The Normal School Quarterly Series 6 October, 1907 Number 25 The Tariff Question in American History By O. L. MANCHESTER UNIVERSITY OF ILLINOIS 2 51915 PRESIDENT'S OFFICE Entered August 18, 1902, at Normal, Illinois, as second class matter, under Act of Congress of July 16. 1894 PUBLISHED BYTHE I LLINOIS STATE NORMAL UNIVERSITY, NORMAL, ILLINOIS NORMAL SCHOOL QUARTERLY Published by the Illinois State Normal University, Normal, III . Series 6 October , 1907 No. 25 The Act of 1789. The Tariff Question in American History . Our ship of state under the Articles of Confederation stranded upon the rock of revenue. When the First Con- gress met under the Constitution it lost no time in providing revenue for the government’s support. The preamble of this first tariff act states that the act is designed to provide means for the support of the government and for the payment of its debts, and to provide for the encourage- ment and the protection of manufactures. The act was short and its rates, some being specific and some ad valorem , were low. A few months later the House of Representatives di- rected Alexander Hamilton, Secretary of the Treasury, to report upon the subject of manufactures. Two years after- wards his report was sent to the House. It is generally ad- mitted to be the best argument for protection ever written in America. Mr. Hamilton maintained that agriculture and manufacturing were pursuits of equal value and that neither could flourish at its best without the other. Manufacturing w r ould bring the di- vision of labor and the introduction of ma- chinery; it would lead to the employment of classes that would other- wise be unengaged in industry; would increase immigration. It would furnish a steady demand for the produce of the soil. Foreign Hamilton’s Report upon Manufactures. 2 The Normal School Quarterly nations, he said, were trying to sell us everything and to buy nothing from us. If Europe would not buy of us, we must contract our wants for her products. That manufactures would grow up here without government aid, he did not believe. He pointed out that the influence of habit and the spirit of imitation in men, cause changes in occupations to be made more tardily than is consistent with the interest of individuals or with the interest of society; that the fear of failure in untried enterprises would deter the very capi- talists who were most likely to succeed, from making the attempt. More formidable obstacles still were the superiority already enjoyed by nations that had preoccupied and perfected the chief fields for manufacturing enterprise, and the aids of various sorts granted by foreign nations to their manufactories. He says: “ Whatever room there may be for an expectation that the industry of a people, under the direction of a private interest, will, upon equal terms, find out the most beneficial employment for itself, there is none for a reliance that it will struggle against the force of unequal terms, or will, of itself, surmount all of the adventitious barriers to a successful com- petition, which may have been erected, either by the advantages naturally acquired from practice and previous possession of the ground, or by those which may have sprung from positive regulations and an artificial policy”. . . .To the objections that manufacturing could not succeed in the United States because of the scarcity of hands, dearness of labor, and lack of capital, he replied: Some dis- tricts of America were fully peopled, use could be made of women and children, and of immigrants; the disparity of wages here and abroad had been greatly exaggerated, and the cost of manual labor was becoming continually of less moment in consequence of the in- creasing use of machinery; the lack of capital could be overcome by expanding the circulating medium, improving credit, attracting foreign capital. . . .That prices of manufactures are enhanced by im- port duties, Mr. Hamilton said, seemed reasonable in theory, but was seldom borne out by the facts. High prices might be the temporary effect of imposts but low prices were the ultimate and inevitable effect of every successful manufactory established. . . .The establishment of manufactories here would bring benefits to all sections of the country and to all classes of the people. Ideas of a contrariety of interests were, in the main, as unfounded as they were mischievous. The independence and the security of the nation seemed to be closely connected with the adoption of the policy of protection. The Tariff in American History 3 During the first twenty years of our Early Acts national life under the Constitution at an< ^ least twenty acts that had to do with the Protection. tariff were passed. The motive behind them was usually a need for more revenue. How far the desire to protect home manufactories figured as a sub- sidiary motive has been a matter of much dispute. Pro- tectionists have pointed to the plain wording of the pre- amble of the Act of 1789, to the fact that many of the duties were laid upon articles such as were made here, to the sentiment in favor of protection to be noticed in many of the speeches made in Congress in the years immediately following Hamilton’s report, and to the fact that Congress was continually beset with petitions from cities praying for protection. Stanwood (American Tariff Controversies in the Nineteenth Century, Vol. I, p. 71) says: It seems im- possible to come to any other conclusion than that the purposes of Congress were accurately stated in the pre- amble. On the other hand Benton (Debates of Congress, Vol. I, p. 84, Note) says that every speech on the Act of 1789 showed revenue to be the object of every proposed duty, protection being merely incidental, and that the Act cannot be quoted as any authority for the protective system that later so disturbed the country. It is to be noted that the rates demanded for protection were moderate, Hamilton himself suggesting no ad valorem rate above fifteen per cent, and suggesting specific duties that would be pro- hibitory, upon only a very few articles. That it had been the English policy, carried out with a fair degree of success, to throttle manufacturing in America during our colonial period, is well known. During the years that we are now considering Great Britain was in the midst of an industrial revolution that was to tighten her Manufactures before 1808. 4 The Normal School Quarterly grip upon the prize — the world’s leadership in manufactur- ing. An English barber had discovered a machine that could do as much work, in the textile industries, as a thous- and spinsters; a poor w y eaver had caught from a spinning- wheel tipped over by children at play, the idea that led to the invention of the spinning- jenny; a duke, disappointed in love, had conceived in his life of seclusion the scheme that materialized in fully three thousand miles of navigable canals; a working mechanic at Glasgow had seen that steam would rush into and expand in a vacuum, and the steam- engine was the result; a farmer boy had invented the “mule;” a clergyman, the power-loom; when men had been lacking for factory operatives the greatest English states- man had uttered the terrible words “Take the children;” the greatest economic philosopher of England had written his remarkable book, An Inquiry into the Causes of the Wealth of Nations. England did not intend that these in- ventions of Arkwright, Hargreaves, Watt, Crompton, and Cartwright, should be shared with the world. She passed the most stringent laws forbidding the exportation of machinery or the models of machinery. From Hamilton’s report and from other sources we may gather the condition of manufacturing as an industry in the United States during this period (before 1808). We had made good progress in ship-building, were doing well in manufacturing leather, boots, harnesses, gloves, etc.; we made from iron, implements of husbandry, household utensils, tools, anchors, etc.; we manufactured sugars, liquors, wool hats, tin utensils, wagons, brick and tiles, and many other articles of the cruder sort. The textile indus- tries were almost entirely carried on in the household tho carding and fulling mills were many. In short the nation remained, as the colonies had been, mainly agricultural. Our imported manufactures were paid for thru agricultural The Tariff in American History 5 The Period of Restriction, dition of things. exports to the West Indies and other countries, and thru the proceeds of our carrying-trade upon the ocean. Napoleon’s Berlin and Milan decrees, the English Orders in Council, our own Em- bargo, and Non-Intercourse Act, the war of 1812-1815, completely changed the con- Our foreign trade was ruined. What we did not manufacture ourselves we had to do without. Our exports and imports for 1808 aggregated less than one- third, and the same for 1814 less than one-twentieth those of 1807. These years of restriction gave our manufactories a wonderful start. The first cotton factory had been started in 1787 but it had little success. Samuel Slater had brought over in his head the models of the Arkwright machinery and succeeded in setting it up here in 1790. Whitney invented the cotton-gin in 1794. Up to that time cotton had been little cultivated in America. Its culti- vation increased rapidly after the invention of the gin, by means of which one man could do the work that had re- quired fifty. Before this period we had made of cotton goods only an insignificant part of our large consumption. In 1808 there were but four cotton factories in America. In 1812 there were within a radius of thirty miles from Provi- dence, fully fifty. The consumption