Part 8 (2/2)
Let me here state the fact, that without any fresh authorization, Secretary of the Treasury Carlisle did in January, 1895, issue $50,000,000 of Government bonds to replenish the free gold in the Treasury, and that an injunction suit against their sale was dissolved by Judge c.o.x at Was.h.i.+ngton on the 30th of that month. Gorman had been right. The credit of the country would not have suffered by the additional issuance of some final $60,000,000 (?) of silver certificates if the gold in the Treasury had concurrently been upbuilt to the extent of $50,000,000 to $100,000,000; but an immensity of business loss would have been averted.
But to resume the orderly recital of those times. October dragged along its weary length, while the Senate debated and business withered.
Finally, on the 30th, the Senate accepted unconditional repeal of the Free-Silver Act. On November 1st, it became a law. The fear of repudiation thus escaped, though with fearful loss, the country plunged into all the unsettlement caused by a too sudden and too extensive change in the tariff. These changes were announced by the House Committee on December 27th.
The conditions mentioned in the last paragraph beginning on page 22 of the introduction to this book, were at work. Before the market had recovered from the ”Silver panic” of 1893-4, the terror caused to the business world by the proposed very decided changes in the customs dues laid hold upon every trader in the United States and reflectedly upon every one of its citizens. It shook business throughout. Would not such a plan as is set forth in the footnote below [Footnote: ”Mr. DeCourcy W.
Thorn expressed himself yesterday as heartily indorsing the Democratic celebration to be held in this city January 17 next, to which all the party leaders will be invited and at which subjects of interest to the party will be discussed.
”When asked to give his opinion on some of the questions worthy of discussion at this gathering Mr. Thorn mentioned the tariff and economy in the conduct of national affairs.
”In the coming national Democratic celebration,” he said, ”I hope suggestions dealing with a rational reformation of the tariff and the need for national economy of every kind will be duly considered, and that on these two subjects alone, to be treated thoroughly but temperately, will this national Democratic gathering advise our party as to its best course to pursue.
”In three successive Presidential canva.s.ses since the Civil War the Democratic party has received a majority vote of the people of the United States, and in my opinion would have gained three thereby, instead of the alternate two, elections to the Presidency if the tariff issue, the major one of the two great issues--namely, tariff and economy--on which they won, had been so sought to be applied as not to threaten unduly to affect general business.”
PROTESTS AGAINST EXTRAVAGANCE
”All will agree with me that a reasonable economy, instead of the actual wild extravagance of government, is more than ever a national need. Who will disagree with me, that in addition to the contribution from internal revenue, the tariff should be used merely to contribute towards the due expenses of the Government economically administered, but so applied as not to break down the standard of American citizens.h.i.+p, as exemplified in the working people of our country; and eked out, if it is possible, by contributions into the national treasury of sound inheritance taxes?”
URGES CUT ON NECESSARIES
”Is it not possible to apply that general plan as follows: Divide, say, all of the articles now upon the tariff list into three cla.s.ses.
”(_a_) All such as are usually found in the typical American homes--I mean the homes of those admirably called by Grover Cleveland the 'plain people,' who are just the same cla.s.s, I believe, as those indicated by Abraham Lincoln, when he said, 'G.o.d must greatly love the common people, for he made so many of them'--and put that list of articles on a free list or a severely tariff-for-revenue-only list.
”(_b_) Create a second division composed of all the articles of luxury. Put upon them the very highest tariff they will stand and yet come into the country, except in the case of articles of antique art.
These latter should be admitted free.
”(_c_) Keep upon all other articles now in the tariff list the actual duties for the period of one year, but after that period and the actual imposition of the proposed new tariff I am discussing shall have begun, put all the articles involved in Cla.s.s _c_ upon a tariff-for-revenue-only basis, so constructed as not to break down the standard of the American workingman's living.”
YEAR TO MARKET STOCK
”This period of one year--say, would allow manufacturers to market their stock on hand or already required to be produced on the basis of the market influenced by the quasi-Government protection extended by the existing tax laws of the nation.
”At the end of this period the manufacturer would be obliged to produce at less cost in order to find a market in compet.i.tion with his foreign compet.i.tor, which compet.i.tion would result in lower prices that he and his foreign compet.i.tors would have to offer to the working people and other citizens of our country,”
EFFECT ON WAGES
”Those working people and other citizens would for a year have been enjoying at lesser cost all of the articles used in the typical American home I have referred to and could without loss therefore well afford to submit to a reduction in wages so long as that reduction in wages was contemporaneous with affording them a proportionate or more than proportionate reduction in cost of the articles for whose purchase those wages were sought to be expended. At the same time, the manufacturer at a proportionately lesser cost of production, through this reduction in wage-paying, would be selling as much or more of his old products at their old profit.
”Could we add to the income from the tariff and internal revenue the sums derived from the sound national inheritance tax I have mentioned above it is evident we would have supplied for the period of change from one tax system to another an 'adequate governor' to use a mechanical ill.u.s.tration, to prevent undue oscillation of prices in the business world.”
BANK RESOURCES TO PREVENT STRAIN
”The further use of the existing financial agencies for cooperation of the banks in all sections to ma.s.s resources and apply them to prevent undue local strain upon credit dispels the fear of any necessary injury to the financial fabric in effecting this change.
”Grover Cleveland, whose character and principles I have long revered, seemed to me in the application of his plan for tariff reform to have endangered at once the success and the permanence of his reform of the tariff--which you recall was confessedly and very properly not a reformation to free trade--by failing to provide in it a method for avoiding or at least minimizing and shortening any incident disturbance to the business world. His plans, further, failed by not reasonably insuring for the transition period from the old tariff to the new one sufficient national income for national expenses.”] have virtually prevented all that? When I sent that plan, which I had stated in an interview in the _Baltimore Sun_ of December 24, 1910, to the various members of the Finance Committee of the United States Senate and to the Committee on Ways and Means of the House of Representatives, very many of them wrote me affirmatively on the subject.
To revert, however to the due order of our tale. It was on January 17, 1893, that Secretary of the Treasury John G. Carlisle, without any new legislative authority, offered to sell $50,000,000 Government bonds already mentioned. If issued during the Silver-repeal fight when Gorman proposed his compromise, and if Carlisle had made it clear very early that as many such issues for gold would be made as were needed to keep the trading public safeguarded against any monetary-business cramping caused by the governmental policy affecting the tariff, a minimum rather than something approaching a maximum of disturbance would have followed.
In better spirits because of the issuance of the $50,000,000 Government bonds for gold, the business world worked along. The House had pa.s.sed the Tariff Bill early in February by a big majority. Business soon looked up decidedly. But the Seigniorage Bill was adopted in March.
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