The Tariff in Our Times

by Ida M. Tarbell

The intention of the wool and the iron and steel interests and their allies to force the tariff to the front in the campaign, was frustrated at once by the extraordinary sweep to silver in the Democratic Convention and the revolt to that party of a large body of leading Republicans. If the election was to be won at all, it had got to be won by an unequivocal and whole-hearted stand for the gold standard and to that Mr. McKinley was forced, half-silverite as he was, after a few flat efforts to arouse enthusiasm for the bill of 1890. It was McKinley and the gold standard, not Mr. McKinley and prohibitive tariffs, which was opposed to Bryan and free silver, and in 1896, Mr. McKinley won by the votes of the Gold Democrats. It is probably true that many of them were given to understand that the Republicans would let the tariff alone or at least would not be in a hurry to revise it: at least that claim was made by men of character and intelligence. It was hardly Mark Hanna who could have made such a promise. Mr. Hanna knew too well what his backers in iron and steel and wool expected, and would demand for their contributions. That these contributions were large, there can be no doubt. James M. Swank, the general manager of the Iron and Steel Association, has said that more money was spent to elect Mr. McKinley than had been spent to elect Mr. Harrison, and certainly Mr. Swank was in a position to know.

At all events, the work to which Mr. McKinley called Congress in extra session immediately after his inauguration, on March 4, 1897, was not establishing sound money; it was raising more revenue by duties “so levied upon foreign products as to preserve the home market as far as possible to our producers; to revive and increase manufacturers; to relieve and encourage agriculture; to increase our domestic and foreign commerce; to aid and develop mining and building; and to render labor in every field of useful occupation the liberal wages and adequate rewards to which skill and industry are justly entitled.” Why Mr. McKinley expected a new bill to do what his own had not been able to do, he did not explain.

The new bill was almost ready to report when the extra session was called, for Mr. Dingley and his committee had been at work all of the preceding winter preparing it. A sincere effort was made to give a good bill according to Republican lights. “We expect,” Mr. Dingley wrote Colonel George C. Tichenor, who was assisting him, “to cut nearly all our duties considerably below those of the act of 1890.” In not a few cases, Mr. Dingley accepted the Wilson rates practically as they stood. This was true of the metal and cotton schedules. He felt safe in doing this, because, as he said, they were “really made by the manufacturers.” Throughout the schedules the committee aimed to replace the Wilson specifics by ad valorems and, of course, this caused more or less uncertainty as to whether or not by the change those rates had not been raised more than the committee acknowledged. The Democrats charged that they had, but the fact seems to be that Mr. Dingley sincerely aimed to keep duties nearer, if possible, to the Wilson Bill than to the McKinley Bill. The committee particularly desired to escape the charge of fixing prohibitive duties. This had been done in 1894, professedly to cut down the revenue, and the mischief it had worked the party was not yet forgotten. In spite of the repeated assurances of Mr. Dingley that the extremes of the bill of 1890 were to be avoided, the committee did report many rates as high and a few even higher; for instance, the duties on flax and linen were advanced. A number of the unimportant articles which the old bill had put on the free list were put back in the dutiable list, as were nearly all the important articles made free by the Wilson Bill,—wool, salt, lumber, cotton bagging, cotton-ties, and burlaps.

Works of art had been made free by the Democrats; the Dingley Bill restored the duty. One reason given was that “many objects having no artistic quality or merit whatever, and calculated rather to corrupt than encourage art or culture” were being imported! Foreign books, that is, “books in language other than English,” over twenty years old, engravings, etchings, music, maps, scientific books and periodicals and supplies of all kinds for colleges, libraries, galleries, and laboratories had been allowed to come in untaxed by the Wilson Bill; all these duties were restored by the Dingley Bill. Travellers were again subjected to the irritation of having their luggage overhauled, and the amount of purchases allowed them was reduced to $100.00. This exasperating tax first appeared in the McKinley Bill; here the limit fixed was $500.00. The Democrats dropped the clause but it was now restored. But in spite of these mediæval provisions, the Dingley Bill, when presented to the House on March 19, 1897, was a fairly good protectionist measure, certainly a real improvement on the McKinley Bill. There were fewer prohibitive rates, less contradiction, and less quakery.

In introducing the bill, the Republicans had laid down a program for rushing it through the House by March 31, and this was carried out, under protest, of course. The bill did not come to the Senate from the Finance Committee until May, and it came back with many changes. Mr. Aldrich, the chairman of the committee, claimed that on the whole these changes were downward. He was emphatic in his assertions that moderate duties were expected by the country. It was “thoroughly understood in the last political campaign,” said Mr. Aldrich, “that if the Republican party should be again intrusted with power, no extreme tariff legislation would follow. It was believed, in the changed condition of the country, a return to the duties imposed by the act of 1890 would not be necessary even from a protective standpoint.

“Industrial conditions in this country, with very few exceptions, do not demand a return to the rates imposed by the act of 1890. The bitter contest which is going on among the leading nations of the world for industrial supremacy has brought about improvements in methods and economies in production to an extent which was not thought possible a few years ago. These new conditions must be taken into account in considering the rates to be imposed.”

