A few phases of the attempt at tariff reduction indicate the extent to which political decay and especially Democratic demoralization had gone. As it passed the House, the Wilson bill left both raw and refined sugar on the free list. This was unsatisfactory to the Louisiana sugar growers, who desired a protective duty on the raw product, and was objected to by the Louisiana senators. On the other hand, the American Sugar Refining Company, usually known as the "Sugar Trust," desired free raw materials but sought protective duties on refined sugar. In the Senate, a duty was placed on raw sugar, partly for revenue and partly to satisfy the Louisiana senators. On refined sugar, rates were fixed which were eminently satisfactory to the Trust. Rumors at once began to be spread broadcast over the country that the sugar interests had manipulated the Senate. The people were the more ready to believe charges of this sort because of experience with previous tariff legislation and because the Sugar Trust had been one of the earliest and most feared of the monopolies which had already caused so much uneasiness. A Senate committee was appointed, composed of two Democrats, two Republicans and a Populist, to investigate these and other rumors. Their report, which was agreed to by all the members, made public a depressing story. It appeared that one lobbyist had offered large sums of money for votes against the tariff bill on account of the income tax provision. Henry O. Havermeyer, president of the American Sugar Refining Company, testified that the company was in the habit of contributing to the campaign funds of one political party or the other in the states, depending on which party was in the ascendancy; that these contributions were carried on the books as expense; and that they were given because the party in power "could give us the protection we should have." Further, one or more officers of the company were in Washington during the entire time when the tariff act was pending in the Senate and had conferred with senators and committees. Senator Quay testified that he had bought and sold sugar stocks while the Senate was engaged in fixing the schedules and added: "I do not feel that there is anything in my connection with the Senate to interfere with my buying or selling the stock when I please; and I propose to do so." Finally the committee summarized the results of its investigation, taking the occasion to

strongly deprecate the importunity and pressure to which Congress and its members are subjected by the representatives of great industrial combinations, whose enormous wealth tends to suggest undue influence, and to create in the public mind a demoralizing belief in the existence of corrupt practices.

Yet one more drop remained to fill the cup of Democratic humiliation to overflowing. The constitutionality of the income tax had been assumed to have been settled by previous decisions of the Supreme Court, especially that in the case Springer v. United States, which had been decided in 1880, and in which the Court had upheld the law. The new tax was brought before the Court in 1894, in Pollock v. Farmers' Loan and Trust Company. The argument against the tax was pressed with great vigor, not merely on constitutional grounds, but for evident social and economic reasons. Important financial interests engaged powerful legal talent and it became clear that the question to be settled was as much a class and sectional controversy as a constitutional problem. Counsel urged the Court that the tax scattered to the winds the fundamental principles of the rights of private property. Justice Field, deciding against the tax, declared it an "assault upon capital" and a step toward a war of the poor against the rich. There was fear among some that the exemption of the smaller incomes might result in placing the entire burden of taxation on the wealthy. Justice Field, for example, felt that taxing persons whose income was $4,000 and exempting those whose income was less than that amount was like taxing Protestants, as a class, at one rate and Catholics at another. The sectional aspects of the controversy were brought out in objections that the bulk of the tax would fall on the Northeast. The most important point involved was the meaning of the word "direct" as used in the Constitution in the phrase "direct Taxes shall be apportioned among the several States … according to their respective Numbers." If an income tax is a direct tax, it must be apportioned among the states according to population. Unhappily the framers of the Constitution were not clear as to what they meant by the word direct, and specifically they could not have told whether an income tax was direct or not, because no such tax existed in England or America at that time. Hence the Supreme Court was placed in the awkward position of defining a word which the framers themselves could not define, although the uniform practice hitherto had been to regard the income tax as indirect and therefore constitutional, even if not apportioned according to population.

The Pollock case was heard twice. The result of the first trial was inconclusive and on the central point the Court divided four to four. After a rehearing, Justice Jackson, who had been ill and not present at the first trial, gave his vote in favor of constitutionality, but in the meantime another justice had changed his opinion and voted against it. By the narrow margin of five to four, then, and under such circumstances, the income tax provision of the Wilson-Gorman act was declared null and void. Probably no decision since the Dred Scott case, with the single exception of the Legal Tender cases, has put the Supreme Court in so unfortunate a light. Certainly in none has it seemed more swayed by class prejudice, and so insecure and vacillating in its opinion.

Before the question regarding the constitutionality of the income tax was settled, the Democrats reaped the political results of the Wilson-Gorman tariff act. The law went into force on August 27, 1894; the congressional elections came in November. The Democrats were almost utterly swept out of the House, except for those from the southern states, their number being reduced from 235 to 105. Reed was replaced in the speaker's chair; tariff reform had turned out to be indistinguishable from protection; and the Democracy, after its only opportunity since 1861 to try its hand at government, was demoralized, discredited, and in opposition again.

BIBLIOGRAPHICAL NOTE

The election of 1892 is described in the standard histories of the period, and especially well in Peck.

The rise and growth of the Populist movement resulted in a considerable literature of which the following are best: S.J. Buck, The Agrarian Crusade (1920), is founded on wide knowledge of the subject and contains bibliography; F.J. Turner in The Atlantic Monthly (Sept., 1896), gives a brief but keen account; other articles in periodicals are F.E. Haynes, in Quarterly Journal of Economics, X, 269, W.F. Mappin, in Political Science Quarterly, IV, 433, and F.B. Tracy, in Forum, XVI, 240; F.E. Haynes, Third Party Movements (1916), is detailed; M.S. Wildman, Money Inflation in the United States (1905), presents the psychological and economic basis of inflation; J.A. Woodburn, Political Parties and Party Problems (1914); F.L. Paxson, New Nation (1915).

Cleveland's administration is well discussed by D.R. Dewey, National Problems (1907), and by H.T. Peck, who also presents an unusual analysis of Cleveland in The Personal Equation (1898). The income tax is best handled by E.R.A. Seligman, The Income Tax (1914). Cleveland's own account of the chief difficulties of the administration are in his Presidential Problems.

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