THE WILSON BILL
“Gentlemen, you can pass your bill. You can pass it when you please,”
Colonel Roger Q. Mills told the Republicans in Congress at the outset of
the debate on the McKinley Bill; “but whenever it does pass it will have
a Hell Gate to go through after it leaves the House and Senate. There is
a whirlpool with sunken rocks beneath the surface of the water through
which your little craft will have to sail.
“You say that this question was settled at the last presidential
election. Yes, Grover Cleveland had a majority of one hundred thousand
votes of the American people. If there is anything in the signs of the
times, they indicate that that majority will be greatly increased in the
near future. I want you to pass your bill and go with it out West; take
it with hair, hide, and wool all over it, and discuss it there; I want
you to meet the people whom you have ‘not hesitated’ to tax from 1 to
200 per cent on the necessaries of life.
“Mr. Chairman, we promise our friends that we will examine their bill.
It needs discussion, and will get whatever we are permitted to give it;
and then when we have done that you will pass it, and when you leave
this House and Senate with this enormous load of guilt upon your heads
and appear before the great tribunal for trial, may ‘the Lord have mercy
upon your souls.’”
This was in May of 1890. The bill became a law in October. In the
interval, wise Republicans like John Sherman and James G. Blaine were
doing their utmost to prepare for the passage of the “Hell Gate,” which
Colonel Mills had prophesied and the roar of which became louder with
each week’s approach to the fall elections. While his party granted the
duties which bolstered the trusts, Mr. Sherman hurried through his bill
making trusts a crime. While his party raised higher the wall which shut
trade both in and out, Mr. Blaine worked for free trade between
ourselves and our neighbors on the American hemisphere. But these were
palliatives, not cures, and sensible people recognized their character.
The storm was on the party almost as the measure went through. In the
Congress which passed the McKinley Bill, the Republicans and Democrats
stood 166 to 159. In the House of Representatives elected a little over
a month after the passage of the McKinley Bill the proportion was 88 to
236: they had lost 78 votes. No such avalanche as overwhelmed the party
in the fall of 1890 is loosened by one cause. It is always a number, but
in this case it was a number of which the prohibitive duty and the
political methods it had required to force it through Congress was the
centre and strength. The other causes were kindred in their nature. The
overthrow of the party at bottom was a plain revolt against the
political immorality, the intellectual humbug, and the unholy greed
which had produced the bill. At the heart of the Democratic victory was
the inspiration of a real cause. The defeat of ’88 had left the party
determined rather than cast down. They knew they were fighting for a
right principle. Their joy in the conflict grew rather than diminished
as the months passed.
The Democrats had won the House and Senate and all the indications were
that they would win the presidency in 1892. The first fifteen months’
trial of the new measure admirably served their ambition, for that
happened which, lack of work aside, makes life hardest for the world in
general,—the price of food went steadily up. The fact that a dollar
would buy more sugar did not compensate for the fact that it bought less
flour, less corn-meal, less meat, and fewer potatoes. Moreover, there
were other advances which irritated the world in general,—advances in
the prices of coal, lumber, and particularly tin ware and canned goods.
Tin plates which sold for $4.79 a box in 1890 sold for $5.33 in 1891,
and by the time the tin found its way into a milk pan or a dinner pail
or a tomato can there was a still greater per cent of increase. It was
so palpably a higher cost because of the duty, it was so generally and
correctly believed that the increase would not for many years benefit
more than a few, that irritation increased with every purchase. Among
manufactured goods it was tin plates almost alone which advanced.
Manufactured goods generally fell in price in 1891. Some of the high
grade cottons and woollens advanced, but these were exceptions. The fact
of a decided increase in a common article like tin plate, the fact that
coal and lumber were dearer, quite overshadowed the fall in the prices
of goods generally.
There was no hesitation in the minds of the Democrats about what they
should do with their power when they took possession of Congress in
December, 1891. They proposed to begin at once to reform the McKinley
Bill. The history of their efforts in the ’80’s being what we have seen,
and Roger Q. Mills being still a member of the House of Representatives,
it was to be expected that he would be elected speaker of the House.
Mills was a candidate, so were Charles F. Crisp of Georgia and William
M. Springer of Illinois. On the Tuesday before the Democratic caucus,
Colonel Mills had one hundred and twenty votes pledged. When the first
vote was taken, Mr. Crisp was in the lead. On the thirtieth ballot Mills
was defeated by one vote. After the contest, he took the Congressional
Directory and checked off the names of twenty-four men who had asked him
for committee assignments, promising to support him in return; the
doughty Colonel had refused. Once in the contest Springer sent him word
that he would withdraw if Colonel Mills would make him chairman of the
Ways and Means Committee. Colonel Mills asked to have the proposition
submitted in writing! Tom Johnson, who was devoted to Mills, came to him
once when the balloting was going on, and said, “I do wish you wouldn’t
be a fool; give me two chairmanships and ask me no questions and I will
elect you on the next ballot.” The Colonel only shook his head. There is
no doubt that if he had withdrawn with his followers from the caucus and
thrown the election into the House, the Republicans would have elected
him. Indeed, they so sent him word.
Mr. Crisp was elected, and he appointed Mr. Springer chairman of the
Ways and Means Committee. To Colonel Mills he offered the second place
on the Committee; this Mills refused, “Having been a member of the
committee of the Ways and Means for ten years, and chairman in the
fiftieth Congress,” he wrote Mr. Springer, “the reasons which have in
your judgment rendered my appointment as chairman unwise would
disqualify me for service on any other part of that Committee, and it
would not be sincere to say that it would be agreeable to accept your
tender.
