Chapter IX: Great Questions and Great Answers (3)

“When they made the law creating the greenbacks they incorporated
into its essential provisions the most solemn pledge men could
devise, that they would come back to the doctrines of the fathers.
The very law that created the greenback provided for its redemption
and retirement; and every time the necessities of war required an
additional issue, new guarantees and new limitations were put upon
the new issues to insure their ultimate redemption. They were issued
upon the fundamental condition that the number should be so limited
forever that under the law of contracts the courts might enforce
their sanctions. The men of 1862 knew the dangers from sad
experience in our history; and, like Ulysses, lashed themselves to
the mast of public credit when they embarked upon the stormy and
boisterous sea of inflated paper money, that they might not be
beguiled by the siren song which would be sung to them when they
were afloat on the wild waves.

“But the times have changed; new men are on deck; men who have
forgotten the old pledges; and now only twelve years have passed
(for as late as 1865 this House, with but six dissenting votes,
resolved again to stand by the old ways and bring the country back
to sound money)—only twelve years have passed, and what do we find?
We find a group of theorists and doctrinaires who look upon the
wisdom of the fathers as foolishness. We find some who advocate what
they call “absolute money;” who declare that a piece of paper
stamped a “dollar” is a dollar; that gold and silver are a part of
the barbarism of the past, which ought to be forever abandoned. We
hear them declaring that resumption is a delusion and a snare. We
here them declaring that the eras of prosperity are the eras of
paper money; and they point us to all times of inflation as a period
of blessing to the people, prosperity to business; and they ask us
no more to vex their ears with any allusion to the old standard, the
money of the Constitution. Let the wild crop of financial literature
that has sprung into life within the last twelve years witness how
widely and how far we have drifted. We have lost our old moorings,
have thrown overboard our old compass; we sail by alien stars,
looking not for the haven, but are afloat on an unknown sea....

“No theory of currency that existed in 1860 can justify the volume
now outstanding. Either our laws of trade, our laws of value, our
laws of exchange, have been utterly reversed or the currency of
to-day is in excess of the legitimate wants of trade. But I admit
freely that no Congress is wise enough to determine how much
currency the country needs. There never was a body of men wise
enough to do that. The volume of currency needed, depends upon laws
that are higher than Congress and higher than governments. One thing
only legislation can do. It can determine the quality of the money
of the country. The laws of trade alone can determine its quantity.

“In connection with this view we are met by the distinguished
gentleman from Pennsylvania [Mr. Kelley] with two historical
references on which he greatly relies in opposing resumption. The
first is his reference to France. Follow France, says the honorable
gentleman from Pennsylvania, follow France, and see how she poured
out her volumes of paper money, and by it survived a great crisis
and maintained her business prosperity. Oh, that the gentleman and
those who vote with him would follow France! I gladly follow up his
allusion to France. As a proof that we have not enough money, he
notices the fact that France has always used more money than either
the United States or England. I admit it. But does the gentleman not
know that the traditions and habits of France are as unlike those of
England and the United States as those of any two nations of the
world can be in regard to the use of money? I say to the gentleman
that in France, banking, as an instrument of trade, is almost
unknown. There are no banks in France except the Bank of France
itself. The government has been trying for twenty years to establish
branches in all the eighty-nine departments, and thus far only
fifty-six branches have been organized. Our national, State, and
private banks number nearly ten thousand. The habits of the French
people are not adapted to the use of banks as instruments of
exchange. All the deposits in all the saving-banks of France are not
equal to the deposits in the saving-banks of New York City alone. It
is the frequent complaint of Americans who make purchases in Paris
that the merchants will not accept drafts, even on the Bank of
France.

“Victor Bonnet, a recent French writer, says: ‘The use of deposits,
bank accounts, and checks, is still in its infancy in this country.
They are very little used even in great cities, while in the rest of
France they are completely unknown. It is, however, to be hoped that
there will be more employed hereafter, and that here, as in England
and the United States, payments will be more generally made through
the medium of bankers and by transfers in account-current. If this
should be the case, we shall economize both in the use of specie and
of bank-notes; for it is to be observed that the use of bank-notes
does not reach its fullest development except in countries where the
keeping of bank accounts is universal, as is evident by comparing
France in this respect with England.’

“M. Pinard, manager of the Comptoir d’Escompte, testified before the
commission of inquiry, that the greatest efforts had been made by
that institution to induce French merchants and shopkeepers to adopt
English habits in respect to the use of checks and the keeping of
bank accounts, but in vain; their prejudices were invincible. ‘It
was no use reasoning with them; they would not do it, because they
would not.’

“So long as the business of their country is thus done hand to hand
by the use of cash, they need a much greater volume of money in
proportion to their business than England or the United States.

