“Gentlemen, you can pass your bill. You can pass it when you please,” Colonel Roger Q. Mills told the Republicans in Congress at the outset of the debate on the McKinley Bill; “but whenever it does pass it will have a Hell Gate to go through after it leaves the House and Senate. There is a whirlpool with sunken rocks beneath the surface of the water through which your little craft will have to sail.
“You say that this question was settled at the last presidential election. Yes, Grover Cleveland had a majority of one hundred thousand votes of the American people. If there is anything in the signs of the times, they indicate that that majority will be greatly increased in the near future. I want you to pass your bill and go with it out West; take it with hair, hide, and wool all over it, and discuss it there; I want you to meet the people whom you have ‘not hesitated’ to tax from 1 to 200 per cent on the necessaries of life.
“Mr. Chairman, we promise our friends that we will examine their bill. It needs discussion, and will get whatever we are permitted to give it; and then when we have done that you will pass it, and when you leave this House and Senate with this enormous load of guilt upon your heads and appear before the great tribunal for trial, may ‘the Lord have mercy upon your souls.’”
This was in May of 1890. The bill became a law in October. In the interval, wise Republicans like John Sherman and James 210G. Blaine were doing their utmost to prepare for the passage of the “Hell Gate,” which Colonel Mills had prophesied and the roar of which became louder with each week’s approach to the fall elections. While his party granted the duties which bolstered the trusts, Mr. Sherman hurried through his bill making trusts a crime. While his party raised higher the wall which shut trade both in and out, Mr. Blaine worked for free trade between ourselves and our neighbors on the American hemisphere. But these were palliatives, not cures, and sensible people recognized their character. The storm was on the party almost as the measure went through. In the Congress which passed the McKinley Bill, the Republicans and Democrats stood 166 to 159. In the House of Representatives elected a little over a month after the passage of the McKinley Bill the proportion was 88 to 236: they had lost 78 votes. No such avalanche as overwhelmed the party in the fall of 1890 is loosened by one cause. It is always a number, but in this case it was a number of which the prohibitive duty and the political methods it had required to force it through Congress was the centre and strength. The other causes were kindred in their nature. The overthrow of the party at bottom was a plain revolt against the political immorality, the intellectual humbug, and the unholy greed which had produced the bill. At the heart of the Democratic victory was the inspiration of a real cause. The defeat of ’88 had left the party determined rather than cast down. They knew they were fighting for a right principle. Their joy in the conflict grew rather than diminished as the months passed.
The Democrats had won the House and Senate and all the indications were that they would win the presidency in 1892. The first fifteen months’ trial of the new measure admirably served their ambition, for that happened which, lack of work aside, makes life hardest for the world in general,—the price 211of food went steadily up. The fact that a dollar would buy more sugar did not compensate for the fact that it bought less flour, less corn-meal, less meat, and fewer potatoes. Moreover, there were other advances which irritated the world in general,—advances in the prices of coal, lumber, and particularly tin ware and canned goods. Tin plates which sold for $4.79 a box in 1890 sold for $5.33 in 1891, and by the time the tin found its way into a milk pan or a dinner pail or a tomato can there was a still greater per cent of increase. It was so palpably a higher cost because of the duty, it was so generally and correctly believed that the increase would not for many years benefit more than a few, that irritation increased with every purchase. Among manufactured goods it was tin plates almost alone which advanced. Manufactured goods generally fell in price in 1891. Some of the high grade cottons and woollens advanced, but these were exceptions. The fact of a decided increase in a common article like tin plate, the fact that coal and lumber were dearer, quite overshadowed the fall in the prices of goods generally.
There was no hesitation in the minds of the Democrats about what they should do with their power when they took possession of Congress in December, 1891. They proposed to begin at once to reform the McKinley Bill. The history of their efforts in the ’80’s being what we have seen, and Roger Q. Mills being still a member of the House of Representatives, it was to be expected that he would be elected speaker of the House. Mills was a candidate, so were Charles F. Crisp of Georgia and William M. Springer of Illinois. On the Tuesday before the Democratic caucus, Colonel Mills had one hundred and twenty votes pledged. When the first vote was taken, Mr. Crisp was in the lead. On the thirtieth ballot Mills was defeated by one vote. After the contest, he took the Congressional Directory and checked off the names of 212twenty-four men who had asked him for committee assignments, promising to support him in return; the doughty Colonel had refused. Once in the contest Springer sent him word that he would withdraw if Colonel Mills would make him chairman of the Ways and Means Committee. Colonel Mills asked to have the proposition submitted in writing! Tom Johnson, who was devoted to Mills, came to him once when the balloting was going on, and said, “I do wish you wouldn’t be a fool; give me two chairmanships and ask me no questions and I will elect you on the next ballot.” The Colonel only shook his head. There is no doubt that if he had withdrawn with his followers from the caucus and thrown the election into the House, the Republicans would have elected him. Indeed, they so sent him word.