“I leave to you, without suggestion from me, to make such other
arrangements as you, in the discharge of official duty, may determine.”
There was no possibility of any legislation passing beyond the House in
that session of Congress. A Republican Senate and President stood in the
way, but agitation for political and educational purposes was possible
and it was carried on. Fully 150 petitions were presented the first
session of the new Congress, the 52d, December, 1891 to August, 1892,
asking for the repeal of the whole or some part of the McKinley Bill.
More than 100 bills were introduced, providing for its repeal or
amendment. The Democrats undertook only the reform of especially
obnoxious duties. Five bills were brought in: (1) a bill to place wool
on the free list and to reduce the duty on woollen goods; (2) a bill to
admit free of duty bagging for cotton, machinery for manufacturing
bagging, cotton-ties and cotton-gins; (3) a bill to place binding twine
on the free list; (4) a bill to reduce and ultimately to abolish the
duty on tin and terne plates; and (5) to reduced the duty on lead ores.
These bills were all passed by the House after thorough discussion; as
good material as the party could have for the presidential campaign
which was on the country before the “pop-gun” bills, as the Republicans
called them, were out of the way.
In the face of an almost certain victory in the impending election,
serious Democrats began to ask themselves what, after all, should they
do? What did they mean by tariff reform? To the majority there is no
doubt that it meant simply a combination of tariff for revenue and of
moderate protection of those industries already established, which it
was believed could not yet compete with foreign goods. They professed to
believe in free raw material—and did unless the raw material happened to
be a leading product of their constituents. They were not generally in
favor of drastic cutting, but preferred it to gradual.
This in the main was the position of Mr. Cleveland. It certainly was a
little more radical than some of Mr. Cleveland’s advisors, Mr. Whitney
and Mr. Vilas, for instance. But it was a position which filled men like
Colonel Mills and Henry Watterson and Tom Johnson with disgust. They
determined that it was time that the party stopped its coquetting with
protection and followed a single-hearted tariff-for-revenue only policy,
and it was such a policy which Mr. Watterson in particular determined
should be adopted by the Democratic convention. He had succeeded in
getting a tariff-for-revenue only plank into the platforms of 1876 and
1880. In 1884 he had seen his party, “with General Butler astride its
back and Mr. Randall on its flanks,” as he described it, obliged to
straddle. In 1888 this straddle had been repeated. Mr. Cleveland, seeing
a “condition and not a theory,” could not sanction a plank which
promised to reform the tariff with revenue only in mind. He knew the
effects of duties on industries ought to and would be considered. Mr.
Watterson went to Cincinnati in 1892 prepared for the fight of his life.
He won. They called him a platform-smasher afterwards; he corrected
them: he was a platform-maker; and that was true. Henry Watterson by his
tactics and eloquence led the Democratic convention of 1892 to declare
for tariff-for-revenue only, and Mr. Watterson meant just that.
“How would I make a tariff bill?” he said, later, in one of the most
notable political speeches of the period.
“By the aid of all the best experts and authorities I would get
together all the needful statistical data. I would then find a clean
sheet of paper. I would lay this on the table—not the little round
one, but the big oblong table—in the Ways and Means Committee Room.
Then I would open the cupboard containing, among other perishable
contents, the McKinley Bill. I would take this out none too
gently—and pitch it into the fire. Then I would draw upon my clean
piece of paper three lines. Thus:
ARTICLES DUTY REVENUE
I I I
I I I
I I I
I I I
I I I
I I I
I would begin at the top of the first column with sugar. Then the
duty, say one cent a pound. Then the estimated revenue—say
$35,000,000. Then I would abolish the sugar bounty, making a
difference of $45,000,000 in the revenue. I would follow with tea
and coffee. I would continue, giving precedence as far as possible
to revenue-yielding commodities not produced in this country, down
through the largest revenue-yielding domestic products—without the
least regard to protection, incidental or otherwise—and when I got
$200,000,000 I would stop. Then I would take another bit of white
paper, and I would frame an Internal Revenue Act, raising
$175,000,000 on spirits and tobacco-making, $375,000,000 in all—and
the rest, $50,000,000 or $75,000,000, as the estimate might require,
I would raise by a tax, first on inheritance and dividends, and
then, if needs required, on big incomes.
“Then I would call the Committee—the Democratic members of the
Committee, I mean—and, when any one of them proposed to confuse the
simplicity of this perfectly plain Tariff-for-Revenue-only Act by
the old cant about the danger of being too precipitate and extreme,
I would knock him out—not down—by saying: “Read the National
Democratic Platform.””
How far from this uncompromising sort of revision Mr. Cleveland was, his
letter of acceptance in 1892 shows:
“Tariff reform is still our purpose. Though we oppose the theory
that tariff laws may be passed having for their object the granting
of discriminating and unfair governmental aid to private ventures,
we wage no exterminating war against any American interests. We
believe a readjustment can be accomplished, in accordance with the
principles we profess, without disaster or demolition. We believe
that the advantages of freer raw material should be accorded to our
manufacturers, and we contemplate a fair and careful distribution of
necessary tariff burdens rather than the precipitation of free
trade.
“We anticipate with calmness the misrepresentation of our motives
and purposes, instigated by a selfishness which seeks to hold in
unrelenting grasp its unfair advantage under existing laws. We will
rely upon the intelligence of our fellow-countrymen to reject the
charge that a party comprising a majority of our people is planning
the destruction or injury of American interests; and we know they
cannot be frightened by the spectre of impossible free trade.”
