The Tariff in Our Times

by Ida M. Tarbell

The demand of the wool-growers that the prohibitive duties on all kinds of wool substitutes be restored, was imperative. By raising the cry of “shoddy” they could wrest a duty from Congress on any material, no matter how valuable to the manufacturer. Perhaps no word has been more unjustly degraded in the history of industry in this country. The world has never produced enough raw wool to meet the demand for woollens. It has always been necessary and probably always will be necessary, to use wool waste and wool rags. Ingenious machines have been devised for preparing all this material for the manufacturer. It is a legitimate part of the business, and one that helps to provide warm, cheap clothing for the poor. “It would be as unreasonable,” says one authority, “to despise paper makers because they use up linen rags, or to despise dyers who use colors made from coal tar, as to despise manufacturers who use up waste woollen rags as shoddy. It is said that 125,000,000 pounds of shoddy, mungo, etc., are manufactured into wool every year in England alone. If this immense quantity were wasted, it is difficult to estimate the increase which would take place in the price of wool and the consequent dearness of cloth; but the result would be that countless persons would be unable to afford proper clothing.” The wool-growers cut off all importations of shoddy in the new schedule. It would displace American wool. As we shall see, it drove the manufacturers, not to use more wool, but to find a substitute for wool.

Of course, the McKinley rates on raw wool meant the McKinley rates on woollen goods, that is, if the National Association could get them. In principle, they were those of the compact of 1867, between the two wings of the wool industry, which rates have already been explained. They provided for compound duties; that is, one set of duties which made up to the manufacturer for the tax he paid on his raw material—the aim being, of course, to put him on the same basis as his foreign rival—and a second set which was purely protective. In estimating the first class of duties, the National Association demanded that four pounds of wool should be reckoned to a pound of cloth. It had been shown again and again that it was only “sometimes” that this amount of wool was required for a pound of cloth, that the effect of the ratio was to make all of the heavy-shrinking wools for which four or more pounds were needed too dear to be imported, and at the same to give an entirely unnecessary compensation to cloth goods made from wools which shrink but slightly. When the point was made, the National Association raised a hue and cry, and Congress was warned to respect its influence as it had been in 1890. When it came to the duties for protection the Association which had protested against the greed of the wool-growers in demanding high duties showed themselves equally greedy and more successful; for the wool-growers, except in the case of carpet wools, which we do not produce, had to content themselves with the McKinley rates, while the woollen manufacturers were able to raise the duty on the goods which are chiefly imported to the highest point it had ever touched, 55 per cent. It is interesting to note that in the compact of 1867, to which the Association constantly appealed in the making of the Dingley Bill as it had in earlier bills, 25 per cent was considered a proper protection for the goods on which the Association now asked and received 55 per cent. When the bill finally passed the Conference it carried the same puzzling provision for a duty on wool tops as had been put into the McKinley Bill on the suggestion of the then president of the National Association of Wool Manufacturers, Mr. William Whitman. As we have seen, this was not a clearly stated figure: tops were to carry the duty of the basket clause of the schedule. Figured out, this amounted to a higher duty on tops than the bill provided for yarn, which is the more advanced stage of wool on its way to cloth. There was opposition to this duty and grumblings of manipulation, but it was many years before the truth about it became public property.

The success of the National Association in getting into the bill exactly what it wanted was generally believed by those who knew what was going on in Washington at this time to be due to the confidential relations with the Finance Committee of the secretary of the Association, S. N. D. North. During the making of the Wilson Bill, Mr. North was known to have had a desk in the office of Senator Aldrich, and from that vantage ground to have made a desperate but unsuccessful attempt to secure for the industry he represented something of the favor which other lobbyists were wresting from the Democrats. During the making of the Dingley Bill he occupied the same inside position. To all appearances he was a confidential clerk of Mr. Aldrich’s; as a matter of fact, he was a paid representative of the woollen manufacturers, looking after their interests while apparently aiding the Finance Committee as he could. That Mr. Aldrich, himself, did not understand the real nature of the wool schedule finally adopted, one can hardly doubt, for he told Mr. North at the time, according to a letter the latter gentleman wrote to Mr. Whitman: “I don’t suppose this tariff is going to last long, because the rates are so high; but I am perfectly willing that the wool manufacturers should have all that there is in it and that the tail should go with the hide.”