in bales had increased between 1800 and 1815 from 500 to 90,000 a year, and the latter date saw 500,000 spindles in operation. The history of our woolen, iron, glass manufactories, etc., was much the same — a small start before this period and a wonderful growth during it. Thomas Jefferson wrote to John Adams in 1812, “Nothing more salutary for us has ever happened than the British obstructions to our demands for their manufactures;” and again to Kosciusko the same year, “Come peace when it will, we shall never again go to Eng- 6 The Normal School Quarterly land for a shilling’s worth of goods where we have gone for dollars’ worth.” In 1812 all duties were doubled as a war measure and these war duties were contin- ued until the Tariff of 1816 went into effect. The Tariff of 1816. After the signing of peace, notwithstanding the war duties, large importations of foreign goods began. This embar- rassed the young manufactories, and some of them failed. Appeals to Congress for protection were many. The effect of all this is to be seen in the Tariff of 1816. President Madi- son in his annual message of 1810 had view r ed with satisfac- tion the growth of manufactories, seen in them some com- pensation for the loss of trade; in 1815 he held that the manufactories should be considered in the adjustment of the duties, that without protection lines of industry may fail to spring up even tho we are particularly fitted to carry them on, that free trade tho right in theory admits of exceptions in practice. The Tariff of 1816 was moderately protective — so mod- erately that James G. Blaine, in his historical argument for protection (North American Review, 1889), classes it among free trade tariffs, and lays to it the hard times in 1819. R. W. Thompson, in his History of the Tariff, repeatedly asserts that it was strongly protective, and that under its favorable influence the country speedily recovered from the depression of 1819. President Monroe, in his annual message of 1822, says that the manufactories of the country seem to be pros- pering again. Mr. Benton, remarking upon the passage of this so-called Lowndes- Calhoun bill in the House, says (De- bates of Congress, Vol. V., p. 645): And thus was inaugurated a new policy. . . .Revenue had been the object of import duties, and protection to manufactures the incident. Now this policy was reversed. Protection became the object and rev- The Tariff in American History 7 enue the incident, to such a degree as often to disregard revenue alto- gether. The ad valorem duties under this act ranged from seven and one-half to thirty per cent, and the specific rates were even higher. Upon cotton and woolen goods the rate was fixed at twenty-five per cent for three years, and at twenty thereafter. On cotton cloths some minimum duties were established; for example, cloth costing twenty-five cents or less a square yard was to be taxed as tho costing twenty-five cents. When in the course of a few years the cost of manu- facture became cheaper this rate became practically prohibi- tory as to the coarser grades. There was no woolen mini- mum and there was a duty on raw wool that partially offset the advantage to the manufacturer of the duties upon the imported competing manufactured products. The iron manu- factories were not favored much in this act but were given higher duties in 1818. The equivalent ad valorem rate upon all dutiable goods ran about thirty-three per cent; on all goods free and dutiable the rate ran but very little lower, for the free-list was small. The Tariff Act of 1824 The first strong popular movement for pro- tection came in consequence of the hard times of 1819. The foreign market for our agricultural exports was poor, and the demand arose for pro- tection to our infant industries and for a home market for agricultural products. A high tariff bill barely failed of pas- sage in 1820. The question had become a sectional one, the South and the commercial interests of New England oppos- ing, and the middle and western agricultural states with the manufacturing interests of New England favoring it. The agitation was kept up until the so-called Clay Tariff of 1824 was passed. It was carried by the votes of the western and middle states, with those of Rhode Island and Connecticut. This act raised the minimum on cotton goods. It raised the 8 Tl le Normal School Quarterly duties on woolen goods but raised also the duty on raw wool. Under the operation of this act the equivalent ad valorem rates on dutiable and on all goods averaged, respectively, about thirty -nine and about thirty- six per cent. Henry Clay, author of this bill, and 4 'father of the Amer- ican system/’ in his main speech for it, argued: In casting our eyes around us, the most prominent circumstance which fixes our attention and challenges our deepest regret is the gen- eral distress that pervades the whole country. It is forced upon us by numerous facts of most incontestable character. It is indicated by diminished exports. . . . ; by the depressed state of our navigation; by our diminished commerce; by successive unthreshed crops of grain . . . . ;by alarming diminution of the circulating medium; by numerous bankruptcies ; by a universal complaint of want of employment, and a consequent reduction in the wages of labor; by the ravenous pur- suit after public situations . . . . ; by the reluctant resort to the peri- lous use of paper money; by the intervention of legislation .... be- tween debtor and creditor; and, above all, by the low and depressed state of values . . . .which have sunk .... about fifty per centum within a few years. This distress pervades every part of the Union, every class of society; all feel it, though in different degrees. It is like the at- mosphere which surrounds us— all must inhale it, and none can escape it .... It is most painful to sketch or dwell upon the gloom of this pic- ture. But I have exaggerated nothing. Perfect fidelity to the orig- inal would have authorized me to have thrown on deeper and darker hues What is the cause of this wide-spreading distress . . . . ? We are the same people. We have the same country. We cannot arraign the bounty of Providence. The showers still fall .... The sun still casts his vivifying influence upon the land. The land .... yields .... its accustomed fruits, its richest treasures. Our vigor is unimpaired. Our industry has not relaxed .... Our people have .... been practising the most rigid economy. The causes of our affliction are human causes .... The causes are to be found in the fact that we have shaped our industry. ... in reference to an extraordinary war in Europe, and to foreign markets that no longer exist. ... We have allowed our resources at home to wither in a state of neglect. . . .Europe has no longer occasion .... for American commerce . . . , the produce of Amer- ican industry .... The greatest want of civilized society is a market for the sale .... of the surplus produce of its labor .... The object of The Tariff in American History 9 this bill is to create a home market and to lay the foundations of a genuine American policy .... Foreign nations cannot, if they would, take our surplus product. . . . Our powers of production are increasing four times as fast as their powers of consumption.. .. If they could take it, they will not. The policy of all Europe is adverse to the reception of our agricultural produce .... For years our export trade has failed to grow satisfactorily .... Is this foreign market, so incom- petent at present, likely to improve in the future? It must become worse and worse .... Our agriculture is our greatest interest .... Can we do nothing +o invigorate it? .... We must give a new direction to some portion of our industry. We must speedily adopt a genuine American policy If we cannot sell we cannot buy .... Four-fifths of our people make comparatively nothing that foreigners will buy, have nothing to make purchases with from foreigners .... It is vain to tantalize us with the greater cheapness of foreign fabrics .... A cheap article is as much beyond the grasp of him who has no means to buy as a high-priced one . . . .Let us suppose that half a million persons are now employed fabricating articles abroad for our consump- tion They are in effect subsisted by us; but their actual means of subsistence are drawn from foreign agriculture. If we could trans- port them to this country their demand for flour, beef, pork, and other articles of subsistence .... would exceed our total export of last year What activity this would give to our now dispirited farming interests! But if we give by this bill employment to an equal num- ber of own citizens the beneficial effects .... will be nearly dou- bled. Daniel Webster, in reply, said he did not know where any such distress existed. In the New England states was general prosperity. Prices were low only as compared with the inflated prices measured in paper after the war. He denied that the manufactories needed more protection. The protective policy might be all right within bounds, but carried to the point of prohibition, it became absurd. The bitterness of the South towards the Clay Tariff can be judged from the following expressions, to be found in the speech of John Randolph. : I speak with knowledge of what I say, when I declare, that this bill is an attempt to reduce the country south of Mason and Dixon’s 10 The Normal School Quarterly line to a state worse than its colonial bondage; a state to which the domination of Great Britain was, in my opinion, far preferable, for the British Parliament would never have dared to lay such duties up- on our imports It is a sacrifice of the interests of a part of this nation to the ideal benefit of the rest. It marks us out as the victims of a worse than Egyptian bondage .... and I trust it will be met in the southern country as was the Stamp Act. . . .1 do not stop here to argue about the constitutionality of this bill; I consider the Constitution a dead letter. . . .