Mr. Cleveland was inaugurated in March of 1893, but tariff reform was
not the first work before him. The Silver Question was the more
pressing, and the extra session he called for August had as its business
the repeal of the purchasing clause of the Silver Bill which the
Republicans had adopted in 1890, and by which they had bought a part of
the votes for the McKinley Bill. The extra time of this session was
utilized to begin work on the tariff. More loudly than ever the public
demanded its reform. Nothing that had been promised that the McKinley
Bill would do had been done, nothing but reducing the surplus—and that
had been overdone. The combination of free sugar, prohibitive tariffs,
and reckless spending with purchasing bonds not yet due at a premium,
had reduced it to over $105,000,000 in the year the bill was adopted, to
$2,500,000 in the year Mr. Cleveland was elected and a deficit was
ahead; in fact, Mr. Cleveland inherited a deficit which the fiscal year
after his inauguration had reached nearly $70,000,000. He also had
inherited a business depression, the culmination of which came in the
first summer of his administration, and along with the deficit and panic
a series of labor troubles equal to those of the ’80’s. The McKinley
Bill had failed utterly to do the two things which its makers had
oftenest declared it would do, preserve prosperity and satisfy labor.
Steadily after its passage depression grew. In 1892 the labor troubles
of our country were as acute as in any year of our history, and these
troubles were in the highly protected industries, in iron, steel, wool,
and cotton. The McKinley Bill was not the cause of the depression, as
the Democrats argued. The world was in panic. One of those periodic
disturbances which sweeps the globe, a logical result of man’s bungling
with the laws of trade, had started. That we did not feel the acute
pangs of this disturbance as soon as Europe was due to the stimulants we
had been taking in the way of high tariffs and cheap money. When they
wore off, as they quickly did, our condition was the worse for the
delay. A few months after Mr. Cleveland’s election the depression and
unrest culminated in the panic of ’93. There has always been an effort
to shift the responsibility of this disturbance on the Democrats. The
panic of ’93 was caused, so Republican orators have repeated for
eighteen years, by alarm at the prospect of a Democratic revision of the
tariff. There was never a serious charge with less foundation. That
panic was headed directly towards us long before Mr. Cleveland’s
nomination. A McKinley bill could not stop it; but it did make it the
more acute when it came, by the very fact that it had helped free silver
to hold it back.
By utilizing the extra session, the Ways and Means Committee had a bill
ready for the regular session which began in December, 1893. The
chairman now at the head of the Committee was James Lyne Wilson of West
Virginia. His appointment to succeed Mr. Springer, who had engineered
the “pop-gun” bills, had been particularly satisfactory to the
tariff-for-revenue only Democrats. Mr. Wilson was a man of fifty, an
educated gentleman, who had been, in turn, a Confederate soldier, a
practising lawyer, and a college president. Through it all he had kept
alive a disposition to politics. He had written and spoken on whatever
public question was uppermost. He had attended conventions, and served
as a delegate, a “scholar in politics.” Finally, this interest and
activity took him to Congress, where his sound economic ideas and his
skill in presenting them had recommended him to the best element in his
party, Cleveland, Carlisle, and Mills. In 1884 he aided Carlisle in his
fight against the Randall faction. In 1888 he was put on the Ways and
Means Committee, where he served Mr. Mills excellently. It has been
customary to speak of Mr. Wilson as impractical and academic, but the
bill he brought in in December, 1893, far from being a schoolmaster’s
application of his own theories, was distinctly practical. The bill was
not what he had hoped to make it. Mr. Wilson said in his report: “With
the tariff, as with every other long-standing abuse that has interwoven
itself with our social and industrial system, the legislator must always
remember that in the beginning temperate reform is safest, having in
itself the principle of growth.” The first step he had had in mind was
to take taxes from the materials of industry. In Mr. Wilson’s judgment
it was the higher cost of raw materials rather than higher wages which
hampered American manufacturers. Therefore the Wilson Bill made wool,
coal, iron-ore, hemp, and flax free. To “help the farmers” duties were
taken from agricultural machinery, from cotton bagging, from salt, and
from binding twine. An effort was made to do away with all specific
duties. On manufactured goods there was no severe reduction: from
one-third to one-half on window glass; 25 per cent on steel rails; lower
rates on what Mr. Wilson called the “bogus industry” of making American
tin plate; one-fourth cent per pound on refined sugar instead of
one-half.
The bill was a grave disappointment to the tariff-for-revenue only
Democrats. It did not go far enough, complained Mr. Mills in an article
in the _North American Review_ for February, 1894. It was only “a
Sabbath Day’s journey on the way to reform.” He would have put every
item in the chemical schedule on the free list. He would not only have
made ores free, but pigs, bars, bloomers, slabs, ingots, sheets, and
plates, that is, all materials which had been advanced to a first or
second stage towards manufacture. On the same principle he would have
made not only wool and hemp free, but yarns and fibres. Mr. Mills was
particularly disturbed because Mr. Wilson had not equalized the import
duty and the internal taxes on beer, whiskey, and tobacco. He believed
these three should bear the brunt of taxation. As it was then, the
internal tax was low and the duties very high. The brewers, distillers,
and cigar-makers paid low taxes, and, cut off from foreign competition
by high duties, kept up prices. Colonel Mills reckoned that under the
McKinley Bill the duty on imported cigars amounted to $70.44 a thousand,
the internal tax was $3.00 per thousand. He wished to make each $6.00.
This would give revenue and cheaper cigars at once. At the same time it
would check the tendency to combine.
