On the second point Mr. Mills and his colleague had the completest official study of the cost of production in the United States which had been made up to that time. This study was in the first report ever published by the Bureau of Labor,[[1]] and was made by our first Commissioner, Carroll D. Wright. Mr. Wright showed conclusively how much less a part muscular labor played in the cost of a great bulk of protected articles than was supposed. Since the Civil War machines had displaced men in the making of agricultural implements, until 600 men did what formerly had required 2100; in boots and shoes 100 were doing what had formerly required 500; in carpet making, in cotton weaving, in the lumber business, in the production of metals, in the manufacture of paper, of woollen goods, of tobacco, of silk, of practically everything, indeed, a sweeping displacement of hand labor had taken place and always with a resulting increase of quantity and decrease of labor cost. This was in 1886, and what was then a comparatively new development is to-day an old story, but one far more wonderful. Machines have multiplied and improved in practically every industry, with a resulting decrease in labor cost.
[1]. The Bureau was established by Congress in 1884, President Arthur approving. Mr. Cleveland made the first appointment in January, 1885.
Mr. Mills made an effective argument from Mr. Wright’s report by comparing the labor cost in the manufacture of many leading necessities of life with the duties which the manufacturers were fighting for in the name of labor.
“I find in this report,” said Mr. Mills, “one pair of 5–pound blankets. The whole cost as stated by the manufacturer is $2.51. The labor cost is 35 cents. The tariff is $1.90. Now here is $1.55 in this tariff over and above the entire labor cost of these blankets.... Here is one yard of flannel weighing 4 ounces; it cost 18 cents, of which the laborer got 3 cents, the tariff on it is 8 cents. How is it that the whole 8 cents did not get into the hands of the laborer?... One yard of cashmere, weighing 16 ounces costs $1.38. The labor cost is 29 cents; the tariff duty is 80 cents. One pound of sewing silk costs $5.66; the cost for labor is 85 cents; the tariff is $1.69. One gallon of linseed oil costs 46 cents; the labor cost is 2 cents; the tariff cost is 25 cents. One ton of bar iron costs $31.00. The labor cost is $10.00. The tariff fixes several rates for bar-iron and gives the lowest rate $17.92. One ton of foundry iron costs $11.00; the labor costs $1.64; the tariff is $6.72. None of these tariffs go to the laborer. The road is blocked up. They cannot pass the pocket of the manufacturers. This “great American” system that is intended to secure high wages for our laborers is so perverted that all its beneficence intended for the poor workingman stops in the pockets of his employer and the laborer only gets what he can command in the open market for his work.”
Now admitting that Mr. Mills was too sweeping in his conclusion, there is no escaping the truth or the meaning of the figures. The price of all sorts of necessary manufactured articles was increased by the duties, rarely to their full amount to be sure, but yet much beyond what was necessary to put the domestic manufacturer on an equal footing with the foreigner. Somebody got the extra profit, and it was not the workingman. But the workingman paid the extra price. Mr. Mills illustrated it in this way. “Suppose,” he said, “that a laborer who is earning a dollar a day by his work finds a suit of woollen clothes he can buy for $10.00 without the tariff. Then the suit can be procured for 10 days’ work, but the manufacturer goes to Congress and says, ‘I must be protected against the man buying this cheap suit of clothes,’ And Congress protects him by putting on a duty of 100 per cent, or $10.00. Now it will require the laborer to work twenty days to get this suit of clothes. Now tell me if 10 days of his labor have not been annihilated?”
It fell to William McKinley of Ohio, who for the first time in the Great Debate showed his skill in tariff matters, to answer Mr. Mills. “It is an old story,” he said lightly. “It is found in Adam Smith, but it is not true”; and to prove it was not true Mr. McKinley awakened the House by dragging from his desk a full suit of ready-made clothes. Holding them up triumphantly in one hand, he showed in the other a bill for them. They cost just $10.00. “So you see,” went on Mr. McKinley, “the poor fellow did not have to work 10 days more to get that suit of clothes.” There was “great applause and laughter” on the Republican side and there was talk of having the suit photographed to show in the campaign.
Mr. Mills said nothing, but he began an investigation. He sent to the shop where, according to the bill read by Mr. McKinley, and printed in the Congressional Record, the suit had been bought, and secured one like it. He then traced it to the manufacturer and from him secured an exact analysis of its cost. The result pleased him and he decided to save it for his speech closing the debate, but when the day came Mr. Mills was so full of facts and figures that he was forgetting the suit. His son, Mr. Charles H. Mills, was in the gallery, and realizing the situation passed down a note reading, “Don’t forget McKinley’s suit of clothes.” A smile passed over the Colonel’s face and taking a fresh start he presented the result of his investigation. The gist of his entertaining remarks was that the suit had actually cost to manufacture, tariff aside, just $4.98. The labor cost was $1.65. The tariff on the wool used in the suit was $1.70. Adding this to the $4.98, gave $6.68 and on this sum the manufacturer was allowed a duty of 40 per cent to compensate for the wool tax and also of 35 per cent to protect him against the imported article. The whole cost, plus the three tariffs was $10.71. “Of course,” said Mr. Mills, “the manufacturer had to undersell the foreign suit and to do so he dropped under him 71 cents and sold his $4.98 suit for $10.00 with the help of the tariffs.”
As for Mr. McKinley’s comment that the illustration came from Adam Smith, Mr. Mills had a story to tell. It reminded him, he said, of the small boy who was caught thieving and whose mother in chiding him, said, “Don’t you know it is wrong to steal? Don’t you know what the Bible says?” “Oh, now, mother,” the youngster replied, “that’s an old story. Moses told it 4000 years ago.”
As a matter of fact, Mr. McKinley’s answer to Mr. Mills had been a trick. Mr. Mills had not said that a man could not buy a suit of clothes for $10.00 in the United States; he said that if a tariff of 100 per cent was put on a suit which could be sold for $10.00 without the tariff, a man would pay $20.00 for his suit. Mr. McKinley had diverted attention from the real point simply by holding up a ten-dollar suit in the Halls of Congress. It was characteristic of the way in which the taxation element of the tariff was beginning to be handled that after Mr. Mills’s answer the suit disappeared entirely from the debate; that is, there began at this time a concerted effort on the part of supporters of protection to evade or deny the fact that the tariff was a tax the effect of which was to increase the cost of living. In all the early years this point was met with fairness. The tariff was a tax consented to by a majority of the people because of what they believed to be good and sufficient reasons. Henry Clay called it a tax,—the protectionists who advocated raising the duties in the Civil War called them taxes. The Republican party as a whole admitted them to be taxes in 1872. The tariff Commission of 1883, made up of protectionists, approved by a Republican administration, called them taxes—taxes which had become largely unnecessary for the purposes for which they were laid and therefore unjust.
All through the Great Debate the necessity of stopping the use of the word grew on the Republicans. They sought to replace the obnoxious term which was unquestionably influencing the country by something alluring. The tariff a tax, they cried; why, the tariff is the cause of prosperity; and they set out to force the argument away from the practical questions which Mr. Cleveland’s message had raised,—the question of who, after all, got the profit, the question of the relation of high duties to panics and trusts, to depressions and high prices.