Chapter CDXXXI: Act 8: Parliament 1. repeated in Act 99. Parliament 7 (28)

"Up to the revolutionary period of 1848-50, the policy of the
German Zollverein or Custom's Union was a pronounced
protectionism. The general liberalization, so to speak, of
political life in Western Europe through the events of the
years mentioned and the larger sympathy they engendered
between nations produced, however, a strong movement in
Germany and German-Austria in favor of greater freedom of
commercial exchange between these two countries. It resulted
in the conclusion, for the term of twelve years, of the treaty
of 1853 between the Zollverein and Austria, as the first of
the international compacts for the promotion of commercial
intercourse that formed so prominent a feature of European
history during the following twenty years. The treaty was a
first, but long step towards free exchange, providing, as it
did, for uniform duties on imports from other countries, for a
considerable free list and for largely reduced duties between
the contracting countries. It also contained stipulations for
its renewal on the basis of entire free trade. … A very
influential association was formed, with free trade as the
avowed ulterior object. Its leaders, who were also the
champions of political liberalism, represented intellects of
the highest order. They included the well-known economists
Prince Smith, Mittermaier, Rau, Faucher, Michaelis, Wirth,
Schulze and Braun. An 'Economic Congress' was held annually,
the proceedings of which attracted the greatest attention, and
exercised a growing influence upon the policy of the
governments composing the Zollverein. … The beneficial results
of the treaty of 1853 were so obvious and instantaneous that
the Zollverein and Austria would have no doubt sought to bring
about improved commercial relations with other nations by the
same means, but for the disturbance of the peace of Europe by
the Crimean war, and the conflict of 1859 between France,
Italy and Austria. The bitter feelings, caused by the latter
war against the two first named countries wherever the German
tongue was spoken, rendered the negotiation of commercial
treaties with them out of the question for a time. The great
achievement of Richard Cobden and Michel Chevalier, the famous
treaty of 1860 between Great Britain and France, changed this
reluctance at once into eagerness to secure the same
advantages that those two countries had insured to each other.
The enlightened and far-seeing despot occupying the throne of
France, being once won over to the cause of free exchange by
Cobden's ardor and persistence and clear and convincing
arguments, against the views of the majority of his ministers
and with probably 90 per cent. of his subjects strongly
opposed to the abandonment of protectionism, determined, with
the zeal of a new convert, to make the most of his new
departure. He was very willing, therefore, to meet the
advances of the Zollverein, so that in the spring of 1862,
after a whole year's negotiation, a formal treaty was
consummated between it and the French Empire. It was a very
broad measure. … It comprised a copyright and trade-mark
convention, provisions for liberal modifications of the
respective navigation laws and a commercial treaty proper. The
latter provided for the free admission of raw materials, for
the abolition of transit and export duties and for equalizing
import duties as nearly as possible, and also contained a
'most favored nation' clause. … In pursuance of the terms of
the treaty of 1853 with Austria, negotiations had been
commenced early in the sixties with reference to its renewal
upon the basis of the removal of all custom-barriers between
the two countries. Austria was naturally against the
conclusion of a treaty between the Zollverein and France with
herself left out, and opposed its consummation with all the
means at her command. … After long negotiations, accompanied
by much excitement in Germany, a compromise was reached in
1864, under which the Zollverein was renewed for twelve years,
that is till 1877, and the French treaty ratified on condition
that a new treaty should be made with Austria. This was done
in 1865, but the new convention did not provide for the
complete commercial union, contemplated under that of 1853. It
was only a compact between two independent nations, but on
more liberal lines than the old treaty, and certainly
constituting a yet nearer approach to free trade. … In other
directions the Zollverein lost no time in following the
example of Napoleon by entering successively in 1865 and 1866
into commercial treaties with Belgium, Italy, Great Britain
and Switzerland, which were simple conventions, by which the
contracting parties granted to each other the position of the
most favored nation, or formal tariff regulating treaties
after the model of that between the Zollverein and France.
These additional treaties were no more than the latter the
work of Bismarck. … The general upheaval in Germany arising
from the war between Prussia and Austria and her North and
South-German Allies, while temporarily delaying the farther
progress of tariff reform, subsequently accelerated its
forward march. …
{3079}
A special treaty for the reform of the constitution, so to
speak, of the Zollverein was concluded in July, 1867, between
the North-German Federation, the new political constellation
Prussia had formed out of all Germany north of the Main, after
destroying the old Diet, and Bavaria, Wuertemberg, Baden and
