no one can study the drift of public opinion in each of the great agitations of the tariff question in the last fifty years without realizing that at least nine-tenths of the people have stood only for such duties as would produce needed revenue and would give industries which were trying to prove their ability to exist in the united states, protection through a limited period. but when it came to the point the people have never had such duties. to those familiar with the methods of tariff-making which have prevailed over this half-century, it was obvious that the bill of 1909 would result as had the bills of 1883, of 1890, of 1894, and of 1897. there were optimists who said that this could not be. this time the “voice of the people” was too clear, this time the game was too apparent. but the game was no more clear and “the voice of the people” no louder than in other years. the preparatory work for the bill was preceded as always by long months of “hearings.” the absurdity of this method of seeking facts on which to frame a bill would be obvious enough if the country had not grown so accustomed to it. the reports published of the hearings before the ways and means committee for the last bill cover something over 8725 pages. it is unbelievable that any serious body of men would consent to sit day after day to listen to such a conglomeration of narrow and selfish notions of what the witnesses’ personal enterprises need to help them along—much less consent to print them at public expense. white-haired men came to 298repeat the pleas that we heard in war times—sons repeated the jargon they had learned from their fathers. and never has the “infant industry” argument been more alive. all sorts of little trades sought help; for instance, from new york state came a cry for duty on basket willows; the suppliant (a woman) complained that she was obliged to compete with foreign-grown willows sent into the country by the shipload and sold far below what willows can be grown for in this country. from virginia came a cry that mountain ivy root for making pipes be protected from the competition of brier wood. there were many more industries like these which in the nature of the case could affect but a small number of people that asked that the whole country be taxed that they be taken care of. there has never been a completer demonstration of how general the notion has become that no matter how few are benefited by a duty, it is fair to ask the whole mass to subscribe to the fund. hundreds of pages of testimony are given to requests not to disturb the present schedules unless it be to increase the duty, and when sifted down the reason of the requests is not protection, but prohibition. how ridiculously lacking the testimony was in anything like satisfactory proof of the cost of production here and abroad, one has only to read to see. it was evident that almost none of the manufacturers knew the facts the committee needed. all that the great majority could offer were the phrases they had learned in their youth or had been taught by their predecessors in business. they were men influenced by a superstition, and it is probable few, if any of them, will escape from its influence until, like mr. carnegie, they retire from business. then we may expect some of them to come, as mr. carnegie has done, with ridicule and derision for the whole system,—to say, as he did, of the duty seekers:
they are incapable of judging. no judge should be permitted 299to sit in a cause in which he is interested; you make the greatest mistake in your life if you attach importance to an interested witness.
but it was not the character of the information presented which was the most sinister phase of the “hearings”; it was the pressure which one felt the informer could exercise on congress when the time came. these hundreds of witnesses, organized or unorganized, all possessed more or less political importance. they had it in their power to upset local machines, displace local bosses, defeat congressmen, hold back campaign contributions, make endless mischief. they had been trained for years to expect reward for political support in the shape of duties. they were not going to give it up in a day. they had behind them bodies of favored workmen trained to believe that high wages depended on protection, and these favored workmen were not going to give up their creed in a night. congressmen knew this well enough. they knew in 1909, when they began work on the payne-aldrich bill, that they were in the position they had been for forty years and more—forced to make a bill with a divided mind—to fix duties with an eye to what effect it was going to have on the fall elections in their districts—on campaign funds for the next presidential election.
the absurdity, even criminality, of these methods, which have persisted so long, was completely demonstrated in the course of the payne-aldrich bill in the making of the schedule which for twenty years has been the most important in our tariff, from a doctrinal and a political point of view, and that is k, the wool schedule. when the late revision was undertaken duties were in operation which had been forced from a reluctant congress in 1897, solely by the political power of the combined wool-growers association and the national association of wool manufacturers. in the decade following the 300adoption of the dingley bill the power of the former organization waned. the members of the “wool trinity” who had held so strong a whip over congress were dead. ohio, which had been their headquarters, no longer felt the life-and-death interest it once had in prohibitive wool duties. but the second association was as alive and ready for action as ever, and in the fall of 1908, when mr. taft’s promises of tariff revision became reasonably convincing, the head of the association, mr. william whitman of boston, called together those in the business whose interests were identical with his, and they sought counsel with the growers of wool in the far west. in october of 1908 the two interests met in chicago. mr. whitman says that this conference was called at the suggestion of the wool-growers. for people who had taken an initiative the wool-growers were very modest. they said frankly they were not prepared to talk extensively on tariff questions, that they had come to listen. mr. whitman did the talking, and to such good effect that the conference decided: “it is the sense of this meeting that in the coming revision of the tariff the present duties on wool and woollen goods be maintained without reduction.”
some two months later mr. whitman appeared before the ways and means committee with an elaborate argument for preserving the wool duties. he made a particular point of defending the duty on raw wool. “fair play for all interests” is the subhead under which mr. whitman asked that the tax on his raw material be continued. the bulletin of the wool association puts the principle this way: “the traditions of the association all condense themselves into the golden rule”—“do unto others as you would have others do to you; between grower and manufacturer and as between one manufacturer and another, that has always been the guiding principle.”
