As

pressed in Europe, coupled with the threat to enforce discriminating duties against any country which should refuse to grant to our products entering its territory concessions similar in amount to those made by the United States in throwing open our markets to sugar free of duty. The South American Commission, itself, in dealing with reciprocity after its trip through South America, had stated unequivocally its belief that substantial concessions, either on wool or on sugar, must be offered to those countries before they could be induced to enter into any reciprocity scheme. for wool, it was, of course, out of the question. The woolgrowers of the United States had too long been hampered by high protective duties to submit easily to a reduction in the tariff on the raw product. And the wool industry of the United States had attained considerable proportions. How strong it really was might be appreciated from the sole fact that the duties had been steadily advancing, and that it seemed to be impossible to secure any reduction whatever. The McKinley bill raised them to an unprecedented height. But, in the case of sugar, there was no important domestic interest to be violated-none, at least, which could not be appeased by a relatively small outlay for bounties. Sugar, too, was in a much more unfortunate condition than wool, the world over, and any concessions in the matter of its production would gladly be accepted by countries which were feeling even more than the normal competitive strain.

CHAPTER VI

RECIPROCITY AND THE MCKINLEY ACT

The defeat of President Cleveland in the autumn of 1887 was interpreted, rightly or wrongly, by the Republican leaders, as a verdict against a low tariff policy. With the impression that tariff reform had been set aside, went the belief that the popular verdict at the polls carried with it unqualified approbation of reciprocity, as opposed by President Cleveland and favored by his Republican antagonists. As had been the case in 1882, an effort was now made to revise the tariff, but in this instance the plan of imposing generally higher duties was confessed and open. It was intended to apply a tariff schedule which would very generally increase duties throughout the whole list of protected commodities. Yet it was necessary to remember the existence of a strong sentiment in favor of some plan for the extension of foreign markets for American manufactures, as well as for the products of our farms. There can be little doubt that the failure of the McKinley bill to include a reciprocity clause when first introduced was due merely to the rather adverse verdict of the PanAmerican Congress and the ill success experienced in securing reciprocity treaties theretofore. That such a clause was later incorporated, while the measure was in the Senate, must be regarded as a strong testimonial to the existence of a powerful tariff reform movement, able to make itself felt even against the rising tide of protectionism. The fact that a new administration had come into power, with new views on the reciprocity question, had been emphasized by President Harrison's message, in which he transmitted to Congress the report of the

International American Conference.1 In strong contrast to President Cleveland's pessimistic and hostile attitude toward the reciprocity idea, was President Harrison's emphatic recommendation of the adoption of reciprocal commercial treaties between all American republics. The grounds on which Mr. Harrison's advocacy of reciprocity were based are well worthy of note. He pointed out that we already admitted free of duty eighty-seven per cent. of all South American products imported to the United States. The only important articles not already on the free list, said he, were wool and sugar. Mr. Harrison also complained, in the tone later adopted by Secretary Blaine, of the fact that we had in the past been too generous and had given away so much that it was now hard for us to get that to which we were entitled since we had no basis for bargaining. The expressions on this topic contained in the message already referred to are one of the earliest suggestions of a retaliatory policy, and indicate clearly that the retaliatory system of tariff legislation in process of adoption by Europe had not passed unnoticed by those Republicans who recognized the need of enlarging our markets.

The new tariff act was reported by Mr. McKinley from the House Committee on Ways and Means on April 16, 1890. This bill was H. R. 9416, and was entitled "An Act to reduce the revenue and equalize duties on imports and for other purposes." It formed the basis of what later came to be known as the McKinley Act, and was debated in the House from May 7 to May 21, 1890. On the latter date it passed the House with various amendments. On May 23d the measure was laid before the Senate and referred to the Committee on Finance. In the Finance Committee the Act was considerably altered and, the changes requiring some time, it did not reap

*

1 "Messages and Papers of the Presidents of the U. S.," Vol. IX., p. 74. 2 "I deem it proper to call especial attention," wrote Mr. Harrison, "to the fact that more than 87 per cent. of the products of these nations (South American) sent to our ports are now admitted free. The real difficulty in the way of negotiating profitable reciprocity treaties," he added significantly, "is that we have given freely so much that would have had value in the mutual concessions which such treaties imply."

pear before the Senate until June 17th, when it was reported back, with amendments, by Mr. Morrill. It was taken up July 7th, and debated until the 10th of September, when it was passed by a vote of forty to twenty-nine, fifteen Senators not voting. The bill then went back to the House and was referred to the Committee on Ways and Means on the 12th of the month. By the recommendation of that committee, the amendments of the Senate were nonconcurred in and a conference committee was appointed to take the matter in charge on the 16th. The conferees required ten days to make their report, which finally appeared on the 26th and was adopted on the 27th. On the 30th, the report was likewise adopted by the Senate and the bill received the President's signature on the following day.

It would be impossible in this discussion to go into an elaborate analysis of the McKinley bill as a tariff measure. Yet a few points concerning it must be noted for the sake of its bearing upon the reciprocity movement. It should be understood at the outset that the bill was passed only after serious misgiving and hesitation on the part of the Republican leaders. The inconvenience and difficulty involved in altering the tariff were thoroughly appreciated; and, had it not been for the belief that the election of 1888 was won on the tariff issue, and that its outcome was consequently a mandate for the adoption of more highly protective duties, it is likely that the tariff would have been allowed to rest at the point it had reached in 1883. All this was clearly apparent in the long and tedious debates which occurred during the process of pushing the measure through Congress.

As a whole, the McKinley bill was a large extension of the protective policy. It raised duties on many articles, included others not previously subject to taxation, and altered in a radical way the method of fixing valuations. The so-called "method of minimum valuations" was largely extended, in order to hide the extended character of the tariffs now im

posed upon various articles. In its original form, the McKinley bill made no provision for reciprocity.

It will be remembered that the South American Commission had reported that our trade with the Latin countries of the southern hemisphere could be increased only by granting to them concessions on their principal staples, and the commission had gone on to mention wool and sugar as the most important of these. The McKinley bill, in the face of this suggestion, raised the duties on many forms of wool and taxed with special rigor the coarse wools which were the particular product of some South American countries.

In studying the McKinley Act as an incident in the history of reciprocity, its bearing on sugar is of primary importance. The condition of the international sugar market has already been sketched, partly with a view to giving this measure its proper setting in relation to the sugar question. The point of connection between the reciprocity movement and the sugar provisions of the bill is found in the fact that sugar was the main commodity which later was used as a basis for reciprocity, and that its peculiar position in the world-market at the moment gave the action of the United States in placing it upon the free list, under the McKinley Act a factitious importance. At the same time, it forced the reciprocity provisions of that act into a prominence probably greater than they otherwise could have attained and gave the policy, perhaps, as good a chance of success as could have been expected for it.

The action of the McKinley bill with relation to sugar was of such surpassing importance, not merely in its relation to national finance, but also as concerns the reciprocity movement, that it is worth while to give its sugar section in full. Sections 231-241 of the McKinley Act, as ultimately passed, read as follows:

231. "That on and after July first, eighteen hundred and ninetyone, and until July first, nineteen hundred and five, there shall be paid, from any moneys in the Treasury not otherwise appropriated, under the provisions of section three thousand six hundred and eighty-nine