NORMAL SCHOOL QUARTERLY 
 
 Published by the Illinois State Normal University , Normal , Illinois 
 
 Series 1 
 
 APRIL , 1903 
 
 No. 5 
 
 The Tariff Question in American History. 
 
 Our ship of state under the Articles of Confederation stranded 
 upon the rock of revenue. When the First Congress met under the 
 Constitution it lost no time in providing revenue for the govern- 
 ment’s support. 
 
 The Act The P ream ^ e this tariff act states that the 
 of 1789 ac ^ ^signM to provide means for the support of 
 
 the government and for the payment of its debts, 
 and to provide for the encouragement and the protection of manu- 
 factures. The act was short and its rates, some being specific and 
 some ad valorem , were low. 
 
 A few months later the House of Hepresentatives directed 
 Alexander Hamilton, Secretary of the Treasury, to report upon the 
 subject of manufactures. TVo years afterwards his report was 
 sent to the House. It is generally admitted to be the best argu- 
 ment for protection ever written in America. 
 
 Mr. Hamilton maintained that agriculture and man- 
 HamiltoiTs ufacturing were pursuits of equal value and that 
 
 Report Upon neither could flourish at its best without the other. 
 Manufactures* Manufacturing would bring the division of labor and 
 the introduction of machinery; it would lead to the 
 employment of classes that would otherwise be unengaged in industry; 
 would increase immigration. It would furnish a steady demand for the 
 produce of the soil. Foreign nations, he said, were trying to sell us every- 
 thing 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, causes 
 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 capitalists who were 
 
most likely to succeed, from making the attempt. More formidable ob- 
 stacles still were the superiority already enjoyed by nations that had 
 already preoccupied and perfected the chief fields for manufacturing en- 
 terprise, and the aids of various sorts granted by foreign nations to their 
 manufactories. He says: “Whatever room there may be for an expecta- 
 tion, that the industry of a people, under the direction of 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 un- 
 equal terms, or will, of itself, surmount all of the adventitious barriers 
 to a successful competition, 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 scarcity of hands, dearness 
 of labor, and lack of capital, he replied : Some districts of America 
 were fully peopled, use could be made of women and children, and of immi- 
 grants; the disparity of wages here and abroad had been greatly exagger- 
 ated, and the cost of manual labor was becoming continually of less 
 moment in consequence of the increasing 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 en- 
 hanced by import duties, Mr. Hamilton said, seemed reasonable in theory, 
 but was seldom borne out by the facts. High prices might be the tempo- 
 rary 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. 
 
 Early Acts 
 and 
 
 Protection. 
 
 During the first twenty years of our national 
 life under the Constitution at least twenty acts 
 that had to do with the tariff were passed. The 
 motive behind them was usually a need for more 
 revenue. How far the desire to protect home manufactories fig- 
 ured as a subsidiary motive has been a matter of much dispute. 
 Protectionists have pointed to the plain wording of the preamble 
 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 
 
 2 
 
Manufactures 
 before 1808. 
 
 in the years immediately following Hamilton’s report, and to the 
 fact that Congress was continually beset with petitions from cities 
 praying for protection. On the other hand Benton (Debates of 
 Congress, Yol. I, p. 84, Note) says that every speech on the Act of 
 1789 showed revenue to be the object of every proposed duty, pro- 
 tection 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 protec- 
 ion were moderate, Hamilton himself suggesting no ad valorem 
 rate above fifteen per cent, and suggesting specific duties that 
 would be prohibitory, upon only a very few articles. 
 
 That it had been the English policy, carried out 
 with a fair degree of success, to throttle manu- 
 facturing 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 grip upon the prize — the world’s leadership in man- 
 ufacturing. An English barber had discovered a machine that 
 could do as much work, in the textile industries, as a thousand 
 spinsters ; a poor weaver 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 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 fac- 
 tory operatives the greatest English statesman had uttered the ter- 
 rible 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 inventions 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 mod- 
 els of machinery. 
 