A more severe critic than Colonel Mills was Mr. Watterson. In a speech
in Louisville in January, he said:
“I have read with exceeding care and great concern, the reports
accompanying the newly-introduced measure, of Tariff revision. The
Democratic report begins by a masterly declaration of
Tariff-for-revenue only logic, to end in an actual exposition of
Protectionist practice. For the Chairman of the Ways and Means
Committee I entertain the very greatest respect. He is an able,
conscientious, patriotic Democrat. He has encountered difficulties
and made sacrifices, and endured disappointments, which should earn
him the sympathy, rather than the criticism, of his party
associates. But, with submission, I think he has been forced by
pressure, and not by his own consent, to bring in a measure that
strikes a blow at the cause of genuine Tariff Reform, and may set
the policy of revenue only back for many years to come. It is far,
very far, from a measure that can be truthfully described as
embodying the idea of ‘a Tariff-for-revenue only.’ It is merely
better than the McKinley Bill in degree, not in kind, and if
Protectionism is ever to be dislodged, I doubt the Trojan-horse
stratagem to which it seems to incline. We live in the age of
Carnegies and Goulds, not in that of Priam and Æneas.”
But the bill Mr. Wilson reported was better from a Democratic point of
view than the one sent to the Senate early in February. The chief
difficulty encountered in the passage through the House he hinted at in
an anecdote he told just before the bill was voted on.
“When Sir Robert Peel was just entering upon his work of tariff
reform in England,” said Mr. Wilson, “he read to the House of
Commons a letter that had been sent him by a canny Scotch fisherman.
The writer protested against lowering the duty on herrings, for
fear, as he said, that the Norwegian fisherman might undersell him;
but he assured Sir Robert, in closing the letter, that in every
respect except herrings he was a thoroughgoing free-trader. I trust
that no Democrat to-day will be thinking more about his herrings
than the cause of the people.”
It was not the “herrings” which had found their way into the bill,
however, which caused the largest number of Democrats to hesitate over
it. They were all accustomed to them. It was a greater innovation, an
amendment providing for a tax on all incomes of over $4000. Mr. Wilson
had not approved of it, he had believed it inexpedient; but when the
committee decided otherwise, he threw in his fortunes loyally with them.
“I have never been hostile to the idea of an income tax,” he said. “It
has been opposed here as class legislation; it is nothing of the kind,
Mr. Speaker; it is simply an effort, an honest first effort, to balance
the weight of taxation on the poor consumers of the country who have
heretofore borne it all. Gentlemen who complain of it as class
legislation forget that during the fifty years of its existence in
England it has been the strongest force in preventing or allaying those
class distinctions that have harassed the governments of the Old World.”
The bill was passed, “herrings,” income tax, and all, on February 1,
1894, and was at once sent to the Senate. So sharp had the criticism of
the bill been that the Democratic caucus appointed a sub-committee of
three to go over it and make a more representative Democratic measure,
before it should be reported. This committee was made up of Jones of
Arkansas, Vest of Missouri, and Mills of Texas. Colonel Mills had been
elected to the Senate the fall before. Although not a member of the
Finance Committee, he was placed on the sub-committee. After three
weeks’ hard and incessant work, the bill was reported to the Democratic
caucus, and here a strong opposition at once developed, an opposition so
obstinate that it was obvious it would defeat the bill if it could not
be satisfied. The leaders of this faction were Senators Arthur P. Gorman
of Maryland and Calvin S. Brice of Ohio. These gentlemen had organized
so solidly a small number of their party colleagues, dissatisfied with
the reductions the bill made on articles in which they were interested,
that they were able to say to the Committee that unless their demands
were satisfied no bill should pass. A look at the make-up of the Senate
shows how easily they could carry out their threat. There were in the
body thirty-eight Republicans, forty-four Democrats, and four Populists,
the latter voting on the tariff with the Democrats. Five votes diverted
from the forty-four would, if the Republicans voted solidly, as they
were expected to do, give a majority of one against the bill. Messrs.
Gorman and Brice could show the five votes. One of these was that of
David J. Hill of New York, who had given notice that he would in no case
support a measure carrying an income tax. The result of this alignment
was that the bill was revised under the direction of Senators Gorman and
Brice and reported to the Senate with some 634 amendments.
As an illustration of the kind of reconstruction which went on, take the
sugar schedule. It is an illuminating example of tariff-making as
practised by the Senate of the United States, both then and now. We have
seen what the McKinley Bill did for raw sugar,—made it free, but gave
bounties to the home sugar-growers equivalent to two cents a pound. As
for refined sugar, all grades from No. 16, Dutch Standard, upward, were
allowed one-half cent a pound, which was undoubtedly a pure gratuity to
the sugar trust. Formed in 1887, with a capital of $50,000,000, the
stock of this organization had not been listed on the New York stock
exchange until February of 1889. When the McKinley Bill was first
brought into the House in January of 1890, sugar certificates were worth
fifty cents on the dollar. Their rise between that date, when it looked
as if refined sugar would be given no duty, and the date in May, when
the one-half cent was fixed, was told three years later on the witness
stand by a Senator of the United States who was familiar with operations
of this sort, Calvin S. Brice of Ohio:
“During the month of January,” said Mr. Brice, “sugar stock
fluctuated between 50 and 60, with as wide or wider fluctuations in
each of the four following months. So then when the bill had passed
the House of Representatives and had been favorably considered and
settled in the Senate Finance Committee in May, the sugar trust
certificates had advanced to 95, an advance of 45 points or
$22,500,000 computed on the capital of the sugar trust, or
$33,750,000 if the other $25,000,000 which were added a few months
afterwards as representing the Spreckels, Harrison, and Knight
refineries are taken into account. During the fall of 1890 the
Baring panic temporarily depressed sugar trust certificates, as well
as other securities in the New York Stock Exchange, but as soon as
that had gone by, the sugar trust certificates went above par, and
eventually under the operations of the McKinley Act reached 134 or
135; an advance from January, 1890, when the McKinley Bill was
introduced, of 85 points, or $42,500,000 on the sugar trust
certificates, and an advance of $63,750,000 on the American Sugar
Refining Company’s Stock, the Company which in 1891 succeeded the
original trust.”