Hesse, under the provisions of which the tariff and revenue
policy of all Germany was to be managed by the
'Zollparlament,' consisting of an upper house, made up of
representatives of the governments, and of a lower house of
representatives of the people elected by universal suffrage on
a population basis. Thus tariff reform was actually the chain
that bound up, as it were, the material interests of all
Germans outside of Austria for the first time, as those of one
nation. Negotiations for a new commercial treaty with the dual
monarchy of Austria-Hungary—into which Austria had changed in
consequence of the events of 1866—commenced immediately after
the restoration of peace, and were brought to a satisfactory
conclusion in March, 1868. The treaty was to run nine years,
and provided for still lower duties than under the old treaty,
the principal reductions being on all agricultural products,
wines and iron. … The Franco-German war put an end to the
treaty of 1862 between France and the Zollverein. As a
substitute for the commercial part of it, article II of the
treaty of peace of 1871 provided simply that France and
Germany should be bound for an indefinite period to allow each
other the most favorable tariff rates either of them had
granted or might grant to Great Britain, Belgium, Holland,
Switzerland, Austria-Hungary and Russia. … A large majority of
the members of the first Reichstag [under the newly created
Empire] favored further legislation in the direction of free
trade, and the work of tariff reform was vigorously taken in
hand, as soon as the constitution and the essential organic
laws of the Empire had been framed. … In the session of 1873
the National Liberals brought in a motion asking the
Government to present measures for the abolition of all duties
on raw and manufactured iron, salt and other articles. The
Government responded very readily. … Prince Bismarck was no
less pronounced for a strict revenue tariff than any of the
other government speakers. Up to the end of 1875, there was
not the slightest indication of a change of views on his part
upon this general subject. … The climax of the free trade
movement in Germany can be said to have been reached about the
time last stated. But a few months later, suspicious signs of
a new inspiration on the part of the Prince became manifest.
Rumors of dissensions between him and Minister Delbrück began
to circulate, and gradually gained strength. In May, 1876, all
Germany was startled by the announcement that the latter and
his principal co-workers had resigned. Soon it was known that
their retirement was due to a disagreement with the Prince
over tariff reform matters. A crisis had evidently set in that
was a great puzzle at first to everybody. Gradually it became
clear that the cause of it was really a sudden abandonment of
the past policy by the Prince. The new course, upon which the
mighty helmsman was starting the ship of state, was signalized
in various ways, but the full extent of his change of front
was disclosed only in a communication addressed by him to the
Federal Council, under date of December 15, 1878. It was a
most extraordinary document. It condemned boldly all that had
been done by the government under his own eyes and with his
full consent in relation to tariff reform ever since the
Franco-German treaty of 1862. … As the principal reason for
the new departure, he assigned the necessity of reforming the
public finances in order to increase the revenues of the
Government. The will of the Chancellor had become the law for
the federal council, and, accordingly, the tariff-committee
began the work of devising a general protective tariff in hot
haste. It was submitted to the Reichstag by the Prince in May,
1879. … Thus Germany was started on the downward plain of
protectionism, on which it continued for twelve years. Beyond
all question, the Chancellor was solely responsible for it. …
The tariff bill of 1879 met with vigorous opposition under the
lead of ex-Minister Delbrück, but was passed by the large
majority of 217 to 117 —showing the readiness with which the
'bon plaisir' of the master had made converts to his new
faith. It was a sweeping measure, establishing large duties on
cereals, iron, lumber and petroleum, increasing existing
duties on textile goods, coffee, wines, rice, tea, and a great
number of other minor articles and also on cattle. The
protectionist current came to a temporary stop from 1880-1883,
inasmuch as in the new Reichstag, elected in 1881, the
protection and anti-protection parties were so evenly balanced
that the Government failed to carry its proposals for still
higher duties. The elections of 1884, in which the Government
brought every influence to bear against the opposition,
resulted, however, in the return of a protectionist majority.
Accordingly, there followed in 1885 a new screwing up of
duties, tripling those on grain, doubling those on lumber, and
raising most others. In 1887 the duties on grain were even
again increased. But now the insatiateness of protection and
especially the duties put on the necessaries of life produced
a strong reaction, as evidenced by the largely increased
membership of the opposition parties in the present Reichstag.
… The Imperial Government, shortly after the retirement of
Prince Bismarck had untied its hands, entered upon
negotiations with Austria-Hungary, Italy, Switzerland and
Belgium, which resulted in … reciprocity treaties."