Mr. Crisp was elected, and he appointed Mr. Springer chairman of the Ways and Means Committee. To Colonel Mills he offered the second place on the Committee; this Mills refused, “Having been a member of the committee of the Ways and Means for ten years, and chairman in the fiftieth Congress,” he wrote Mr. Springer, “the reasons which have in your judgment rendered my appointment as chairman unwise would disqualify me for service on any other part of that Committee, and it would not be sincere to say that it would be agreeable to accept your tender.
“I leave to you, without suggestion from me, to make such other arrangements as you, in the discharge of official duty, may determine.”
There was no possibility of any legislation passing beyond the House in that session of Congress. A Republican Senate and President stood in the way, but agitation for political and educational purposes was possible and it was carried on. Fully 150 petitions were presented the first session of the new Congress, the 52d, December, 1891 to August, 1892, asking 213for the repeal of the whole or some part of the McKinley Bill. More than 100 bills were introduced, providing for its repeal or amendment. The Democrats undertook only the reform of especially obnoxious duties. Five bills were brought in: (1) a bill to place wool on the free list and to reduce the duty on woollen goods; (2) a bill to admit free of duty bagging for cotton, machinery for manufacturing bagging, cotton-ties and cotton-gins; (3) a bill to place binding twine on the free list; (4) a bill to reduce and ultimately to abolish the duty on tin and terne plates; and (5) to reduced the duty on lead ores. These bills were all passed by the House after thorough discussion; as good material as the party could have for the presidential campaign which was on the country before the “pop-gun” bills, as the Republicans called them, were out of the way.
In the face of an almost certain victory in the impending election, serious Democrats began to ask themselves what, after all, should they do? What did they mean by tariff reform? To the majority there is no doubt that it meant simply a combination of tariff for revenue and of moderate protection of those industries already established, which it was believed could not yet compete with foreign goods. They professed to believe in free raw material—and did unless the raw material happened to be a leading product of their constituents. They were not generally in favor of drastic cutting, but preferred it to gradual.
This in the main was the position of Mr. Cleveland. It certainly was a little more radical than some of Mr. Cleveland’s advisors, Mr. Whitney and Mr. Vilas, for instance. But it was a position which filled men like Colonel Mills and Henry Watterson and Tom Johnson with disgust. They determined that it was time that the party stopped its coquetting with protection and followed a single-hearted tariff-for-revenue only policy, and it was such a policy which Mr. 214Watterson in particular determined should be adopted by the Democratic convention. He had succeeded in getting a tariff-for-revenue only plank into the platforms of 1876 and 1880. In 1884 he had seen his party, “with General Butler astride its back and Mr. Randall on its flanks,” as he described it, obliged to straddle. In 1888 this straddle had been repeated. Mr. Cleveland, seeing a “condition and not a theory,” could not sanction a plank which promised to reform the tariff with revenue only in mind. He knew the effects of duties on industries ought to and would be considered. Mr. Watterson went to Cincinnati in 1892 prepared for the fight of his life. He won. They called him a platform-smasher afterwards; he corrected them: he was a platform-maker; and that was true. Henry Watterson by his tactics and eloquence led the Democratic convention of 1892 to declare for tariff-for-revenue only, and Mr. Watterson meant just that.
“How would I make a tariff bill?” he said, later, in one of the most notable political speeches of the period.