“How is it in England? Statistics, which no man will gainsay, will
show that ninety-five per cent. of all the great mercantile
transactions of England is done by drafts, checks, and commercial
bills and only five per cent. by the actual use of cash. The great
business of commerce and trade is done by drafts and bills. Money is
now only the small change of commerce. And how is it in this
country? We have adopted the habits of England, and not of France,
in this regard. In 1871, when I was Chairman of the Committee on
Banking and Currency, I asked the Comptroller of the Currency to
issue an order naming fifty-two banks which were to make an analysis
of their receipts. I selected three groups: The first group were the
city banks; not, however, the clearing-house banks, but the great
city banks not in the clearing-house association. The second group
consisted of banks in cities of the size of Toledo and Dayton, in
the State of Ohio. In the third group, if I may coin a word, I
selected the ‘countriest’ banks—the smallest that could be found at
points away from railroads and telegraphs.

“The order was that all those banks should analyze all their
receipts for six consecutive days, putting into one list all that
can be called cash, either in coin, greenbacks, bank-notes, or
coupons; and into the other list all drafts, checks, or commercial
bills. What was the result? During those six days $157,000,000 were
received over the counters of those fifty-two banks; and, of that
amount, $19,370,000 was in cash—twelve per cent. only in cash; and
eighty-eight per cent. of that vast amount, representing every grade
of business, was in checks, drafts, and commercial bills. Does a
country that transacts its business in that way need as much
currency afloat among the people as a country like France, without
banks, without savings institutions, and whose people keep their
money in hoards.

“I remember in reading one of the novels of Dumas, when an officer
of the French army sent home his agent to run his farm, he loaded
him down with silver enough to conduct the business for a year;
there was no thought of giving him credit in a bank; but of locking
in the till, at the beginning of the year, enough coin to do the
business of the year. So much for the difference between the habits
of France and those of Anglo-Saxon countries. Let us now consider
the conduct of France during and since the German war. In July,
1870, the year before the war began, the Bank of France had
outstanding $251,000,000 of paper circulation, and held in its
vaults $229,000,000 of coin. When the war broke out, they were
compelled immediately to issue more paper, and to make it a legal
tender. They took pattern by us in their necessity, and issued paper
until, on the 19th of November, 1873, four years ago next Monday,
they had $602,000,000 of paper issued by the Bank of France, while
the coin in the bank was reduced to $146,000,000.

“But the moment their great war was over, they did what I
recommended to the gentleman from Pennsylvania [Mr. Kelley], they
commenced to reduce their paper circulation, and in one year reduced
it almost $100,000,000, and increased the coin circulation
$120,000,000. In the year 1876 they had pushed into circulation
$200,000,000 of coin, and retired nearly all their small notes. They
are at this moment within fifty days of resumption of specie
payments. Under their law, fifty days from to-day, France will again
come into the illustrious line of nations who believe in a sound
currency. I commend to the eloquent gentleman from Pennsylvania [Mr.
Kelley] the example of France....

“The overwhelming and fixed opinion of England is that the
cash-resumption act of 1819 was a blessing and not a curse, and that
the evils which England suffered from 1821 to 1826 did not arise
from the resumption of cash payments. I appeal to every great writer
of acknowledged character in England for the truth of this position.
I ask the gentleman to read the eighth chapter of the second book of
Miss Martineau’s _History of the Peace_, where the case is admirably
stated. I appeal also to the opinion of Parliament itself,
especially to the House of Commons, which is as sensitive an index
of public opinion as England knows. When they were within about
eighteen months of resumption of specie payment, a motion was made,
like the motion of my colleague from Ohio [Mr. Ewing], that the
resumption-act bill be repealed or modified, because it was
producing distress. And a number of gentlemen in the House of
Commons made speeches of the same spirit as those which we have
heard here within the past week. The distress among the people, the
crippling of business, the alarm of the mercantile classes, all were
paraded in the House of Commons, and were answered by those knights
of finance whose names have become illustrious in English history.
And at the end of a long debate on that proposition, on the 11th of
April, 1821, a vote was taken, and the proposition was rejected by a
vote of 141 to 27. In other words, by a vote of 141 to 27 the House
of Commons resolved that their act for the resumption of specie
payments was not causing distress, and ought not to be repealed, and
ought not to be modified, except to make it more effective. As a
matter of fact, it was so modified as to allow resumption to take
place much sooner than was provided in the act of 1819....

“I now proceed to notice the second point that has been made in
favor of this bill. It is assumed that specie payment will injure
the debtor class of this country, and thereby oppress the poor; in
other words, that the enforcement of the resumption law will oppress
the poor and increase the riches of the rich. It is assumed that the
laboring-men are in debt, and that the rich men constitute the
creditor class. I deny this proposition _in toto_. I affirm that the
vast majority of the creditors of this country are the poor people;
that the vast majority of the debtors of this country are the
well-to-do people—in fact, people who are moderately rich.

