Chapter XIX: , page 276 (6)

The chief point of interest for the United States in this law
is to be found, not so much in the high rates adopted, as in
the statement made in the Reichstag foreshadowing a changed
policy on the part of Germany in making new commercial
treaties. On the final day of the tariff debate Dr. Paasche,
one of the leaders of the majority, asserted that the
government had promised that it would no longer extend treaty
advantages to other countries than those that reciprocate with
corresponding concessions. ‘We expect,’ said Dr. Paasche,
‘that the government will undertake a thorough revision of all
the treaties containing the most favored-nation clause.
Promises of this kind were made to us in committee. We have
absolutely no occasion to concede anything to such nations as
are glad to take what we give by treaty to other countries
without making us any concessions in return. The United States
has introduced a limitation of the most-favored-nation clause;
we have every reason to act in precisely the same manner."

_W. C. Dreher,
A Letter from Germany
(Atlantic Monthly, March, 1903)_.

In March, 1905, a few weeks after the conclusion of the last
of the seven special tariff treaties referred to above, which
modify the general German tariff of 1902-1906, in favor of the
nations which became parties to them, the Consul-General of
the United States at Berlin sent to the State Department at
Washington the following table, showing, with reference to
forty-six of the principal articles of German import from
America (1) the then maximum or autonomous duty as paid under
the tariff of 1879; (2) the same duties as modified and
reduced by then existing treaty concessions; (3) the new
autonomous duties that were to go into effect in 1906, and (4)
the amounts to which each of these rates of duty would be
reduced on merchandise coming from certain of the seven
European countries which had just concluded treaties of
commerce with Germany.

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The figures show in all cases, unless otherwise specified, the
amount in American currency of duty per double centner (100
kilograms or 220.4 pounds):

Merchandise.
Tariff New tariff law of Difference.
1902 (to go into
(adopted in 1879). effect in 1906).

Maximum. Reduced Autonomous. Reduced
by treaty. by treaty.

Wheat $1.19 $0.83 $1.78 $1.30 $0.58

Rye 1.19 .83 1.66 1.19 .47

Oats .95 .67 1.66 1.19 .47

Barley .53 .47 1.66 .95 .71

Corn .47 .38 1.19 .71 .48

Wheat Flour 2.50 1.74 4.36 2.42 1.94

Malt .95 .85 2.44 1.37 1.07

Potatoes Free. Free. .59 1.24 (a)

Hops 4.76 3.38 16.66 4.76 11.90

Dried apples, pears, apricots, peaches .96 .95 2.38 .95 1.43

Dried Prunes 2.38 1.19 1.19

Fresh apples in barrels Free. Free. 2.38 1.19 1.19

Sausages 4.76 4.04 16.66 9.52 7.14

Lard 2.38 2.38 2.97 2.38 .59

Salted Meats 4.76 4.04 10.71 8.33-9.25 2.38-1.46

Butter 4.76 3.80 7.14 4.76 2.38

Cheese 4.76 4.76 7.14 3.57-4.76 3.57-2.38

Eggs .71 .47 1.42 .71 .71

Margarine 4.76 3.80 7.14 4.76 2.38

Wood Alcohol Free Free 4.76 Free. 4.76

Cows and oxen, per head 2.14 2.14 4.28 1.90 2.38

Horses, per head 4.76 4.76 21.42-85.68 7.14-28.56 14.28-57.12

Hogs, per head 1.42 1.19 4.28 2.14 2.14

Shoes, coarse 11.90 11.90 20.23 20.23 …

Shoes, medium 16.66 15.47 28.86 23.80 5.06

Shoes, fine 16.66 15.47 42.84 30.70 7.14

Lumber, rough … … 1.42 .47 .95

Lumber, dressed 2.38 2.38 2.38 2.38 …

Sewing machines 5.71 5.71 8.33 2.85 5.48

Sewing machines, power 5.71 5.71 4.76 1.90 2.86

Electrical machinery

a. Under 500 kilograms (
1,102 pounds) per 100 kilograms 2.14 2.14 …

b. 500 to 3,000 kilograms
(1,102 to 6,614 pounds) 1.66 1.42 .24

c. More than 3,000 kilograms 1.42 .95 .47

Machine tools:

a. 250 kilograms
(551 pounds or less),
per 100 kilograms. 4.76 2.85 1.91

b. 250 to 1,000 kilograms
(551 to 2,205 pounds) 2.85 1.90 .95

c. 1,000 to 3,000 kilograms
(2,205 to 6,614 pounds) 1.90 1.42 .48

d. 3,000 to 10,000 kilograms
(6,614 to 22,046 pounds) 1.42 1.19 .23

Over 10,000 kilograms .97 .97 …

Telegraph instruments, telephones, electric lighting and power apparatus. 14.28 (b).95-9.52 (b)

Railway and street cars 2.38 .71 1.67

Motor cars and motor bicycles, each:

a. 50 kilograms
(110 pounds) or less, each 35.70 … …

b. 50 to 100 kilograms
(110 to 220 pounds), each 28.56 … …

c. 100 to 250 kilograms
(220 to 550 pounds), each 21.42 … …

d. 250 to 500 kilograms
(550 to 1,110 pounds) 14.28 9.52 4.76

e. 500 to 1,000 kilograms
(1,110 to 2,220 pounds) 9.52 5.95 3.57

f. 1,000 kilograms and over 4.76 3.57 1.19

(a) Free from August 1 to February 14.

(b) According to weight.

"It needs but a glance at this list," said Consul-General
Mason, "to show how important will be the concessions granted
to one or more of the seven treaty nations, and how formidable
will be their competition in the German market against similar
goods coming from countries which, for want of a reciprocal
treaty or other convention, will be subject to the autonomous
or unmodified tariff in exporting goods into Germany."