The dealings in the certificates on the New York Stock Exchange in 1890
Senator Brice declared to have amounted to 8,000,000 shares,
$800,000,000. As for profits, the trust’s president, Mr. H. O.
Havemeyer, said on the witness stand in 1894 that he reckoned them at
close to $25,000,000 for the three years, or, as he put it,
“three-eighths of a cent more on every pound they (the consumers) ate.”
Without the McKinley Bill this would have been impossible, and, said Mr.
Havemeyer, “as long as the McKinley Bill is there we will exact that
profit.”
This episode had scandalized the country and intensified the disgust
with the sugar refiners which their open swindling in the preceding
fifteen years had aroused. When the Democrats in the House came to make
their bill they at first proposed a duty of one-fourth cent a pound on
refined sugar, half of what McKinley had given. This was undoubtedly
one-fourth of a cent too much. With free raw sugar the refiners could
carry on their business at a profit. This was demonstrated to Mr.
Wilson’s satisfaction while the bill was still in the House, and when it
left, refined sugar as well as raw was free.
As said above, the bill was referred to a sub-committee of which Colonel
Roger Q. Mills was a member. Now Mr. Mills, like most tariff-for-revenue
only Democrats, had always held that a tax on raw sugar was one of the
least obnoxious that could be placed. It yielded a large and steady
revenue. It was true that it was a tax falling more heavily on the poor
than on the rich, but unhappily most taxes are unjust in this respect.
Holding this opinion, and believing that the bill did not provide
sufficient revenue, Mr. Mills, as he later related, said to his
colleagues:
“We have got to have more money than the Wilson Bill makes, and we
have to have a duty on sugar. I do not want it. I do not like to go
backwards. I would not have taken sugar off the dutiable list and
put it on the free list. It has been done, and I do not like to put
anything back on the dutiable list, but we have got to do it, and
you may as well make up your minds about it. We have to have more
money.”
Senators Vest and Jones held out for several days against him, but
finally they reluctantly agreed to a duty on raw sugar. On refined they
proposed only enough to make up to the refiners for the extra cost of
their raw material—that is, a compensatory, not a protective, duty.
But this plan never reached the public. The House bill had aroused the
Sugar Trust to wrath, and all through the winter and spring of 1894 one
or more of its chief officers was in Washington, besieging the Senate
and the Administration. Mr. H. O. Havemeyer, the president, Theodore
Havemeyer, the vice-president, and John O. Searles, secretary and
treasurer, armed with samples and statistics and proofs of political
influence, urged upon a worried and reluctant committee a scheme of
duties which would give them at least as large a benefit as they had
under the McKinley Bill. The gentlemen seem to have been able to secure
the attention of all the Senators whom they thought it worth while to
approach, excepting Senator Mills. Mr. Havemeyer made repeated efforts
to get to him, but always failed. Finally he asked Secretary Carlisle to
give him a note of introduction. He knew Senator Mills, he told the
secretary, but he was a busy man and peculiar, and it was difficult to
see him. Mr. Carlisle gave the note, and one evening Mr. Havemeyer
presented it at the Senator’s door with his own card and that of Mr. J.
R. Rickey, the inventer of the famous “gin-Rickey.” Was the Senator in,
and would he see them? The answer came back. “Senator Mills is in, but
he will _not_ see the gentlemen.” Nor did Mr. Havemeyer ever succeed in
presenting his ideas of a sugar schedule to Senator Mills.
The activities of the sugar people caused all sorts of rumors to run
rife through the press, and finally when the bill was reported on the
20th of March providing a rate of about one cent a pound on raw sugar
with an additional one-eighth of a cent per pound on refined, there was
an immediate outcry. When later further changes were made in the
schedule, making it more intricate and more advantageous to the
refiners, dissatisfaction grew. “It would have been quite as appropriate
and edifying,” said the _Nation_, “and quite as good policy, to have
enacted that the Standard Oil Trust should receive $30,000,000 out of
the public treasury during the next six months as a reward of merit, and
two and one-eighth cents per gallon for all the oil they might hereafter
sell in this country, as to do what is done for the sugar trust.” The
ugliest rumors were afloat, talk of bribes, deals, and threats. They
finally culminated in an article published in the _Philadelphia Press_
and signed “Holland” (E. J. Edwards), in which in a most circumstantial
way the author declared that $500,000 had been contributed to the
Democratic campaign fund by the Sugar Trust. In return pledges had been
given that the Trust would be taken care of. When the House removed the
duty, the Trust had reminded the Administration of its pledges. Mr.
Carlisle, by Mr. Cleveland’s directions, had appeared before the
sub-committee and had told them that the party was bound to satisfy the
sugar interests. There were detailed descriptions of interviews between
sugar men and Senators, and of directions sent from the White House. One
of the shameful features of the story was that a number of Senators had
taken advantage of secret information on the sugar schedule to speculate
in sugar stock. This amazing story of political barter would have raised
a chorus of jeers, had there not been before the country’s eye so much
corroborating evidence. The clamor was so loud over the article that in
May an investigation was made. Many of the details of the story were
discredited. Mr. Cleveland, Mr. Carlisle, and Mr. Mills were certainly
cleared, but a substantial scandal remained. By the frank admission of
Mr. Havemeyer, it was proved that the trust was in the habit of making
contributions to both parties, that is, each party got something, if the
result was doubtful. If not, the contribution went to the dominant side,
that being the one to which the trust would look for favors. This
conclusion is clinched by the following bit of a dialogue which occurred
in the course of the investigation:
“_Mr. Havemeyer._—The American Sugar Refining Company has no
politics of any kind.