“As a matter of fact, the poor man, the laboring-man, can not get
heavily in debt. He has not the security to offer. Men lend their
money on security, and in the very nature of the case poor men can
borrow but little. What then do poor men do with their small
earnings? When a man has earned, out of his hard work, a hundred
dollars more than he needs for current expenses, he reasons thus: ‘I
can not go into business with a hundred dollars; I can not embark in
trade; but, as I work, I want my money to work.’ And so he puts his
small gains where they will earn something. He lends his money to a
wealthier neighbor, or puts it in the savings-bank. There were, in
the United States, on the first of November, 1876, forty-four
hundred and seventy-five savings-banks and private banks of deposit,
and their deposits amounted to $1,377,000,000, almost three-fourths
of the amount of our national debt. Over two and a half millions of
the citizens of the United States were depositors. In some States
the deposits did not average more than $250 each. The great mass of
the depositors are men and women of small means—laborers, widows,
and orphans. They are the lenders of this enormous aggregate. The
savings-banks, as their agents, lend it to whom? Not to the laboring
poor, but to the business men who wish to enlarge their business
beyond their capital. Speculators sometimes borrow it. But in the
main, well-to-do business men borrow these hoardings. Thus the poor
lend to the rich....

“There is another way in which poor men dispose of their money. A
man says: ‘I can keep my wife and babies from starving while I live
and have my health, but if I die they may be compelled to go over
the hills to the poor-house’; and, agonized by that thought, he
saves out of his hard earnings enough to take out and keep alive a
small life-insurance policy, so that, if he dies, there may be
something left, provided the insurance company to which he intrusts
his money is honest enough to keep its pledges. And how many men do
you think have done that in the United States? I do not know the
number for the whole country, but I do know this, that from a late
report to the insurance commissioner of the State of New York, it
appears that the companies doing business in that State had 774,625
policies in force, and the face value of these policies was
$1,922,000,000. I find, by looking over the returns, that in my
State there are 55,000 policies outstanding; in Pennsylvania,
74,000; in Maine, 17,000; in Maryland, 25,000; and, in the State of
New York, 160,090. There are, of course, some rich men insured in
these companies, but the majority are poor people, for the policies
do not average more than $2,200 each. What is done with the assets
of these companies, which amount to $445,000,000? They are loaned
out. Here again the creditor class is the poor, and the insurance
companies are the agents of the poor to lend their money for them.
It would be dishonorable for Congress to legislate either for the
debtor class or for the creditor class alone. We ought to legislate
for the whole country. But when gentlemen attempt to manufacture
sentiment against the resumption act, by saying it will help the
rich and hurt the poor, they are overwhelmingly answered by the
facts.

“Suppose you undo the work that Congress has attempted—to resume
specie payment—what will result? You will depreciate the value of
the greenback. Suppose it falls ten cents on the dollar, you will
have destroyed ten per cent. of the value of every deposit in the
savings-banks, ten per cent. of every life-insurance policy and
fire-insurance policy, of every pension to the soldier, and of every
day’s wages of every laborer in the nation.

“In the census of 1870, it was estimated that on any given day there
were $120,000,000 due to laborers for their unpaid wages. That is a
small estimate. Let the greenback dollar come down ten per cent. and
you take $12,000,000 from the men who have already earned it. In the
name of every interest connected with the poor man I denounce this
effort to prevent resumption. Daniel Webster never uttered a greater
truth in finance than when he said that of all contrivances to cheat
the laboring-classes of mankind, none was so effective as that which
deluded them with an irredeemable paper money. The rich can take
care of themselves, but the dead-weight of all the fluctuations and
losses falls ultimately on the poor man who has only his day’s work
to sell.

“I admit that in the passage from peace to war there was a great
loss to one class of the community, to the creditors; and in the
return to the basis of peace some loss to debtors was inevitable.
This injustice was unavoidable. The loss and gain did not fall upon
the same. The evil could not be balanced nor adjusted. The debtors
of 1862–’65 are not the debtors of 1877. The most competent judges
declare that the average life of the private debts in the United
States is not more than two years. Of course, obligations may be
renewed, but the average length of private debts in this country is
not more than two years. Now, we have already gone two years on the
road to resumption, and the country has been adjusting itself to the
new condition of things. The people have expected resumption, and
have already discounted most of the hardships and sufferings
incident to the change. The agony is almost over; and if we now
embark again upon the open sea we lose all that has been gained, and
plunge the country into the necessity of venturing once more over
the same boisterous ocean, with all its perils and uncertainties. I
speak the deepest convictions of my mind and heart when I say that,
should this resumption act be repealed and no effectual substitute
be put in its place, the day is not far distant when all of us,
looking back on this time from the depths of the evils which will
result, will regret, with all our power to regret, the day when we
again let loose the dangers of inflation upon the country.

* * * * *

“Although I do not believe in keeping greenbacks as a permanent
currency in the United States, although I do not myself believe in
the Government becoming a permanent banker, yet I am willing for one
that, in order to prevent the shock to business which gentlemen
fear, the $300,000,000 of greenbacks shall be allowed to remain in
circulation as long as the wants of trade show manifestly that they
are needed. Now, is that a great contraction? Is it contraction at
all?

“Why, gentlemen, when you have brought your greenback up two and
one-half cents higher in value, you will have added to your volume
of money $200,000,000 of gold coin which can not circulate until
greenbacks are brought to par.

“Let those who are afraid of contraction consider that and answer
it.

“Summing it all up in a word: the struggle now pending in the House
is on the one hand to make the greenback better, and on the other to
make it worse. The resumption act is making it better every day.
Repeal that act and you make it infinitely worse. In the name of
every man who wants his own when he has earned it, I demand that we
do not make the wages of the poor man to shrivel in his hands after
he has earned it; but that his money shall be made better and
better, until the plow-holder’s money shall be as good as the
bond-holder’s money; until our standard is one, and there is no
longer one money for the rich and another for the poor.”

