The Tariff in Our Times

by Ida M. Tarbell

That members of the Republican party should dare in his presence to talk such doctrine was gall and wormwood to Mr. Stevens, and he flung at them, and at Mr. Kasson particularly, an epithet which in his mouth was only one degree less opprobrious than that of “slave-holder” and “rebel”—“free trader,” and he could prove it, for here was Mr. Kasson’s name on one of the circulars of the Free Trade League. Mr. Kasson did not deny the charge: “I have the distinguished honor,” he replied, “of being a councillor-elect to it, and I am giving my counsel to it (the League), and to all the people of the United States.”

The bill passed the House by a large majority—the high duties on farm products which the Westerners asked tacked to it. It was evident that Congress, as a whole, had broken with the avowed tariff policy of the past 20 years.

It was the middle of July, 1866, when the bill reached the Senate—too hot for tariffs, the Senators decided. It was several months indeed before it came before them. Along with it came a bill prepared by Mr. Wells, who had been greatly disturbed by the outbreak of high protectionism. A moderate protectionist himself—he appreciated the injustice and the dangers in recklessly and generally increasing duties. He had carefully studied the schedules, and he knew how inevitably disaster must follow to some interests from the sweeping changes proposed. He accordingly prepared a bill much more moderate in its duties, which he claimed would give the necessary revenue and at the same time protect as far as was just. It met the hearty approval of the Senate, where there had been much sarcasm spent on the House bill, principally by the Republicans themselves. “The idea has seemed to prevail of late,” said Mr. Fessenden, “that if anybody choose to start a new manufacture by way of experiment, thinking he can succeed in it, the duty of this country, whatever the effect on commerce, or whatever the taxation on individuals, is to place duties which will prevent the importation of that article if it interferes with the manufacture started.... Is it worth while,” he asked, “to prohibit the importation of all articles and end our relations with foreign countries?”

Mr. Wells’s bill was made an amendment to the revised House bill, and sent back. Mr. Morrill advised its acceptance, and promptly. The time had come when, in his opinion, it was “reasonable to have an unreasonable tariff.” But there were few of the members, particularly of the Western members, who agreed with Mr. Morrill. The bitter feeling that the East was legislating for itself to the injury of the farmer broke out hotly. A genuine struggle of sections followed, to the disgust and alarm of Stevens, who knew that if the Westerners could not or would not accept the “home market” argument, high protection was a lost cause. That his own side should imperil the bill was particularly trying to him. “If the gentlemen who are in favor of a tariff bill hold their tongues and vote,” he snarled, “letting the other side do the talking, they may get a tariff, but they never will if they keep up their debate.” But they would not hold their tongues, and they did not get the bill. In the general dissatisfaction it failed. But high protection did not end with it. The failure to pass the bill was the signal for a move of far-reaching consequences.

The morning after the House dropped the bill Mr. John Sherman asked the Senate to consider a measure for raising revenue by putting up the duties on wool and woollen goods. There was a general outcry. Where did such a bill come from—who had ever heard of it—how could Mr. Sherman expect a measure plainly in the interest of a single industry to be properly considered, when Congress was to expire “day after to-morrow,” and more and more of the same kind, including some caustic remarks about the influence a private industry must have to force such a measure before the Senate at such a time.

As a matter of fact the bill now so suddenly sprung on the Senate had been lying in wait for some seven months for just such a contingency as the failure of the tariff bill—a fine example of business foresight! This was its history: In July, 1866, when the Senate postponed taking up the tariff Judge Bingham of Ohio had brought into the House a bill providing for higher duties on wool and woollens. It was evidently framed to take care of the wool-growers of his state. Certain woollen manufacturers, who had known nothing of his intention, saw the danger of the bill antagonizing both Congress and those manufacturers who were advocating free wool, and persuaded Judge Bingham to allow it to be sidetracked until the fate of the general tariff was decided. This was done, the bill being quietly passed on to the Senate, where nobody but Mr. Sherman seems to have known or remembered anything about it. When the tariff bill dropped, the wool interests immediately asked that their special measure be presented, and Mr. Sherman agreed. Part of the dismay that the Senate showed at the presentation of the measure was no doubt due to its familiarity with the solid organization and effective lobbying of the wool manufacturing interests of that day as well as with their reputation for unsavory lobbying in the past. It was not yet forgotten how in the forties and fifties the wool interests had combined with the Pennsylvania iron men to force Western representatives, who at that time were all working for land grants for railroads, to vote for their tariffs. The scandal of 1857 in the fight for free raw wool was not yet forgotten. The charge of corruption at that time had even forced a Congressional investigation in which it was shown that one Boston wool firm had spent some $87,000 of its own money besides some thousands of other people’s. These sums they charged frankly on their books “to expenses in securing the passage of the tariff of 1857.” The investigation showed that the agent of the manufacturers confiscated most of the money intrusted to him; that none of it, as far as shown, ever reached a Congressman, though a considerable sum did go to editors and “influential persons”—such was $5000 to Mr. Thurlow Weed, for collecting statistics and using arguments!