“By the aid of all the best experts and authorities I would get together all the needful statistical data. I would then find a clean sheet of paper. I would lay this on the table—not the little round one, but the big oblong table—in the Ways and Means Committee Room. Then I would open the cupboard containing, among other perishable contents, the McKinley Bill. I would take this out none too gently—and pitch it into the fire. Then I would draw upon my clean piece of paper three lines. Thus:
Articles Duty Revenue
   
I I I
I I I
I I I
I I I
I I I
I I I
215I would begin at the top of the first column with sugar. Then the duty, say one cent a pound. Then the estimated revenue—say $35,000,000. Then I would abolish the sugar bounty, making a difference of $45,000,000 in the revenue. I would follow with tea and coffee. I would continue, giving precedence as far as possible to revenue-yielding commodities not produced in this country, down through the largest revenue-yielding domestic products—without the least regard to protection, incidental or otherwise—and when I got $200,000,000 I would stop. Then I would take another bit of white paper, and I would frame an Internal Revenue Act, raising $175,000,000 on spirits and tobacco-making, $375,000,000 in all—and the rest, $50,000,000 or $75,000,000, as the estimate might require, I would raise by a tax, first on inheritance and dividends, and then, if needs required, on big incomes.
“Then I would call the Committee—the Democratic members of the Committee, I mean—and, when any one of them proposed to confuse the simplicity of this perfectly plain Tariff-for-Revenue-only Act by the old cant about the danger of being too precipitate and extreme, I would knock him out—not down—by saying: “Read the National Democratic Platform.””
How far from this uncompromising sort of revision Mr. Cleveland was, his letter of acceptance in 1892 shows:
“Tariff reform is still our purpose. Though we oppose the theory that tariff laws may be passed having for their object the granting of discriminating and unfair governmental aid to private ventures, we wage no exterminating war against any American interests. We believe a readjustment can be accomplished, in accordance with the principles we profess, without disaster or demolition. We believe that the advantages of freer raw material should be accorded to our manufacturers, and we contemplate a fair and careful distribution of necessary tariff burdens rather than the precipitation of free trade.
“We anticipate with calmness the misrepresentation of our 216motives and purposes, instigated by a selfishness which seeks to hold in unrelenting grasp its unfair advantage under existing laws. We will rely upon the intelligence of our fellow-countrymen to reject the charge that a party comprising a majority of our people is planning the destruction or injury of American interests; and we know they cannot be frightened by the spectre of impossible free trade.”
Mr. Cleveland was inaugurated in March of 1893, but tariff reform was not the first work before him. The Silver Question was the more pressing, and the extra session he called for August had as its business the repeal of the purchasing clause of the Silver Bill which the Republicans had adopted in 1890, and by which they had bought a part of the votes for the McKinley Bill. The extra time of this session was utilized to begin work on the tariff. More loudly than ever the public demanded its reform. Nothing that had been promised that the McKinley Bill would do had been done, nothing but reducing the surplus—and that had been overdone. The combination of free sugar, prohibitive tariffs, and reckless spending with purchasing bonds not yet due at a premium, had reduced it to over $105,000,000 in the year the bill was adopted, to $2,500,000 in the year Mr. Cleveland was elected and a deficit was ahead; in fact, Mr. Cleveland inherited a deficit which the fiscal year after his inauguration had reached nearly $70,000,000. He also had inherited a business depression, the culmination of which came in the first summer of his administration, and along with the deficit and panic a series of labor troubles equal to those of the ’80’s. The McKinley Bill had failed utterly to do the two things which its makers had oftenest declared it would do, preserve prosperity and satisfy labor. Steadily after its passage depression grew. In 1892 the labor troubles of our country were as acute as in any year of our history, and these troubles were in the highly 217protected industries, in iron, steel, wool, and cotton. The McKinley Bill was not the cause of the depression, as the Democrats argued. The world was in panic. One of those periodic disturbances which sweeps the globe, a logical result of man’s bungling with the laws of trade, had started. That we did not feel the acute pangs of this disturbance as soon as Europe was due to the stimulants we had been taking in the way of high tariffs and cheap money. When they wore off, as they quickly did, our condition was the worse for the delay. A few months after Mr. Cleveland’s election the depression and unrest culminated in the panic of ’93. There has always been an effort to shift the responsibility of this disturbance on the Democrats. The panic of ’93 was caused, so Republican orators have repeated for eighteen years, by alarm at the prospect of a Democratic revision of the tariff. There was never a serious charge with less foundation. That panic was headed directly towards us long before Mr. Cleveland’s nomination. A McKinley bill could not stop it; but it did make it the more acute when it came, by the very fact that it had helped free silver to hold it back.