With these bits of marble chipped from the temple of his arguments on the currency question, we must content ourselves. Upon this question Garfield was undoubtedly ahead of his generation. The resumption bill which he introduced in 1868 was better than the one adopted in 1875. He presented the fundamental principles as he understood them in 1868. From them he never changed. All subsequent efforts were but their elaboration, and, at this writing, history itself is their fulfillment and demonstration.

It is easy to see that his style of speaking changed somewhat. He became more terse and epigrammatic. He condensed the philosophical parts of his speeches, and enlarged the practical parts. He became more direct in address, more sparing of ornament, and simpler in language. But this was all. He was never known to be on but one side of a question. He took his position only after the most laborious investigations and careful thought. Once taken, nothing could drive him from it. In his answers to the riddles propounded by the Sphinx of American currency and finance, James A. Garfield is entitled to a place in the gallery of fame, beside the greatest financiers known to our national history. In the future, no authority will be, or can be, higher than Garfield.

Our next inquiry relates to Garfield’s record upon questions affecting THE REVENUE AND EXPENDITURES OF THE UNITED STATES. Owing to his long service on the Committees of Ways and Means and on Appropriations, these twin topics of surpassing importance continually lay like couchant lions right in his political pathway.

Of the question of revenue, the tariff is the most vital branch. On the subjects of free-trade and protection, Garfield had made up his mind while at Williams College. Professor Perry, the instructor in political economy, was an unqualified free-trader. After his usual careful investigation, Garfield took the opposite view. He formulated the following proposition: “As an abstract theory, the doctrine of Free-Trade seems to be universally true, but as a question of practicability, under a government like ours, the protective system seems to be indispensable.”

Into the defense of that proposition he threw all his energies. In his speeches on the tariff we will find but one continual elaboration of this view. The speeches are moderate and conservative, avoiding either extreme. His object was to legislate for the whole country and not for any locality or class alone. On April 1, 1870, he delivered a speech on the tariff, which is of the first rank among his earlier efforts.

It presents an interesting history of England’s tariff policy toward the colonies, a brilliant discussion of the trend of prices since the war, and closes with a review of the eventful history of tariff legislation in this country, not omitting the South Carolina nullification. The high tariffs required by the high prices prevailing during the war, he thought, should be gradually reduced. Every one knows that the advantage of a high tariff on imports is the protection it gives to American industry by keeping up the prices here, and preventing competition with the cheap labor of Europe. But it is equally true that, while keeping prices up is good for the seller, and indirectly for the laborer whom he employs, it is bad for the buyer. Free-trade makes low prices. Avoiding alike the Scylla on the one hand and the Charybdis on the other, Garfield chose a medium. He closed his speech of April 1, 1870, by an appeal against either extreme:

“I stand now where I have always stood since I have been a member of
this House. I take the liberty of quoting, from the _Congressional
Globe_ of 1866, the following remarks which I then made on the
subject of the tariff:

“‘We have seen that one extreme school of economists would place the
price of all manufactured articles in the hands of foreign producers
by rendering it impossible for our manufacturers to compete with
them; while the other extreme school, by making it impossible for
the foreigner to sell his competing wares in our market, would give
the people no immediate check upon the prices which our
manufacturers might fix for their products. I disagree with both
these extremes. I hold that a properly adjusted competition between
home and foreign products is the best gauge by which to regulate
international trade. Duties should be so high that our manufacturers
can fairly compete with the foreign product, but not so high as to
enable them to drive out the foreign article, enjoy a monopoly of
the trade, and regulate the price as they please. This is my
doctrine of protection. If Congress pursue this line of policy
steadily, we shall, year by year, approach more nearly to the basis
of free-trade, because we shall be more nearly able to compete with
other nations on equal terms. _I am for that protection which leads
to ultimate free-trade. I am for that free-trade which can only be
achieved through a reasonable protection._’”

As the representative of General Garfield’s tariff speeches in these pages, we select the one of February 4, 1878. Of this speech a gentleman of high abilities and information, says: “Having read and re-read it carefully, and having read all the great speeches made in Congress for forty years before the war on this difficult question, it is my deliberate conviction that the sound American doctrine of protection has never been stated with equal clearness, breadth, and practicality.”

THE TARIFF.

“A few days ago, the distinguished gentleman from Virginia, who now
occupies the chair [Mr. Tucker], made a speech of rare ability and
power, in which he placed at the front of his line of discussion a
question that was never raised in American legislation until our
present form of Government was forty years old; the question of the
constitutionality of a tariff for the encouragement and protection
of manufacturers. The first page of the printed speech of the
gentleman, as it appears in the _Congressional Record_, is devoted
to an elaborate and very able discussion of that question.

