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. 156Mills 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 157could 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 158manufactured 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 159value. 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 160affected 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 5?. 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.
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.
161“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 162the 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 163$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 164tax,—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 165a 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 166consumers. 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 167had 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 the............