 3 
 
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, har- 
 nesses, gloves, etc. ; we made from iron, implements of husbandry, 
 household utensils, tools, anchors, etc.; we manufactured sugars, 
 liquors, wool hats, tin utensils, wagons, bricks and tiles, and many 
 other articles of the cruder sort. The textile industries were al- 
 most entirely carried on in the household, tho carding and full- 
 ing mills were many. In short the nation remained, as the 
 colonies had been, mainly agricultural. Our imported manufac- 
 tures were paid for thru agricultural 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 Eng- 
 ^ er * OC * lish Orders in Council, our own Embargo, and 
 
 Restriction. Non-Intercourse Act, the war of 1812-1815, 
 
 completely changed the condition of things. Our 
 foreign trade was ruined. What we did not manufacture ourselves 
 we had to do without. Our exports and imports for 1808 aggre- 
 gated less than one-third, and the same for 1814 less than one twen- 
 tieth those of 1807. These years of restriction gave our manufac- 
 tories 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 us here in 1790. Whitney invented the cotton-gin in 
 1794. Up to that time cotton had been little cultivated in Amer- 
 ica. Its cultivation 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 1803 there 
 were but four cotton factories in America. In 1812 there were 
 within a radius of thirty miles from Providence, 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 
 
 4 
 
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 manufac- 
 tures;” and again to Kosciusko the same year, “'Come peace when 
 it will, we shall never again go to England for a shilling’s worth of 
 goods where we have gone for dollars’ worth.” 
 
 The Tariff 
 of 1816. 
 
 In 1812 all duties were doubled as a war measure 
 and these war duties were continued until the Tar- 
 iff of 1816 went into effect. After the signing of 
 peace, notwithstanding the war duties, large importations of for- 
 eign goods began. This embarrassed 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 Madison in his annual message of 1810 had viewed with 
 satisfaction the growth of manufactories, seen in them some com- 
 pensation for the losses of war; in 1815 he held that the manufac- 
 tories 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 moderately 
 that James G. Blaine, in his historical argument for protection 
 (Korth American Review, 1889), classes it among free trade tar- 
 iffs, and lays to it the hard times in 1819. E. W. Thompson, in 
 his History of the Tariff, repeatedly asserts that it was strongly 
 protective, and that under its favorable influence the country speed- 
 ily recovered from the depression of 1819. President Monroe, in 
 his annual message of 1822, says that the manufactories of the 
 country seem to be prospering again. Mr. Benton, remarking upon 
 the passage of this so-called Lowndes-Calhoun bill in the House, 
 says (Debates of Congress, Yol. 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 
 
 5 
 
this policy was reversed. Protection became the object and revenue the 
 incident, to such a degree as often to disregard revenue altogether. 
 
 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 twen- 
 ty-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 
 manufacture became cheaper this rate became practically prohibi- 
 tory as to the coarser grades. There was no woolen minimum and 
 there was a duty on raw wool that partially offset the advantage to 
 the manufacturer of the duties upon the imported competing manu- 
 factured products. The iron manufactories 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 first strong popular movement for protection 
 The Tariff came in consequence of the hard times of 1819. 
 
 Act of 1824. The foreign market for our agricultural exports 
 
 was poor, and the demand arose for protection to 
 our infant industries and for a home market for agricultural pro- 
 ducts. A high tariff bill barely failed of passage in 1820. The 
 question had become a sectional one, the South and the commercial 
 interests of New England opposing, and the middle and western 
 agricultural states with the manufacturing interests of New Eng- 
 land 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 Ehode Island and Con- 
 necticut. This act raised the minimum on cotton goods. It raised 
 the 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. 
 
 6 
 
Henry Clay, author of this bill, and “father of the American 
 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 general 
 distress that pervades the whole country. It is forced upon us by numer- 
 ous 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 dim- 
 inution 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 pursuit after public situations . . . . ; 
 by the reluctant resort to the perilous use of paper money; by the inter- 
 vention of legislation .... between 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 atmosphere 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 
 picture. But I have exaggerated nothing. Perfect fidelity to the original 
 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 practicing 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 extra- 
 ordinary 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 . . . . 9 the produce 
 of American industry. . . .The greatest want of civilized society is a market 
 for the sale. . . .of the surplus produce of its labor. . . .The object of 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 sur- 
 plus 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 incompetent at present, likely to improve in 
 the future ? .... It must become worse and worse .... Our agriculture is our 
 
 7 
 
greatest interest. . . .Can we do nothing to 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 ar- 
 ticle 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 consumption .... They are in 
 effect subsisted by us ; but their actual means of subsistence are drawn from 
 foreign agriculture. If we could transport 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 em- 
 ployment to an equal number of our own citizens. . . .the beneficial effects 
 . . . .will be nearly doubled. 
 
