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" TE'E

CCITERESK‘;ICI'AL HISTORY OF Tiff-.3 3..lLSCN-GOJLN RL‘JVEITU j ACT

OF 1894"

, /
1,

- /

. . . "r” j .
Willis J. Dunn

-1937-

submitted in partial fulfillment of the requirements

for the degree of ;ester of Arts in the Craduete School of
pichigan state College of Agriculture and fipolied Science.

IHESIS

_

 

hpproved for the Department of

History and Political Science

771 all 175;

10909;}:

icknorledgenent

I vish to express my sincere appreciation for the
constructive criticism and helpful suggestions given me

by Professor E. B. Lyon.

II.

III.

Outline

Introduction

A.

Tariff trends before the Civil War

1. Walker Tariff Act of 1846

2. Tariff Act of 1857
The Civil War and its effect on tariff legislation
The Republican Party and protection

1. The future of the party after the Mar

2. Its vacillating policy 1564—1875

3. Its acceptance of the protection policy, 1875

4. Republican tariff legislation 1875-1890

a. The Morrison Bill of 1884

b. The 31118 Bill of 1888

Major issues effecting the tariff when Democracy re-

turned in 1893

A.

The Democratic tariff plank in the Campaign of
1892 7

Tariff as the major issue of the Campaign

The effect of the election of 1892 on Denocratic
control in Congress

The Panic of 1895 as it effected the Tevenue

Issue

The Legislative history of tre hilson-Corman Revenue

act of 1894

A.

Attitude of the Cleveland Administration toward

tariff revisions, 1895-1894

1. Congress
a. House of Representatives
b. The Senate
2. President Cleveland
B. Preparation of the WilsOn Bill in the Special
Session of the Fifty-third Congress
1. Resolution requesting the bill October 25,
1893
2. The Condition of the United States Treasury
in 1893
C. The report of the Wilson Bill by the Ways and
Means Committee to the House of Representatives
in the Second Session of the Fifty-third Congress
1. Introduction of the bill into the House
December 19, 1893
2. Debate on the bill in the Committee of the
Whole, January 8, to February 1, 1894
3. Significant amendments
4. Passed by the House, February 1, 1894
5. Public opinion on the House Bill as express-
ed by the press
D. Introduction of the Wilson Bill into the Senate,
February 2, 1894
1. Referred to the Finance Committee, February
2, 1894
2. Reported out of the Finance Committee to the

Senate, March 20, 1894

5. Debate on the Bill in the Committee of the
Whole, Lpril 2, to July 5, 1894
4. Significant Amendments
5. Public opinion of the Senate amendments as
expressed by the press
6. Passed by the Senate as amended, July 3, 1894
E. The hilson-Gorman bill retzrned to the House of
Representatives for furtter consideration, July 6,
1894
1. Reference of the bill to the Hays and heans
Committee, July 7, 1894
2. The bill reported back to the House by the
Ways and Leans Committee, July 7, 1894
5. The debate on the prOposo Senate amendments,
July 7, 1894
4. Rejection of the Senate amendments, July 7, 1894
F. Congressional Conferences on the bill
l. The conferees
2. The bill submitted to Joint-Conference Committee
on July 7, 1894
3. The first conference
a. Tne report of the House conferees, July 19,
1894
b. The report of the Senate ccnferees, July
20, 1894
4. The se ond conference
a. The report of the House confe*ees, August

is, 1894

b. The report of the Senate conferees,

August 14, 1894

G. The Wilson-Corman Revenue Bill as accepted by
Congress

H.. The resolution became law with the signing of the
bill

I. Signed by the President of tre Senate, August
14, 1894

2. Signed ty the Speaker of the House August 15,
1894

3. Became law without the President's signature

August 28, 1894

IV. Conclusion

American tariff legislation was initiated with the
inauguration of the new government under the Constitution
of the United States. The first Congress passed the Tariff
Act of 1789 which with several revisions from time to time
constituted the major source of national income down through
the period of the war of 1812. These early tariff provisions
were for revenue purposes and only incidentally, when duties
were high, did they afford a degree of protection. The
Period of the war, 1812-1814, created a situation which made
it necessary_for the United States to beco e economically
self-sufficient. In consequence the infant industries, that
had sprung up during the war-time period, demanded a degree
of protection with the termination of the war in order to-
avert the "dumping" policies of foreign producers, English n1
particular who threatened the continuance of the newly—found-
ed American industries. A program for the developrent of a
system of national econom was fostered, in part at least, by
the protective tariff legislation which found its first
expression in the Act of 1816. The protective feature was
enlarged upon in the subsequent Acts of 1824, 1828, 1852,
1855, and 1842.

In the Baltimore Convention of 1844 the machination of
Robert Walker of Mississippi led the Democratic party to
nominate a Southerner, James K. Polk, as their candidate.
With Polk's election the influence of the Southern wing of
the Democratic party was assured from.March 4, 1845 to March

4, 1849. During the campaign of 1844 the tariff issue had

 

I} W. E. Dodd, "Expansion and CoanIct," pp. 127-128.

been purposely obscured by the party leaders, but Polk had
expressed his stand in the following manner:
I have heretofore sanctioned such honest

descriminating duties as would produce the amount

of revenue needed and at the same time afford

reasonable incidental protection merely, not for

revenue. 2

In 1845 the Treasury had a moderate surplus and with the
advent of the year of 1846 it seemed likely that it would be
increased. In keeping with the Southern Democratic position
on the tariff Robert walker, the Secretary of the Treasury,
recommended the following six principles as the basis for
new tariff legislation: (1) all tariff rates should provide
for a revenue sufficient for current government expenditures;
(2) no duty should be imposed on any article above the lowest
rate which would yield the largest amount of revenue; (5)
below such rate discrimination could be made descending the
scale of duties or, for imperative reasons, the article
might be placed on the free list; (4) that a maximum duty
should be charged on luxeries; (5) that all minimum and
Specific duties should be abolished in favor of fig valorem
duties; (6) that all duties should Operate equally through-
out the Union. In 1846 Congress passed a bill embracing

these ideas of Secretary Walker with provisions for tariff

schedules alphabetically arranged.

The period from 1846 to 1861 was one of great industrial

prosperity and LES fostered by the tariff, the discovery of

 

2. E.L{Bogart, "Economic History of the AmeriCan People", pp.4l5-
415.

3. Ibid.

gold in California, as well as the increased demand for
manufactured goods resulting from a growing population due
to immigration.4 The acceptance of the halker Tariff Act of
1846 occurred at the beginning of an upward trend in the
economic cycle so that the administration of the measure was
more adequate fiscally than the government expenditures deman-
ed. The effect produced was indicated in the increased
annual income from 1846 to 1857 which was $46,000,000 over
the previous annual income derived from the tariff between
the years of 1842-1846 which had been $26,000,000.5

The Tariff Act of 1857 was based on the Act of 1846 and
effected a general tariff reduction amounting to an average
of 20% in 1859, 19% in 1860, and 18.1% in 1861.6

From 1855 to 1857 the average annual income of the
Federal Government had amounted to $68,000,000, but in 1858
as a result of the depression, which had begun in 1857, the
annual income drOpped to $46,000,000 resulting in an actual
deficit of $50,000,000 during the years from 1858 to 1860.7

In the Republican Convention of 1860, due to the influence
of Horace Greely and the wishes of several former Whigs, a
moderate protective plank was written into the platform.whid1

stated:

While providing revenue for the support of

 

4.E.L.Bogart, "Economic History of the American PeOple",
pp 415-415.

5.Ibid.

6.W.W.JEnnings, "History of Economic Progress in the U.S.",
pp. 295-294.

7.D.R.Dewey, "Financial History of the United States“,p. 266.

the general government by duties on imports,
sound policy renuires such an adjustment of
these imposts as to encourage the development

of the industrial interests of the whole country,
and we commend that policy of national exchanges
which serves to the workingmen liberal wages, to
agriculture renumerating prices, to mechanics
and manufacturers an adequate reward for their
skill, labor, and enterprise, and to the nation
commercial prosperity and independence. 8

Such a position on the tariff was made possible because
of three different factors: (1) the party was making a bid
for the vote of manufacturing interests in Pennsylvania;

(2) the National Treasury was in need of increased revenue;
(5) free trade had become practically synonomous with the

9
slave power of the South.

To meet the economic situation the lorrill Tariff Act
of 1861 was enacted before the fall of Fort Sumter and the
culmination of the secession movement. J. S. Morrill, the
author of the measure, was a Vermont Republican who ardently
believed in protection and who described the Act of 1861 in
the following sentences:

No prohibitory duties have been aimed at

but to place our people on a level of fair

competition with the rest of the world is thought

to be more than reasonable. Most of the highest

duties fixed upon have been so fixed with a view

more to revenue than to protection. 10

With the outbreak of the Civil War subsequent tariff

laws were drafted in order to raise revenue for the govern-

ment's war-time needs. The Merrill bill, however, did not

 

a: Percy Ashley, "dodern Tariff History", p. 196 ff.
9. Ibido ‘
10. D.R.Dewey, op. cit., p. 266.

pass the Senate until several of the Southern States had
seceded from the Union. 11 The next tariff measure was
passed in the summer of 1861 with provisions for raising the
rates on iron and wool. Again, in December of the same
year tariff revisions were made which placed duties on tea,
coffee, and sugar,12while a later act of the same year
provided for increases in the revenues.15 In effect these
several tariff laws of 1861 had merely restored the tariff
level to what it had been in 1846 under the Walker Act.14
One of the weaknesses of the Federal Government's
administration of the Civil War was its inability to enact
revenue laws that could meet the wartime demands on the
Treasury. The many internal revenues provided by
Congressional acts during the war had raised the prices on
raw materials of the manufacturers, and led to their demand
for increased protection for their manufactured goods.15
Contemporary with the tariff measures was the Federal
Income Tax. This revenue feature provided for a tax of 5%
on all incomes over $800, but was increased in 1865 to 5%
.on all incomes between 8600 and 85,000, and 10% on all incomes
over $5,000.. This tax was repealed in 1872. It is evident
from these facts that under Democratic influence before the
Civil War tariffs were gradually reduced until the wartime
demands for revenue introduced a policy that started a trend

16 17
toward increasing tariffs.

 

11.*F.w.Taussig,*"Tarifr“HiStory ofdthe U.SiW, pp. 159—160.
12. Ibid.

13. Ibid.

14. D.R.Dewey, op. cit., p. 266.

15. Ibid.

16. Ibid.

17. See appendix A.

The Republican.Party had been organized in 1854 for the
purpose of preventing the spread of slavery to the Federal
territories. This objective of the party was expressed in
its platform of 1856 as follows:

Resolved that in View of the necessity of
battling for the first principles of Republican
government and against a scheme of an aristocracy,
the most revolting and oppressive with which the
earth has ever been cursed or man debased, we will
COOperate and be known as Republicans until the
contest be terminated. 18
As the Civil War progressed the Republican administratkbn

was forced to raise revenues by every conceivable means whidi

included high tariffs, a multiplicity of internal revenue

measures, the income tax, besides the many heavy loans.

Having realized its objective, the Republican party at
the close of the war was confronted with the vital question
of continuing as a national organization., Naturally the
party politicians were not inclined to let go of the gains
made by the Republicans under the Lincoln administration,
1861-1865. If the party were to continue it would be necessary
to revitalize itself by making new affiliations and deciding
its position on the post—war issues which confronted the
country. Should the party support the interests of the
western farmer; should it seek to win the favor of the
Eastern industrialists; or should it try to win the support

of both elements?

From 1865 to 1875 the Republican administration had
not definitely determined its position on pzotection, largexy

because it had not yet decided the question of its economic

 

18. Frank A. Flower, "History of the Republican Party", p. 180.

affiliations. After the war period when the Federal Govern-
ment began to cut the sources of national revenues, it was
not the tariff which met with lowered revisions, but rather
the ripeal of internal revenue measures as well as the income
tax.1 The repeal of the excises was due to two influences,
namely; (1) the popular discontent with the multitude of
internal taxes, and (2) the influence of manufacturing groups
who were anxious to repeal excises on raw materials and
thereby cut the costs of production, but who at the same

time wished to retain high tariffs. During the years from
1865 to 1869 the antag nism between President Johnson and
Congress afforded a political situation favorable to the
manufacturing group in obtaining its objective.

After 1875 the income from the tgriff declined because
of a decrease in our imports?oandthe effect of this decline
tended to encourage higher tariffs rather than add to the
internal taxes. In 1875 a "lame-duck" Republican Congress
restored the duties to their wartime level and in so doing

the party in power definitely committed itself to the policy
21
of protection.
Republican Presidents were hampered by Democratic Houses
during the years of 1875 to 1881 and by a Democratic Senate

from 1879 to 1881, thus preventing the passage of tariff laws.

Congress in 1881 provided a Tariff Commission, which in spite

 

19. Percy Ashley, Op. cit., p. 202.
20. See appendix B.
21. Percy Ashley, 0p. cit., p. 208.

of its protectionist bias due to the character of its
personnel, came to the conslusion that "a substantial reduction
of tariff duties is demanded".22 It was not until 1885 that
its report received due attention when a protectionist
measure, which reduced the duties on a few textiles and
raised duties on other manufactured goods, was passed.
This same measure also provided for the repeal of internal
Itaxes which had made possible the passage of the tariff
provisions.20 The McKinley Bill of 1890 was passed to
meet the pledges for protection as advocated by the Republican
party Platform of 1888. The Congressional elections of 1888
had been fought largely on the tariff issue and in as much
as the Republicans had gained strength by the elections
they logically concluded that their victory was a popular
mandate for increased protection.24 The new bill raised all
duties beyond the wartime level and the American public was
confronted with the tariff issue more clearly and decisively
than at any previous time.25

As the Republican party had been gradually drawn from a
moderate leaning toward protection, so the Democratic party
on the other hand had continued to oppose the protective
principle and to advocate a tariff for revenue only. In
the election of 1856 the Democratic party had openly opposed

26
protection but at the same time it had elected James Buchanan.

 

22. Percy Ashley, "hodern Tariff HiStory", p. 195.

25. W.W.Jennings, "History of Economic Progress in
the 5.8.", p. 457 ff. .

24. F.W.Taussig, "Tariff History of the U.S.", pp. 23

25. Ibid.

26. Percy Ashley, "Modern Tariff History", p. 195.

ff ,
N
I
{\3
(I)
()1

o

The election of 1884 marked the return of the nemocrats for
the first time since the Civil War. The platform was a general
document except on the issae of prohibition to which it referred
to as being a "sumptuary" law. The tariff was not mentioned

27
nor was any legislation in that direction promised.

President Cleveland in 1885 had little or no under-
standing of the complex tariff issue of his day.28 With the
usual dogged perseverance the President, after a careful study
of the whole question, drew up his memorable message to
Congress in December of 1887, which presented a clear and
logical exposition of his tariff views.29 As a result of this
message the Election of 1888 was the first of a series to be
fought between the two major parties on the tariff issue.60

The Tariff legislation of the Democrats during the period
from 1884 to 1889 consisted of two measures. The first of
these, the Morrison Bill, was Sponsored by Mr. Morrison of
Illinois. It advocated a twenty per cent "horizontal" re-
duction of the tariff on all schedules with the purpose at
heart of fulfilling the party pledges in spirit but in reality
of leaving protection undisturbed. The vot of the House in
December of 1886 revealed that a Democratic minority was
opposed to t riff reform as indicated by a vote of 26 for
and 169 Democrats against-~thus the bill failed of enactment

51
in the House.

 

27. Frank Kent, "The Democratic Party", pp. 286-295.

28. Ibid.

29. Ibid.

50. Ibid.

51. F.W.Taussig, "Tariff History of the U.S.", pp. 250-252.

10

Two years later Congress faced a changed situation.
Tariff had been an issue in the Campaign of 1888 and the
'Democrats, who had been elected, were soon to present the
Mills Bill in fulfillment of Democratic party pledges. The
prOposed bill of the House reduced some protective tariffs
but its outstanding feature was the alteration of duties on
raw materials and the placing of wool on the free list.52
However, the presence of a Republican majority in the Senate
made possible the introduction of a counter bill so that

neither of these bills were passed. Nevertheless, they did

reveal the poSitions of both parties on the tariff issue.

6

In summary it may be stated that the tariffs from 1846
to the outbreak of the Civil War, 1860, had been devised as
revenue measures with protection only incidental. However,
after the Civil war protection rather than revenue had come
to be the prime objective of tariff legislation. The Republican
party had definitely accepted the protectionist principle
and consistently advocated the protective system, while the
Democratic party had assumed the role of champion for revenue

tariffs only.

II

Two years after the passage of the McKinley Tariff Act
of 1890 the Democratic party included the following tariff
plank in its platform:

We denounce the Republican protection as
a fraud, a robbery of the great majority of the

 

52. F.W.Taussig,‘WTariff History of the U.Sjfi, p. 256.

11

American people for the benefit of the few. we
declare it to be a fundamental principle of the
Democratic Party that the federal government has

no constitutional power to impose and collect
tariff duties except for the purposes of revenue
only, and we demand that the collection of such
taxes shall be limited to the necessities of the
government when honestly and economically administ-
ered.

- We denounce the McKinley tariff law enacted
by the Fifty-first Congress as the culminating
atrocity of class legislation; we endorse the
efforts made by the Democrats of the present
Congress to modify its most oppressive features

in the direction of free raw materials and cheap-
er manufactured goods that enter into general
consumption, and we promise its repeal as one of
the beneficient results that will follow the action
of the people in intrusting to the Democratic
Party. Since the McKinley tariff went into operation
there have been ten reductions of the wages of the
laboring men to one increase. he deny that there
has been any increase of prosperity to the country
since that tariff went into Operation, and we

point to the dullness and distress, the wage reduct-
ion and strikes in the iron trade, as the best
possible evidence that no such prosperity has
resulted from the McKinley Act. 55

That the Democratic Party had adopted by 1892 the views

introduced by Grover Cleveland in his famous message of
54
December 16, 1887 was conclusive. 'In 1892 the public feel-

ing in opposition to tariff was running high, as indicated in

periodical literature by such writers of pr minence as hr.

\

David A. Wells who wrote in the "Forum" of September 1892:

If the legislative department of the State
decides that it would be expedient to establish
or stimulate the manufacture of certain commodities,
no one under a free government would venture to
openly justify such action except on the ground
that the public welfare would be thereby promoted,
although practically, such justification in the
United States has long since ceased to be other
than a pretence and a cover for the promotion
of private interests. 55

 

55. Frank Kent, "The Democratic Party", p. 510.ff.
54. Allan Nevins, "Letters of Grover Cleveland", p. 168.
55. "Forum", Vol. 51, p. 51.

12

As a result of the November election of 1892 the
Democratic party had gained control of the majorities in
both the Senate and the House of Representatives, but these
majorities could not brook any difference of Opinion with—
in the party.36 In the House of Representatives the Democratic
party had 220 members as against 126 Eepublican members;
while in theWSenate there were 44 Democrats as against 58
Republicans.07 Then too, by 1895 there were three POpulists
in the Senate who could be depended upon to vote with the
Democrats on a tariff bill.38 It was apparent that only by
a very narrow margin did the Democratic party have control

of legislation and that dissension within the party would

defeat constructive legislation sought by the executive.

