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 29consent 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 30out 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 59? 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 26? 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 31paid 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 2? 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 32in 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 re?nforcements 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 33hard 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 34$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 35was, 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 36Iowa, 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 37is 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 38would 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 39bill, 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. 40There 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 41at 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 42energetic. 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 43of 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 44must 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 45schemes. 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 46harps.” 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 47Andrew 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. 48While 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 49exclusive 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 50increase 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 51of 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. 52Men 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.