“You may intrench yourself in parchment to the teeth,” says Lord Chatham, “the sword will find its way to the vitals of the Constitution”. . . .There never was a constitution under the sun, in which, by an unwise exercise of powers of the government, the people may not be driven to the extremity of resistance by force .... If, under a power to regulate trade, you prevent exportation; if with the most approved spring lancets, you draw the last drop of blood from our veins; if, secundum artem , you draw the last shilling from our pockets, what are the checks of the Constitution to us? A fig for the Constitution! When the scorpion’s sting is probing us to the quick, shall we stop to chop logic? Shall we get some learned and cunning clerk to say whether the power to do this is to be found in the Con- stitution, and then, if he, from whatever motive, shall maintain the affirmative, like the animal whose fleece forms so material a portion of this bill, quietly lie down and be shorn?. . . .But no force— no sir, no force short of Bussian despotism, shall induce me to purchase, or, knowing it, to use any article from the region of the country which attempts to cram this bill down our throats. On this we of the South are resolved, as were our fathers about the tea that they refused to drink. . . .If any gentleman believe that I am not as much attached to the Union as any man on this floor, he labors under a great mis- take. . . .But there is no magic in this word union. I value it only as the means of preserving the liberty and the happiness of the people. The marriage of Sinbad the sailor with the corpse of his dead wife was a union, and just such a union as this will be, if, by a bare ma- jority in both Houses, this bill shall become a law. In the tariff of 1824 the woolen manufac- turers were favored little more than in that of 1816. There w T ere heavy importations of woolen goods in 1825, Now came a determined fight for woolen minimum duties. A bill barely failed of passage in The Tariff of 1828. The Tariff in American History 11 1827 that would have taxed all imported woolen goods cost- ing between forty cents and two and one-half dollars as tho worth the latter amount, at thirty- three and one-third per cent. In 1828 John Quincy Adams and Andrew Jackson were the candidates for the presidency. Each was claimed to be a friend of protection, but Adams in his three annual messages had omitted to say anything for protection. Jack- son had on the Democratic ticket with him, Calhoun, whose hostility to protection by this time was pronounced. Adams came from a section none too friendly to the “American sys- tem.” The Democratic ticket needed, in order to win, not only the votes of the South but those of the strong protection states of the middle west. It is claimed that the bill pre- pared by Jackson’s friends in Congress was never intended to pass; it had been loaded with provisions so distasteful to New England that it was not expected her representatives could vote for it. The Southern congressmen aided in voting down amendments offered by New Englanders and then voted against the measure at the last. It was thought to throw the odium of the bill’s defeat upon New England, and that this would hurt the presidential chances of Adams in the "West. In the end enough New England members, in- cluding Webster, voted for the bill to let it thru. This tariff has been called the “tariff of abominations.” The cotton minimum was raised again; the duties upon woolen goods were high, tho the original scheme of the bill of 1827 had been knifed by the insertion of a dollar minimum. For the fiscal year ending in 1830, the equivalent ad valorem, rates were, on dutiable goods, 48.9, and on all imports 45.3 per cent. Adams’ fourth annual message, written after his defeat, came out squarely for protection. Southern Discontent. The Tariff of 1828, altho its worse features were gotten rid of during the two or three years following, hurried on to its acute 12 The Normal School Quarterly stages the discontent of the South. In the summer after the passage of the act, Vice-President Calhoun developed his theory of nullification. It became the basis of the “South Carolina Exposition.” This document argued that the South was and must remain agricultural, that there must be permanently a conflict of interests between it and the rest of the Union as to the tariff policy, that in consequence Con- gress should be careful not to exceed its constitutional rights in laying imposts. It maintained that a state had the right to veto a law that was palpably unconstitutional, but declared that such action was for the time being deferred in the hope that Congress would see fit to repeal the obnoxious law — a hope that was strong because of the change in administra- tion close at hand. In February, 1829, South Carolina, thru her senators, Hayne and Smith, presented her formal protest to the Senate of the United States. The purport of the protest was, that Congress had no power to tax the people at its own good will and pleasure, and to apply the money raised to objects not specified by the Constitution; that the power to protect manufactures was nowhere given to Congress and indeed seemed to be reserved to the States; that tho the power to regulate commerce might be so exercised as to protect domestic manufactures, yet this was far different from a power to protect them eo nomine; that even tho Con- gress had the right, under its power to lay imposts or to regulate commerce to protect manufactures, yet a tariff, the operation of which should be grossly unequal and oppressive, would be an abuse of power incompatible with the principles of a free government; that the very existence of South Carolina as a state depended upon her agriculture and her commerce; that lest an apparent acquiescence in the system of protective duties be drawn into a precedent, the state protested against it as unconstitutional, oppressive, and unjust. The Tariff in American History 13 On the last days of January, 1830, occurred the great debate in the Senate of the United States upon nullification. Webster’s Reply to Hayne struck a responsive chord in the hearts thruout the North. In April, at a banquet on Jefferson’s birthday, Calhoun and his sympathizers tried their new doctrine of nullification on President Jackson and discovered that it was a terrible misfit. In December came Jackson’s annual message. One paragraph read: The power to impose duties on imports originally belonged to the several States. The right to adjust those duties with a view to the encouragement of domestic branches of industry is so completely incidental to that power that it is difficult to suppose the existence of the one without the other. The States have delegated their whole authority over imports to the General Government without limitation or restriction, saving the very inconsiderable reservation relating to their inspection laws. This authority having thus en- tirely passed from the States, the right to exercise it for the purpose of protection does not exist in them, and consequently if it be not possessed by the General Government it must be extinct. Our political system would thus present the anomaly of a people stripped of the right to foster their own industry and to counteract the most selfish and destructive policy which might be adopted by foreign nations. This surely can not be the case. This indispensable power thus surrendered by the States must be within the scope of the authority on the subject expressly delegated to Congress. In his annual message of 1829, President Jackson had expressed regret that nations would not let commerce flow in the Tariff Act of 1832. channels to which individual interest, always its surest guide, might direct it; thought the correct policy was to put rates where they would insure fair competition; and that in reducing the tariff the revenue duties should be taken off first. In his next annual message he said that re- venue should be the main object of duties but that they might properly be so adjusted as to afford protection, that in the adjustment the government should be guided|by the 14 The Normal School Quarterly general good and that only objects of national importance should be favored; those having to do with national defence deserved attention first, and where other manufacturers were favored the aid should be merely temporary. He con- demned combinations of small minorities in Congress en- tered into for mutual assistance in measures, which resting solely upon their own merits could never be carried. In 1831 he urged reductions to relieve the people from un- necessary taxes. Mr. Clay, now a senator, was not prepared to abandon protection. He admitted that the revenue must be reduced, but maintained that it must be done without reducing pro- tective duties. “To preserve, maintain, and strengthen the American system, he would defy the South, the President, and the devil.” So Adams reported him to have said. He introduced a resolution instructing the Committee on Fi- nance to prepare a bill that would reduce the revenue by taking off the duties on most articles not coming into com- petition with home-made articles. In favor of the reso- lution Mr. Clay said: Eight years ago it was my painful duty to present an