The platform promises of the Democratic party were

modified in their fulfillment by the economic conditions

that immediately followed the inauguration of the Cleveland
administration. Instead of a troublesome government surplus,
which had been created by a high protective tariff, the Panic
of 1895 was steadily reducing the Government revenues until
it became necessary for President Cleveland to call a special
session of Congress immediately following his inauguration.
zhéée the main issue involved in the Panic was a monetary

one, yet the rays and Means Committee was authorized by

this Special Session of Congress to prepare a general tariff

 

56. F.W.Taussig, "Tariff History of the U.S.", p. 280.
57. Ibid.
58. Ibid.
59. O.C.Lightner, "History of Business Dapressions", p. 188.

15

4O
measure to be reported in the regular session. During

the trying months of the Special Session of Congress two

things vere happening to the Treasury of the United States:

(1) its sources of revenue were cut off by the prohibitive

tariffs of 1890 and the general business decline, and (2)

the Secretary of the Treasury was forced to deplete the gold

reserve of the country 820,000,000 below its statutory level.41
As a result of the business depression wage reductions

had caused strikes in industry while a bumper crOp had Caused

an agricultural surplus that reduced the farmer's income.42

These tendencies within and without the government made a

new revenue measure imperative. In the House of Representatives

a reform tariff was welcomed by those who wanted to raise

revenue and decrease protection, while in the Senate a

majority wanted to keep protection but remedy the financial

problem of the Treasury}:3 It is evident than, that the Panic

of 1895 tended to force both Houses to come to terms on a

revenue measure in an hour of crisis.

III

In Congress the .ajority party was divided on the
question of tariff reform. The opposition in the House
was not sufficient to block a reform measure so that Dr.

W.L.Wilson of West Virginia, who was chairman of the Hays

 

40. Cong. Record, 55 Cong. l Sess., p. 5100.

41. A.D.Noyes, "Thirty Years of American Finance", p. 026.
42. Ibid.

45. Ibid.

l4

and heans Committee, was able to assume the leadership of the
tariff reform group in accordance with the wishes of President
Cleveland?4 with the President's prodding, the wilson Bill

was ready by November 27, 1894 so that it could be pushed
forward in the House without delay?D In the Senate a
different situation prevailed for there the Democratic
Senators Hill and Corman, whose presidential aspirations had
been overshadowed by hr. Cleveland, at once became the leaders
of Opposition to tariff reform. moreover, because of their
political strength, they were able to revise the wilson Bill
of the House into the dilson-Gorman Bill of the Senate.

This Senate Opposition was "accentuated b= the violent
personal enmity which many Senators developed against Clevelmd.
horgan of Alabama, a silverite and a believer in Hawaiian
annexation, Declared that, 'I hate the ground that man walks
on%?" Murphy of NeW'York had a grievance against Lileveland,
since the time hr. Hill and hr. Crocker of few York combined
to exalt Murphy to the ,enate and Cleveland protested even
telling Murphy to his face that he was unfit for the Senatorial
Office. All this was in 1892 when Cleveland was President-
elect?7 Irrespective of what the Senate did with the Wilson
Bill President Cleveland in 1894 still held to the same tariff
views that he had expressed in 1887 so that the Wilson Bill

48
as passed by the House had his approval from the start.

 

44. Frank Kent, "The Democratic Party", p. 528 f.
45. Allen Nevins, "Grover Cleveland", p. 568.

46. Ibid.

47. Ibid.

48. Frank Cent, Op. cit., p. 528 ff.

15

During the Special Session Of Congress called by President
Cleveland the Ways and means ggmmittee was authorized to
prepare a new tariff measure.* The membership as follows:

W.L. Wilson of West Virginia, Chrmn.; Benton McMillin,
Tennesee; H.G.Turner, Georgia; Alex.B.Montgomery, Kentucky;
J.R.Whiting, hichigan; W.Burke, New York; M.T.Stevens,
Massachusetts; W.J.Bryan, Nebraska; C.R.Beckinridge, Arkansas;
W.D.Bynum, Indiana; J.C.Tarsney, Missouri; T.B.Reed, Maine;
J.C.Burrows, Michigan; S.A.Payne, New York; John Dalzell,
Pennsylvania; Albert J. Hopkins, Illinois; John H. Gear,

Iowa.

William Lyne Wilson, the Chairman of the Ways and Means
Committee, had been a educator, as well as a Cabinet member
before his election to Congress. During the Civil War he
had served in the Confederate Army under General Robert E.
Lee. The Federal Test Oath laws had kept Wilson from practic-
ing law for some years during which time he had been President
of West Virginia University. He was elected to Gongress from
a district where high tariffs on coal were in favor so that
his views on taaiff reform were hardly in keeping with the
wishes of his district. He helped to frame the Mills Bill
of 1888 and vigorously Opposed the McKinley Bill of 1890.

The Wilson Bill embodied his ideas in that it embraced free

50
raw materials, and ad valorem instead Of specific duties.
_*

 

Z§. Cong. Record, 53 Cong. 2 Sess., p. 2a22.
50. "Dictionary of American Biography", Vol. 20, pp. 551-255.

\

16

The condition of the United States Treasury at this
time depended upon thre: factgrs, namely: (lglthe character
of the policy of the Secretary of the Treasury; (2) the amount
of surplus revenue available; (5) the general economic conditions

prevalent in the country.

John G. Carlisle has Cleveland's Secretary of the
Treasury from 1895 to 1897. He was born in Kentucky, of
humble parentage, had been a teacher, a l wyer and, during
the Civil War, a State legislator. In 1887 he entered
national politics as a United States Representative. when
Cleveland appointed Carlisle in 1895 the latter had gained
the recognition Of the American public as a stetesman and
economist, as well as a constitutional lawyer.02

The condition of the Treasury according to the report
,Of July 1895 revealed that the government income had an
increase of nearly s26,000,000 over that of 1892, in spite
of the fact that no bonds had been sold. During the same
period the government's expenses had been increase: by
$58,000,000 over those of 1892. Nevertheless, a surplus of
$2,541,274.29 was in the Treasury and according to the
estimates that were made for the next two years this Treasury
report anticipated a surplus. The actual conditions indicat-

ed that the treasury faced several perplexing problems, namely:

 

51. J)A.Barn s, "J.G.Caf1isle", p. 205.
52. Ibid.

17

(l) the Sherman Silver Lct of 1890 had caused a decrease in
the gold reserve which t nded to destroy public confidence,
(2) European invesgors had already started to liquidate their
American securities, (5) the surplus revenue of vlevelands
First Administration had Vanished during the Harrison Admin-
istratiog, and the government now faced a serious currency
problem. &

On December 19, 1895 Mr. Wilson of Lest Virginia as
Chairman Of the Lays and Means Committee presented a bill
entitled, "House Resolution 4864, to reduce taxation, to
provide revenue for the government and for other purposesg?
Mr. Burrows, one Of the hichigan representatives on the
Committee of Ways and means, requested that a minority report
be printed. Permission was gragged and the report was made
available on December 21, 1895. Thus by such action a bill
was introduced into the House of Representatives which was

to become a source of serious and prolonged debate, as well

as a cause for party divisions.

It was not until January 8, 1894 that the house resolv-
ed itself into the Committee of the Whole to consider the
bill.57 hr. Wilson Opened the general debate, in which 265
Of the 552 Representatives took part, by first indicating the

need for tariff reform legislation, and by asserting that the

 

55. J.A.Barnes, "J.G.Carlisle", p. 201.

54. Ibid.

55. Congressional ”ecord, 55 Cong. 2 Sess., p.415.
56 . Ibid.

57'. Ibid..

18

proposed bill was aimed at a practical solution of that
58
problem. In his introductory remarks hr. Wilson stated
that:
The majority Of the members on the Committee

of Ways and Heans who have prepared this bill do

not present it under any delusion as to its true

character. They have had to deal with a system

that has grown up through thirty years of legis-

lation. They do not profess that they have been

-able in one stroke of reform to free it from

injustice. 59

hr. Wilson, in reviewing the tariff policies of the
past, asserted that protectionism had created a privileged,
class whs through the tariff b ought economic and social
inequalities to the masses, and he further pointed out that
the Republican tariff of 1885 had forced the laborer to
pay 117% for 100%.of value for his wool clothing while the
McKinley Act of 1890, also a aepublican measure, had raised

60

the price from 1175 to 255%. He concluded that the natural
advantage possessed by America in having its iron and coal
mines in close proximity to each other had not produced the
desired social benefits under a protective tariff, but had

Simply added toffife strength and wealth of the owners Of

these resources.

In referring to the condition of the Treasury Mr.
Wilson suggested that internal taxes could be used in meet—
ing the deficit if an amendment for a 25 income tax on all

incomes over $4000 were added to the bill as recommended by

 

 

$8. Congressional Record, 55-Cong. 2 Sess., Appendix, p. 195 ff.
59. Ibid.
60. Ibid.
51. Ibid.

19

62
the Ways and Means Committee of the House.

On the evening of January 8 the bill was again presented
for debate in the House before the Committee of the Rhole.
Mr. Lane, a Democrat from Illinois, at that time Spoke in
favor of the bill and urged its passage for the following
reasons: (1) the Democratic party in the recent campaign had
promised to revise the tariff downwa d and the proposed
bill constituted a general reduction in the rates; (2) that
protective tariff laws were unconstitutional because they
constitute class legislation and such legislation had been
dedlared unconstitutional in the State Supreme Courts Of
Iowa, Kansas, Maine, and Michigan; (5) because tariff does
not produce high wages--they are merely the result of
conditions in the American labor market and was further
demonstrated by the fact that those industries protected by
the high tariff Of 1890 had, in many cases, lowered wages;
(4) That tariff revision was essential to equalize the returns
on farmers investment with those of the manufacturers who
had made profits amounting to 562% before 1890, and 44%
after 1890 while the farmers investment return averaged only

65
two per cent.

A Republican member of the House from Massachusetts,

Mr. Morse, continued the debate for the Opposition by declar-
ing that the tariff was not a tax on the American people, and

TEL Cong. Record, 55 Cong. 2 Sess., Appendix, p. 195 ff.
(Ki Cong. Record, 55 Cong. 2 Sess., p. 558 ff.

20

by referring to salt as an example he showed that while a
duty of $2 a pound had been imposed, yet the farmer could
buy all the salt he needed for 50¢ a barrel--the barrel
included. He also maintained that wool farmers needed
protection from the importation of foreign wool at a cheap
price. Mr. Morse blamed recent railroad failures to the
Democratic threat to destroy that tariff protection which
was vital to those companies. After comparing the platforms
of Andrew Jackson and Cleveland to show that Cleveland'S'
tariff views were Opposed to those of Jackson, he expressed
his disapproval of the prOposed lrw by giving as his reason
that it was an attempt to show favoritism to interests of
the majority party. In proof of this Mr. Morse pointed
out that protection was taken away from northern lumbering
interests which were known to be Republican, while protection
was increased for the chocolate industry, which was located
in a district strongly Democratic.64

Mr. Bell, a Democratic Representative from Texas arose
to define the difference between a protective tariff and a
revenue tariff. The protective tariff he stated prohibits
the sale of imports while a revenue tariff on the other hand
is so adjusted as to permit the entry of imports but exacts
customs duty adequate for the United States Treasury. When
protection is practiced not only is government revenue cut

off, but the people are taxed in other ways in order to meet

 

7’64. Cong. Record, 55 Cong. 2 Sess., p. 546 ff.

Zl

the expenditures of government. Bell illustrated his point
by commenting that a pair of shoes imported to sellf at
$1.25 would yield a tax of twenty-five cents to the govern-
ment while shoes manufactured within our country of the same
quality might sell for $1.20 a pair, but the twenty cents,
instead of being paid to the government in a tax would be
added to the profits of the manufacturer. On this basis the
growth of wealth in the country tended to be one of inequality
and unfairness. In his desire to further convince the
Committee of his contention, Mr. Bell pointed.out that while
the cost of labor on a pair of American-made shoes was
twenty—five cents in England the labor costs were thirty-
four cents a pair.65

In answer to the statement of mr. Morse, who advocated
protedtion for wool growers, Mr. Bell said that since the
price of wool in London had been higher than in the United
States from 1867 to 1891 with the exdeption of two years,
1871-1872, it seemed correct to conclude that the tariff
was 2;? the cause of a fair wool price as England had no
tariff. Mr. Bell continued his remarks by attributing the
cause for depressed ecgnomic conditions of the country to
the thinley tariff of 1890 which, he claimed, had caused
the home industries to overproduce, thereby flooding the
'markets at a time when agricultural indebtedness prevented a
like extension of buying power to increase consumption enough

to consume the goods. He continued by stating that peOple

 

55. Con . Record, 53 Cong. 2 Sess., p. 548 ff.
66g Ibi .

22

were starving while the banks bulged with money~~a condition
due.to an une ual distribution of profit caused by a protect-
ive tariff system. After citing the reductions that would
result from the new tariff prOposed, hr. Bell concluded his
remarks by arguing that thEVproposed law was a just one as

well as a party necessity.

The debate for the opposition w s continued by hr.
Bowers, a Republican from California, who remarked that
uncertainty was largely the c;use of the present economic
distress and that the basis of this uncertainty was the tariff
reform issue which had been before the people since 1884.
After denouncing Democratic principles contained in the
prOposed measure he pointed out thwt the muropean countries
would welcome such tariff legislation as was being proposed
in the United States as it would enable them to profit at
the expense of the American producer. Bowers quoted from
the Pall Mall Gazette of London, dated November 9, 1892

‘68
which made the following comment:

 

Both the merchants and unemployed working-
men of angland have reason to rejoice at the
Democratic victory as with the possibility of the
reOpening ~"f the American market to the goods of
Birmingham, Bradford, and Kanchester. Capitalists
will get a chance to procure some return on their
money invested and the workingmen will hrve an
Opportunity to get a decent price for their labor
without the necessity of striking. 69

After presenting several letters and petitions, which sought
to defeat the bill, hr. Bowers retired to his seat. The

Committee of the Whole was dissolved without coming to any

 

'67. Cong. Record, as Cong. 2 Sess., p. 548 ff.
68m Cong. Record, 55 Cong. 2 Sess., p. 559.
69. Ibid.

decision on the measure?0

On January 9, l894, hr. Burrows, a eepublican from
Michigan, attacked the proposal because, first, it supplant-
ed the thinley Bill which had successfully reduced the
surplus, and secondly, because the revenue obtained by the
McKinley Bill was needed by the Treasury, in as much as the
uncertainty of American tariff policy had thrown the country
into a panic. He went on to show that a great many new
textile factories had been established on thplstrenrth of
the po;icies set forth by the EcKinley Bill. That the
tariff was constitutional was evidenced by the fact that the
Constitution was designed to protect Lmerican Welfare hr.
Burrows asserted, and he at empted to prove his statements
by quoting from such eminent Americans as James Madison,
Thomas Jefferson, and Daniel Webster.72.A new title for the
bill was suggested by Kr. Burrows which, if accepted, would
have read, "A bill to lessen revenue, to destroy American
industries, end paupe ize American labor."785He concluded
by asserting that ad valorem duties offered too great an
opportunity for fraud in the stating of the price and the value
of the goods.74

In the evening session of the same day Mr. Haines, a
Democrat from New York, continued the debate by presenting

a petition from Troy, New York which asked for the defeat of

 

VO. Cong. Record, 55 Cong. 2 Sess., p. 559.
71. Cong. Record, 55 Cong. 2 Sess., p. 572.
’72. Ibid.
'75. Ibid.
74. Ibid.

{\fi
4:.

75
the Lilson bill. 4fter drawing a pathetic picture of

European industrial conditions and pointing out that the
Wilson bill would produce like conditions in american if
passed, hr. Haines asserted that tte opponents of the bill
76
had taken a justifiable position.
The Populist Senator from Kansas facetiously asked if

the Troy petition came from those who made collars and shirts,

7/
or from the people who wore shirts and collars, and was
78
answered by Mr. Haines with the single word "both." Mr.

79
W. J. Bryan, the Democrat from Nebraska, asked to that

extent protection was desired to which Mr. Haines replied thgg

the protection of the McKinley bill was all that was needed.

Again Mr. Bryan inquired of hr. Haines, that if such protection.

were granted, would hr. Haines be willing to help-pass the 81

pending bill to thich query Hr. Haines replied affirmatively.
The Republican Representative from Pennsylvania, Mr.

Woomer, continued the discussion by lauding the protective

theory of tariff legislation be cause it fostered new industries,

and he was Of the Opinion that at all tines a country as rich

in natural resources as America should develop new industries

by giving them the protection from outside competition

essential for their growth. He thought the protective tariff

should be the policy of this country and that it should be

75 Cong. Record, 55 Cong. 2 Sess., p. 604.

76. Ibid.

'WZ Ibid., p. 607

'78. Ibid., p. 607.

79. Ibid., p. 608.

800 Ibid. ’ p. 608'
8]. Ib id. , p. 608 '

 

25

consistently maintained. As to the comparative advantage

Of the protective system to farmers, he stated that while
they might have to pay higher prices for some types of menu-
factured goods, yet they would find compensating benefits in
tariffs on wool, potatoes, and eggs. In closing his remarks
he directed attention to two reaknes es Of the prOposed
hilson Bill, namely: (1) it did ironically offer a degree

of protection thile the party sponsoring the bill was vehemently
declaring protection as un arranted and unconstitutional,
and (2) the change from Specific duties to g: valorem duties
was a weakness of the bill vhich hr. Burrows Of Kichigan had

82
lready pointed out.

CD

Mr. Pendleton, a Democrat from Texas, favored the bill
by declaring that in addition to "death and taxes being two
sure things", might be added another certainty, and "that is
that no bill which promises any substantial relief to the

tax-burdened people will meet the approval Of the tariff-
85
protected industries." The two tasks which the Democrat

\

party ought to perform, as hr. Pendleton ssw them were: (1;
to reduce the tax burden as far as possible, and (2) to see

that the tax burden was equally distributed among all classes
84
of citizens. He further declared that protective tariffs

enabled merchants to profiteer at home and cut prices abroad,

 

82. Cong. Record, 55 Cong. 2 Sess., p. 608 ff.
83. Ibid., p. 611 r.
84. Ibid.

26

and he contended that the protective system had destroyed
American commercial shipping, as attested to by the fact that
in 1860 United States ships carried thirty per cent of our
own imports and exports, while in 1894 American vessels were
carrying only fifteen per cent of our oxn goods.8sifir.
Pendleton argued that the free list of the proposed bill
would hurt his district, but since the bill see such a great
improvement over the McKinley Act of 1890 he mould favor its
passage, however reserving the ri ht to advocate such amend-
ments uhich, in his estimation, would improve the bill.86

As could be expected Mr. Curtis, a Republican from New
York, Opposed the Wilson bill because he thought it sought
to raise revenue and in so doing left enough protection to
throw the whole system of business out of b lance. He offered
as examples in proof of this contention the reduction of
tariff duties on granite, marble and sandstone, and added
that the laborers did not live in marble palaces they would
not be able to profit by the reduction, yet they would_be
taxed to make up for the deficit in the revenue the govern-
ment would loose by such reductions?!7 Curtis w as of the
opinion that duty-free lumber would ultimately raise the price
of Canadian lumber because of an increased demand for it,
that the American lumbering industry would cut.vages and
prices, and the government would loose the tariff revenues

88
while our citizens would be taxed to make up the loss.

 

85 Cong. Record. 55 Cong. 2 Sess., p. 611 f..

86. Ibid.

8% Cong. Record. 55 Cong. 2 Sess., Appendix, p. 56 f.
88 Ibid.