 Daniel Webster, in reply, said he did not know where any such 
 distress existed. In the New England states was general prosper- 
 ity. Prices were low only as compared with the inflated prices 
 measured in paper after the war. He denied that the manufac- 
 tories needed more protection. The protective policy might be all 
 right within bounds, but carried to the point of prohibition, it be- 
 came 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 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 Parlia- 
 ment would never have dared to lay such duties upon 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 bond- 
 age. . . .and I trust it will be met in the southern country as was the Stamp 
 Act .... I 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 govern- 
 
 8 
 
ment, 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 mo^t approved spring lancets, you draw the last drop of blood from 
 our veins; if, secundum artem, you draw the last shilling from our pock- 
 ets, what are the checks of the Constitution to us? A fig for the Consti- 
 tution! 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 Constitution, 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 Russian 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 tnroats. 
 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 mistake .... 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 majority in both 
 Houses, this bill shall become a law. 
 
 In the tariff of 1824 the woolen manufacturers 
 The Tariff were favored little more than in that of 1816. 
 of 1828. There were heavy importations of woolen goods in 
 
 1825. Now came a determined fight for woolen 
 minimum duties. A bill barely failed of passage in 1827 that 
 would have taxed all imported woolen goods costing 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. 
 Jackson 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 system.” 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 prepared by Jackson’s friends in Con- 
 
 9 
 
gress was never intended to pass; it had been loaded with provi- 
 sions 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, including Webster, voted for the 
 bill to let it thru. This tariff has been called the “tariff of abom- 
 inations.” 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 4-5.3 per cent. Adams' 
 fourth annual message, written after his defeat, came out squarely 
 for protection. 
 
 - .. The Tariff of 1828, altho its worse features were 
 
 Southern 
 
 Discontent g°^ en during the two or three years follow- 
 
 ing, hurried on to its acute stages the discontent of 
 the South. In the summer after the passage of the act, Vice- 
 President Calhoun developed his theory of nullification. It be- 
 came the basis of the “South Carolina Exposition.” This docu- 
 ment 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 
 Congress 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 administration 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 
 
 10 
 
to apply the money raised to objects not specified by the Constitu- 
 tion ; 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 Congress had the right, under 
 its power to lay imposts or to regulate commerce to protect manufac- 
 tures, 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 com- 
 merce: that lest an apparent acquiescence in the system of protect- 
 ing duties be drawn into a precedent, the state protested against 
 it as unconstitutional , oppressive , and unjust . 
 
 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 J ackson 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 en- 
 couragement 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 entirely 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 anomoly 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 ex- 
 pressly delegated to Congress. 
 
 11 
 
In his annual message of 1829, President Jackson 
 Tariff Act had expressed regret that nations would not let com- 
 of 1832. merce flow in the channels to which individual in- 
 terest, always its surest guide, might direct it; 
 thought the correct policy was to put rates where they would in- 
 sure fair competition; and that in reducing the tariff the revenue 
 duties should be taken off first. In his next annual message he 
 said that revenue 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 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 condemned combinations of small minori- 
 ties in Congress entered 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 unnecessary 
 taxes. 
 
 Mr. Clay, now a senator, was not prepared to abandon protec- 
 tion. He admitted that the revenue must be reduced, but main- 
 tained that it must be done without reducing protective duties. “To 
 preserve, maintain, and strengthen the American system, he would 
 defy the South, the President, and the devil/ 5 So Adams reported 
 him to have said. He introduced a resolution instructing the Com- 
 mittee on Finance to prepare a bill that would reduce the revenue 
 by taking off the duties on most articles not coming into competi- 
 tion with home-made articles. In favor of the resolution Mr. 
 Clay said : 
 
 Eight years ago it was my painful duty to present an unexaggerated 
 picture of the general distress pervading the whole land .... If I were to 
 select any term of seven years of the most wide-spread desolation, it would 
 be exactly that term of seA 7 en years immediately preceding the establish- 
 ment of the tariff of 1824. I have now to perform the more pleasing task 
 of exhibiting an imperfect sketch of the existing state of unparalleled 
 prosperity. On a general survey, we behold cultivation extended, the arts 
 flourishing, the face of the country improved, our people fully and profit- 
 
 12 
 
ably employed, the public countenance exhibiting tranquility, contentment 
 and happiness. 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 cit- 
 ies expanded, and whole villages springing up, as it were by enchantment; 
 our exports and imports increased and increasing; our tonnage, foreign 
 and coastwise, swelling and fully occupied; the rivers of our interior ani- 
 mated by countless steamboats; the currency sound and abundant; the 
 public debt of two wars nearly redeemed; and* to crown all, the public 
 treasury overflowing, embarrassing 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 debt means 
 the subversion of the American system, its payment will be the bitterest of 
 curses. .. .This system of protection 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 
 only to that terrible appeal. If ever one state or a minority of the states 
 can by menacing the Union force the abandonment of great measures, 
 from that moment the Union is practically 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 abandonment. 
 
