THE MILLS AND ALLISON BILLS
It is one of the ironies of the political history of this period that
the Democrat who for many years had been among the most devoted to a
reform bill, William R. Morrison of Illinois, should not have been in
Congress now that the tide had turned to lead in its making. Mr.
Morrison had been defeated in the fall of 1886 and it was necessary to
have a new chairman for the Ways and Means Committee. Roger Q. Mills of
Texas was chosen. The appointment was a red rag to the high
protectionists, for Mr. Mills was an out-and-out free-trader. After Mr.
Carlisle he was the ablest and best informed man in Congress on the
tariff. There are two classes of Congressmen, those who study their
subjects and those who do not. While three-fourths of Mr. Mills’s
colleagues visited with constituents, dined with their fellows, looked
after their fences, held their ears to the ground, he was poring over
tables and reports. He had entered Congress in 1873, an ex-confederate
officer thrice wounded during the war but still as handsome a man as
there was in the body—one of the few Congressmen who never allowed Ben.
Perley Poore to put his biography into the Congressional Directory! Mr.
Mills was the soul of chivalry, and more than once exasperated his
Democratic colleague by his generosity to his opponents. He had refused
in 1883 to join the Democrats in their opposition to the admission of
the colored members from South Carolina. They had been elected, they
must be admitted. In 1884 McKinley’s seat was contested. Mr. Mills
became convinced that McKinley had really been elected and he voted
accordingly. Poor “Pig Iron” Kelley, ill and distracted over the attack
on his favorite doctrine of protection as well as over the corruption in
his own party which had at last become too general and high-colored to
escape even his blind eyes, had angered the House and it had moved to
reprimand him. Mr. Mills protested: he was old, he had faithfully served
his country, he would have no part in so cruel and unjust a measure.
Mr. Mills had been brought up in the fine old school of Democracy. Free
speech, free trade, independent action, self-reliance were cardinal
virtues to him. He took his principles as he found them in Thomas
Jefferson, and he literally followed Jefferson’s advice to go back
frequently to the ideas on which the government had been founded for
encouragement and advice. The interpretation of protection which he had
found in force when he entered Congress and the growing combinations of
business men to support it, he despised, and from the first all his
fighting blood had been up against them. He had been on the Ways and
Means Committee continually since his first appointment and had
contributed some of the strongest arguments and sayings to be found in
the various debates. “Free poker and a taxed Gospel” was his phrase; his
way of characterizing the failure to get Bibles on the free list and
playing cards off.
Naturally Mr. Mills brought to his chairmanship some positive ideas. One
of the most positive was that there should be no hearings given to
manufacturers. If he had denied the right to life, liberty, and
happiness, no louder wail would have arisen. With every tariff bill the
“hearings” had been growing longer and more futile, declared Mr. Mills,
and one who undertakes to read them, even to look over them, cannot deny
that he was right. Admitting all that any candid protectionists could
claim for the value of the hearings there was already an accumulation of
recent ones as great as any committee could digest. There were the two
big volumes of the tariff commission dated 1883, perhaps on the whole
the best which had been taken; there were several volumes from Mr.
Morrison’s committee and from the Senate Finance Committee. This was
enough in Mr. Mills’s opinion and he set his foot down about taking
further testimony of this kind. He even held out against meeting
socially the gentlemen who haunted Washington for the purpose of keeping
their representatives in mind of what might happen “back home” if what
they had asked was not given. Several amusing incidents resulted from
his obstinate stand on the matter. One came through the determination of
the “Parsee Merchant” to force Mr. Mills to talk with some of the
manufacturers. The “Parsee” was as devoted a free-trader as Mr. Mills,
but he did not share Mr. Mills’s antipathy to lobbyists. He was a man of
the world, a great diner-out, a brilliant talker. At his own dinners in
Washington he brought together people of the most varied tastes. One
night he entertained the Ways and Means Committee, including the
Chairman. The dinner was under way when a card was brought in. With
assumed surprise Mr. Moore exclaimed, “Why, it’s my friend Mr.
Havemeyer, bring him in.” Now for some time Mr. Mills had been besought
to meet Mr. Havemeyer, and he had persistently refused. He did not
propose to be trapped into a meeting. The great sugar man came in one
door; Mr. Mills went out the other.
Mr. Mills had of course decided notions about the principles to be
embodied in the bill. He stood for free raw materials, and consequently
increased the free list considerably; wool, salt, lumber, wood pulp,
flax, hemp, and jute were the important additions. Tin plates and
cotton-ties were the leading manufactured items he made free. His chief
hobby, however, was no specific duties. As the schedules then stood both
specific and ad valorem were assessed on a great variety of articles. As
an illustration, take dress goods, which started with a division into
part wool and all wool. The former class was then divided according to
value, those goods worth 20 cents or less per square yard carrying a
specific duty of 5 cents per square yard and 35 cents ad valorem; those
worth more than 20 cents, 7 cents and 40 per cent ad valorem. All-wool
goods were divided according to weight: those weighing 4 ounces or less
per square yard carried 9 cents per square yard, and 40 per cent ad
valorem; those over 4 ounces, 35 cents per pound and 40 per cent ad
valorem. The confusion resulting from this complexity was constant and
opportunity for fraud increased with each variation. The scandals
through the ’70’s and ’80’s charged by the Republicans solely to ad
valorem duties were largely due to the irritating classifications
according to value and the mixture of ad valorem and specific duties.