When the Finance Committee had believed the House rates extreme, Mr. Aldrich said that they had lowered them. A comparison of the bills shows that this was the fact in the case of the chemical, the earthen ware, and the glass and metal schedules. There were also reductions on certain parts of the wool schedule. While the Senate amendments, on the whole, aimed at lowering rates, they also aimed, like the House bill, to protect everything which asked protection. The sugar schedule had undergone material changes and mysterious ones. The rates on all but the lowest raw sugars were higher than they were in the Dingley Bill, and there was a gap between sugars of 87° and 88° polariscope test much wider than between any other two grades. This exceptional differential was effected by such indirection that there was an immediate cry that Mr. Aldrich was trying to play into the hands of the sugar trust. The schedule was twice changed in the Senate, but when the bill came into conference Mr. Dingley succeeded in having the House rates restored.

The political make-up in the Senate in 1897 was such that it created for the Republicans a situation not unlike that of the Democrats in 1894. Their Republican majority was considerable, but there was a group of this majority interested in free silver and not in the tariff, and it could not be counted on. If they supported the bill, it would be in return for concessions which they might ask. Almost at once it developed that this group was going to use its power to raise the duties on all grades of wool higher than the House or Senate had proposed to do. Wool had been free under the Wilson Bill. To cut a duty on an important product like wool 11 and 12 cents a pound without giving time for adjustment, of course causes a severe strain on a business even in prosperous times; to do it at a moment when all business is depressed and when the particular product, as in the case of wool in 1894, has been suffering ups and downs for many years, is to increase the strain dangerously near the breaking point. Free wool did intensify an existing distress but that the sheep growers would not have rallied from it and adjusted themselves in a very few years, no disinterested person can for a moment believe. If they had been willing to do this, there is no doubt that the business of wool-growing would be on a more solid basis to-day than it has ever been in this country. It would be conducted according to those laws of supply and demand which govern trade, and not be subjected, as it is now, to periodical excitations and depressions as public opinion forces duties up or down. The wool-growers had no thought, however, of accepting the situation as long as they had political power. Judge William Lawrence, the president of the National Wool-Growers Association, kept up a clamor throughout the campaign, and when the new bill was under consideration, demanded rates higher than wool had ever received. He was sternly rebuked by strong protectionists for his greed. “Any revision of the tariff,” one influential interest allied to him, said, “which carried such rates of duty on this raw material, would not only fatally hamper the American wool manufacturer, but would excite on the part of the people such natural opposition, by reason of their prohibitory character, that their enactment would necessarily be followed by agitation for their repeal, an agitation which would grow and gather and continue until it finally resulted in still another tariff revision, perhaps at the end of four years. To insure any degree of permanence to the tariff law about to be enacted it is necessary that, in so important a schedule as this, it shall commend itself to the popular judgment as one constructed on fairly conservative lines. The schedule proposed by Judge Lawrence far exceeds in its proposed rates of duty any schedule ever before demanded with reference to any article, either raw or manufactured, in connection with any revision of the tariff ever undertaken in the United States.

“It is not necessary in this connection to undertake any analysis of these proposals. Their significance will at once be apparent to every wool manufacturer. Their enactment would be tantamount to a blanket provision in the law to the effect that ‘the importation of wools of foreign growth is prohibited, on and after the passage of this act.’ Such a wool schedule would not only be fatal to the wool manufacturer, but equally fatal to the wool-grower; for it would enormously restrict the use of domestic wool, which would be superseded by foreign wool imported in the manufactured form.”

But Judge Lawrence and his Association, as had been proved in 1883 and again in 1890, held moderate protection as little better than free trade. They wished to shut out all foreign wool. They refused to modify their demands now, and when both House and Senate Committees put the rates down, they turned on their representatives with a demand that their wants be satisfied. That they could rally a group strong enough to defeat the bill was plain. The Western silver Senators were also wool Senators. They took no interest in the bill as a party measure; they would gladly defeat it if it did not give them what they wanted. Moreover, the demand for a duty on wool was supported by a group of Eastern woollen manufacturers who had always exercised great political power. This was the group known as the National Association of Wool Manufacturers. Although they deplored Judge Lawrence’s extreme demands, they stood for a duty on wool. In the judgment of this Association, they must either support the wool duty or be prepared to abandon their own protection; accordingly they now resolved that “an impartial application of the principle of protection is essential to a complete and uniform development of the industrial resources of the nation,” and they “earnestly” seconded the appeal for a duty on wool. This resolution they sent to the wool-growers, who naturally had always been suspicious of the support of men willing to work for a law which made their own materials dearer, with a private note, assuring them that “a spirit of sympathy and fellowship” towards all wool-growers animated the Association. That his spirit was far from animating all in the business, the loud protests against taxing wool which came from many leading but non-political woollen manufacturers at this time is evidence. So strong was the vote the wool interest mustered that the Senate finally yielded in its fight for the lower duty. Eight and 9 cents a pound on clothing and combing wool were what it had been struggling for; 10 and 11 cents were granted: but when the bill went into conference these rates were advanced to 11 and 12 cents, making the duties exactly what they were in the McKinley Bill. The duty on wool of the third class, that is, on carpet wool, was raised higher than in the bill of 1890, an entirely indefensible increase. We did not then and do not now raise carpet wool in this country. Our land is too valuable. But the Western growers of coarse wool had been told that carpet wool was being imported free for use in cloth-making, that it was “deplacing” American wool, and they had demanded that it should be taxed. It is probable that a small amount of carpet wool did and still does find its way into certain clothes, but it is a negligible amount, and to put a tax upon the raw material of an entire industry, making every yard of domestic carpet dearer for the sake of protecting the scared wool-growers of the West against a purely imaginary competition was as silly as it was unjust.