 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. 
 
 13 
 
Nullification. The year that followed was an ominous one. 
 
 Compromise A third time Calhoun wrote out minutely his 
 
 Tariff of ideas about nullification. He went over the 
 
 1833 . old ground again and one step farther, in that 
 
 he specified just how 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 “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 foresaw the 
 extinction of the public debt; declared that wherever protection 
 exceeded what was necessary to counteract the regulations of for- 
 eign 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 
 outweighed its benefits ... A few days later was issued his proclama- 
 tion 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 enforced, 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 indeed become criti- 
 cal. 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 South, John C. Calhoun, who had resigned the Vice- 
 
 14 
 
Presidency 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 suffer- 
 ing amendment beyond recognition; the Senate had before it an- 
 other tariff bill; the Force Bill was being quarreled over rather 
 than debated ; less than three weeks of the twenty-second Con- 
 gress remained; then the nullification ordinance of South Carolina 
 would be in effect ; and other southern states had likewise declared 
 the tariff laws unconstitutional and unjust — what of them? Feb- 
 ruary 12, Mr. Clay astonished the Senate and the country by the 
 introduction 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 re- 
 turns 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 established 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 all goods. The Democrats looked upon the pass- 
 age of this bill as a violation of good faith, claiming that the con- 
 sumer, after he had put up with high rates for nearly nine years, 
 supposing that the final twenty per cent rate would last indefinitely, 
 was now cheated out of the benefit in consideration of which he had 
 
 Tariff 
 of 1842. 
 
 15 
 
made the bargain. The Whigs pleaded that the treasury was empty, 
 and that no congress could bind the hands of its successors. Presi- 
 dent Tyler vetoed two bills, which would have raised the duties 
 without 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 pro- 
 ducers interested than from the public at large. There is much truth in 
 Calhoun’s remark that the Act of 1842 was passed,. .. .because the poli- 
 ticians wanted an issue. 
 
 As the infant industry and the home market arguments for pro- 
 tection 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 
 generally argued that the difference in wages was not so great as 
 usually claimed, and not sufficient to render successful competition 
 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 Presi- 
 dent Polk and from the Treasury Report of Secretary R. J. Walker, 
 in 1845, Of these papers the following will give some idea: 
 
 Tariff 
 of 1846 
 
 Only so much revenue should be raised as, added to the receipts from 
 the sale of public lands, will support economically the government. . . .No 
 duty should ever be placed above the rate that will yield the largest reve- 
 nue. Duties above this revenue limit are for protection 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 inferences and doubtful constructions? 
 ....Below this limit there may be and should be discriminations. Some 
 
 16 
 
articles yield the largest revenue 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. Spe- 
 cific and minimum duties are no better in principle .... 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 num- 
 ber 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 protec- 
 tive 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 protected indus- 
 tries 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. 
 
 The Act of 1846, following such ideas, sweeping away all mini- 
 mum and specific duties, establishing eight classes of goods paying 
 rates of 100, 40, 30, 25, 20, 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 prosper- 
 ity in all industries. President Taylor wanted more revenue, encourage- 
 ment to manufacturers; did not doubt the constitutionality of protective 
 duties. President Filmore’s messages argued for protective duties. Presi- 
 dent Pierce claimed that the revenue was becoming greater than they knew 
 what to do with and pleaded for reductions. 
 
 17 
 
Tariff 
 of 1857. 
 
 Under the operation of the Tariff of 1846 the impor- 
 tations had tripled and the revenue collections dou- 
 bled in ten or eleven years. The Act of 1857 was 
 passed with little opposition. Said President Buchanan in his 
 inaugural address : “Our present financial condition is without par- 
 allel in history. No nation has ever before been embarrassed from 
 too large a surplus in the treasury.” The new law kept the sched- 
 ules of the preceding law but reduced the rates to the following: 
 80, 30, 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 equiv- 
 alent 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. 
 