“_Senator Allen._—Only the politics of business?
“_Mr. Havemeyer._—Only the politics of business.”
Whatever the Democrats received in 1892 from the Sugar Trust,—and it is
probably as certain that they received, not $500,000, but a good sum, as
it is certain that Mr. Quay received something like $100,000 from the
same source in the campaign of 1888,—it was the sugar refiners who
succeeded in getting the rates they wanted into the Wilson Bill, not the
sugar-producers. So strong was their position with the faction
remodelling the bill, that is, with Mr. Gorman and Mr. Brice, that they
were able to overpower even the Louisiana Senators, on whom the victory
of the insurgents was supposed to depend, and to replace the specific
duty which these interests wanted and which raw sugar long had had, by
an ad valorem rate, a form which was believed to work and probably did
work decidedly to the advantage of the trust.
The charge in the _Press_ article that many Senators had speculated in
sugar stock, was investigated. Men like Cushman K. Davis, George Gray,
George F. Hoar, Roger Q. Mills, John M. Palmer, John Sherman, and John
P. Morgan had to suffer along with Quay and Brice, Smith of New Jersey
and Murphy of New York, the humiliation of an examination. Senators
McPherson and Quay acknowledged that they had been dealing in sugar
while the schedule was in the Senate. In no other cases was the fact
established, but the suspicion remained in spite of denials that other
Senators were equally guilty. This popular belief was more strongly
entrenched around Senator Aldrich than any other member of the body. He
had been the chief advocate of the refiners in the Senate for a number
of years. He was a friend of John O. Searles, and the two had been much
together while the schedule of 1894 was making. His fortunes apparently
expanded rapidly about this time. The suspicion crystallized in a
nickname for his country home which still clings to it,—“the sugar
house,”—but there was never a vestige of proof, so far as the author
knows, that sugar had anything to do with Senator Aldrich’s fortune.
Of course, it would have been impossible for the sugar Senators to have
received the favors they did if they had not acquiesced in similar gifts
to other interests. They paid for their advantages by consenting to a
duty on iron-ore, on silverore containing lead, and on coal, all of
which should have been free under Democratic doctrine. They paid by
consenting to scores of increased duties on manufactured articles, which
in some cases raised rates to the McKinley level. A typical transaction
was the duty on collars and cuffs. It had been cut by the House. Senator
Murphy of New York wanted it raised to oblige certain constituents. He
threatened to vote against the bill if he was denied. He, of course, got
what he wanted.
Nor was it the Democrats alone who raided the Wilson Bill. The revolt of
Senators Gorman and Brice was an invitation to the Republicans to see
what they could do for their constituents. When the news of what was
going on spread through the country, Washington rapidly filled up with
the agents and counsel of the protected industries, and under the
leadership of Senator Quay a campaign of obstruction was carried on.
Unless you give us what we ask, you shall have no bill at all, said
Senator Quay; I will talk it to death. He began to execute his threat on
April 14, and ended on June 16. Day after day, the _Congressional
Record_ states laconically, “Senator Quay resumed the floor in
continuance of the speech begun on the 14th of April,” and occasionally
it adds, “speech will be printed when finished.” Senator Quay occupied
twelve days of the period in his filibustering. He ceased because he had
assurance that the duties he sought would be granted. His speech covers
some 235 pages of the _Congressional Record_, an exhibit of legislation
by violence which happily has few parallels in our history. James M.
Swank, the manager of the Iron and Steel Association, says that Senator
Quay secured higher rates of duties in “hundreds” of cases by his
filibuster. He and Senator Aldrich seem to have turned their advantage
mainly to saving their own chief industries,—iron and steel and
cotton,—for both schedules were written by the manufacturers.
The chief industry which did not get about what it wanted was wool. The
House had provided for free wool and a 35 per cent duty on all
manufactured goods. This was 5 per cent less than Mr. Mills had proposed
to put on woollens in 1888. Of course the Republicans prophesied the
most terrible disasters from this change. The industry had been sharing
in the general depression of the country, that is, the McKinley Bill had
not been able to make it prosperous. The National Association of Wool
Manufacturers, confronted by this fact, pleaded that the bill be given a
longer test. They declared that there was a “universal agreement between
manufacturers” that the “tariff was now scientifically adjusted.” Nobody
was going to suffer from the rates, they said, and in time they would
insure permanent prosperity. The Association, of course, overlooked the
fact that the rates they were then enjoying had, with only slight
decreases in 1883, been in force since 1867, and that they had not
prevented periodical depressions. They overlooked the fact, too, that,
far from being united, as they declared, a very large body of the ablest
woollen manufacturers in the country were at that moment petitioning for
free wool and advising lower duties on their own products. All of this
had little effect on the Democrats. The schedule went to the Senate as
it had been prepared by Mr. Wilson’s committee; and when the
sub-committee took hold of it, the duty on woollens was made 30 per cent
instead of 35 per cent. This schedule was reported to the Senate on
March 20, and soon after that the wool-growers and wool manufacturers
learned of the Democratic insurgent movement for higher duties led by
Gorman and Brice.
