THE WILSON TARIFF ENACTED

By Harry Thurston Peck.

REPRESENTATIVE WILLIAM L. WILSON, of West Virginia, author of the historic tariff measure which bears his name, was so displeased by the manner in which the Bill, as originally framed, was emasculated by the Senate, that he besought his House confreres not to pass it. It passed, however, and became a law in 1894 without the signature of President Cleveland, who charged a group of Democratic Senators, who were active in its emasculation, with being guilty of "party perfidy and dishonor."

This was the first piece of national legislation that provided for the assessment of an income tax. Largely because the Supreme Court declared the income tax feature unconstitutional, and partly because the general business depression of 1893-4 was attended by a marked falling off in imports, the Act was a failure as a revenue law. This account is from Peck's "Twenty Years of the Republic," by permission of Dodd, Mead & Company.

ON December 19th, Mr. Wilson, the chairman of the Committee on Ways and Means, reported to the House the bill popularly known as "the Wilson Bill." The Republicans at once denounced it as free trade legislation; yet an analysis of its provisions as originally reported showed plainly enough that while it was distinctly a step in the direction of freer trade it was on the whole a very conservative measure. In the first place, it removed entirely the duties on wool, on coal, on iron ore, on lumber, and on sugar, both raw and refined. It made rather moderate reductions in the duties on woolen goods, cottons, linens, silks, pigiron, steel billets, steel rails, tin plate, china, glassware, and earthenware. A number of minor and miscellaneous articles received new schedules.

The most noticeable feature of the bill was its treatment of raw materials as just described. Here lay the point of departure from Republican tariff legislation, which in taxing raw materials had made American protectionism a thing unlike the protectionism of other leading nations. The Wilson Bill, in providing for the free entry of wool, coal, iron ore, lumber and sugar, adopted a principle recognized by scientific economists, while it adhered closely to the recommendations of President Cleveland's various messages and to the promise made in the Democratic platform of 1892.

The remission of the duty on wool was the boldest assertion of the new policy; for the duty on wool was the one provision of the McKinley tariff that had been of practical advantage to many American farmers. Its repeal was bitterly opposed by the wool-growers of Ohio and other States, whom Senator Sherman estimated at a million souls, and the value of their annual product at $125,000,000. Free iron ore was opposed by the interest that had secured control of the Western ore beds, but it was of distinct advantage to the Eastern manufacturers. Free coal affected very few sections of the country. In New England and on the Pacific Coast, consumers might get their supply of coal from the adjacent mines in Canada rather than from the more distant coal-fields of Pennsylvania and West Virginia; but the country at large must still use American and not imported coal. The same thing was true with regard to lumber.

The question of the tariff on sugar, however, was somewhat more complex. During the years preceding 1894, the refining of sugar in the United States had gradually become monopolized by the American Sugar Refining Company, oftener spoken of as the Sugar Trust, of which Mr. H. O. Havemeyer was the head. This corporation was one of the most powerful of all those to which public attention had been directed, and it was one of the most unpopular. The interests of this corporation would be served by admitting raw sugar free, thus giving the Trust the benefit of cheap materials, and by a tax upon refined sugar which came from other countries. This was precisely what the McKinley Act had done, enormously increasing the profits of the Trust. The Wilson Bill, as reported to the House, provided for the admission of raw sugar free, in accordance with the general theory as to raw materials, but it also admitted refined sugar free, thereby depriving the Sugar Trust of any special advantage, and leaving it to stand upon its own legs.

So much for the distinctive features of the new tariff measure in its original form. The rest of its schedules were lower than those of the McKinley Act, but in the main quite as high if not higher than those of the Tariff Act of 1883, passed by a Republican Congress. In fact, taken as a whole, the Wilson Bill, so far from being in essence a free-trade measure, was one that would have been regarded in the years before the Civil War as a piece of rigorous protective legislation. It embodied, however, as has been explained, the general principle of free raw materials; while still it dealt considerately with the many interests which had grown up under the shelter of the thirty-two tariff acts which the Republicans had passed between 1860 and 1890.

The Wilson Bill was very well received by the Democrats in the House and by the party as a whole. Little change was made in the original draft during the five weeks when it was under consideration by the Representatives. But many Democrats and some Republicans from the South and West eagerly advocated the insertion in the bill of a clause providing for a tax on incomes. This would yield, it was said, a substantial revenue and wipe out the anticipated deficit; and most of all, it would make the possessors of large fortunes contribute to the Government a sum proportionate to their wealth. There was a strong and very wide-spread feeling that many of the richest persons in the country had so successfully "dodged" their taxes as to have secured a practical exemption from any taxation whatsoever. Secretary Carlisle had suggested laying a tax upon certain classes of corporations; but the House adopted instead a tax of 2 percent. upon all incomes of more than $4,000, the tax to remain in force until January 1, 1900. This clause was adopted on January 24th by a vote of 204 to 140, and the bill as a whole received the approval of the House on February 1st, by a vote of 182 to 106-61 members not voting. When the result was announced by the Speaker, it was received with a burst of Democratic cheering, and Mr. Wilson was showered with congratulations by his followers and friends.