27

By similar reasoning he Opposed many articles on the free
list claiming such a measure would unbalance the existing
relations between labor and industry, imperil revenues,
and fail to equalize the government burden on the peOple.
He, too, blamed the uncertain tariff policy of the party in
power for bringing about the Panic of 1895.539

The Republican Representative from Illinois, Mr. HOpkins,
continued the debate on January 10, 1894 by quoting from
a document written by Mr. Ingersoll of Pennsylvania which
showed that the prices of goods of the protectfid industries
were lower in hmerica than in foreign markets.90 By reveal-
ing a list of commodity prices for the year of 1857 and
comparing them with a list of commodity prices for 1894 he
showed that the 1894 prices were less than the prices for
1857 and that while protection was not present in 1857 it
was in 1894. glkru Bryan asked if protection had caused the
reduction and Ar. Hopkins replied that undoubtedly it had,
in as much as protection had forstered inventions and through
inventions came cheaper manufactured goodsf323 Not satisfied
with Mr. Hopkins answer Mr. Bryan again askefii if this reason-
ing also applied to agricultural products. kr. Hopkins

retorted that he considered the reduction in farm products

as an effect of a low tariff. Mr. Bryan inquired, if he

 

ikh Cong. Record, 55 Cong. 2 Sess., Appendix, p. 56 f.
90. Ibid., p. 652.

91, Ibid., p. 655.

92. Ibid.

as Ibid.
94'. lb 1d. 0

28

were to understand that the same tariff which lowered the
price Of manufactured goods also raised the prices of farm
products.“5 At this juncture hr. Hopkins declined to assume
any responsibility for what hr. Bryan might understand, but
he did claim to prove that protective tariffs were universally
beneficial by citing specific reductions in the selling
prices Of products manufactured by protected industries.‘
Mr. Hopkins concluded his remarks by expressing grave fears
for American labor if the Xilson bill were passed because
he believed it would tend to lower wages, and by causing an97
increased import trade would force our workers out of jobl.
In the evening session Of the same day hr. Snodgrass,
a Democrat from Tennesee, continued the debate by calling for
all true Democrats to vote for the Wilson Bill, and by re-
marking that those who were elected on the Democratic ticket
and who Opposed the measure Uhould join the ranks Of the
Republicansggather than remain Democrats and block party
legislation. He confessed that there were parts of the
bill which he did not like such as the high rate on finished
steal, the duty-free iron and coal, the sugar bounty, and the
income tax of 2% on all incomes over $4000--unless such a
tax would be graduated?9 By referring to and by quoting
Andrew Jackson he attempted to prove that the protective
tariff in American history had been and continued to be both

100
unjust and unconstitutional. Snodgrass declared that the

 

95. Cong. Record, 55 Cong. 2 Sess., p. 655.
95. Ibid.
97. Ibid., p. 661.
98. Ibid.
99. Ibid., p. 662.
100. Ibid.

29

prOposed bill would give a net saving of $500,000,000 to the

American public annualy by taking into consideration price

reductions, as well as by the lowering Of taxes due to the lCl

increase in revenue when the prohibitive tariffs were lovered.l
The Pennsylvania Republican Representative, hr. Mahon,

by presenting a brief history of the tariff laws of the

United States indicated how the agricultural south had

gradually grown to favor free trade, while the industrial

North had come to demand the high tariff provision. To

illustrate this conflict of economic interests he quoted

from the Uonstitution adopted by the Confederate States

which forbade protectiv%2tariffs. Kr. Mahon, however, favor-

ed a protective tariff.

On January 11, I894 hr. Beckenridge, a Democrat from
Kentucky, spoke in favor Of the Wilson Bill by commenting
on its fairnegimpnd the inclusion of the principle of ad

valorem duties.

On the same day Kr. Richards of Ohio defined the issue
as not being one of protectionliifsus free trade, but rather
an issue of reform or no reform. After citing the 1892
Campaign as being for reform he proceeded to give a history

of the tariff in which he attempted to show that free trade

 

10L Cong. Record, 55 Cong. 2 Sess., p.6625f.
102. Ibid., pp. ave—ass.

10:5. Ibid., p. 710.

104. Ibid., p. 713 r.

50

eras were times of independence and progress, while high
tariff periods were productive Of protected interests and
trusts. He concluded that‘the remedy for §g%s condition
could be found in a tariff for revenue only. Relative to
tariffs favoring wool growers he pointed out that the price
of wool was higher during the years from 1846-1860, with
the exception Of the panic year of 1858, without protection,
than the price had been for the fifteen year period predeed-
. ing 1894, with protection. In addition to this he showed how
wool tariffs changed the quality of woolen manufactured
goods by encouraging the use of shoddy. Richards stated
that before 1890 the ratio of shoddy to pure wool had been
one to four, while it was raised to the ratio of one to one
after the passage of the thinley Act. In commenting on any
possible harm low ta iffs on iron might do, he pointed out
that free ore simply competed with sources of supply that
were located within one hundred miles of the seaboard, while
for those iron mines located farther inland the transportation
across the land cost enough to give American ore a price
advantage. In answering the argument that protection makes
possible high wages Richards stated that wages in the tariff
countries Of Germany and France were lower than they were in
106 107

the free-trade countries of Belgium and England.

Mr. Everett, a Democrat from Massachusetts, continued

the debate by suggesting that later he wished to Bropese an

 

105. Cong. Record, 53 Cong. a Sess., p. 713 f.
106. Ibid.
107. See Appendix C.

51

amendment to the bill, But that at the present time he would

defend it as it stood%oq He quoted from the writings of

Alexander Hamilton to show that European high protection made

it essential for the United States to adOpt a similar policy,

and suggested that if we feared the competition Of RurOpean

labor then we should meet the issue by appropriate leggslation

restricting the migration of such labor to our country.9

He further stated that the system Of protection violated

the principles Of Christianity and was, therefore, pagan,

since it promoted the interest Of one country at the expense
110

of all others.

The Republican Representative from New'York, Mr. Payne,
who was next to speak was of the Opinion that no one liked
the Wilson Bill completely in its present form. He felt
that various tariff schedules were treated in the bill as
local issues and that the bill with its suggested amendments
was simply catering to local interestlSLEl While he did not
favor the passage of the bill he did favor its preservation
as a monument to the folly of the Democratic party%12

Mr. Simpson, a POpulist Representative from Kansas,
next wished to place himself on record as favoring a tariff

115
for revenue only. Agriculture being the backbone of American

 

lUU. Cong. Record, 55 Cong. 2 Sess., p. 756.
109.1bid., p. 762.

110. Ibid. .

111. Ibid., p. 765 f.

112. Ibid.

113. Ibid., p. 772 f.

52

life, Mr. Simpson declared the s ccess or failure of the
country hinged on the condition of that basic economic
activity}14 Between the years of 1850 and 1890, he remarked,
the farmers decreased their holdings of the wealth of the
nation from sixty to forty per cent while in the country at
large conditions were in contrast to this. health had
increased in the nation over 257% during the years from 1850
to 1880, but during this period the gross income of the

farmer was only six per cent, while that of the manufacturer
averaged over two hundred per cent on his investment.10

When asked by Mr. Bowers from California is he would attribute
the decline in agricultural wealth to the Republican protective

policy, Mr. Si pson replied that hiemost certainly would

place that responsibility upon it.

Another Republican, Mr. Daniels of Virginia, next Spoke
by discussing the constitutional aspects of the question.
He stated that since tie states had the power to levy tariffs
before the Constitution of the United States was adopted, then
the Federal Congress did not now possess that authority
since the power still rested with the several states, if
tariffs by the Federal Government were to be declared
unconstitutional. He endeavored to show that the tariffs
passed by the States previous to the addption of the United
States Constitution were protective in purpose, and then to

prove that such protective measures should now be provided

 

114. Cong. Record, 55 Cong. 2 Sess., p. 772 f.
115. Ibid.
116. Ibid.

33
117

by federal law, he cited the Supreme Court decision that
declared a State could not set up tariff barriersl.18 He
further explained how the provisions of the Act of 1890 gave
the right to American manufacturers to have refunded to them
99% of the tariff they paid on raw materials when they shipped
the finished products made from those raw materials back to
foreign countries. In this way a free trade relationship
was established for the manufacturer but it did not give
corresponding advantageflgo the consumer. Er. Daniels

V

opposed the “ilson bill.

Hr. Hermann, a Republican frngOregon, Opposed the bill
by presenting statistical material favoring protection which
brought out the fact, that while in the United States the
laborer earned from $249 to $258 more a year than his English
cousin yet it allowed more than enough for a protective
tariff and at the same time pay American labor a higher wageJIZl
Mr. Hermann's argument was largely concerned with the merits
of the McKinley Bill.r

The Democratic Representative from.NeW Jersey, Mr. finglish
placed tariffs in three categories, namely: (1) the tariff
of robbers for protection only; (2)-the tariff of idiots
providing insufficient revenue and giving no protection; (3)
the tariff for revenue only for which the Democratic party

125
stood. He rejected entirely the idea that industry any

 

117. Cong. Record, 53 Uong.*2 Sess., p. 772 f.

118. Ibid., p. 777. (Briggs vs. the State of Bennsylvania)
119. Ibid., p, 777.

120. See Appendix, D.

121. Ibid., Cong. Record, Appendix, p. 507.

122. Ibid.

123. Ibid., Cong. Record, p. 789.

longer needed to be fostered by protection?4

Mr. Pickler, a Republican from South Dakota, was the
next member to engage in debate by stating that over one-
sixth of the imports of 1889 were products which competed
with the American farmer, and that the repeal of the McKinley
Bill would not only restore that condition, but in addition
would give the Canadian wool growers and horse breeders the
opportunity to compete with us. Mr. Turner of Georgia
replied to Mr. Pckler by pointing out that an 2d valorem
duties would give even more protection than the specific
duties of the LcKinley Bill. He attempted to prove his
contention br citing a comparison of duty on a ten dollar
hexican male with the duty on a one hundred and fifty dollar
mule that would compete with Dakota mules. He added that the
Wilson Bill would require a thirty dollar duty on the valuable
mule, but only two dollars on the Mexican mule. Under the
icKinley Act both would be taxed alike; under the Wilson
Bill the importation, that would compete with the American
product of value, would receive equal protection according
to Mr. Turner}?5

Mr. Grosvenor, a Republican from Ohio, undertook in his
remarks to eXplain why American—made goods that needed
protection at home were sold cheaper abroad than at home by

American manufacturers by stating t at such goods were of an

 

12$ Cong. Record, 55 Cong. 2 Sess., p. 777.
125 Ibid., Appendix, pp. 45-46.

inferior quality since foreign tariff laws permitted low
126
quality goods to be imported for a lower tariff bounty.

The Democratic Reprsontative from Yew York, hr. Cockran,
who was a member of the Hays and Means Committee, stated that
it was the uninformed who feared that the proposed bill
would be unable to raise sufficient revenue, and to support
his remark he quoted from hr. Took, as "perhaps the greatest
authority who ever wrote on pric s," as follows:

The breaking down of the old barriers to

the free exercise of the skill and industry of

the modern states is equal in its economic effect

to the discovery of a new and beneficient agent

in nature, to the Opening of a fresh continent

or the access to a new South Sea. 127

Much discussion was provoked as :0 whether increased
imports wo 1d not slow down internal production and thus off-
set any benefits of reduced tariffs. Kr. Cockran maintained
the negative position throughout his discussion by assert-
ing that our imports would consist of those products which
we ought not to produce and for which we could better trade

goods that we could ggtter trade goods that we could more

efficiently produce.

Mr. Weadock, a Democrat from.Kichigan, advocated a
revenue tariff only and then expressed his appfggal of the

”ilson Bill as establishing good revenue rates.

 

129% Cong. Record, SB'Uong. 2*Sess., Appendix, p. 142.
121 Cong. Record, 53 Cong. 2 Sess., Appendix, p. 11 ff.
128. Ibid., App., p. 11 ff.

129. Ibid., App., p. 213.

36

Mr. Doolittle, a Republican from Washington, added his
support to the Opposition of the debate by basing his
arguments on the previous thirty years of prosperity attribut-
ing it to the protective policy of the Republican partyl.30

Mr. Bryan, a Democrat from Nebraska, was granted unlimit-
ed time tO discuss the proposed measure. He stated that
the bill as it stood reduced by fifty per cent the taxes
imposed by the thinley Bill of 18901.01 Protection was
attacked by him because raised prices proportionate to the
increase in wages thereby leaving the manufacturer to reap
the sole benefits Of high tariff laws. TO substantiate this
statement he shoved the decrease in the value Of farm lands
in heW'hngland from 1880 to 1890, while in the earlier period 1
from 1850 to 1860 under low tariffs land values had increased¥02
In referring to the coal indust y he remarked that, if we
could not produce coal as cheaply as Canada, then we had
better produce something which Canada could not produce and
buy our coallfi‘5 Mr. Bryan defended the gradual reduction Of
the sugar bounty at the rate Of 12%% each year for eight
years as provided for in the proposed bill on the ground-
that it prevented a sugar tariff, while at the same time,
it gradually reduced the government expense occasioned by
the bounty. The tax reduction effected by this bill would
amount to $75,000,000 directly according to the imports Of

1895, as well as an estimated saving Of $575,000,000 being

 

150. Cong. Rocord, 55 Cong. 2 Sess., p. 806 ff}

151. Cong. Record, 55 Cong. 2 Sess., App., p. 219 ff.
152.. Ibid.

155.. Ibid.

taken by American Manufacturers who were able to raise prices
SO that the people would pay four dollars in price increases
before the Government obtained one dollar in revenue. The
total saving according to Mr. Bryans' estimate would amount
to fize dollars per capita or twenty-five dollars per family
head? LT. Bryan looked upon ad valorem duties as the fairest
method Of taxation and he accused the Opponents of the measure
Of waving the "bloody shirt" on the wool schedule, when they
stated the bill was a Southern measure in as much as Texas
alone raised more sheep then all the Northern States, and yet
they were willing to grant free wool to textile mills of
Massachusetti?J

The general debate on the bill closed on January 14,
1894. During the morning session Of January 15, 1894, Mr.
Wilson, the Chairman Of the Ways and Means Committee, request-
ed that the bill be taken up section by section. After some
discussion as to the %E%priety Of such a proceedure his
suggestion ras adopted. From January 15, to February 1,
1894, the date the Democratic caucus had set for the final
vote on the bill, the day sessions were given over to consider-
ing the various sections of the bill while the evening sessions

were marked by prolonged debate.

Mr. Hudson, a Populist from Kansas, spoke in favor of

the bill and GSpecially iavored the income tax feature although

 

154. See Appendix E.

155. Cong. Record, 55 Cong. 2 Sess., App., p 219 ff.
156. Ibid., p. 822.

157. Allen Nevins, "Grover Cleveland," p. 566.

58

he did not advocate the income tax on Corporations in as
much as so many Of the common people held stock in those
corporations. Hudson also expressed a desire to have the
income tax graduated according to the amount Of income
received alluding to quotations from English statesmen who
158

believed in a graduated income tax.

hr. Sperry, a Democrat from Connecticut favored a tariff
for revenue only by remarking that:

It is a condition that confronts us. It

is a condition which ought to be met without re-

gard to theory. The condition is one to which

this House ought to give its immediate attention.

Tie Secretary Of the Treasury is today beseeching

Congress to grant him permission to issue bonds

to run the government into debt in a time Of

profound peace. 159
He attacked the Wilson Bill because at a time when increased

revenue was needed, it proposed to reduce the government
140

income from tariff.

Mr. Post, a Republican from Illinois, addressed the
Committee of the While on "party responsibility" asserting
that the welfare Of all the people was the duty Of any party
and since the Republican tariff had brought prosperity while
the Democratic tariff had brought depression the path Of
duty was clear, the proposed bill was not to be regarded as

141

a good thing for all the people. hr. McKeighan, a Populist

from Nebraska spoke in favor of the bill because a Protectige

 

158. Cong. Record, 55 vong. 2 Sess., App. p. 49 ff.
159. Ibid., App., p. 107 ff.

14o.Ibid., App., p. 107 ff.

141. Ibid., App., p. 86.

59

tariff benefitted only 125,000 people at the expense Of all
the rest, while Mr. Hayes a Democrat from Iowa favored the
bill not as an end but rather as a constructive step toward
142

a tariff for revenue only.

Mr. Caldwell, a Republican from Ohio, Opposed the
measure on the ground that a free wool provision would decrease
the number of sheep in the country and be disasterous for that
industry's future}43

Mr. Sibley, a Democrat from.Pennsy1vania, addressed the
Committee first in Opposition to the issuing of bonds to aid
the Treasury deficit and suggested a legal tender bond bear-
ing 25 interest to be used in payment Of pensions until either
the deficit was removed or bonds had been issued to the extent
of $50 per capital?4 These bonds would be legal tender except
for import duties and taxes. He next Spoke in favor Of an
income tax calling upon all Democrats to support such a

145
measure as a just means to provide government revenue.

Mr. Bell. a Democrat from Colorado, spoke in favor Of the
income tax provision but expressed fears Of its passage due
to the general feeling of doubt that persuaded legislators on
the proposal. He looked upon the measure as being more
equitable than any previous revenue bill but proceeded to

point out that already the balance Of trade had turned

 

142 Cong. Record, 55 Cong. 2 Sess., p. 1020; App., EC I452.
143 . Ibid., p. 1026.

144 . Ibid., p. 1050 ff.

145 . Ibid., p. 1050 ff.

4O

unfavorable to the United States under the threat of free
trade just as it had done under the free trade status that
existed from 1857 to 1861. He concluded that the proposed
146
bill should not be passed lest it repeat these conditions.

A considerable number Of minor aiendments were made to
the bill on the floor Of the Rouse and many more were prOpos-
ed ahich were not passed. 0n the whole the am ndments to
the bill as recomm nded by ‘he Rays and weans Committee were

147

neither numerous nor as a rule important. however, two
important amendments were passed which were personally propos-
ed, namely: (1) a provision for a free wool schedule to take
effect immediately, and (2) a provision that all sugar

- 148
bounties were to cease after July 1, 1894. It was Mr.
Johnson, a Republican from Ohio, who proposed an amendment to
the bill, which Congress passed by a vote Of 112 to 102,
placing wool on the free ist immediately. The Committee had
already placed it on the free list, but the change was not

149
to be effective till December 1, 1894. hr. Earner, a
Democrat from New York next introduced an amendment that
provided for all sugar bounties to be immediately repealed
and which would have if accepted placed sugar on the free
150

list. The bill as previously reported out Of the hays and
Means Committee had provided for a gradual reduction of the

sugar bounty over a pe;iod Of yeggi at the rate Of twelve and

one-half per cent for eight years.

 

146' Cong. Record, 55 Cong. 2 Sess., p. 1079.

147. E. Stanwood, "American Tariff Controversies", p. 5
148' Ibid., p. 100.

149. Cong. Record, 55 Cong. 2 Sess., p 947.

150. Ibid., p. 947. '

151. Ibid., p. 1181 f.

N
H3-
0

41

Mr. Robertson of Louisiana who shortly prOposed an-

amendment for the repeal of the sugar bounty wished to continue
152
a fairly high tariff on the product. He was supported by
Mr. Cannon of Illinois who argued that the Democratic party
was inconsistent if it did not include a tax on sugar since
it stood in favor of a tariff for revenue only, and that
the sugar tariff had been an accepted source of revenue for
155
over one hundred years. Mr. Cannon reminded the House
that, although the Democratic members had opposed free sugar
154

in the McKinley bill of 1890, they were favoring it in 1894.