When Mr. Mills went to work on the bill he had before him a trial
measure on which he had spent six months at home before his appointment
and which for his own satisfaction he had had printed. He had attempted
in his bill to avoid all specific duties; thus in the case of dress
goods he wiped out all classifications and put a straight 40 per cent on
the value, but as he afterwards said: “When I got to work with my
brethren on the bill I found it would not go and I had to abandon my ad
valorem tariff bill. The schoolmaster had not been sufficiently around
to bring our people back to the Democratic principle of taxation as to
value.” Mr. Mills simplified the complicated cotton schedule in the same
way that he had the woollen schedule, by sweeping away the confusing
classifications and assessing a straight 40 per cent on their value. The
duties were reduced less drastically on iron and steel, and sugar
suffered a reduction of only 18 per cent. The failure to apply the same
rule to iron and steel and sugar as to wool and cotton was probably
“geographic,” as Tom Reed charged. “This bill, far from being
philosophical, is political from one end to the other,” Mr. Reed said in
debate. “Is it not singular that this great principle of labor cost
somehow or other seems to be strictly geographical—that it strikes the
Canadian line with cyclonic force and that the Southern states seem to
be so far removed from the storm centre as not to be in the slightest
degree even ruffled?” Mr. Mills’s committee was made up largely of
Southerners; iron and sugar interests were strong in their districts,
both claimed special protection and both received it.
The Mills Bill aroused a tremendous discussion. The “Great Debate,” as
it is called in tariff annals, lasted for over a month. One hundred and
fifty-one speeches were made, those of Mr. Mills, McMillin of Tennessee,
Wilson of West Virginia, Scott of Pennsylvania, Cox of New York, and
Carlisle of Kentucky were the most important on the Democratic side:
those of Reed of Maine, McKinley of Ohio, Burrows of Michigan,
Butterworth of Ohio, and Kelley of Pennsylvania, the leading ones on the
Republican side. The Democratic attack was along the lines of Mr.
Cleveland’s message with particular emphasis on the small per cent of
wages directly affected by the tariff and the large amount of the duty
which went elsewhere than to labor. A large body of expert calculations
on these points were at their service. The first point had been recently
solved by three able statisticians, each working independent of the
other. They were Worthington Ford, E. B. Elliot, and Simon Newcomb. The
results at which they arrived were bad for the claim that high wages
depended on protection. They showed that as a fact the duties affected
but a small amount of labor; according to Mr. Ford 4.07 per cent,
according to Mr. Elliot 4.34 per cent, to Mr. Newcomb 5½. That is, there
was 94 per cent of the wages of the community which were not affected by
tariffs, although the earners of these wages were paying higher prices
for many of the necessities of life because of these tariffs.
On the second point Mr. Mills and his colleague had the completest
official study of the cost of production in the United States which had
been made up to that time. This study was in the first report ever
published by the Bureau of Labor,[1] and was made by our first
Commissioner, Carroll D. Wright. Mr. Wright showed conclusively how much
less a part muscular labor played in the cost of a great bulk of
protected articles than was supposed. Since the Civil War machines had
displaced men in the making of agricultural implements, until 600 men
did what formerly had required 2100; in boots and shoes 100 were doing
what had formerly required 500; in carpet making, in cotton weaving, in
the lumber business, in the production of metals, in the manufacture of
paper, of woollen goods, of tobacco, of silk, of practically everything,
indeed, a sweeping displacement of hand labor had taken place and always
with a resulting increase of quantity and decrease of labor cost. This
was in 1886, and what was then a comparatively new development is to-day
an old story, but one far more wonderful. Machines have multiplied and
improved in practically every industry, with a resulting decrease in
labor cost.
Footnote 1:
The Bureau was established by Congress in 1884, President Arthur
approving. Mr. Cleveland made the first appointment in January, 1885.
Mr. Mills made an effective argument from Mr. Wright’s report by
comparing the labor cost in the manufacture of many leading necessities
of life with the duties which the manufacturers were fighting for in the
name of labor.