_H. Villard,
German Tariff Policy
(Yale Review, May, 1892)._

ALSO IN:
_W. H. Dawson,
Bismarck and State Socialism._

TARIFF: (United States and Canada): A. D. 1854-1866.
The Reciprocity Treaty.

The Treaty commonly known in America as the Canadian
Reciprocity Treaty of 1854, between the governments of Great
Britain and the United States, was concluded on the 5th of
June, 1854, and ratifications were exchanged on the 9th of
September following. The negotiators were the Earl of Elgin
and Kincardine, on the part of the British Government, and
William L. Marcy, Secretary of State of the United States,
acting for the latter.
{3080}
By the first article of the treaty it was agreed that, "in
addition to the liberty secured to the United States fishermen
by the … convention of October 20, 1818, of taking, curing,
and drying fish on certain coasts of the British North
American Colonies therein defined, the inhabitants of the
United States shall have, in common with the subjects of Her
Britannic Majesty, the liberty to take fish of every kind,
except shell-fish, on the sea-coasts and shores, and in the
bays, harbors, and creeks of Canada, New Brunswick, Nova
Scotia, Prince Edward's Island, and of the several islands
thereunto adjacent, without being restricted to any distance
from the shore, with permission to land upon the coasts and
shores of those colonies and the islands thereof, and also
upon the Magdalen Islands, for the purpose of drying their
nets and curing their fish; provided that, in so doing, they
do not interfere with the rights of private property, or with
British fishermen, in the peaceable use of any part of the
said coast in their occupancy for the same purpose. It is
understood that the above-mentioned liberty applies solely to
the sea-fishery, and that the salmon and shad fisheries, and
all fisheries in rivers and the mouths of rivers, are hereby
reserved exclusively for British fishermen." The same article
provided for the appointment of commissioners and an
arbitrator or umpire to settle any disputes that might arise
"as to the places to which the reservation of exclusive right
to British fishermen contained in this article, and that of
fishermen of the United States contained in the next
succeeding article, apply." By the second article of the
treaty British subjects received privileges on the eastern
sea-coasts and shores of the United States north of the 36th
parallel of north latitude, identical with those given by the
first article to citizens of the United States on the coasts
and shores mentioned above. Article 3 was as follows: "It is
agreed that the articles enumerated in the schedule hereunto
annexed, being the growth and produce of the aforesaid British
colonies or of the United States, shall be admitted into each
country respectively free of duty: Schedule: Grain, flour, and
breadstuffs, of all kinds. Animals of all kinds. Fresh,
smoked, and salted meats. Cotton-wool, seeds, and vegetables.
Undried fruits, dried fruits. Fish of all kinds. Products of
fish, and of all other creatures living in the water. Poultry,
eggs. Hides, furs, skins, or tails, undressed. Stone or
marble, in its crude or unwrought state. Slate. Butter,
cheese, tallow. Lard, horns, manures. Ores of metals, of all
kinds. Coal. Pitch, tar, turpentine, ashes. Timber and lumber
of all kinds, round, hewed, and sawed, unmanufactured in whole
or in part. Firewood. Plants, shrubs, and trees. Pelts, wool.
Fish-oil. Rice, broom-corn, and bark. Gypsum, ground or
unground. Hewn, or wrought, or unwrought burr or grindstones.
Dye-stuffs. Flax, hemp, and tow, unmanufactured.
Unmanufactured tobacco. Rags." Article 4 secured to the
citizens and inhabitants of the United States the right to
navigate the River St. Lawrence and the canals in Canada
between the ocean and the great lakes, subject to the same
tolls and charges that might be exacted from Her Majesty's
subjects, but the British Government retained the right to
suspend this privilege, on due notice given, in which case the
Government of the United States might suspend the operations
of Article 3. Reciprocally, British subjects were given the
right to navigate Lake Michigan, and the Government of the
United States engaged itself to urge the State governments to
open the several State canals to British subjects on terms of
equality. It was further agreed that no export or other duty
should be levied on lumber or timber floated down the river
St. John to the sea, "when the same is shipped to the United
States from the province of New Brunswick." Article 5 provided
that the treaty should take effect whenever the necessary laws
were passed by the Imperial Parliament, the Provincial
Parliaments, and the Congress of the United States, and that
it should "remain in force for ten years from the date at
which it may come into operation, and further until the
expiration of twelve months after either of the high
contracting parties shall give notice to the other of its wish
to terminate the same." Article 6 extended the provisions of
the treaty to the island of Newfoundland, so far as
applicable, provided the Imperial Parliament, the Parliament
of Newfoundland and the Congress of the United States should
embrace the island in their laws for carrying the treaty into
effect; but not otherwise.

_Treaties and Conventions between the
United States and other Powers,
edition of 1889, pages 448-452._

The Treaty was abrogated in 1866, the United States having
given the required notice in 1865.

_F. E. Haynes,
The Reciprocity Treaty with Canada of 1854
(American Economic Association Publications,
volume 7, number 6)._

TARIFF: (United States): A. D. 1861-1864.
The Morrill Tariff and the War Tariffs.

"In 1861 the Morrill tariff act began a change toward a higher
range of duties and a stronger application of protection. The
Morrill act is often spoken of as if it were the basis of the
present protective system. But this is by no means the case.
The tariff act of 1861 was passed by the House of
Representatives in the session of 1859-60, the session
preceding the election of President Lincoln. It was passed,
undoubtedly, with the intention of attracting to the
Republican party, at the approaching Presidential election,
votes in Pennsylvania and other States that had protectionist
leanings. In the Senate the tariff bill was not taken up in
the same session in which it was passed in the House. Its
consideration was postponed, and it was not until the next
session—that of 1860-61—that it received the assent of the
Senate and became law. It is clear that the Morrill tariff was
carried in the House before any serious expectation of war was
entertained; and it was accepted by the Senate in the session
of 1861 without material change. It therefore forms no part of
the financial legislation of the war, which gave rise in time
to a series of measures that entirely superseded the Morrill
tariff. Indeed, Mr. Morrill and the other supporters of the
act of 1861 declared that their intention was simply to
restore the rates of 1846. The important change which they
proposed to make from the provisions of the tariff of 1846 was
to substitute specific for ad-valorem duties. … The specific
duties … established were in many cases considerably above the
ad-valorem duties of 1846. The most important direct changes
made by the act of 1861 were in the increased duties on iron
and on wool, by which it was hoped to attach to the Republican
party Pennsylvania and some of the Western States. Most of the
manufacturing States at this time still stood aloof from the
movement toward higher rates. … Mr. Rice, of Massachusetts,
said in 1860: 'The manufacturer asks no additional protection.
He has learned, among other things, that the greatest evil,
next to a ruinous competition from foreign sources, is an
excessive protection, which stimulates a like ruinous and
irresponsible competition at home'.

_Congressional Globe, 1859-60,
page 1867._

{3081}

Mr. Sherman said: … 'The manufacturers have asked over and
over again to be let alone. The tariff of 1857 is the
manufacturers' bill; but the present bill is more beneficial
to the agricultural interest than the tariff of 1857.'

_Congressional Globe, 1859-60,
p. 2053._

_C. F. Hunter's speech,
Congressional Globe, 1859-60, p. 3010._

In later years Mr. Morrill himself said that the tariff of
1861 'was not asked for, and but coldly welcomed, by
manufacturers, who always and justly fear instability.' …

Congressional Globe, 1869-70, p. 3295.