Mr. Tarsney of the Ways and heans Committee, defended
the bill because it was free from both a bounty and a duty
on sugar. He was of the belief that a bounty stood as a
wasteful unconstitutional subsidy while a protective tariff
stood for an unfair tax on consumers for the benefit of
producers. The Democratic Representative from Tennesee, Mr.
Cox, asked whether or not bounties were constitutienal to
which question Mr. Tarsney evasively answered by quoting from
Mr. Cockran of New York who had remarked:

These protected industries are in the

condition of an individual who has been upon

a long debauch and that to take away from them

that which has sustained them would result in

death. 156

While individual representatives favored tariff reform

in general, yet protection for the industries in their own

 

152; Cong. Record, 55 Cong. 2 Sess., p. 1248.
155 Ibid., p: 1186.
154-. Ibid., p. 1192.
155 Ibid., p. 1192.
156 Ibid., p. 1195.

42

L—

. a _ ,
district seemed to be justifiable. hr. Mercer, a Democrat
from Nebraska--a sugar beet producing state, favored a sugar
duty, while Ir. J. E. Washington a Democrat from Tennesee,
Opposed the bounty but favored the retention of the tariff

158 o u a .

duty. A Republican from California, hr. Lowers, Justified
the sugar bounty on the basis that it would produce a home
industry within a ten-year period, thereby freeing the
Unit d States from its subservience to the foreign sugar

159 . .
interests. He tried to strengthen his argument by explaining
the effect of the coffee tariff on the price of coffee. He
informed tie House that whenever the coffee tariff had been
lowered the Brazilian producers had ihcreased the selling
price, so that while the government lost revenue the American
peOple paid just as mich for their coffee. Such exploitation,
he remarked, could be stOpped only by a home-producing

160
industry. Iaturally Kr. Blanchard from Louisiana favored
161
a sugar bounty to aid the American cane sugar industry.
Mr. Wilson of Lest Virginia eXplained that, while free sugar
with a decreasing bounty was a compromise measure, an immediate
repeal would not do violence to the intent of the proposed
162

rbill. After considerable debate Mr. Warner's amendment for

free fggar was passed on January 25, 1894 by a vote of 161

to 58.

 

157. E. Stanwood, Khmerican Tariff Controversies", p.‘525.
158. Cong. Record, 55 Cong. 2 Sess., p. 1194.

159. Ibid., p. 1196.

160. Ibid., p. 1197.

161. Ibid., p. 1200.

162. Ibid., p. 1205.

165. Ibid., p. 1250.

.1)
C23

The most significant of all the House amendments to the
revenue bill was the one pr sented on January 29, 1894 by hr.
McMillin, a Democrat from Tennesee. The prOposed amendment
provided for an income tax of two per cent per annum on all
incomes of persons and corporations whose gross receipts
totaled s4,000 when the income was estimated by including:

(1) all interest received on notes or bonds; (2) all income
from real estate sales; (5) all received by gifts or
inheritance; (4) all income as salary; but excluding, (1)
all interest paid on indebtedness; (2) all taxes paid to
federal, state or municipal governments; (5) only one amount
of a4,000 from the income of all the employed in any one

164
family. There were certain exemptionsfrom the income tax
as outlined by the ammendment providing that; (1) all religious
and charitable organizations should not be taxed; (2) all
income from Federal bonds was exempted; (5) mutual insurance
companies were not required to pay;(4) the salaries of Federal

165
employees were not to be subject to such a tax. All residents
and citizens of the United States whether resident or not,
were expected to file reports when their income exceeded
55,500. This also applied to all corporations Operating with-
in the jurisdiction of the Federal Government. In case a
revenue coll ctor was refused this information, the amend-
ment provided that he c uld obtain aid and make an estimate
of the income of such a person or firm and after adding

fifty per cent thereto, could use such an estimate as a

 

'154 U} S. Statutes at Large, Vol. 28, pp. 555-561.
165 Ibid. .

166

Federal income tax claim.

hr. homillin defended his proposal by first attack-
ing Republican protectionism and by asserting that the time
had come for using taxes for public good rather than for the
benefit of private interests. He estimated the government
costs to be ,8 per caoita which he believed should be paid

167
by a tax on what persons already possessed. fir. Stone, a
nemocrat from Kentucky, inquired why initcd States bonds were
tax-fr e and to which 1r. kchillin replied by stating that
such exemption should not be cont mplated for it seemed
168 ‘
unconstitutional in his opinion. 1r. Compton of haryland
inquired as to the amount of revenue the proposed tax would
raise, and _r. hchillin replied that a four per cent tax
on personal incomes would raise 550,0h0,000 annually with
and additional 915,000,000 from the corporation and inherit—
169
ance taxes. In referring to the ouestion of administration,
chillin asserted that $546,000,000 had been raised by a
similar tax during the Civil War period when law and order
170
were less stable than they were in 1894. Mr. McMillin had
raised the question as to the source from which revenue to
off-set the reductions of the hilson Bill could be best
171

raised on the estates of the dead or the labor of the living.
He pointed out, as the virtues of the new tax, its flexibility

172
and justice as well as its successful use in other countries.

 

166. U. S. Statutes—at-Large, Vol. 28, pp. 556-561.
167. Cong. Record, 55 Cong. 2 Sess., App., pp. 411-420.
168. Ibid.

169. Ibid.

170. Ibid.

171. Ibid.

172. Ibid.

.—

4d

The Republic n Representative from Pennsylvania, hr.
Stone, pointed out that since protect ve ttriffs had always

provided ample revenue for government expenses, it was a

sound method which represented the fiepublican position and
175
should be continued as a permanent American policy. hr.

Bartlett, a wemocrat from Vew York, remarked that since the
Populists rather than the Democratic platfomm had stood for
an income tax, the Democrats who favored such a tax were
174
traitors to their party. In busting from Tr. Uavid A. Wells,
the well known economist, Er. Bartlett stated:
The practice of taxing prOperty outside

of the territory and jurisdiction of the State

and which, therefore, the laws of the State can

in no way protect, merely because the owner is

a citizen or resident of the state, rests upon

identically the sime principle as that which

constitutes the basis of bargandage, namely,

that control of the person of the victim confers

the right to a revenue consisting of a percentage

of the value of all the victims prOperty of every

description and wherever situated. 175

hr. Pence, a Populist from Colorado, proposed an amend-
ment to the income tax amendment that would have graduated
the income tax by placing a levy of 1% on all incomes between
$2,500 and 510,000; 2% onall incomes between p10,000 and
$50,000; 5% on all incomes between $50,000 and s60,000;
_4% on all incomes between $60,3qg and $100,000; 5% on all
incomes over $100,000 annually. Mr. Sibley of Pennsylvania

offered a substitute for hr. Pence's prOposal that would have

 

173- Cong. Record, 55 Cong. 2 S;ss., App., p. 1642.
174 . Ibid., p. 1599. ‘
175. Ibid., p. 1599.

126. Ibid., p. 1750.

46

required a tax of 2% on all incomes between $4,000 and
$10,000; 5% on all incomes between $10,000 and $50,000;
5% on all incores between n50,000 and $100,000; 10% on all
incomes over 5100,000. Sibley defended his suggestion by
a:serting that it was based on principles in accordance with
the Bibltiv Due to the fact that debate was limited little
discussion was provoked, but bothltge amendments of hr.
Pence and Mr. Sibley were rejected:

The income tax amendment to the Wilson Bill passed the
Commiitee of the Whale on February 1, 1894 by a vote of
175 to 56. after the vote, the Committee of the WhOle arose
and Mr. Richarson of Tennesee reported the bill to the
House of Representatives. There was never any doubt that
the bill would pass the House quickly and easily which it
did on February 1 by a vote of 204 to 140, there being 8

179 180

Representatives not voting. Of this vote there were 194
Democrats and 10 Populists who voted for the bill, and 18
Democrats who voted against it. Of the dissenting votes
there were 9 from Few York, 5 from Louisiana, 2 from
Pennsylvania, and 1 each from Eew Jersey, Connecticut, Rhode

Island, and Nebraska. It was evidenced by this vote that

party unity was far from realized.

During the months that the House of Representatives was

debating upon the provisions of the Wilson Bill the editors

 

177. Cong. Record, 55 Gong. 2 Sess., p. 1751.

178. Ibid., p. 1752.

179. Allen Nevins,"Grover Cleveland", p. 565.

180. Cong. Record, 55 Cong. 2 Sess., pp. 1780-1796.
181. Allen Nevins, op. cit. p. 567.

47

and journalists of the country were commenting on the wisdom

of such a measure.

"The protectionist organs indulged in an instant and

raucous outcry, the New York Tribune declaring that the bill

 

meant hauling down the American flag, and the Philadelphia

 

Public Ledger that it would practically revolutionize our

 

whole economic structure." 0n the other hand the "extreme

free trade organs were equally critical, hatterson's Courier-
182

Journal attacking the measure as feeble and inadequate."

The real truth was probably stated in the "New York Journal

 

of Commerce:

The reductions of duty are much more moderate
than has generally been expected. As a rule, '
the existing duties leave such a wide margin of
difference between the prices at which home goods
can be profitably made and those at which like
foreign articles can be imported, that the
tariff goes far beyond all requirements for
'protective effort. The PrOposed duties do not,
for the most part, even approximately wipe out
the surplusage of duty. Beyond this, most of
the leading branches of industry will be benefitted
either by an entire exemption of raw materials
from duty or by reductions of duty upon articles
partly manufactured and which become the raw
materials of other products.......the spectacle
of an industrial revolution which has created such
an incontinent scare all over the country is there-
fore dispelled. Those who had hoped for a fund-
amentally non-protective tariff find a tariff
still more highly protective than that of any
other country. 1'3

hx-Speaker of the House, Thomas B. Read, wrote in the

North American Review of January 1894 that if the Rays and

 

162, Allen Nevins,fiGrover Cleveland", pp. 564-565.
183. Ibid., p. 565.

48

Keane Committee had sought to paralyze business, they would

have devised no better way than to prolong the tariff controverég?
A contrary Opinion was expressed by Kr. A. T. Lyman, the

Treasurer of the Lowell Massachusetts Carpet 00., who remark-

ed that the low price of wheat as well as the general business
depression of 1895 had effected business rather than the

185
tariff controversy.

An economist of California, who was a SpeCialist on
tariff, hr. 0. L. Elliot explained in the March number of
the Overland Monthly for 1894 that both protection and free
trade sought prosperity, but differed as to the means of
accomplishing it. He asserted that high wages must be earned
or they could not be paid, so that the solution of the tariff
problem demanded a series of new definitions relative to
society and new concepts of national life as well as a
revolutionary change in our industrial conditiongésu

The Providence Rhode Island Journal, an independent daily,
of March 22, contended that the Wilson Bill would bring to
an end the steps toward reciprocity encouraged by the KcKinley
Bill but that such a change would be beneficial in as much
as the idea of reciprocity had been a failure:‘ 0n the other

hand the Chicago Record, an independent daily, favored such

agreements as well as a bounty or tariff on sugar in order to

 

184. Public Opinion, V. 16, p. 582.
185. Ibid.

186. Ibid., p. 618.

187. Ibid., p. 616.

49

188
aid the Louisiana cane and western beet sugar interests.

The Philadelphia Press, a Republican daily, of Larch

 

16, 1894 held that sugar was the chief item involved in
189
reciprocity and favored the House bill, while the Chicago

Herald, a Democratic paper of _arch 21, remarked that an

amendment abrngning the reciprocity of the LcKinley Bill
0

U

was most needed.

In general, while the press comments were in the nature
of discussion relative to the merits and demerits of the
bill's several provisions, yet they manifested far more
concern over the passage of some bill that would end the
uncertainty that had prevailed for months. The Republican
group opposed the bill as could be expected, while the
Democrats outside of Congress were dissatisfied with it
because it did not carry through enough of a reform as
indicated in the t riff rates?gl

On February 2, 1894 Mr. Daniel Wolsey Voorhees, the
Democratic Senator from Indiana, who had served in the House
of Representatives during the years from 1861 to 1866 and
again from 1867 to 1875 as Chairman of the Senate Finance
Committee, placed the bill entitled "House Resolution 4864,

to reduce taxation, to provide revenue for the Government

 

158. Public Opinion, v. 16, p. 617.
189. Ibid.

190. Ibid.

191. E.Stanwood, op. cit., p. 521.

 

50

and for other purposes" before the Senate and m ved that it
19a 195
be referred to the Committee on Finance. It was so oredered.
Kr. Quay, a Republican from Pennsylvania, requested that
copies of the bill be printed both in document as well as

194
in bill form. Kr. guay's reque t was granted.

From February 2 to march 20 the press continued to
express wonder, while the people waited for the introduction
of the hilson bill in the senate. For months before the
Bill reached the senate "high-tariff lobbyists had been
concentrating their pressure upon Senators known to be

195
doubtful". During the time the Bill was in the hands of
the Finance Committee of the senate little is known as to
what happened to the measuie. It was first entrusted to
Senators Vest and hills (Mills was not a member of the
Finance Committee) vho undertook to revise tariff schedules
dew ward beyond what the House Bill had done. when this
became known certain Democratic Senators, who were opposed
to even as much of a reduction as was provided for in the
House measure, took steps that resulted in a Democratic
Caucus in which the Louisiana Senators, especially white,
argued for a duty of either forty—five per cent ad valorem
or a specific rate of one and one-half cents a pound on

96 a
sugar. "Pugh of Alabama gave defiant notice that he would

oppose any bill which placed coal and iron ore on the free

 

192. Dictionary 9f American‘Biography, Vol. 19, p. 291.
193. Cong. Record, 55 Cong. 2 Sess., p. 1804.

194. Ibid., p. 1804. '

195..A11en Nevins, "Grover Cleveland", p. 568.

195. Ibid., p. 572.

 

 

 

51

197
list, and others rose in rebellion". Although "the ndministration

leaders, Voorhees, Vest, Jones, and Harris, argued hotly,
C8

they saw tiat a compromise was inescapable"}J The Caucus
finally chose a sub-committee of the Finance Uommittee
consisting of VestiOJones, and hills who were given instructions

.3
to modify the Bill enough to secure the votes of forty-three
Democrats. They were to personally interview the Democratic
Senators in order to find out just what they wanted in the

200
Bill.

The composition of the United States Senate in 1894
consisted of forty-four Democrats, four POpulists, and thirty-
seven Republicans. The Populists could be counted on to
vote for the bill if it included an income tax provision
but such a provision would be sure to alienate one Democrat
(Mr. Hill of New York) and all the Republicang¥xLA1though no
official list of the Senators who Opposed the bill was made
availa 1e, it is certain that "the antagonism felt in the
Senate was both revealed and accentuated by Cleveland's
militant attempt to place on the Supreme Court bench a man
personally repugnant to Hill. Following the death of Justice
Samuel Blatchford in the summer of 1895, the President short-
ly nominated William B. Hornblower of New York City to this

202
vacant seat". This was a very wise choice as Hornblower,

besides being a Princeton graduate, was the head of an

 

I97. Allen Nevins, "Grover Cleveland", p. 572.
198. Ibid.

199. Ibid.

300. E.Stanwood, op. cit., p. 528.

201. Ibid., p. 527.

202. Allen Nevins, 0p. cit., p. 569.

important law firm. The appointment, however, was too much
for Hill who looked upon Hornblower as a bitter enemy, because
two years before Hornblower had been on a Committee of
Investigation for the New York State Bar Association. This
committee had found Hill and his friend Isazc H. Maynard
205
"guilty of an utterly unjustifiable crime". Maynard, who at
that time was deputy attorney-general and acting counsel for
the Board of State Canvassers, had committed a theft of the
public records of Dutchess county in order to make certain
of the Democratic control of the State Senate. Hill now
rallied his friends to defeat the appointment and was success-
ful by a ballot of six votes due to the fact that Cleveland
took no pains to influence his friends in the Senate since ha
allowed no personal situations to influence his decisions as
204
a public servant. Lu‘leveland further defied Hill by passing
over the nomination of Rufus W. Peckham who would have been
acceptable to Hill, and ap3ointed Peckhamls brother, Wheeler
H. Peckham, who had been even more aggressive than Hornblower
in revealing Hill's misconduct in as much as he had been the
- 205
President of the New York State Bar Association. Again
Cleveland's prestige was disturbed for the Senate leg by the
O
intriguing Hill, rejected the appointment of Peckham.
The President then capitulated bv appointing Senator White

207
of Louisiana to the office. This whole affair was an insult

 

EMXi Allen Nevins, "Grover L’leveland", p. 569.
204. Ibid., pp. 569-570. -

205. Ibid., p. 570.

206. Ibid., p. 571.

207. Ibid.

53

to the President and a victory for the Senate opposition
, _ _, , 208

wh1ch tended to encourage further dissen51on.

Several Senators, among them Hill of New York and Smith
of New Jersey; did not conceal their disapproval of the
income tax feature of the wilson Bill. Senator hurphy of
New York revealed his tariff position by insisting upon
protection for collars and cuffs at least. Senators Brice of
Ohio and Gorman of karyland'were looked upon as the leaders
of an "insurgent" group which included the above mentioned
as well as the Senators from West Virginia, karyland, and
Alabama. These "insurgents" needed to muster but five
Democratic votes in order to block revenue legislation. It
was therefore inevitable that certain decided changes would‘3

09

have to be made in the House Bill when it reached the denate:

On March 20, Senator Voorhees of Indiana announced that
the Finance Committee was ready to report the bill out on

210
April 2 for the Senate's consideration. The bill reported as
ready at this time laid a moderate tariff on those commodities
211

most discussed in the caucus, namely: sugar, iron ore, and coal.
hr. Voorhees was interrogated by Mr. handerson, a Populist
from Nebraska, as to whether or not the amendments and changes
would be available in printed form, to which query hr.

212
Voorhees replied that such could not be definitely promised.

 

208. Allen Nevins, "Grover Uleveland", p. 572.
209. E.Stanwood, op. cit., p. 527-528.

210. Cong. Record, 55 Uong. 2 Sess., p. 5126.
211. Allen Nevins, 0p. cit., pp. 572-575.

212. Cong. Record, Op. cit., p. 5126.

54

Mr. McPherson, a Republican from Lew Jersey, announced
that while he did not favor the entire bill yet he did think
it to be a fair compromise in as much as the Committee had

215
differed so widely.

As scheduled the “avenue Bill was presented on April 2
to the senate which resolved itself into the Committee of the
hhole for debate on the measure. hr. Voorhees, Chairman of
the finance Comnittee, introduced the measure by first
reconeiling the paradoxical nature of a measure which prOpos-
ed to i crease government income, and at the same time prOpos-
ed to reduce the tariff. He introduced statistics to prove

214
that sufficient revenue co 1d be produced by the measure.
Voorhees attacked the doctrine of protection by presenting
certain merits of the prOposed bill in contrast to the
protection 2f previous meaSures. He believed that ad valorem

215
duties were preferable to specific ddties and, although he
favored duty-free raw wool, he did not ohject to a low tariff
on manufactured woolons, nor was he Opposed to a moderate
216
duty of one-eirhth cert per pound on sugar.

Mr. Allison, a nepublican from Iowa, continued the debate
by emphasizing certain defects in the bill as seen by the
minority. He stated that the income tax as well as the sugar
tariff represented a departure from the accepted methods of

taxation at a time when higher tariffs with specific duties

 

215. Cong. Record, 55gfiong. 2 dess., p. 5126.
214. see Appendix G. '
215. Uong. Record, on. cit., pp. 5596-5599.
216. Ibid.

