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are intended only to enforce an earnest recommendation that the surplus revenues of the government be prevented by the reduction of our customs duties, and, at the same time, to emphasize a suggestion that in accomplishing this purpose, we may discharge a double duty to our people by granting to them a measure of relief from tariff taxation in quarters where it is most needed and from sources where it can be most fairly and justly accorded.
Nor can the presentation made of such considerations be, with any degree of fairness, regarded as evidence of unfriendliness toward our manufacturing interests, or of any lack of appreciation of their value and importance.
"These interests constitute a leading and most substantial element of our national greatness and furnish the proud proof of our country's progress. But if, in the emergency that presses upon us, our manufacturers are asked to surrender something for the public good and to avert disaster, their patriotism, as well as a grateful recognition of advantages already afforded, should lead them to willing coöperation. No demand is made that they shall forego all the benefits of governmental regard; but they can not fail to be admonished of their duty, as well as their enlightened self-interest and safety, when they are reminded of the fact that financial panic and collapse, to which the present condition tends, afford no greater shelter or protection to our manufactures than to our other important enterprises. Opportunity for safe, careful, and deliberate reform is now offered; and none of us should be unmindful of a time when‘an abused and irritated people, heedless of those who have resisted timely and reasonable relief, may insist upon a radical and sweeping rectification of their wrongs.
The difficulty attending a wise and fair revision of our tariff laws is not underestimated. It will require on the part of the Congress great labor and care, and especially a broad and national contemplation of the subject, and a patriotic disregard of such local and selfish claims as are unreasonable and reckless of the welfare of the entire country.
Under our present laws more than four thousand articles are subject to duty. Many of these do not in any way compete with our own manufactures, and many are hardly worth attention as subjects of revenue.
A considerable reduction can be made in the aggregate, by adding them to the free list. The taxation of luxuries presests no features of hardship; but the necessaries of life, used and consumed by all the people, the duty upon which adds to the cost of living in every home, should be greatly cheapened.
The radical reduction of the duties imposed on raw material used in manufactures, or its free importation, is of course an important factor in any effort to reduce the price of these necessaries; it would not only relieve them from the increased cost caused by the tariff on such material, but the manufactured product being thus cheapened, that part of the tariff now laid upon such product as a compensation to our manufacturers for the present price of raw material could be accordingly modified. Such reduction, or free importation, would serve, besides, to largely reduce the revenue. It is not apparent how such a change could have any injurious effect upon our manufacturers. On the contrary, it would appear to give them a better chance in foreign markets with the manufacturers of other countries, who cheapen their wares by free material. Thus our people might have the opportunity of extending their sales beyond the limits of home consumption, saving them from the depression, interruption to business, and loss caused by glutted domestic market and affording their employés more certain and steady labor with its resulting quiet and contentment.
The question thus imperatively presented for solution should be approached in a spirit higher than partisanship and considered in the light of that regard for patriotic duty which should characterize the action of those intrusted with the weal of a confiding people. But the obligation to declared party policy and principle is not wanting to urge prompt and effective action.
Both great political parties now represented in the government have by repeated and authoritative declarations condemned the condition of our laws which permits the collection from the people of unnecessary revenue, and have in the most solemn manner promised its correction, and neither as citizens nor partisans are our countrymen in a mood to condone the deliberate violation of these pledges.
Our progress toward a wise conclusion will not be improved by dwelling upon the theories of protection and free trade. This savors too much of bandying epithets.
It is a condition which confronts us—not a theory. Relief from this condition may involve a slight reduction of the advantages which we award our home productions, but the entire withdrawal of such advantages should not be contemplated. The question of free trade is absolutely irrelevant; and the persistent claim, made in certain quarters, that all efforts to relieve the people from umjust and unnecessary taxation are schemes of so-called “Free Traders" is mischievous and far removed from any consideration for the public good. The simple and plain duty which we owe the people is to reduce taxation to the necessary expenses of an economical operation of the government, and to restore to the business of the country the money which we hold in the Treasury through the perversion of governmental powers. These things can and should be done with safety to all our industries, without danger to the opportunity for remunerative labor which our workingmen have, and with benefit to them and all our people, by cheapening their means of subsistence and increasing the measure of their comforts.
The Constitution provides that the President “shall from time to time give to the Congress information of the state of the Union.” It has been the custom of the Executive, in compliance with this provision, to annually exhibit to the Congress, at the opening of its session, the general condition of the country, and to detail with some particularity the operation of the different Executive Departments. It would be especially agreeable to follow this course at the present time and to call attention to the valuable accomplishments of these departments during the fiscal year. But I am so much impressed with the paramount importance of the subject to which this com munication has thus far been devoted, that I shall forego the addition of any other topic, and only urge upon your immediate consideration the “state of the Union as shown in the present condition of our Treasury and our general fiscal situation, upon which every element of our safety and prosperity depends.
