, 31.
Underwood, John W. H., 102.
United Shoe Machinery Co. and Linen Thread Company interwoven, 274,
275.
United States, population of, 259.
United States Census, 304.
United States Government, 24, 25, 27.
United States Investor, 305.
Vest (Senator), 221, 224.
Vilas, 213.
Wages:
government investigation regarding, 261, 262.
Walker, Francis A., 349.
Wanamaker:
contributes money for campaign, 175.
received seat in Cabinet, 175.
War, 9.
qualities developed by, 23, 24.
consequences of, 27, 32.
taxes, 12, 13.
Washington, 6.
Watterson, Henry:
as party leader, 81.
dictator, 82.
writes tariff plank, 82, 83, 139.
platform-maker, 214.
criticises Mills Bill, 219, 220.
Ways and Means Committee, hearings before, 297, 298, 299.
Wells, David A.:
early life of, 29.
head of Commission, 29.
prepares tariff bill, 38.
Carey’s hatred for, 56, 57.
summary of wool conditions, 57, 58.
reports on salt, 58, 59, 60.
effect of report of, 162.
removed from office, 69.
to Democrats, 83.
effect of dismissal of, 91.
Wells Bill:
approved by Senate, 38.
made an amendment to House Bill, 39.
Wentworth, Long John, 37, 38.
West:
disturbed over 1864 tariff bill, 21.
objects to 1866 bill, 37.
asks protection for farmers, 37.
succeeds in getting high duties on farm products, 38.
Wharton, Joseph, 86.
consulted by Blaine, 87.
tariff speech of, 96, 97.
before Tariff Commission, 103.
White, Horace, 55, 83.
Whitman:
Pres. National Association of Wool Growers, 194.
suggestions of, 194, 195.
calls conference, 300.
appears before Ways and Means, 300, 301.
attacked, 303.
denies charges, 304, 305.
correspondence demanded of, 305.
proofs regarding, 307.
reasons for powers of, 312, 313.
on increased cost of living, 350.
Whitney, 213.
Wholesale Saddlery Association, 276.
Wickersham, 352.
Wilson, James F., 36.
Wilson, James Lyne:
head of Ways and Means, 217.
qualifications of, 217, 218.
presents bill, 218.
disappointment of, 234, 235.
Wilson Bill:
provisions of, 218.
opposed by Mills and Watterson, 219, 220.
amendments, 220, 221.
passes House, 221.
Senate opposition to, 221.
revised, 222.
returned to House with 634 amendments, 230.
Cleveland makes protest against, 230, 231.
Wood, Fernando:
appointed head of Ways and Means, 84.
as Mayor, 84.
arrogance of, 84.
stirred by resolution, 85.
tabulates objections to tariff in operation, 87.
brings in new bill, 87.
Wood, William M., 312.
Wood Bill:
unrest over, 84, 85.
brought in, 87.
features of, 87, 88.
indifference to, 88.
opposition to, 88, 89, 90.
object of, 88.
condemnation of, 88.
failure of, 90.
Wood-screws, 7.
Wool:
Interests ask higher tariff, 40.
scandal regarding, 41.
campaign of 1866, 42, 43.
bill of 1867 passes House, 43.
bill signed by Johnson, 44.
dissatisfaction of growers, 113.
growers send trinity, 113.
demands of trinity, 113.
Interests disappointed, 229, 230.
conditions, 245.
Interests muster strong vote, 248.
carpet wool, 248.
value of, 280.
scarcity, 281.
wool tops, 250.
adulteration of, 282.
amount produced in U. S., 285.
two classes of manufacturers, 286.
substitutes for, 287.
decrease in per capita consumption, 288.
comparative prices in England and America, 291, 292.
Interests force Congress, 299.
Interests hold conference, 300.
Compact of Interests, 301.
carders appear before Ways and Means, 302.
carpet manufacturers ask common-sense duty, 303.
combination of Interests, 312, 313.
failure of protective dogma in, 333, 334.
Wool schedule, 284.
complexity of, 289.
difficulty of, 310, 311.
mastered by Dolliver, 311.
shown to be without principle, 311.
reasons for passage, 312, 313.
Wright, Carroll D.:
report of, 143, 160.
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By JOHN R. COMMONS, Professor of Political Economy in the University
of Wisconsin.
_Cloth, 12mo, 258 Pages, $1.25_
A concise summary of the practical outcome of the various theories of
distribution.
An Introduction to the Study of Political Economy
By LUIGI COSSA, Professor in the Royal University of Pavia. Revised
by the author, and translated from the Italian by Louis Dyer, M.A.,
Balliol College.
_Cloth, 12mo, 587 pages, $2.60 net_
Outlines of English Industrial History
By W. CUNNINGHAM, D.D., Fellow and Lecturer of Trinity College,
Cambridge, and Tooke Professor of Economic Science in King’s
College, London, and ELLEN A. MCARTHUR, Lecturer of Girton College,
Cambridge.
_Cloth, 12mo, 274 pages, $1.50 net_
Outlines of Economic Theory
By HERBERT JOSEPH DAVENPORT, Ph.D., Associate Professor of Economics
in the University of Chicago.
_Cloth, 8vo, 381 pages, $2.00 net_
Economic Essays
By CHARLES FRANKLIN DUNBAR, late Professor of Political Economy in
Harvard University. Edited by O. M. W. Sprague, Assistant Professor
of Economics in Harvard University. With an Introduction by F. W.
Taussig, Henry Lee Professor of Economics in Harvard University.