unexagger- ated picture of the general distress pervading the whole land — If I were to select any term of seven years of the most wide-spread deso- lation, it would be exactly that term of seven years immediately pre- ceding the establishment of the tariff of 1824. I have now to per- form the more pleasing task of exhibiting an imperfect sketch of the existing state of unparalled prosperity. On a general survey, we be- hold cultivation extended, the arts flourishing, the face of the country improved, our people fully and profitably employed, the public countenance exhibiting tranquillity, contentment and happi- ness. We have the agreeable contemplation of a people out of debt; land rising slowly in value; a ready, tho not an extravagant, market for all the surplus productions of our industry; innumerable flocks and herds browsing and gamboling on ten thousand hills and plains; our cities expanded, and whole villages springing up, as it were by enchantment; our exports and imports increased and increasing; our The Tariff in American History 15 tonnage, foreign and coastwise, swelling and fully occupied; the rivers of our interior animated by countless steamboats; the cur- rency sound and abundant; the public debt of two wars nearly re- deemed; and, to crown all, the public treasury overflowing, embar- rassing Congress to select objects which shall be liberated from the impost. If the term of seven years were to be selected of the greatest prosperity which this people have enjoyed since the estab- lishment of the present Constitution, it would be exactly that period of seven years which immediately followed the passage of the tariff of 1824. This transformation of the condition of the country has been mainly the work of American legislation If the extinction of the public debts means the subversion of the American system its payment will be the bitterest of curses This system of pro- tection began upon that ever memorable 4th day of July, 1789. A vast majority of the people of the United States has approved and continues to approve it The question is, shall we break it down? The great principle, which lies at the foundation of all free government, is that the majority must govern; from which there is or can be no appeal but to the sword. That majority ought to govern wisely, equitably, moderately, and constitutionally, but govern it must, subject to that terrible appeal. If ever one state or a minority of the states can by menacing the Union force the aban- donment of great measures, from that moment the Union is practi- cally gone. It may linger on in form and name but its vital spirit has fled forever The danger to our Union does not lie on the side of persistence in the American system, but on that of its abandon- ment. The resolution was passed, as was a law of the general nature that it proposed. The Tariff of 1832 remained in force, as we shall see, but about ten months. Because of the increase in the free list the equivalent ad valorem rates on all and on dutiable goods now draw apart, the former falling much more than the latter. The year that followed was an ominous one. A third time Calhoun wrote out mi- nutely his ideas about nullification. He went over the old ground again and one step farther, in that he specified just how Nullification. Compromise Tariff of 1833. 16 The Normal School Quarterly a state should go at it to nullify an act of Congress. His first communication had gone to the legislature, his second to the people, and this one went to the governor of South Carolina. The state was quick to act. The legislature called a convention of the people. It met and in November passed an ordinance of nullification, which declared the Tariff Acts of 1828 and 1832 4 ‘Null and void and no law within the jurisdiction of South Carolina;” prohibited the payment of imposts after the first of February; forbade, under dire penalties, appeal to federal courts; declared that any attempt on the part of the United States to employ force would sever South Carolina’s connection with the Union. In December came Jackson’s annual message. It fore- saw the extinction of the public debt; declared that where- ever protection exceeded what was necessary to counteract the regulations of foreign nations and to secure articles necessary in war, it should be reduced gradually to a revenue basis; that perpetual protection was not desirable; that the whole system possibly begot a discontent that out- weighed its benefits ... A few days later was issued his proclamation to the people of South Carolina. It showed the false and fatal character of the nullification doctrine, declared that the laws of the United States must be en- forced, and ended with an appeal eloquent and tender enough to start tears in a patriot’s eyes even after seventy years have fled. Mr. Hayne, now governor of South Carolina, issued a proclamation of his own, denouncing that of President Jackson. He called for volunteers. Federal soldiers were already on the scene. The situation had in- deed become critical. The two men who could end the strife, if they but would, were in the Senate of the United States: Henry Clay, the idol of the Whig party of the North; the other, the idol of more than his own state in the The Tariff in American History 17 South, John C. Calhoun, who had resigned the Vice-Presi- dency in order to be elected to the Senate, where he could be in the thickest of the fray. Unfortunately for the country, each of these two men seemed to have but one idea in his head — “and this so big that he could not turn it over to examine both sides.” How was it all to end? In the House a bill prepared after Jackson’s idea was suffering amendment beyond recognition; the Senate had before it another tariff bill; the Force Bill was being quar- reled over rather than debated; less than three weeks of the Twenty-second Congress remained; then the nullification ordinance of South Carolina would be in effect; and other southern states had likewise declared the tariff laws uncon- stitutional and unjust — what of them? February 12, Mr. Clay astonished the Senate and the country by the intro- duction of his Compromise Bill. Calhoun seconded him. March 2, it was a law; and March 11, the Ordinance of Nullification was repealed. The bill provided that from all rates of duty exceeding twenty per cent, one tenth of the excess should be taken off January 1, 1834, another tenth, a third tenth, and a fourth tenth, each after two years; then one-half of the remaining excess in January, and the other half in July, 1842. Mr. Clay said he had two objects in offering the bill: the one was to save the Union; the other was to save the American system as long as he could. In the election returns he had read its doom. The hardest thing in the Act for Calhoun to accept was a provision for home valuation. The bottom rate of twenty per cent estab- lished by the Compromise Tariff remained in force just two months. The Whigs had come into power again, and the Tariff of 1842 was made strongly protective, its rates running about thirty-four and about twenty-eight per cent respectively on dutiable and on Tariff of 1842. 18 The Normal School Quarterly i all goods. The Democrats looked upon the passage of this bill as a violation of good faith, claiming that the consumer, after he had put up with high rates for nearly nine years, supposing that the final twenty per cent rate would last in- definitely, was now cheated out of the benefit in consider- ation of which he had made the bargain. The Whigs pleaded that the treasury was empty, and that no congress could bind the hands of its successors. President Tyler vetoed two bills, which would have raised the duties with- out stopping the distribution of money received from sale of public lands among the states. Taussig says of this Act (Tariff History, p. 113): It had not such a strong popular feeling behind it as had existed in favor of the protective measures of 1824, 1828, and 1832. In the farming states the enthusiasm for the home-market idea had cooled perceptibly; and in the manufacturing States the agitation came rather from the producers interested than from the public at large. There is much truth in Calhoun’s remark that the Act of 1842 was passed, — because the politicians wanted an issue. As the infant industry and the home market arguments for protection were losing their force and popularity, a new argument had been coming to the front and appeared for the first time full-fledged in the debates on this tariff. It was the pauper labor argument — the argument that wages here are higher than in Europe and that the discontinuance of protection would mean the reduction of American wages to the European level. Hitherto protectionists had gener- ally argued that the difference in wages was not so great as usually claimed, and not sufficient to render successful com- petition on our part in the end impossible. The election of 1844 put legislation in the hands of the Democrats and brought a notable change in our tariff policy. The main principles and arguments back of the new policy may be gleaned from the messages of President Polk and from Tariff of !846. The Tariff in American History 19 the Treasury Report of Secretary R. J. Walker, in 1845. Of these papers the following will give some idea: Only so much revenue should be raised as, added to the receipts from the sale of public lands, will support economically the govern- ment No duty should ever be placed above the rate that will yield the largest revenue. Duties above this revenue limit are for protec- tion in the main and are not constitutional. They are not authorized by any express grant, and