“I find in this report,” said Mr. Mills, “one pair of 5–pound
blankets. The whole cost as stated by the manufacturer is $2.51. The
labor cost is 35 cents. The tariff is $1.90. Now here is $1.55 in
this tariff over and above the entire labor cost of these
blankets.... Here is one yard of flannel weighing 4 ounces; it cost
18 cents, of which the laborer got 3 cents, the tariff on it is 8
cents. How is it that the whole 8 cents did not get into the hands
of the laborer?... One yard of cashmere, weighing 16 ounces costs
$1.38. The labor cost is 29 cents; the tariff duty is 80 cents. One
pound of sewing silk costs $5.66; the cost for labor is 85 cents;
the tariff is $1.69. One gallon of linseed oil costs 46 cents; the
labor cost is 2 cents; the tariff cost is 25 cents. One ton of bar
iron costs $31.00. The labor cost is $10.00. The tariff fixes
several rates for bar-iron and gives the lowest rate $17.92. One ton
of foundry iron costs $11.00; the labor costs $1.64; the tariff is
$6.72. None of these tariffs go to the laborer. The road is blocked
up. They cannot pass the pocket of the manufacturers. This “great
American” system that is intended to secure high wages for our
laborers is so perverted that all its beneficence intended for the
poor workingman stops in the pockets of his employer and the laborer
only gets what he can command in the open market for his work.”
Now admitting that Mr. Mills was too sweeping in his conclusion, there
is no escaping the truth or the meaning of the figures. The price of all
sorts of necessary manufactured articles was increased by the duties,
rarely to their full amount to be sure, but yet much beyond what was
necessary to put the domestic manufacturer on an equal footing with the
foreigner. Somebody got the extra profit, and it was not the workingman.
But the workingman paid the extra price. Mr. Mills illustrated it in
this way. “Suppose,” he said, “that a laborer who is earning a dollar a
day by his work finds a suit of woollen clothes he can buy for $10.00
without the tariff. Then the suit can be procured for 10 days’ work, but
the manufacturer goes to Congress and says, ‘I must be protected against
the man buying this cheap suit of clothes,’ And Congress protects him by
putting on a duty of 100 per cent, or $10.00. Now it will require the
laborer to work twenty days to get this suit of clothes. Now tell me if
10 days of his labor have not been annihilated?”
It fell to William McKinley of Ohio, who for the first time in the Great
Debate showed his skill in tariff matters, to answer Mr. Mills. “It is
an old story,” he said lightly. “It is found in Adam Smith, but it is
not true”; and to prove it was not true Mr. McKinley awakened the House
by dragging from his desk a full suit of ready-made clothes. Holding
them up triumphantly in one hand, he showed in the other a bill for
them. They cost just $10.00. “So you see,” went on Mr. McKinley, “the
poor fellow did not have to work 10 days more to get that suit of
clothes.” There was “great applause and laughter” on the Republican side
and there was talk of having the suit photographed to show in the
campaign.
Mr. Mills said nothing, but he began an investigation. He sent to the
shop where, according to the bill read by Mr. McKinley, and printed in
the Congressional Record, the suit had been bought, and secured one like
it. He then traced it to the manufacturer and from him secured an exact
analysis of its cost. The result pleased him and he decided to save it
for his speech closing the debate, but when the day came Mr. Mills was
so full of facts and figures that he was forgetting the suit. His son,
Mr. Charles H. Mills, was in the gallery, and realizing the situation
passed down a note reading, “Don’t forget McKinley’s suit of clothes.” A
smile passed over the Colonel’s face and taking a fresh start he
presented the result of his investigation. The gist of his entertaining
remarks was that the suit had actually cost to manufacture, tariff
aside, just $4.98. The labor cost was $1.65. The tariff on the wool used
in the suit was $1.70. Adding this to the $4.98, gave $6.68 and on this
sum the manufacturer was allowed a duty of 40 per cent to compensate for
the wool tax and also of 35 per cent to protect him against the imported
article. The whole cost, plus the three tariffs was $10.71. “Of course,”
said Mr. Mills, “the manufacturer had to undersell the foreign suit and
to do so he dropped under him 71 cents and sold his $4.98 suit for
$10.00 with the help of the tariffs.”
As for Mr. McKinley’s comment that the illustration came from Adam
Smith, Mr. Mills had a story to tell. It reminded him, he said, of the
small boy who was caught thieving and whose mother in chiding him, said,
“Don’t you know it is wrong to steal? Don’t you know what the Bible
says?” “Oh, now, mother,” the youngster replied, “that’s an old story.
Moses told it 4000 years ago.”
As a matter of fact, Mr. McKinley’s answer to Mr. Mills had been a
trick. Mr. Mills had not said that a man could not buy a suit of clothes
for $10.00 in the United States; he said that if a tariff of 100 per
cent was put on a suit which could be sold for $10.00 without the
tariff, a man would pay $20.00 for his suit. Mr. McKinley had diverted
attention from the real point simply by holding up a ten-dollar suit in
the Halls of Congress. It was characteristic of the way in which the
taxation element of the tariff was beginning to be handled that after
Mr. Mills’s answer the suit disappeared entirely from the debate; that
is, there began at this time a concerted effort on the part of
supporters of protection to evade or deny the fact that the tariff was a
tax the effect of which was to increase the cost of living. In all the
early years this point was met with fairness. The tariff was a tax
consented to by a majority of the people because of what they believed
to be good and sufficient reasons. Henry Clay called it a tax,—the
protectionists who advocated raising the duties in the Civil War called
them taxes. The Republican party as a whole admitted them to be taxes in
1872. The tariff Commission of 1883, made up of protectionists, approved
by a Republican administration, called them taxes—taxes which had become
largely unnecessary for the purposes for which they were laid and
therefore unjust.