The insistent demands of the wool men, for years, had been such, that even good Mr. Morrill had grown tired of them. “Their evils somehow never disappear,” he said, querulously, when he presented his bill in ’66, and he went on then to say that never since he had been in Congress had so large a number of petitions for help been received as had been coming from the wool interests East and West. The wool men, as a matter of fact, were organized then as probably no interest in the country had ever been before. The chief organization was the National Association of Wool Manufacturers, having at its head as able a lobbyist and promoter as the country has ever produced—this was John L. Hayes—a New Englander—a graduate of Dartmouth and of the Harvard Law School, a man of wide and varied experience. He had been counsel for Canada when the reciprocity treaty of 1854 was framed. He had founded iron works in Maine and promoted a railroad in Mexico. He had been in politics. He had held office in Washington. He was a natural scientist of no mean order—a man versatile, knowing, engaging, and energetic. Mr. Hayes took charge of the interests of the wool manufactures in 1865, and he carried on a splendid campaign for higher tariffs. The only hitch in it had been the necessity of combining with the wool-growers. The decline in the price of wool after the war had lead the latter to conceive the idea that if all foreign wool could be shut out of the country, the domestic grower would be able to monopolize the market—at his own price. To accomplish this they had organized to fight for a duty which they meant should be prohibitive. The disadvantage at which the manufacturer would find himself, should such a measure pass, was obvious, but to fight for free wool was to antagonize a group of unusual political power. Ohio was the chief centre of this group, but it could count on the support of New York, Pennsylvania, and Michigan. Mr. Hayes realized that if the wool manufacturers should succeed in keeping their raw material free, the wool-growers in retaliation might force low duties on woollens. It seemed to him and to the association he directed better policy to work with rather than against their opponents, and largely through his influence the two conflicting interests were brought together at a convention held in Syracuse, New York, early in 1866. There was an attempt to convince the sheep men that free raw wool would benefit them more than any tariff, but they refused the argument. They must have real protection. The two interests succeeded finally in working out an agreement which satisfied each. The basis of this agreement was, as afterwards stated by Commissioner Wells, “that the duty on raw or unwashed wools and hair, other than wools adapted for carpets, should be fixed at rates varying from ten to twelve cents per pound, and from ten to eleven per cent ad valorem. In order, then, to compensate the manufacturer for such a prospective enhancement of the price of his raw material, it was agreed that, in consideration of the fact that four pounds of the cheapest imported wool (mestiza), paying an aggregate duty of forty-six cents, were sometimes employed in the fabrication of a pound of finished cloth, the duty on cloth should be fifty cents per pound, and on other fabrics of wool of varying weight a duty in like proportion. In order, next, to give the manufacturer protection against his foreign competitors, 25 per cent ad valorem was added; and in order to further compensate for the payment of an internal revenue tax of 6 per cent, which tax was repealed in the succeeding year, 10 per cent more was added, thus making the aggregate duty on shawls, cloths, and woollen goods generally, fifty cents per pound and thirty-five per cent ad valorem. It will thus be seen that if the manufacturers, as is often alleged, did not enter into the arrangement for an increase in duty through their own seeking, they nevertheless managed to secure full compensation for all that was granted to the wool-growers; and in addition to that, through force of subsequent circumstances, an additional protection in excess of what, according to their showing, they considered necessary.”