301before mr. whitman was excused from cross-examination, however, a serious questioning of his interpretation of the golden rule was introduced into the testimony. it came from a maker of carded woollens as distinguished from worsteds, mr. edward moir, of marcellus, new york. the carded woollen manufacturers, like many other innocent americans, took the results of the presidential election of 1908 as evidence that the tariff was to be thoroughly revised. “at last,” said they, “we shall get relief.” accordingly, soon after the election, mr. moir, learning that there was to be a meeting of the national association of wool manufacturers, and supposing that the revision of the wool schedule was to be discussed, presented himself at the gathering. to his surprise he found that some weeks before the election, about the time, indeed, that mr. taft’s promises of downward revision were most definite and vigorous, representatives of this association had met representatives of the wool-growers of the far west, and the two had made what they called a “solemn compact” to resist all changes in the wool schedule! the inequalities were to stand. the carded woollen mills were to be fed carpet wool and cotton if they could get them, the man on small income was to continue to wear cotton worsteds and sleep under cotton blankets, the well-to-do were to continue to pay $1.50 for cloth they could buy in england for seventy-five cents. when mr. moir protested, he found he stood alone; i.e. he found that the national association of wool manufacturers apparently represented the worsted industry. a little later, when the ways and means committee began its hearings, mr. moir found that this same association was giving information on what the wool schedule needed, and that it did not include help for him. outraged, he went to work to organize the carded woollen men. over one hundred were soon in line, and this body carried its grievance to 302the ways and means committee. the reports of the tariff hearings contain some very interesting explanations from mr. whitman of the points of which the carded woollen men complained. take the matter discussed in the last chapter, of collecting 11 cents on every pound of grease wool imported into the country, regardless of quality or value, or whether it shrinks 15 or 80 per cent. how did mr. whitman defend this duty, which is, as one can see, the very foundation of his advantage over his competitors? he defended it almost hysterically by the claim that it is only a specific duty, which will prevent undervaluation at the customs. mr. whitman buys his wool according to its value. he does not insist upon paying a fixed price through fear of misrepresentation. wool is a standard like wheat and corn. centuries of experience have made men expert in judging its value. undoubtedly there would be efforts at undervaluation if the duty were according to value. but a specific duty does not prevent fraud—witness the sugar trust. everybody knows that such cheating is dangerous work. even the sugar trust, with all its cunning, has not escaped entirely. there would be little chance for the regular importer to do much cheating, and if there was a percentage of fraud, what could it amount to compared with a duty which is always unfair, which is actually a legalized fraud?
mr. whitman’s defence of the amount of compensation allowed manufacturers for the duty on grease wool was interesting also. it will be remembered that this duty on wool worth over 40 cents a pound is 44 cents; that is, it is reckoned as if four pounds of grease wool were used in making a pound of cloth. mr. whitman defends this ratio, so rarely correct, by using the same argument with which mr. aldrich met the attack upon it in 1890 when the mckinley bill was making.
303“it is true that certain wools do not shrink so much, but whether they do or not is not the point. the american manufacturer must be reimbursed on the basis of the shrinkage of wools used by his foreign competitors or available for the latter’s use.”
this is as hard to follow as the long-standing consolation offered to the complaining consumer that “the foreigner pays the tax.” however, it is hardly more away from the point than mr. whitman’s second defence of the 4 to 1 ratio, which, in essence, is that it must be right because it was so fixed in 1867! curiously enough, while mr. whitman defends the 4 to 1 ratio because it was decided on by the compact of ’67, he insists that 55 per cent ad valorem on cloth is none too much, although in 1867 the manufacturer considered 25 per cent sufficient!
but the carded wool men were not the only branch of the industry which disputed the soundness of mr. whitman’s “fair play for all” schedule. a few weeks after his hearing, it came out that one great branch of the woollen industry, the carpet manufacturers, had left the national association in a body. they had wakened up to the fact that for some twenty years or so they had been serving largely as cat’spaws for the worsted makers’ chestnuts. they had refused to contribute further to the organization, and frankly bolted schedule k, asking for a common-sense adjustment of the duty on carpet wools.
the most sensational and serious attack on mr. whitman’s testimony was made, on the very day he appeared, in a pamphlet distributed to the committee. it bore an ugly title, “how an exorbitant duty on wool tops was concealed in the dingley law by the cunning manipulation of s. n. d. north and william whitman.” the name attached to the pamphlet as author was that of a man well known in wool circles, the editor of the american cotton and wool reporter, frank 304p. bennett. in proof of the charges he made, mr. bennett offered documentary proof of the first order. nothing less than extracts from letters which had passed between mr. north and mr. whitman at the time of the “cunning manipulation.”
to those familiar with the personal relations of the three gentlemen the substance of the charges was not new. they had been first made by mr. bennett the year after the passage of the dingley bill (1898) and in very precise form. what they amounted to then was that mr. north, although the paid secretary of the national association of wool manufacturers, had worked on mr. aldrich’s finance committee while it was busy with the dingley bill, as “the paid lobbyist of william whitman and one other manufacturer,”—that he had secured benefits for them “regardless of other interests,” and that “these gentlemen now (1898) aimed at the control of the united states census, which they proposed to secure by having mr. north (their agent) made director of the census!” it was an ugly looking accusation, and naturally the association appointed a committee to look into the matter. both mr. north and mr. whitman made statements. they amounted to a complete denial of all the charges, and particularly of any tampering with the top duty. mr. whitman showed by the documents he presented that the duty on tops as it finally appeared in the dingley bill was the same as that fixed by the mckinley bill. he also showed it had been retained at the request of the wool-growers. he said that when he discovered this duty was in the dingley wool schedule he wrote a letter of protest to mr. dingley, in which he said:
“as tops now stand in the proposed tariff bill, the duty is absolutely prohibitory.... this places me in a very awkward position before the community. nearly everybody in this part of the 305country is aware of the fact that the arlington mills, of which i am the treasurer, has just completed an enormous plant for the manufacture of tops, and everybody will say that, through my influence, there has been secured upon tops prohibitory duties. yarn spinners and weavers will complain, although they may not be directly affected; but everybody who is at all jealous or envious will charge that this duty has been imposed at my solicitation.... the objections, then, that i have to the top rates as now incorporated in the bill are:
“1st. that they are unnecessarily high and will do nobody any good.