On the 1st day of March, 1906, this tariff came into effect,
and the tariff arrangements of Germany with the United States,
under which the latter had enjoyed important concessions,
secured by the "most favored nation" agreement in its
commercial treaty with Germany, came to an end.

TARIFFS: A. D. 1909.
Economic Results of the Protective System.

See (in this Volume)
GERMANY: A. D. 1009 (APRIL).

TARIFFS: Great Britain: A. D. 1909.
List of articles on which Import Duties are collected.

The following is a complete list of the articles enumerated in
the British tariff as subject to import duties:

Beer; Cards, Playing; Chicory; Cocoa; Coffee;
Fruit, dried or otherwise preserved without sugar;
Spirits and Strong Waters (including all alcoholic
liquors, cordials and other alcoholic preparations);
Sugar (including all confectionery, sugar-preserved
fruits, and other sugared preparations);
Tea; Tobacco, in all forms; Wine.

TARIFFS: A. D. 1909.
Question of Preferential Trade raised by Mr. Chamberlain.

See (in this Volume)
ENGLAND: A. D. 1903 (MAY-SEPTEMBER).

TARIFFS: The United States: A. D. 1908-1909.
The Demand for Tariff Revision.
Its Expression in the Presidential Election.
The Action of Congress and the President.
The Payne-Aldrich Tariff Act.

For more than a decade prior to the presidential election of
1908 the popular demand for a revision of the exorbitantly
protective duties imposed by the so-called Dingley Tariff of
1897 had been steadily rising in the United States, and making
itself heard by men in public life. It had penetrated the mind
of the great captain-general of the protectionist forces.
{641}
President McKinley, as early as 1901, and his last public
utterance, addressed to a multitude at the Pan American
Exposition, in Buffalo, on the 5th of September, the day
before he was struck down by a murderous anarchist, contained
this wise admonition on the subject:

"We have a vast and intricate business, built up through years
of toil and struggle, in which every part of the country has
its stake, which will not permit of either neglect or of undue
selfishness. No narrow, sordid policy will subserve it. The
greatest skill and wisdom on the part of manufacturers and
producers will be required to hold and increase it. … Our
capacity to produce has developed so enormously, and our
products have so multiplied, that the problem of more markets
requires our urgent and immediate attention. Only a broad and
enlightened policy will keep what we have. No other policy
will get more. … We must not repose in fancied security that
we can forever sell everything and buy little or nothing. If
such a thing were possible, it would not be best for us or for
those with whom we deal. We should take from our customers
such of their products as we can use without harm to our
industries and labor. Reciprocity is the natural outgrowth of
our wonderful industrial development under the domestic policy
now firmly established. What we produce beyond our domestic
consumption must have a vent abroad. … If perchance some of
our tariffs are no longer needed for revenue or to encourage
and protect our industries at home, why should they not be
employed to extend and promote our markets abroad?"

TARIFFS: The Party-Platform Promises of 1908.

But President McKinley’s words fell on deaf ears, among those
to whom he had been leader and guide in this department of
economic policy hitherto. They gave no heed to his new
counsels of moderation for seven years. Even treaties of
commercial reciprocity, which he had learned to appreciate
since his own tariff-making was done, were negotiated in vain
by the executive department of Government, to be scorned and
rejected by the Senate. By 1908, however, the claim of the
many-millioned consumers of the nation, for some relief from
the intolerable cost to which almost every necessary of living
had been worked up by the protective tariff lever, had risen
to a pitch which compelled some attention from the managers of
political parties and drew from them promises in the
"platforms" prepared for the presidential and congressional
canvassing of that year.

See (in this Volume)
UNITED STATES: A. D. 1908, APRIL-NOVEMBER)

The National Republican Convention at Chicago, which nominated
Mr. Taft for the presidency, made this distinct and emphatic
pledge:

"The Republican party declares unequivocally for a revision of
the tariff by a special session of Congress, immediately
following the inauguration of the next President, and commends
the steps already taken to this end, in the work assigned to
the appropriate committees of Congress, which are now
investigating the operation and effect of existing schedules.
In all tariff legislation the true principle of protection is
best maintained by the imposition of such duties as will equal
the difference between the cost of production at home and
abroad, together with a reasonable profit to American
industries. We favor the establishment of maximum and minimum
rates to be administered by the President under limitations to
be fixed in the law, the maximum to be available to meet
discriminations by foreign countries against American goods
entering their markets, and the minimum to represent the
normal measure of protection at home."

The National Convention, at Denver, of the Democratic party,
supposedly confirmed in opposition to the whole theory of
tariff protection by all its doctrinal history, made this
declaration:

"We favor immediate revision of the tariff by the reduction of
import duties. Articles entering into competition with
trust-controlled products should be placed upon the free list,
and material reductions should be made in the tariff upon the
necessaries of life, especially upon articles competing with
such American manufactures as are sold abroad more cheaply
than at home, and graduated reductions should be made in such
other schedules as may be necessary to restore the tariff to a
revenue basis."

The Republican Party elected its candidate for the presidency,
with a majority in Congress, and was given the greater
opportunity to redeem its pledge, while the Democratic Party
obtained sufficient representation in both branches of
Congress to aid and influence the promised revision with
important effect. President Taft, in his inaugural address,
spoke impressively of the urgent duty thus laid on Congress,
saying:

"A matter of most pressing importance is the revision of the
tariff. In accordance with the promises of the platform upon
which I was elected, I shall call Congress into extra session,
to meet on the fifteenth day of March, in order that
consideration may be at once given to a bill revising the
Dingley act."

TARIFFS:
The Making of the Payne-Aldrich Tariff.

