On December 19th, Mr. Wilson,2 the chairman of the Committee on Ways and Means reported to the House the bill popularly known as "the Wilson Bill." The Republicans at once denounced it as free trade legislation; yet an analysis of its provisions as originally reported showed plainly enough that while it was distinctly a step in the direction of freer trade it was on the whole a very conservative measure. In the first place, it removed entirely the duties on wool, on coal, on iron ore, on lumber, and on sugar, both raw and refined. It made rather moderate reductions in the duties on woolen goods, cottons, linens, silks, pig-iron, steel billets, steel rails, tin plate, china, glassware, and earthenware. A number of minor and miscellaneous articles received new schedules.
The most noticeable feature of the bill was its treatment of raw materials as just described. Here lay the point of departure from Republican tariff legislation, which in taxing raw materials had made American protectionism a thing unlike the protectionism of other leading nations. The Wilson Bill, in providing for the free entry of wool, coal, iron ore, lumber and sugar, adopted a principle recognized by scientific economists, while it adhered closely to the recommendations of President Cleveland's various messages and to the promise made in the Democratic platform of 1892.
The remission of the duty on wool was the boldest assertion of the new policy; for the duty on wool was the one provision of the McKinley tariff that had been of practical advantage to many American farmers. Its repeal was bitterly opposed by the wool-growers of Ohio and other States, whom Senator Sherman estimated at a million souls, and the value of their annual product at $125,000,000. Free iron ore was opposed by the interest that had secured control of the Western ore beds, but it was of distinct advantage to the Eastern manufacturers. Free coal affected very few sections of the country. In New England and on the Pacific Coast, consumers might get their supply of coal from the adacent mines in Canada rather than from the more distant coal-fields of Pennsylvania and West Virginia; but the country at large must still use American and not imported coal. The same thing was true with regard to lumber.
The question of the tariff on sugar, however, was somewhat more complex. During the years preceding 1894, the refining of sugar in the United States had gradually become monopolized by the American Sugar Refining Company, oftener spoken of as the Sugar Trust, of which Mr. H. O. Havemeyer was the head. This corporation was one of the most powerful of all those to which public attention had been directed, and it was one of the most unpopular. The interests of this corporation would be served by admitting raw sugar free, thus giving the Trust the benefit of cheap material), and by a tax upon refined sugar which came from other countries. This was precisely what the McKinley Act had done, enormously increasing the profits of the Trust. The Wilson Bill, as reported to the House, provided for the admission of raw sugar free, in accordance with the general theory as to raw materials, but it also admitted refined sugar free, thereby depriving the Sugar Trust of any special advantage, and leaving it to stand upon its own legs.
So much for the distinctive features of the new tariff measure in its original form. The rest of its schedules were lower than those of the McKinley Act, but in the main quite as high if not higher than those of the Tariff Act of 1883, passed by a Republican Congress. In fact, taken as a whole, the Wilson Bill, so far from being in essence a free-trade measure, was one that would have been regarded in the years before the Civil War as a piece of rigorous protective legislation. It embodied, however, as has been explained, the general principle of free raw materials; while still it dealt considerately with the many interests which had grown up under the shelter of the thirty-two tariff acts which the Republicans had passed between 1860 and 1890.
The Wilson Bill was very well received by the Democrats in the House and by the party as a whole. Little change was made in the original draft during the five weeks when it was under consideration by the Representatives. But many Democrats and some Republicans from the South and West eagerly advocated the insertion in the bill of a clause providing for a tax on incomes. This would yield, it was said, a substantial revenue and wipe out the anticipated deficit; and most of all, it would make the possessors of large fortunes contribute to the Government a sum proportionate to their wealth. There was a strong and very wide-spread feeling that many of the richest persons in the country had so successfully "dodged" their taxes as to have secured a practical exemption from any taxation whatsoever. Secretary Carlisle had suggested laying a tax upon certain classes of corporations; but the House adopted instead a tax of 2 per cent. upon all incomes of more than $4,000, the tax to remain in force until January 1, 1900. This clause was adopted on January 24th by a vote of 204 to 140, and the bill as a whole received the approval of the House on February 1st, by a vote of 182 to 10661 members not voting. When the result was announced by the Speaker, it was received with a burst of Democratic cheering, and Mr. Wilson was showered with congratulations by his followers and friends.
But after the bill reached the Senate, affairs took a decidedly different turn. The Democratic majority in the upper house was a very small one, and its close cohesion had already been destroyed, while there were many reasons why a tariff measure such as the Wilson Bill should encounter serious opposition there. These reasons may be indicated briefly as springing, first, from personal opposition to President Cleveland, and second, from the fact that the Senate, unlike the House, was controlled by powerful financial interests, which were ably represented on the floor. The personal animosity toward the President, which did not at once find open expression, was in part an inheritance from his first administration; in part a result of the masterful way in which he had forced the repeal of the Sherman Act; and to a large degree, it represented the traditional antagonism which most Senators entertain toward every President who has not had Congressional experience sufficient to make him understand and properly respect the usages, the prerogatives and the prejudices of the Senatorial body. . . .
