Mr. Chairman, we hear a great deal from the other side to the effect that all taxes upon the business of the country are paid by the consumer. As a general proposition it is true; but one other thing is also true: all taxes on the business of a bank are paid by the borrower. The consumer of an article meets the manufacturer and vendor upon equal terms; he comes offering his money for the article he needs. The borrower comes asking favors of the man or institution who is to lend him money, and he is obliged to assume the expense imposed by the Government on the money he borrows. All the expenses that you put upon the machinery of banking, therefore, come out of the debtor and borrower class; they are direct taxes upon the business of the country, and upon the resources and credit of the men who carry on the business and employ the labor of the country.

Roger Q. Mills [Tex.] declared that the purpose of the bill was to prevent the payment of the public debt and so fasten the national banking system on the country, and to serve as a plausible excuse for continuing high tariffs.

Mr. Chairman, is it not a little singular that this thing was born in Philadelphia, Pennsylvania? Is it not a little strange that the first gun in favor of the repeal of internal taxes came from the gentleman from Pennsylvania on that side [Mr. Kelley], and from the gentleman from Pennsylvania [Samuel J. Randall] on this side of the House; the speech of one gentleman being delivered in the tariff convention of New York City, and the speech of the other delivered to the national bankers and the tariff men of New York City?

MR. RANDALL.-My speech was delivered before a Democratic meeting

MR. MILLS.-I know what sort of Democrats they were. MR. RANDALL.-And a meeting that gave response by applause.

MR. MILLS.-Yes; and it was a meeting of national bankers and high-tariff men; heretics in the Democratic party, and who have always been regarded as heretics from its very foundation.

Why is it that this thing comes from Pennsylvania? The great cry for reform in taxation comes from Pennsylvania, and the protectionists at that. You do not hear anybody in Texas or in Missouri or in Iowa or through the Western country demanding the repeal of the taxation on banks. You do not hear any great complaint from the people about the money that

comes into the treasury being superabundant and about there being no necessity for it.

What man of common sense ever would think of giving away his revenues when he had his debts, bearing interest, due, and demanding payment? But the Congress of the United States is being boldly and insolently asked to-day to throw away the treasures of the people of the United States for the sole purpose of gratifying the godless greed of these monopolists; nothing else in the world. Who is to be benefited by giving away these $17,000,000 that are now reecived from the coffers of the banks? How many of your people in the West and South will be benefited by that?

The bill passed the House on June 27 by a vote of 128 to 80. It was debated at great length in the Senate, but did not come to a vote during this session.

During the next session of Congress (December, 1882March, 1883) the bill was again extensively discussed in the Senate. It was finally passed with amendments on February 20, 1883. The House refusing to accept the amendments, a conference was held. The report of this was adopted by both chambers on March 2. President Arthur approved the bill on March 3, 1883.

CHAPTER IX

THE TARIFF OF 1870

Gen. Robert C. Schenck [O.] Introduces in the House a Bill “To Amend Existing Laws Relating to the Duty on Imports"-Debate: Protectionists, William D. Kelley [Pa.], Horace Maynard [Tenn.], Gen. Schenck; Anti-Protectionists, James Brooks [N. Y.], William B. Allison [Ia.], Samuel S. Marshall [Ia.], James J. Winans [O.], Gen. James A. Garfield [O.]-Bill Is Passed-Subsequent Acts of Congress Providing for Further Reduction-Debate in the House [1872] Between Samuel Shellabarger [O.], Protectionist, and Job E. Stevenson [O.],

Anti-Protectionist.

F

ROM 1857 down to the close of the Civil War the tariff question was agitated only when urgent calls for money for the prosecution of the war came up. In 1861 a bill introduced by Justin S. Morrill [Vt.] was passed, raising the tariff of 1857 one-third. This tariff remained in force only a few months. During the following years of the war the need of additional revenue caused measure after measure, revising the tariff upward, to be adopted, and it was inevitable that some protective duties should creep in.

On February 1, 1870, Robert C. Schenck [O.] introduced in the House of Representatives a bill "to amend existing laws relating to the duty on imports." It was discussed at great length throughout the session, and its provisions were finally incorporated in a bill to reduce internal revenue. The new measure became a law on July 14, 1870. Most of the protective features of the existing tariff were retained, though about 130 articles were added to the free list, and the duties on tea, coffee, sugar, spices, and pig-iron were reduced. The real burden of the war tariff was hardly lightened, as the high duties on the necessaries of life still remained.