 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 argu- 
 ment for protection by James G. Blaine.) To this Taussig re- 
 plies: “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, speculation, 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 ^e first ac ^ was P as sed by the House before there 
 Tariffs was an ex P ec ^ a tion of war and it became a law be- 
 
 fore war began. Mr. Morrill, Chairman of the Com- 
 mittee 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 coldlv welcomed by 
 
 18 
 
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 im- 
 ports, than the duties under the law passed in 1846 were. Then 
 began the war and for four or five years the rates climbed up stead- 
 ily. 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 capital- 
 ists. 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 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. 
 
 Attempts Within the first six years after the war practically 
 all the internal revenue taxes that had been the 
 Reductions occasion for compensatory 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, making 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 
 
 19 
 
acts introduced and debated, no one had much chance of passage, 
 until The Commission Tariff of 1888 . 
 
 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 Ar- 
 thur 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 manufac- 
 tures, etc.; yet he said we should be careful not to abandon the policy of 
 protecting and aiding American labor. 
 
 Taussig says of the Commission Tariff of 1883 : a Its general 
 character cannot 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 actually increased the ad valorem equivalent rates. The 
 Morrison 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. Ho other President ever discussed in his messages 
 the tariff to such length as did President Cleveland. His mes- 
 sages 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 anticipated, 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 abandoning the theory of our free in- 
 stitutions, which would lerve 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 protec- 
 tion. It is a condition not a theory that confronts us. Shall we reduce 
 collections to our needs? The internal revenue is not collected from 
 articles that are really necessaries. There is no complaint as to it. But 
 
 20 
 
our present tariff laws, the vicious, inequitable, and illogical source of 
 unnecessary 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 dutiable goods 
 is just about what it was during the civil war.... A suspicion is abroad 
 that the immense fortunes accumulated in this country during late years 
 are not of natural growth. This scheme lays a tax upon every consumer 
 in the land for the benefit of the manufacturer. The excuse is that pro- 
 tection is needed for “infant industries,” which never seem ready to discard 
 their leading strings. New recruits are always being added to the ranks 
 of the manufacturers that want favor, efforts for reform meet stubborn 
 resistance .... The indirect 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. Competition 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 protec- 
 tionist 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 suffers most under these laws. He manu- 
 factures nothing, but pays the increased prices for manufactures. His 
 
 21 
 
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 thus pay tribute to 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 pro- 
 duction, extend our sales abroad, relieve the market at home. . . .The gov- 
 ernment 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 legislation. Yet there 
 should be no sudden changes that would ruin vested interests. Our manu- 
 facturers should consent to reductions lest eventually an abused people in- 
 sist upon a too sweeping rectification of its wrongs. 
 
 Th M 1C* I The Mills Bill* which would have admitted hemp, 
 Tariff Bill an( ^ wool ^ ree 5 which would have 
 
 abolished many compensatory and specific duties, 
 was passed by the democratic House but defeated in the republican 
 Senate in 1888. The Senate proposed 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 internal taxes rather than the surrender of any part 
 of the protective system. The election was fought upon the tariff 
 question 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 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 
 
 22 
 
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 being asserted that all attempts up to that time to 
 establish that industry had been thwarted by the temporary reduc- 
 tion 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, cof- 
 fee, 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-important question in the campaign of 1888 was the tariff 
 question. The one thing that election settled was that the protective pol- 
 icy should be secured, that any revision must be made in full recognition 
 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 import 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 export trade but that it has increased under them. 
 The balance of trade has been in our' favor during the protective tarilf 
 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 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 di- 
 versify 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 deprecate the 
 value of foreign trade — but is not an American consumer a better custo- 
 mer 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 
 
 23 
 
per cent of our whole trade. We try nations as they appear on the bal- 
 ance-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 agriculture, in mining, in manufacturing. There is no na- 
 tion 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 wdiat 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 error 
 for us to have taken off the duties from coffee, tea, hides, and sugar, with- 
 out 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. Ttvo years 
 later a Democratic president was elected, and the Senate became 
 democratic. 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 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, 
 general reductions, especially upon the necessaries of life. It pro- 
 vided, 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. T!he votes of the three or four populists 
 were not to be relied upon. Old animosities dating back to Cleve- 
 land’s first administration still lived. The stormy special session 
 of the preceding summer, when the purchase clause of the Sherman 
 