“As soon as it became known that all the schedules were being
written up to or towards protective rates,” one of their leading
historians wrote afterwards in the Bulletin of the Association, “the
woollen manufacturers began to gather in Washington with a view to
discovering what could be done to save their own industry from
destruction. The first efforts to this end were directed towards
securing compound duties. Many variations in the compound rates
originally suggested were made, finally resulting in a schedule in
which all manufacturers acquiesced.
“The compound schedule was thrown out of court almost immediately,
coupled with the information that under no circumstances would the
suggestion of compound duties on woollen goods be considered. If at
this juncture the woollen manufacturers had been so fortunate as to
possess among the Democratic Senators a single friend, so earnestly
and honestly their friend as to do for them what certain Senators
did for certain other industries (notably several branches of the
iron and steel industry), this compound schedule could have been
forced into the bill, as other specific duties were forced into it
everywhere else, as the condition precedent to its passage. But they
had no such friend, none at least who was willing to go as far as
other Senators went for other industries. Thus it happens that the
wool schedule is almost the only one in the Senate bill which was
not dictated by some one powerful enough to make its terms fairly
satisfactory to the industries concerned.”
The Wilson Bill was returned to the House Committee with 634 amendments
attached. The Committee refused to accept the amendments and a
conference was arranged. Nothing came of this. The Senate conferrees
held to the amendments, the House conferrees to disagreement. In
reporting the disagreement to the House, Mr. Wilson read a letter from
President Cleveland protesting against the bill. It voiced his pain and
disgust at the outcome of the long fight he had led and counselled
resistance to the miserable compromises which filled the bill:
“My public life has been so closely related to the subject” (tariff
reform), Mr. Cleveland wrote, “I have so longed for its
accomplishment, and I have so often promised its realization to my
fellow-countrymen as a result of their trust and confidence in the
Democratic party, that I hope no excuse is necessary for my earnest
appeal to you that in this crisis you strenuously insist upon party
honesty and good faith and a sturdy adherence to Democratic
principles.
“I believe these are absolutely necessary conditions to the
continuation of Democratic existence.
“I cannot rid myself of the feeling that this conference will
present the best, if not the only, hope of true Democracy.
Indications point to its action as the reliance of those who desire
the genuine fruition of Democratic effort, the fulfilment of
Democratic pledges, and the redemption of Democratic promises to the
people. To reconcile differences in the details comprised within the
fixed and well-defined lines of principle will not be the sole task
of the conference, but as it seems to me its members will also have
in charge the question whether Democratic principles themselves are
to be saved or abandoned.
“There is no excuse for mistaking or misapprehending the feeling and
temper of the rank and file of the Democracy. They are downcast
under the assertion that their party fails in ability to manage the
government, and they are apprehensive that efforts to bring about
tariff reform may fail; but they are much more downcast and
apprehensive in their fear that Democratic principles may be
surrendered. In these circumstances they cannot do otherwise than to
look with confidence to you and those who with you have
patriotically and sincerely championed the cause of tariff reform
within Democratic lines and guided by Democratic principles. This
confidence is vastly augmented by the action under your leadership
of the House of Representatives upon the bill now pending.
“Every true Democrat and every sincere tariff reformer knows that
this bill in its present form and as it will be submitted to the
conference falls far short of the consummation for which we have
long labored, for which we have suffered defeat without
discouragement, which in its anticipation gave us a rallying cry in
our day of triumph, and which in its promise of accomplishment is so
interwoven with Democratic pledges and Democratic success, that our
abandonment of the cause or the principles upon which it rests means
party perfidy and party dishonor.
“One topic will be submitted to the conference which embodies
Democratic principle so directly that it cannot be compromised. We
have in our platforms and in every way possible declared in favor of
the free importation of raw materials. We have again and again
promised that this should be accorded to our people and our
manufacturers as soon as the Democratic party was invested with the
power to determine the tariff policy of the country.
“The party now has that power. We are as certain to-day as we have
ever been of the great benefit that would accrue to the country from
the inauguration of this policy, and nothing has occurred to release
us from our obligation to secure this advantage to our people. It
must be admitted that no tariff measure can accord with Democratic
principles and promises or bear a genuine Democratic badge that does
not provide for free raw materials. In these circumstances, it may
well excite our wonder that Democrats are willing to depart from
this, the most Democratic of all tariff principles, and that the
inconsistent absurdity of such a proposed departure should be
emphasized by the suggestion that the wool of the farmer be put on
the free fist and the protection of tariff taxation be placed around
the iron-ore and coal of corporations and capitalists.
“How can we face the people after indulging in such outrageous
discriminations and violations of principles?
“It is quite apparent that this question of free raw materials does
not admit of adjustment on any middle ground, since their subjection
to any rate of tariff taxation, great or small, is alike violative
of Democratic principle and Democratic good faith.
“I hope you will not consider it intrusive if I say something in
relation to another subject which can hardly fail to be troublesome
to the conference. I refer to the adjustment of tariff taxation on
sugar. Under our party platform and in accordance with our declared
party purposes, sugar is a legitimate and logical article of revenue
taxation. Unfortunately, however, incidents have accompanied certain
stages of the legislation which will be submitted to the conference,
that have aroused in connection with this subject a national
Democratic animosity to the methods and manipulations of trusts and
combinations.