“He insists that the two powers conferred upon Congress, to levy
duties and to regulate commerce, are entirely distinct from each
other; that the one can not by any fair construction be applied to
the other; that the methods of the one are not the methods of the
other, and that the capital mistake which he conceives has been made
in the legislation of the country for many years is that the power
to tax has been applied to the regulation of commerce, and through
that to the protection of manufactures. He holds that if we were to
adopt a proper construction of the Constitution we should find that
the regulation of commerce does not permit the protection of
manufactures, nor can the power to tax be applied, directly or
indirectly, to that object.

“I will not enter into any elaborate discussion of that question,
but I can not refrain from expressing my admiration of the courage
of the gentleman from Virginia, who in that part of his speech
brought himself into point-blank range of the terrible artillery of
James Madison, one of the fathers of the Constitution, and
Virginia’s great expounder of its provisions.

“In a letter addressed to Joseph C. Cabell, on the 18th of March,
1827, will be found one of those discussions in which Mr. Madison
gives categorically thirteen reasons against the very constitutional
theory advanced now by the gentleman from Virginia [Mr. Tucker]. It
would almost seem that the distinguished author of the book which I
hold in my hand had prophetically in his mind the very speech
delivered in this House by the later Virginian, for he refutes its
arguments, point by point, thoroughly and completely.

“I say that more than a hundred pages of Madison’s works are devoted
to discussing and exploding what was, in 1828, this new notion of
constitutional construction. In one of these papers he calls to mind
the fact that sixteen of the men who framed the Constitution sat in
the first Congress and helped to frame a tariff expressly for the
protection of domestic industries; and it is fair to presume that
these men understood the meaning of the Constitution.

“I will close this phase of the discussion by calling the attention
of the committee to the language of the Constitution itself:

“‘The Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debts and provide for the common
defense and general welfare of the United States.’

“Language could hardly be plainer to declare the great general
objects to which the taxing power is to be applied.

“It should be borne in mind that revenue is the life-blood of a
government, circulating through every part of its organization and
giving force and vitality to every function. The power to tax is
therefore the great motive power, and its regulation impels,
retards, restrains, or limits all the functions of the Government.

“What are these functions? The Constitution authorizes Congress to
regulate and control this great motive power, the power to levy and
collect duties; and the objects for which duties are to be levied
and collected are summarized in three great groups: First, ‘to pay
debts.’ By this, the arm of the Government sweeps over all its past
history and protects its honor by discharging all obligations that
have come down from former years. Second, is ‘to provide for the
common defense.’ By this, the mailed arm of the Government sweeps
the great circle of the Union to defend it against foes from without
and insurrection within. And, third, is to ‘promote the general
welfare.’ These are the three great objects to which the
Constitution applies the power of taxation. They are all great,
beneficent, national objects, and can not be argued out of
existence.

“The fifteen specifications following in the eighth section of the
same article—such as the power to raise armies, to maintain a navy,
to establish courts, to coin money, to regulate commerce with
foreign nations and among the several States, to promote science and
the useful arts by granting patents and copyrights—are all
specifications and limitations of the methods by which this great
central power of taxation is to be applied to the common defense and
the general welfare. And it is left to the discretion of Congress to
determine how these objects shall be secured by the use of the
powers thus conferred upon it.

“The men who created this Constitution also set it in operation, and
developed their own idea of its character. That idea was unlike any
other that then prevailed upon the earth. They made the general
welfare of the people the great source and foundation of the common
defense. In all the nations of the Old World the public defense was
provided for by great standing armies, navies, and fortified posts,
so that the nation might every moment be fully armed against danger
from without or turbulence within. Our fathers said: ‘Though we will
use the taxing power to maintain a small army and navy sufficient to
keep alive the knowledge of war, yet the main reliance for our
defense shall be the intelligence, culture, and skill of our people;
a development of our own intellectual and material resources, which
will enable us to do every thing that may be necessary to equip,
clothe, and feed ourselves in time of war, and make ourselves
intelligent, happy, and prosperous in peace.’

“To lay the foundation for the realization of these objects was a
leading motive which led to the formation of the Constitution, and
was the earliest and greatest object of solicitude in the First
Congress.

“Two days after the votes for president were counted, and long
before Washington was inaugurated, James Madison rose in the first
House of Representatives, and for the first time moved to go into
the Committee of the Whole on the state of the Union, for the
express purpose of carrying out the theory of the Constitution to
provide for the common defense and the general welfare, both by
regulating commerce and protecting American manufactures. Thus, on
the 8th of April, 1789, he opened a debate which lasted several
weeks, in which was substantially developed every idea that has
since appeared save one, the notion that it was unconstitutional to
protect American industry. All other phases of the subject were
fully and thoroughly handled in that great debate.

“Our fathers had been disciplined in the severe school of experience
during the long period of colonial dependence. The heavy hand of
British repression was laid upon all their attempts to become a
self-supporting people. The navigation laws and commercial
regulations of the mother country were based upon the theory that
the colonies were founded for the sole purpose of raising up
customers for her trade. They were allowed to purchase in British
markets alone any manufactured article which England had to sell. In
short, they were compelled to trade with England on her own terms;
and whether buying or selling, the product must be carried in
British bottoms at the carrier’s own price. In addition to this, a
revenue tax of 5 per cent. was imposed on all colonial exports and
imports.