The new Congress, as called by the President, was convened on
the 15th of March, 1909, and a provisional tariff bill was
introduced in the House of Representatives on the 18th by
Chairman Payne of its Ways and Means Committee. This Bill was
a product of the work of the House Committee of the preceding
Congress, which had been giving hearings on successive tariff
schedules since November. Naturally the protected interests
swarmed to Washington, with attorneys and technical experts,
and their side of every argument for and against existing
duties was heard in its most persuasive form. Naturally, too,
the unprotected consumers, less able to combine, were
represented at the hearings in no such potent way, and their
side of most arguments, according to all accounts, was but
feebly pressed. Mr. Charles Francis Adams, who has the habit
of plain speech, wrote a letter to Congressman McCall, of
Massachusetts, while these hearings were in progress, in which
he characterized a conspicuously greedy part of the clamorers
for high duties in terms that were savagely rough, but not
entirely undeserved. "Speaking after the fashion of men," he
said, "they are either thieves or hogs. I myself belong to the
former class. I am a tariff thief, and I have a license to
steal. It bears the broad seal of the United States and is
what is known as the ‘Dingley Tariff.’ I stole under it
yesterday; I am stealing under it today; I propose to steal
under it to-morrow.
{642}
The Government has forced me into this position, and I both do
and shall take full advantage of it. I am therefore a tariff
thief with a license to steal. And—what are you going to do
about it? The other class come under the hog category; that
is, they rush, squealing and struggling, to the great
Washington protection trough, and with all four feet in it
they proceed to gobble the swill. … To this class I do not
belong. I am simply a tariff thief. … But, on the other hand,
I am also a tariff reformer. I would like to see every
protective schedule swept out of existence, my own included.
Meanwhile, what inducement have I to go to Washington on a
public mission of this sort? A mere citizen, I represent no
one. … Meanwhile, have it well understood that my position is
exactly the position of tens of thousands of others scattered
throughout the country; to ask us to put aside our business
affairs and at our own expense to go to Washington on a
desperate mission is asking a little too much."

The Bill introduced by Mr. Payne was under debate in the House
for three weeks, and passed on the 10th of April. In the
Senate it was then nominally taken into consideration by the
Finance Committee of that body, but that Committee, in fact,
under the dominating lead of its chairman, Senator Aldrich,
framed a new and protectively stiffened Bill, changed in 847
particulars from that of the House. A little more than twelve
weeks were required for this more arduous labor of Mr.
Aldrich, which the Senate approved by the passage of the Bill
on the 8th of July. On the 9th it went to a conference
committee of the two Houses; and there the President’s
influence, not much exerted, apparently, until now, wrung a
few important concessions to the great public of consumers,
which the special interests guarded by a majority in Congress
had been determined not to yield. The American people owe it
to President Taft’s insistence that their shoes may be
cheapened by a free importation of hides, and that lumber for
their houses and coal for warming them may come from Canada at
a slightly lower rate of duty than before; but he failed to
loosen the grip of the woolen and cotton interests on the
protected prices at which they are clothed.

After twenty days of battle the conferees reached agreement,
July 29; the House adopted their report on the 31st, the
Senate on the 5th of August. It was signed at once by the
President, and went into effect the next day.

In the House the Bill was adopted by a vote of 195 to 183,
twenty Republicans voting against it and two Democrats in its
favor. In the Senate the vote stood 47 to 31, the negative
including seven Republicans, and one Democratic senator
recording himself on the side of the Bill. The opposing
Republicans in both Houses were stigmatized as "insurgents,"
and the autocratic Speaker of the House, Cannon, of Illinois,
presumed, so far as the powers of his office would stretch, to
"read them out" of their party. In their struggle to secure a
more honest fulfilment of the election promises of both
parties, and more loyalty to the welfare of the people at
large, the Republican "insurgents" had no such compact and
earnest support from the Democrats of Congress as even party
considerations gave reason to expect.

After signing the Bill, the President gave out a statement for
publication, in part as follows:

"I have signed the Payne tariff bill because I believe it to
be the result of a sincere effort on the part of the
Republican party to make a downward revision, and to comply
with the promises of the platform as they have been generally
understood, and as I interpreted them in the campaign before
election.

"The bill is not a perfect tariff bill or a complete
compliance with the promises made, strictly interpreted, but a
fulfilment free from criticism in respect to a subject matter
involving many schedules and thousands of articles could not
be expected. It suffices to say that, except with regard to
whiskey, liquors, and wines, and in regard to silks and as to
some high classes of cottons—all of which may be treated as
luxuries and proper subjects of a revenue tariff—there have
been very few increases in rates.

"There have been a great number of real decreases in rates,
and they constitute a sufficient amount to justify the
statement that this bill is a substantial downward revision,
and a reduction of excessive rates.

"This is not a free trade bill. It was not intended to be. The
Republican party did not promise to make a free trade bill.

"It promised to make the rates protective, but to reduce them
when they exceeded the difference between the cost of
production abroad and here, making allowance for the greater
normal profit on active investments here. I believe that while
this excess has not been reduced in a number of cases, in a
great majority, the rates are such as are necessary to protect
American industries, but are low enough, in case of abnormal
increase of demand, and raising of prices, to permit the
possibility of the importation of the foreign article, and
thus to prevent excessive prices."

"The administrative clauses of the bill and the customs court
are admirably adapted to secure a more uniform and a more
speedy final construction of the meaning of the law. The
authority to the President to use agents to assist him in the
application of the maximum and minimum section of the statute,
and to enable officials to administer the law, gives a wide
latitude for the acquisition, under circumstances favorable to
its truth, of information in respect to the price and cost of
production of goods at home and abroad, which will throw much
light on the operation of the present tariff and be of primary
importance as officially collected data upon which future
executive action and executive recommendations may be based.

"The corporation tax is a just and equitable excise measure,
which it is hoped will produce a sufficient amount to prevent
a deficit, and which, incidentally, will secure valuable
statistics and information concerning the many corporations of
the country, and will constitute an important step toward that
degree of publicity and regulation which the tendency in
corporate enterprises in the last twenty years has shown to be
necessary."

{643}

TARIFFS:
New Apparatus of Tariff Administration.