is it conceivable that such immense powers would have been left by the framers of the Constitution to mere in- ferences and doubtful constructions? — Below this limit there may be and should be discriminations. Some articles yield the largest rev- enue at rates that are on other articles wholly or partially prohibitory . . , The maximum revenue duties should be placed upon luxuries. Taxation should be in proportion to property. Of indirect taxes, unless care is taken, the poor will pay far more than their just share. — All minimum and specific duties should be done away with, as thru them the poorer grades of goods are taxed as high as the better grades. A tax of thirty dollars assessed on all houses without regard to their value would be intolerable. So would a provision that all houses worth less than five thousand dollars should be taxed as tho worth that sum. Specific and minimum duties are no better in prin- ciple — Duties should be arranged so as to keep the equilibrium of benefits among sections of the country Two-thirds of the taxes collected in increased prices from the people under the existing tariff law, do not reach the treasury at all but are paid to the manufacturers. No proposition to collect any such amount from the people by direct taxes and to turn it over to the manufacturers would be entertained for one moment. The profits in manufacturing are double those in agriculture. The manufacturing capitalists do not number more than one-twentieth of one per cent of the people, from whom these heavy taxes are collected. The occasional fall of prices under a protective tariff proves nothing, is usually due to improvements in machinery, etc. To measure the cost of our protection we must compare prices at home and those abroad Wages have not risen under the law of 1842, while prices have. The number of laborers working in protect- ed industries does not exceed four hundred thousand The Tariff of 1842 raises more revenue than is needed, imposes many prohibitory duties, and many more above the revenue standard, discriminates against the poor, and is sectional in its operation. 20 The Normal School Quarterly The Act of 1846, following such ideas, sweeping away all minimum and specific duties, establishing eight classes of goods paying rates of 100, 40, 80, 25, 15, 10, 5 per cent respectively, a free class, and unenumerated articles paying 20 per cent, was passed by the votes of the West and the South. During its operation the equivalent ad valorem rate on dutiable goods averaged a little over twenty-six, and on all goods a little over twenty-three per cent. President Polk’s annual messages speak of the Act as having largely increased the revenue, increased foreign trade, and brought great prosperity in all industries. President Taylor wanted more rev- enue, encouragement to manufacturers; did not doubt the constitu- tionality of protective duties. President Filmore’s messages argued for protective duties. President Pierce claimed that the revenue was becoming greater than they knew what to do with and pleaded for reductions. Under the operation of the Tariff of 1846 the importations had tripled and the reve- nue collections doubled in ten or eleven Tariff of 1857. years. The Act of 1857 was passed with little opposition. Said President Buchanan in his inaugural address: “Our present financial condition is without parallel in history. No nation has ever before been embarrassed from too large a surplus in the treasury.” The new law kept the schedules of the preceding law but reduced the rates to the fol- lowing: 80, 80, 24, 19, 15, 12, 8, 4 per cent. Unenumerated goods paid 15 per cent. There were some shifts from one class to another. New England united with the South in voting for this bill. The equivalent ad valorem rates under this law ran about 20 and 16 per cent on dutiable and on all goods respectively. These low rates coupled with the diminished importations during the hard times following, did not yield revenue enough, and Buchanan’s messages in 1858 and in 1860 call for revision. He recommends specific duties, alleging frauds under ad valorem rates. The Tariff in American History 21 It is sometimes claimed that the hard times of 1819, 1837, and 1857, were due to the low tariffs of 1816, 1833-42, 1846, and 1857 (as in the books of H. C. Carey, and in the historical argument for protection by James G. Blaine). To this Taussig replies: “Yet no fair-minded person, having even a superficial knowledge of the economic history of these years can entertain such notions. The crises of 1837 and 1839 were obviously due to quite a different set of causes .... The tariff had nothing whatever to do with them The crisis of 1857 was an unusually simple case of activity, spec- ulation, over-banking, panic, and depression; and it requires the exercise of great ingenuity to connect it in any way with the tariff act.” The War Tariffs. The first act was passed by the House be- fore there was an expectation of war and it became a law before war began. Mr. Morrill, Chairman of the Committee on Ways and Means, claimed that it was to restore practically the rates of 1846 but to make the duties specific instead of ad valorem. The Act was “not asked for and but coldly welcomed by the manufacturers.” In the anxiety to get the specific duties high enough so that they would be the equivalent of the ad valorem rates of 1846, they were placed where, as it proved, they were one-half higher on dutiable goods, and perhaps one-sixth higher on all imports, than the duties under the law passed in 1846 were. Then began the war and for four or five years the rates climbed up steadily. There was an ever increasing need of revenue, a desire to offset internal taxes upon manufactures, a lack of time for careful con- sideration, and the influence upon legislation of interested capitalitsts. An act passed in 1862 raised the rate upon dutiable goods by about one-half, and the rate upon all goods by about one-third. In 1864 the rates made another and an equal jump. This bill was debated in the House just three 22 The Normal School Quarterly days, and in the Senate two days. Its protective rates remained in force, in the main, for twenty years and both rates reached about the same height that the rates did under the so-called Tariff of Abominations. Within the first six years after the war practically all the internal revenue taxes that had been the occasion for compen- satory protective duties, were swept away. Mr. Morrill, who had managed the acts of 1861, 1862, and 1864, in the House, claimed that justice now demanded that the compensatory duties should be taken off. But other questions were pressing, the manufacturers opposed re- ductions, the matter was put off from year to year, the Wells Bill, which would have made a start in the direction, failed in 1867, for lack of a two-thirds majority in the House, and people became more and more habituated to the continuance of the duties that in the beginning had been intended to be temporary. Some reductions were made in 1870, but mostly upon revenue articles. In 1872, in answer to a demand from the West, a bill was passed, finally with the consent of the manufacturers who feared a more strenuous measure, mak- ing a general reduction of ten per cent, coupled with a more sweeping reduction of non- protective duties. The hard times of 1873 reduced importations and revenue, and the ten per cent reduction was rescinded in 1875. From that time on, of the many acts introduced and debated, no one had much chance of passage, until The Commission Tariff of 1883. President Grant’s messages counsel postponement of revision, care not to disturb home production that affords employment to labor at living wages in contrast to the pauper labor of the Old World.” President Hayes’ messages were of the same general tenor. In 1881 President Arthur wrote that revision was necessary and favored the appointment of a commission to recommend a bill. The next year he declared for lower duties upon cotton and woolen goods, silk goods, iron and steel manufactures, etc.; yet he said we should be careful Attempts at Reductions. The Tariff in American History 23 not to abandon the policy of protecting and aiding American labor. Taussig says of the Commission Tariff of 1883: “Its general character connot be easily described; in truth, it can hardly be said to have had any general character. On the whole, it may be fairly described as a half-hearted attempt on the part of those wishing to maintain a system of high protection, to make some concession to a public demand for a more moderate tariff system.” It proved that the act ac- tually increased the ad valorem equivalent rates. The Mor- ison Horizontal Reduction Bill was defeated in 1884 by a com- bination in the house of the Republicans and protection Democrats. The tariff was the chief issue in the campaign of 1884 and the Democrats won. No other President ever discussed in his messages the tariff to such length as did Pres- ident Cleveland. His messages during his first term, that of 1887, being entirely devoted to the tariff, contained among other points the following: The annual revenue is ever in excess of our needs. It is a puzzle what to do with it. No more bonds are due, some not due have been bought at a premium, the interest on bonds has been antici- pated, yet accumulations are being hoarded in the treasury, inviting to lavish expenditures, to schemes of plunder, and crippling business thruout the country. The worst thing is that we are therein aban- doning the theory of our free institutions, which would leave to every man the product of his toil minus only what must