On the 19th of July, 1886, I had called the attention of the Senate to the difficulty and danger of hoarding in the treasury surplus revenue, and the readiness of the Senate to provide for the reduction of taxes and the application of the surplus. The revenues could have been reduced without endangering domestic industries. At the date of his extraordinary message both Houses of Congress were quite ready to reduce taxes. Full authority had been given to the Secretary of the Treasury to apply surplus revenue to the purchase of United States bonds. But the President, set in his opinion, was not satisfied with such measures, but demanded the reduction of duties which protected American industries.
The greater part of my speech in reply to the President's message was a discussion of the different forms of taxation imposed by the United States and especially the duties imposed on imported goods. I never was an extreme protectionist. I believed in the imposition of such a duty on foreign goods which could be produced in the United States as would fairly measure the difference in the cost of labor and manufacture in this and foreign countries. This was a question not to be decided by interested capitalists, but by the careful estimate of business men. The intense selfishness exhibited by many of those who demanded protection, and the error of those who opposed all protection, were alike to be disregarded.
I believe that no judicious tariff can be framed by Congress alone, without the help of a commission of business men not personally interested in the subject-matter, and they should be aided by experienced officers in the revenue service. I have participated in a greater or less degree in the framing of every tariff law for forty years. I have spoken many times on the subject in the Senate and on the rostrum. My reply to the President's message is the best exposition I have made as to the principles and details of a protective tariff. If I had my way I would convene such a tariff commission as I have discussed, give it ample time to hear and gain all information that could aid it, and require it to report the rates of duty proposed in separate schedules so that the rate of each schedule or paragraph might be raised or lowered from time to time to meet the wants of the treasury. If Congress would allow such a bill to become a law we could dismiss the tariff free from party politics and lay the foundation for a durable system of national taxation, upon which domestic industries may be founded without the hazard which they now encounter every year or two by "tinkering with the tariff."
The real controversy raised by the President's message was not whether taxes should be reduced, but what taxes should be reduced or abolished. I stated the position of the two parties in a debate with Mr. McKenna, as follows;
"There is a broad line of division between the two parties as they exist now and as they will exist in the future. The President says, 'retain all internal taxes and reduce the duties on imported merchandise that comes in competition with home industries.' We say we will not strike down any prospering industry in this country; that where manufactures have sprung up in our midst by aid of a duty, this protection, as you call it, we will not reduce; we will not derange contracts, industries, or plans, or lower the prices of labor, or compel laborers or manufacturers to meet any sudden change or emergency. We say that we are willing to join with you in reducing the taxes. We will select those taxes that bear most heavily upon the people, especially internal taxes, and repeal those. We will maintain the policy of protection by tariff duties just as long as it is necessary to give our people the benefit of a home market, and diversified productions a fair chance in the trade and commerce of our country, but we will not invite into our country foreign importations to compete with and break down our home industries."
The bill entitled "A bill to reduce taxation and simplify the laws in relation to the collection of the revenue," known as the Mills bill, was the outcome of the President's message. It was reported to the House of Representatives by Roger Q. Mills, of Texas, and thus obtained its name. Mr. Mills, on the 17th of April, called it up for consideration, and it was debated and amended, and passed the House on the 21st of July, more than seven months after the President's cry of alarm, by the close vote of 162 yeas to 149 nays. Samuel J. Randall, then absent and sick, desired his colleague to pair him against the bill, as, if present, he would record his vote in opposition to the bill. It came to the Senate and was referred to the committee on finance. On the 8th of October Mr. Allison, from that committee, reported back the Mills bill with a substitute for the entire bill. This substitute was a careful and elaborate protective tariff bill, containing some provisions I did not approve, but, in its general provisions, was, in my opinion, a far better bill than the Mills bill. The debate on these rival bills continued until the close of the session on the 19th of October, when the Senate, by a resolution, authorized and directed the committee on finance to continue during the recess of Congress the investigation of such revenue measures, including the Senate and House bills, as had been referred to the Senate.
The history of the bills during the second session of this Congress is easily told. They were debated in the Senate nearly every day until the 22nd of January, 1889, when the amendment of the Senate was adopted as a substitute for the entire Mills bill, by the close vote of 32 yeas to 30 nays. It was debated in the House of Representatives and referred to its committee of ways and means. It was reported by the committee to the House of Representatives, with a resolution declaring that the action of the Senate in substituting an entire bill for the House bill was in violation of the constitution. No action was taken on this resolution, and then all tariff legislation was defeated for that Congress.
On the 6th of March, 1888, Senator Beck made a rambling speech commencing with a fierce denunciation of a bill then pending to grant pensions to certain disabled soldiers of the Union army. He then veered off on the tariff and the great trusts created by it. I ventured, in a mild-mannered way, to suggest to him a doubt whether trusts were caused by the tariff, whether they did not exist as to domestic as well as to foreign productions. I named to him the whisky trust, the cotton-seed trust and other trusts of that kind, and wanted to know how these grew out of the tariff. Thereupon he changed his ground and took up the silver question and commenced assailing me for the coinage act of 1873, saying I was responsible for it. He said it was secretly passed, surreptitiously done, that I did it, that I knew it.
I promptly replied to that charge by showing from the records that the act referred to, and especially the part of it relating to the silver dollar, was recommended by Mr. Boutwell, the Secretary of the Treasury, and all the officers connected with coinage and the mints, that it was debated at great length for three successive sessions in both Houses, that it was printed thirteen times, and that the clause omitting the old silver dollar was especially considered and the policy of it fully debated, and a substitute for the old dollar was provided for by each House. I can say with confidence that every Member of the Senate but Beck felt that he had been worsted in the debate, and that the charge aimed at me, but which equally applied to Morrill and Bayard, and especially to all the Senators from the silver states who earnestly and actively supported the bill, was thoroughly refuted.
Senator Beck, chafed by his defeat, on the 13th of March made in the Senate a three hours' speech in support of his position. Instead of going to the public records and showing by them whether or not the law was put through the Senate in a secret way, he quoted what several Senators and Members said they did not know, what Grant did not know, a mode of argument that if of effect would invalidate the great body of the legislation of Congress.