The President’s remarks in the next to the last paragraph of
the above statement have reference to an important section of
the Tariff Act, which authorized the creation of a Board of
General Appraisers, a Customs Court of Appeals, and an agency
for the collection of information. The Board is to consist of
nine general appraisers of merchandise, the salary of each to
be $9,000 per annum, who shall possess all the powers of a
Circuit Court of the United States. To these general
appraisers all cases of dissatisfaction with the amount and
rates of duties levied by the appraisers and assistant
appraisers at the various ports would be referred; the board
to exercise both judicial and inquisitorial functions. The
Customs Court was to be composed of a presiding Judge and four
associate Judges appointed by the President, each to receive a
salary of $10,000 per annum; to be a Court of Record, with
jurisdiction limited to Customs cases, and to have several
judicial circuits, including Boston, New York, Philadelphia
and Baltimore, New Orleans and Galveston, Chicago, Seattle,
Portland and San Francisco, and such other places as may be
found necessary.

More important, however, than either of these creations was
the third one, embodied in a brief clause of the Act, which
reads:

"To secure information to assist the President in the
discharge of the duties imposed upon him by this section, and
the officers of the Government in the administration of the
customs laws, the President is hereby authorized to employ
such persons as may be required."

The President availed himself promptly of this permission to
have assistance from a commission or bureau of tariff
information, and on the 11th of September it was announced
that he had chosen for the service three well-qualified
gentlemen, namely: Professor Henry C. Emery, of Yale,
chairman; James B. Reynolds, of Massachusetts, assistant
secretary of the treasury, and Alvin H. Sanders, of Chicago,
editor and proprietor of the Breeders’ Gazette. In announcing
the selection of the board, the following statement was made
at the Executive Offices: "The President and the secretary of
the treasury have agreed upon the plan that these three
gentlemen are to constitute the board and are to be given
authority to employ such special experts as may be needed in
the investigation of the foreign and domestic tariff."

The important direction that was given at once by President
Taft to this Tariff Board, as he has named it, was explained
in his Message to Congress, December 6, 1909, as follows:

"An examination of the law and an understanding of the nature
of the facts which should be considered in discharging the
functions imposed upon the Executive show that I have the
power to direct the tariff board to make a comprehensive
glossary and encylopædia of the terms used and articles
embraced in the tariff law, and to secure information as to
the cost of production of such goods in this country and the
cost of their production in foreign countries. I have
therefore appointed a tariff board consisting of three
members, and have directed them to perform all the duties
above described. This work will perhaps take two or three
years, and I ask from Congress a continuing annual
appropriation equal to that already made for its prosecution.
I believe that the work of this board will be of prime utility
and importance whenever Congress shall deem it wise again to
readjust the customs duties. If the facts secured by the
tariff board are of such a character as to show generally that
the rates of duties imposed by the present tariff law are
excessive under the principles of protection as described in
the platform of the successful party at the late election, I
shall not hesitate to invite the attention of Congress to this
fact, and to the necessity for action predicated thereon.
Nothing, however, halts business and interferes with the
course of prosperity so much as the threatened revision of the
tariff, and until the facts are at hand, after careful and
deliberate investigation, upon which such revision can
properly be undertaken, it seems to me unwise to attempt it.
The amount of misinformation that creeps into arguments pro
and con in respect to tariff rates is such as to require the
kind of investigation that I have directed the tariff board to
make, an investigation undertaken by it wholly without respect
to the effect which the facts may have in calling for a
readjustment of the rates of duty."

TARIFFS:
The Corporation Tax.

The Corporation Tax mentioned in the final paragraph of the
President’s statement is one imposed by an incongruous section
of the Tariff Act, designed for revenue additional to the
expected yield of import duties. It exacts one per cent. of
the net earnings in excess of $5000 of all corporations, joint
stock companies, and associations organized for profit and
having a capital stock represented by shares, and all
insurance companies. Foreign corporations are liable for the
tax to the extent of their business in the United States. The
net income upon which the tax is paid is to be ascertained by
deducting from the gross income of the corporation all
ordinary and necessary expenses of operation and maintenance;
all uncompensated losses actually paid within the year on its
bonded or other indebtedness not exceeding the paid-up capital
stock; all Federal and State taxes already paid and all
amounts received by it as dividends upon stock of other
corporations subject to the tax hereby imposed.

Holding corporations were exempted in the original Bill. That
exemption was struck out, but the Conference Committee adopted
the original clause. Corporations exempted from the tax
are:—Labour organizations, fraternal beneficiary societies,
orders or associations operating under the lodge system, and
providing for the payment of life, sick, accident, and other
benefits to their members and dependents; domestic building
and loan associations organized and operated exclusively for
the mutual benefit of their members, and any corporation or
association organized and operated exclusively for religious,
charitable, or educational purposes, no part of the profits of
which inures to the benefit of any private stockholder, or
individual, but all the profit of which is in good faith
devoted to these purposes.

TARIFFS:
Two Opposite Views of the new Tariff.

The Payne-Aldrich Tariff has been and will long be a subject
of bitterly contentious discussion, from opposite standpoints
of disgusted disappointment and happy satisfaction, before a
large indifferent audience, which takes such legislation as
belonging to an established order of conditions in the United
States. For a fair presentation of the conflicting judgments,
two carefully chosen reviews of the Act, from the two points
of view, by unquestionably representative writers, are quoted
below. The first is from President Woodrow Wilson, of
Princeton University, as follows:

{644}

"The methods by which tariff bills are constructed have now
become all too familiar and throw a significant light on the
character of the legislation involved. Debate in the Houses
has little or nothing to do with it. The process by which such
a bill is made is private, not public; because the reasons
which underlie many of the rates imposed are private. The
stronger faction of the Ways and Means Committee of the House
makes up the preliminary bill, with the assistance of
‘experts’ whom it permits the industries most concerned to
supply for its guidance. The controlling members of the
Committee also determine what amendments, if any, shall be
accepted, either from the minority faction of the Committee or
from the House itself. It permits itself to be dictated to, if
at all, only by the imperative action of a party caucus. The
stronger faction of the Finance Committee of the Senate, in
like fashion, frames the bill which it intends to substitute
for the one sent up from the House. It is often to be found at
work on it before any bill reaches it from the popular
chamber. The compromise between the two measures is arranged
in private conference by conferees drawn from the two
committees. What takes place in the committees and in the
conference is confidential. It is considered impertinent for
reporters to inquire. It is admitted to be the business of the
manufacturers concerned, but not the business of the public,
who are to pay the rates. The debates which the country is
invited to hear in the open sessions of the Houses are merely
formal. They determine nothing and disclose very little. …

"One extraordinary circumstance of the debates in the Senate
should receive more than a passing allusion. The Republican
party platform had promised that the tariff rates should be
revised and that the standard of revision should be the
differences between the cost of producing the various articles
affected in this country and in the countries with which our
manufacturers compete. One of our chief industrial competitors
is now Germany, with its extraordinary skill in manufacture
and the handicrafts and its formidable sagacity in foreign
trade; and the Department of State, in order to enable
Congress the more intelligently to fulfil the promises of the
party, had, at the suggestion of the President, requested the
German Government to furnish it with as full information as
possible about the rates of wages paid in the leading
industries of that country,—wages being known, of course, to
be one of the largest items in the cost of production. The
German Government of course complied, with its usual courtesy
and thoroughness, transmitting an interesting report, each
portion of which was properly authenticated and vouched for.
The Department of State placed it at the disposal of the
Finance Committee of the Senate. But Senators tried in vain to
ascertain what it contained. Mr. Aldrich spoke of it
contemptuously as ‘anonymous,’ which of course it was not, as
‘unofficial,’ and even as an impertinent attempt, on the part
of the German Government, to influence our tariff legislation.
It was only too plain that the contents of the report made the
members of the controlling faction of the Finance Committee
very uncomfortable indeed. … It would have proved that the
leaders of the party were deliberately breaking its promise to
the country. It was, therefore, thrown into a pigeonhole and
disregarded. It was a private document.

"In pursuance of the same policy of secrecy and private
management, the bill was filled with what those who discovered
them were good-natured or cynical enough to call ‘jokers,’
—clauses whose meaning did not lie upon the surface, whose
language was meant not to disclose its meaning to the members
of the Houses who were to be asked to enact them into law, but
only to those by whom the law was to be administered after its
enactment. This was one of the uses to which the ‘experts’
were put whom the committees encouraged to advise them. They
knew the technical words under which meanings could be hidden,
or the apparently harmless words which had a chance to go
unnoted or unchallenged. Electric carbons had been taxed at
ninety cents per hundred; the new bill taxed them at seventy
cents per hundred _feet_;—an apparent reduction if the
word feet went unchallenged. It came very near escaping the
attention of the Senate, and did quite escape the attention of
the general public, who paid no attention at all to the
debates, that the addition of the word feet almost doubled the
existing duty.

"The hugest practical joke of the whole bill lay in the
so-called maximum and minimum clause. The schedules as they
were detailed in the bill and presented to the country,
through the committees and the newspapers,—the schedules by
which it was made believe that the promise to the country of a
‘downward’ revision was being kept by those responsible for
the bill, were only the minimum schedules. There lay at the
back of the measure a maximum provision about which very
little was said, but the weight of which the country may come
to feel as a very serious and vexatious burden in the months
to come. In the case of articles imported from countries whose
tariff arrangements discriminate against the United States,
the duties are to be put at a maximum which is virtually
prohibitive. The clause is a huge threat. Self-respecting
countries do not yield to threats or to ‘ impertinent efforts
on the part of other Governments, to affect their tariff
legislation.’ Where the threat is not heeded we shall pay
heavier duties than ever, heavier duties than any previous
Congress ever dared impose.

"When it is added that not the least attempt was made to alter
the duties on sugar by which every table in the country is
taxed for the benefit of the Sugar Trust, but just now
convicted of criminal practices in defrauding the Government
in this very matter; that increased rates were laid on certain
classes of cotton goods for the benefit, chiefly, of the
manufacturers of New England, from which the dominant party
always counts upon getting votes, and that the demand of the
South, from which it does not expect to get them, for free
cotton bagging was ignored; that the rates on wool and woollen
goods, a tax which falls directly upon the clothing of the
whole population of the country, were maintained unaltered;
and that relief was granted at only one or two points,—by
conceding free hides and almost free iron ore, for
example,—upon which public opinion had been long and anxiously
concentrated; and granted only at the last moment upon the
earnest solicitation of the President,—nothing more need be
said to demonstrate the insincerity, the uncandid, designing,
unpatriotic character of the whole process. It was not
intended for the public good. It was intended for the benefit
of the interests most directly and selfishly concerned."

_Woodrow Wilson,
The Tariff Make-Believe
(North American Review, October, 1909)._

{645}

The second quotation is from an article in _The Atlantic
Monthly_, by Honorable Samuel W. McCall, Congressman from
Massachusetts, setting forth reasons for a moderate
satisfaction with the Act:

"The certain method of determining just what the Payne Act
does, is, as I have said, to take its paragraphs in detail and
scrutinize the new duties in comparison with those which they
have supplanted. Such a course will show the exact character
and number of the increases and decreases. Those who have no
other means of comparison at hand may safely take the table
prepared by the Honorable Champ Clark of Missouri, Democratic
leader in the House of Representatives, and produced by him
July 31 last, in his speech in the House of Representatives
against the Conference Report on the bill. It is true that in
commenting upon it he showed that he was a trifle rusty on his
Cobden, and made the amount of actual revenue the test,—a
method only less weird than that based upon the average ad
valorem, for it is demonstrable that a purely free-trade
tariff after the British model would provide us a greater
revenue than does the Payne Act. While the table given by Mr.
Clark exaggerates in some cases the extent of the increases,
it will clearly appear from it that on the whole the decreases
so vastly outnumber the increases as to make the new law seem
almost revolutionary in character. If one takes the schedules
in their order, he will find in the first schedule, which
relates to chemicals, that the increases are a bare half-dozen
in number, and include fancy soaps and alkaloids of opium and
cocaine, while the decreases are more than fifty, and include
many of the articles which are in general consumption, such as
sulphur, various forms of soda, potash, lead, and sulphate of
ammonia, the last of which is put on the free list.