be taken for the support of the government. The case is becoming one of ruthless extortion and culpable betrayal of fairness and justice. The question is not one of theory between free trade and protection. It is a con- dition not a theory that confronts us. Shall we reduce collections to to our needs? The internal revenue is not collected from articles that are really necessaries. There is no complaint as to it. But our pres- ent tariff laws, the vicious, inequitable, and illogical source of un- necessary taxation ought to be revised Seventy per cent of our im- posts come from duties upon sugar, wool, silk, iron and steel, cotton, flax, hemp, jute, and their manufactures. The average rate on du- tiable goods is just about what it was during the civil war A sus- picion is abroad that the immense fortunes accumulated in this 24 The Normal School Quarterly country during late years are not of natural growth. The scheme lays a tax upon every consumer in the land for the benefit of the manufac- turer. The excuse is that protection is needed for “infant industries, ’ ’ which never seem ready to discard their leading strings. New re- cruits are always being added to the ranks of the manufacturers that want favor, efforts for reform meet stubborn resistance.. .The in- direct and almost stealthy manner in which these taxes are collected conceals their true nature and their extent. But they are paid by the people no less surely when added to the price of the things that supply their wants, than if paid directly to the tax-collector. These tariff laws raise the price to the consumer of all articles imported and subject to duty, by precisely the sum paid in such duties. The amount of the duty measures the tax paid by those who purchase these imported articles. Comparatively few use imported articles but millions use similar articles made at home and pay nearly or quite the enhanced price which the duty gives to the imported articles. The duties from the imported articles go to the treasury, but those who buy domestic goods pay the tax to home manufacturers. Competi- tion at home often is strangled by trusts. Where combination is necessary to keep prices up it is proof that some one is willing to accept lower prices. When competition at home keeps prices below the point of importation, it is proof that duties are not needed or at least that reductions can be made Classes are forming here, one of the very rich and one of the very poor. Corporations are becoming the people’s masters. The communism of the rich and powerful is no better or less dangerous than that of the poor and needy. It is claimed that we must put up with these higher prices in order that our laborer may be protected from the pauper labor of Europe. About 2,600,000 out of our 17,400,000 workers are employed in manufacturing industries that claim to be benefited by the tariff. To these the protectionist makes his plea to save their employment by resisting a change. The laborer is interested in all that reduces the cost of living. Let us remember that when looking out for his protection. He is a consumer and with other consumers is forced to pay enhanced prices for nearly everything because of the tariff. We must and can reduce for him the cost of living without curtailing his chances for work or reducing his wages It is the farmer who suf- fers most under these laws. He manufactures nothing, but pays the increased prices for manufactures. His own products must struggle unprotected in the markets of the world. The farmer is told he must have a high duty on wool. The farmers that raise no sheep The Tariff in American History 25 thus pay tribute bo those that do and to the manufacturer. The few farmers who do raise sheep pay more than enough in increased prices for manufactures, to sweep away all their gains from the higher prices of wool — Of the 4,000 articles now taxed, many are not worthy of attention and should be put upon the free list. The main reductions should be upon necessaries and upon raw materials; the compensatory duties should be taken off the finished products, and this will cheapen production, extend our sales abroad, relieve the market at home The government has been entering into partnership practically with its favorites, to the injury of the masses. The favored ones refuse to abate one iota of their selfish advantage and combine to control leg- islation. Yet there should be no sudden changes that would ruin vested interests. Our manufacturers should consent to reductions lest eventually an abused people insists upon a too sweeping rectifica- tion of its wrongs. The Mills Bill, which would have admitted The McKinley hemp, flax, lumber, and wool free; which Tariff Bill. would have abolished many compensatory and specific duties, was passed by the Democratic House but defeated in the Republican Senate in 1888. The Senate pro- posed a further extension of the protective system and the repeal of some internal taxes. In its platform in 1888 the Republican party declared for the entire repeal of the inter- nal taxes rather than the surrender of any part of the pro- tective system. The election was fought upon the tariff ques- tion and the Republicans won. They passed the McKinley Bill in 1890. This bill worked an increase in the protective duties, extending the system farther than during the war; under it the equivalent ad valorem rate upon dutiable goods rose from about 45 to about 49 per cent. The bill brought down the rate upon all goods from about 29 to about 21 per cent. Most of this fall was due to the free admission of sugar; a bounty of two cents a pound was paid, however, to sugar-raisers. The bill raised the duties upon raw wool, also those upon woolen cloths, dress goods, carpets, etc. The duties upon 26 The Normal School Quarterly linens, and upon some silk goods, were raised, as were those upon such grades of cotton goods as had ordinarily been im- ported; upon the cheaper grades of cotton manufactures, and upon iron and steel manufactures the duties remained the same or were somewhat reduced. The bill extended the principles of minimum and compound duties. All thru it shows a determined effort to bring about the establishment of new manufacturing industries in this country; thus it was sought to encourage the home production of tin plate; it be- ing asserted that all attempts up to that time to establish that industry had been thwarted by the temporary reduction of prices by foreign syndicates. A reciprocity provision was added to the bill at the last moment; this empowered the President to re-impose, by proclamation, certain duties upon sugar, tea, coffee, hides etc. , unless our exports were received upon favorable terms by the countries sending us those articles. The aim was, chiefly, to get concessions from South American countries. The following thoughts are to be found in Mr. McKinley’s opening speech upon his bill: The all-imporbant question in the campaign of 1888 was the tariff question. The one thing that election settled was that the protective policy should be secured, that any revision must be made in full re- cognition of the principle of protection. We have not abolished the internal revenue system, tho such taxes are reduced somewhat. We have extended the drawback system. Any American citizen may im- port any raw material, manufacture it into the finished product and receive back, if this product is exported, within one per cent the duty he paid on the raw material. This disposes of the cry that the tariff prevents our manufacturers from entering the foreign market. Statistics show that protective tariffs have not interrupted our ex- port trade but that it has increased under them. The balance of trade has been in our favor during the protective tariff periods of our history, and usually against us under revenue tariff periods. The main objections to this bill come from importers and from foreigners. It will diminish the importation of foreign competing goods. We do The Tariff in American History 27 not conceal the purpose of this bill— but we want our own country- men and all mankind to know it. It is to increase production here, to diversify our productive enterprises, enlarge the field, and increase the demand for American workmen. This is an American bill, made for the American people and for American interests. We do not dep- recate the value of foreign trade— but is not an American consumer a better customer for us than a foreign consumer? Yet our foreign trade was never so great as today. Since 1870 it has increased two and one-half times as fast as that of Great Britain. Yet our domestic trade is ninety-five per cent of our whole trade. We try nations as they appear on the balance-sheet of the world. We try systems by results; we are too practical a people for theory. After twenty-nine years of protective tariff laws we find ourselves enjoying a prosperity, the like of which has never been seen before, either here or elsewhere. Our workman deposits seven dollars in the savings-bank while the English operative deposits one dollar. We lead all nations in agricul- ture, in mining, in manufacturing. There is no nation in the world where the reward is given to the labor of men’s hands and to the work of their brains that is given in the United States. No sane man will give up what he has for what is promised by your theories. President Harrison in his annual message of 1890, praised the reci- procity clause, claiming that it would have been an unpardonable er- ror for us to have taken off the duties from coffee, tea, hides, and sugar, without demanding a fair return as regards the acceptance of our products by the