“Tariff reform is still our purpose. Though we oppose the theory that tariff laws may be passed having for their object the granting of discriminating and unfair governmental aid to private ventures, we wage no exterminating war against any American interests. We believe a readjustment can be accomplished, in accordance with the principles we profess, without disaster or demolition. We believe that the advantages of freer raw material should be accorded to our manufacturers, and we contemplate a fair and careful distribution of necessary tariff burdens rather than the precipitation of free trade.
“We anticipate with calmness the misrepresentation of our motives and purposes, instigated by a selfishness which seeks to hold in unrelenting grasp its unfair advantage under existing laws. We will rely upon the intelligence of our fellow-countrymen to reject the charge that a party comprising a majority of our people is planning the destruction or injury of American interests; and we know they cannot be frightened by the spectre of impossible free trade.”
Mr. Cleveland was inaugurated in March of 1893, but tariff reform was not the first work before him. The Silver Question was the more pressing, and the extra session he called for August had as its business the repeal of the purchasing clause of the Silver Bill which the Republicans had adopted in 1890, and by which they had bought a part of the votes for the McKinley Bill. The extra time of this session was utilized to begin work on the tariff. More loudly than ever the public demanded its reform. Nothing that had been promised that the McKinley Bill would do had been done, nothing but reducing the surplus—and that had been overdone. The combination of free sugar, prohibitive tariffs, and reckless spending with purchasing bonds not yet due at a premium, had reduced it to over $105,000,000 in the year the bill was adopted, to $2,500,000 in the year Mr. Cleveland was elected and a deficit was ahead; in fact, Mr. Cleveland inherited a deficit which the fiscal year after his inauguration had reached nearly $70,000,000. He also had inherited a business depression, the culmination of which came in the first summer of his administration, and along with the deficit and panic a series of labor troubles equal to those of the ’80’s. The McKinley Bill had failed utterly to do the two things which its makers had oftenest declared it would do, preserve prosperity and satisfy labor. Steadily after its passage depression grew. In 1892 the labor troubles of our country were as acute as in any year of our history, and these troubles were in the highly protected industries, in iron, steel, wool, and cotton. The McKinley Bill was not the cause of the depression, as the Democrats argued. The world was in panic. One of those periodic disturbances which sweeps the globe, a logical result of man’s bungling with the laws of trade, had started. That we did not feel the acute pangs of this disturbance as soon as Europe was due to the stimulants we had been taking in the way of high tariffs and cheap money. When they wore off, as they quickly did, our condition was the worse for the delay. A few months after Mr. Cleveland’s election the depression and unrest culminated in the panic of ’93. There has always been an effort to shift the responsibility of this disturbance on the Democrats. The panic of ’93 was caused, so Republican orators have repeated for eighteen years, by alarm at the prospect of a Democratic revision of the tariff. There was never a serious charge with less foundation. That panic was headed directly towards us long before Mr. Cleveland’s nomination. A McKinley bill could not stop it; but it did make it the more acute when it came, by the very fact that it had helped free silver to hold it back.
By utilizing the extra session, the Ways and Means Committee had a bill ready for the regular session which began in December, 1893. The chairman now at the head of the Committee was James Lyne Wilson of West Virginia. His appointment to succeed Mr. Springer, who had engineered the “pop-gun” bills, had been particularly satisfactory to the tariff-for-revenue only Democrats. Mr. Wilson was a man of fifty, an educated gentleman, who had been, in turn, a Confederate soldier, a practising lawyer, and a college president. Through it all he had kept alive a disposition to politics. He had written and spoken on whatever public question was uppermost. He had attended conventions, and served as a delegate, a “scholar in politics.” Finally, this interest and activity took him to Congress, where his sound economic ideas and his skill in presenting them had recommended him to the best element in his party, Cleveland, Carlisle, and Mills. In 1884 he aided Carlisle in his fight against the Randall faction. In 1888 he was put on the Ways and Means Committee, where he served Mr. Mills excellently. It has been customary to speak of Mr. Wilson as impractical and academic, but the bill he brought in in December, 1893, far from being a schoolmaster’s application of his own theories, was distinctly practical. The bill was not what he had hoped to make it. Mr. Wilson said in his report: “With the tariff, as with every other long-standing abuse that has interwoven itself with our social and industrial system, the legislator must always remember that in the beginning temperate reform is safest, having in itself the principle of growth.” The first step he had had in mind was to take taxes from the materials of industry. In Mr. Wilson’s judgment it was the higher cost of raw materials rather than higher wages which hampered American manufacturers. Therefore the Wilson Bill made wool, coal, iron-ore, hemp, and flax free. To “help the farmers” duties were taken from agricultural machinery, from cotton bagging, from salt, and from binding twine. An effort was made to do away with all specific duties. On manufactured goods there was no severe reduction: from one-third to one-half on window glass; 25 per cent on steel rails; lower rates on what Mr. Wilson called the “bogus industry” of making American tin plate; one-fourth cent per pound on refined sugar instead of one-half.
