Mr. Chase had calculated that the receipts from the amended Morrill Bill would amount to about $80,000,000 a year, but they fell far short—only about 51 millions, of which the customs yielded 49 millions. The expenses of the war increased at a frightful rate, and it was soon evident that the struggle was to be longer than had been expected. Early in 1862 new schemes of taxation began to be considered. The result was that the Ways and Means Committee decided to ask Congress to pass an internal revenue bill, and still further to add to the duties provided for in the Morrill Bill. It was in June when the two new measures came from the committee. Taken together they were calculated to make the country gasp. The tax bill touched almost every article of daily life. It provided for licenses on a man’s business whatever it was—running a bowling alley, a hotel, or an attorney’s office; for taxes on his income and his inheritances, on his carriages, his gold watch, his silver plate; for revenue stamps on the documents he signed, the telegrams he sent, the matches he struck; nothing that he ate or drank or made escaped. The direct taxation on manufactured articles was so high that in many cases it would have acted as a bonus to foreigners to bring in their goods if the Ways and Means Committee had not foreseen this, and aimed to amend the tariff law so that increased duties would compensate for the internal taxes. As might have been expected from the hurried way in which the bill had been prepared, the duties intended as compensations were not always exact. Sometimes, as in the case of books and umbrellas, they were insufficient, and the foreigner could bring over his wares and undersell the overtaxed domestic producer. Again, the duties were in excess of the direct taxes and served only to protect the home manufacturer in extortionate prices. Thaddeus Stevens, the chairman of the Committee, and Mr. Morrill both explained to the House with great care that the whole scheme of the changes was to make the additional duty cover as nearly as possible the internal taxes. “If we bleed manufacturers we must see that the proper tonic is administered at the same time,” said Mr. Morrill. Any duty not compensatory was placed purely for revenue reasons. In no case, they said, were the new duties for protective purposes—the whole change must be regarded as “temporary”—a war measure, and nothing else.
It was a foregone conclusion that the bills whatever their provisions would pass, for the people were actually demanding taxation, that the war might be properly waged. Nevertheless, there was much bitter remonstrance at the duplication of taxes, which in certain cases was excessive and unjust. Take the newspaper business, for instance. Almost everything a printing house used was taxed—paper paid 3 per cent; a duty was put also on rags imported for paper making, which still further raised the price; the advertising income was taxed. Revenue stamps were required on every telegram a member of the staff sent, on every check made out, on every official paper signed. When the bill was under consideration, the New York Herald computed that it would add from thirty to forty thousand dollars a year to its expenses. The Herald got great joy out of the situation. It could afford the expense, but in its judgment no other New York newspaper could, and in a long and interesting editorial (July 1, 1862) it said, jubilantly: “Many papers will be killed, but the Tribune and the Evening Post will die first. They have no advertising patronage and but very little circulation, and so by a just retribution of Providence they will be the first victims of the taxation which they have brought upon us by causing our Civil War.” The comforting assurance of the destruction of his two hated contemporaries, combined with the disgust and anger of England over the increased duties, gave Mr. Bennett such satisfaction at this time that he became almost benevolent towards the Lincoln administration.
Mr. Greeley did not share Mr. Bennett’s conviction that the Tribune would be destroyed by the new taxes, for he wrote Mr. Morrill:
“If newspapers are to be taxed at all, their advertising can bear it best, as it is a source of profit which circulation is not. We can stand 2 mills per pound on paper—though that will be a pretty productive tax. I think that item alone will cost the Tribune establishment $7000 per annum, all to come out of profits that can’t be made in these times. Still taxes must be put on—only do give us some substantial retrenchment—especially of mileage—to go to the people on.”
The House passed the new bill promptly. Even if it had felt more seriously than it did the objections to it there would have been little chance of delay, for the chairman of the Ways and Means Committee, Thaddeus Stevens of Pennsylvania, was a dictator who tolerated little interference with any measure he approved. Mr. Stevens at this time was a man of 70, sombre and gaunt, with rugged features, deep-set eyes, and a splendid brow. He was lame, a club foot, and his health was permanently broken. But never had his wit been keener, his sarcasm more biting, his eloquence greater, his will more indomitable. He understood Congressional tactics as few men ever have, and he was a filibuster of first order. He was frequently unscrupulous in getting what he wanted. If he wanted it, it must be right and the means were a secondary consideration. Stevens always stood by his own, right or wrong, not that he entertained illusions about his Republican colleagues. “Which one is our d——d rascal?” he asked one day when called upon to vote in a contested election case, and “our d——d rascal” got his vote. The last thing Stevens would allow was delay over revenue bills. If a member took to questions he considered immaterial in the debate he hauled him back sharply to his muttons, and it was a rash man indeed who offended a second time. Only one thing would send him off on a tangent, and that was an effort to secure some advantage over a man of another race or color. In the debate on the present bill, for instance, he broke out in a fiery denunciation of California because the representatives were trying to secure a high duty on cleaned rice, which the Chinese used almost exclusively. The Californians frankly avowed that the duty was intended as a discrimination against the Chinaman. Stevens was at them in an instant, the engineering of the bill quite forgotten, in a hot speech against the injustice of their attitude.