countries producing the above articles. In 1891 he wrote that the act was fulfilling the prophecies of its friends, that our foreign commerce was unparalleled, the free list large, prices not advanced, labor splendidly paid. Wilson Tariff of 1894. One month after the McKinley Bill went into effect the congressional elections resulted in a sweeping Democratic victory. The House of Representatives became democratic, almost three to one. Two years later a Demo- cratic president was elected, and the Senate became demo- cratic. For the first time since the war the party opposed to a high protective tariff controlled every branch of the government. Grover Cleveland in his annual message, 1893, said: “ After a hard struggle tariff reform is directly before 28 The Normal School Quarterly us.” He reiterated his arguments for free raw materials, reduction of taxation upon the necessaries of life, etc. The bill reported in the House by the ways and means committee faithfully followed the recognized Democratic program — free raw materials, extinction of compensatory duties, gen- eral reductions, especially upon the necessaries of life. It provided, too, for an income tax. The House promptly passed the bill. In the Senate the sailing was not smooth. That body was closely divided politically. The votes of the three or four populists were not to be relied upon. Old animosities dating back to Cleveland’s first administration still lived. The stormy special session of the preceding summer, when the purchase clause of the Sherman Act had been repealed, had left its sores. The Louisiana senators were opposed to free sugar, the Maryland and the West Virginia senators to free coal, the Alabama senators to free iron ore; one of the senators from New York to the income tax; several senators from different states to free wool. The bill was referred to the finance committee, thence to a sub-committee (Jones, Vest and Mills); for three days its advocates behind closed doors in the Democratic caucus, argued, appealed, threat- ened; then came forth a bill that in spite of its wounds and scars was still called the Wilson Bill. Coal and iron ore were no longer on the free list; a duty had been put on sugar; the rates on many schedules had been materially raised. The Senate passed the bill, it went to a conference committee, there was a disagreement, Chairman Wilson reported the disagreement in the House, reading a letter from President Cleveland, in which it appeared that the writer looked upon the defection of certain Democratic senators as treacherous and dishonorable. Senator Gorman of Maryland made his notable speech in answer. In the end the House had to ac- The Tariff in American History 29 cept the Senate’s terms. The bill became a law without the President’s signature. The Act as finally passed put wool upon the free list and swept away the compensatory duties, with whatever dis- guised protection they contained, from the woolen manufac- tures. The ad valorem rates upon the same were in the main kept as they had been upon goods where competition really might be expected to occur. In other places they were somewhat reduced. The duties upon other textile manufac- tures were really reduced but little if at all. There were many nominal and ineffective reductions. Coal and iron ore were taxed, but at a lower rate than formerly. Lumber and copper were admitted free, the latter provision at least be- ing of little consequence. The duty on tin plate was reduced one-half. The reduction of duty on pig iron and on steel rails still left the rates prohibitory. Rates upon chinaware and earthware were considerably reduced. The bounty on sugar was abolished and an impost of 40 per cent ad valorem put on raw sugar; an additional duty of one-eighth of one cent per pound was laid on refined sugar, with an extra one- tenth of a cent upon such as came from countries that paid sugar bounties. It was popularly considered that this was a surrender to the sugar trust. The provision of the Act tax- ing all incomes exceeding $4,000 was later declared uncon- stitutional by the Supreme Court, on the ground that it was a direct tax and was not apportioned among the states ac- cording to population. The Wilson Bill brought down the equivalent ad valorem rate upon dutiable goods to about 41 per cent; the rate on all goods was reduced but very slightly. The policy of reciprocity was abandoned. The election of 1896 was fought upon the silver question. Their victory gave the Republicans control again. Upon the mon- ey question they could not and did not need to legislate, The Dingley Tariff of 1897. 30 The Normal School Quarterly but it was otherwise as to the tariff. Uncle Sam’s expenses were running higher than his ordinary receipts. The de- ficit had first appeared during the last year of the McKinley law, due to decreased importation because of the hard times and because the elections had foreshadowed lower rates. It continued, tho perhaps growing less, during the operation of the Wilson tariff. The Supreme Court’s decision that the income tax was unconstitutional destroyed all chance of rev- enue from that source. The treasury was replenished only by taking for use the notes redeemed with the gold obtained thru the sale of bonds. President McKinley called a special session of Congress and asked for tariff legislation. The bill passed was essentially a return to the policy of the McKinley bill; indeed it went a little farther than the latter bill had gone, the equivalent ad valorem rates upon dutiable goods having mounted higher during the years of its opera- tion than during any other years in our history, and av- eraging about 50 per cent. For the fiscal year ending* with June, 1906, our imports were valued at $1,213,417,649. The g*oods imported free were valued at 45.22 per cent of the total value. The dutiable goods paid, at an average equivalent ad valorem rate of 44.16 per cent, $293,910,395 in duties. This was $3.49 for each man, woman, and child in the United States. During the fiscal year ending in June, 1899, the rate upon dutiable goods touched the top notch in our history, 52.07 per cent. The high rate has not diminished importation, the value of our im- ports for the last six years having been greater than during any other six consecutive years. The equivalent ad valorem rate upon all goods is averaging about 26. It is important to remember that when rates are so high as to be prohibitory, they cut no figure in the ad valorem rates quoted. The principal articles admitted free, with a figure after each that represents the value of the importation in round millions, were as follows for the fiscal year ending June 30, 1906: coffee, 73; raw hides and skins, 62; silk, unmanufactured, and bolting cloths, 54; unmanufactured India rubber and gutta percha, 48; chemicals, drugs, dyes, medicines, n. e. s., 48; unmanufactured vegetable fibers and textile grasses, 37; copper, unmanufactured, 33; The Tariff in American History 31 tin in bars, pigs, etc., 31; tea, 15; undressed furs and skins, 13; fruits and nuts, n. e. s., 13. The following will show from what articles we collect the largest amount in duties, the value of the importations of each, and the equivalent ad valorem rate for each. ARTICLE VALUES DUTY COLLECTED RATE 1. Sugar and molasses $86,032,686 $52,594,731 61 2. Wool, and manufactures of 63,265,115 37,968,695 60 3. Manufactures of cotton 61,756,361..., 33,349,342 54 4. Tobacco, and manufactures of.. 22,917,352 23,927,701 104 5. Silk, and manufactures of 32,591,910 17,351,095 53 6. Fibers, grasses, and manufs. of. 53,010,920 19,242,164 36 7. Liquors and spirits 18,302,783 13,528,212 74 8. Iron, steel and manufs. of 30,579,453 9,784,043 32 9. Earthen, stone, and chinaware.. 12,805,945 ... 7,542,252 59 10. Chemicals, drugs, dyes, n. e. s... 25,455,116 6,770,869 27 From the above ten classes we collect three-fourths of the total collected in duties. Other important articles are: fruits and nuts, n. e. s.; leather, and manufactures thereof; wood, and manufactures of; glass and glassware; hides of cattle; diamonds and other precious stones. No duties have caused more discussion during late years than those upon wool and the manufactures of wool. The present law took raw wool off the free list, made three classes of wool, taxing that of the first class 11 and that of the second 12 cents a pound; wool of class three is of two grades, one taxed 4 and the other 7 cents. The equivalent ad valorem rate for 1906 upon raw wool was 43.5. Upon manufactures of wool the rates are compound; thus, upon Brussels carpet, 44 cents a square yard and 40 per cent ad valorem. The four important classes of woolen manufactures import- ed are women’s dress goods, cloths for men’s wear, carpets, and ready-made wearing apparel. The equivalent ad valorem rates upon these were, respectively, for 1906, 103, 97, 61, and 82 per cent. Many of the rates are prohibitory; thus almost the only carpets imported are those made whole for rooms, and the importations of dress goods and cloths are almost entirely of the finer qualities. This does not mean, of course, that the prices of cheaper goods may not be in- creased to the consumer because of rates that are prohibitory. The government reports, to analyze the workings of the present tariff, group all articles imported into six classes: Class A, consisting 32 The Normal School Quarterly of foodstuffs in crude condition and of food animals; Class B, pre- pared foodstuffs; Class C, crude materials for use in manufacturing; Class D, manufactures for further use in manufacturing; Class E, manufactures ready for consumption; Class F, miscellaneous