Hardly had the Morrill tariff been passed when Fort Sumter was
fired on. The Civil War began. The need of additional revenue
for carrying on the great struggle was immediately felt; and
as early as the extra session of the summer of 1861,
additional customs duties were imposed. In the next regular
session, in December, 1861, a still further increase of duties
was made. From that time till 1865 no session, indeed hardly a
month of any session, passed in which some increase of duties
on imports was not made. … The great acts, of 1862 and 1864
are typical of the whole course of the war measures; and the
latter is of particular importance, because it became the
foundation of the existing tariff system. … The three revenue
acts of June 30, 1864, practically form one measure, and that
probably the greatest measure of taxation which the world has
seen. The first of the acts provided for an enormous extension
of the internal-tax system; the second for a corresponding
increase of the duties on imports; the third authorized a loan
of $400,000,000. … Like the tariff act of 1862, that of 1864
was introduced, explained, amended, and passed under the
management of Mr. Morrill, who was chairman of the Committee
on Ways and Means. That gentleman again stated, as he had done
in 1862, that the passage of the tariff act was rendered
necessary in order to put domestic producers in the same
situation, so far as foreign competition was concerned, as if
the internal taxes had not been raised. This was one great
object of the new tariff. … But it explains only in part the
measure which in fact was proposed and passed. The tariff of
1864 was a characteristic result of that veritable furor of
taxation which had become fixed in the minds of the men who
were then managing the national finances. Mr. Morrill, and
those who with him made our revenue laws, seem to have had but
one principle: to tax every possible article indiscriminately,
and to tax it at the highest rates that anyone had the courage
to suggest. They carried this method out to its fullest extent
in the tariff act of 1864, as well as in the tax act of that
year. At the same time these statesmen were protectionists. …
Every domestic producer who came before Congress got what he
wanted in the way of duties. Protection ran riot; and this,
moreover, not merely for the time being. The whole tone of the
public mind toward the question of import duties became
distorted. … The average rate on dutiable commodities, which
had been 37.2 per cent. under the act of 1862, became 47.06
per cent. under that of 1864. … In regard to the duties as
they stood before 1883, it is literally true, in regard to
almost all protected articles, that the tariff act of 1864
remained in force for twenty years without reductions."

_F. W. Taussig,
Tariff History of the United States,
pages 158-169, with foot-note._

Under the Morrill Tariff, which went into effect April 1,
1861, the imposts which had averaged about 19 per cent. on
dutiable articles were raised to 36 per cent.

_J. G. Blaine,
Twenty Years of Congress,
volume 1, page 400._

TARIFF: (Australia): A. D. 1862-1892.
Contrasted policy of Victoria and New South Wales.

Both New South Wales and Victoria "are young countries, and
are inhabited by men of the same race, speech, and training:
capital and labour oscillate freely between them: both use
substantially the same methods and forms of government: while
against the larger territory of New South Wales may be set the
superior climate and easier development of its southern
neighbour. Whatever may be the balance of the natural
advantages, whether of climate or population, is on the side
of Victoria, whose compact, fertile, and well watered
territory gained for it, on its first discovery, the
well-deserved title of Australia Felix. The striking and
ultimate point of difference between the two countries is
their fiscal policy. Since 1866 Victoria has lived under a
system of gradually increasing Protection, while the policy of
New South Wales has been, in the main, one of Free Trade.
According to all Protectionist theory Victoria should be
prosperous and New South Wales distressed; there should be
variety and growth in the one country, stagnation in the
other. At least the progress of Victoria ought to have been
more rapid than that of New South Wales, because she has added
to the natural advantages which she already enjoyed, the
artificial benefits which are claimed for a Protective tariff.
If, in fact, neither of these conclusions is correct, and,
while both countries have been phenomenally prosperous, New
South Wales has prospered the most, one of two conclusions is
inevitable—namely, either that certain special influences have
caused the more rapid progress of New South Wales which were
not felt in Victoria, or that Protection has retarded instead
of assisted the development of Victoria's natural superiority.
Writers of all schools admit that activity in certain
departments of national life is a fair indication of
prosperity and progress. It is, for instance, generally
allowed that an increase in population, a development of
agricultural and manufacturing industry, a growth of foreign
commerce, an increase in shipping, or an improvement in the
public revenue, are all signs of health and well-being; and
that a concurrence of such symptoms over a lengthened period
indicates an increase in material wealth. Accepting these
tests of progress, our comparison proceeds thus: first, we
examine the position of the two Colonies as regards
population, foreign commerce, shipping, agriculture,
manufactures, and revenue, at the time when both of them
adhered to Free Trade; from which we find that, according to
all these indications of prosperity, Victoria was then very
much the better off: In 1866 she outnumbered New South Wales
in population by 200,000 souls: her foreign commerce was
larger by £8,300,000: she had a greater area of land under
cultivation: her manufactures were well established, while
those of New South Wales were few and insignificant: she was
ahead in shipping, and her revenue was greater by one-third.
Passing next to the years which follow 1866, we observe that
New South Wales gradually bettered her position in every
province of national activity, and that, as the fetters of
Protection became tighter, Victoria receded in the race.
{3082}
She gave way first in the department of foreign commerce, next
in population, shipping, and revenue, until, in 1887, she
maintained her old superiority in agriculture alone. From this
accumulation of facts—and not from any one of them we infer
that the rate of progress in New South Wales under Free Trade
has been greater than that of Victoria under Protection."

_B. R. Wise,
Industrial Freedom,
appendix 3._

TARIFF: (Europe): A. D. 1871-1892.
Protectionist reaction on the Continent.
High Tariff in France.