“2d. they are so high on the article our mills manufacture as to create unfavorable criticism.”
this letter and the strong and definite denials of mr. north and mr. whitman were considered satisfactory by the investigating committee, which announced that in its judgment the statements of mr. bennett were “malicious and unwarranted,” and that he had forfeited his right to membership in the association.
the matter probably would have ended there if four years later, 1902, mr. bennett had not sued a lynn, massachusetts, newspaper for libel. when the case was tried the newspaper summoned various witnesses to prove that mr. bennett’s newspaper, the united states investor, made a practice of blackmailing concerns which did not advertise in it. among those witnesses was mr. whitman. in the course of his testimony, mr. bennett’s lawyer, moorfield storey, saw an opportunity to demand mr. whitman’s correspondence over the years of the making of the dingley bill. the court upheld him, and all of mr. whitman’s political letters of that period—“my entire private correspondence, embracing correspondence with every member i have relations with, private and public,” mr. whitman said of the letters—were turned over 306to mr. bennett, who at once took copies of those which interested him. it was nearly seven years before mr. bennett found a sufficiently dramatic moment in which to use the letters he took from mr. whitman’s file. it came finally—the day when mr. whitman was explaining to the ways and means committee why a wool schedule made in 1867 should be preserved in 1909.
as related above, mr. whitman had cleared himself in 1898 from mr. bennett’s charge of manipulating the top duty in the dingley bill by publishing a letter he had written to mr. dingley protesting against the duty. he had also related that mr. dingley had accepted his suggestion and had put it into the bill, and that the reason it had not appeared finally was that the wool-growers had objected so strenuously that the committee had given in to them. this looked all right, but there was a chapter of which mr. whitman and mr. north said nothing, and of which mr. bennett had no proof until he got hold of the correspondence, and this chapter was published in the little pamphlet distributed by mr. bennett to the ways and means committee on december 2, 1908.
it seems that when the top duty suggested by mr. whitman came to the senate committee in 1897 it struck a snag at once. it was prohibitive—just as the higher one for which it had been substituted—the figures were different, but not their effect. mr. north was summoned to explain—the finance committee having apparently accepted him as its wool expert. mr. north consulted mr. whitman and an agitated correspondence followed. the letters to mr. north show that mr. whitman was in great alarm lest the duty he had suggested be lowered: “no possible legislation in connection with the woollen schedule would be so dangerous to the woollen industry as legislation which would favor the importation of tops.” “you know how important it is, not only to me, but 307to the whole wool industry of the united states, that such rates of duty should be imposed upon tops as will enable them to be made here and not to be imported from foreign countries.” “the prosperity of the woollen industry in this country depends wholly upon the ability of the domestic manufacturers to manufacture the tops here.” “it is of the greatest importance that the arlington mills products (tops and yarns) have the full measure of protection accorded to associated industries.” these extracts and the context show conclusively that though mr. whitman may not have wanted a rate so high that it would be suspicious, he was after a duty which would be prohibitive, and that he was depending upon the confidential relations of the paid secretary of the wool association with members of the united states senate in charge of the tariff bill to secure what he wanted.
mr. whitman’s second defence—that it was the wool-growers, not he, that kept the high duty on tops in the dingley bill—loses its weight also when one looks into the origin of that duty. it first appeared in the mckinley bill of 1890, and so far as the writer has been able to discover from an extended examination of the debates and hearings, the top duty was devised for the mckinley bill by mr. whitman. nobody else ever seems to have had anything to do with it. he advocated it in 1889 before the senate finance committee. he presented it in january, 1890, to the ways and means committee, explaining and defending it. mr. whitman was the father of the obnoxious top duty. he found it was suspicious. he revised it so that it would “look better,” but do the same work!
in spite of ample proof of gross unfairness and trickery in the dingley wool schedule, mr. payne reported it practically unchanged. as it passed the house it still gave to mr. whitman a prohibitive duty on his tops. the finance committee 308was equally complaisant, for, as mr. aldrich, its chairman, said later, the schedule as he reported it to the senate “followed precisely the act of 1897 in every word.” but when the wool schedule reached the senate for debate, its smooth passage was over, for there on may 5, 1909, it was treated to one of the most searching analyses of duties which has ever been made in congress. the significant fact was that it came from a republican who had been for twenty years in congress, and who had served on the dingley ways and means committee,—senator dolliver of iowa, one of a group who, when they had discovered by the character of the bill reported from the house and by the attitude of the majority of the party in the senate towards it that there was no intention of treating seriously the campaign promises of revising the tariff downward, had revolted: insurgents, they were called. these men all believed in the doctrine of protection, and most of them had been all their political lives under the spell of the notion that it had created american prosperity. but they were honest men, and slowly they had awakened to a consciousness that the sacred dogma had been stretched and twisted in the last fifty years until it had been made literally to cover a multitude of sins. they saw how its meaning had been manipulated to justify unscrupulous duties whose only contribution to prosperity was turning the profits of labor and natural wealth into some private pocket. they all seem to have taken without reserve the latest strain put upon the protective formula in order that it might cover whatever a manufacturer wanted, the form in which it had appeared in the republican platform of 1908, insuring the person lucky enough to have a business which could be protected that he should have a duty which would not only cover the difference in the cost of his production, but insure him a profit. the insurgents did not object to this interpretation, but they saw 309at once that mr. aldrich in reporting his bill had no intention, in cases where duties had been advanced, of giving the senate evidence that the difference in the cost of production here and abroad made an advance necessary, that the facts he had he refused to make public. i asked senator bristow of kansas, whom i knew to be a strong and convinced protectionist, what started his revolt against the bill? “red paint,” he replied promptly. “i was interested in that. we paint our barns with it in kansas. i saw them putting up duties which i believed would affect its cost. i wanted to know why. i could find no reason—no proof that it was necessary. i insisted, and i soon made up my mind that they had no intention of considering the difference in the cost of production, that they sneered at the idea, that they were simply intent on giving their political supporters what they wanted. moreover, they intended to force us to be a party to the business. it was the most dishonest and corrupt work i have ever seen, and i revolted.”
