On the 20th of December, 1860, Mr. Hunter, from the committee on finance, to whom was referred the tariff bill, reported it back with a recommendation that it be postponed until the 4th day of March following. This was, in effect, to reject the bill, as Congress terminated on that day. The committee on finance, and a majority of the Senate as then constituted, was opposed to the passage of the bill, but the secession movements, then openly threatened, soon changed the political complexion of the Senate, by the resignation of Senators on account of the secession of their states. On the 18th of January, 1861, Mr. Cameron, of Pennsylvania, moved to take up the bill, and, upon his motion, it was made a special order for the following Wednesday. On the 23rd of January it was referred to a committee of five members, consisting of Mr. Simmons, Mr. Hunter, Mr. Bigler, Mr. Fessenden, and Mr. Gwin. This was done on the same day when the committees of the Senate were reorganized on account of the withdrawal of Senators. The special committee appointed by the Vice President was friendly to the bill. Then for the first time it became possible to secure favorable action in the Senate. Many amendments were proposed and adopted by the Senate, but they did not materially affect the general principles upon which the bill was founded. It passed the Senate with these amendments by the decided vote of 25 yeas to 14 nays. All of the amendments of the Senate but one were promptly agreed to by the House, and a conference between the two Houses was ordered. Messrs. Simmons, Bigler and Hunter were the managers on the part of the Senate and Messrs. Sherman, Phelps and Moorhead on the part of the House.
On the 27th day of February, five days before the close of the session, the conferees reported to the Senate their agreement and the report of the committee was adopted without objection or division of that body, and also by the House of Representatives, and the bill was signed by President Buchanan.
This law, passed in the throes of a revolution, and only possible as the result of the withdrawal of Senators to engage in the war of secession, met all the expectations of its friends. It was fair, just and conservative, and would, in peaceful times, yield about $50,000,000 a year, the amount of national expenditures in 1860, and, at the same time, protect and strengthen all existing home industries, and lay the foundation for great increase in production. It was destined, however, to begin its existence at a period of revolution. The secession of eleven states precipitated the war, involving enormous expenditures, in the face of which all revenue laws were inadequate and powerless. The credit of the government, its resources and capacity for taxation, had to be appealed to. Resort was had to every possible mode of taxation that could be devised by the ingenuity of man, to supply the requirements of the war, and to maintain the public credit. The Morrill tariff act was, therefore, greatly modified by subsequent laws, the duties doubled and in some cases trebled. Internal taxes, yielding twofold the amount collected from customs, were levied, and cheerfully paid, and duties on imported goods were quickly increased. The details of this act became the victim of the war, but the general principles upon which it was founded, the application of specific duties where possible, and the careful protection extended to the products of the soil and the mine, as well as of the workshop, have been maintained to a greater or less extent until the present time.
I have participated in framing many tariff bills, but have never succeeded in securing one that I entirely approved. The Morrill tariff bill came nearer than any other to meeting the double requirement of providing ample revenue for the support of the government and of rendering the proper protection to home industries. No national taxes, except duties on imported goods, were imposed at the time of its passage. The Civil War changed all this, reducing importations and adding tenfold to the revenue required. The government was justified in increasing existing rates of duty, and in adding to the dutiable list all articles imported, thus including articles of prime necessity and universal use. In addition to these duties, it was compelled to add taxes on all articles of home production, on incomes not required for the supply of actual wants, and, especially, on articles of doubtful necessity, such as sprits, tobacco and beer. These taxes were absolutely required to meet expenditures for the army and navy, for the interest on the war debts and just pensions to those who were disabled by the war, and to their widows and orphans.
These conditions have, in a measure, been fulfilled. The war is over; the public debt has been diminished to one-third of the amount due at the close of the war. The pension list is the chief and almost only outstanding obligation growing out of the war, but this is fully met by internal taxes on spirits, tobacco and beer. What is needed now is a tariff or tax on imported goods sufficient in amount to meet the current expenditures of the government, and which at the same time will tend to encourage the production in this country of all articles, whether of the farm, the mine or the workshop, that can be readily and at reasonable cost produced in this country.
And here we meet the difficulty that the mode, extent, manner and objects of tariff taxation are unhappily mixed up in our party politics. This should not be so. Whether the mode of taxation should be by a percentage on the value of goods imported, or by a duty imposed on the weight or quantity, depends upon the nature of the article. If the article is sold in the market by weight or quantity, the duty should be specific, i. e., a certain rate on the unit of weight or quantity. If it is of such a nature that its value cannot be measured by weight or quantity the duty should be ad valorem, i. e. a percentage of its value. This is matter of detail to be fixed by the custom of merchants. As a rule it is better to fix the duty upon weight or measure, rather than upon value, for by the former mode the amount is easily ascertained by the scale or yard stick, while to base the duty upon value, changing from day to day, is to invite fraud and litigation.
The extent or rate of duty to be imposed should depend entirely upon the pecuniary wants of the government, and the nature of the article imported. If the article is one of luxury, mainly consumed by the rich, the duty should be at a higher rate than upon an article in general use. This principle is sometimes disputed, but it would seem that in a republic a just discrimination ought to be made in favor of the many rather than of the few. On this principle all political parties have acted. The rates have been higher on silks, satins, furs and the like than on goods made of cotton, wool, flax or hemp. To meet the changing wants of the government all articles should be classified in schedules, so that the rate of duty on a single schedule, or on many schedules, could be advanced or lowered without disturbing the general scheme of taxation.
As to the manner of taxation and the places where duties should be collected, all will agree that they should be paid as nearly as possible where the goods are to be consumed. The concentration of importations at any one port on the coast, or at several ports, gives to the people residing at or near such favored ports an advantage over the people living in the interior of the country. The system of interior ports, or places of delivery to which goods may be consigned, has been adopted and generally approved. The object is that all parts of the country shall have equal facilities and bear equally the burdens of taxation.
The method of importations should be so simplified that any person, in any part of the United States, may order from any commercial port or country any article desired and be able to receive it and pay the prescribed duty, at any considerable port or city in the United States that he may designate.
As to the objects of tariff taxation there is and always will be an honest difference of opinion. The main purpose is to secure the revenue from foreigners seeking our market to dispose of their products. The United States has the right, exercised by every nation, to determine upon what terms the productions of foreign nations shall be admitted into its markets, and those terms will be such as its interests may demand. Great Britain may admit nearly all commodities free of duty, but even that country is guided by her interests in all her commercial regulations. All other nations classified as civilized seek, like the United States, by tariff laws, not only to secure revenue, but to protect and foster domestic industries. Japan has won its entrance among civilized nations by securing treaties with European countries and the United States, by which she has been relieved from restrictions as to her duties on imports, and now has the right to regulate and fix her import duties as her interest dictates.