"The Franco-German War (1870-1) and the overthrow of Napoleon
III. at once arrested the free-trade policy, which had little
support in the national mind, and was hardly understood
outside the small circle of French economists. The need of
fresh revenue was imperative, and M. Thiers, the most
prominent of French statesmen, was notoriously protectionist
in his leanings. Pure revenue duties on colonial and Eastern
commodities were first tried; the sugar duty was increased
30%; that on coffee was trebled; tea, cocoa, wines and
spirits, were all subjected to greatly increased charges. As
the yield thus obtained did not suffice, proposals for the
taxation of raw materials were brought forward but rejected by
the legislature in 1871, when M. Thiers tendered his
resignation. To avoid this result the measure was passed, not
however to come into operation until compensating productive
duties had been placed on imported manufactures. The existing
commercial treaties were a further obstacle to changes in
policy, and accordingly negotiations were opened with England
and Belgium, in order that the new duties might be applied to
their products. As was justifiable under the circumstances,
the former country required that if imported raw products were
to be taxed, the like articles produced in France should pay
an equivalent tax, and therefore, as the shortest way of
escape, the French Government gave notice for the termination
of the treaties (in the technical language of international
law 'denounced' them), and new conventions were agreed on; but
as this arrangement was just as unsatisfactory in the opinion
of the French Chambers, the old treaties were in 1873 restored
to force until 1877, and thus the larger part of the raw
materials escaped the new taxation. The protectionist tendency
was, too, manifested in the departure from the open system
introduced in 1866 in respect to shipping. A law of 1872
imposed differential duties on goods imported in foreign
vessels. … The advance of the sentiment in favour of a return
to the restrictive system was even more decidedly indicated in
1881. Bounties were then granted for the encouragement of
French shipping, and extra taxes imposed on indirect imports
of non-European and some European goods. In 1889 the carrying
trade between France and Algiers was reserved for native
ships. The revision of the general tariff was a more serious
task, undertaken with a view to influencing the new treaties
that the termination of the old engagements made necessary.
The tariff of 1881 (to come into force in 1882) made several
increases and substituted many specific for ad valorem duties.
Raw materials escaped taxation; half-manufactured articles
were placed under moderate duties. The nominal corn duties
were diminished by a fraction, but the duties on live stock
and fresh meat were considerably increased. … A new
'conventional tariff' speedily followed in a series of fresh
treaties with European countries. … The duties on whole or
partially-manufactured goods remained substantially unchanged
by the new treaties, which do not, in fact, vary so much from
the general tariff as was previously the case. The number of
articles included in the conventions had been reduced, and all
countries outside Europe came under the general code. The
reaction against the liberal policy of 1860 was thus as yet
very slight, and did not seriously affect manufactures. The
agricultural depression was the primary cause of the
legislation of 1885, which placed a duty of 3 francs per
quintal on wheat, 7 francs on flour, 2 francs on rye and
barley, and one franc on oats, with additional duties on
indirect importation. Cattle, sheep, and pigs came under
increases of from 50% to 100%. … Not satisfied with their
partial success, the advocates of high duties have made
further efforts. Maize, hitherto free, as being chiefly used
by farmers for feeding purposes, is now liable to duty, and
the tariff proposed in the present year (1891) raises the
rates on most articles from an average of 10% to 15% to one of
30% and 40%. … Germany did not quite as speedily come under
the influence of the economic reaction as France. … Italian
commercial policy also altered for the worse. From the
formation of the kingdom till 1875, as the various commercial
treaties and the general tariff of 1861 show, it was liberal
and tending towards freedom. About the latter date the forces
that we have indicated above as operating generally throughout
Europe, commenced to affect Italy. The public expenditure had
largely increased, and additional revenue was urgently
required. Agriculture was so depressed that, though the
country is pre-eminently agricultural, alarm was excited by
the supposed danger of foreign competition. The result was
that on the general revision of duties in 1877 much higher
rates were imposed on the principal imports. … Depression both
in agriculture and elaborative industries continued and
strengthened the protectionist party, who succeeded in
securing the abandonment of all the commercial treaties, and
the enactment of a new tariff in 1887. … The first effect of
the new system of high taxation with no conventional
privileges was to lead to a war of tariffs between France and
Italy. … Austria may be added to the list of countries in
which the protectionist reaction has been effectively shown. …
In Russia the revival (or perhaps it would be more correct to
say continued existence), of protection is decisively marked.
… Spain and Portugal had long been strongholds of
protectionist ideas. … Holland and Belgium have as yet [1891]
adhered to the system of moderate duties."

_C. F. Bastable,
The Commerce of Nations,
chapter 9._

A new tariff system was elaborated by the French Chambers,
with infinite labor and discussion, during the year 1891, and
adopted early in the following year, being known as the "Loi
du 11 .Janvier, 1892." This tariff makes a great advance in
duties on most imports, with a concession of lower rates to
nations according reciprocal favors to French productions. Raw
materials in general are admitted free of duties. The
commercial treaties of France are undergoing modification.

{3083}

TARIFF: (United States): A. D. 1883.
Revision of the Tariff.

