Contemporary American History, 1877-1913

by Charles A. Beard

In accordance with party pledges Mr. Taft called Congress in a special session on March 11, 1909, and after a hotly contested battle the Payne-Aldrich tariff act was passed. The President made no considerable effort to force the hand of Congress one way or the other, and he accepted the measure on the theory that it was the best tariff law that could be got at the time. Indeed, it was pointed out by members of his party that the bill contained "654 decreases in duty, 220 increases, and 1150 items of the dutiable list in which the rates were unchanged." It was also stated that the bill was framed in accordance with the spirit of the party platform which had made no promise of a general sweeping reduction. It was admitted, however, that precise information upon the difference between the cost of production at home and abroad could not have been obtained in time for this revision, but a tariff board was created by law for the purpose of obtaining the desired information, on the basis of which readjustments in schedules could be made from time to time.

On April 9, 1909, the Payne tariff act passed the House, one Republican voting against it and four Democrats from Louisiana voting in favor of it. This vote, however, was of no significance; the real test was the vote on the several amendments proposed from time to time to the original bill, and on these occasions the Democratic lines were badly broken. On April 12, Mr. Aldrich introduced in the Senate a tariff bill which had been carefully prepared by the finance committee of which he was chairman. This measure followed more closely the Dingley law, making no recommendations concerning some of the commodities which the House had placed on the free list, and passing over the subject of income and inheritance taxes without remark. The Aldrich measure was bitterly attacked by insurgent Republicans from the West,—Senators Dolliver and Cummins, of Iowa, La Follette, of Wisconsin, Beveridge, of Indiana, and Bristow, of Kansas,—who held out to the last and voted against the bill, even as amended, on its final passage, July 8. The conference committee of the two Houses settled their differences by July 30, and on August 5 the tariff bill became a law.

There were several features of the transaction which deserve special notice. Very early in the Senate proceedings on the bill, an income tax provision was introduced by Senators Cummins and Bailey, and it looked as if enough support could be secured from the two parties to enact it into law. Although President Taft, in his acceptance speech, had expressed an opinion to the effect that an income tax could be constitutionally enacted notwithstanding the decision of the Supreme Court in the Income Tax cases, he blocked the proposal to couple an income tax measure with the tariff bill, by sending a special message on June 16, recommending the passage of a constitutional amendment empowering Congress to levy a general income tax, and advising a tax on the earnings of corporations. His suggestions were accepted by Congress. The proposed amendment to the Constitution was passed unanimously by the Senate, and by an overwhelming majority in the House,[80] and a tax on the net incomes of corporations was also adopted. A customs court to be composed of five judges to hear appeals in customs cases was set up, and a tariff commission to study all aspects of the question, particularly the differences between cost of production in the United States and abroad, was created.

Revision of the tariff had always been a thankless task for any party. The Democrats had found it such in 1894 when their bill had failed to please any one, including President Cleveland, and when for collateral or independent reasons a period of industrial depression had set in. The McKinley bill of 1890 had aroused a storm of protest which had swept the Republicans out of power, and it is probable that the Dingley tariff of 1897 would have created similar opposition if it could have been disentangled from the other overshadowing issues growing out of the Spanish War. The Payne-Aldrich tariff likewise failed to please; but its failure was all the more significant because its passage was opposed by such a large number of prominent party members. The Democrats, as was naturally to be expected, made all they could out of the situation, and cried "Treason." Even what appeared to be a concession to the radicals, the adoption of a resolution providing for an amendment to the Constitution authorizing the imposition of an income tax, was not accepted as a consolation, but was looked upon as a subterfuge to escape the probable dilemma of having an income tax law passed immediately and submitted to the Supreme Court again.

Notwithstanding the dissensions within his party, Mr. Taft continued steadily to press a legislative policy which he had marked out. In a special message on January 7, 1910, he recommended the creation of a court of commerce to have jurisdiction, among other things, over appeals from the Interstate Commerce Commission. This proposal was enacted into law on June 18, 1910; and the appointments were duly made by the President. The career of the tribunal was not, however, particularly happy. Some of its decisions against the rulings of the Commission were popularly regarded as too favorable to railway interests; one of the judges, Mr. Archbald, of Pennsylvania, was impeached and removed on the ground that his private relations with certain railway corporations were highly questionable; and at length Congress in 1913 terminated its short life.

Acting upon a recommendation of the President, Congress, in June, 1910, passed a law providing for the establishment of a postal savings system, in connection with the post offices. The law authorized the payment of two per cent interest on money deposited at the designated post offices and the distribution of all such deposits among state and national banks under the protection of bonds placed with the Treasurer of the United States. The scheme was applied experimentally at a few offices and then rapidly extended, until within two years it was in operation at more than 12,000 offices and over $20,000,000 was on deposit. The plan which had been branded as "socialistic" a few years before when advocated by the Populists was now hailed as an enlightened reform, even by the banks as well as business men, for they discovered that it brought out secret hoardings and gave the banks the benefit at a low rate of interest—lower than that paid by ordinary savings concerns.

The postal savings system was shortly supplemented by a system of parcels post. Mr. Taft strongly advocated the establishment of such a system, and it had been urged in Congress for many years, but had been blocked by the opposition of the express companies, for obvious reasons, and by country merchants who feared that they would be injured by the increased competition of the mail order departments of city stores. Finally, by a law approved on August 24, 1912, Congress made provision for the establishment of this long-delayed service, and it was put into effect on January 1, 1913, thus enabling the United States to catch up with the postal systems of other enlightened nations. Although the measure was sharply criticized for its rates and classifications, it was generally approved and regarded as the promising beginning of an institution long desired.

While helping to add these new burdens to the post-office administration, Mr. Taft directed his attention to the urgent necessity for more businesslike methods on the part of the national administration in general, and, on his recommendation, Congress appropriated in 1910 $100,000 "to enable the President to inquire into the methods of transacting the public business of the Executive Department and other government establishments, and to recommend to Congress such legislation as may be necessary." A board of experts, known as the Economy and Efficiency Commission, was thereupon appointed, and it set to work examining the several branches of administration with a view to discovering wasteful and obsolete methods in use and recommending changes and practices which would result in saving money and producing better results. Among other things, the Commission undertook an examination of the problem of a national budget along lines followed by the best European governments, and it suggested the abandonment of the time-honored "log-rolling" process of making appropriations, in favor of a consistent, consolidated, and businesslike budget based upon national needs and not the demands of localities for Federal "improvements," regardless of their utility.

Although he was sharply attacked by the advocates of conservation for appointing and supporting as Secretary of the Interior, Mr. R. A. Ballinger, who was charged with favoring certain large corporations seeking public land grants, Mr. Taft devoted no little attention to the problem of conserving the natural resources. In 1910, Congress enacted two important laws bearing on the subject. By a measure approved June 22, it provided for agricultural entries on coal lands and the separation of the surface from the mineral rights in such lands. By another law, approved three days later, Congress made provision for the withdrawal of certain lands for water-power sites, irrigation, classification of lands, and other public purposes. These laws settled some questions of legality which had been raised with reference to earlier executive action in withdrawing lands from entry and gave the President definite authority to control important aspects of conservation.

From the opening of his administration Mr. Taft used his influence in every legitimate way to assist in the development of the movement for international peace. In his acceptance speech, at the opening of his campaign for election, he had remarked upon the significance and importance of the arbitration treaties which had been signed between nations and upon the contribution of Mr. Roosevelt's administration to the cause of world peace. Following out his principles, Mr. Taft signed with France and England in August, 1911, general arbitration treaties expanding the range of the older agreements so as to include all controversies which were "justiciable" in character, even though they might involve questions of "vital interest and national honor." The treaties, which were hailed by the peace advocates with great acclaim, met a cold reception in the Senate which ratified them on March 7, 1912, only after making important amendments that led to their abandonment.