_Cloth, gilt top, 8vo, 372 pages, $2.50 net_
Economic Essays
By CHARLES FRANKLIN DUNBAR, late Professor of Political Economy in
Harvard University. Edited by O. M. W. SPRAGUE, Assistant Professor
of Economics in Harvard University. With an Introduction by F. W.
TAUSSIG, Henry Lee Professor of Economics in Harvard University.
Published in New York, 1904.
_Cloth, gilt top, 372 pp., 8vo, $2.50 net_
The Rate of Interest
Its Nature, Determination, and Relation to Economic Phenomena. By
IRVING FISHER, Ph.D., Professor of Political Economy in Yale
University.
Published in New York, 1907.
_Cloth, 442 pp., 8vo, $3.00 net_
The Nature of Capital and Income
By IRVING FISHER, Ph.D., Professor of Political Economy in Yale
University.
Published in New York, 1906.
_Cloth, 427 pp., 8vo, $3.00 net_
The Purchasing Power of Money
Its Determination and Relation to Credit Interest and Crises. By
IRVING FISHER, Professor of Political Economy in Yale University,
assisted by HARRY G. BROWN, Instructor in Political Economy, Yale
University.
_Cloth, xxii + 505 pp., $3.00 net_
The Income Tax
A Study of the History, Theory, and Practice of Income Taxation at
Home and Abroad. By EDWIN R. A. SELIGMAN, Professor of Political
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_Cloth, xi + 711 pp., $3.00 net; by mail, $3.20_
International Commercial Policies
with Special Reference to the United States: a Text-book, by GEORGE
MYGATT FISK, Ph.D., Professor of Commerce in the University of
Illinois.
Published in New York, 1907.
_Half leather, 288 pp., 12mo, $1.25 net_
The Law of the Employment of Labor
By L. D. CLARK.
_Cloth, 12mo_
Elements of Economics of Industry
Being the First Volume of Elements of Economics. By ALFRED MARSHALL,
Professor of Political Economy in the University of Cambridge.
Published in London, 1892. Latest reprint, 1907.
_Cloth, 440 pp., 12mo, $1.00 net_
Essentials of Economic Theory as Applied to Modern Problems of
Industry and Public Policy
By JOHN BATES CLARK, Ph.D., Professor of Political Economy in
Columbia University.
Published in New York, 1907.
_Cloth, 566 pp., 12mo, $2.00 net_
A History of Political Economy
By JOHN KELLS INGRAM, LL.D., Fellow of Trinity College, Dublin.
Published in New York, 1907.
_Cloth, 250 pp., 12mo., $1.50 net_
Introduction to Public Finance
By CARL COPPING PLEHN, Ph.D., Professor of Finance in the University
of California.
Published in New York, 1896. Revised and enlarged edition, 1909.
_Cloth, 468 pp., 12mo, $1.75 net_
History of Coinage and Currency in the United States, and the
Perennial Contest for Sound Money
By A. BARTON HEPBURN.
Published in New York, 1903.
_Cloth, 666 pp., 8vo, $2.00 net_
Public Finance
By C. F. BASTABLE, M.A., LL.D., Professor of Political Economy in
the University of Dublin.
Published in London, 1892. Third edition, 1903.
_Cloth, 780 pp., 8vo, $4.25 net_
Practical Problems in Banking and Currency
Being a number of selected addresses delivered in recent years by
prominent bankers, financiers, and economists. Edited by WALTER
HENRY HULL. With an introduction by the Honorable C. F. PHILLIPS, of
New York.
Published in New York, 1907.
_Cloth, 596 pp., 8vo, $3.50 net_
The Theory of International Trade, with Some of Its Applications to
Economic Policy
By C. F. BASTABLE, M.A., LL.D., Professor of Political Economy in
the University of Dublin.
Published in London, 1897. Fourth edition, 1903.
_Cloth, 197 pp., 12mo, $1.25 net_
International Civil and Commercial Law
As Founded upon Theory, Legislation, and Practice. By F. MEILI,
Professor of International Private Law in the University of Zurich.
Translated and Supplemented with Additions of American and English
Law, by ARTHUR H. KUHN, A.M., member of the New York Bar.
Published in New York, 1905.
_Cloth, 559 pp., 8vo, $3.00 net_
The Industrial History of the United States
By KATHERINE COMAN, Ph.B., Professor of Economics and Sociology in
Wellesley College.
Published in New York, 1905. Latest reprint, 1907.
_Cloth, 343 pp., 12mo, $1.25 net_
An Introduction to the Industrial and Social History of England
By EDWARD P. CHEYNEY, Professor of European History in the
University of Pennsylvania.
Published in New York, 1901. Sixth reprint, 1909.
_Cloth, 317 pp., 12mo, $1.40 net_
Wages in the United States
By SCOTT NEARING, Ph.D., of the Wharton School, University of
Pennsylvania, Author of “Social Adjustment,” etc.
_Cloth, 12mo, $1.50 net_
The Tariff in Our Times: A Study of Fifty Years’ Experience with the
Doctrine of Protection
By IDA M. TARBELL.
_Cloth, 12mo_
PUBLISHED BY
THE MACMILLAN COMPANY
64–66 Fifth Avenue, New York
------------------------------------------------------------------------
TRANSCRIBER’S NOTES
1. P. 63, changed “The manufacturers were to supply all the tools
of the farmers and miners—the farmers and miners all the raw
materials of the manufacturers.” to “The manufacturers were to
supply all the tools of the farmers and miners”.
2. Silently corrected typographical errors and variations in
spelling.
3. Retained anachronistic, non-standard, and uncertain spellings as
printed.
4. Enclosed italics font in _underscores_.
*** End of this LibraryBlog Digital Book "The Tariff in our Times" ***
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