In 1882, "Congress appointed a Tariff Commission 'to take into
consideration, and to thoroughly investigate, all the various
questions relating to the agricultural, commercial,
mercantile, manufacturing, mining, and industrial interests of
the United States, so far as the same may be necessary to the
establishment of a judicious tariff, or a revision of the
existing tariff upon a scale of justice to all interests.'
Several things it was expected would be accomplished by
revising the tariff, and the measure received the assent of
nearly all the members of Congress. The free-traders expected
to get lower duties, the protectionists expected to concede
them in some cases, and in others to get such modifications as
would remove existing ambiguities and strengthen themselves
against foreign competition. The protective force of the
existing tariff had been weakened in several important
manufactures by rulings of the treasury department. … The
composition of the commission was as satisfactory to the
manufacturing class as displeasing to free-traders. … Early in
their deliberations, the commission became convinced that a
substantial reduction of the tariff duties was demanded, not
by a mere indiscriminate popular clamor, but by the best
conservative opinion of the country, including that which had
in former times been most strenuous for the preservation of
the national industrial defences. Such a reduction of the
existing tariff the commission regarded not only as a due
recognition of public sentiment, and a measure of justice to
consumers, but one conducive to the general industrial
prosperity, and which, though it might be temporarily
inconvenient, would be ultimately beneficial to the special
interests affected by such reduction. No rates of defensive
duties, except for establishing new industries, which more
than equalized the conditions of labor and capital with those
of foreign competitors, could be justified. Excessive duties,
or those above such standard of equalization, were positively
injurious to the interest which they were supposed to benefit.
They encouraged the investment of capital in manufacturing
enterprise by rash and unskilled speculators, to be followed
by disaster to the adventurers and their employees, and a
plethora of commodities which deranged the operations of
skilled and prudent enterprise. … 'It would seem that the
rates of duties under the existing tariff—fixed, for the most
part, during the war under the evident necessity at that time
of stimulating to its utmost extent all domestic
production—might be adapted, through reduction, to the present
condition of peace requiring no such extraordinary stimulus.
And in the mechanical and manufacturing industries, especially
those which have been long established, it would seem that the
improvements in machinery and processes made within the last
twenty years, and the high scale of productiveness which had
become a characteristic of their establishments, would permit
our manufacturers to compete with their foreign rivals under a
substantial reduction of existing duties.' Entertaining these
views, the commission sought to present a scheme of tariff
duties in which substantial reduction was the distinguishing
feature. … The attempt to modify the tariff brought into bold
relief the numerous conflicting interests, and the difficulty
and delicacy of the undertaking. As our industries become more
heterogeneous, the tariff also grows more complex, and the
difficulty of doing justice to all is increased. For example,
the wool manufacturers to succeed best must have free wool and
dye-stuffs; on the other hand, both these interests desired
protection. The manufacturers of the higher forms of iron must
have free materials to succeed best; on the other hand, the
ore producers, the pig-iron manufacturers, and every
succeeding class desired a tariff on their products. It was
not easy for these interests to agree, and some of them did
not. The iron-ore producers desired a tariff of 85 cents a ton
on ore; the steel-rail makers were opposed to the granting of
more than 50; the manufacturers of fence wire were opposed to
an increase of duty on wire rods used for making wire, and
favored a reduction; the manufacturers of rods in this country
were desirous of getting an increase; the manufacturers of
floor oil-cloths desired a reduction or abolition of the duty
on the articles used by them; the soap manufacturers desired
the putting of caustic soda on the free list, which the
American manufacturers of it opposed; some of the woolen
manufacturers were desirous that protection should be granted
to the manufacturers of dye-stuffs, and some were not; the
manufacturers of tanned foreign goat and sheep skins desired
the removal of the tariff on such skins; those who tanned
them, and who were much less numerous, were equally tenacious
in maintaining the tariff on the raw skins, and the same
conflict arose between other interests. The method of
determining how much protection their several interests
needed, and of adjusting differences between them, has always
been of the crudest kind. … Although not all of the
recommendations of the commission were adopted, most of them
were. Those which pertained to the simplification of the law
were adopted with only slight changes. The bill reported by
the commission contained, not including the free list, 631
articles and classifications. … Less than 25 articles, mainly
in the cotton, woolen goods, and the iron and steel schedules,
were matters of contention. The rates on 409 of the 631
articles mentioned in the tariff recommended by the commission
were adopted, and between 50 and 60 more articles have
substantially the same rates, though levied under different
clauses. Of the 170 changes, 98 were fixed at lower rates than
those proposed by the commission, 46 at higher, and 26 have
been classed as doubtful."

_A. S. Bolles,
Financial History of the United States, 1861-1885,
book 2, chapter 7._

TARIFF: (United States): A. D. 1884-1888.
Attempts at Tariff Reform.
The Morrison Bills and the Hewett Bill.
President Cleveland's Message.
The Mills Bill and its defeat.