All through the Great Debate the necessity of stopping the use of the
word grew on the Republicans. They sought to replace the obnoxious term
which was unquestionably influencing the country by something alluring.
The tariff a tax, they cried; why, the tariff is the _cause_ of
prosperity; and they set out to force the argument away from the
practical questions which Mr. Cleveland’s message had raised,—the
question of who, after all, got the profit, the question of the relation
of high duties to panics and trusts, to depressions and high prices.
“We have now spent twenty days in the discussion of the Mills Bill,”
said Mr. Reed, when he made his leading speech. “Have you noticed what
has been the most utterly insignificant thing in the discussion? The
most utterly insignificant thing in the discussion has been the Mills
Bill.” It was true, and Mr. Reed’s party was responsible. It was engaged
in a shrewd struggle to divert attention from damaging evidence and to
establish a superstitious reverence for the doctrine of protection which
would put it out of the reach of attack by facts and logic.
Seven months after Mr. Cleveland’s message, July 21, the House passed
the Mills Bill—passed it by a very decent majority—162 to 114. Mr.
Randall’s followers, who in May, 1884, had been 41 strong against Mr.
Morrison’s original bill, and in June, 1886, 35 strong against his
second bill, had dwindled to three or four. They had not given up
without a fight. Randall had prepared a second bill to introduce, but
even the most devoted of his followers realized the hopelessness at that
moment of any bill which advocated reduction as his did by free tobacco
and free whiskey and prohibitory tariffs. Randall, too, was away from
the House much of the spring of 1888, suffering from the disease which
two years later was to end his life; and his group, left without the
stimulus of his magnetic presence, subject to the pressure of the
majority and to the rising popular approval of Mr. Cleveland, dwindled
away one by one. They left him with heavy hearts. Indeed, for more than
one of them the most painful experience of his political life was “going
back on Sam Randall,”—not, let it be noted, on the doctrine of
protection.
Four days after the House bill was passed it was turned over to a
sub-committee of the Senate Finance Committee, appointed two months
before to prepare for its reception. The chairman of this sub-committee
was Senator William B. Allison of Iowa. It could not have been a better
man. Allison was at the time nearly sixty years old and he had been in
Congress constantly for over twenty-five years. Most of the time he had
served on the House or Senate Committees in charge of the tariff. He had
begun his career as a very moderate protectionist of the Garfield type.
In all of the early years of the Republican struggle to keep the
war-time promises as to high duties, _i.e._ to reduce them as the
internal taxes came off, Allison had been a leader. In March of 1870,
when the Schenck Bill was under consideration, he made one of the ablest
tariff reform speeches of the period; a speech which dogged his later
life. But Allison was a strong party man. As the tariff became gradually
a matter of politics rather than of principle he adapted his views to
the needs of the campaigns, striving diligently for duties which would
win the most supporters and do the least harm to consumers. By
temperament he was admirably adapted to compromise. They used to say in
Iowa that he could walk on eggs from Des Moines to Washington and not
break one. Senator Dolliver admirably characterized Senator Allison’s
gift of getting on with men in his eulogy delivered in the Senate in
1905: “He avoided dogmatism even in its most attractive forms and made
room in the expression of his opinion for those differences which he
knew would be encountered sooner or later, giving leeway for composing
those disagreements which he knew must be composed before anything could
be actually done.” Senator Allison was peculiarly ready for making a
tariff bill at this time, for he had been the head of a sub-committee
which only a few months before had finished an important new measure for
reforming the Administration of the Customs. This had already passed the
Senate and at the time Allison and his colleagues took up revision, was
before the Committee of Ways and Means.
By way of emphasizing its sympathy with the protected as well as to show
its disapproval of Mr. Mills’s attitude, the Senate Committee began
hearings in May of 1888 which were continued at intervals until the
first of the next year. They make four big volumes and altogether are an
illuminating compilation for the student. Much more important than the
hearings was a piece of work going on quietly at the same time at
Senator Allison’s request: this was the actual preparation by an expert
of a bill which was to serve as a guide and model to the Committee. The
expert chosen was Colonel George C. Tichenor, a man who knew more about
the administration of our customs and had more authoritative notions of
what duties should be to meet a moderate protectionist program than
anybody then living. Colonel Tichenor had first come into touch with the
tariff in 1877 when he had been appointed by John Sherman, then
Secretary of the Treasury, a special agent of the Department. Here he
was so impressed with the importance of the question and possibly also
with the rarity of men who really knew anything about it, that he
determined to master all its intricacies. In 1881 he was sent abroad by
the Secretary to study undervaluations and the cost of production.