The influence on the bill of this despotic power of the wool interests was similar to that of sugar on the Wilson Bill, but it did not make itself clear in the Senate as it had in the earlier bill. It came out in the conference of the two Houses which followed the passage of the bill by the Senate on July 7. Some 872 amendments had been tacked to the measure and the conference spent nearly a fortnight over them. When finally reported, the rates were generally higher than either the House or Senate had advised. It was impossible to give to wool all it demanded on a threat of defeating the bill, unless other interests were favored, and so it happened that when the Dingley Bill was finally passed, it was, on the whole, a more oppressive measure than the McKinley Bill. Moreover, it was made more oppressive by a House and Senate whose leaders had declared from the beginning of their work that the country asked and had been promised moderate duties. It was as real a breaking of promises as the Wilson Bill was a surrender of principles.

And there was a general feeling among those who had made it, and in the Administration itself, that as Mr. Aldrich told Mr. North, duties were too high and would have to come down. What would have happened if the public mind had continued to be occupied with the tariff as it had in 1890 and in 1894, it is difficult to say. It is not probable that there would have been any such revolt as the McKinley Bill caused. The disillusion the country had suffered over the ability of the Democrats to carry out consistent reforms was too keen. Moreover, what industry wanted and needed more than anything else was to be let alone; even the most irreconcilable of tariff-for-revenue only men could have hardly counselled another revision at this juncture. The Dingley Bill, bad as it was, did not stir the popular mind. Silver occupied it, and silver was soon displaced by the most absorbing interest which a country can have—a war—and the war was followed by the question of imperialism, and imperialism was not settled before the country had entered on a period of such magnificent and bewildering prosperity as it had never before dreamed. The heavy decline in prices which had begun in 1891 reached its lowest point for raw materials at the end of 1896, for manufactured goods in 1897. It was not until 1904 that the prices which manufacturers had received in 1890 were reëstablished, but after they were once reached, they soared rapidly far beyond. As for raw materials, they regained the ground they had lost much more quickly.

Wealth of all descriptions began to increase in an unheard of way. In 1897 the gold and silver produced in the United States was worth something over $89,000,000; in 1900 this had risen to $115,000,000, and in 1905, to over $122,000,000. While in 1897 we produced over 8,500,000 tons of pig-iron, in 1905 it was 16,500,000, and we were consuming about all we produced. Of bituminous coal in these three years we produced respectively 131,000,000, 189,000,000, and 281,000,000 tons. Of wheat we grew in 1897 over 530,000,000 bushels, about the same in 1900, and in 1905 nearly 700,000,000 bushels. The cotton crop in 1897 was valued at $319,500,000; in 1900 at $511,000,000, and in 1905 at $632,000,000. Our hay averaged an annual value in this period of over $500,000,000; our potato crop something like $150,000,000. The value of our farm animals in 1897 was about $1,655,000,000; in 1900 it was $2,280,000,000; and in 1905 over $3,000,000,000. And so one might go on recording phenominal growths of almost everything which the earth yields in return for man’s labor. And never before had there been so rapid an increase in the number of laborers available. We could bring in labor free and in this period we used the privileges as never before. Immigration which in 1897 was but 230,000 rose in 1900 to 448,500; and in 1905 to over 1,000,000. The great bulk of these newcomers were men of a working age, that is, over fifteen and under forty. These great numbers were added annually to those who already were at work in the country until in 1900 nearly 30,000,000 people were busy in this country, drawing from the earth the materials of wealth, moulding them to men’s uses, and transporting them to the markets where they were wanted, and these markets were not those of the United States alone. Our home consumption was enormous, but we bought and sold with all the nations of the earth in constantly increasing quantities, selling always many millions more than we bought.