55

would improve business ethics since specific duties would

be less easily evade§}7 Senator kills, a Democrat frem Gaxas,
addressed the senate in favor of ad valorem duties by stating
that democratic taxation should be according to the value of
the goods rather than according to its quantit§}8 Senator
Peffer, a Populist from Kansas, expressed concern about the
mounting Government expenses by revealing that the annual
taxes amounted to five per cent of the assessed valuation of
the real property of the country, while indebtedness amounted
to thirty-Ehree and one third per cent more than the assessed
valuatioi}. He remarked that the estimates of hr. Voorhees
were shy by an amount of p60,000,00ST Mr. Peffer's chief
objection to the proposed bill was that it discriminated against
the farmer by reducing 2;: duty on agricultural products to
the extent of a5,500,000. As a remedy he suggested his own
measure which provided for duty—free necessities regardless

-J I

of the place of their manufacturer.

On April 9 Mr. Allen, a Democrat from Nebraska, moved
that the debate should cease on June 4 so that a final vote
could be taken by June 7, but as Mr. sgggman, a Republican
from Ohio, objected no action was taken. Mr. Hill of New
York continued the general debate by asserting that the party

in power was responsible for action in as much as measures

more than men had been involved in the elections of 1890 and

 

217‘" Cong. Record, 55 Cong. 2 Sess., App. pp. 694-697.
gig‘. Ibid., p. 5448.
~ . Ibid., bpp., pp. 654-665.

220 . Ibid., App., pp. 654-665.

221 . Ibid., App., pp. 654-665.

222 . Cong. Record, 55 Cong. 2 Sess., pp. 5549-2550.
225 . Ibid.

56

224
and 1892. after finding fault with the President's Hawaian

policy, he commended the general behaviour of the administration
and pointed out especially the handling of the uherman Silver

. . 225
Purchase Act as well as the repeal of Federal election Laws.
In addition to recognizing these accomplishments, he urged
the need for tariff reform in the light of the depressed
economic conditions of the country and called for united action
on a non-nartisian pasis in order to remedy the Treasury

226
deficit. At the sane time, he voiced tte objection of Few
York State to Submit to any form of an income tax for Federal
227
revenue. hr. Hill next quoted from President Cleveland's
Message to Vongress of December 4, 1895 in which he had
mentioned a corporation income tax, but had rewained silent
2&3

on the advisability of a personal income tax. Besides find-
ing fault with the general principle of such a tax, kr. Eill
asserted that the exemption of $4,000 was too high if such
a tax were to be enacted. He further attacked the income tax
as being inquisitorial, since it retuired that all persons
taxed would be obliged to give a complete acceunting of their
income sources. Due to these objections the prOposed measure
appeared to Mr. Hill as Eggng too revolutionary and
unnecessary at that time. Mr. Hill asked the Senate to contrast
the experience of the country during the Civil War times when

Hew York State alone paid three per cent of the income tax

as against the Eastern and Mid-Western contribution which

 

224. Cong. Record, sa‘EBng. 2 Sess., pp. 5557-5558.
225. Ibid.
226. Ibid.
227. Ibid.
228. Ibid.
229. Ibid.

57

amounted to seventy per cent of the inco e tax collections,
with a tariff that was collected from all sections alike, and

250
then decide which was the more equitable tax to levy.

The debate was continued by fenator Lodge, a Pepublican
from Massachusetts, who contended that two questions were
involved in the tariff, namely: (1) the domestic effects of
the tariff upon business and wages as well as on the general
prosperity of the country, and (2) the theoretical considerations
which involved a choice between protection or free trade.

Mr. Lodge defended the theory of proteCtion by stating that
there were twenty-eight paupers for every one thousand persons
in England, Ireland, and Scotland, while in the United States
there was only half a pauper for every thousand personséfil

He further showed that the reduction of he tariff would
remove from labor many American workers, so that theneffects
of the panic would be increased as well as prolongedfoh

Kr. Morgan, a Democrat from “labama, opened his debate

by quoting from the Few York Evening Post as follows:

 

The Vill-Gorman-Pugh school of Democrats in the
Senate, who a;e trying to block tariff reform
ought to have their eyes opened by the address
issued by the Linnesota Democratic issociation
yesterday. ihis is exactly the sort of pronun-
ciamento which is needed, because it names the
offenders, the two from Iew Jersey, the two from
Louisiana, the two from haryland, the two from
Alabama, Camden-of nest Virginia, and Erica of
Ohio. These are the men who wear the mask of
Democrats that they may the better betray our
cause. These they are who have wrought this
marvelous change putting our party in the attitude

 

'250- Cong. Record, 55 Cong. 2 Sess., p. 5565.
251. Ibid., pp. 5611-5625.
252. Ibid., p. 5625.

58

of defeat and giving our Opponents that of victory. 255
Mr. Morgan pleaded not guilty to this charge by pledging his
support to the Bill as it was reported out of the Senate

25
Finance Committee.

After a few days of debate it became evident that
moderate duties would not be acceptable to the Senate. when
the Republicans began to predict the defeat of all tariff
legislation hr. Jones of Arkansas, took the bill under his
personal charge only to find that certain Senators "had
entered into a combination confined to themselves to stand by

255
one another in their different demands". Jones resolved to
"go throuch the bill paragraph by paragraph with each of the
dissatisfied Democrats" and in so doing he discovered that the
combination was headed by Corman of haryland and supported
by others who were backed by "some of the most powerful
qr"
c506
economic interests in the country". This group, which was
composed of hurphy from New York representing the-linen shirt
and collar manufacturers of Troy, Gorman and Pugh represent-
257
ing the iron and coal interests of their states and Smith of
New Jersey representing glass and pottery manufacturers, were
0
258
all interested in protection. Jones took the revised amend-
ments, as agreed upon after advising with as many Denocratic
Senators as would be re uired to pass the bill, to the
' 259
Secretary of the Treasury Carlisle. After a nine-hour

conference Carlisle was quoted by Jones as stating that he

would favor those Changes, if they would guarantee the

 

255. Cong. Record, 55Cong. 2’Sess., p. 2 61.

254. Ibid.

235. Allen havins, "Grover Vleveland", pp. 572—575.
256. Ibid., p. 573.

237. Ibid.

258. Ibid.

259. *bid.

59 ~

passage of the bilf?£)Cleveland expressed hOpe that eventually
free iron and coal could be gained, but favored the compromise
amendments to get the bill through the Senate with the hope

that the conference would adhere more closely to the President's

. 241
deSires.

The Republican Senator from Oregon, Mr. Mitchell, first
upheld tie constitutionality of a high tariff in Opposing
the Wilson Bill, and at the same time, he expressed his fear
as to the effects of duty-free wool, lead, hay, and horses,
as well as other agricultural products on which American
farmers wogld be forced to compete with the cheap huropean
products. ”hr. Quay, a Republican from.Pennsylvania, express-
ed regret that the Finance Committee had failed to do its
duty by not rewriting the House bill in order to free it from
its absurdities, sectionalisn, and injustices. He spent
much time and many words in defending high protection for
iron, steel and sugar and asserting that these prosperous

industries constitutedfifisnational asset and should be protect-

ed for the public good.

While hr. McLaurin, a Dem crat from.mississippi, did not
favor all the provisions of the measure, yet he favored its
passage because he was convirced that it was a step in the
direction of tariff reform since it sought to tax on the basis
of ability to pmy§44he did not accept the s4,000 exemption of

the income tax provision, but advocated the elemination of

 

240. Allen Nevins, ”Grover Cleveland”, p. 575.

241. Ibid. .

242. Cong. Record, 55 Cong. 2 Sess., pp. 5725, 5740-5745.
245. Ibid., App., pp. 756-757.

244. Ibid., p. 5773. -

60

that provision entirely and the raising of tariff rates in
245

order to offset the decrease that would otherwise follow.

Because the proposed measure was designed to include
enough protection to secure a sufficient number of votes to
pass it in the Senate, Mr. Gallinger, a Republican from New

246

Hampshire, Opposed its passage. Besides its compromise
provisions he expressed fear for those industries, whose
protection would be disturbed, and asserted that he was oppos-

ed to the income tax on the ground that it would remove the

tax burden from the foreign importer to the wealth of the

247 -
North. In proof of his assertions that the Bill would have

these disastrous effects, Kr. Callinger noted the hOpefulness
of Canada as well as other foreign powers that the Bill might
be passed?48

The Senator from hinnesota, hr. Washburn, not;d that the
proposed bill as it had come from the House adhered to the
Chicago Platform of 1892, but the Senate bill did not. In
as much as the free list provisions of both measures did not
demand reciprocity on the part of foreign countries, he
Opposed the Eill?490n the other hand Senator Mills from Texas
Stated that while the present bill did not meet his whole-
hearted approval, yet it Could not be expected that a measure
enacted by a legislative assembly representing so vast a
country could be entirely satisfactory to all sections. He

further remarked that he favored duties on coffee, tea, sugar,

 

245. Cong. Record, 55 Cong. 2*Sess., pp. 5789-5785.
246. Ibid., p. 5884.

247. Ibid., p. 5894.

248. Ibid., p. 5902.

249. Ibid., pp. 3963-3995.

61

cotton, wool, and manufactured goods, but at the same time low
enough to obtain only revenue for the government. hr. hills
explained that American wheat was being kopt at home as a
result of the American high tariffs which had prevented
European producers from sellirg their manufactured goods on
the American market thereby realizing credit for purchasing
American wheat. In proving that high tariffs do not give the
working man the advantage of higher wages, tVe Senator present-
ed statistics to show that the cost of labor amounted to a
larger per cent of the value of the goods produced in Europe
than in America; that is, LurOpean workers were paid a larger
share of the vealth they produced than were American woiggrs.
Mr. Mills 0 ncluded his debate by urging the immediate passage
252 .
of the bill.

On April 25, 1894 Senator Harris, a Democrat from
Tennesee, moved that the sessions of the Senate be held until
six o'clock in the afternoon daily except Saturday until the
reading of the bill could be completed and all amendments to

255 254
the bill be passed. The motion was agreed upon.

Although the presentation of amendments to tie hilson
Bill be: n April 25 in reality the debate on the Bill continued
but the presentation of amendments was in Order. As soon as
the Finance Committee presented its first amendment which chang-

ed the date of its inauguration from June 1 to June 50 hr.

 

250. Cong. Record, 55 Cong. 2 Sess., pp. 4020-4025.
251. See Appendix F.

252. Cong. Record, 55 Cong. 2 Sess., p. 4051.

255. Ibid., p. 4062.

254. Ibid., p. 4065.

62

Aldrich from Rhode Island, who was the leader of the Republican
opposition, asserted that such an amendment was futile and
that the bill as all the Democratic Senators well knew was
255
far from being in its completed form. He went so far as to
state that three or four hundred additional amendments were
being secretly planned. “hen Kr. Voorhees questioned that
assertion, hr. Aldrich reaffirmed his statement by saying
the bill could not be intelligently discussed in its present
256
form. In reply to Senator Aldrich both the Senator from
Illinois, hr. Palmer, and the Senator from Texas, hr. hills,
' 257 '
denied any such possibility for revisions. In reality these
Democratic Senators were misinformed for the Jones' amendments
were as yet unpresented, but it was about time for them to be
introduced. It is now generally conceded that many. f the
provisions of the Jones amendments were dictated by Republicans
258
through Democratic "insurgents". hr. Sherman from Ohio
protested the secrecy with which the majority of the Committee
had handled theDill, to which Mr. Voorhees, the Chairman of
the Committee on Einance, offered to give voice to any minority
259 ‘

opinion of the Committee.

The first amendment pr posed by the Committee was never

passed, nor has it tabled until Kay 2. During the discussion

on that amendment Senator Lodge from hassachusetts, maintained.

 

255. E. Stanwood, op. Eit., pp. 550-551.

256. Cong. Record, 55 Cong. 2 Sess., p. 4252.

257. Ibid., pp. 4252, 4255.

258.Allen Nevins, "Grover Cleveland", p. 574.

259. Cong. Record, 55 Cong. 25ess., pp. 425p-4260r

65

that those Democrats, w~o proposed to change the bill, ought
‘ . 260
to air their prOposals immediately before the Senate.

Mr. Hoar, a Republican from Massachusetts, opposed the
prOposed bill delaying action on the part of the majority
party by a prolongei speech defending protectionism as a

. 261
vital part of American life. Kr. Palmer from Illinois answered
hr. Hoar by asserting that protectionism, it it were needed
to preserve industry, had served the-same end as communism but
262
for only a restricted group.

hr. Gallinwer from Few Hampshire proposed an amendment
resembling the provision of the McKinley Act of 1890 in that
it vould iave allowed reciprocal tariffs to be arranged between
Canada and the United States at the discretion of a joint-

265
comxission. However, the amendment was soon withdrawn.

"On hay 5 a fresh Democratic caucus, dominated by Jones
and his allies, resolved by a vote of 59 to 1, Hill being the
dissenter, to support four hundred aid eight new amendments
prOposed by the Finance Committee--that is, the Jones amend-

264 -
ments". From.kay 7 to July 5 these amendments were und r
consideration by the Senate. "The forty-three Democrats"
that Jones interviewed, "stood together like a stone wall and
265
redeemed their pledges like men". There was one breal when

three Democrats joined the Republicans tr make the sugar

schedule effective immediately instead of January 1, 1895, as

 

260. Cong. Record, 55 Cong. 2 Sess., p. 4517.
261. Ibid., pp. 4475-4477.

262. Ibid., p. 4487.

265. Ibid., p. 4471.

264. Allen Nevins, "Grover Cleveland”, p. 574.
265. Ibid.

64

.266

was formerly planned.

The amendment proposed by the Finance Committee which
occasioned m ch debate was the proposal to take iron from

267
the free list by placing a duty of forty cents a ton upon it.
Immediately protests were sent to the Senate from the iron and
steel intersts of the c untry which demanded at least a duty
of seventyefive cents a ton, while, at the same time other
268
petitions were read requesting duty-free iron ore. Mr. Peffer
of Kansas next proposed an amendment to the amendment to remove
269
all duty from iron ore, but his proposal was rejected.
Next Mr. Platt of Connecticutt proposed an amendment to the
amendment that would place a duty of sicty cents a ton on iron
270
ore, but his prOposal was laid on the table. Lr. Gorman of
Maryland addressed the Senate expressing his opposition to
any great upset in tariff grotection and by favoring the present
law because it fulfilled the party pledges in cutting tariff
rates far below the thinley rates of 1390 as well as the Mills
Bill of 1888, and yet would provide 5 fficient revenue to pay
. 272

the Government's expenses.

With some further discussion on the amendment it was
agreed to place a duty of forty cents a ton on iron ore and
thereby one of the basic principles of tariff reform was

275
sacrificed.

 

266. Allen Nevins "Grover Cleveland", p. 574.

267. Cong. Record, 55 Conn. 2 Sess., p 4995.
268. Ibid., 5025. “
269. Ibid.

270. Ibid., pp. 5058, 5065.
271. See Appendix G.

272. Ibid., pp. 5l5l-5l54.
275. Ibid., p. 5070.

65

The amendment dealing with revisions of the sugar duties
provoked major discussion. Senator Manderson, a Republican
from Nebraska, prOposed an amendment that would have continued
the county on sugar until 1906, as provided by the thinley

274
Bill. After Senator Jones, a Democrat from Arkansas, offered
an amendment to the House bill that would have repealed all
sugar bounties after January 1, 1895, hr.-Manderson withdrew
275
his amendment.

Senator Caffery, a Democrat from Louisiana, spoke in
favor of a sugar tariff or a sug r bounty in order to protect
the sugar interests of his state. ,He expressed a preference

276
for a tariff in as much as the bounty seemed to be unpopular.
His proposal was supported by his colleague Senator Blanchard
of Louisiana, who asse ted that such protection was needed in

' 277
order to preserve the sugar interests of his state. Although
Senator Peffer of Kansas expressed his views by remarking that
the issuing of government bonds was a Wall Street suggestion
O

uncalled for by the financial needs of the government which
could be easily remedied by internal taxes, yet he favored a
bounty instead of a tariff when it came to the question of

278
sugar.

Senator Jones of Arkansas next presented an amendment to
' 279
place a duty of forty per cent ad valorem on sugar. This

prOposed amendment was the source of much debate which finally

 

274. Cong. Record, 55 Cong. 2 Sess., p. 5641.
275. Ibid., p. 5641.

276. Ibid., p. 5647.

277. Ibid., pp. 5649-5650.

278. Ibid., pp. 5767-5768.

279. Ibid., p. 5661.

66

reached a settlement in the sugar schedule by providing for
280
such a tax. It passed June 5, 1894 by a vote of 55 to 28.

Senator Hale, a Republican, placed an amendment before
281
tie Senate providing cu toms duties on horses and mules.
His prOposal found supporters among those Senators whose
constituencies would have been benefitted thereby, but the
regions so effected did not have sufficient voting strength
282

to pass the amendment.

Senator Cullom of Illinois on behalf of the Republican
opposition Opened his address to the Senate by giving a brief
history of the Wilson Bill in which he remarked, that the
;Wilson Bill after a fight in the house had been sent to the
Senate from whence it was piloted into the secret council of
the majority members of the Finance Committee. Senator Cullom
pointed out that the purpose of the Bill's provisions was to
Oppress tge North for the benefit of the Souph. In order to
remedy this evil he favored a general revision of the measu;e

285
which would afford the necessary protective features.

The Republican Senator from nontana, hr. Powers, express-
ed his approval of a wool tariff, because it would amply protect

284
the finished product of the farm. He was backed by nearly all

the Senators from the wool-growing states including Senator

Peffer of Kansas, Hoar and Lodge of Massachusetts, and Platt

 

280. Cong. Record, 55 Cong. 2 Sess., p. 5776.
281. Ibid., p. 5856.

282. Ibid., p. 5871.

285. Ibid., pp. 5951-5952.

284. Ibid., p. 6159.

67

285
of Connecticut. While duty-free wool was theoretically

maintained, yet a good many ad valorem duties were placed
286
on wool by the Senate amendments.

The income tax featore of the Bill had aroused some
Opposition in the House, but it was in the Senate that it
encountered its bitterest struggle. Senator Hill of New York
spoke first on that feature of the bill when it was taken up

287
June 21, 1894. From the point of View of party policy, hr.
Hill contended that an income tax was an nwise_measure in as
much as it wvs a Populist rather than a Democratic feature,
and that no national energency then existed to make such a
tax imperative and cordemned it as a rider to the prOposed
288
bill. To show that such a tax was an unwarranted innovation,
which had been made without the sanction of the Democratic
Party Convention, Senator Hill pre gated a petition from the
9
Democratic business men of New York. In referring to England's
income tax he argued that because of Britain's committment to
a war-time program over a long period of years such a tax was
necessary, while the American situation did not permit the
United States government to resort to it during an era of
peace. He strengthened his contention by quoting the eminent
historian, Professor Goldwin Smith of Oxflord University, who
had said that such a tax constituted a demoralizing influence

290
on any people. Moreover, Hill maintained, that since the

 

285. Cong. Record, 55 Cong. 2 Sess., pp. 6169-6259.
286. Ibid., pp. 6118, 6119, 6597, 6599.

287. Ibid., p. 6611.

288. Ibid., p. 6611.

289. Appendix H.

290. Cong. Record, 55 Cong. 2Sess., p. 6615.

68

states under their existing tax system were taxing heavily

the larger incomes, a federal income tax would add to the

burden of those who were already tearing the greater portion

291

of the municipal and state taxes. In concluding his remarks

Senator Hill cited the estimate of the Secretary of the

Treasury, for the year of 1895 providing the Wilson Bill were

passed, which showed a surplus over ei<enses of some thirty-

one billion dollars even if the income tax feature of the bill
292

were eliminated.