“The colonists were doomed to the servitude of furnishing, by the
simplest forms of labor, raw materials for the mother country, who
arrogated to herself the sole right to supply her colonies with the
finished product. To our fathers, independence was emancipation from
this servitude. They knew that civilization advanced from the
hunting to the pastoral state, from the pastoral to the
agricultural, which has such charms for the distinguished gentleman
from Virginia. But they also knew that no merely agricultural people
had ever been able to rise to a high civilization and to
self-supporting independence. They determined, therefore, to make
their emancipation complete by adding to agriculture the mechanic
arts, which in their turn would carry agriculture and all other
industries to a still higher development, and place our people in
the front rank of civilized and self-supporting nations. This idea
inspired the legislation of all the earlier Congresses. It found
expression in the first tariff act of 1789; in the higher rates of
the act of 1790; and in the still larger schedule and increased
rates of the acts of 1797 and 1800.

“In 1806 the non-importation act forbade the importation of British
manufactures of silk, cloth, nails, spikes, brass, tin, and many
other articles; and the eight years of embargo witnessed a great
growth in American manufactures. When the non-importation act was
repealed in 1814, John C. Calhoun assured the country that Congress
would not fail to provide other adequate means for promoting the
development of our industries; and, under his lead, the protective
tariff of 1816 was enacted.

“I have given this brief historical sketch for the purpose of
exhibiting the ideas out of which the tariff legislation of this
country has sprung. It has received the support of the most renowned
names in our early history; and, though the principle of protection
has sometimes been carried to an unreasonable extreme, thus bringing
reproach upon the system, it has nevertheless borne many of the
fruits which were anticipated by those who planted the germ.

“Gentlemen who oppose this view of public policy tell us that they
favor a tariff for revenue alone. I therefore invite their attention
to the revenue phase of the question. The estimated expenditures for
the next fiscal year are two hundred and eighty and one-half million
dollars, including interest on the public debt and the
appropriations required by law for the sinking fund. The Secretary
of the Treasury estimates the revenues which our present laws will
furnish at $269,000,000; from customs, one hundred and thirty-three
millions; from internal revenue, one hundred and twenty millions;
and from miscellaneous sources, sixteen millions. He tells us that
it will be necessary to cut down the expenditures eleven millions
below the estimates in order to prevent a deficit of that amount.
The revenues of the last fiscal year failed by three and a quarter
millions to meet the expenditures required by law.

“In the face of these facts can we safely diminish our revenues? If
we mean to preserve the public faith and meet all the necessities of
the Government we can not reduce the present revenues a single
dollar. Yet the majority of this House not only propose to reduce
the internal tax on spirits and tobacco but they propose in this
bill to reduce the revenues on customs by at least $6,000,000. To
avoid the disgrace of a deficit they propose to suspend the
operations of the sinking fund and thereby shake the foundation of
the public credit. But they tell us that some of the reductions made
in this bill will increase rather than diminish the revenue. Perhaps
on a few articles this will be true; but as a whole it is undeniable
that this bill will effect a considerable reduction in the revenues
from customs.

“Gentlemen on the other side have been in the habit of denouncing
our present tariff laws as destructive to, rather than productive
of, revenue. Let me invite their attention to a few plain facts:

“During the fifteen years that preceded our late war—a period of
so-called revenue tariffs—we raised from customs an average annual
revenue of forty-seven and a half million dollars, never in any year
receiving more than sixty-four millions. That system brought us a
heavy deficit in 1860, so that Congress was compelled to borrow
money to meet the ordinary expenses of the Government.

“Do they tell us that our present law fails to produce an adequate
revenue? They denounce it as not a revenue tariff. Let them wrestle
with the following fact: During the eleven years that have passed
since the close of the war we have averaged one hundred and seventy
and one-half million dollars of revenue per annum from customs
alone. Can they say that this is not a revenue tariff which produces
more than three times as much revenue per annum as that law did
which they delight to call ‘the revenue tariff?’ In one year, 1872,
the revenues from the customs amounted to two hundred and twelve
millions. Can they say that the present law does not produce
revenue? It produces from textile fabrics alone more revenue than we
ever raised from all sources under any tariff before the war. From
this it follows that the assault upon the present law fails if made
on the score of revenue alone.

“I freely admit that revenue is the primary object of taxation. That
object is attained by existing law. But it is an incidental and
vitally important object of the law to keep in healthy growth those
industries which are necessary to the well-being of the whole
country.

“Let us glance at the leading industries which, under the provisions
of the existing law, are enabled to maintain themselves in the sharp
struggle of competition with other countries. I will name them in
five groups. In the first I place the textile fabrics, manufactures
of cotton, wool, flax, hemp, jute, and silk. From these we received
during the last fiscal year $50,000,000, which is more than
one-third of all our customs revenue.