The reports of the heads of departments, which will be submitted, contain full and explicit information touching the transaction of the business intrusted to them, and such recommendations relating to legislation in the public interest as they deem advisable. I ask for these reports and recommendations the deliberate examination and action of the legislative branch of the government. There are other subjects not embraced in the departmental reports demanding legislative consideration, and which I should be glad to submit. Some of them, however, have been earnestly presented in previous messages, and as to them I beg leave to repeat prior recommendations.
As the law makes no provision for any report from the Department of State a brief history of the transactions of that important department, together with other matters which it may hereafter be deemed essential to commend to the attention of Congress, may furnish the occasion for a future communication,
GROVER CLEVELAND. Washington, Dec. 6, 1887.
THE MCKINLEY BILL.
MR. McKINLEY'S SPEECH, APRIL 16, 1890, INTRODUCING HIS PRO
POSED TARIFF-REFORM MEASURE.
“If any one thing was settled by the election of 1888 it was that the protective policy, as promulgated in the Republican platform and heretofore inaugurated and maintained by the Republican party, should be secured in any fiscal legislation to be had by the Congress chosen in the great contest and upon that mastering issue. I have interpreted that victory to mean, and the majority in this House and in the Senate to mean, that a revision of the tariff was not only demanded by the votes of the people, but that such revision should be on the line and in full recognition of the principle and purposes of protection. The people have spoken; they want their will registered and their decree embodied in public legislation.
“ The bill which the Committee on Ways and Means have presented is their answer and interpretation of that victory and in accordance with its spirit and letter and purpose. We have not been compelled to abolish the internal-revenue system that we might preserve the protective system, which we were pledged to do in the event that the abolition of the one was essential to the preservation of the other. That was unnecessary.
“The bill does not amend or modify any part of the internal-revenue taxes applicable to spirits or fermented liquors. It abolishes all the special taxes and licenses, so-called, imposed upon the manufacture of tobacco, cigars, and snuff, and dealers thereof, reduces the tax upon manufactured tobacco from eight to four cents per pound, and removes all restrictions now imposed upon the growers of tobacco. With these exceptions the internal-revenue laws are left undisturbed.
“From this source we reduce taxation over $10,000,000, and leave with the people this direct tax which has been paid by them upon their own products through a long series of years.
“The tariff part of the bill contemplates and proposes a complete revision. It not only changes the rates of duty, but modifies the general provisions of the law relating to the collection of duties. These modifications have received the approval of the Treasury Department, and are set forth in detail in the report of the committee, and I will not weary this committee in restating them here. A few of the more important changes, however, are deserving our attention.
“There has been for many years a provision in the law permitting the United States to import for its use any article free of duty. Under this provision gross abuses have sprung up, and this exemption from duty granted the United States has served as an open doorway to frauds upon our revenue and unjustifiable discriminations against our own producers.
"Not only has the government imported supplies from abroad, but its officers, agents, and contractors have been held to enjoy the same privilege, which has been exercised to the injury of our own citizens. The result has been that supplies imported by contractors for governmental work, have, in many instances, been in excess of the demand for such public work and been applied to other and different uses.
“ This provision of law has been eliminated in the proposed revision, and if approved by the House and Senate and the President, the government, its officers, agents, and contractors, will hereafter have to pay the same duties which its citizens generally are required to pay. Your committee have been actuated in this by the belief that the government should buy what it needs at home; should give its own citizens the advantage of supplying the United States with all of its needed supplies, and that the laws which it imposes upon its own people and taxpayers should be binding upon the government itself.
“The committee have also fixed a limit upon the amount and value of personal effects accompanying the passenger returning from foreign travel io $500. It has been too common for citizens of the United States visiting other countries to supply themselves not only for their immediate uses, but for future uses and for the uses of their friends, and there has heretofore been no limit to the amount and value of foreign articles which could be brought in free of duty under the designation of " personal effects” if accompanied by the returning passenger.
“The practical effect of this provision was that the wealthy classes who were able to visit distant countries secured exemption from the payment of duties, while the average citizen, unable to go abroad, was compelled to pay a duty upon the articles which he might want to use. The limit of $500 is believed to be sufficient for all honest purposes.
“We have also introduced a new provision in the bill which requires that foreign merchandise imported into the United States shall be plainly stamped with the name of the country in which such articles are manufactured. There has been a custom, too general in some foreign countries, to adopt American brands, to the injury of our own manufacturers. Wellknown articles of American production with high reputation have been copied by the foreigner, and then by the addition of the American brand or American marks have fraudulently displaced American manufacture, not in fair competition, but under false pretenses. The counterfeit has taken the place of the.genuine article, and this we propose to stop.