On June 22, Senator Kyle of South Dakota addressed the
Senate by favoring the income tax amendment to the Bill and
by offering as proof for the soundness of his ideas quotations
from such eminent authorities as Professor Ely, an outstand-
ing econo ist at the University of Lisconsin, Professor
Thompson of the Social Science Department at the T’niversity
of Pennsylvania, hr. N. A. Dunning, Editor of the Rational
Watchman, and Professor Levi, of Kings College, London, all

295
of whom favored an income tax as just and equitable.
Senator Kyle continued by asserting that wealth had usually
been favored by our system of taxation, and he produced a
chart of st tistics indicating that the rich paid taxes on
eight per cent of the real value of their prOperty while the
poor paid on the ave—age of twenty-four per cent of the real

294
Value of their property. re concluded his remarks by remarking

 

291. Cong. Record, 55 Cong. 2 Sess., p. 6615?

292. Appendix G.

295. Cong. Record, 55 Cong. 2 Sess., of. 6685-6690.
294. Appendix I. '

69

that the decline in the revenue from the Income Tax of the
Civil War period had been another illustration of the fact,
that the righ were unwilling to bear their just part of the
tax burden?“5

The next provision of the Bill, which came under the fire
of debate, was the provision that the incomes accruing from
Government bonds should be exempted from the proposed income
tax. Senator Rill of Eew York pointed out that the exemdtion
of such securities would remove SOge s655,000,000 of taxable
wealth from the scope of an income tax which had been built
on the principle of taxing those best able to payégéfie then
suggested that both state and municipal bonds should also be
included in the exemption as a matter of fairnessto both
governments?970n the other hand Senator Vest of Missouri
argued that such a proposal would further defeat the very
purpose of the income tax provision, while Senator Hill
defended his position by asserting that any other course of
action would make it too difficult for the states and
municipalities to negotiate bond issues?98When the amendment
I88 rejected Senator Hill immediately proposed that the
'exemption 2e extended to include the state bonds but not the
municipaléngest continued his opposition on the same ground
as before, namely, that it sought to defeat the purpose of

500
the income tax provision of tie bill. Senator Higains, a

 

295. Cong. Record, 55 Cong. 2 Sess., p. 6690.
296. Ibid., p. 6804.

297. Ibid.

298. Ibid., p. 6805.

299. Ibid., p. 6810.

.500. Ibid., p. 6811.

70

Democrat from Delaware, prolonged the discussion by accusing
the Democratic party of violating its state rights principles
in two ways, namely; (1) by proposing an inc0ne tax which was
a state's method of income by taxation, and (2) by seeking to
501
include in it income derived from state bands. After some
lesser discussion between Vest of Missouri, Hill of Pew York,
502
and Hoar of hassachusetts, the vote was taken and the proposal
505
was rejected.

After r peated attempts to so amend the inco a tax
provision of the Bill that it would be useless, the Senate
began to consider the amount of ex mption to be allowed by
that provision. Senator Allison of Iowa prOposed an amend-
ment to exempt small corporations from the tax provision,
while Senator Hoar of Massachusetts prOposed an amendment to
allow a tax exemption on the i come of a corporation equal to

‘ 504
the aggregate exemption of all its stockholders. Senator
Hill of Raw York, argued that only individuals should be
taxed while Vest, of Missouri, argued that, since corporations
enjoy the protection of Federal law, they should likewise

505
bear their share of the income tax. Senator Allison finally

506

withdrew his amendment. While several amendments recommended
by tre Committee on Finance were agreed to, yet they were
merely inserted to clarify the administrative set up under

507 '
the Bill.

 

501. Cong. Record, 55 Cong. 2 Sess., p. 6811.—
502. Ibid., pp. 6812-6814. "
505. Ibid., p. 6820.

504. Ibid., pp. 6820, 6852.

505. Ibid., p. 6865.

506. Ibid., p. 6855.

507. Ibid., pp. 6887-6896.

71

Senator Allison next raised debate on the internal
revenue feature of the Bill by proposing a change in the
limit on the bonding period of distilled liquor from eight
to four years, but his proposal was rejected?08

June 29 was the last day the Bill was considered in the
Committee of the Whole. hany amendments were prOposed on that
day and several of them passed the Senate, but none of these
was of any great significance?09

On July 2 the Senate was ready to consider the report
of the Committee of the Whole. The opening minutes were
consumed by the various Senators asking for a separate vote
on certain specific amendments effecting provisions of the
Dill in which they were interested?lOThe report of the
Committee was generally accepted with but little debate and
with few changes. The greatest change was the one providing
for the repeal of the sugar bounty immediately instead of
January 1, 1895?11"At the last moment, on the morning of July
5, there was an interview between Harris and Cleveland.
Harris told the President that he and his friends in the
Senate, particularly Vilas, musn reconcile themselves to the
Bill as it stood without the dotting of an 'i' or the cross-
ing of a 't; or all hOpe for tariff legislation wogig sink

in utter failure before twenty-four hours elapsed". Late

the same night, after an eleven hour continuous session, votes

 

508. Cong. Record, 55 Cong. 2 Sess., p. 7006.
509. Ibid., 7006-7014.

510. Ibid., pp. 7042-7044.

511. E. Stanwood, op. cit., p. 559.

512. Allen Nevins, "Grover Cleveland", p. 579.

72

Jere taken. "Seventy-seven of the eighty-five Senators were
in their seats. Twelve of the Senators mere paired. Hill it
was said, was confident till the very end that his 'no' would
defeat tie bill" and the Republicans were led to expect the
defeat of the bill up to the final roll callflS"A sigh of
relief went up from the Uemocratic side” when it was announc-
ed that the bill had passed by a vote of 39 to aeélérhe
margin was even closer than the final vote indicated for
Blanchard of Louisiana had refused to vote while Caffery, his
colleague, voted 'no' in protest "against what he considered
an injustice to his st te"?l5When Irby of South Carolina, who
was knownqto be doubtful voted "aye", "Caffery was observed
to start"T16A few seconds later the Populist from South
Dakota, kyle, and deard Murphy also voted "aye"?l7lt is
evident than that if Irby and Kyle had joined both Senators p
from Louisiana "the bill would have been lost beyond recovery”?18
The bill had passed, but it was only a hollo 'victory for the

‘ O
maj rity party?ldThe bill was then returned to the House of

Representatives from which it had originated.

While the Wilson Bill WLS pending in the Senate a con-
siderable amount of speculation and comment was offered by
the press as to what was actually happening to it. The
independent Few York Herald of harch 17, 1894 expressed wonder

as to the amount of time the Senate would consume in consider

 

515. E. Stanwood, 0p. cit., p. 559.

514. Cong. Record, as Long. 28ess., p. 7156.
515. Allen Hevins, 0p. cit., p. 580.

516. Ibid.

517. Ibid.

518. Ibid.

.519. Ibid.

r...

'70

520
ing the Bill, while the tariff reform paper, American Indus-

tries, assailed the Senate Finance Uommittee by asserting
that the proposed changes showed the trail of the serpent

521
of vested interests. The New York Outloor asserted that the

 

promise of duty-free raw.materials had been reduced to free
wool, and that the promise of free necessities had now become

lost since sugar was to be taxed under the pro osed changes
"ion
c.1436

to the extent of one cent a pound. The American Federation

of Labor paper, the American Federationist, pointed to the

 

changes made in the Senate as evidence that only the organization

of labor, rather than a protective tariff, could insure
525 »
high wages to the worker. The Farmers' Alliance paper, the

Washington hational Economist, called the Bill less oppressive
524
than the previous McKinley Act.

 

The independent Detroit News remarked that, since the

 

prOposed bill was to raise revenue, protection would defeat

it's purpose, hence wiSdom-demanded that the tariffs be lower-
525
ed. The Democratic Baltimore Sun stated that every loyal

 

Democrat world be dissatisfied and indignant at the changes
526

made by the Senate Finance Committee, while the New Orleans

 

States, also a Democratic paper, opposed all changes, except
527
those changes offering protection to sugar.

 

The Democratid paper, The Kansas City Times, accused

Senator Gorman of leading a clique of Democratic Senators who

 

520. Public Opinion Vol. 16, p. 592.
521. Public Qpinion Vol. 16, p. 592.
522. Ibid.

525. Ibid.

524. Ibid.

525. Ibid., p. 475.

526. Ibid., p. 568.

527. Ibid.

 

74

528
had borrowed the Democratic party by which to sponsor protection.
Both the Detroit News and the Indianapolis hews, which were

9

 

 

independent papers, agreed with that Opinion.

The accusation of hribery of senators in order to raise
tariffs was heralded by many papers including the Democratic
Brooklyn Eagle, the Republican Toledo Blade, and the independent

550
Philadelphia Ledger.

 

 

 

Harper's Weekly_referred to the Senate Bill as being of

 

a gorse character than the )cKinley Bill, but exjressed the
hOpe that the House would finally refuse to concur on the
55
Senate amendments.
The View of the Canadian press of course depended largely
upon the political bias of the papers represented. The liberal

Toronto Globe remarked that such a bill as the Senate had

 

revised out of the Wilson Bill and which was nearing completion
on the eve of Independence Day, proved to what depths America
had sunk since the Day of Independence when she had revolted
against unjust and unfair taxation?52The conservative Montreal
Gazette, on the other hand , praised the Democratic Opposition
to the Bill asserting that tgo much was at stake for even a
free trade party to ignore?00

A variety of Opinions prevailed throughout the country

but in general the opinion of the public seemed to favor the

 

528. Public gpinion, V01. 17, p. 2057
529. Ibid.

550. Ibid., p. 204.
551. Ibid., p. 529.
552. Ibid.

553. Ibid., p. 329.

75

Wilson Bill as it had left the House, and was still unaware

that the Senate had largely changed the measure by its many
554
amendments.

On July 6, the Wilson-Corman Bill was referred back to
555
the Ways and keans Connittee by the House of Representatives.

Cleveland urged the House leaders to show fight which they soon
began to do. A canvass of the House by the horld indicated

that 116 Democrats were decidedly osposed to the amended bill,
556
while only two definitely favored it. William L. Wilson led

an aggressive battle to force the S nets to recede, and he

{as able to secure the backing of the Lays and teans Committee
557
which submitted the following resolution to the House:

Resolved, that after the passage of this
resolution the Committee of the Whole on the
state of the union shall be discharged from the
further consideration of the bill (House
Resolution 4864) with the Senate amendments there—
to, and the same shall be considered in the House:
that after two hours of general debate it shall
be in order in the House to move to nonconcur in
the Senate amendments to the said bill in gross,
and to agree to a committee of conference as asked
for by the Senate, on the disagreeing votes of
the two Houses; and the House shall, without
further delay or other nation, proceed to vote
upon said notion. 558 .

kr. Reed wf Maine asserted that the Constitution gave to
the House of Representatives the expressed authority to write
tax bills and strenuously objected to the delegating of that

559
authority to either a conference committee or to the Senate.

 

554. Public Opinion, V01 17, p. 529 f.

555. Cong. Record, 55 Cong. 2 Sess., p. 7161.
556. Allen Nevins, "Grover Cleveland", p. 580.
557. Ibid. .

558. Cong. Recsvd, 55 Cong. 2Sess., p. 7189.
559. Ibid.

76

Mr. Wilson stated that he would not attempt to contrast the

amended bill with the original one, but would simply point

out that it had been returned after "five months pendency in
540
the Senate with some six-hundred and thirty-four amendments."

While he admitted a great many of these revisions were of
minor importance, yet he noted that some of them involved a
change in the whole pursose of the Bill. He also pointed to
tTe fact that theoriginal bill had as its ptrpose ”two clear.
and intelligent principles"; (1) the maintainance of the duty-
free feature on basic raw materials of which only wool and
lumber had survived the Senate revision, and (2) ad valorem
duties which had been largely eliminated by the Senate in
541 .
favor of specific duties. Mr. Payne, a Democrat from New York,
asserted that ninety per cent of the six-hundred and thirty-
542
four amendments were material changes in the Bill. Mr.
Dalzell remarked that the nilson Bill of the House as sent to
the Senate fulfilled the Democratic platform, while the‘bill
sent back by the Senate was best described in the words of
senior Senator from New York, Mr. Hill, who stated:
The Senate bill, tre Gorman compromise bill,

as it is now generally Known in the press through-

out the country, I mean the bill in its present

shape is neither satisfactory to the Democratic

party nor to the country. There is no mistaking

public sentiment upon this point.

The true principles of tariff reform have
been sacrifieed in the effort to insure the re-

tention of an income tax. This the country
believes—-this the country understands. We

 

540. Cong. Record, 55 Co g. 2 Sess., p. 7191.
541. Ibid., p. 7191.
542. Ibid., p. 7192.

77

promised the peOple bread and we are giving them

a stone. he promised them free raw material and

we are giving them taxed coal, taxed iron orr,

taxed coke, taxed lead ore, and other taxed raw

materials. 545

The House passed favorably on Kr. Wilson's motion for a
Gonference Committee, and confereex were subsequently ap-

544 .
pointed. The personnel of the Conference Committee was
exceptionally well qualified from the standpoint of the loyal
Democrats. From the House there were four Democratic and
three Republican members on the Committee. Mr. hilson, the
Chairman of the Ways and teens Committee as well as a leader
for tariff reform; hr. McMillin, who prOposed the Income Tax
amendment; Mr. Turner a ssutherner from Georgia, and Mr.
545

Montgomery or Kentucky constituted the Democratic members;
while hr. Reed of haine, hr. Burrows of Hpchigan, and hr.
Payne of HeW'York constituted the Republican grou; from the

546
House. The Democratic conferees from the Senate were tariff
reform sympathizers and having steer d the wilson Bill through
the Senate knew how far the Senate would compromise on the
measure. The Democratic conferees from the Senate were Mr.
Voorhees of Indiana, Chairman of the Finance Committee, hr.
Harris of Tennesee, hr. Vest of Lissouri, and hr. Jon 8 Of

547 -

Arkansas, while the Republican members were yr. Sherman of

548
Ohio, hr. Allison of Iowa and Mr. Aldrich of Rhode Island.

Senator Hill was quoted by the New York World as assert-

 

 

545. Cong. Record, 55 Cong. 2 Sess., p. 7194.
544. Ibid., p. 7195.

545. Ibid.

546. Ibid.

547. Ibid., p. 7156.

548. Ibid.

78

ing that the conferees were at a standstill because, of their
choice of food for he said, "Men who are in agreement and
making progress never send for sweet milk and corn bread;

when you see trays carrying a decanter and a box of cigars,
549
you can bet that an agreement has been reached."

On July 15, Senator Brice of Ohio predicted a deadlock

which was realized three days later when the conference
550
committee voted itself unable to reach a decision.

The report of the House conferees was considered in the
House on July 19, when 1r. Outwaite of the Rules Committee
laid a motion before the House which read as follOWs:

Resolved, thzt after the adOption of this

' resolution it shall be in order when the House
conferees on the house Bill 4864 make a report
0f disagreement to move that the House insist ‘
uson its disagreement to the Senate amendments
to said bill in gross, and ask a further
conference with the Senate on the disagreeing
votes of the two Houses thereon. That two hours
of debate shall be allowed upon said motion,
and then without delay or other motion a vote
small be taken thereon. Should such a motion
prevail the Speaker shall appoint the House
conferees and the natter shall then for the time
being pass from the consideration of the House. 551

The House however RES reluctant in adopting this recommend-
ation of the Rule Committee and hr. Wilson of West Virginia
was obliged to present an adverse report of the conferees
back to the House which read:

The Conference Committee on the bill House

Resolution 4864, after final, full and free
conference, failed to agree. The Senate conferees

 

549. Allen Nevins, "Grover Cleveland", p. 580.
550. Ibid., p. 581.
551. Cong. Record, 55 “ong. 2 Sess., p. 7709.

79

insist on their amendments to said bill, and the
house conferees insist on their disagreement to
the Senate amendments.

W. L. Wilson

Benton Echillin

H. G. Turner

A. B. Lontgome y 552
Conferees on the part of
the House

Mr. Wilson advised the House to insist on their disagreement
and to give a call for a second conference. To conv'nce the
House, that this should be done, he made a definite departure
from what had previously been considered proper by closing
his speech in a sensational manner with the reading of a

letter sent to him by President Cleveland under the Date of
555 '
July 2. The letter in part read as follows:

Every true Democrat and every sincere tariff
reformer knows that this bill in its present form
as it will be submitted to the conference falls
far short of the consummation for which we have
long labored, for which we have suffered defeat
without discouragement, which in its anticipation,
gave us a rallying cry in our day of triumph, and
which, with Democratic pledges and Democratic
success that our abondonment of the cause of the
principles upon which it rests means party perfidy
and party dishonor.

Our tOpic will be submitted to the conference
which embodies Democratic principle so directly
that it cannot be compromised. he have in our
platforms and in every way possible declared in
favor of the free importation of raw materials.
we have again and again promised that this should
be accorded to our peOple and our manufacturers
as soon as the Democratic party was vested with
the power to determine the tariff policy of the
country. The party now has that power. We are
as certain today as we have ever been of the great
benefit that would accrue to the country fram the
i auguration of this policy, and nothing has
occurred to release us from our obligation to
secure this advantage to our peOple. It must be

 

352. Cong. Record, 55 Cong. 2 Sess., p. 7711.
555. See Appendix J.

80

admitted that no tariff measure can accord with
Democratic principles and promises, or bear a
benuine Democratic Badge, t"at does not provide
for free raw materials. In the circumstances it
ray well excite our WODCGT that Democrats are
willing to depart from this the most Democratic

of all tariff principles, and that the inconsistent
absurdity of such a proposed departure should

be emphasized by the suggestion that the wool

of the farmer be placed on the free list and the
protection of tariff taxation be placed around the
iron ore and coal of corporations :nd capitalists.
How can we face the people after indulging in

such outrageous discriminations and violations

of principles. 554

hr. Wilson had "Persuaded Cleveland to let him use this letter
' 555
in tie hOpe of moving the Senate to favorable action"..

The report of the Senate conferees on the first conference
was submitted on July 19 and was tabled until the following
556
day. In the meantime news of Cleveland's letter as read by
nilson to the House had served the same end as a "brickbat
557
thrown into a nest of hornets". The behavior of the Senate
was not at all promising to those who honed for a peaceable
adjustment. Only a few Senators stood by the President of
558
whom were Vilas, Gray, and strange though it may seem, Hill.
Besides leading obstructionists Cleveland's letter had turnai
the Senators previously interested in compronise, including
Jones, Vest, and Harris, against him. They viewed the letter
as being an unwarranted attack "upon their personal and
559
political integrity" and were aflane with resentment. On
July 20 the report of the conferees, as well as the nessage

560
U
from the House asking for furt;cr conference, was presented.

 

554. Allen Nevins, "Grover Cleveland", pp. 555-557.
555. Ibid., p. 581.

556. Cong. Record, 55 Cong. 2 Sess., p. 775
557. Allen Nevins, "Grover Cleveland”, p. 5
558. Ibid.

559. Ibid. -
560. Cong. Record, 55 Cong. 2 Sess., p. 7755.

C0
[.1

Senator Hill of New York then made a motion that the Senate
recede on the amendments that had placed duties on bituminous
561
coal and iron ore. There was great laughter and not a little
indignation in both tre Senate and galleries, when hr. Hill
presented his motion. Hill referred to the letter from t-e
President, which Representative Eilson read to the House,
expressing agreement with the President that the country
562
needed duty—free raw materials. It was well known that hr.
Hill favored the elimination of the income tax provision of
the Bill so that he was forced to defend his stand, while at
the same time pledging his loyalty to the President, by
quoting fro: the previously mzntioned letter of the President
which read, "You know how much I deprecated the incorporation
565
in the proposed bill of tie income tax feature". hr. Hill,
likewise, quoted from Lresident Cleveland's famous Tariff
hessage of 1887, as well as from his Acceptance Jpeech of
564

1892 to clarify and lend weight to his remarks.