"The second schedule shows a slight increase upon the smaller
sizes of plate glass, and this increase is many times offset
by decreases upon fire and other brick, gypsum, various kinds
of window-glass, nearly all the grades of marble, and other
important articles.

"In the metal schedule there is an increase in fabricated
structural steel, zinc ore, and a very few other items, some
of which relate to articles not manufactured when the Dingley
law was passed; but, on the other hand, the basic article of
iron ore is reduced from forty to fifteen cents per ton, the
lowest ad valorem that it has had in the history of the
country; pig iron is reduced from four dollars to two dollars
and a half per ton, scrap iron and steel from four dollars to
one dollar per ton, bar iron from six-tenths to three-tenths
of a cent a pound, cotton ties from five-tenths to
three-tenths of a cent per pound, steel rails from seven
dollars and eighty-four cents to three dollars and ninety-two
cents per ton. There are nearly a hundred other reductions in
the metal schedule: in fact, the reductions in this schedule
are so general, and in some cases so drastic, that it may be
said, practically, that these duties have been cut in two.

"The lumber schedule shows but two unimportant increases,
while the schedule generally is cut nearly forty per cent. One
grade of sawed boards is reduced from one dollar to fifty
cents per thousand feet, and all other sawed lumber from two
dollars to a dollar and a quarter per thousand. Fence posts
are put on the free list. Dressed lumber, telephone poles,
railroad ties, and other important products of wood, are very
much reduced.

"Notwithstanding the attempt that is being made to create a
sectional feeling in the West, the only schedule covering
necessary articles in which increases predominate is the
agricultural schedule. The duties are also increased upon
champagnes and other wines, brandy, ale, beer, tobacco, silks,
high-priced laces, and various other articles, which for want
of a better term, are called luxuries.

"Bituminous coal is reduced from sixty-seven cents to
forty-seven cents per ton, which with the exception of a very
brief period, is in value the lowest duty we have ever imposed
upon it.

"Agricultural implements are reduced, and a provision added
admitting them free of duty from any country which admits our
agricultural machinery free.

"Works of art more than twenty years old are put on the free
list.

"Hides of cattle are put on the free list, and an enormous
reduction made, not merely on all the products of these hides,
but on nearly all articles of leather. Sole leather is cut
from twenty to five per cent ad valorem, upper leather from
twenty to seven and a half per cent, and boots and shoes from
twenty-five to fifteen per cent, and, on important kinds, to
ten per cent. … The two great textile schedules are
practically unchanged. The wool duty is politically the most
powerful of any in the tariff. The farmers of the country have
been pretty thoroughly educated to the belief, whether rightly
or wrongly, that the free-wool agitation, culminating in the
tariff of 1894, was responsible for the slaughter of their
flocks. Their representatives formed the strongest single
element behind the passage of the Dingley law; and, in the
session just ended, their strength was so great as to
discourage any assault upon the wool duties. These duties
range from forty to more than one hundred per cent of the
value, and so long as they are maintained at such a high point
it is idle to talk of any very material reduction on woolens
or worsteds. The centre of the entire schedule is the duty
upon wool. … Every duty in this schedule from top to bottom
might have been cut ten per cent without trenching upon the
necessary amount of protection.

"The Dingley duties upon cottons were greatly less than those
in the woolen schedule. This was doubtless due to the fact
that we are the great cotton-producing nation, and our
manufacturers are at no disadvantage in raw material with any
of their foreign competitors. … These duties are so
complicated that it is difficult for one who is not an expert
to understand them; but according to the best experts, they
are, at least, no higher in the Payne Act than the Dingley
duties were intended to be, and were interpreted to be for
four years after the passage of the act."

{646}

The following is from an article in the _American Review of
Reviews, September, 1909:_

"Summing up the changes made in the tariff as shown in the
various Senate documents, the new act has increased the
Dingley rates in 300 instances, while reducing them in 584
cases. The increases affect commodities imported in 1907 to
the value of at least $105,844,201, while the reductions
affect not more than $132,141,074 worth of imports. Four
hundred and forty-seven million dollars’ worth of imports (on
the basis of 1907) remain subject to the same duties as under
the Dingley tariff. That is to say, 65 per cent of the total
imports remain subject to the old rates, more than fifteen per
cent of the total will be subject to higher duties, the
average increase amounting to 31 per cent. over the Dingley
rates; and less than 20 per cent. of the imports are to be
subject to lower duties, the reduction being estimated about
23 per cent. below the Dingley rates. All of these figures
greatly underestimate the increases of duty for the following
reasons: First they do not take into account the numerous
changes (nearly all increases of duty) due to classification,
similar to the instances cited in the case of sawn wood,
structural iron, and cotton cloth; second a large part of the
imports subject to ad valorem duties will now be assessed on
the basis of domestic prices instead of the prices in foreign
markets (with due allowance for freight and duty), as has
hitherto been the case; and, finally, the possibility, even if
remote, of the application of maximum rates to imports from
some of the foreign countries, which will amount on the
average to an increase of more than 50 per cent. over the new
rates. The real increase of duty will not be accurately known
for a year, until we have full returns of the imports and
duties actually levied under the new law under the decisions
of the Board of General Appraisers and the new Customs Court."

TARIFFS:
Certain Outside Effects.