“Section 49 of the bill provides that goods, wares, and merchandise, and all articles manufactured in whole or in part in any foreign country by convict labor shall not be entitled to entry at any of the ports of the United States, and the importation thereof is prohibited. Nearly, if not all of the States of the Union have laws to prevent the products of convict labor in the State penitentiaries from coming in competition with the product of the free labor of such States. The committee believed that the free labor of this country should be saved from the convict labor of other countries, as it has been from the convict labor of our own States, and so recommend this provision. It will be of small account to protect our workmen against our own convict labor and still admit the convict-made products of the world to free competition with our free labor.
* By way of encouraging exportation to other countries and extending our markets, the committee have liberalized the drawbacks given upon articles or products imported from abroad and used in manufactures here for the export trade. Existing law refunds 90 per cent. of the duties collected upon foreign materials made into the finished product at home and exported abroad, while the proposed bill will refund 99 per cent. of said duties, giving to our citizens engaged in this business 9 per cent. additional encouragement, the government retaining only 1 per cent. for the expenses of handling.
We have also extended the drawback provision to apply to all articles imported which may be finished here for use in the foreign market. Heretofore this privilege was limited. This, it is believed, will effectually dispose of the argument so often made that our tariff on raw materials, so-called, confines our own producers to their own market and prevents them from entering the foreign market, and will furnish every opportunity to those of our citizens desiring it to engage in the foreign trade.
“Now, the bill proposes that the American citizen may import any product
he desires, manufacture it into the finished article, using, in part, if necessary, in such manufacture domestic materials, and when the completed product is entered for export refunds to him within 1 per cent. of all the duty he paid upon his imported materials.
“In the same direction we have made, by section 23, manufacturing establishments engaged in smelting or refining metals in the United States bonded warehouses under such regulations as the Secretary of the Treasury may prescribe, and have provided that metals in any crude form requiring smelting or refining to make them available in the arts imported into the United States to be smelted or refined and intended for export in a refined state, to be exempt from the payment of duties. This, it is believed, will encourage smelting and refining of foreign materials in the United States, and build up large industries upon the sea-coast and elsewhere, which will make an increased demand for the labor of the country.
“It completely, if the provision be adopted, disposes of what has sometimes seemed to be an almost unanswerable argument that has been presented by our friends on the other side, that if we only had free raw material we could go out and capture the markets of the world. We give them now within 1 per cent. of free raw material, and invite them to go out and capture the markets of the world.
“It is asserted in the views of the minority, submitted with the report accompanying this bill, that the operation of the bill will not diminish the revenues of the government; that with the increased duties we have imposed upon foreign articles which may be sent to market here we have increased taxation, and that therefore instead of being a diminution of the revenues of the government there will be an increase in the sum of fifty or sixty million dollars.
“Now, that statement is entirely misleading. It can only be accepted upon the assumption that the importation of the present year under this bill, if it becomes a law, will be equal to the importations of like articles under the existing law; and there is not a member of the Committee on Ways and Means, there is not a member of the minority of that committee, there is not a member of the House, on either side, who does not know that the very instant that you have increased the duties to a fair protective point, putting them above the highest revenue point, that very instant you diminish importations, and to that extent diminish the revenue.
“The bill recommends the retention of the present rates of duty on earthen and china ware. No other industry in the United States either requires or deserves the fostering care of government more than this one. It is a business requiring technical and artistic knowledge, and the most careful attention to the many and delicate processes through which the raw material must pass to the completed product. For many years, and down to 1863, the pottery industry of the United States had had little or no success, and made but slight progress in a practical and commercial way. At the close of the low-tariff period of 1860 there was but one pottery in the United States with two kilns. There were no decorating kilns at that time.
" In 1873, encouraged by the tariff and the gold premium, which was an added protection, we had increased to 20 potteries, with 68 kilns, but still no decorating kilns. The capital invested was $1,020,000, and the value of the product was $1,180,000. In 1882 there were 55 potteries, 244 kilns, 26 decorating kilns, with a capital invested of $5,076,000; and the value of the product was $5,299,140.
“The wages paid in the potteries in 1882 were $2,387,000 and the number of employés engaged therein 7,000; the ratio of wages to sales in 1882 was 45 per cent. In 1889 there were 80 potteries, 401 kilns, and decorating kilns had increased from 26 in 1882, to 188 in 1889. The capital invested in the latter year was $10,597,357, the value of the product was $10,389,910;