The debate on the report of the eegferees extended from
July 20 to July 27. On July 25 German launched on of the
bitterest attacks against Cleveland ever delivered by a
responsible Senator upon a President of his own party. In
referring to the letter he stated that it was one of the
"most extraordinary, unprovoked, and unwise communications
ever penned by a chief magistrate, and he further contended

565
that it was the product of dishonesty and duplicity. Although

 

561. Cong. Record, 55 Cong. 2 8:38., p. 7755. ”
562. Ibid., p. 7754.

565. Ibid.

564. Ibid.

565' Allen NBVinS,"Grover Cleveland”, PP. 581-552,

82

Gorman was the recognized leader of the insurgents, he was
never a leader on the floor of the Senate during the period
of the debate. In his address at this time he insisted that
a deeleted Treasury and an eager country awaited the speedy
566
passage of the Bill. He took pains to quote the Secretary of
the Treasury, Carlisle, in order to assure his colleagues
that the Senate amendments were consistent with Democratic
567
party promises. In answer to an inquiry by Senator Gorman
Senator Harris of Tennesee stated that the current press
report, indicating the President's willingness to agree to
the Senate amendments, if no better modifications could be
. 568
made, was a correct one. Senator Gorman then concluded by
569
pleading for no comprogise on the Senate amendments. There-
fore, the motion of Senator Hill to recede was rejected on
570
July 25 by a vote of 65 to 6. On July 27, the Senate decided
by formal motion to maintain its position and appointed the
same conferees for a Second conference. "Cleveland's letter,
essentially an appeal to public sentiment, had come, like
his tariff message of 1887, just a little too late. It had
all the desired effect in calling forth a burst of remonstrance
against the Senate obstructionists, but the time had passed.
. 571
when such a demonstration could do any good". "Democratic
State Conventions in Iowa, Indiana, Florida and Massachusetts

passed resolttions endorsing the letter; public meetings for

that purpose were held in haryland; and Governor hatthews of

 

566. Cong. Record, 55 Cong. 2 Sess., p. 7801.
567. Ibid., p. 7805.
568. Ibid., p. 7805.
569. Ibid., p. 7809.
570. Ibid., p. 7891.
571. Allen Nevins, "Grover Cleveland", p. 582.

85

Indiana declared that nine-tenths of the Democrats of his
572
state preferred no bill at all to the Corman Bill".

The report of the second conference coymittee was not
forthcoming until August 15, 1894, when Kr. Catchings of the
House Rules Committee presented a resolution to the House.
.which set forth:

Resolved, that after the adoption of this
resolution it shall be in order in the House to
move that the order heretofore made requesting a
Conference with the Senate on the disagreeing
votes of the two Houses on House Resolution 4864
be rescinded; that the Conferees heretofore appoint-
ed on the part of the House be discharged from
further duty in that behalf and that the House
recede from its disagreement to the Senate amend-
ments to said bill in gross, and agree to the
same. That after two hours debate on said motion
(which shall be indivisible) the vote shall be
taken without delay or other motion, general
leave to print is hereby gr nted for ten days. 575

The resolution also called for separate bills to put sugar,
574
0081, iron ore, and barbed wire on the free list. After

two hours of uneventful debate the Bill was passed by the
575
House with 188 yeas and 5 nayes.

On August the fourteenth theBill was signed by the
576
President of the Senate and was next submitted and signed
577
by the Speaker of the House on August the fifteenth.

It was quite natural to anticipate in the Wilson-Gorman

Bill of 1894 the realization of tariff reform, in as much as

 

572. Allen Nevins, "Grover Clevelafid", p. 582.
575. Cong. Record, 55 Cong. 2 Sess., p. 8468.
374. Ibid., p. 8469.

375. Ibid., pp. 8472-8473.

576. Ibid., p. 8475.

.L

377. Ibid., p. 9305.

84

tie Democratic party hid taken so definite a position on the
tariff. The tariff measure, as originally presented by the
Lays and Means Committee under the able leadership of Lillian
L. Wilson of west Virginia, incorporated Cleveland's tariff
iders as well as those presented in the Platform of 1892.

In the Senate, however, the Wilson Bill was revised to such
an extent thatit largely became for all purposes a new bill.
The original purpos; of the Wilson Bill to increase the revenue,
but dininish protection, was at least partially lost by the
'wholesale revisions carried through by the Senate. "Under
the guidance of Senator Gorman the bill was changed until the

protective elements fairly outweighed any principle of reform".

Certain feat res of the Republican MCKinley Act of 1890,
however, were abandoned by the new act, namely: (1) the
bounty or subsidy on American-produced raw sugar was with-
drawn, and (2) th: reciprocity feature, which had been insert-
ed with thepurpose of securing a larger share of the Latin

American trade, was also cast aside.

The McKinley Act of 1890 had established an average rate
of 49.5% which was a little more than the wartime level of a
generation before, but the actual degree of protection it
afforded certain industries was doubled since 1864. The

Wilson-Corman Act of 1894 brought back the duties to the
'579

I
.’

average level of the Act of 1885, or 39-9fi-

 

578. D. R. Dewey,"Financial History of the U. S. ", p. 456.
579. W. W. Jennings, "Economic Progress in the United States",
pp. 464-465. .

578

85

In revising the Wilson Bill the Senate restored many of
the intricate specific duties which the House had eliminated.
There WLS, however, one marked improvement over the thinley
Act in regard to the wool and woolen schedule. Paw wool was
now placed on the free list without any serious hardship to
the farmer. The Specific duties on woolens were also removed,
but the ad valorem rates were scarcely touched. In general
all the textile schedules were so ewhat lower than those of
the LcKinley Bill, but sorewhat higher than those of the 1885
measure. The duties on coal and pig iron were restored to
nearly fifty per cent of those in the thinley Act, but in
regard to pig iron this had little importance in as much as
the United States was independent of its importation. The
duty on steel rails was out fr‘m $15.44 to S7. 84 a ton; pig
iron was reduced from 86.72 to $4.00 a ton; tin ;late was

580
revised downward from 2.4 cents to 1.2 cents a pound. The
sugar interests in the long run virtually decided the duty
on refined sugar, while the 405 on raw sugar was about half
tie rate under the Act of 1885 or the bounty under the EcKinley
581 .
Act. These revisions on the sugar schedule allo ed a marmin

of tariff profit which had not been contemplated in the

original Wilson Bill.

In order to derive ample revenue to meet the critical
fiscal condition of the Treasury in 1894, as well as gain

the support of the POpulists on the tariff measure, the

 

580. W. W. Jennings, 0p. cit., pp. 464F465.
581. Ibid.

86

Democrats resorted to the income tax principle which had been
fitst employed by the Lincoln administration during the Civil
War crisis, but which had been abandoned as a federal tax
measure in 1872 with the repeal of the legislation. The
income tax provision of the Wilson-Corman Bill of 1894
provided tgat all incomes in excess of #4.000 were to bear a
582
tax levy at the rate of two per cent. This was to be declar-
ed unconstitutional shortly by an ultraconservative Supreme
Court in 1895, on the pretense th;t it was a direct tar and
therefore had to be apportioned among the several states in
accordance with the provisions of the Constitution, although
an earlier decision in 1884 by the Supreme Court had declared
. 585
the incore tax an indirect tax. The income tax provision
was vehemently denounced by its opponents "as inquisitorial,
perjury provoking, undemocratic, and unconstitutional, and
was called a discrimination against the well-to-do and a
_ 584
popular bid for support from tfie poor." It is thought that
the high limit of incomes to be taxed wrs due largely to the
585 _
influence of the Pepulists. This feature of the Wilson-Gorman
Bill was especially favored in the South and West, while Few
England, Pennsylvania, and Yew'York cast only five votes in
586

the House favoring it.

The Wilson-German Revenue bill was transmitted on August

15 to President Cleveland who permitted it to become a law

without his signature on August 28, 1894. President Cleveland

 

382. D. R. Dewey, op. cit., p. 456. ,

588. Allen Nevins, "Grover Cleveland", Appendix II.
584. W. W. Jennings, op. cit., p. 465.

585. Ibid.

586. Ibid.

87

explained his pocket veto dn a leiter to Thomas C. Catchings
of Mississippi by stating that he had heped the result of
their efforts for tariff reform woudd be of such a nature
that he coudd heartily endorse the tariff bill, but under
the circumstances he was determined to let it becone law
without his signaturejevThe House Bill followed the wishes
of Cleveland, but he had consented to vital amendments in
order to get the bill through the Senate with thehOpe that PP
the lost ground could be regained in the conference cor-ritteefl8
When the bill was in the Senate, he wrote his friend, Senator
William Vilas on July 25, that all who favored reform were

to aid in passixg the bill with the Senate amendments, but

to "take holdcafter the remission of the matter to the
conference"f89As early as February 25 Clefieland hnew that the
House Bill would be greatly endangered by the insurgent group

in the Senate as he had written to L. Clarke Davis of the

Public Ledger that he believed the right would eventually win,

 

but that he did not believe all who once wanted tariff reform
wanted it as much as their political interests led them to
proclainégoAt that tire Cleveland had yielded to the Senate
in the contest ov r the choice of a Supreme Court Justice as
he was aware that to prolong that contest night 8881 the fate
of the tariff bill‘f’cjl

During the days between the time the Bill was sent to

\ o
the Presedent and theiime it became law, the Freeident
\

 

587. R. N. hchlroy, "Grover Cleveland", pp. 115-119.
588. Allen Nevins, "Grover Cleveland", p. 565.

589. Ibid., p. 562.

590. Ibid., p. 568.

591. Allen Nevins, 0p. cit., p. 571.

88

received many letters urging him to sign or veto the Bill.
Among these was one from Senator Palmer who wrote in part
as follows:
Your message of 1887 made Tariff reform the

leading issue......The present Tariff bill contains

all that your true friends in Congress were able

to obtain......If you.....conclude to veto the bill

they can defend you.....If you sign the bill, you

thereby retain the leadership of the Democratic

party. The party can defend you and itself by

comparing the measure with the thinley Bill.....

The present Tariff bill is a Democratic measure. 592

Andrew Canegie also wrote to Uleveland urging him to veto
the bill in order that a new bill could be written that
would raise tariffs on luxuries used by the rich. He also
pointed to the fact that Cleveland had entered the tariff
reform battle when a surplus made it necessary, but since
that is no longer the situation Carnegie urged the President

595

to alter his views on tariff.v

In spite of the neculiar cirsumstances in which the
President found himself, he decided to allow the Bill to
become law without his signature. He opposed many of its
provisions and was convi ced that the government could tell
afford to lose the revenwe incident to permitting raw materials

594 . ‘

to be imported duty-free. Cleveland made no claim to be
better than his party, therefore, he would not disown the bill
by a veto, but all the things being considered he felt it was
right to withhold his personal approval by refusing to give

595
the measure his signature.

 

592. R. N. EbElroy, op. cit., pp. 114-I15.
595. Ibid., pp. 121-124.

594. Ibid., p. 108.

595. E. Stanwood, op, cit., p. 554.

IV

With the exception of a small group of "protectionists"
the Democratic Party had been consistently advocating tariff
reform as a party policy both before and after the Civil War
period. The grow h of a tariff reform element within the
Republican ranks, which gave rise to the short—lived liberal
Republican Party, undoubtedly revitalized the position of the
Democratic group until they again won control of the national
adminidistration in 1885. The fruitless efforts of the
Democrats in the Lorrison Bill of 18B4 and the hills Bill of
1888, discouraging as they must have been to the Democratic
tariff reformers, seem to have girded them for the realization
of their tariff program wfen Grover Vleveland c:ue to the

Presidency for a second term in 1895.

The passage of the thinley Tariff Act of 1890 during the
Republican administration of Benjamin Harrison had aroused
sharp onposition outside of Uongress and had found expression
in the Vongressional elections of 1890 which resulted in the
return of a most substantial majority of Democrats in the
House and a loss of eighty-eight seats by the Republicans.

The sharp upturn in retail prices as well as the marked decrease
in importations were both attributed to the thinley measure.
Public opinion had turned decidedly against the high protective
wall which the Republicans had raised, and that opinion was
dominant between the years of 1890-1892. hhile it is always
dangerous to account for the election of a President on a

single plank of a party platform, especially when there are

90

several issues of major imyo tance before the electorate, yet
it may be said pith a degree of certainty that the alection

of 1892, which involved the tell-prot cted steel industry of
the-Carnegie Company, did much in arousing public opinion
favorable to labor and undoubtedly turned many votes away from

the party of high protection.

The Wilson-Gorman Sevenue Act of 1894 was passed by a
Democratic Uongress at a time when that party had taken a
most definite position on the tariff issue during the campaigns
for the previous eight years. The rapidly changing economic
conditions between tte Election of 1892 and the introduction
of the hilson Bill of 1894 may have caused a change in public
opinion less favorsble to the program proposed. Wherefore,
since the basic features of the tariff reform did not come to
be included in the wilson-Gorman Act, the ques ion arises as
to how far public opinion in 1894 was willing to embrace the
proposals presented in the Wilson Dill. As a cansequence of
the Panic of 1895 there was shifting of public Opinion which
in 1892 had largely supported both tariff revision and a
program of sound money. shortly Cleveland Tas forced to use
his power over patronage in order to fulfill his sound money
promise by obtaining a repeal of the dherman silver Purchase
Act of 1890 after calling a special session of Uongress for
that purpose. The period of economic depression lasting from
1895 to 1897 came at a most inappropriate time for tie

initiation of tariff reform on the Democratic pattern. As the

91

years went by many peOple experienced the privations that
always come during a period of economic recession, and which
always give Opportunity for explanation as well as criticism
of the existing economic order. The opponents of tariff
reform were positive in their declarations that the depression
was being prolonged becatse of the undertainty of the propos-
ed changefi in the tariff. hhen the Wilson Bill was introduc-
ed in the House the public was in sympathy with its purpose
and provisions, but the length of tine consum d in the
consideration of it had tended to endourage the people to
entertain any legislation that would alleviate the depressed.
economic conditions. In short by the time the Senate was
prepared to vote on the much revised House measure public
interest had shifted from insistence on tariff reform to the
demand of an adequate law to meet the distressing fiscal

situation.

It is logical at this point to question the desirability
of a tariff reform program during a period of economic recession
and especially at a tixe when the Treasury of the United
States was confronted with theproblem of enlarging deficits
and the dwi dling of the gold reserve far below the minimum
established by the Besumption.hct of 1875. From the point of
view of sound finance it seemed imperative that the existing
revenue laws should be maintainoa, if not augmented, in order
to meet the crises. In the light of such facts Congress was
inclined to b:co e more hesitant in revising the tariff flown-

ward and in substituting the always unpOpular internal taxes

upon the electorate in order to realize the necessary revenue.
It appeared that the longer Congress hesitated the longer the
depression continued and the more public opinion suung toward
any adequate tariff measure regardless of tariff reform

principles.

A close examination of the hilson-Gorman Act reveals many
compromise provisions which were necessary to secure the
passage of the measure. In the sugar provisions may be found
the eXQlanation as to why the Senators from Louisiana were
willing to support the Bill, as well as the support from the
several Senators of the Western beet-sugar producing states.
The protection afforded the linen collar and cuff industry of
Troy, New York, ras inserted to win the vote of Senator
Murphy of that state, while coal and iron received the necessary
attention in order to win the votes of the Senators from Lary-
land, Alabama, West Virginia, and Ohio. Raw wool was allowed
to remain on the free list as it was apparent that no effective
lobby was present to prevent it. Theincome tax enlisted the

four Populist Senators.

Even though the Revenue not of 1894 failed to achieve
any degree of tariff reform through its many provisions, yet
it did effect a lower income for the Gov-arnment through the
revised import duties. The loss of in ome, however, largely
came as a result in the decline of our importations during the
depression years. In order to meet the anticipated reduction
of income through the source of customs duties, the act of
1894 provided an inco e tax feature as a supplementary
provision. There were three definite aims to be realized

through the income tax feature, namely: (1) the application

93

of a canon of taxation that it was a just and equitable tax,
(2) the Support of the Pepulist vote in Congress, (3) the
fiscal purpose of obtaining sufficient incone for the Govern-
ment along with the tariff duties--the incidence of taxation
was placed on thise persons best able to bear it. Whether or
not it was a wise principle for the Democratic party to
insert in the Act of 1894 may be open to question. Several
criticisms were offered by leading Democrats against the
income tax provision. To some Democrats the idea of the
income tax ves too closely associated With the "radicalism"
of the Pepulist Platform of 1892, while to others it seemed
an unwarranted discrimination against the well—to-do persons
if not a deliberate bid for the support of the masses. There
were, however, some persons, who probably would have been
unwilling t3 1ave sunported such a measure during normal times
but preferred it in meeting a fiscal energancy to other types

of internal taxes.

When it was revealed that the Democratic members in
Congress favored tariff reform in general but were at the
same time seeking protection for vested interests locsted
within their districts, then the sincerity of the Democratic
Party in regarc to tariff reform was seriously questioned.
Grover Cleveland in his letter to L. Clarke Davis of the

Public Ledger was frank in his admission that he did not

 

believe the sincerity of all Demo rats who proclai ed their
396 '
interest in tariff reform.

 

396. Allen Nevins, "Grover Cleveland", p. 568.

94

The Tariff Act of 1894 as actually enacted seemed to
prove that the Democratic Party stood for lower tariff rates
rather than for a covprehensive program of tariff reform.
Cleveland sized up the situation remarkably well when he
stated, "every sincere tariff reformer knows that these bill
in its' present form and as it will be submitted to the
conference falls far short of the consummation for which we

397
have long labored."

7r?

what Senators had.a large th in determining the final

Fc5
C)

provisions of the set? In the Senate 1r. Voorhees of Indiana,
Chairm n of the Finance Committee, desired the pasSage of the
Wilson Bill as it came from the House, while Senators Vest of
Missouri, Jones of Arkansas, hills of Texas, Vilas of Wisconsin,
and Palmer of Illinois heped for lower rated through the
Senate's revisions. in sharp contrast to the reform element

in the Senate was the active, almostmilitant, group of

Senators who represented varinus vested interests. The latter
group was led by Senator German of'haryland whose name was
ultimately attached to the Bill as it left the Senate, in as
much as his pro osals rather than those of the Chairman
Voorhees were incorporated in the measure. To Senator Jones
must be given credit for the tart he took in determining just
wrat compromises were necessary in order to secure the sufficient
number of votes for the peerage of the Bill. On Senators

Jones, Gorman, Hill, Brice, and the Four Populist Senators

'the resgonsibility for getting the measure through the Senate

largely rested.