the insurgents determined to demonstrate to the country the utter unscrupulousness of the leaders of their own party, and to do this effectively they divided among themselves the schedules which they knew to be most important politically and therefore to be most open to suspicion, the intention being thoroughly to master their intricacies. schedule k fell to senator dolliver. now senator dolliver had always been what one may call a mckinley protectionist or prohibitionist. he had followed that leader with the unquestioning fidelity which the man had the ability to inspire in many who knew him. his speeches in the ’90’s are brilliant and witty defences of the new interpretation of protection which the party for political reasons was trying to force on the country. they are thoroughly orthodox and thoroughly unsound. in 1897 mr. dolliver was a member of the dingley ways and 310means committee, which seriously tried to lower the rates in all the schedules, and particularly in wool. he had seen the effort frustrated by the very group whom he knew now to be behind the wool bill which mr. aldrich reported. he determined to master the history and the operation of the schedule in so thorough a fashion that he could go on to the floor of the senate or on to any platform and make clear to a popular audience its tricks and its injustices. he believed that such an exposure must in the long run kill it. now the wool schedule is one of the most difficult in our tariff laws to understand and to explain. it is really the accumulation of fifty years of active superstition and greed. an ocular demonstration of the change in its character and its intelligibility may be had by comparing the wool schedule of fifty years ago and that of to-day as printed in the official collection of united states tariff bills. fifty years ago wool was disposed of in perhaps fifty words, which anybody could understand; to-day it takes some three thousand, and as for intelligibility, nobody but an expert versed in the different grades of wools, of yarns, and of woollen articles could tell what the duty really is. it is a mistake to suppose that because a man has been twenty years in congress and has served for a portion of that time on the ways and means committee, he therefore understands the tariff schedules. as a rule, it is safe to say that a congressman understands rarely the real meaning of the rates he votes for. what he understands is that the committee has made the bill for what it considers sound party reasons, and that if he does not accept the rate, he or some colleague is in danger of defeat, and he accepts it without too much scrutiny. it is a case where it is just as well not to know too much. moreover, it takes an amount of hard time-taking study to master a schedule, which only an occasional man has the will to give. senator dolliver knew that neither he nor 311any other insurgent understood enough of wool-growing and wool manufacturing to cope with the schedule. later in the course of the debate he illustrated the difficulties he encountered in spite of his twenty years in congress. he was told that a certain paragraph was worded to conceal a trick.
“i had to read it four or five times before i could see the point where the proposition emerged,” senator dolliver said. “i handed it to intelligent men and asked them if they saw any distinction in that language between clothing wools and combing wools, and, one after another, bright men said, ‘i cannot see any distinction.’ if you will get the paragraph and read it yourself, you will notice with what delicacy of phrase, worthy of poets and artists, this distinction has been wrought into the very foundation of the wool tariff.” now it was this aggregation of tricks, evasions, and discriminations that senator dolliver determined to master, and master it he did, by months of the severest night-work. he poured over statistics and technical treatises. he visited mills and importing houses and retail shops. he sought the aid of experts, and in the end he knew his subject so well that he went on to the floor of the senate without a manuscript and literally played with schedule k, and incidentally also with senator aldrich and several other stand-patters whose long experience in juggling with untruths had destroyed their agility in handling truths.
when he had finished his clean, competent dissection, schedule k lay before the senate a law without principles or morals; and yet, just as it was, the senate of the united states passed it, and the president of the united states signed it, and it went on the statute books, even to mr. whitman’s prohibitive duty on tops.
what made mr. whitman so powerful? probably we shall not go far astray if we assert that the real reason is that 312for many years he and his worsted friends have been one of the main financial reserves of the high protective wing of the republican party in new england, and that in return they have got what they asked for. that is political ethics—or etiquette. ever since 1888 it has been a settled and openly expressed principle in political circles that your protection shall be in proportion to your campaign contribution. in that year it was laid down officially that as the manufacturers of the united states got “practically the sole benefit of the tariff” and in prosperous years “made millions” out of it, therefore it was entirely justifiable that those who granted the tariff should, when their time of need came, put these manufacturers “over the fire” and “fry the fat out of them.”
mr. whitman’s individual support is not to be despised, but with it has always gone the support of his association. it means the support of the great “wool trust” with william m. wood at its head, and it means also, as we have seen, the support of the wool-growers of the far west—not, be it noted, of all the wool-growers of the country, but of those who, like the worsted manufacturers, are getting more out of the present duties than their competitors, and are therefore most anxious to keep them. these are the men who produce a wool which on an average will yield only about 44 pounds of clean wool in every 100 pounds sheared from the sheep. yet their protection on this 100 pounds is the same as that of the farmer of the south whose wool yields 60 pounds to every 100, or the eastern and middle state farmers whose wool yields 52 out of every 100 pounds. the protests of these eastern, southern, and middle west farmers that they are not fairly treated were no more heeded by the makers of the payne-aldrich bill than the protests of the carded woollen and carpet manufacturers. the reason is obvious enough. the western wool-growers are as loyal and generous in their support 313of their senators as are mr. whitman and mr. wood of theirs. each group—the wool-growers of the far west and the worsted manufacturers of the east—controls a good-sized block of votes. by uniting these blocks they control probably the largest and most dependable vote of any tariff-protected interest in the country. it is a vote which for over forty years has never bolted. it is a vote which always gets what it asks, for the simple reason that it is powerful enough to defeat any duty in a tariff bill if the backer of that duty is hostile, and nobody doubts it will exercise the power if tried. it is the size and solidarity of the vote which explains why when, through the boldness of the insurgents, the most odious features in the wool business had been laid before the senate and a motion was made to send schedule k back to the committee for revision, it was lost by 8 yeas and 59 nays. it is mr. taft’s reason—given frankly enough after he found the odium of allowing the schedule to stand was not going to pass. “the interests of the wool-growers in the far west,” said mr. taft, “and the interests of the wool manufacturers in the eastern states, and in other states, reflected through their representatives in congress, were sufficiently strong to defeat any attempt to change the wool tariff, and had it been attempted it would have beaten the bill reported from either committee.” apparently the same combine was strong enough to prevent the presidential veto the country had a right to expect from mr. taft.
not less significant than the experience of wool in the payne-aldrich bill was that of cotton.