By utilizing the extra session, the Ways and Means Committee had a bill ready for the regular session which began in December, 1893. The chairman now at the head of the Committee was James Lyne Wilson of West Virginia. His appointment to succeed Mr. Springer, who had engineered the “pop-gun” bills, had been particularly satisfactory to the tariff-for-revenue only Democrats. Mr. Wilson was a man of fifty, an educated gentleman, who had been, in turn, a Confederate soldier, a practising lawyer, and a college president. Through it all he had kept alive a disposition to politics. He had written and spoken on whatever public question was uppermost. He had attended conventions, and served as a delegate, a “scholar in politics.” Finally, this interest and 218activity took him to Congress, where his sound economic ideas and his skill in presenting them had recommended him to the best element in his party, Cleveland, Carlisle, and Mills. In 1884 he aided Carlisle in his fight against the Randall faction. In 1888 he was put on the Ways and Means Committee, where he served Mr. Mills excellently. It has been customary to speak of Mr. Wilson as impractical and academic, but the bill he brought in in December, 1893, far from being a schoolmaster’s application of his own theories, was distinctly practical. The bill was not what he had hoped to make it. Mr. Wilson said in his report: “With the tariff, as with every other long-standing abuse that has interwoven itself with our social and industrial system, the legislator must always remember that in the beginning temperate reform is safest, having in itself the principle of growth.” The first step he had had in mind was to take taxes from the materials of industry. In Mr. Wilson’s judgment it was the higher cost of raw materials rather than higher wages which hampered American manufacturers. Therefore the Wilson Bill made wool, coal, iron-ore, hemp, and flax free. To “help the farmers” duties were taken from agricultural machinery, from cotton bagging, from salt, and from binding twine. An effort was made to do away with all specific duties. On manufactured goods there was no severe reduction: from one-third to one-half on window glass; 25 per cent on steel rails; lower rates on what Mr. Wilson called the “bogus industry” of making American tin plate; one-fourth cent per pound on refined sugar instead of one-half.
The bill was a grave disappointment to the tariff-for-revenue only Democrats. It did not go far enough, complained Mr. Mills in an article in the North American Review for February, 1894. It was only “a Sabbath Day’s journey on the way to reform.” He would have put every item in 219the chemical schedule on the free list. He would not only have made ores free, but pigs, bars, bloomers, slabs, ingots, sheets, and plates, that is, all materials which had been advanced to a first or second stage towards manufacture. On the same principle he would have made not only wool and hemp free, but yarns and fibres. Mr. Mills was particularly disturbed because Mr. Wilson had not equalized the import duty and the internal taxes on beer, whiskey, and tobacco. He believed these three should bear the brunt of taxation. As it was then, the internal tax was low and the duties very high. The brewers, distillers, and cigar-makers paid low taxes, and, cut off from foreign competition by high duties, kept up prices. Colonel Mills reckoned that under the McKinley Bill the duty on imported cigars amounted to $70.44 a thousand, the internal tax was $3.00 per thousand. He wished to make each $6.00. This would give revenue and cheaper cigars at once. At the same time it would check the tendency to combine.
A more severe critic than Colonel Mills was Mr. Watterson. In a speech in Louisville in January, he said:
“I have read with exceeding care and great concern, the reports accompanying the newly-introduced measure, of Tariff revision. The Democratic report begins by a masterly declaration of Tariff-for-revenue only logic, to end in an actual exposition of Protectionist practice. For the Chairman of the Ways and Means Committee I entertain the very greatest respect. He is an able, conscientious, patriotic Democrat. He has encountered difficulties and made sacrifices, and endured disappointments, which should earn him the sympathy, rather than the criticism, of his party associates. But, with submission, I think he has been forced by pressure, and not by his own consent, to bring in a measure that strikes a blow at the cause of genuine Tariff Reform, and may set the policy of revenue only back for many 220years to come. It is far, very far, from a measure that can be truthfully described as embodying the idea of ‘a Tariff-for-revenue only.’ It is merely better than the McKinley Bill in degree, not in kind, and if Protectionism is ever to be dislodged, I doubt the Trojan-horse stratagem to which it seems to incline. We live in the age of Carnegies and Goulds, not in that of Priam and ?neas.”