“I confess to sharing in this feeling, and yet it seems to me we
ought, if possible, to sufficiently free ourselves from prejudice to
enable us coolly to weigh the considerations which in formulating
tariff legislation ought to guide our treatment of sugar as a
taxable article. While no tenderness should be entertained for
trusts, and while I am decidedly opposed to granting them, under the
guise of tariff taxation, any opportunity to further their peculiar
methods, I suggest that we ought not to be driven away from the
Democratic principle and policy which lead to the taxation of sugar
by the fear, quite likely exaggerated, that in carrying out this
principle and policy, we may indirectly and inordinately encourage a
combination of sugar refining interests. I know that in present
conditions this is a delicate subject, and I appreciate the depth
and strength of the feeling which its treatment has aroused.
“I do not believe that we should do evil that good may come, but it
seems to me that we should not forget that our aim is the completion
of a tariff bill, and that in taxing sugar for proper purposes and
within reasonable bounds, whatever else may be said of our action,
we are in no danger of running counter to Democratic principle. With
all there is at stake, there must be in the treatment of this
article some ground upon which we are all willing to stand, where
toleration and conciliation may be allowed to solve the problem
without demanding the entire surrender of fixed and conscientious
convictions.”
It was on July 19th that Mr. Wilson read this letter to the House.
Following it a bitter attack was made upon Mr. Cleveland by Mr. Gorman
and others in the Senate. They declared they had kept the President
fully informed of the changes which were being made in the bill; that
they had told him that it would be impossible to pass a bill which did
not embody them. Mr. Cleveland had insisted that a bill must be passed,
and he had urged them to go ahead and do the best they could. This is no
doubt true. But no one who knew Grover Cleveland can accept their
contention that he had practically assured them that he would accept any
bill that they could pass. It was not like him to make such a promise,
nor was he a man to mislead. Moreover, Mr. Cleveland would have been
false to his own great sense of responsibility if, for the sake of
party, he had let the repudiation of principle, and the juggling and
trading the bill represented, go without public reproof. There was a
chance, too, that his remonstrance might force from the Senate certain
concessions, such as the free iron-ore and coal which he so much wanted.
Mr. Cleveland took the chance. His letter failed to do what its author
sought. Indeed, it made the dominant faction in the Senate so angry that
it flatly refused to recede from any of the amendments to which the
House had declined to assent. The upshot of the matter was that on
August 13th the House gave in. Mr. Wilson’s brief closing remarks show
his disappointment. Until the last he had hoped and believed, he said,
that some form of honorable compromise would be achieved. “But,” said
he, “we have simply realized in this great fight the fact so well stated
by the great leader of the tariff reform fight in Great Britain—that
when the people have gained a victory at the polls they must have a
further stand-up and knock-down fight with their own representatives.
And we have realized if nothing else the warning lesson of the
intrenchment of the protective tariff in this country under thirty years
of class legislation until the mere matter of tariff schedules is a
matter of insignificance and the great question presents itself,—is this
to be a government by a self-taxing people or a Government of taxation
by trust and monopolies? The question is now, whether this is a
government by the American people for the American people, or a
government of the sugar trust for the benefit of the sugar trust.”
But he advised voting for the bill. It was with most of its rates as it
was with the sugar duty.
“Vicious as it may be, burdensome to the people as it may be,
favorable to the trust as it may be, it is less vicious, less
favorable to the trust, less burdensome to the people than is the
McKinley law, under which this trust (sugar) has grown so great as
to overshadow with its power the American people.”
Never had an opposition a more substantial reason for taunting a
majority than had the Republicans when it was finally seen that the
Senate had won. Mr. Reed had been spokesman for the Republicans
throughout the making of the bill and he had used his power in as
sheerly and consistently brutal a fashion as is to be found in the
records of Congress. But what he now said had a ring of honest
indignation and it was entirely justified by the facts.
“The adoption of the Senate bill,” said Mr. Reed, “is a complete
abandonment of the fundamental principles of tariff reform. The
Senate bill has been constructed upon entirely different lines. It
was framed upon the broad bedrock foundation of the necessity of
securing 43 votes, and all minor considerations had to give way to
this great underlying principle.
“Coal is taxed in order to secure the necessary votes of the
selfstyled ambassador from the sovereign state of Maryland;
protection is accorded to the industries of the state of Maryland as
the price of her votes; seventy-five millions of people are to be
burdened with a tax on sugar in order to hold the votes of the
sugar-producing state of Louisiana, and the sugar trust had to have
its demands satisfied in order to insure liberal contributions to
the Democratic campaign fund; while Republican Senators had but to
threaten interminable debate to secure full protection to the
industries of their state.
“In this way the Gorman Bill was constructed and passed, and it is
this measure, so framed, you now propose without amendment or debate
to indorse and approve. How you are able to do this with any sense
of self-respect, it is difficult to understand. You voted for the
Wilson Bill under protest, declaring you did so because, it was a
movement in the right direction, a step towards free trade; and now
you accept the Gorman Bill without regard to the principles upon
which it was constructed and without knowing whether it leads
towards protection or free trade in the face of an acknowledged
abandonment of all principle. Such unexampled party stultification
cannot be too severely condemned.
“What will be the fate of this bill at the other end of the avenue,
it is impossible to forecast, but the President of the United States
will belie his reputation for courage and tenacity of purpose if he
does not promptly stamp it with his veto.
“When this bill is laid before the President for Executive approval
and he has sufficiently examined it to be assured of its identity as
the very measure which he himself has already publicly repudiated, I
can imagine him taking the Wilson letter in one hand and reading his
own words, ‘This is an act of party perfidy and party dishonor,’ and
then dropping his pen from the other, exclaiming with ineffable
scorn, ‘Is thy servant a dog that he should do this thing?’”
Mr. Reed was right. The bill, which was passed by a vote of 182 to 106,
12 Democrats only voting against it, was never signed by Grover
Cleveland. It became a law without his name on August 27, 1894.