when mr. aldrich reported the bill of 1909 to the senate on april 12, there was lively curiosity in many quarters about what the cotton schedule would contain. rumors were general that it had been cleverly manipulated in its passage through the ways and means committee. it was said that 314mr. payne had declared “in language somewhat exaggerated by impiety,” as senator dolliver afterward put it, that he had been fooled by the gentleman who had presented the needs of the schedule to him. it was known that he was so certain of the odium of a certain paragraph which he had reported that he had risen in the house and withdrawn it. it was certain that the first publication of the schedule had drawn down an avalanche of criticism and charges of bad faith, many of them from the most respectable and best informed trade sources. so vigorous and authoritative had the attack been that many believed that mr. aldrich would not venture to report the schedule which the house had sent him.
schedule i, as the cotton schedule is known, is one of first importance. in 1905 there were over six hundred and thirteen million dollars invested in cotton manufactures in this country. the product was something over four hundred and forty-two million dollars—a big proposition from every point of view, not one to be lightly or dogmatically treated. a question of humanity, too, as well as of economics, for there were over 310,000 persons employed, 125,000 of whom were women, and 40,000 children under sixteen years of age.
it was not against the entire schedule that charges had been brought, but against that which concerns itself with woven goods—that is, sheetings, shirtings, muslins, calicoes. a very large proportion of the product in cottons comes under this head. fully three hundred and eight of the four hundred and forty-two millions of dollars of cotton products produced in 1905 was in woven goods. now all woven goods have been protected for many years, and so well protected that the importations in 1905 were only about eight millions of dollars—or about 2? per cent of the product. these importations were not scattered over the whole group of cotton goods—they 315were concentrated on the higher grades. of the cheaper cotton goods there is almost no importation; on the contrary, we exported over forty million dollars’ worth of them in 1905. what that means, of course, is that we have come to a point in making the cheap grades of cottons where we do not need much, if any, protection, since we can afford to export and sell them in competition with english-made goods.
with the higher grades of goods it is another story. we cannot make them as cheap as they are made abroad. we are turning out many really beautiful cotton fabrics, and our qualities and designs are continually improving, but they cost us more. the protection given all these better grade fabrics, however, has been sufficient to permit a great expansion in this part of the industry, and while it has not prevented importation, it has probably allowed no more than was a healthy stimulus to the industry. at least this was the opinion given to the ways and means committee by the most important witness that appeared before it on cotton—henry f. lippitt, the general manager of the important group of rhode island mills in the manville company. mr. lippitt is a member of one of the half dozen or so families in whose hands the textile industries of rhode island are largely concentrated. his father, grandfather, and great-grandfather were cotton manufacturers. they were able men at their trade, as he is. they were also, as he is, stiff protectionists and active republican politicians. mr. lippitt’s father and one of his brothers have been governors of rhode island. he has always been one of the main stays of the party in the state—a support of the blind boss brayton and one of mr. aldrich’s stanchest friends. since the passage of the payne-aldrich bill mr. lippitt has succeeded to mr. aldrich’s seat in the senate. mr. lippitt’s expression about what was needed in the cotton schedule was accepted as authoritative, 316and this is what he said on december 1, 1908, when he appeared as a representative of the arkwright club of boston:
“we are going to ask you to leave the duty as it is on the cloth schedule with the exception of some very minor points.
“we ask that the present schedule shall not be materially changed and that cotton manufacturers be allowed to continue the operation and further development of this important industry upon the same tariff conditions that now prevail.
“the importations are not so large that we feel justified in asking that the duties be increased, but we would not like to see them decreased.”
upon this representation of the “wants” of the manufacturers the trade rested. if mr. lippitt asked that the schedule be left as it was, there was general confidence that it would be done. there seems to have been little or no curiosity about “the very minor points” to which mr. lippitt referred. he did not make these known to the committee itself until some six weeks later. then in a letter written for the arkwright club of boston, the leading organization of cotton manufacturers in the country, mr. lippitt and a fellow manufacturer, mr. j. r. maccoll, the manager of the lorraine mills of pawtucket, rhode island, made certain suggestions to mr. payne. this letter was not read at the public hearings; it was not published until the appendix to the hearings came out. the first the public knew of it was when mr. payne reported his bill to the house on march 17, 1909; and then an uproar began. far from “minor” changes having been made, it was declared that radical and complicated ones sure to bring great confusion had been introduced. to make the cotton schedule any more complicated than it has been for fifty years is in itself a severe criticism. under the dingley bill cotton cloth was subject to four distinct classifications in fixing duties. these were based upon the number 317of threads to a square inch, the weight, color, and value. duties were graded also according to the varying fineness, weight, and value, so that there were scores of combinations in duties possible. if, after all this, the cloth had a figure worked in it, as so many of the finer goods do, there was an extra duty per square yard for that.
it would seem difficult to add anything to this complication, but mr. payne’s bill did it. it began by upsetting an established definition in the cotton trade—a definition accepted the world over as to what the word “thread” means in appraising cloth. a thread has been a thread, regardless of how many filaments or ply were twisted together to make it. this was no longer to be so. the poor appraiser could no longer apply his magnifying glass to a square inch of cotton cloth and count the threads: he must untwist a thread and compute the number of ply! of course this immediately threw the fabric into a higher classification than under the old law, and increased the duty on it. a cloth which counted fifty threads carried under the old law a duty of say one cent per square yard, but if these threads were three ply—and each ply must be counted by the new paragraph—then it was at once boosted into the one hundred and fifty thread class, where the duty is one and one-half cents per square yard! this was the first of mr. lippitt’s “very minor points.” but this did not end the counting business. there is a great variety of cotton cloths which have figures worked on to the body. the swisses and curtain madras are common examples of these. these figures, of course, increase the value of the goods, and the dingley bill provided for them by giving them an extra one or two cents per square yard, according as they cost seven or over seven cents a square yard. but mr. payne’s bill went this duty one better by arranging that when the threads of a cloth were counted not the threads in the 318body alone should be considered, but also the threads in the figure worked on the body. here again the number of threads in a square inch would be so increased as to throw the fabric into a higher class and so raise the duty. another increase came in the matter of color. heretofore the body of the cloth had been all that was considered in estimating color, but the new law proposed that cloth into which colored figures or threads had been introduced should be called colored. a single colored thread introduced into a white piece was enough to throw it into the colored class. one entirely new duty was added, and that was a cent a yard for cloth which had been mercerized—and a single mercerized thread was enough to put a piece into this class.