 24 
 
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 Dem- 
 ocratic caucus, argued, appealed, threatened; 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 materi- 
 ally 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 de- 
 fection of certain Democratic senators as treacherous and dishon- 
 orable. Senator Gorman of Maryland made his notable speech in 
 answer. In the end the House had to accept 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 disguised protection 
 they contained, from the woolen manufactures. 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 
 manufactures 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 being of little conse- 
 quence. The duty on tin plate was reduced one-half. The reduction 
 of duty on pig iron and on steel rails still left the rates pro- 
 hibitory. Eates upon chinaware and earthenware were consider- 
 ably reduced. The bounty on sugar was abolished and an impost 
 of 4Q 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 
 
 25 
 
extra one-tenth of a cent upon such as came from countries that paid 
 sugar bounties. It was popularly considered that this was a sur- 
 render to the sugar trust. The provision of the Act taxing all in- 
 comes exceeding $4,000 was later declared unconstitutional by the 
 Supreme Court, on the ground that it was a direct tax and was not 
 apportioned among the states according 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 Dingley ^ ie e ^ ec ^ on 1896 was f° u ght upon the silver 
 Tariff of 1897 q ues tion. Their victory gave the Republicans con- 
 trol again. Upon the money question they could 
 not and did not need to legislate, but it was otherwise as to the 
 tariff. Uncle Sam’s expenses were running higher than his ordin- 
 ary receipts. The deficit 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 revenue from that 
 source. The treasury was replenished only by taking for use the 
 notes redeemed with the gold obtained thru the sale of bonds. Pres- 
 ident 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 operation than 
 during any other years in our history, and averaging about 50 per 
 cent. 
 
 For the fiscal year ending with June, 1902, our imports were valued 
 at $899,793,754. The goods imported free were valued at 44 per cent of 
 the total value. The dutiable goods paid, at an average equivalent ad 
 valorem rate of 49.8 per cent, $251,453,155 in duties. This was $3.17 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 impor- 
 
 26 
 
tation, the value of our imports for the last three years having been 
 greater than during any other three consecutive years. The equivalent 
 ad valorem rate upon all goods is averaging about 28.5. 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 last complete fiscal year: Cof- 
 fee, 71; silk, raw 43 ; hides and skins, raw, n. e. s., 41; chemicals, drugs, 
 dyes, n. e. s., 34 ; fibres, grasses, 28 ; India rubber, gutta percha, 27 ; cop- 
 per, unmanufactured, 25; tin bars, etc., 19; cotton, unmanufactured, 12; furs, 
 fur skins, raw, n. e. s., 10; fruits and nuts, n. e. s., 9. 
 
 The following will show from what articles we collect the largest 
 amounts in duties, the value of the importations, and the equivalent ad 
 valorem rate for each: 
 
 
 Article 
 
 Values 
 
 Duty collected 
 
 Rate 
 
 1. 
 
 Sugar ( and molasses ) 
 
 . .$61,064,950 
 
 $53,009,269 
 
 86.81 
 
 2. 
 
 Wool and manufactures of 
 
 .. 35,353,020 
 
 26,396,839 
 
 74.64 
 
 3. 
 
 Manufactures of cotton 
 
 .. 44,590,085 
 
 24,485,988 
 
 54.91 
 
 4. 
 
 Tobacco and manufactures of 
 
 , .. 16,332,287 
 
 18,757,718 
 
 114.85 
 
 5. 
 
 Manufactures of silk 
 
 . . 32,242,228 
 
 17,293,290 
 
 53.64 
 
 6. 
 
 Fibres, grasses, and manuf . of . . . 
 
 . .. 41,076,059 
 
 15,157,639 
 
 36.90 
 
 7. 
 
 Tron, steel, and manuf. of 
 
 , . . 28,261,053 
 
 10,464,404 
 
 37.03 
 
 8. 
 
 Liquors 
 
 . . 14,233,197 
 
 10,148,513 
 
 71.30 
 
 9. 
 
 Tea 
 
 
 7,882,607 
 
 76.33 
 
 10. 
 
 Chemicals, drugs, dyes, n. e. s . . . . 
 
 . . 23,513,121 
 
 6,369,018 
 
 27.09 
 
 
 From the above we get about half 
 
 our duties. 
 