In the debate in the House on the tariff bill leading

speakers in favor of the principle of protection were: William D. Kelley [Pa.], Horace Maynard [Tenn.], and General Schenck. Among the important anti-protectionists were: James Brooks [N. Y.], William B. Allison [Ia.], Samuel S. Marshall [Ia.], James J. Winans, [O.], and James A. Garfield [O.].

THE SCHENCK BILL

HOUSE OF REPRESENTATIVES, MARCH 3-APRIL 1, 1870

MR. BROOKS.-I do not doubt that every gentleman who now listens to the sound of my voice is abstractly for free trade, if free trade could be realized. It is the nature of man to desire the greatest freedom of intercourse, not only with his own countrymen, but with all mankind. God, who has given man dominion over fish and fowl and all living creatures in the earth, instituted no geographical or political boundaries, and He doubtless intended all to commune together as brethren in the freest intercourse and trade. He has given us different climes for different productions, and different races of men, all wonderfully fitted for their varied work of production, and all created profitably to interchange that production; whether from the sea or the soil, whether from the plow, the loom, the forge, or the anvil; whether the work of the muscle or the brain. He has planted us all upon the earth and commanded us to love one another, and not to destroy each other, neither by the sword nor the cannon, nor by what is as fatal to human happiness, by conflicting, damaging, or destructive tariffs that violate all his commands. While, and when, we have struck off the manacles of chattel slavery from 4,000,000 of men, and poured out our blood like water therefor, we have been all that while as ingloriously riveting the chains of monopoly slavery upon 36,000,000 other men in the tyrannical restraints we have imposed upon their personal liberty in trade, commerce, and intercourse; and thus what we gained in the world's estimation by the one great act we lose in the greater crime. Man's audacity, however, on the tower of Babel, inflicted upon him a confusion of languages and of tongues, and hence divided. men into States or kingdoms, and with them, as punishments, have come tariffs, or supposed necessities for tariffs to support conflicting governments. In the conflict of these tariffs it has been a struggle among nations to lay countervailing duties, the

one to damage the other, or to outcheat each other in intercourse and trade. This has been the policy of nations for years and years. But now, England and France, especially England, have rapidly retraced their fatal steps, while for nine long years we have been piling up tariff upon tariff. And this country has become now the most tariffed, the most taxed, and in that respect the most accursed nation upon earth. While God has done everything in this vast Republic of ours to bless us, man seems to be doing his utmost to counteract the Almighty will.

What, Mr. Chairman, more beautiful spectacle exists now than that of free trade in our own country, from the rockbound shores of Passamaquoddy in the East to the Golden Gate or Puget sound of the West? But how much more beautiful would be that spectacle, if on that long line of imaginary boundary from Miramichi on the East to the straits of Fuca on the West, among that broad-spread English-speaking people, there were but one law for customs, one rule of duties, one universal free trade. On our Atlantic coast, just beyond the waters of Maine, are two valuable islands-Nova Scotia and Prince Edward's. Both of them produce articles which are desirable and necessary for the food and comfort of our country, more especially for the poorer classes of our people-fish of almost all kinds in teeming abundance, potatoes, cheaper than the duties we impose upon them imported, oats, the best in the world, and coal, practically nearer to New England than from the mines of Pennsylvania or Maryland. We might have free trade with both these islands, but it is forbidden by our laws, and we compel the inhabitants there to turn their potatoes into pork, when on the sea coast we are suffering for the supply, and this pork, thus made, goes to Europe, there to come into competition with the pork of our Western States. These islands need and demand our breadstuffs, our cottons, and other manufactures, our boots and shoes, and leather, but we take from them little or nothing wherewith to pay for them, and so turn the whole trade over to England.

Now, if the numerous articles of production of those islands were introduced into this country free, they would enable the mechanics and laborers of New England to live from ten to fifteen per cent. cheaper than they now do. The herring of these waters are largely in demand for the colored population of the South, but our enormous duties forbid their extensive use. Mackerel are much in demand for the West, but few can afford to pay the duties and buy. Thus man fights with Provi