This was the basis of the wool schedule which had been embodied in Mr. Morrill’s bill and also of the bill which Mr. Sherman had sprung on the Senate. That the Senate did not like the wool bill was evident. On all sides there was strenuous opposition to protecting one industry and not another, and yet the bill went through. It is worth nothing in view of the support of the scandalous wool schedule of 1909 by both the Senators from Massachusetts, that both Senators Summer and Wilson of Massachusetts voted against the wool bill of 1867 and that Senators Morrill and Fessenden absented themselves. A few hours before the end of the session the wool bill was received by the House and passed. But its fate was by no means decided. It still must have the President’s signature, and the President was Andrew Johnson. Johnson was in poor temper to favor any measure sanctioned by “Thad Stevens and his gang.” He had just vetoed one of Stevens’s pet measures, and it was very likely he would veto any bill favoring a special interest, for his traditions and sympathies were all with a liberal commercial policy. Mr. Hayes knew this, and he and his friends collected outside the door of the Capitol chamber, where, as the custom is, the President signs bills on the last night of a session. Late in the evening it was rumored that the bill would be vetoed. Hayes hurriedly summoned aid,—Bingham of Ohio, the framer of the bill, the Secretary of the Treasury, and the Attorney-General. What pressure this force brought to bear on Mr. Johnson is unknown, but at a minute before twelve, according to Mr. Hayes’s story, the President put his name to the wool bill. It was a great triumph for Mr. Hayes. “The wool bill of 1867 and its enactment into law,” says one of the protectionist organs, “were chiefly due to his personal influence with leading members of both branches of Congress.”

The passage of the wool bill proved that an industry, if strongly enough organized and headed by a sufficiently able and respectable lobbyist, could secure from the Congress of the United States protective favors which could not be secured for the whole mass of industries. The lesson had immediate effect. The next year (1868) Congress was asked to pass a similar bill, favoring the Lake Superior copper industry. The rich mines in that section had been in operation for several years, and in the last two or three years their output had been increasing rapidly. As was natural, there had been a great amount of speculation in copper mining stocks. The public had subscribed almost as much to wildcat and bogus copper schemes in this period as to the same kind of oil schemes. Probably something like $20,000,000 had been actually invested in the region, there were forty or fifty thousand persons settled in the district, and there was a considerable fleet on the Lakes in the copper-carrying trade. It was the beginning of a great industry. Now for many years there had been in Maryland, Connecticut, and Massachusetts copper-smelting works which used ores from Chile and Cuba mixed with ores from the Eastern states. Since 1864 the Eastern concerns had paid a duty of 5 per cent on foreign copper ore. The Lake Superior interests had been suffering for several months from decreased prices, due largely to a great increase in the world’s copper output. They had asked relief in 1866, and a higher duty had been accorded them in the bill that failed. They now concluded, as the wool men had, that if they could not get what they wanted in one way they would in another, and in July, 1868, brought in a bill asking for a duty equal to about 25 per cent on copper ore. It was a rate which, if granted, was bound to put the New England and Baltimore works out of commission, put an end to the carrying trade with Chile and Cuba, raise the price of copper so that American-built ships could not get their copper bottoms in our ports, and drive many industries then using copper to cheaper substitutes, like galvanized iron, sheet tin, zinc, or lead, and put still others to an expense which, as they would have no compensating tariffs to protect them, would greatly cripple them. Excited debate followed the bill everywhere, especially in the Senate, where Zach Chandler fought for it. The time had come, he declared, when the manufacturers were not going to have all the protection; miners and farmers were going to have it now. There was not an article made in Connecticut, which was opposing this bill, which was not protected, “not an article from a wooden button to a brass clock or from carpetings to Jew’s harps.” If you don’t give protection to us this way (through special bills), we’ll take a horizontal tariff for our copper and lumber and wheat and wool, and then if “your clocks will not run, let them stop.” His picture of the suffering of the miners following the closing of the mines no doubt won many to the measure. It was because of that, said Mr. Morrill, that he should vote for it, though he believed it would help speculation in copper stocks more than the suffering miners of Michigan, and that it was a blow to ship-building and commerce. Would it not be better, suggested Mr. Grimes of Iowa, to organize a branch of the Freedman’s Bureau and send it to Michigan to take care of the miners?

The bill finally passed and by large majorities, and in February, 1869, went to President Johnson. Whatever the influences which had induced Johnson to sign a bill which must have been so repugnant to him as the wool bill, there was little chance that they would have any effect upon him now. His term was almost over. In a few days he was to yield the White House to “that little fellow Grant,” as he called him, and go back to his Tennessee home to hoe potatoes and discuss politics with his neighbors in his son-in-law’s village store.