“It is said that a tax should not be levied upon the clothing of the
people. This would be a valid objection were it not for the fact
that objects of the highest national importance are secured by its
imposition. That forty-five millions of people should be able to
clothe themselves without helpless dependence upon other nations is
a matter of transcendent importance to every citizen. What American
can be indifferent to the fact that in the year 1875 the State of
Massachusetts alone produced 992,000,000 yards of textile fabrics,
and in doing so consumed seventy-five million dollars’ worth of the
products of the fields and flocks, and gave employment to 120,000
artisans? There is a touch of pathos in the apologetic reply of
Governor Spottswood, an early colonial Governor of Virginia, when he
wrote to his British superiors:

“‘The people of Virginia, more of necessity than inclination,
attempt to clothe themselves with their own manufactures.... It is
certainly necessary to divert their application to some commodity
less prejudicial to the trade of England.’—Bancroft’s _History of
the United States_, vol. iv, page 104.

“Thanks to our independence, such apologies are no longer needed.
Some of the rates on the textiles are exorbitant and ought to be
reduced; but the general principle which pervades the group is wise
and beneficent, not only as a means of raising revenue, but as a
measure of national economy.

“In the second group I have placed the metals, including glass and
chemicals. Though the tariff upon this group has been severely
denounced in this debate, the rate does not average more than
thirty-six per cent. _ad valorem_, and the group produced about
$14,000,000 of revenue last year. Besides serving as a source of
public revenue, what intelligent man fails to see that the metals
are the basis of all the machinery, tools, and implements of every
industry? More than any other in the world’s history, this is the
age when inventive genius is bending all its energies to devise
means to increase the effectiveness of human labor. The mechanical
wonders displayed at our Centennial Exposition are a sufficient
illustration.

“The people that can not make their own implements of industry must
be content to take a very humble and subordinate place in the family
of nations. The people that can not, at any time, by their own
previous training, arm and equip themselves for war, must be content
to exist by the sufferance of others.

“I do not say that no rates in this group are too high. Some of them
can safely be reduced. But I do say these industries could not have
attained their present success without the national care; and to
abandon them now will prevent their continued prosperity.

“In the third group I place wines, spirits, and tobacco in its
various forms which come from abroad. On these, rates of duty range
from eighty-five to ninety-five per cent. _ad valorem_; and from
them we collected last year $10,000,000 of revenue. The wisdom of
this tax will hardly be disputed by any one.

“In the fourth group I have placed imported provisions which come in
competition with the products of our own fields and herds, including
breadstuffs, salt, rice, sugar, molasses, and spices. On these
provisions imported into this country we collected last year a
revenue of $42,000,000, $37,000,000 of which was collected on sugar.
Of the duty on the principal article of this group I shall speak
further on in the discussion.

“On the fifth group, comprising leather and manufactures of leather,
we received about $3,000,000 of revenue.

“On the imports included in the five groups I have mentioned, which
comprise the great manufacturing industries of the country, we
collect $119,000,000—more than ninety per cent. of all our customs
revenue. I ask if it be not an object of the highest national
importance to keep alive and in vigorous health and growth the
industries included in these groups? What sort of people should we
be if we did not keep them alive? Suppose we were to follow the
advice of the distinguished gentleman from Virginia [Mr. Tucker]
when he said:

“‘Why should me make pig-iron when with Berkshire pigs raised upon
our farms we can buy more iron pigs from England than we can get by
trying to make them ourselves? We can get more iron pigs from
England for Berkshire pigs than we can from the Pennsylvania
manufacturers. Why, then, should I not be permitted to send there
for them?...

“‘What a market for our raw material, for our products, if we only
would take the hand which Great Britain extends to us for free-trade
between us!’

“For a single season, perhaps, his plan might be profitable to the
consumers of iron; but if his policy were adopted as a permanent
one, it would reduce us to a merely agricultural people, whose chief
business would be to produce the simplest raw materials by the least
skill and culture, and let the men of brains of other countries do
our thinking for us, and provide for us all products requiring the
cunning hand of the artisan, while we would be compelled to do the
drudgery for ourselves and for them.

“The gentleman from Virginia [Mr. Tucker] is too good a logician not
to see that the theory he advocates can only be realized in a state
of universal peace and brotherhood among the nations; and, in
developing his plan, he says:

“‘Commerce, Mr. Chairman, links all mankind in one common
brotherhood of mutual dependence and interests, and thus creates
that unity of our race which makes the resources of all the property
of each and every member. We can not if we would, and should not if
we could, remain isolated and alone. Men under the benign influence
of Christianity yearn for intercourse, for the interchange of
thought and the products of thought as a means of a common progress
toward a nobler civilization....

“‘Mr. Chairman, I can not believe this is according to the Divine
plan. Christianity bids us seek, in communion with our brethren of
every race and clime, the blessings they can afford us, and to
bestow in return upon them those with which our new continent is
destined to fill the world.’

“This, I admit, is a grand conception, a beautiful vision of the
time when all the nations shall dwell in peace; when all will be, as
it were, one nation, each furnishing to the others what they can not
profitably produce, and all working harmoniously together in the
millennium of peace. If all the kingdoms of the world should become
the kingdom of the Prince of Peace, then I admit that universal
free-trade ought to prevail. But that blessed era is yet too remote
to be made the basis of the practical legislation of to-day. We are
not yet members of the ‘parliament of man, the federation of the
world.’ For the present, the world is divided into separate
nationalities; and that other divine command still applies to our
situation: ‘He that provideth not for his own household has denied
the faith, and is worse than an infidel;’ and, until that better era
arrives, patriotism must supply the place of universal brotherhood.