The slight concessions made in the protectionist
tariff-revision of 1883 did not at all satisfy the opinion in
the country demanding greater industrial freedom, and the
question of tariff-reform became more important than before in
American politics. The Democratic Party, identified by all its
early traditions, with the opposition to a policy of
"protection," won the election of 1884, placing Mr. Cleveland
in the Presidency and gaining control of the House of
Representatives in the 49th Congress. But it had drifted from
its old anchorage on the tariff question, and was slow in
pulling back. A large minority in the party had accepted and
become supporters of the doctrine which was hateful to their
fathers as an economic heresy.
{3084}
The majority of the Democrats in the House, however, made
strenuous efforts to accomplish something in the way of
reducing duties most complained of. Their first undertaking
was led by Mr. Morrison of Illinois, who introduced a bill
which "proposed an average reduction of 20 per cent., but with
so many exceptions that it was estimated the average reduction
on dutiable articles would be about 17 per cent. The rates
under the Morrill Act of 1861 were to form the minimum limit.
An extensive addition to the free list was proposed, including
the following articles: ores of iron, copper, lead, and
nickel, coal, lumber, wood, hay, bristles, lime, sponges,
indigo, coal tar and dyewoods." In the Committee of Ways and
Means the bill underwent considerable changes, the articles in
the free list being reduced to salt, coal, lumber and wood. It
was reported to the House March 11, and remained under debate
until May 6, when it was killed by a motion to strike out the
enacting clause, on which 118 Republicans and 41 Democrats
voted aye, against 4 Republicans and 151 Democrats voting nay.
The 4 Republicans supporting the bill were all from Minnesota;
of the 41 Democrats opposing it 12 were from Pennsylvania, 10
from Ohio, 6 from New York, 4 from California and 3 from New
Jersey. "The Morrison 'horizontal bill' having been thus
killed, Mr. Hewett, a New York Democrat, and a member of the
Ways and Means Committee, on May 12 introduced a new tariff
bill, providing for a reduction of 10 to 20 per cent. on a
considerable number of articles and placing several others on
the free list." The bill was reported favorably to the House,
but action upon it was not reached before the adjournment.
During the same session, a bill to restore the duties of 1867
on raw wool was defeated in the House; an amendment to the
shipping bill, permitting a free importation of iron and steel
steamships for employment in the foreign trade, passed the
House and was, defeated in the Senate; and a bill reducing the
duty on works of art from 20 to 10 per cent. was defeated in
the House. In the next Congress, the Forty-ninth, Mr. Morrison
led a new undertaking to diminish the protective duties which
were producing an enormous surplus of revenue. The bill which
he introduced (February 15, 1886) received radical changes in
the Ways and Means Committee, "inasmuch as it was clearly seen
that the opposition from the metal and coal interests was
sufficiently strong to destroy all chance of consideration in
the House. Accordingly, it was found preferable to make the
duties on wool and woolens the special point for assault." But
the bill modified on this new line,—lowering duties on woolens
to 35 per cent. ad valorem, and placing wool in the free list,
with lumber, wood, fish, salt, flax, hemp and jute,—was
refused consideration by a vote of 157 to 140 in the House, on
the 17th of June. Again there were 35 members of his own party
arrayed against Mr. Morrison. At the second session of the
same Congress, December 18, 1886, Mr. Morrison repeated his
attempt with no better success.

_O. H. Perry,
Proposed Tariff Legislation since 1883
(Quarterly Journal of Economics, October, 1887)._