Colonel Tichenor spent some four years in different parts of Europe
seriously examining various sides of the tariff question. His studies
had led him to one conclusion which was of particular influence at the
moment, and that was that specific duties should replace ad valorem
wherever possible, the exact opposite to Mr. Mills’s conclusion. Colonel
Tichenor believed the ad valorem duty more equitable, but that human
ingenuity and dishonesty would always find ways of evading it, and that
as a result both the honest importers and the government would suffer.
It was to be expected that the administration should feel strongly about
undervaluations and be ready to accept almost any system which promised
to make them more difficult. The scandals arising from them had been
flagrant for years. These undervaluations were by no means due alone to
dishonest importers, they were due quite as much to dishonest and
incompetent customs-house officials, to bungling and tricky schedules,
and to a general belief in Europe that our tariffs _ought_ to be evaded.
Many of Tichenor’s recommendations had a value which time has
emphasized, such was his warning that specific duties could not be
placed arbitrarily without grave injustice; it would require time and
preparation to arrange them; such was his protest against “ambiguous
phrases, vague description, loose and uncertain definitions,
contradictory terms” in a tariff law, and his appeal for “plain, simple,
and definite terms.”
Colonel Tichenor had been continued in the Treasury Department after Mr.
Sherman left it by President Cleveland. He had been used indeed almost
as much by the Democrats as by the Republicans. The Randall Bill
referred to above was done largely by Tichenor and into it he had
introduced many of his favorite ideas. While he was working on the
Randall Bill, Mr. Allison had sought his help on the Customs
Administration bill; indeed, the latter was much more Colonel Tichenor’s
bill than any one else’s.
It will be seen then that the man to whom Senator Allison turned in the
spring of 1888 was thoroughly equipped to make a bill—that he did not
even have to begin at the bottom. He had one in hand, the Randall Bill
introduced in March but which had never been heard from since its
reference to the Ways and Means Committee. By readjusting the rates of
this bill to meet more perfectly Senator Allison’s ideas, Colonel
Tichenor soon turned over the document on which the sub-committee went
to work. It became apparent almost at once to those who knew what was
doing in the Committee that the rates in Colonel Tichenor’s bill were
being decidedly increased—a fact which seems to have caused Allison some
concern, for we find him writing to Tichenor in August, “You have seen
that the constant tendency here is to increase rates. How would this
suit our people in the West?”
In October (the 3d) Mr. Allison reported his bill to the Senate as a
substitute for the Mills Bill. The latter was so bad, he said, that it
could not be amended. There was nothing to do but prepare an entirely
new measure. What this measure was, _not_ Mr. Allison, but Nelson W.
Aldrich of Rhode Island, explained. This report is the first important
evidence we have of the powerful influence Mr. Aldrich had already come
to exercise in the Senate on tariff matters. It is also a complete
statement of the interpretation of protection which he had adopted and
to which he has been ever since faithful. Mr. Aldrich had been in the
Senate since 1881. In the making of the bill of 1883 his work for his
wool, cotton, and sugar constituents had been marked by those who
studied the debates and votes. From that time on business men interested
in tariffs had come to count on him more and more. By 1888 he had indeed
become more influential than either Sherman or Allison. The report he
now made shows that he had none of their leanings towards moderation,
none of their anxieties over the evils in protection which both had at
one time or another admitted, none of their dislike of complicated
schedules and classifications. Mr. Aldrich rejected every principle on
which Mr. Mills had worked. He was particularly hard on the attempt to
substitute ad valorem for specific duties. The most important work
Congress had in hand after taking care of the surplus was stopping
undervaluations, he declared; nothing but specific duties would
accomplish this. No expert knowledge was required for the enforcement of
specific duties by customs officials, “as the articles upon which they
are levied have only to be counted, weighed, or measured”; an
extraordinary statement when one remembers the scandals in those years
over specific duties on sugar; extraordinary also when one finds that
many of the schedules in the new bill, as in the law then in force, were
subdivided according to the value of the articles, and that in addition
to the specific duties on these classes were ad valorem duties. Thus Mr.
Aldrich, after denouncing ad valorem duties, presented a bill filled
with ad valorems laid on ad valorems! Sharp issue was of course taken
with Mr. Mills’s free list. Mr. Aldrich declared it destructive. The
Republicans had indeed pretty generally given up the idea of admitting
free any raw materials which were produced in this country. The notion
that if you gave to one you must to all had been steadily making
converts since the early ’70’s, and it was laid down emphatically now by
Mr. Aldrich as one of the tariff principles of the party. No free raw
materials where there is competition, but a long free list. Mr. Aldrich
called attention to the growth of the free list as a proof of the
party’s generosity. In 1847, he said, 88 per cent of the articles
imported were dutiable. This had been cut down in 1887 to 66 per cent.
This was a deceptive statement, for in that period the variety of things
imported had enormously increased, and besides the free list was made up
largely of articles so rare and unimportant that the ordinary person had
to consult the dictionary to know for what many of them were used. In
the nature of the case, it could matter little to consumers whether they
carried a duty or not. But increasing the free list had become a
favorite pastime with enthusiasts like Mr. Kelley. It was presented as a
proof of the interest that the protectionist had in the consumer!