besides all this reclassification, the duties which in the dingley bill had been added for the value of the cloth were increased and complicated in a most irritating fashion—by dividing the values into several classes. there was one duty for cloths worth 12? to 15 cents, another for those worth 15 to 17?, another for those worth from 17? to 20. but who was to fix the value when the margins were so narrow? it was a temptation to fraud,—the importer naturally trying to prove that the cloth worth 13 cents was worth but 12?; his opponent, the domestic manufacturer, trying to prove that the cloth really worth 12? was worth 13.
mr. payne reported a schedule then which not only raised duties on many kinds of cotton goods, but multiplied the opportunities for fraud and added seriously to the work of appraising. mr. payne claimed to have been entirely misled about what the new rates would do—at least about the changes in counting threads—for when the schedule came up he rose in the house and asked that the old methods of counting be restored, and he said with an emphasis which showed his disgust at the way he felt he had been tricked:
319“the committee has not sought to increase the duty by that method. if they wanted to increase the duty, they would go in the open to do it.”
the cotton schedule came to mr. aldrich, therefore, under suspicion—suspicion of having been cleverly and slyly revised upwards by the advice of one of his strongest and most generous political supporters, the man who had the credit of managing his last senatorial campaign and collecting the large sums of money which it required to re?lect him. naturally the curiosity was keen about what mr. aldrich would report. what he reported was, with one exception, just what mr. lippitt and mr. maccoll had asked for. he did not stand for the new definition of thread which they had invented, but he did provide that the number of threads and the color should no longer depend on the body of a cloth, but should be estimated by the figure wrought into it. he practically asked that if a single colored thread was woven in or applied to a piece of shirting, it should take the added duty which was given to colored goods. he also stood by the clause which put an additional cent on all which had even one mercerized thread in them, and by the complicated specific duties which had been invented for all goods costing over 12? cents per square yard.
now if mr. aldrich believed that the rates on these particular cotton goods should be raised and complicated in this way, he was justified in raising them; but there has never been a time in the history of protection in this country when it was more imperative for a new and increased duty to be clearly explained. there was never a time when it was more necessary that all rates should be measured by the fundamental principles of protection. it was mr. aldrich’s business to prove to the senate that the new rates were justifiable. but mr. aldrich made no attempt to do anything of the kind. 320on the contrary, when the charges were taken sharply to account by senator dolliver in an analysis which must stand as a model of the kind of criticism which every schedule in the tariff bill needs from protectionists, mr. aldrich met him by asserting that the rates on cotton goods had not been raised. that all that had been done was to readjust duties in such a way as to restore the “intent” of the dingley bill, which, he said, had been largely destroyed by certain court decisions. it is easy to show how far from the fact mr. aldrich was in his statement. the fabrics which had been referred to the courts were few in number, including the goods known as etamine and madras curtain goods. there had been no court decision whatever affecting the great bulk of plain cotton goods, white or colored; and yet the tables estimating duties which are to-day in use by one of the largest and most respected importing houses in this country show that the increase in duties on colored cotton cloths of from 100 to 150 threads per square inch are all the way from about 2 to 42 per cent, and as usually happens the 2 per cent increase is on the highest priced goods. if these same goods were mercerized, the increase in duties is from about 12 to 56 per cent. in the next higher grade of fineness (over 150 and not over 200 threads) the duties have increased from 2 to 24 per cent—if mercerized, from 14 to 38 per cent. white goods of the ordinary weaves of the same grades of fineness as those above have like increases. not one of these cloths was touched or could be touched by the court decisions mr. aldrich hid behind.
it was inevitable that when the effect of the changes was made clear there should have been at once a cry raised that mr. aldrich, in allowing these increases of duties, was rewarding mr. lippitt for the able work it was known that he had done in the last senatorial campaign. it was pointed out that the goods affected were not common coarse goods. they 321were the higher grades which are made in the manville mills, and well made. it was also said that mr. lippitt was adding to his mills a big mercerizing plant. “he expects to pay for it out of that extra cent,” the cynical said. it was certainly natural and necessary that mr. aldrich should resent these charges, but mr. aldrich went a little too far in his denials, and, taken seriatim, they look queer, at least.
“no manufacturer has been before the committee on finance in regard to this schedule. every change that was made in it was made upon the recommendation of the government experts and nobody else.”
but later mr. aldrich said: “they (the new rates) are the creation of the committee itself, and no man was consulted either on the board of appraisers or anywhere else with reference to these provisions until the committee had decided what they should be”; and again—“the committee having decided what to do, they turned the matter of regulating the schedules to the experts of the government, and never to any manufacturer at any time.”
it is probably true that mr. lippitt was not before the senate committee. it was not necessary. his suggestion made to the ways and means committee had been used by mr. aldrich almost intact. moreover, the work of the “experts” to which mr. aldrich referred had been done with mr. lippitt. it was an open secret in washington that mr. lippitt spent weeks with messrs. sharretts and de vries, the government experts, whom mr. aldrich said first had made every change in the cotton schedule and whom, a little later, he said had done nothing of the kind, but simply regulated them.
moreover, reference to “experts,” coming from mr. aldrich at that point in the making of the bill of 1909 did not inspire confidence. something of the character of the work “experts” had done for him in 1897 had been sufficiently demonstrated 322by frank p. bennett, in the matter of william whitman and his top duty. if that was what mr. aldrich understood by experts, then it was certain it was the kind of tariff-making which the country had set out to correct—a species of jugglery in the interests of some good campaign contributor made by a specialist willing to turn his knowledge to adroit manipulation. that there was a general suspicion around washington that one of the “experts” who aided mr. lippitt, and was now aiding mr. aldrich, had done something of the same kind of work for the senator in regard to sugar in 1897, only added to the severity of the criticism which greeted his effort to unload the cotton duties. however, in falling back on “experts” mr. aldrich was only taking us at our word. we have all talked more or less volubly about “tariffs made by experts.” mr. aldrich gave us an example of what it may be in the cotton schedule. it turns out that it can easily be something like the familiar “business administration” of municipalities—administrations ably conducted to give the conductors what they want.
