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 182force 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 183take 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 184commerce 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 185from 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 186tariff 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 187view 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 188do 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 189cry 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 190necessary 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 191in 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 2? or 2? 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 2? 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 192of 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 193could 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 194industry. 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 3? 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 s............