“For the present Gortschakoff can do more good to the world by
taking care of Russia. The great Bismarck can accomplish more for
his era by being, as he is, a German to the core, and promoting the
welfare of the German Empire. Let Beaconsfield take care of England,
and McMahon of France, and let Americans devote themselves to the
welfare of America. When each does his best for his own nation to
promote prosperity, justice, and peace, all will have done more for
the world than if all had attempted to be cosmopolitans rather than
patriots. [Applause.]

“But I wish to say, Mr. Chairman, that I have no sympathy with those
who approach this question only from the stand-point of their own
local, selfish interest. When a man comes to me and says, ‘Put a
prohibitory duty on the foreign article which competes with my
product, that I may get rich more rapidly,’ he does not excite my
sympathy; he repels me; and when another says, ‘Give no protection
to the manufacturing industries, for I am not a manufacturer and do
not care to have them sustained,’ I say that he, too, is equally
mercenary and unpatriotic. If we were to legislate in that spirit, I
might turn to the gentleman from Chicago and say, ‘Do not ask me to
vote for an appropriation to build a court-house or a post-office in
your city; I never expect to get any letters from that office, and
the people of my district never expect to be in your courts.’ If we
were to act in this spirit of narrow isolation we should be unfit
for the national positions we occupy.

“Too much of our tariff discussions have been warped by narrow and
sectional considerations. But when we base our action upon the
conceded national importance of the great industries I have referred
to, when we recognize the fact that artisans and their products are
essential to the well-being of our country, it follows that there is
no dweller in the humblest cottage on our remotest frontier who has
not a deep personal interest in the legislation that shall promote
these great national industries. Those arts that enable our nation
to rise in the scale of civilization bring their blessings to all,
and patriotic citizens will cheerfully bear a fair share of the
burden necessary to make their country great and self-sustaining. I
will defend a tariff that is national in its aims, that protects and
sustains those interests without which the nation can not become
great and self-sustaining.

“So important, in my view, is the ability of the nation to
manufacture all these articles necessary to arm, equip, and clothe
our people, that if it could not be secured in any other way I would
vote to pay money out of the Federal Treasury to maintain government
iron and steel, woolen and cotton mills, at whatever cost. Were we
to neglect these great interests and depend upon other nations, in
what a condition of helplessness would we find ourselves when we
should be again involved in war with the very nations on whom we
were depending to furnish us these supplies? The system adopted by
our fathers is wiser, for it so encourages the great national
industries as to make it possible at all times for our people to
equip themselves for war, and at the same time increase their
intelligence and skill so as to make them better fitted for all the
duties of citizenship both in war and in peace. We provide for the
common defense by a system which promotes the general welfare.

“I have tried thus summarily to state the grounds on which a tariff
which produces the necessary revenue and at the same time promotes
American manufactures, can be sustained by large-minded men, for
national reasons. How high the rates of such a tariff ought to be is
a question on which there may fairly be differences of opinion.

“Fortunately or unfortunately, on this question I have long occupied
a position between two extremes of opinion. I have long believed,
and I still believe, that the worst evil which has afflicted the
interests of the American artisans and manufacturers has been the
tendency to extremes in our tariff legislation. Our history for the
last fifty years has been a repetition of the same mistake. One
party comes into power, and believing that a protective tariff is a
good thing establishes a fair rate of duty. Not content with that,
they say: ‘This works well, let us have more of it,’ and they raise
the rates still higher, and perhaps go beyond the limits of national
interest.

“Every additional step in that direction increases the opposition
and threatens the stability of the whole system. When the policy of
increase is pushed beyond a certain point, the popular reaction sets
in; the opposite party gets into power and cuts down the high rates.
Not content with reducing the rates that are unreasonable, they
attack and destroy the whole protective system. Then follows a
deficit in the Treasury, the destruction of manufacturing interests,
until the reaction again sets in, the free-traders are overthrown,
and a protective system is again established. In not less than four
distinct periods during the last fifty years has this sort of
revolution taken place in our industrial system. Our great national
industries have thus been tossed up and down between two extremes of
opinion.

“During my term of service in this House I have resisted the effort
to increase the rates of duty whenever I thought an increase would
be dangerous to the stability of our manufacturing interests; and by
doing so, I have sometimes been thought unfriendly to the policy of
protecting American industry. When the necessity of the revenues and
the safety of our manufactures warranted, I have favored a reduction
of rates; and these reductions have aided to preserve the stability
of the system. In one year, soon after the close of the war, we
raised $212,000,000 of revenue from customs.

“In 1870 we reduced the custom duties by the sum of twenty-nine and
one-half millions of dollars. In 1872 they were again reduced by the
sum of forty-four and one half millions. Those reductions were in
the main wise and judicious; and although I did not vote for them
all, yet they have put the fair-minded men of this country in a
position where they can justly resist any considerable reduction
below the present rates.