As between the United States and France, the situation
produced by the new Tariff Act, which caused existing
commercial agreements between the two countries to be
abrogated on the 31st of October, 1909, was explained as
follows in a Press despatch of September 22 from Washington:

"The State Department has received from Consul-General Mason
at Paris the text of the announcement by the French government
of the abrogation of the several commercial agreements with
the United States by the action of President Taft in
conformity with the provisions of our new tariff act.

"‘Under and in consequence of these conditions,’ the French
announcement says, ‘there is reason to decide that the decrees
dated July 7, 1893, May 28, 1898, and February 21, 1903, which
constitute the measure of the application of the
Franco-American agreement for merchandise produced in the
United States and the Island of Porto Rico shall cease to be
enforced on October 31, 1909.’

"On that date the articles produced in the United States and
exported to France will pay what is known in France as its
general tariff, but which in effect is its maximum rates of
duty. The principal articles of export from the United States
under this agreement are mineral oils and coffee from Porto
Rico. At the same time articles imported from France into the
United States under these agreements will pay our regular or
highest rate. These include canned meats, fresh and dried
fruits, manufactured and prepared pork meats, lard, and a few
other articles of less importance."

The effect of the Payne-Aldrich Tariff Act on trade between
the United States and Canada was left an open question,
dependent on a decision which President Taft must make on or
before April 1, 1910. Section 2 of the Law expressly provides
the President with power to treat "any dependency, colony, or
other political subdivision having authority to adopt and
enforce tariff legislation" as a separate fiscal entity. The
question for the President to decide is whether Canada, by
reason of her preferential treatment of the Mother Country or
by reason of the commercial treaty which she is about to
conclude with France, will be judged guilty of "undue
discrimination" and unworthy of the _minimum_ rates.

Looked at from the English standpoint, it is thought that he
"can hardly declare so natural a relationship as the existing
British preference to be ‘unduly’ discriminatory when a
similar relationship exists between Cuba and the United
States, and when Porto Rico, Hawaii, and the Philippines
actually enjoy reciprocal free trade with America and with
America alone."

A more practical consideration in the matter, however, is that
suggested in the following, from a Boston newspaper, which
remarks:

"According to the Department of Commerce and Labor, there are
now 147 branch factories in Canada, representing a capital of
$125,000,000, established by United States concerns which
formerly supplied their Canadian trade with the product of
industry on this side the national border. This is the result
of retaliatory legislation in Canada invited by our own tariff
against Canadian imports. If further tariff war is invited by
the imposition of the maximum schedules against Canada, still
more United States capital will go over the line to provide
employment and wages for Canadian workmen."

The _Monetary Times_, of Toronto, made an exhaustive
inquiry on this subject late in 1909, and found 168 American
manufacturing concerns in Canada, representing an estimated
investment of $226,000,000.

The spirit in which President Taft will interpret the maximum
and minimum clause of the Act, and exercise his discretion in
applying it, was indicated by him in his Message to Congress,
December 6, 1909, when he said: "By virtue of the clause known
as the ‘Maximum and Minimum’ clause, it is the duty of the
Executive to consider the laws and practices of other
countries with reference to the importation into those
countries of the products and merchandise of the United
States, and if the Executive finds such laws and practices not
to be _unduly discriminatory_ against the United States,
the minimum duties provided in the bill are to go into force.
Unless the President makes such a finding, then the maximum
duties provided in the bill, that is, an increase of 25 per
cent. ad valorem over the minimum duties, are to be in force.
Fear has been expressed that this power conferred and duty
imposed on the Executive is likely to lead to a tariff war. I
beg to express the hope and belief that no such result need be
anticipated.

{647}

"The discretion granted to the Executive by the terms ‘unduly
discriminatory’ is wide. In order that the maximum duty shall
be charged against the imports from a country, it is necessary
that he shall find on the part of that country not only
discrimination in its laws or the practice under them against
the trade of the United States, but that the discriminations
found shall be undue; that is, without good and fair reason. I
conceive that this power was reposed in the President with the
hope that the maximum duties might never be applied in any
case, but that the power to apply them would enable the
President and the State Department through friendly
negotiation to secure the elimination from the laws and the
practice under them of any foreign country of that which is
unduly discriminatory. No one is seeking a tariff war or a
condition in which the spirit of retaliation shall be
aroused."

On the 19th of January, 1910, the President issued the first
of his proclamations relative to the operation of the maximum
and minimum rates of duty. Six countries, namely Great
Britain, Russia, Italy, Spain, Switzerland, and Turkey, were
designated as entitled to the minimum rates. Negotiations with
Germany and France were understood to be still in progress,
which might, it was hoped, clear away the differences that
obstructed a similar concession to those countries. In the
case of Germany, the difficulty related to the exclusion of
American meats.

A second proclamation, February 7, announced the conclusion of
an agreement with Germany which gave to each country the
minimum rates of the other. This agreement had been ratified
by the Reichstag on the 5th.

Negotiations with France and with Canada occupied more time,
being protracted in the latter case almost to the limit of the
period prescribed in the Act. Terms of agreement were arrived
at in both instances, and, in the end, the President was not
called on to apply the maximum rates to any country.

----------TARIFFS: End--------

TARSUS:
Moslem attack on Armenians.

See (in this Volume)
TURKEY: A. D. 1909 (JANUARY-MAY).

TARTARS:
Holy War against Armenians in the Caucasus.

See (in this Volume)
RUSSIA: A. D. 1905 (FEBRUARY-NOVEMBER).

TASHINCHIAO, Battle of.

See (in this Volume)
JAPAN; A. D. 1904 (JULY-SEPTEMBER).

TAVERA, DR. T. H. PARDO DE.

See (in this Volume)
PHILIPPINE ISLANDS: A. D. 1901.

TAXATION:
Graduated Taxation of Land.

See (in this Volume)
NEW ZEALAND: A. D. 1905.