 

397. Allen Nevins, "Grover Cleveland”, p. 355.

What part did pressure groups play during the revision

of the Bill in the Senate?
were motivated by the interests
less; Such vested interests as
were well served by able men in

the Wilson Bill lingered in the

interests were manipulating the

It is clear that certain Senators

they represented more or
sugar, coal, and iron ore
the United States Senate. As
Senate rumors grew that the

Senate. Such a charge found

ready acceptance by the larger part of the American public

because of similar eXperience with previous tariff measures

and because t;e Sugar Trust had
generally feared monOpolies.

_rovided to reveal any such

VIE 8

Committee consisting cf two Democrats,

been one of the first and most

A Congressional investigation

manipulatisns. The Senate

two Republicans, and

one Popoulist rendered a doleful report-in which it was

contended that at least one lobbyist had affered large amounts

of money for the pu pose of deferting t*e inco e tax provision
of the Bill. The testimony offered the Uommittee by henry
0.

indicated that
ing largely to
the other with
Besides officers of

be served.

Havemeyer, p esident of the nmerican Sugar Refining Company,
his co pany had made a practice of contribut-
the campaign funds of one political party or

the obvious purpose that its interests reuld

that organization had been in

hashington throughout the period of thepending legislation

for the sole purpose of can

The general impression that the

interests had been paying the campaign expenses

wring with Senators

and Committees.
report made was that vested

of eoliticians

and that the politicians in return had permitted interests to

frame tariff schedules.

Likewise there is evidence revealing the willingness of
at least two Senators to Speculate in sugar stock vhile the
Senate's Deliberations on the tariff schedules were in progress.
Senator euay of Pennsylvania openly admitted that he had
bought sugar stoc: when it was low well knowing that the sugar
amendment would ultimately raise the price. Senator McPherson
of hew Jersey admitted buying sugar stock wien the price on
the nernet was deflated fo” the fear that the bounty would be
removed Lnd no protection substituted to keep out foreign
sugar. He admitted th:t before he had been able to sell he

598
had realized several hundred dollars by the transaction.

During tie entire period of tpe battle for tariff reform,
Cleveland maintained the position he ham previously taken in
his famous Message of 1587. Just as in 1887 he hrd cone to
realize that his tariff views had come too late for a popular
campaign for reform, so now in 1894 he realized that his
argument with the Sqnate over theappointment of a Supreme
Court Justice was making personal enemies whose influence
was likely to defeat his tariff reform proposals later. Again
Cleveland erred when he favored the passing of the Senate
amendments with the hOpe that they might be altered subsequently
in the conference 0 nmittee, because in so doing he delayed
his appeal to the public Lads through his letter which hr.
Wilson later read to.tne House. That famous letter care too
late to allow public opinion to force the Senate in line.

Nevertheless, in Spite of those blunders it can be accurately

 

598. Allen hevins, "Grover’bloveland", P. 573.

stated that V'leveland Lt no time fo seek his position for
tariff reform. Cleveland M88 willing to pernit the measure
to become a law in so far as it actually lowered the tariff—
duties, but he refused to give the hill his personal approval
by signing it in as much as it was not in Leeping With his
tariff reform ide 3. His characterization of the Apt of

1894 as a pi:ce of "party perfidy'and party dishonor" simply
videned the breach between the executive avd tie Democratic

party leaders.

Cleveland's refusal to veto the bill may seem to indicate
his aiswer to the query as to whether or not it would have
been better to have c ntinued with the LcKinley Act of 1890.

0

One might conclude that an outri ht veto would certainly have
harmed his party no more than the Act itself. On theother
hand the ocntnuance of the previous Republican tariff measure
might have been interpreted as a distict loss to the prestige
of tie party whose leaders were at odds among themselves as
well as with their executive -ver a major econjnic issue.'
Neither thethinley Act of 1590 nor the nilson-Gorman Act of
1894 pleased Grover Vleveland, but the condition of the Treasury
»made the prohibitive duties of the LcKinley not during a
period of economic recession less acceptable than the defect-
ive Wilson-Corman Act of his own party's making. He there-
fore accepted t e new Bill as beirg the lesser of the two evils.

The Wilson-Gorman Revenue Act very shortly proved itself
inadequate as a revenue measure. while the constitutionality

of the incore tax provision of the Act had been sesamed to have

98

been settled by previ us Supreme Court decisions, yet it was
not until the Supreme Court reversed its opinion in the case

of Springer vs. United States (1880) by declaring in the case

 

"I

of Pollock X§° farmer's Loan and Trust Company (1895) the

 

income tax provision unconstitution in that being a direct
tax it must be apportioned :ronp the several states on the

basis of numbers.

Not only was the bill considered as a decisive repudiation
of Democratic tariff reforners, but it was also considered as
a direct expression of defeat for the agrarian reformers of
the test. Senator hills of Texas declared that there were
not a thousana people in the United States tho were satisfied
399
with the not in its final form. The American farmer's hepes

for a ssible return of a more profitable agriculture by a

drastic revision of tariff duties were made less likely when
he learned that theincone tax provision had been thrown but
by the Court as unconstitutional. Plutocracy of the east

seemed to be still in the fav red position.for the further

exploitation of the agrarian group.

The Democrats also were forced to accept the political
effects which always accompany unpopular legislation. The
Act went into effect on August 24, 1894 just a few wneks
before the Congressional elections of November. With the
exception of its so-thern representation in the House the

Democrats were just about removed from that chamber so that

 

399. Allen Nevins, "Grover Cleveland", p. 588.

99

when the New Congress met a Républican orgcnization Wzs effect—
ed. Tariff reform becare a lost on se with the subsequent
Dingley Tariff Act of 1897, which going into effect on the

davn of a new era of businsss prosperity asswred the Republicans
of political dorinetion and the EainTe"ance of high protective

tariffs.

 

APPJHDIX A

l

The affect of the Civil War on “ariff Rates

 

 

 

 

Commodity Merrill Tariff Act of July, Act of June,
, of 1861 1862 1864

Pig Iron $ 6. Ton h 6. Ton 2% 9. Ton
Iron rods 20. Ton 25. Ten 30. Ton
Steel rods 35. Ton .
Ingots 30. Ton 45. Ton
Salt . 04 bu. .18 cwt. .18 cwt.
Silk 30% 40%
Wool 160. Ton & 8% 200. Ton a; 10%p263. Ten 85 1371'

 

 

 

 

APPENDIX B
2
United States Imports and Exports 1870-1875
Fiscal year
Ending Exports Imports

June 30,
1870 $393,000,000 , ,
1871 443,000,000 520,000,000
1872 444,000,000 627,000,000
1873 522,000,000 642,000,000
1874 586,000,000 567,000,000
1875 513,000,000 533,000,000

 

 

 

 

’—__‘_

l. D. R. Dewey, op. cit., p. 266.
2. Percy Ashley, "Modern Tariff History", p. 209.

 

 

1TH

APP

_ul‘u

DIX g

l

Wages in Protected and Non-protected Countries

 

 

Type '
of Protected Non-protected

’Labor Germany France Belgium England
Bricklayer $3.45 $4.00 $6.00* $8.12
Mason 4.00 5.00 6.00 8.16
Carpenter 4.18 5.42 5.40 8.25
Painter 4.60 4.90 4.20 7.25
Plasterer 4.35 5.40 8.10
Blacksmith 3.90 5.40 8.12
Cabinet—

maker 4.95 4.80 7.70
Common

labor 2.60 3.00 5.00

 

 

 

 

 

 

 

APPENDIX 2

2
Comparison of English and American Wages With the Cost of Clothing

 

 

 

 

 

 

 

 

 

 

Occupation Wages Prices

Americann English En lish American Articl
Baker $2.04 $1.205 . 0 81.25 Shirts
Blacksmith 2 . 10 i 1 . 60 U 1. oo ' . '75 Drawers
Cabinet Maker 2.41 1.03 i .25 .30 Hose
Common laborer 1.71 .88 2.00 2.00 Boots ,
Machinist 2.71 1.50 1.50 1.25 Shoes
Iron Moulder 2.65 1.65 1.00 1.50 Hats
Painter 2.82 1.48 12.50 15.00 _Suits
Plumber 3.48 1.70 .20 .25 Caps

 

 

 

1. Cong. Record, 53 Cong.2 Sess., p. 509.
2. Ibid., p. 720.

APPBKDIX p

l

Bryan's Estimate of the Reduction of Taxation to be
Bffected by the Wilson Bill of the House

Source

Amount

 

 

Decrease in import duties
Price reductions
Total tax reduction

Per capita reduction
Per family reduction

a 75,000,000
300,900,900

 

 

9575,000,000

$5.00
25.00

 

 

 

APPENDIX E

Comparison of Wages Paid to Value of Goods Produced

2

 

 

Value of Number of ‘Productf Annual
Country product employees per

(in millions) .(in millions) hand we a .
United Kingdom ‘$4,100,000 5,189 8790 $254
France 2,425,000 4,443 545 175
Germany 2,915,000 5,350 545 155
Russia 1,815,000 4,760 381 120
Austria 1,265,000 3,090 409 150
Italy 605,000 2,281 265 130
Spain 425,000 .1,167 364 120
Belgium 510,000 953 545 165
Switzerland 160,000 370 433 150
United States 7,215,000 3,837 1,880' 347

 

 

1. Cong. Record, 53 Cong. 2 Sess., App., p. 229

 

2. Ibid., p. 4020

 

 

 

APPENDIXIQ

Estimated Income and Expense of the United States Govern-
ment for the Year of 1895 Based on the Lilson-Gorman Revenue
Act, as Presented by Senators Voorhees and Uorman

 

Items

Income
by
Revenue

EXpenses
and
Deductions

Surplus

 

Voorhees' Estimate:
Internal revenue
,lncome tax

33pirits

“Cards

Customs
miscellaneous
Postal service
Total Income

 

Civil Service

her Department

Navy Department

Indians

Tensions

Enterest

Postal deficit
and expense

Total exoense

Esti;ated Surplus

m160,000,000
30,000,000
20,000,000
3,000,000
163,361,000
20,000,000
84,427,766

 

480,788,766

390,000,000.00
$5,000,000.00
33,000,000.00
9,000,000.00
145,0“0,000.00
29,000,000.00

90,399,485.33

 

451,390,425.33

 

 

German's Estimate:

Total income as

above

Sugar tax by Sentte
3.7.718 ndment

Total income

Total expense includ-
ing Pension reductions

Surplus (with income
tax)

Deduction of inco;e
tax

Surplus without
income tax

 

 

480,788,766

1 329 067

462fII7f533

 

420,775,219

30,000,000

 

61,342,614
2

31,342,614

 

 

l. Cong. Record, 53 Cong. 2 Sess., p. 3

2. Ibid., D. 661.9.

'.:'91 o

APP 1;- ND 1x 1;;

Petition garding the Income Tax Law as Present—
b

Do
ed 7 Senator Hill of New York 1

We the undersigned citizens of the United
States and members of the Democratic Party respect-
fully petition the Federal Senate to strike out
the clause in the pending tariff bill which
provides for an income tax.

In subnitting this petition we not only
plead for the continuation of the system of tax-
ation which has endured without interruption in
times of peace since the foundation of the
Government, but we claim a right to protection
against the establishment of the different system
proposed injuring to us through the fact of the
hemocratic success in 1892.

At the last general election an income tax
was proposed, not by the Democratic pa ty but by
two organizations of recent date, The Populists
and Social Labor parties, each essentially
communistic in its character and purposes. ‘While
we do not enter upon a discussion of the justice
or injustice of an income tax or of its merits or
demerits as a feature of our Federal Government
we submit that the proposition for its enactment
at this time comes as a political surprise with-
out warrant and without authority proper to the
introduction of a policy so revolutionary.

without making an effort to add to our number
appearing before the Senate as petitioners, we
subgit this petition for protection against the
GHECtTeDt of an income tax in the conviction that
we demand only what is our moral and political right
under the last natdonal election.

Respectfully,

h. B. Cutting
John H. Inman
Alex. 5. Orr
Evan Thomas
William Sanway
Louis Windnuller
J. Edward Simmons

1. Cong. Record, 53 Cong. 2 Sess., p. 6611.

 

 

APPEND IX 1

Comparison of Tax Burden upon the

1

Rich and the Poor

 

 

 

 

 

 

 

 

 

 

 

 

 

\ P Assessed iPer
Property of the Rich Real Value
- Value cent
Title and trust building , , , 0
Chamber of Commerce 2,250,000 225,000 10
Rand McNally 1,600,000 160,000 10
Haymarket Theater 600,000 41,700 6
Franklin Mac Veigh 175,000 16,750 9
Plaza Building 600,000 30,060 5
I
Average per cent of taxes paid 8%
APPENDIXII
Assessed' ‘ Per
Property of the Poor Real Value
Value cent
‘T1.1ynch $2,000 15 500 25.
E. Young 4,000 1,600 40
H. Seeberger 7,000 1,526 21
F. A. Feder 6,000 1,050 17
R. V. Peters 9,500 2,384 25
W. A. Hendrie 7,000 1,450 20
Average per cent of taxes paid 24%

 

~~ "_-

 

l. Cong. Record, 53 Cong. 2 Sess., pp. 6687-6688.

 

 

'0‘

APPEITD IX g

The Letter from Grover Cleveland to William L. Wilson

Washington July 2, 1894

The certainty that a conferaice will be ordered between
the two houses of Congress for the purpose of adjusting
differences on the subject of tariff legislation makes it
also certain that you will be again called on to do hard
service in the cause of tariff reform.

My public life has been so closely related to this subject,
I have so longed for its accomplishment, and I have so often
promised its realization to my fellow-countrymen as a result
of their trust and confidence in the Dexocratic party, that
I hope no excuse is necessary for my earnest appeal to you
in this crisis you strenuously insist upon party honesty and
good faith and a sturdy adherence to Democratic principles.

I believe these absolutely necessary conditions to the
continuation of Democratic existence.

I cannot rid myself of the feeling that this conference
will present the best, if not the only, hope of true Democracy.
Indications point to its action as the reliance of those who
desire the genuine fruition of Democratic effort, the fulfill-
ment of Democratic pledges, and the redemption of Democratic
promises to the people. To reconcile differences in the
details comprised within the fixed and well-defined lines of
principle will not be the sole task of the conference, but,
as it seems to me, its members will also have in charge the
question whether Democratic principles themselves are to be
saved or abandoned. There is no excuse for mistaking or
misapprehending the feeling and the temper of the rank and
file of the Democracy. They are down cast under the assertion
that their party fails in ability to manage the Government,
and they are apprehensive dm their fear that Democratic
principles may be surrendered.

In these circumstances they cannot do otherwise than to
look with confidence to you and those who with you have
patriotically and sincerely championed the cause of tariff
reform within Democratic lines and guided by Democratic
principles. This conference is vastly augmented by the action
under your leadership of the House of Representatives upon
the bill now pending.

Every true Democrat and every sincere tariff reformer
knows that this bill in its present from as it will be submitted
to the conference falls far short of the consummatdon for
which we have long labored, for which we have suffered defeat
without discouragement, which, in its anticipation, gave us
. a rallying cry in our day of triumph, and which, in its promise

 

of accomplis ment, is so interwoven with Democratic pledges
and Democratic success that our abandonment of the cause of
the principles upon which it rests means party perfidy and

party dishonor.

Our tOpic will be submitted to the conference which
embodies Democratic principles so directly that it cannot
be compromised. We have in our platforms and in every way
possible declared in favor of the free importation of raw
materials. We have again and again promised that this should
be accorded to our peogle and our manufacturers as soon as
the Democratic party was invested with thepower to determine
the tariff policy of the country. The party now has that
power. We are as certain today as we have ever been of the
great benefit that would accrue to the country from the
inauguration of this policy, and nothing has occurred to
release us from our obligation to secure this advantage to our
people. It must be admitted thatno tariff measure can accord
with Democratic principles and promises, or beer a genuine
Democratic badge, that does not provide for free raw materials.
In the circumstances it may well excite our wonder that
Democrats are willing to depart from this the most Democratic
of all tariff principles, and that the inconsistent absurdity
of such a proposed departure whould be emphasized by the
suggestion that the wool of the farmer be placed on the free
list and theprotection of the tariff taxation be placed
around the iron ore and coal of corporations and capitalists.
how can we face the people after indulging in such outrageous
discriminations and violations of the principles?

It is quite apparent that this qu stion of free raw
materials does not admit of adjustment on any middle ground,
since their subjection to any rate of tariff taxation, great
or small, is alike violative Democratic principle and Democratic
good faith.

I hope that you will not consider it intrusive if I say
something about another subject which can hardly fail to be
troubleso e to the conference. I refer to the adjustment of
tariff taxation on sugar. Under our party platform, and in
accordance with our declared party purposes, sugar is a
legitimate and logical article of revenue taxation. Unfortunatel',
however, incidents have accompanied certain stages of the
legislation which will be submitted to the conference that have
aroused in connection with this subject a natural Democratic
animosity to the methods and manipulation of trusts and
combinations. In confess to sharing in this feeling; and
yet it seems to me we ought, if possible, to sufficiently
free ourselves from prejudice to enable us cooly to weigh the
considerations which in formulating tariff legislation ought
to guide our treatment of sugar as a taxable article. While
no tenderness should be entertained for trusts, and while I
am decidedly opposed to granting them under the guise of
tariff taxation any opportunity to further their peculiar
methods, I suggest that we ought not to be driven away from

 

the Democratic principle and policy which lead to the taxation
of sugar, by the fear, quite likely exaggerated, that in
carrying out this principle and policy we may indirectly and
inordinatly encourage a combination of sugar-refining interests.
I know that in present conditions this is a delicate subbect,
and I appreciate the depth and strength of the feeling which
its treatment has aroused. I do not believe we should do

evil that good mey come, but it seems to me that we should

not forget that our aim is the com lation of a tariff bill,

and that in taxing sugar for pr:pee purposes and within
reasonable bounds, whatever else may be said of our action,

we are in no danger of running counter to Democratic principle.
With all there is at stake, there must be in the treatment of
this article some ground upon which‘we are all willing to
stand, where toleration and conciliation may be allowed to
solve the protlem, without demanding the entire surrender of
fixed and conscientious convictions.

I ought not to prolong this letter. If what I have-
written is unwelcore, I beg of you to believe in my good
intentions. In the conclusions of the conference touching
the numerous items which will be considered, the people are
not afraid that their interests will be neglected. They knaw
that the general result, so far as they are concerned, will
be to place lome necessities and comforts easier within their
reach and to irsure better and surer compensation to those
who toil.

we all know that a tariff covering all the varied interests
and co ditions of a country ah vast as ours, must of necessity
be largely the result of Lonorable adjustment and compromise.

I expect very few of us can say when our measure is perfected
that all its features are exactly as we would prefer. You
know how much I deprecated the incorporation in the proposed
bill of the incone tax feature. In matters of this kind,
however, which do not violate a fixed and recognized Democratic
doctrine, we are willing to defer to the judgment of a majority
of our Democratic brethren. I think there is a general
agreement that this is party duty. This is more palpably
apparent when we realize trat the business of our country
timidly stands and watches for the result of our efforts to
perfect tariff lerislation, that a quick and certain return

of prosperity waits upon a wise adjustment, and that a confid-
ing people still trust in our hands their prosperity and well—
being.

The Democracy of the land plead most earnestly for the
speedy com lation of the tafiff legislation which their
representatives have undertaken; but they demand not less
earnestly that no stress of necessity shall tempt those they
trust to the abandonment of Democratic principles. 1

 

1. Allen Yevins, "Grover Cleveland", pp. 355-357.

PRImfiRY SOURCES

 

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\O

 

_- a.“

 

 

 

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& co.

 
       

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\ FINDS 'Q
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