CHAPTER IX

THE MCKINLEY BILL

HE answer of the country to Mr. Cleveland's

TH

vigorous appeal for a revenue tariff was an unmistakable commission to the Republicans to frame a tariff law on the opposite principle. The President's recommendations had been embodied in the Mills Bill, which was debated with unprecedented thoroughness; the Democratic Party formally endorsed this bill as a statement of the principles in which they now openly believed; the Republicans squarely opposed it; the issue was argued in every State to the practical exclusion of all others; and before the Mills Bill received its final quietus in Congress, its principles were definitely repudiated by the voters.

President Harrison, in his inaugural address, on March 4, 1889, favored a readjustment of the Tariff in such a way as to prevent the accumulation of all unnecessary surplus, and in his first message to Congress, December 3, 1889, recommended a revision of the Tariff Law, both in the administrative features and in the schedules.

The first recommendation received prompt at

tention. On the 17th of December, 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. It is safe to say that many importers, however much they disliked the high protective duties of the McKinley Tariff, would have accepted its provisions with cheerful faces had it not been prefaced by this administrative law.

It sought to protect the Government against imposition, and the honest importer against fraud. Under the former laws, ingenious systems of undervaluation and false appraisement of merchandise had developed, which deprived the Government of vast sums, estimated variously at from one fourth to one half the amount that would have been collected on a correct valuation of the imports. Dishonest importers were reaping a harvest from the advantages thereby gained over those who paid their duties honestly. To correct these abuses had been the object of a part of the legislation attempted by the previous Congress, in which both Senate and House were agreed. McKinley had strongly urged, but in vain, a Conference Committee, which might at least agree upon this needed reform, pointing out that it was a non-partisan question, concerning simply

the honest collection of the revenue and an honest administration of the laws.

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. Since then, it has been amended by subsequent legislation, chiefly in 1913, but substantial portions of it still remain in force.1

1 The Customs Administrative Act of 1890 has been amended by the Tariff Acts of 1894, 1897, and 1909, and more especially by the Act of 1913. The Act of 1890 was reenacted with certain modifications in each of the above-named acts, so that it does not now stand as the Act of 1890. The Act of 1890 was drafted largely by Colonel Geo. C. Tichenor, who was Assistant Secretary of the Treasury and afterwards chairman of the Board of General Appraisers; A. K. Tingle, who was supervising special agent of the Treasury; and General Spaulding, one of the ablest assistant secretaries the Treasury ever had. These were all trained customs men. Prior to 1890 the law was in fragmentary form, scattered here and there through numerous legislative enactments. · All these parts were brought together and correlated in this act which also contained many new provisions that marked a distinct advance in customs laws and procedure.

The Law of 1890 was improved in some respects and weakened in

.

To the preparation of the general bill, the Committee on Ways and Means devoted nearly four months of labor. Every interest in the country that asked for it was given a hearing. "Manufacturers, merchants, farmers, grangers, members of the Farmers' Alliance, agents, factors, wool-growers, FreeTraders and Protectionists, all who presented themselves to the committee were freely, fully, patiently heard. The minority party, equally with the majority, was given every facility to present its views, and both those who opposed and those who advocated the bill were urged to present any testimony they could in support of their respective positions." Mr. Flower, of New York, a Democratic member of the committee, frankly admitted, "I do not know of a single manufacturer or laborer who desired to be heard that has not been accorded a full and free hearing." This was in marked contrast to the procedure of the committee which prepared the Mills Bill. In that case not only were persons who were others, by the later Tariff Acts, but on the whole it was one of the most important administrative acts in relation to the Tariff ever put on the statute books.

The Act of 1913 improves the Act of 1890 in certain particulars, for example, with regard to the method of preparing and presenting invoices for passage through the customs. But, on the other hand, giving special agents of the Treasury and secret service agents authority to seize books, records, etc., and penalizing importers if they fail to turn over the books, has been criticized as going a little too far.

- 1 McKinley, in The Tariff in the Days of Henry Clay and Since.

interested in the maintenance of protective duties denied a hearing, but the minority members of the committee were excluded from the discussion.

The McKinley Bill was reported on the 16th of April, 1890. Its consideration was begun by the House on the 7th of May. In his report accompanying the bill, McKinley began with the statement, based upon the annual report of the Secretary of the Treasury, that for the fiscal year ending June 30, 1890, the probable excess of receipts over expenditures would be $92,000,000. Deducting the amount required for the sinking-fund, the net surplus would be $43,678,883. A surplus nearly as large was indicated for the coming fiscal year, and the available cash in the Treasury was nearly $90,000,000. These facts made a reduction desirable and this the bill contemplated. 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