TAXATION:
Progressive Taxation of Fortunes.

See (in this Volume)
WEALTH, THE PROBLEMS OF.

TAYLOR, EDWARD R.

See (in this Volume)
MUNICIPAL GOVERNMENT: SAN FRANCISCO.

TEACHERS:
English and American Interchange of Visits.

See (in this Volume)
EDUCATION: INTERNATIONAL INTERCHANGES.

TEAMSTERS’ UNION:
Strike at Chicago.

See (in this Volume)
LABOR ORGANIZATION: UNITED STATES: A. D. 1905 (APRIL-JULY).

TECHNICAL EDUCATION.

See (in this Volume)
EDUCATION.

TEHERAN: TEHRAN: Revolutionary events in.

See (in this Volume)
PERSIA.

TELEGRAPHERS’ STRIKE:
In France.

See (in this Volume)
LABOR ORGANIZATION: FRANCE: A. D. 1909 (MARCH-MAY).

TELEGRAPHERS’ STRIKE:
In Russia.

See (in this Volume)
RUSSIA: A. D. 1904-1905.

TELEGRAPHERS’ STRIKE:
In the United States.

See (in this Volume)
LABOR ORGANIZATION: UNITED STATES: A. D. 1907.

TELEGRAPHY.

See (in this Volume)
SCIENCE AND INVENTION: ELECTRICAL.

TELEPHONE AND TELEGRAPH MERGER, United States.

See (in this Volume)
COMBINATIONS, INDUSTRIAL, &c.: UNITED STATES: A. D. 1909.

TELISSU, Battle of.

See (in this Volume)
JAPAN: A. D. 1904 (FEBRUARY-JULY).

TELLES, Sebastião.

See (in this Volume)
PORTUGAL: A. D. 1906-1909.

TEMPERANCE.

See (in this Volume)
ALCOHOL PROBLEM.

TENEMENT HOUSE REFORM.

See (in this Volume)
NEW YORK: A. D. 1900-1903.

TERRITORIAL FORCE, THE BRITISH.

See (in this Volume)
WAR, THE PREPARATIONS FOR: MILITARY.

TEWFIK PASHA.

See (in this Volume)
TURKEY: A. D. 1908 (JULY-DECEMBER), and after.

TEXAS: A. D. 1906-1909.
Successful Prosecution of the Waters-Pierce Oil Company.

See (in this Volume)
COMBINATIONS, INDUSTRIAL, &C.:
UNITED STATES: A. D. 1904-1909.

THEOTOKIS MINISTRY.

See (in this Volume)
GREECE: A. D. 1906, and 1909.

THIBET.

See TIBET.

THOMSON, Sir Joseph:
Presidential Address to British Association for the
Advancement of Science, at Winnipeg.

See (in this Volume)
SCIENCE AND INVENTION: RECENT: PHYSICAL.

THOMSON, J. J.

See (in this Volume)
NOBEL PRIZES.

TIBET: A. D. 1902.
Russo-Chinese Treaty for Control of the Country.

"A Russo-Chinese treaty concerning Tibet was negotiated [in
the later months of 1902] … by Yung-lu. And as it had to be
notified to the Chief-Lamas of the different Buddhist
countries, it became possible to obtain the confidential
communication of its text immediately on its conclusion. This
text, which I published a month ago in the _Frankfurter
Zeitung_, and which has since been admitted as correct by
Russian semi-official papers, runs as follows:

"Article 1st.
Tibet being a territory situated between Central China and
Western Siberia, Russia and China are mutually obliged to care
for the maintenance of peace in that country. In case troubles
should arise in Tibet, China, in order to preserve this
district, and Russia, in order to protect her frontiers, shall
despatch thither military forces on mutual notification.

{648}

"Article 2nd.
In case of apprehension of a third Power’s contriving,
directly or indirectly, troubles in Tibet, Russia and China
oblige themselves to concur in taking such measures as may
seem advisable for repressing such troubles.

"Article 3d.
Entire liberty in what concerns Russian orthodox as well as
Lamaist worship will be introduced in Tibet; but all other
religious doctrines will be absolutely prohibited. For this
purpose, the Grand-Lama and the Superintendent of the Orthodox
Peking Mission are bound to proceed amicably and by mutual
assent, so as to guarantee the free propagation of both
religions and take all necessary measures for avoiding
religious disputes.

"Article 4th.
Tibet shall be made, gradually, a country with an independent
inner administration. In order to accomplish this task, Russia
and China are to share the work. Russia takes upon herself the
reorganisation of the Tibetan military forces on the European
model, and obliges herself to carry into effect this reform in
a good spirit and without incurring blame from the native
population. China, for her part, is to take care of the
development of the economic situation of Tibet, and especially
of her progress abroad."

_Alexander Ular,
England, Russia, and Tibet
(Contemporary Review, December, 1902)._

TIBET: A. D. 1902-1904.
British Enforcement of Unfulfilled Promises.
The Peaceful Mission of Colonel Younghusband which forced
its way to Lhasa.

For a dozen years prior to 1902 there had been unfulfilled
promises from China to India of a settlement of trade
relations between Tibet and the latter, so far as the nominal
suzerain at Peking had power to settle them. In that year the
Chinese Government proposed to send a Commissioner to the
Tibetan frontier to discuss matters there, and the Viceroy of
India, assenting promptly to the proposal, commissioned
Colonel Younghusband, in June, 1903, to proceed, with the
British Political Officer in Sikkim, to Khamba Jong, for a
meeting with Chinese and Tibetan representatives. The mission
was escorted by 200 native troops, and reached the meeting
place in July, but found no Chinese or Tibetan envoys on the
spot. It remained encamped at the appointed place for six
months or more, Colonel Younghusband returning personally
meantime to Simla to report the situation and receive
instructions. A reserve force was stationed in Sikkim to
protect the mission in case of need.