The general reduction by the Mills Bill of rates on the articles where
the tariff affects the multitude, that is, on iron and steel and woollen
and cotton goods, was resented bitterly by Mr. Aldrich. He represented
the class of Republicans that had come to feel that protection had
created these industries and professed to believe that duties low enough
to admit foreign goods in free competition with them would be ruinous.
The Senate bill raised many of the rates considerably above what they
were in the bill of ’83, and in other cases lowered them, but still kept
them at a prohibitive point. Structural steel is a case in point. It had
begun to show the future which was before it as a building material
replacing wood, particularly in larger buildings and in bridges. Under
the bill of ’83 the duty had been 102¾ per cent. The Mills Bill made it
49.32. The Allison Bill now put it up to something over 91 per cent.
There was no possible justification for so high a duty. Steel beams of
foreign manufacture could be put down in the United States at that date
at about $27.00 a ton exclusive of the tariff. But steel beams were
selling in the United States at $66.00 a ton. The argument which raged
over this particular article was typical of the way the two parties were
handling the question. Senator Vest, in declaring the rate in the Senate
bill excessive, quoted an agreement between Mr. Carnegie and the Knights
of Labor as his authority for saying that the cost of turning a ton of
pig-iron into steel rails was $4.09, and that steel beams cost 30 per
cent more, or $5.32 a ton. In reply to this showing, Senator Aldrich
said that $4.09 was not a fair estimate of the cost of steel rails, that
it represented only the cost of turning pig-iron into steel rails. That
on fixing the duty on rails one should go back to the mines and take the
cost of the iron as it comes from the earth and the cost of changing it
into pig-iron. To which argument Senator Vest replied: “It seems to me,
with the greatest respect to the Senators from Iowa and Rhode Island
that the proposition is entirely absurd and without the shadow of
logical foundation. The pig-iron comes to the manufacture of steel rails
a finished product. The cost of the pig-iron had paid all the antecedent
cost of manufacture, and it would be just as forcible an argument to say
that if the tailor who makes my coat is to be protected, we are not to
take as a basis of calculation the cost of the cloth as it came to the
tailor’s shop, but we are to go back to the wool of the sheep, to the
cost of shearing, to the cost of washing, to the cost of carting, and
all this is to be added to the cost of the cloth, although the tailor
has already paid it.”
The opponents of the rates on steel products were loud in their trust
alarm. They certainly had an effective example to hold up. Mr. Carnegie
had begun to come into his own, as an illustration of what combined
transportation and tariff privileges can do for an able manufacturer. He
and his profits and his castle at Skibo figure in every debate on iron
and steel products at this period. Even Senator Aldrich had grudgingly
to admit a trust in steel beams, but he hopefully declared that if the
prohibitive duty was retained, domestic competition would destroy the
monopoly. Senator Sherman was not quite so hopeful as Senator Aldrich.
He was at last beginning to feel some doubt about the infallibility of
domestic competition.
The reduction of the revenue which both parties recognized as of chief
importance, the Senate bill sought to effect by the repeal or reduction
of direct taxes on whiskey, tobacco, and alcohol used in the arts, and
by reducing lower than the Mills Bill had the duty on sugar. An
important principle which Mr. Aldrich adopted in his report was Mr.
Kelley’s favorite argument that the way to reduce was to raise rates so
high that people could not afford to import: that is, reduction by
increasing taxation. Another significant feature of the document was the
complete repudiation of the old promise to reduce rates when the
extraordinary expenses of the Civil War had been fully met. “The
practical question which we have to solve,” said Mr. Aldrich, “is not
the date when duties were established or the circumstances or promises
under which they were levied; but, the desirability of protection being
conceded, it is what rates are proper and adequate under existing
circumstances.” Equally significant was the almost exclusive attention
Mr. Aldrich’s report gave to the manufacturer and his laborer. To hear
him one would have gathered that the interests of the consumers could
not be served except through protection. The almost exclusive attention
given to the manufacturer by the Senate bill was only an expression of
the appeal which the Republican party was making in the campaign for the
presidency. The platform of the party had declared, “The protection
system must be maintained”; such a revision must be made as would “check
imports of such articles as are produced by our people, the production
of which gives employment to our labor, and releases from import duties
those articles of foreign production, except luxuries, the like of which
cannot be produced at home. If there still remains a larger revenue than
is required for the wants of the government, we favor the entire repeal
of internal taxes rather than the surrender of any part of our
protective system, at the joint behest of the whiskey trust and the
agents of foreign manufacturers.” It was practically a declaration for
prohibitive tariff, nothing else indeed would “check imports of such
articles as are made by our people.”
There is no doubt that the party was driven to this extreme position on
protection by its own political difficulties. The Mugwump movement out
of the party in the early ’80’s, due partly to the failure of the
leaders to keep faith on the tariff, and more to the general corruption
in its service and its methods, had cost them the election of 1884. Mr.