It was something more than ominous that the Wilson Tariff Bill after passing the House by a majority of 76, and after having been referred by the Senate to its Finance Committee, should have been held back by that committee for almost two months. When reported (March 20th), it had been so clipt and trimmed as to exhibit a very curious metamorphosis. Yet in the open Senate the measure fared still worse. As might have been expected, the Republicans fell upon it tooth and nail; but acting in entire harmony with them, were certain Democratic Senators who seemed to have forgotten altogether the solemn pledges which their National Convention of 1892 had given to the country. Foremost among these were the blandly inscrutable Senator Gorman of Maryland, and the newly elected Senator Brice of Ohio. The two appeared upon the Democratic side of the Senate as the unavowed yet most efficient agents of the protected interests, and their object was plainly to modify and mutilate the Wilson Bill in such a way as to deprive it of any real significance and meaning. . . .
The action of the Senate upon the sugar schedule led to a most deplorable scandal. The House had put all sugarboth refined and rawupon the free list, thereby giving governmental aid neither to the Sugar Trust nor to the domestic producer. The two Senators from Louisiana, however, having in mind their sugar-growing constituency, insisted that raw sugar must be taxed. Without their votes, the bill could probably not be carried at all, so close was the division. Furthermore, other Senators believed that such a duty was necessary as a revenue measure; since the funds in the Treasury were low, and the receipts from the income tax would not be available for many months. Hence, the Senate imposed a duty upon raw sugar of 40 per cent. ad valorem, equivalent to about one cent a pound. But a duty on raw sugar without a countervailing duty on refined sugar would have been a serious blow to the Sugar Trust. All the powerful influences at the command of this corporation were immediately brought to bear upon the Senate. Here was a direct issue between one of the most notorious of Trusts on the one side, and the purpose of crippling Trusts avowed by the Democracy on the other. The Democratic platform had spoken of "Trusts and combinations" as "a natural consequence of the prohibitive taxes, which prevent . . . free competition." Would Democratic Senators, in the face of this declaration, impose a prohibitive tax at the bidding of a Trust whose monopoly controlled one of the necessities of life?
The debate upon the subject soon waxed hot. While it was in progress, ugly rumors began to fly abroad. The certificates of the Sugar Trust fluctuated in value every day, as the Senate seemed first favorable and then unfavorable to its interests. There was some difficulty about getting evidence; and in the end nothing was accomplished save to leave a taint upon the names of several Senators and to disgust the country with the whole tariff controversy.
The Trust had its way. Refined sugar was taxed one-eighth of a cent a pound, with an additional duty of one-tenth of a cent on refined sugar imported from countries giving an export bounty. This tax, minutely insignificant tho it may appear, was ample to continue and confirm the Sugar Trust in its supremacy. The fractional duty of one-eighth of a cent a pound meant to the treasury of the Trust not less than $20,000,000 of profit every year. After months of wearisome delay, with frequent scenes of disorder and indecorum, the Senate finally, on July 3d, allowed the mutilated tariff bill to pass, by a scant majority of five votes (39 to 34), with twelve Senators not voting.
The bill went back to the House for its concurrence. Mr. Wilson, rising in his place on July 7th, urged that as altered and amended, it be not passed. He spoke with force and eloquence, and then took the unusual step of reading to the House a personal letter addrest to him by the President on July 2d, anticipating the action of the Senate. It was an extraordinary letter, and the fact of its being read was still more extraordinary; for thus the Executive was made to criticize the action of one house of Congress in a letter practically written to be read before the other house. From a party point of view, a Democratic President was arraigning Democratic Senators before both Democratic and Republican Representatives. That President Cleveland should have permitted such a letter to be read at such a time has seemed to many the clearest possible evidence of his incompetency as a party leader. It was most certainly a gage of defiance to the Senatea body already inimical to him. It violated to some extent the proprieties of executive courtesy toward a branch of the national legislature. It was certain to give the bitterest offense to Senators of his own party. . . .
The effect of it in the Senate was to seal irrevocably the fate of the Wilson Bill as a measure of true reform. Altho the President had named no names in his accusation of "party perfidy and dishonor," the shaft had gone unerringly to its proper mark. Senator Gorman, stung by those pungent words, brought the subject before the Senate, with a show of virtuous indignation. . . .
The House refused to concur in the Senate's amendments, and the bill was sent to a conference committee of both houses. In conference, the Senate's representatives refused to yield a single point. The House could take the bill precisely as it left the Senate, or the bill could fail, leaving the McKinley tariff still in force. In the end, the House was forced to accept the amendments in their entirety, and to pass the bill which Mr. Cleveland had stigmatized as involving "perfidy and dishonor."
The predicament of the President was a cruel one. He could not put his signature to such a measure. He could not veto it, and make the professions of his party utterly ridiculous. And so he let it become a law without his signature.
1 From Peck's "Twenty Years of the Republic." By permission of the Publishers, Dodd, Mead & Company. Copyright, 1906.
2 William L. Wilson. The bill was introduced about nine months after Cleveland took office.