The bill was a grave disappointment to the tariff-for-revenue only Democrats. It did not go far enough, complained Mr. Mills in an article in the North American Review for February, 1894. It was only “a Sabbath Day’s journey on the way to reform.” He would have put every item in the chemical schedule on the free list. He would not only have made ores free, but pigs, bars, bloomers, slabs, ingots, sheets, and plates, that is, all materials which had been advanced to a first or second stage towards manufacture. On the same principle he would have made not only wool and hemp free, but yarns and fibres. Mr. Mills was particularly disturbed because Mr. Wilson had not equalized the import duty and the internal taxes on beer, whiskey, and tobacco. He believed these three should bear the brunt of taxation. As it was then, the internal tax was low and the duties very high. The brewers, distillers, and cigar-makers paid low taxes, and, cut off from foreign competition by high duties, kept up prices. Colonel Mills reckoned that under the McKinley Bill the duty on imported cigars amounted to $70.44 a thousand, the internal tax was $3.00 per thousand. He wished to make each $6.00. This would give revenue and cheaper cigars at once. At the same time it would check the tendency to combine.
A more severe critic than Colonel Mills was Mr. Watterson. In a speech in Louisville in January, he said:
“I have read with exceeding care and great concern, the reports accompanying the newly-introduced measure, of Tariff revision. The Democratic report begins by a masterly declaration of Tariff-for-revenue only logic, to end in an actual exposition of Protectionist practice. For the Chairman of the Ways and Means Committee I entertain the very greatest respect. He is an able, conscientious, patriotic Democrat. He has encountered difficulties and made sacrifices, and endured disappointments, which should earn him the sympathy, rather than the criticism, of his party associates. But, with submission, I think he has been forced by pressure, and not by his own consent, to bring in a measure that strikes a blow at the cause of genuine Tariff Reform, and may set the policy of revenue only back for many years to come. It is far, very far, from a measure that can be truthfully described as embodying the idea of ‘a Tariff-for-revenue only.’ It is merely better than the McKinley Bill in degree, not in kind, and if Protectionism is ever to be dislodged, I doubt the Trojan-horse stratagem to which it seems to incline. We live in the age of Carnegies and Goulds, not in that of Priam and Æneas.”
But the bill Mr. Wilson reported was better from a Democratic point of view than the one sent to the Senate early in February. The chief difficulty encountered in the passage through the House he hinted at in an anecdote he told just before the bill was voted on.
“When Sir Robert Peel was just entering upon his work of tariff reform in England,” said Mr. Wilson, “he read to the House of Commons a letter that had been sent him by a canny Scotch fisherman. The writer protested against lowering the duty on herrings, for fear, as he said, that the Norwegian fisherman might undersell him; but he assured Sir Robert, in closing the letter, that in every respect except herrings he was a thoroughgoing free-trader. I trust that no Democrat to-day will be thinking more about his herrings than the cause of the people.”
It was not the “herrings” which had found their way into the bill, however, which caused the largest number of Democrats to hesitate over it. They were all accustomed to them. It was a greater innovation, an amendment providing for a tax on all incomes of over $4000. Mr. Wilson had not approved of it, he had believed it inexpedient; but when the committee decided otherwise, he threw in his fortunes loyally with them. “I have never been hostile to the idea of an income tax,” he said. “It has been opposed here as class legislation; it is nothing of the kind, Mr. Speaker; it is simply an effort, an honest first effort, to balance the weight of taxation on the poor consumers of the country who have heretofore borne it all. Gentlemen who complain of it as class legislation forget that during the fifty years of its existence in England it has been the strongest force in preventing or allaying those class distinctions that have harassed the governments of the Old World.”