in defending the charges against the cotton schedule mr. aldrich made the following statements:
“the existing law, by a series of undervaluations on the part of importers and of erroneous construction on the part of the general appraisers and the courts, has been so emasculated that the interests of the cotton manufacturers of the united states have been largely destroyed in some lines. this is shown by the fact that the importation of cotton manufactures increased from $23,000,000 in 1898 to $73,000,000 in 1907.” mr. aldrich was mistaken in his figures. the cotton importations in 1898 were over $27,000,000, and 1898 was an “off-year.” the average importations in the decade 1896–1905 were over $40,000,000. moreover, nobody knows better than mr. aldrich that not over $12,000,000 of the 323$73,000,000 imported in 1907 referred to cotton cloths—the only thing in dispute. the other $61,000,000 was duty on our large importations of cotton laces, embroideries, and small goods like handkerchiefs and hosiery. it was a misleading statement, not unlike the statements by which the duty on mercerized goods was defended. the task of defending this fell to mr. lodge in the main,—the senior senator from massachusetts, and mr. smoot from utah, being the senatorial team which backed up mr. aldrich in the tariff debate. mr. lodge’s speech was most interesting. he had been admirably coached on mercerization, and he had his samples with him. he told how it had become a general process since the dingley bill was made—that it required new and expensive machinery and skilled labor—hence for labor’s sake and the honor of our cotton trade we should give it a special duty. what mr. lodge did not say was that this process, in so far as it adds anything to the value of a cloth, was already provided for in the dingley bill. that under the protection there provided, it had become in some ten years firmly and successfully established in the united states. the latest textile directory gives a list of fifty-seven concerns which do some form of mercerizing. some of these are on a large scale. when mr. lippitt appeared before the ways and means committee one of the strong reasons he gave for not changing the dingley duty was that under it the trade had been able to develop on artistic lines and to employ new processes, such as mercerization. he repeated that the dingley duty was sufficient. mr. lodge’s speech would lead one to believe that we had been unable to mercerize goods, that it was an infant needing protection, whereas fifty-seven establishments announce that they do the work! moreover, mr. lodge failed to prove that a cent a square yard was necessary to protect the process. as a matter of fact, it was shown 324by senator dolliver that the process costs nothing of the kind. bills for mercerizing were shown in which the charge was but ? of a cent a square yard. other figures were quoted, but none higher than ? of a cent. it is probable that the process is actually cheaper here than in england or germany, though we do not as yet do work of as high grade. all the evidence, indeed, leads one to believe that there was no sound protectionist defence of the extra duty on mercerized goods, that it was an abuse of power from start to finish.
the duties on cotton cloth in the payne-aldrich bill were adopted not for lack of ample information of their nature, but in spite of it. the members of the responsible committees, the members of congress and the administration, not only had the debates to guide them; they had laid before them repeatedly, by the wholesale dry goods association of new york, graphic “object lessons” of what the new rates would do. discovering that congress was unmoved by its showings, as a last resort the association appealed to the president for a hearing. they believed that if they could prove to him the effect of the duties on common goods, he would not permit the wrong. but the president would not see them. it is probable that mr. taft, knowing that it was futile to oppose the cotton duties, spared himself the ordeal of having to say to gentlemen who had a just grievance, “i can do nothing for you.” it was what he had done in the case of the carded woollen men. and if mr. taft had offered any explanation of his inactivity, as he did in the case of the wool schedule, he would probably have said:
the interests of the cotton manufacturers of new england, new york, and pennsylvania, reflected through their representatives in congress, were sufficiently strong to defeat any attempt to change the cotton tariff, and had it been attempted it would have beaten the bill reported from either committee.
325what made the cotton manufacturers so strong? their alliance in tariff matters with the worsted manufacturers—nothing else. side by side with worsted in new england and new york and pennsylvania, in all the textile centres, is cotton. the worsted manufacturers use larger and larger quantities of cotton in their cheap goods. worsted manufacturers are also frequently cotton manufacturers. the tariff interests of cotton and of worsted manufacturers are identical. everywhere we find them supporting the same political combinations. senator aldrich has always been as liberal in supporting what the wool men wanted as he was in 1909 in carrying out mr. lippitt’s suggestions. so loyal is he to the wool schedule that in 1909, when the attack was made by his own party colleagues on its inequalities, he made the following extraordinary statement:
“there is no senator sitting upon this side of the chamber, there is no person who is acquainted with the tariffs of this or any other country, who does not know that an assault upon the wool and woollen schedule of this bill is an attack upon the very citadel of protection and the lines of defence for american industries and american labor. if the senate destroys the relation in that schedule or destroys the schedule itself, you demoralize the whole protective system; and you destroy every line of defence which the people of this country have who believe in the protective policy.”
now what does this mean? we have seen that the “assault” on the wool schedule was merely the demand that its discriminations be adjusted: there was no demand for lowering duties; but mr. aldrich declared if this readjustment should be made, it would “demoralize the whole protective system”—destroy the “citadel” and the “lines of defence for american industries.” can this mean anything at all but that it would break up the wool “bulwark,” the combination of politicians and favored wool-growers and worsted 326manufacturers fattening off the competing branch of the industry? it can mean nothing else. destroy the combination which has kept the old wool schedule in vogue so long, and you destroy a chief financial support of many congressmen. break down this combination in congress, and what would happen to cotton? it has no such wide power as wool. it could not count on getting what it wanted quietly and unostentatiously as it has always done. allied with wool, its case has always been easy. and it was a good alliance for wool, although not a vital one, for cotton is rich, and when it comes to funds to return high tariff senators, it is generous.
the fact is that this great politico-industrial alliance of cotton and worsted has been the backbone of protection. not of protection as the country understood it, but of protection as mr. aldrich understood it. to mr. aldrich protection never has been a set of principles to be applied with care and candor. it has always been a trading system. i think it is entirely fair to mr. aldrich to say that from his first connection with congress he saw that the tariff, properly worked, was the surest road to power and to wealth that this country offered to a politician. he saw the trading possibilities in it, and he intelligently and persistently gave his great ability to developing them. the backbone of the system he worked out was this alliance between cotton and worsted. in that alliance he had a dependable block of votes with which he could carry to success almost any duty which would strengthen the party, oblige a friend, or help his own pocket. this block of votes was behind practically every increase, and manipulation in the bill of 1909. to mr. aldrich’s credit let it be said that he has made as little pretence that he was not carrying on a traffic in duties as any man in the business. on the whole, he may be said to have been frank about it, especially in private.