Cleveland had stolen their thunder as revisionists when he put boldly to
the country a doctrine very like that which they had publicly proclaimed
in 1872 and 1880. The only element in the country they could rely upon
in 1888 was the manufacturers, and they could only rely upon them when
they gave them what they asked. Particularly necessary was it that they
produce a bill which should in principle and practice satisfy the Iron
and Steel Association. This organization had come to take the same
political relation to the tariff that the Industrial League had held
earlier. Like its predecessor, it aspired to choose chairmen for the
Ways and Means Committee, to name presidents, and to write tariff bills.
Its position in the Republican party in 1888, which was close to that of
a dictator, was due almost as much to the recognition it had received
from Mr. Blaine as to its own energy and efficiency. As we have seen,
Mr. Blaine in the ’70’s had thought it good politics to serve the
Industrial League in any way he could. When the Iron and Steel
Association gradually replaced that organization he followed the same
practice and in 1884, took one of its leading members, B. F. Jones of
Pittsburg, as chairman of the Republican National Convention. Mr.
Cleveland’s election, and the popular revolt against the high tariff
attitude, had only quickened the determination of the Iron and Steel
Association to protectionize the country, to get out of the way all
pestiferous Republican tariff reformers, all free-trade and
tariff-for-revenue only Democrats. They began on the Congressional
districts and did some most effective work. Their most brilliant stroke
was defeating William R. Morrison of Illinois in 1886. For years Mr.
Morrison had represented his District in Congress. He had won the
hostility of the Iron and Steel Association by his aggressive fight on
protection, and it decided he must go. In the fall of 1886 John Jarrett
of Pittsburg, a former president of the Amalgamated Iron and Steel
Association and at the time president of the Tin Plate Association, went
into Mr. Morrison’s district, and by free use of money, “$3.00 a day and
all necessary expenses” according to his own published letters, had
organized a large body of laborers to work for protection. There were
some bitter charges made against Jarrett’s methods; whatever they were,
and it seems from the evidence that they were “bribery and hiring,” they
were successful. Mr. Morrison’s majority was changed to a substantial
minority.
When it came to the campaign of 1888 the Iron and Steel Association
decided that the most critical point was the chairman of the National
Republican Committee. Jones had made a fiasco of the campaign of 1884—no
more practical business men were wanted. The one man the Association did
want was Senator Quay of Pennsylvania. But Mr. Quay had a record behind
him that he was none too anxious to have aired, and he did not want the
work. The Iron and Steel Association, however, had determined that he
must serve, and in July, a few days before the National Committee met,
James M. Swank, who had been secretary of the Association since 1873 and
its general manager since 1885, a position he still holds, and who for
many years has managed every tariff campaign in which his Association
has been interested, took matters into his own hands and telegraphed
General Harrison’s managers that it was Senator Quay alone who would
meet the approval of the financial interests of the East. Without his
knowledge Senator Quay was appointed. He had not been in favor of
Harrison’s nomination, had only consented to it when he found John
Sherman, his own candidate, could not be named, and even then not until
he had assurances from Indianapolis that Pennsylvania should have a seat
in the cabinet. Nominated by the committee, he finally accepted. The
first person Mr. Quay consulted was John Wanamaker (who afterwards
received the seat in the cabinet which Mr. Harrison had promised
Pennsylvania), who saw to the funds. As to Mr. Quay, he saw to using
them to oil and fire the remarkable campaign he set in force—a campaign
for protection backed by the protected. The highest Republican political
authorities have declared repeatedly that only Quay could have won the
campaign of 1888.
It is doubtful if there has ever been a political campaign in the United
States where the appeal for money was so frank—the acknowledgment that
success depended upon it so open. For several years the party had been
relying more and more on the use of money and had also been less and
less nice about how it used it. It was an open secret that Indiana had
been carried in 1880 by the “bright new crisp two-dollar bills” of
Stephen W. Dorsey, secretary of the National Republican Executive
Committee. The dominant faction of the party seemed indeed to think
Dorsey’s work nothing more than a clever trick; no less a person than
General Arthur, soon to be inaugurated as Vice-President of the United
States, boasting of it at a dinner at Delmonico’s in February, 1881,
said, “Indiana was really, I suppose, a Democratic state. It had been
put down in the books always as a state that might be carried by close
and perfect organization and a great deal of ——” General Arthur
hesitated, while everybody laughed. “I see the reporters are present,”
he continued; “therefore I will simply say that everybody showed a great
deal of interest in the occasion and distributed tracts and political
documents all through the state.”