But the bill Mr. Wilson reported was better from a Democratic point of view than the one sent to the Senate early in February. The chief difficulty encountered in the passage through the House he hinted at in an anecdote he told just before the bill was voted on.
“When Sir Robert Peel was just entering upon his work of tariff reform in England,” said Mr. Wilson, “he read to the House of Commons a letter that had been sent him by a canny Scotch fisherman. The writer protested against lowering the duty on herrings, for fear, as he said, that the Norwegian fisherman might undersell him; but he assured Sir Robert, in closing the letter, that in every respect except herrings he was a thoroughgoing free-trader. I trust that no Democrat to-day will be thinking more about his herrings than the cause of the people.”
It was not the “herrings” which had found their way into the bill, however, which caused the largest number of Democrats to hesitate over it. They were all accustomed to them. It was a greater innovation, an amendment providing for a tax on all incomes of over $4000. Mr. Wilson had not approved of it, he had believed it inexpedient; but when the committee decided otherwise, he threw in his fortunes loyally with them. “I have never been hostile to the idea of an income tax,” he said. “It has been opposed here as class legislation; it is nothing of the kind, Mr. Speaker; it is simply an effort, an honest first effort, to balance the weight 221of taxation on the poor consumers of the country who have heretofore borne it all. Gentlemen who complain of it as class legislation forget that during the fifty years of its existence in England it has been the strongest force in preventing or allaying those class distinctions that have harassed the governments of the Old World.”
The bill was passed, “herrings,” income tax, and all, on February 1, 1894, and was at once sent to the Senate. So sharp had the criticism of the bill been that the Democratic caucus appointed a sub-committee of three to go over it and make a more representative Democratic measure, before it should be reported. This committee was made up of Jones of Arkansas, Vest of Missouri, and Mills of Texas. Colonel Mills had been elected to the Senate the fall before. Although not a member of the Finance Committee, he was placed on the sub-committee. After three weeks’ hard and incessant work, the bill was reported to the Democratic caucus, and here a strong opposition at once developed, an opposition so obstinate that it was obvious it would defeat the bill if it could not be satisfied. The leaders of this faction were Senators Arthur P. Gorman of Maryland and Calvin S. Brice of Ohio. These gentlemen had organized so solidly a small number of their party colleagues, dissatisfied with the reductions the bill made on articles in which they were interested, that they were able to say to the Committee that unless their demands were satisfied no bill should pass. A look at the make-up of the Senate shows how easily they could carry out their threat. There were in the body thirty-eight Republicans, forty-four Democrats, and four Populists, the latter voting on the tariff with the Democrats. Five votes diverted from the forty-four would, if the Republicans voted solidly, as they were expected to do, give a majority of one against the bill. Messrs. Gorman and Brice could show the five votes. One of 222these was that of David J. Hill of New York, who had given notice that he would in no case support a measure carrying an income tax. The result of this alignment was that the bill was revised under the direction of Senators Gorman and Brice and reported to the Senate with some 634 amendments.
As an illustration of the kind of reconstruction which went on, take the sugar schedule. It is an illuminating example of tariff-making as practised by the Senate of the United States, both then and now. We have seen what the McKinley Bill did for raw sugar,—made it free, but gave bounties to the home sugar-growers equivalent to two cents a pound. As for refined sugar, all grades from No. 16, Dutch Standard, upward, were allowed one-half cent a pound, which was undoubtedly a pure gratuity to the sugar trust. Formed in 1887, with a capital of $50,000,000, the stock of this organization had not been listed on the New York stock exchange until February of 1889. When the McKinley Bill was first brought into the House in January of 1890, sugar certificates were worth fifty cents on the dollar. Their rise between that date, when it looked as if refined sugar would be given no duty, and the date in May, when the one-half cent was fixed, was told three years later on the witness stand by a Senator of the United States who was familiar with operations of this sort, Calvin S. Brice of Ohio:
“During the month of January,” said Mr. Brice, “sugar stock fluctuated between 50 and 60, with as wide or wider fluctuations in each of the four following months. So then when the bill had passed the House of Representatives and had been favorably considered and settled in the Senate Finance Committee in May, the sugar trust certificates had advanced to 95, an advance of 45 points or $22,500,000 computed on the capital of the sugar trust, or $33,750,000 if the other $25,000,000 which were added a few months afterwards as representing the Spreckels, Harrison, 223and Knight refineries are taken into account. Du............