THE McKINLEY TARIFF BILL

By Charles Sumner Olcott.

AS Charles S. Olcott reminds us in his "Life of William McKinley," from which this account is taken, by permission of Houghton Mifflin Company, the famous McKinley Bill of 1889-90 "was the most thorough and consistent revision of the tariff, from the protective point of view, that had ever been attempted." An important feature of it was the reciprocity section, the authorship of which is attributed to James G. Blaine, then Secretary of State. The Bill provided that whenever the President should be satisfied that the government of any country was imposing unequal or excessive duties on American products introduced into that country, the United States government should have the power to retaliate in kind.

The celebrity given him by this Act of Congress paved McKinley's way to the White House, although he was not elected President until 1900, when he defeated William Jennings Bryan.

ON the l7th of December (1889) Representative McKinley presented from the Committee on Ways and Means an act "to simplify the laws in relation to the collection of the revenue." This bill was a long step in the direction of making revenue laws efficient.

The new proposition established a Board of General Appraisers, to whom were to be referred all questions regarding the proper classification and appraisal of importations. It was designed to relieve the courts of the duty of deciding intricate cases, many of which hinged upon technical terms of trade and involved complicated questions of classification. Such a measure should not have aroused serious opposition yet it was not passed without a struggle and then by a strict party vote. It proved to be a wise and successful measure, and was allowed to remain on the statute books by the Congress that repealed the McKinley Tariff.

The purpose of the bill was clearly stated:

"It is framed in the interest of the people of the United States. It is for the better defense of American homes and American industries. While securing the needed revenue, its provisions look to the occupations of our own people, their comfort and their welfare ; to the successful prosecution of industrial enterprises already started, and to the opening of new lines of production where our conditions and resources will admit. Ample revenues for the wants of the Government are provided by this bill, and every reasonable encouragement is given to productive enterprises and to the labor employed therein. The aim has been to impose duties upon such foreign products as compete with our own, whether of the soil or the shop, and to enlarge the free list wherever this can be done without injury to any American industry, or wherever an existing home industry can be helped without detriment to another industry which is equally worthy of the protecting care of the Government.

"The committee believe that, inasmuch as nearly $300,000,000 are annually required to meet the expenses of the Government, it is wiser to tax those foreign products which seek a market here in competition with our own than to tax our domestic products or the non-competing foreign products. The committee, responding as it believes to the sentiment of the country and the recommendations of the President, submit what they consider to be a just and equitable revision of the Tariff, which, while preserving that measure of protection which is required for our industrial independence, will secure a reduction of the revenue both from customs and internal revenue sources. We have not looked alone to a reduction of the revenue, but have kept steadily in view the interest of our producing classes, and have been ever mindful of that which is due to our political conditions, our labor and the character of our citizenship. We have realized that a reduction of duties below the difference between the cost of labor and production in competing countries and our own would result either in the abandonment of much of our manufacturing here or in the depression of our labor. Either result would bring disaster, the extent of which no one can measure. We have recommended no duty above the point of difference between the normal cost of production here, including labor, and the cost of like production in the countries which seek our markets, nor have we hesitated to give this measure of duty even though it involved an increase over present rates and showed an advance of percentages and 'ad-valorem' equivalents. . . . We have sought to look at the conditions of each industry at home and its relations to foreign competition, and provide for that duty which would be adequate in each case."

The committee estimated that its recommendations, if adopted, would reduce the revenue from imports at least $60,936,536, and from internal revenue $10,327,878, an aggregate of $71,264,414. By far the greatest part of this reduction was to be obtained by remitting the duties on sugar and molasses, which in 1889 yielded $55,975,610. It was stated as a reason for this radical change that the duty on sugar was really a tax, because so large a portion of the amount consumed was necessarily imported. In this respect it differed materially from duties laid on articles produced or manufactured in the United States in sufficient quantity to meet the needs of our people. But protection was not to be denied the producers of sugar in this country and therefore a bounty of two cents a pound was to be paid on all sugars produced in the United States for fifteen years. The estimated cost of this bounty was $7,000,000.

The Republican Party in its platforms of 1884 and of 1888 had specifically demanded protection for the wool-growing industry. McKinley proposed a small increase of one cent a pound in the duties of wool of the first class, nothing on the second class, and an advance from five to eight cents per pound on the third class. This encouragement and defensive legislation would, in his judgment, enable the United States to produce all the wool it consumed, about 600,000,000 pounds.

There is no doubt that the section of the McKinley Bill which attracted the greatest amount of attention was the proposition to increase the duty on tin plate.

It had been taken for granted for many years that tin plate could not be made in the United States. In 1873-75 attempts were made to manufacture it, but before the effort could be fairly started the foreign makers crushed the threatened competition by reducing the price from $12 a box to $4.50. When the American mills were put out of existence the price was advanced to $9 and $10 a box. From that time until 1890 the Welsh manufacturers enjoyed a monopoly and fixed their own prices.

In the Committee of the Whole the duty was fixed at 2.2 cents a pound instead of one cent as provided by the Act of 1883.

Thus, by the operation of a wise piece of legislation, a great industry was transferred from Wales to this country.

The McKinley Bill was the most thorough and consistent revision of the Tariff, from the protective point of view, that had ever been attempted. It was, as the author declared, "protective in every paragraph and American in every line and word."