CHAPTER XV

THE TARIFF OF 1897

[THE DINGLEY BILL]

Nelson Dingley [Me.] Introduces a Tariff Bill in the House-Debate: in Favor, Mr. Dingley, Albert J. Hopkins [Ill.], Jonathan P. Dolliver [Ia.], Gen. Charles H. Grosvenor [O.], Joseph H. Walker [Mass.], John Dalzell [Pa.], Sereno E. Payne [N. Y.]; Opposed, Gen. Joseph Wheeler [Ala.], John C. Bell [Col.], Edward W. Carmack [Tenn.], John L. McLaurin [S. C.], James G. Maguire [Cal.], John Sharp Williams [Miss.], Benton McMillin [Tenn.], Champ Clark [Mo.], Jerry Simpson [Kan.], John M. Allen [Miss.]-Bill Is Passed-Nelson W. Aldrich [R. I.] Introduces the Bill in the Senate-Debate: in Favor, Sen. Aldrich, Richard F. Pettigrew [S. D.]; Opposed, Donelson Caffery [La.], Roger Q. Mills [Tex.], Benjamin R. Tillman [S. C.]-Bill Is Passed with Amendments-Conference Report; Debate in the House: in Favor, Mr. Dingley, Mr. Payne; Opposed, Joseph W. Bailey [Tex.], Mr. McMillin-Report Is Adopted by House and Senate-Bill Is Signed by the President.

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RESIDENT WILLIAM MCKINLEY convened Congress in special session on March 15, 1897, to revise the tariff. On March 22 a bill to this end was introduced in the House by Nelson Dingley [Me.], chairman of the Committee on Ways and Means.

THE DINGLEY TARIFF BILL

HOUSE OF REPRESENTATIVES, MARCH 22-31, 1897

Mr. Dingley supported the measure.

In this revision the committee have endeavored to discard mere theories, and have addressed themselves to the framing of a practical remedy, at least in part, for the ills which have for so many months overshadowed the country.

It is a "condition and not a theory which confronts us." Qur problem is to provide adequate revenue from duties on im

ports to carry on the Government, and in imposing duties to secure this result to so adjust them as to secure to our own people the production and manufacture of such articles as we can produce or make for ourselves without natural disadvantage, and thus provide more abundant opportunities for our labor. For rest assured that no economic policy will prove a success unless it shall in some manner contribute to opening up employment to the masses of our people at good wages. When this shall be accomplished, and thus the purchasing power of the masses is restored, then, and not until then, will prices cease to feel the depressing effect of underconsumption, and the prosperity of our people rise to the standard of 1892.

The great secret of the prosperity of the United States up to 1893, especially after the resumption of specie payments in 1879, was the fact that our people were all at work at good wages, and thus had large purchasing power. It was this large consuming and purchasing power that made our markets the best in the world, that maintained prices at fair rates-in short, that made this country the admiration and envy of the world.

When, by first the anticipated and then partially realized overthrow of protection, industries were arrested, machinery stopped, wages reduced, and employees discharged, through the transfer of the producing and making of part of what we had previously made to other lands, then the purchasing power of the masses was diminished and the demand for products decreased, and this gorged the markets, abnormally lowered prices, and prostrated industries and business.

Mr. Chairman, the past four years have been enlightening, especially to candid investigators of economic problems. We have been attending a kindergarten on a gigantic scale. The tuition has come high, but no people ever learned so much in so brief a time. [Laughter.] Hereafter theories, preached in however captivating language, will have to give way to the teachings of experience.

It has been the favorite assumption of some theorists that revenue and protection in the same tariff schedule are impossible. But we have had, in the past seven years, in the contracted working of the protected wool and woolens schedule of the tariff of 1894, a most striking demonstration otherwise.

By placing wool on the free list and reducing the duties on manufactures of wool, the treasury lost $21,000,000 of revenue, our farmers lost a market for the 80,000,000 pounds of wool which they raised in 1892 in excess of what they raised in 1896-97, as well as nearly 10 cents per pound in price, involving

a loss to them of nearly $30,000,000 per annum already on this one farm product, and our manufacturers and their workingmen lost a market not only for the goods which increased foreign imports had supplanted, but also a market for goods which the farmers and masses of the people were able to purchase in 1893, but which they could not buy in 1896 because of a loss of employment and purchasing power.

Beyond this it has been demonstrated that by placing wool on the free list, to the injury of the farmer and manufacturer, we have not been thereby enabled to increase our exports of manufactures of wool (as was claimed would be the case), but we have greatly increased the use of shoddy by diminishing the purchasing power of the masses and thus compelling them to seek the cheapest cloths. In 1893 less than 300,000 pounds of shoddy and woolen rags were imported, but in 1896 the imports of these exceeded 11,000,000 pounds.