327the tariff bill of which these schedules were the backbone became a law on august 5, 1909. there was something distinctly tragic in the reception the country gave the new law. depressed, cynical, sneering comments were heard on all sides. congress went home anything but proud of itself. here was a piece of legislation which had cost the entire time of a large body of legislators for more than a year, to which an extra five months’ session of congress had been given, and from it nobody carried away enthusiasm, pride, a sense of triumph,—nothing but a disagreeable coppery taste of barter and jugglery, the depressing feeling that he who has gets, as a rule, in the congress of the united states. the only satisfaction was the negative one that at least it was over.
the pity of it was that they had had so fine a chance to do a real thing. it was a task for statesmen. the nature of it was clear enough. nobody was for upsetting a reasonable protection. but practically everybody but the beneficiaries were for cleaning up the tariff. the evils inherent in it—and nobody of intelligence ever denied that they were many—were big, easily seen:
enormous profits to the few; steadily increasing prices to the many; one-sided development of the country; factories growing like gourds and no ships of our own to carry the goods in; the country sacrificed to the city, the peace of god to the blare and the roar of the steel furnace. these ungrateful children of protection had grown until they threatened to crush us. and then the political enormity—the support given to a great number of over-high duties in order to secure in return the campaign funds and local influence of those who profited. these things stared us in the face on every side, and had become hateful to the people. it looked, in fact, as if they were coming to be about all there was of the protective system. there could be, and there was, no quarrel 328among honest men about the necessity of doing a fair housecleaning job.
the method seemed as clear as the task. the definition of protection accepted by the majority in this country was a reasonable one. there is scarcely a doubt that every intelligent voter knew about what it was—that it included tariff for revenue and tariff for moderate protection, until such time as an essential industry was on its feet. now the application of such a definition ought not to be—and would not be—puzzling, if it had not become tangled with the proposition of tariff for politics only. it requires, to be sure, a large amount of exact information, but such information is obtainable through experts. it requires, too, firm and consistent rating through all the schedules. the work obviously demands to be done by disinterested persons, those who have no object except to do an honest task. that this was the only way to get a satisfactory revision everybody knew. and in the face of this perfectly clear proposition, we got a bill perpetuating all of the old abuses and made in the same old way.
this is not saying that there was not some very good tinkering in the bill of 1909. it should not be forgotten that hides and petroleum were made free, that the duties were lowered on rough lumber and print paper, and on coal and iron ore, that a temporary tariff commission was secured; but at no point did congress or the president show a real understanding of the human cry that was at the heart of the movement which had driven them to undertake the revision.
there was a great human cause—easing the burden of our vast laboring class—knocking at the door of congress, and it was not heeded—if, indeed, it was heard. true, there was talk of an “ultimate consumer”—a kind of economic manikin introduced for convenience in demonstration. but that 329this ultimate consumer was a flesh and blood person there was no recognition.
mr. taft seems no more to have understood his great chance than did congress. the only case in which he used his executive power to force congress to correct a duty which was obviously an abuse was hides. mr. taft withstood a fierce attack for this duty from the forces to which he yielded in the far more important matter of wool and cotton. but it was not high-class bargaining, in which, by virtue of his office and his power of veto, he was able to wrest a few concessions, that the country had a right to ask from mr. taft. leadership was his business. it was for him to make clear the great need, to inspire the great action, to create the atmosphere for high endeavor. one big ringing appeal from mr. taft, showing that he felt for the masses of this country and meant, if possible, that there should be a fairer division of burdens, that he saw the shame of bartering legislation for political support and meant to break the practice if he could, would have been worth many times the concessions obtained. it was the spirit of tariff reform, the zeal for honest schedules, the determination that discriminations should be done away with, indignation at the wretched and shameless alliances back of the bills, that it was for mr. taft to feel and to foster. but it is evident that he did not feel these things, and so could not foster them. he had an opportunity to lead in a great moral awakening on the most serious matter since the days of slavery. he did not understand the issue. he saw merely the chance of doing some tinkering, which he did manfully and effectively.
tariff reform calls for more than lowering a duty here and there, more than appointing a tariff board, more than negotiating a reciprocity treaty, good as all these may be. it calls for an intellectual and moral revolt against the entire 330system of protection as we know it. no leader can accomplish the work needed who does not go to the fight hot with indignation at the intellectual jugglery which has swamped the protective principle and weakened the country’s capacity for sound political thinking and its keenness for distinguishing moral values. never until such a revolt comes will the clutch of the greedy beneficiaries of the system be wrenched loose. the wrong done to mind and morals is a far more serious matter than any damming up of trade the policy produces. that at most can endure but a few generations. the laws of trade are too powerful to be long interrupted by unnatural barriers like prohibitive tariffs. they finally flow over them as a river over a dam, and eventually toss them aside like the drift they are. that is, all tampering with liberty and truth comes sooner or later to naught. true, in the meantime the people bear the burden. true, the end of all industrial progress, that is, the fair distribution of a production sufficient to keep in health and happiness the people of all the earth, is put off; but that is less serious than the deterioration of intellectual and moral integrity which it has required to build up our dishonest and inhuman tariff laws.