 
 
 
 Other important articles are: Earthen, stone, and china ware; 
 
 fruits 
 
 and nuts, n. e. s. ; leather and manufactures of; glass and glassware; 
 vegetables; wood and manufactures of, n. e. s. ; hides of cattle; jewelry 
 and precious stones. 
 
 The government reports to analyze the way the present tariff works, 
 make of all articles five classes: Class A, articles of food (and live ani- 
 mals) ; Class B, crude materials for use in manufacturing; Class C, wholly 
 or partially manufactured articles to be used as materials in manufactur- 
 ing ; Class D, manufactures ready for consumption ; Class E, articles of vol- 
 untary use. Now we may give the per cent that the value of dutiable 
 goods of each class forms of the value of all dutiable imports, the per cent 
 the value of its free goods forms of the value of all free goods, the per cent 
 that the value of free goods forms of all the goods of the same class, etc.: 
 
 27 
 

 Class A 
 
 B 
 
 C 
 
 D 
 
 E 
 
 1 . 
 
 Furnishes of all dutiable goods imported. . .22% 
 
 14% 
 
 13% 
 
 27% 
 
 24% 
 
 2. 
 
 Furnishes of all free goods 23 
 
 65 
 
 5 
 
 3 
 
 2 
 
 ■3. 
 
 Portion of the class that comes in free 45 
 
 79 
 
 24 
 
 9 
 
 7 
 
 4. 
 
 Ad valorem rate on all goods (equivalent). ..37 
 
 6 
 
 20 
 
 45 
 
 50 
 
 5. 
 
 Equivalent ad valorem rate on dutiable 68 
 
 30 
 
 27 
 
 49 
 
 57 
 
 6. 
 
 Part of whole duty derived from class 30 
 
 8 
 
 7 
 
 27 
 
 27 
 
 7. 
 
 Furnishes of all goods imported 24 
 
 36 
 
 10 
 
 17 
 
 14 
 
 From these figures it will be seen that few manufactures and few 
 luxuries come in free ; the rates upon these goods are high and from them 
 we get a large portion of our revenue, as we do also from the all-important 
 article, sugar, and from tea, both of which are in Class A. Materials to 
 be used by our manufacturers, for the most part, either come in free or 
 are more lightly taxed; their importation has increased greatly during the 
 last decade. Here belong fibres, raw silk, India rubber, hides, skins, furs, 
 chemicals, wool, cotton, tin in blocks, woods, etc. 
 
 There has been more contention during the last decade or two over 
 wool and woolen goods than over any other articles. The present law 
 took avooI oft' the free list, made three classes of wool, and taxed these at 
 11, 12, and 4 cents a pound respectively. 
 
 The equivalent ad valorem rate last year on raw wool was 59 per 
 cent. . . .Upon manufactures of wool the duties are compound; thus, upon 
 Brussels carpet, 44 cents a yard and 40 per cent ad valorem. The four 
 important classes of woolen manufactures imported are women’s dress 
 goods, cloths for men’s wear, carpets, ready-made wearing apparel. The 
 equivalent ad valorem rates upon these last year were, respectively, 103, 
 98, 64, and 83 per cent. Many of the rates are prohibitory; thus, almost 
 the only carpets imported are those made whole for rooms, and of dress 
 goods and cloths the importations are almost entirely of the finer quali- 
 ties. This does not mean of course that the prices of cheaper goods are 
 not increased to the consumer because of the tariffs that are prohibitory. 
 
 Exports of ^ we ma ^ Relieve the fig ures the greatest statis- 
 rianufactures tican of our greatest rival nation, we easily rank 
 first as a manufacturing nation. Mr. Mnlhal] 
 eight years ago credited ns with a product as great as that of Eng- 
 land and France combined. This happens not only because we 
 have more workmen engaged in manufacturing industries but be- 
 cause the average output per employee is nearly three times the 
 English average. Our home consumption of manufactures is enor- 
 
 28 
 
mous and we do not rank first by any means in the exportation of 
 manufactures. The splendid iron ores of the Lake Superior re- 
 gions, their marvelously cheap transportation on the Great Lakes, 
 the immense scale on which the iron and steel manufacturing has 
 been carried on, have enabled us to contend with fair success against 
 England and Germany in the markets of the world, and our exports 
 of iron and steel products 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 Eng- 
 land’s exports in the same line. Refined mineral oil is the next larg- 
 est item in the list of our exports of manufactures. 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 imple- 
 ments comes next. How much our protective system has had to 
 do with our wonderful development in manufacturing industries 
 is an undetermined question. It is clear that we are doing the best 
 in meeting foreign competition in those lines where we are advan- 
 tageously situated as to the raw materials. 
 