That there was discrimination possible against your white fellow-man in applying a protective tariff, Stevens seems never to have understood. Duties were never too high for him, particularly on iron, for he was an iron manufacturer as well as a lawyer, and it was often said in Pennsylvania that the duties he advocated in no way represented the large iron interests of the state, but were hoisted to cover the needs of his own small and badly managed works. He was as unsound on all financial matters as he was on protection. He wanted to pay the war debt in greenbacks, had a horror of gold going out of the country, and once proposed a law forbidding it to be bought and sold. But taken all in all, Thaddeus Stevens was probably what the House needed in the crisis, a prejudiced, violent dictator, with a holy passion for the Union cause. Such men get things done if the after-cost of their work is heavy. Stevens soon sent the tax and tariff bills to the Senate, where, if not greatly improved, they were passed with promptness. Considerable suspicion was popularly attached to many of the Senate changes in the excise bill, particularly because of the close connection with it of Senator Simmons of Rhode Island. The Senator’s connection with the Morrill Bill which had won him the sobriquet of “Wood-Screw” Simmons has been referred to above. It was fresh in public mind then. He still further distinguished himself at the time he was engineering the tax bill by a gun contract so unsavory that it had to be investigated. It was shown beyond quibble that he had been promised $50,000 for getting a contract for one of his constituents and that he had already received some thousands of the money. The Senator did not pretend to deny the fact, but he declared his transaction to be “strictly legal.” The committee was severe on him. He had no more right to sell his influence, they said, than his vote, both were “the property of the country”; but they intimated that as he was really no worse than many of his colleagues, it was better to let him off, and let off he was, though he soon resigned. The affair did not raise the tax bill in the estimation of the public, nor increase public confidence in the merits of the compensating tariffs which accompanied it.
The passing of the bill went almost unnoticed by the press, so engrossed were the people in war. (It was the summer of McClellan’s Virginia campaign.) A few newspapers of free-trade principles tried to make an issue of it, but without success. Mr. Greeley came out in the Tribune declaring that he would not be drawn into a discussion on protection as long as the war lasted. Indeed there was room for little on the wonderful editorial page of the Tribune, where Horace Greeley stripped bare his agonized heart, but the war and the emancipation of the slave. Greeley, too, was satisfied enough to let protection reëstablish itself through a revenue bill, for if there was anything which he held almost as sacred as human liberty, it was the doctrine of protection to American industries. Greeley saw protection as an actual wealthproducer, and when the Morrill Bill was up in 1860, he declared: “We have as undoubting faith that this bill if passed would add at least $100,000,000 per annum to the earnings and wages of labor throughout the country as we have that the sun will rise to-morrow.” He was one of a very few men in public life whose belief was something more than an inheritance from Henry Clay. In one of his Institute talks he once told how he became a protectionist:
“From early boyhood I had sat at the feet of Hezekiah Niles, Henry Clay and Walter Forward and Rollin C. Mallary, and other champions of this doctrine, and I had attained from a perusal of theirs and kindred writings and speeches a most undoubting conviction that the policy they commended was eminently calculated to impel our country swiftly and surely onward through activity and prosperity to greatness and well-assured well-being. I had studied the question dispassionately, for the journals accessible to my boyhood were mainly those of Boston, then almost if not quite unanimously hostile to protection; but the arguments they combated seemed to me far stronger than those they advanced, and I early became an earnest and ardent disciple of the schools of Niles and Carey, and could not doubt that the policy they commended was that best calculated to lead a country of vast and undeveloped resources like ours up from rude poverty and dependence to skilled efficiency, wealth, and power.”
It is undoubtedly true that the mantle of the early protectionist advocates Niles and Carey fell on Horace Greeley, and that what the one did in the “Register” and the other in his pamphlets, Greeley continued in the Tribune.
There was much calculating on all sides of the amount the new tax bills would yield. Harper’s Weekly at the start estimated that it would be $185,000,000, and in November (1862) it said the amount would be nearer $275,000,000, but it was far too sanguine. At the end of the year (June, 1863) it was found that the customs had yielded less than $64,000,000 and the excise only about $41,000,000, and the country had been spending in the last two years an average of over one and one-half millions a day. The funds raised by taxation were a bagatelle beside the enormous loans which had to be made, the legal tender which had to be issued. By the beginning of 1864 it became evident to Mr. Lincoln and his cabinet that more money must be raised by taxation. It was not a popular thing to do, for the slow progress of the war, the awful cost in life and money, had raised a strong party against Lincoln. It looked as if he might not be reëlected. The opportunists around him advised against any measures which would increase dissatisfaction, but Mr. Lincoln wanted no misunderstanding about his intentions in regard to the war. It had got to be finished at all cost, and he wanted the people to understand what his reëlection meant. He asked them for more men and more money, another draft, higher taxes, higher tariffs. The raising of the tariff was as a method much less disturbing to Lincoln than imposing direct taxes. He had the old Whig’s horror of the tax-collector, and indeed had pictured effectively in his early campaigning “assessors and collectors going forth like swarms of Egyptian locusts, devouring every blade of grass and other green thing.” In 1859, when there was a general curiosity as to what he believed, a correspondent asked him as to his tariff views, and he replied: