The Tariff in Our Times

by Ida M. Tarbell

“You are confronted at the threshold of your legislative duties,” he wrote Congress, “with a condition of the national finances which imperatively demands immediate and careful consideration. The amount of money annually exacted through the operation of present laws, from the industries and necessities of the people, largely exceeds the sum necessary to meet the expenses of the Government.... This condition of our Treasury is not altogether new; and it has more than once of late been submitted to the people’s representatives in the Congress, who alone can apply a remedy. And yet the situation still continues with aggravated incidents, more than ever presaging financial convulsion and widespread disaster.... If disaster results from the continued inaction of Congress, the responsibility must rest where it belongs.”

He set down the income, the expenses, the unusual efforts made to dispose of the surplus, and after all was done, he told them another June would probably see $140,000,000 more in the Treasury than was needed, “with no clear and undoubted executive power of relief.” All of the suggestions before him for getting rid of the surplus: that is, purchasing at a premium bonds not yet due; refunding the public debt; depositing the money in banks throughout the country for use, he believed to be unwise and extravagant. What was needed was something deeper than expedients for spending money, it was stopping the inflow by removing the cause. What was the cause? Why, unnecessary taxation, of course. “Our scheme of taxation by means of which this needless surplus is taken from the people and put into the public treasury,” Mr. Cleveland wrote, “consists of a tariff or duty levied upon importations from abroad, and internal-revenue taxes levied upon the consumption of tobacco and spirituous and malt liquors. It must be conceded that none of the things subjected to internal-revenue taxation are, strictly speaking, necessaries. There appears to be no just complaint of this taxation by the consumers of these articles, and there seems to be nothing so well able to bear the burden without hardship to any portion of the people. But our present tariff laws, the vicious, inequitable, and illogical source of unnecessary taxation ought to be at once revised and amended.”

And Mr. Cleveland set out to explain clearly to the people why, in his opinion, the adjectives he applied to the tariff were not too strong. The argument is important. It was the reason of an honest and candid man for the faith within him and it was destined to convince masses of people and to be the accepted argument of a majority of his party in years of future struggling on the question. The gist of it was that the tariff is really a tax,—that is, the price of the imported article one buys is higher by the amount of the duty, and this duty makes it possible for people who are manufacturers of the same kind of articles as those imported to sell them for a price approximately equal to that demanded for the imported goods. In the first case the tax or duty goes to the government, in the other case to the domestic manufacturer. “It is said that the increase in the price of domestic manufactures resulting from the present tariff is necessary in order that higher wages may be paid to our working-men employed in manufactories, than are paid for what is called the pauper labor of Europe.” Now out of a population of 50,155,783, 2,623,089 persons are employed in such manufacturing industries as are claimed to be benefited by a high tariff. “To these the appeal is made to save their employment and maintain their wages by resisting a change.... Yet with slight reflection they will not overlook the fact that they are consumers with the rest.... Nor can the worker in manufactures fail to understand that while a high tariff is claimed to be necessary to allow the payment of remunerative wages it certainly results in a very large increase in the price of nearly all sorts of manufactures, which in almost countless forms he needs for the use of himself and his family. He receives at the desk of his employer his wages, and perhaps before he reaches his home is obliged, in a purchase for family use of an article which embraces his own labor, to return in the payment of the increase in price which the tariff permits, the hard-earned compensation of many days of toil.”

Mr. Cleveland felt strongly that it was to the 7,670,493 farmers in the country that the tariff worked particular injustice. Seeking an illustration of his idea he went back to his boyhood in New York State, when every farmer he knew had a few sheep; when he himself wore a suit of homespun wool—the very odor of which he said he remembered! What good were these farmers getting from the wool tariff?

“I think it may be fairly assumed,” he wrote, “that a large proportion of the sheep owned by the farmers throughout the country are found in small flocks numbering from twenty-five to fifty. The duty on the grade of imported wool which these sheep yield is ten cents each pound if of the value of thirty cents or less, and twelve cents if of the value of more than thirty cents. If the liberal estimate of six pounds be allowed for each fleece, the duty thereon would be sixty or seventy-two cents, and this may be taken as the utmost enhancement of its price to the farmer by reason of this duty. Eighteen dollars would thus represent the increased price of the wool from twenty-five sheep, and thirty-six dollars that from the wool of fifty sheep; and at present values this addition would amount to about one-third of its price. If upon its sale the farmer receives this or a less tariff profit, the wool leaves his hands charged with precisely that sum, which in all its changes will adhere to it, until it reaches the consumer. When manufactured into cloth and other goods and material for use, its cost is not only increased to the extent of the farmer’s tariff profit, but a further sum has been added for the benefit of the manufacturer under the operation of other tariff laws. In the meantime the day arrives when the farmer finds it necessary to purchase woollen goods and material to clothe himself and family for the winter. When he faces the tradesman for that purpose he discovers that he is obliged not only to return, in the way of increased prices, his tariff profit on the wool he sold, and which then perhaps lies before him in manufactured form, but that he must add a considerable sum thereto to meet a further increase in cost caused by a tariff duty on the manufacture. Thus in the end he is roused to the fact that he has paid upon a moderate purchase, as a result of the tariff scheme which when he sold his wool seemed so profitable, an increase in price more than sufficient to sweep away all the tariff profit he received upon the wool he produced and sold.

“When the number of farmers engaged in wool-raising is compared with all the farmers in the country, and the small proportion they bear to our population is considered; when it is made apparent that, in the case of a large part of those who own sheep, the benefit of the present tariff on wool is illusory; and, above all, when it must be conceded that the increase of the cost of living caused by such tariff becomes a burden upon those with moderate means and the poor, the employed and unemployed, the sick and well, and the young and old, and that it constitutes a tax which, with relentless grasp, is fastened upon the clothing of every man, woman, and child in the land, reasons are suggested why the removal or reduction of this duty should be included in a revision of our tariff laws.”

One of the most significant parts of Mr. Cleveland’s message from the point of view of present-day developments is that in which he pointed out the relation of the tariff to the trusts. By this time (1887) the movement to prevent any lowering of domestic prices of the protected articles by natural-competition was already strong and alarming. The sugar trust, the National Lead Trust Company, the National Linseed Oil Trust, the Copper Syndicate, the association of steel men, the combinations in wax, rubber goods, oil cloth, and dozens of other highly protected articles, were worrying the whole country. “It is notorious,” Mr. Cleveland wrote, “that competition is too often strangled by combinations quite prevalent at this time, and frequently called trusts, which have for their object the regulation of the supply and price of commodities made and sold by members of the combination. The people can hardly hope for any consideration in the operation of these selfish schemes.... The necessity of combination to maintain the price of any commodity to the tariff point, furnishes proof that some one is willing to accept lower prices for such commodity, and that such prices are remunerative.”

Mr. Cleveland did not neglect either to touch upon another feature of the protective trust which was causing uneasiness and of which he was soon to learn much more than he knew then, that was, the measures being taken to prevent any revision at all. “So stubbornly have all efforts to reform the present condition been resisted by those of our fellow-citizens thus engaged (in protected industries) that they can hardly complain of the suspicion entertained to a certain extent that there exists an organized combination all along the line to maintain their advantage.”

Little by little with care and pains the message was beaten out. The greatest caution was taken to have it exact. For example, after the illustration on the farmer and his wool was written, Mr. Cleveland became concerned for his figures. He knew twenty-five to fifty was the right average for a farmer’s sheep in New York State, but how about Ohio? He called in a member of the bureau of statistics, and was told the average Ohio flock was between twenty and forty. And as he verified figures he qualified statements, reiterating his assurance that no revision which would destroy any business was contemplated—none which would throw labor out of work or lower its wages, that no doctrinal discussion was sought. “It is a condition which confronts us—not a theory,” was his famous phrase. And most solemnly did he beg Congress to approach the question “in a spirit higher than partisanship, to consider it in the light of that regard for patriotic duty which should characterize the action of those intrusted with the weal of a confiding people.”

Throughout the whole period of composition of the message Mr. Cleveland took no one into his confidence. Finally, one day after it was complete, Mr. Carlisle called on some business. When he had finished Mr. Cleveland said: “Carlisle, I want to read you something.” It was his message. He had decided to present it practically as it was, he said, but he was afraid he had made it too simple. He wanted it perfectly dignified. Would Mr. Carlisle listen to it and make any suggestions he might have? Walking up and down, Mr. Carlisle listened attentively. Once or twice he broke in, correcting what he believed to be a too general statement. Thus Mr. Cleveland had written, “The majority of our citizens who buy domestic articles of the same class (as imported articles) pay a sum equal to the duty to the home manufacturer.” Mr. Carlisle did not think they paid the full amount of the duty. He believed usually it was a little less. Mr. Cleveland had better say “substantially equal.” Mr. Cleveland wrote finally, “at least approximately equal.” Beyond a few suggestions of this kind Mr. Carlisle had nothing but hearty approval for the message.