If it be claimed that this has reduced the cost of clothing to the people (rather a surprising position for men who have been bewailing the fall of prices), the reply is obvious that it has done so only in appearance, because in point of fact the masses, deprived of work and wages by what has given foreign manufacturers the making of so large a part of our goods, have found it harder to buy their clothing than they did before. The true test of real cheapness is always what any article costs in labor, not in dollars. Nothing is cheap that is thus made by degrading man. Nothing can be cheap in the last analysis when it is thus made by purchasing abroad what we can produce or make without natural disadvantage, when such purchase necessitates the idleness of many of our own workingmen.

This is the lesson taught by the bitter experience of the past four years.

Profiting by this experience, the Ways and Means Committee in framing the pending bill have taken wool from the free list, where it was so unjustly placed by the present tariff, and have restored it to the dutiable list at the same rates as it bore in the tariff of 1890 (11 cents per pound for class 1, clothing wool, and 32 per cent. on the great body of carpet wools); and have also restored the same compensatory duties on manufactures of wool as provided by that act, in order to place the manufacturer of wool on the same basis as to his material as his foreign competitor, as is always necessary in order to provide a market for our domestic wool. A few kinds of wools heretofore classed as carpet wools, which are used for clothing purposes, have been transferred to clothing wools. To this have been

added in a partly specific form duties practically equivalent to the ad valorem duties imposed by both the tariff of 1890 and 1894 as a protection to the wool manufacture.

This, it is believed, will greatly aid the wool grower, stop the further depletion of our flocks, and presently regain what we have lost in the past four years, and ultimately result in the home production of nearly all the clothing wool that we require. It will also greatly encourage the wool manufacturing industry, which has suffered so severely under the tariff of 1894, by giving a partly specific duty on imported wool goods, and also by increasing the purchasing power of the farmers. At the same time it will ultimately increase the revenue from duties on wool and woolens not less than twenty-five millions per annum.

The duty on sugar has also been increased, both for purposes of revenue and also to encourage the production of sugar in the United States, and thereby give to our farmers a new and much-needed crop. We now pay foreign countries about $84,000,000 for imported sugar, notwithstanding the abnormally low price, and this sum will soon be increased to $100,000,000. The success which has attended the growing of sugar beets and the production of beet sugar in California and Nebraska in the past five years, not to mention the progress in the production of cane sugar in Louisiana, has made the problem of producing our own sugar no longer doubtful; and, now that we must have the increased revenue from sugar for the present, a favorable opportunity presents itself to give this boon to our agriculture.

There is little doubt that the increase of nearly three-fourths of 1 cent per pound in the duty will be sufficient to gradually develop beet-sugar production in this country, and that for the present it will increase the annual revenue twenty millions.

An increase has been made in the duty on flax and hemp, as well as jute and manufactures thereof, to practically the same as that borne by cotton goods. This will both increase the revenue for the time being and ultimately develop flax cultivation and linen manufacture here.

For the most part otherwise the increase of duties in the pending bill to the figures of the tariff of 1890 have been in the schedules or paragraphs covering luxuries like tobacco, liquors, silks, laces, etc., which, being articles of voluntary consumption, are always regarded as objects which will bear the highest duties. The exceptions are the earthenware and glass schedules and the agricultural schedule, on which the duties have been placed the same as in the act of 1890, because no other rates seemed to be protective.

The iron and steel schedule, except as to some advanced products, has not been changed from the present law, because this schedule seemed to be one of the two of the present law which are differentiated from most of the others and made in the main protective. The duty on tin plate, the manufacture of which was so successfully established under the tariff of 1890 by the duty of 2 1-5 cents, has been increased from the 1 1-5 cents duty of the present law to 12 cents, which it is believed will prove as protective as the higher rate of 1890, now that the industry has been so successfully established.

The same is true of the cotton schedule, which has been left as it was placed in the act of 1894 for the most part, with some needed advances on fine goods.

In all the other schedules the rates proposed in the pending bill are between the rates of the tariff of 1890 and the present law.

There have been transferred from the free list of the tariff of 1894 to the dutiable list of the proposed bill not only wool, lumber, salt, burlaps, bags, cotton bagging, and cotton ties, which should never have been made nondutiable, but also argols, crude opium, asphaltum, chicle, paintings, and statuary, except when imported for free exhibition by an established gallery or institution; straw ornaments, etc., which under existing conditions ought to contribute something toward the much-needed additional revenue.

Here Mr. Dingley explained why the committee had placed paintings and statuary upon the dutiable list. This was done, he said, to correct several abuses, such, for instance, as the importation of valuable fans under the guise of paintings.

The committee, he said, had found it also necessary to modify the provisions relating to the free admission of clothing and personal effects of tourists, serious abuses having arisen under the existing law.

Mr. Dingley stated that the increase of revenue under the bill was estimated at $113,000,000 a year.

On the question of reciprocity he said:

The report of the Committee on Ways and Means has set forth the fact that the pending bill has not only restored the provisions of the tariff of 1890 as to reciprocity under which our trade was so successfully enlarged, but has extended that policy.