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 238were 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 71? cents to 44? 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 $28.12?. 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 239sold 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 240and 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 241lay, 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 242can 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. 243The 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 medi?val provisions, the Dingley Bill, when presented to the House on March 19, 1897, was a fairly good protectionist measure, 244certainly 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. 245The 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 246more 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 247effect 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. Altho............