The assembling of the 50th Congress, on the 6th of December,
1887, was signalized by a message from President Cleveland
which produced an extraordinary effect, decisively lifting the
tariff question into precedence over all other issues in
national politics, and compelling the Democratic Party to
array its lines distinctly and unequivocally against the
upholders of "protection" as an economic policy. He emphasized
the "paramount importance of the subject" impressively by
passing by every other matter of public concern, and devoting
his message exclusively to a consideration of the "'state of
the Union' as shown in the present condition of our Treasury
and our general fiscal situation." The condition of the
Treasury to which the President called attention was one of
unexampled plethora. "On the 30th day of June, 1885, the
excess of revenues over public expenditures, after complying
with the annual requirement of the Sinking-Fund Act, was
$17,859,735.84; during the year ended June 30, 1886, such
excess amounted to $49,405,545.20; and during the year ended
June 30, 1887, it reached the sum of $55,567,849.54." "Our
scheme of taxation," said the President, "by means of which
this needless surplus is taken from the people and put into
the public treasury, consists of a tariff or duty levied upon
importations from abroad, and internal-revenue taxes levied
upon the consumption of tobacco and spirituous and malt
liquors. It must be conceded that none of the things subjected
to internal-revenue taxation are, strictly speaking,
necessaries; there appears to be no just complaint of this
taxation by the consumers of these articles, and there seems
to be nothing so well able to bear the burden without hardship
to any portion of the people. But our present tariff laws, the
vicious, inequitable, and illogical source of unnecessary
taxation, ought to be at once revised and amended. These laws,
as their primary and plain effect, raise the price to
consumers of all articles imported and subject to duty, by
precisely the sum paid for such duties. Thus the amount of the
duty measures the tax paid by those who purchase for use these
imported articles. Many of these things, however, are raised
or manufactured in our own country, and the duties now levied
upon foreign goods and products are called protection to these
home manufactures, because they render it possible for those
of our people who are manufacturers to make these taxed
articles and sell them for a price equal to that demanded for
the imported goods that have paid customs duty. So it happens
that while comparatively a few use the imported articles,
millions of our people, who never use and never saw any of the
foreign products, purchase and use things of the same kind
made in this country, and pay therefor nearly or quite the
same enhanced price which the duty adds to the imported
articles. Those who buy imports pay the duty charged thereon
into the public treasury, but the majority of our citizens,
who buy domestic articles of the same class, pay a sum at
least approximately equal to this duty to the home
manufacturer. … The difficulty attending a wise and fair
revision of our tariff-laws is not underestimated. It will
require on the part of Congress great labor and care, and
especially a broad and national contemplation of the subject,
and a patriotic disregard of such local and selfish claims as
are unreasonable and reckless of the welfare of the entire
country. Under our present laws more than 4,000 articles are
subject to duty.
{3085}
Many of these do not in any way compete with our own
manufactures, and many are hardly worth attention as subjects
of revenue. A considerable reduction can be made in the
aggregate by adding them to the free list. The taxation of
luxuries presents no features of hardship; but the necessaries
of life used and consumed by all the people, the duty upon
which adds to the cost of living in every home, should be
greatly cheapened. The radical reduction of the duties imposed
upon raw material used in manufactures, or its free
importation, is of course an important factor in any effort to
reduce the price of these necessaries. … It is not apparent
how such a change can have any injurious effect upon our
manufacturers. On the contrary, it would appear to give them a
better chance in foreign markets with the manufacturers of
other countries, who cheapen their wares by free material.
Thus our people might have an opportunity of extending their
sales beyond the limits of home consumption—saving them from
the depression, interruption in business, and loss caused by a
glutted domestic market, and affording their employes more
certain and steady labor, with its resulting quiet and
contentment. The question thus imperatively presented for
solution should be approached in a spirit higher than
partisanship. … But the obligation to declared party policy
and principle is not wanting to urge prompt and effective
action. Both of the great political parties now represented in
the Government have, by repeated and authoritative
declarations, condemned the condition of our laws which
permits the collection from the people of unnecessary revenue,
and have, in the most solemn manner, promised its correction.
… Our progress toward a wise conclusion will not be improved
by dwelling upon the theories of protection and free trade.
This savors too much of bandying epithets. It is a condition
which confronts us—not a theory. Relief from this condition
may involve a slight reduction of the advantages which we
award our home productions, but the entire withdrawal of such
advantages should not be contemplated. The question of free
trade is absolutely irrelevant."—The President's emphatic
utterance rallied his party and inspired a more united effort
in the House to modify and simplify the tariff. Under the
chairmanship of Mr. Mills, of Texas, a bill was framed by the
Committee of Ways and Means and reported to the House on the
2d of April, 1888. "We have gone as far as we could," said the
Committee in reporting the bill, "and done what we could, in
the present condition of things, to place our manufactures
upon a firm and unshaken foundation, where they would have
advantages over all the manufacturers of the world. Our
manufacturers, having the advantage of all others in the
intelligence, skill, and productive capacity of their labor,
need only to be placed on the same footing with their rivals
in having their materials at the same cost in the open markets
of the world. In starting on this policy, we have transferred
many articles from the dutiable to the free list. The revenues
now received on these articles amount to $22,189,595.48.
Three-fourths of this amount is collected on articles that
enter into manufactures, of which wool and tin-plates are the
most important. … The repeal of all duties on wool enables us
to reduce the duties on the manufactures of wool
$12,332,211.65. The largest reduction we have made is in the
woolen schedule, and this reduction was only made possible by
placing wool on the free list. There is no greater reason for
a duty on wool than there is for a duty on any other raw
material. A duty on wool makes it necessary to impose a higher
duty on the goods made from wool, and the consumer has to pay
a double tax. If we leave wool untaxed the consumer has to pay
a tax only on the manufactured goods. … In the woolen schedule
we have substituted ad valorem for specific duties. The
specific duty is the favorite of those who are to be benefited
by high rates, who are protected against competition, and
protected in combinations against the consumer of their
products. There is a persistent pressure by manufacturers for
the specific duty, because it conceals from the people the
amount of taxes they are compelled to pay to the manufacturer.
The specific duty always discriminates in favor of the costly
article and against the cheaper one. … This discrimination is
peculiarly oppressive in woolen and cotton goods, which are
necessaries of life to all classes of people." The ad valorem
duty on woolen goods proposed by the committee in accordance
with these views, ranged from 30 to 45 per cent., existing
rates being reckoned as equivalent to about from 40 to 90 per
cent. ad valorem. Duties on cottons were fixed at 35 to 40 per
cent. On steel rails the bill proposed a reduction from $17
per ton to $11. It lowered the duty on pig-iron to $6 per ton.
It diminished the tariff on common earthenware from 60 to 35
per cent.; on china and decorated earthenware from 60 to 45
per cent.; on window-glass from 93 and 106 to 62 and 68 per
cent. It put tin plates on the free list, along with hemp,
flax, lumber, timber, salt, and other materials of manufacture
and articles in common use. These were the more important
modifications contemplated in what became known as "the Mills
Bill." After vigorous debate, it was passed by the Democrats
of the House with a nearness to unanimity which showed a
remarkable change in the sentiment of their party on the
subject. Only four Democratic representatives were found
voting in opposition to the measure. In the Senate, where the
Republicans were in the majority, the measure was wrecked, as
a matter of course. The protectionists of that body
substituted a bill which revised the tariff in the contrary
direction, generally raising duties instead of lowering them.
Thus the issue was made in the elections of 1888.

TARIFF: (United States): A. D. 1890.
The McKinley Act.

"In the campaign of 1888 the tariff question was the issue
squarely presented. … The victory of the Republicans … and the
election of President Harrison were the results. … The
election was won by a narrow margin, and was affected by
certain factors which stood apart from the main issue. The
independent voters had been disappointed with some phases of
President Cleveland's administration of the civil service, and
many who had voted for him in 1884 did not do so in 1888. … On
the whole, however, the Republicans held their own, and even
made gains, throughout the country, on the tariff issue; and
they might fairly consider the result a popular verdict in
favor of the system of protection. But their opposition to the
policy of lower duties, emphasized by President Cleveland, had
led them not only to champion the existing system, but to
advocate its further extension, by an increase of duties in
various directions. …
{3086}
Accordingly when the Congress then elected met for the session
of 1889-90, the Republican majority in the House proceeded to
pass a measure which finally became the tariff act of 1890.
This measure may fairly be said to be the direct result of Mr.
Cleveland's tariff message of 1887. The Republicans, in
resisting the doctrine of that message, were led by logical
necessity to the opposite doctrine of higher duties. …
Notwithstanding grave misgivings on the part of some of their
leaders, especially those from the northwest, the act known
popularly as the McKinley bill was pushed through."

_F. W. Taussig,
Tariff History of the United States,
chapter 5._