 Reciprocity. 
 
 We have made four tests of the policy of reciproc- 
 ity; we had a reciprocity treaty with Canada from 
 1855-1866, under which certain important articles from either 
 country were admitted free by the other; we had a reciprocity treaty 
 with Hawaiian Islands from 1876 until their annexation in 
 1900, by virtue of which we admitted their sugar and other tropi- 
 cal products free in return for like favor shown our breadstuffs, 
 provisions, manufactures, etc. ; under the provisions of the McKin- 
 ley law agreements were made during the first year or two after its 
 passage with Brazil, Cuba and Porto Rico (thru Spain), with Ger- 
 manv, the Dominican Republic, British West Indies and Guiana, 
 
 29 
 
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. A reciprocity treaty with Cuba seems probable. 
 
 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 of more markets requires our urgent and immediate attention 
 
 By sensible trade arrangements which will not interrupt our home produc- 
 tion we shall extend the outlets for our increasing surplus. .. .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 wonder- 
 ful industrial development .... The period of exclusiveness is past. The 
 expansion of our trade and commerce is the pressing problem. Commer- 
 cial wars are unprofitable. A policy of good will and friendly trade rela- 
 tions will prevent reprisals. Reciprocity treaties are in harmony with the 
 spirit of the times ; measures of retaliation are not. 
 
 The Republican party is pledged to reciprocity. President 
 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 expressions culled from the Congres- 
 sional Campaign Book of 1902 : 
 
 Reciprocity is a device for making one friend and ten enemies. It is 
 a sugar coating for the benefit of those who are refusing to take their pro- 
 tection 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 reci- 
 procity perpetual .... Our experience with reciprocity under the McKinley 
 bill was similar. Under the Dingley 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. 
 
 Three positions should be defined. Let the Demo- 
 cratic Congressional Campaign Book for 1902 and the 
 Democratic platform for 1900 speak for the Demo- 
 cratic view: 
 
 The trusts have made the tariff a very practical question. Protected 
 from outside competition by high tariff walls, we have hundreds of trusts 
 
 The Trusts 
 and 
 
 The Tariff. 
 
 30 
 
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 reductions would be ineffective. Many of the largest corpora- 
 tions would not be affected in the slightest degree by a change in the tariff 
 save as such changes interfered with the general prosperity of the country. 
 To reduce duties would be to ruin first the small competitors 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 opposing view speak for 
 the so-called “Iowa idea 
 
 There are duties that are absolutely indefensible. They can be re- 
 duced 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 pro- 
 duce “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 
 obscure the righteousness and the glory of the principle itself.” 
 
 31 
 
T"E LIBRARY OF THE 
 
 i/i AY 1 9 1931 
 
 UNIVERSITY Hf JL1 NOIS 
 
 Announcements . 
 
 June 4 — Annual Commencement. 
 
 June 8 - July 17 — First summer term of six weeks. 
 
 July 20 - August 27 — Second summer term of six weeks. 
 
 September 7 - November 5 — Fall term of twelve weeks. 
 
 At the summer terms are taught nearly all of the regular 
 twelve-week courses in the various subjects. Students are expected 
 as a rule to take two major subjects only, and recite twice per day 
 in each. There are also minor courses in many subjects and spe- 
 cial courses for mature teachers. 
 
 Especial facilities will be provided for the physical and bio- 
 logical sciences and for elementary nature study. A school garden 
 of two and one-half acres is used in this work. 
 
 Two teachers give instruction in art; the courses include clay 
 modeling, raffia, weaving and construction work for elementary pu- 
 pils, perspective, sketching, color, and the history of art. 
 
 Besides the ordinary courses in the elements of musical nota- 
 tion and the accompanying exercises in singing, special courses are 
 provided in public school music, and in chorus practice. Dr. 
 George F. Boots The Haymakers* Cantata will be rendered by the 
 students about July 15. 
 
 The faculty of the first term will consist of twenty-four in- 
 structors. Twelve will teach the second term. 
 
 Good board and rooms can be had at from $3 to $4 per week. 
 
 Tuition is free to residents of Illinois. 
 
 Address all inquiries for catalogs and information to 
 
 David Felmley, President. 
 
 32