How much had the Dingley Bill to do with this great outpouring of wealth? It certainly did not cause it. A wave of prosperity was sweeping around the globe, as one of depression had from 1891 to 1897; England, Germany, France, and the Orient, shared in the blessings. The Dingley Bill could neither retard nor accelerate this. It could not and did not grow a potato or produce a gold nugget, but it no doubt did cause more of the materials we were producing to be manufactured at home than would have been done under the Wilson Bill. Without it much of the capital and labor given to manufacturing would have gone to agricultural uses and commerce. Sheltered from competition, men aimed to make in the country all that a highly prosperous home market would consume of necessaries, of novelties, of ingenious conveniences, and of luxuries. The Dingley Bill relieved the manufacturer of the necessity of considering what was doing in his trade in other nations. This enormous advantage enticed more capital proportionally than into other lines of industry. And as the industry expanded, immigration was excited. Manufacturing as conducted to-day requires much cheap labor. Save in the skilled work where comparatively few are needed, American labor—naturalized foreign labor, will not stay long. Immigration was necessary in order to supply the cheap labor the textile and the steel and iron industries needed. That is, the Dingley Bill may be credited with adding two or three hundred thousand consumers yearly to our domestic market. The value of this addition is doubtful when we examine the standard of living of the immigrants, the amount of their earnings sent home, and the large proportion of those who are transient, that is, who return to their native land to end their days: just what this proportion is, it is impossible to say, but something of its size may be judged from the steerage passengers sailing annually from the ports of the United States. In 1900, for instance, 448,572 persons came in by steerage, and 293,404 went out. In 1905 1,026,494 came in, and 536,151 went out. The value of the increase in the size of the domestic market, which may fairly be credited to the Dingley Bill, is less impressive also when it is compared with the value of the markets of many millions we might have been conquering at this time if we had had the shipping on the seas which we once had, and which, as already has been seen, we have destroyed by prohibitive tariffs on iron and steel and lumber, and by hampering navigation laws.

The first uneasiness over the bill which its authors felt was along the line of foreign markets. We were not conquering them as rapidly as we ought, or as we must, if our tremendous production was to be disposed of. That which the thoughtful had been warning against was happening. In our zeal to produce, we had not intelligently arranged what we were to do with our products. The Dingley Bill had, it is true, provided a scheme of reciprocity. The really important provision in the scheme gave the President power to negotiate trade treaties with any country, subject to ratifications by the Senate. Mr. McKinley soon after his inauguration appointed a special plenipotentiary to negotiate these treaties,—John H. Kasson, who had always been a moderate protectionist, and who had seen the capitulation of the party to the manufacturers of the country with disgust and dread. Mr. Kasson undertook the work with enthusiasm. By 1900 he had several treaties signed and before the Senate. The most important one was with France. By this treaty we could import into her territory a very large number of articles at a minimum duty, and we in return were to give her a reduced duty on many of her products. Not only Mr. Kasson, but Mr. McKinley himself urged the ratification of these treaties. There was no doubt but that the public generally favored them. But there had appeared in opposition the same forces which had made the McKinley Bill, the Wilson Bill, and Dingley Bill what they were,—political measures, trading contracts, by which for so much influence, so much duty was given. These nervous, superstitious, and greedy forces decided against reciprocity. The nature of their opposition was very well summarized in one of the hearings on the subject by a manufacturer who was himself in favor of the French treaty.

“We have striven to know, both before coming to Washington and since our arrival here, what are the objections to the treaty. We have been informed that the knit-goods manufacturers have been opposed to the ratification of the treaty. We are now informed that of the $100,000,000 worth of knit-goods consumed in the country last year, only $240,000 came from France. We have been informed that the manufacturers of pottery and silks were opposed to the ratification of the treaty. We are now told that both industries have admitted that no injury would be suffered by them. We have learned that the manufacturers of spectacles have believed that they would suffer injury, but they were shown that there would still remain to them eighty-eight per cent of the present tariff; they have been satisfied to believe that no injury would come to them. We have been informed that the manufacturers of imitation jewellery object to the ratification of the treaty. We understand that the treaty proposed to reduce the duty from 60 to 57 per cent. We are further informed that the probabilities are that the result of the treaty will increase far more largely the exports of this class of manufacturers from the United States to France than they import from France to the United States.

“We have heard that opposition to the ratification of the treaty has been based upon the proposed reduction in our tariff on prunes. We find that our exports of prunes to France amount to $260,000, while the imports of prunes from France to the United States amount to $14,000. We have understood that manufacturers of chemicals, gloves, and braids have stated that they will be injured by the ratification of the treaty. After an honest effort to learn the facts in the case, we are reduced to the conclusion that in actual working of this treaty the injuries suffered by them would be problematical in every case, and imaginary in most cases.”