The struggle for money in 1884 had been almost pathetic. Mr. Jones had
of course the richest group in the country to draw from—the iron and
steel manufacturers, and he gave liberally himself,—$87,000, it was
reported at the time. He did not get enough, and a few days before the
election, October 29, a dinner was given in New York for the express
purpose of raising funds: a millionnaires’ dinner, at which were
represented all the various “special interests” of the day, not tariff
interests alone, but the railroads, the Standard Oil Company, monopolies
and privileges generally. Large sums of money were pledged at this
“Belshazzar’s Feast,” as the newspapers dubbed it. Who gave, and how
much, were of course not recorded. David Wells said that he had it on
the best authority that Jay Gould and John Wanamaker each contributed
$100,000, but what his authority was the author does not know. Campaign
contributions were not in as bad order in 1884 as they are to-day, but
there was still a certain sense that contributions of $100,000 to
campaign expenses, made on the eve of an election, were suspicious, and
there is no doubt that the “monopoly dinner” helped defeat Blaine.
Another practice carried to the scandal point in the campaign of ’84 was
that of extracting contributions from government officials. In Indiana a
political manager informed the Federal employees that a list of the
names and amounts given by each person would be carefully made out and
the same reported to the National Committee, and a list would also be
made of all persons who did not contribute. Quarters were set up in
Washington purposely to work the government employees. In 1888 these
proceedings were not repeated by the Republicans, and rumor that the
Democrats in Chicago were attempting them caused a violent discussion in
Congress.
The money precedent was well established then in the party and in 1888
the managers began as early as May, before the Convention nominated
Harrison, to gather it in. The Mills Bill, with its free list, ad
valorem duties, and reduced schedules, was still in debate, and
naturally the money-getters appealed to the protected. James P. Foster,
President of the Republican League of the United States sounded the
slogan for the campaign in a letter which stated with amazing frankness
the feeling the Republicans themselves had about who was getting the
benefit of the “bulwark of prosperity.” It was the manufacturers,
particularly the manufacturers of Pennsylvania, who being the most
highly protected, ought to be “put over the fire and all the fat fried
out of them.” Throughout his campaign Mr. Foster kept up this cry for
“fat.” Another organization as active in money raising as Mr. Foster’s
Republican League was the Tariff League founded in 1884 by Robert
Porter, one of the members of the Tariff Commission of 1883. This League
took itself with great seriousness and taught the doctrine pure and
undefiled without qualification or hesitation. It divided none of the
glory of prosperity with the energy and the thrift or the natural
resources of the country. We were what we were because of protection and
protection alone. The officers of the League undoubtedly believed in
what they said, and they raised money as men would to spread the Gospel.
It was impossible that money raised from men interested as beneficiaries
of protection were, should be all used without scandal. The one implies
the other. Perhaps the most notorious incident of misused funds occurred
in General Harrison’s own state.
But quite apart from the corruption which went on, a great debate
characterized the campaign,—a debate which followed the line of the
House arguments on the Mills Bill, of the Senate’s on the Allison Bill.
The speeches in the two Houses were indeed campaign speeches, addresses
not to a deliberating body, but to a balloting constituency. The
Democrats depended mainly on the cry of excessive taxation. Their
platform had rung the changes on the word until it almost lost its
effect from over-repetition. The Republicans seized the opening and
answered them with jeers. In New York City they even carried parrots in
their processions taught to cry “tariff is a tax.” The high prices of
certain necessities like woollen garments due to the tariff was another
effective Democratic argument. General Harrison dismissed it lightly. “I
have an impression,” he said, “that some things may be too cheap” “cheap
coats involve cheap men.” There could have been no better epigram for
those bent on keeping up prices. Argue as the Democrats would that the
man who had to pay $20.00 here for a suit that would cost him but $10.00
abroad, would be better off if he could put his extra money to other
uses, the Republicans could cry “But without the tariff he would have no
twenty dollars, he would have no ten, for he would have no work!” The
fallacy that there would be nothing to do in the country if protection
did not enable men to manufacture was insisted on continually. Moreover,
the Republicans would not admit what was, and still is, true, that the
great body of wages in protected industries is less than in the
unprotected. The trusts figured repeatedly in the attack on the
Republican position, only to be waved aside, as by Mr. Blaine. “Trusts,”
he declared, “are state issues,” “they have no place in a national
campaign.”
The Republicans were not without good ammunition. The Democratic
revision was full of inconsistencies as any revision made as ours are,
is bound to be. It did show geographic bias. Moreover, the Democratic
position had the disadvantage of being an attempt to meet a condition
and one not of their making. They might be free traders as a few of them
were; they might be tariff-for-revenue only men, as most of them were,
but when it came to making a tariff bill they felt themselves obliged to
fix duties not only with revenue and reform in mind, but with protection
as well. The Republicans could taunt them with inconsistency and
cowardice and describe their revenue duties as disguised protection to
their own friends. And in the same breath that they accused them of
protecting their friends they anathematized them as “free-traders,”
friends of England, enemies of their own countrymen.
The Republicans won the election, though not overwhelmingly. As a matter
of fact, Grover Cleveland had a majority of 100,000 of the popular vote.
It was not the tariff which gave them the victory. Their victory would
have been a defeat if it had not been for the Democratic split which
gave them New York, and the return to their fold of a certain Mugwump
Republican element which had revolted in 1884 and now came back because
dissatisfied with Mr. Cleveland’s civil service work.