articles, the class being of little consequence. In Class A the most import- ant articles are coffee, tea, unground spices, bananas, and cocoa, all of which are admitted free; lemons, oranges, walnuts, etc., are dutiable. Sugar is the all-important article of Class B and is heavily taxed, as too, are malt liquors, distilled spirits, and wines. Of Class C, various chemicals, drugs, and dyes, cotton, uncut diamonds, manilla and sisal grass, jute, undressed furs and skins, goatskins, hides other than those of cattle, India rubber, and raw silk all come in free; but tobacco, wool, and hides of cattle are dutiable. This class, furnishing as it does the raw materials for manufacture, is in- creasing rapidly in importance, at present furnishing, by value, one- third of our imports. Class D contains, among articles that are ad- mitted free, sodium nitrate, tin and copper in pigs, bars, etc.; among dutiable articles, diamonds and other precious stones, cut but not set, iron in pigs, or ingots, tin or terne plates, certain chemicals, furs, leather, spun silk, etc. This class too is growing in import- ance. Class E furnishes two-fifths of all dutiable and one-fourth of all goods imported. Less than one-tenth of the class, by values, comes in free, and these free goods consist mostly of products of the United States returned from abroad, of household effects, scientific appa- ratus, specimens, etc. Manufactures of cotton, wool, silk, fibers, leather, paper, iron and steel, glass, chinaware, etc., are dutiable. This class is decreasing in relative importance. Exports of Manufactures. If we may believe the figures of the great- est statistician of our greatest rival nation, we easily rank first as a manufacturing nation. Mr. Mulhall twelve years ago credited us with a product as great as that of England and Prance combined. This happens not only because we have more workmen en- gaged in manufacturing industries but because the average output per employee is nearly three times the English aver- age. Our home consumption of manufactures is enormous and we do not rank first by any means in the exportation of manufactures. The splendid iron ores of the Lake Superior The Tariff in American History 33 regions, their marvelously cheap transportation on the Great Lakes, the immense scale on which iron and steel manufacturing has been carried on, have enabled us to con- tend with fair success against England and Germany in the markets of the world, and our exports of iron and steel pro- ducts increased four or five hundred per cent between 1890 and 1900, when (in 1900) we exported such products to a value of $122,000,000. This is perhaps half the value of England’s exports in the same line. Refined mineral oil is the next largest item in the list of our exports of manu- factures. The Standard Oil Company divides with Russian producers the markets of the world. The next item is copper. We produce half the copper of the world. The next item is leather and its manufactures. The next is cotton manufactures; altho we raise eighty per cent of the world’s cotton, and consume more raw cotton than England, yet our exports of manufactured cotton are only about seven per cent of those of England. This is the only textile line in which we have done anything in exportation. Our export of agricultural implements comes next. How much our protective system has had to do with our wonder- ful development in manufacturing industries is an undeter- mined question. It is clear that we are doing the best in meeting foreign competition in those lines where we are ad- vantageously situated as to raw materials. We have made four tests of the policy of Reciprocity. reciprocity; we had a reciprocity treaty with Canada from 1855 to 1866, under which certain important articles from either country were admitted free by the other; we had a reciprocity treaty with Hawaiian Islands from 1879 until their annexation in 1900, by virtue of which we admitted their sugar and other tropical products free in return for like favor shown our foodstuffs, provisions, manufactures, etc.; under the provisions of the McKinley 34 The Normal School Quarterly law agreements were made during the first year or two after its passage with Brazil, Cuba and Porto Rico (thru Spain), with Germany, the Dominican Republic, British West Indies and Guiana, Austria-Hungary, and Central American states, under which, in return for certain favors, we admitted free, sugar, molasses, coffee, hides, until the Wilson tariff was passed; under the provisions of the Dingley law we have made agreements with France, Portugal, Germany and Italy, the agreements affecting however but few articles. Under a reciprocity treaty with Cuba, the rates upon Cuban products are 20 per cent less than the regular rates. Products from the Philippines pay 75 per cent of the regular duties. President McKinley’s last speech, delivered at Buffalo the day before he was shot, contained strong words for reciprocity : Our capacity to produce has developed so enormously that the problem ot more markets requires our urgent and immediate atten- tion By sensible trade arrangements which will not interrupt our home production we shall extend the outlets for our increasing sur- plus — We must not repose in fancied security that we can forever sell everything and buy little or nothing Reciprocity is the natural outgrowth of our wonderful industrial development The period of exclusiveness is past. The expansion of our trade and com- merce is the pressing problem. Commercial wars are unprofitable. A policy of good will and friendly trade relations will prevent re- prisals. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not. The Republican party is pledged to reciprocity. Presi- dent Roosevelt’s insistence upon the ratification of the Cuban treaty is well known. The Democratic party’s stand upon the question may be judged from the following ex- pressions culled from the Congressional Campaign Book of 1902. Reciprocity is a device for making one friend and ten enemies. The Tariff in American History 35 It is a sugar coating for the benefit of those who are refusing to take their protection pills straight There is nothing in it for the farmer It hunts foreign markets with a club We are out of pocket a hundred million dollars because of favoritism shown Hawaii Annexation has made reciprocity perpetual. . Our ex- perience with reciprocity under the McKinley bill was similar. Under the JDingley law the mountain has labored and brought forth a mouse. Our reciprocity with European countries is too petty to discuss. Cuban reciprocity would be of the Hawaiian type. Because of the difficulties in the way of reciprocity a few Repub- licans are favorable to a maximum and mimimum tariff. Three positions should be defined. Let the Democratic Congressional Campaign Book for 1902 and the Democratic plat- form for 1900 speak for the Democratic The Trusts and The Tariff. view: The trusts have made the tariff a very practical question. Pro- tected from outside competition by high tariff walls, we have hundreds of trusts that charge as high prices for their products as the tariff will permit while selling in foreign markets on a lower level of prices — The tariff ties the consumer’s hands while the trusts pick his pockets. (Campaign Book, pp. 146-7. Much evidence is given to show that since the passage of the Dingley tariff, trusts have been formed in great numbers, that they have advanced prices at home, and have sold more cheaply abroad) .... And from the Democratic platform of 1900: “Tariff laws should be amended by putting the products of trusts upon the free list.” President Roosevelt may speak for the great majority of the Republicans. He has said in effect: Wages are higher than ever before in our history. Every effort should be bent to secure the permanency of this condition of things — There is general acquiescence in the present tariff system. Nothing could be more unwise than to disturb business by any general changes Yet reciprocity is advisable Duties must never be reduced below what will cover the difference between labor cost here and abroad To attempt to reach trusts thru tariff re- ductions would be ineffective. Many of the largest corporations would not be affected in the slightest degree by a change in the 36 The Normal School Quarterly tariff save as such changes interfered with the general prosperity of the country. To reduce duties would be to ruin first the small com- petitors of the trust A commission of experts might well be appointed to recommend tariff revisions. There are some Republicans who are not disposed to believe with President Roosevelt and the majority of their party. Let Governor Cummins, who has headed this op- posing view speak for the so-called “Iowa idea:” There are duties that are absolutely indefensible. They can be reduced greatly and still the American manufacturer will occupy the whole American market And therefore they ought to be reduced, not years hence but now — We who believe the time has come to make certain changes — do not favor the reduction of any schedule below the point at which the American manufacturer can, if he will, monopolize the whole American market at a fair price. We stand for tariff duties so adjusted that the potential competition from other countries will prevent producers at home from exacting more than a just and reasonable price for what they produce — “If this citadel of protection ever falls it will be because its friends make the excesses and perversions of that policy so obnoxious that they ob- scure the righteousness and the glory of the principle itself.” Illinois State Reformatory Print