INTRODUCTION.

MADISON'S RESOLUTION.

On the third day of the first session of the first Congress after the adoption of the Constitution of the United States Madison offered a resolution affirming that specific duties should be levied on spirituous liquors, molasses, wines, teas, sugars, pepper, cocoa, and spices, and an ad valorem duty on all other articles; also a tonnage duty on American vessels in which merchandise was imported, and a higher rate on foreign vessels.

OUR FIRST TARIFF.

In the spirit of this resolution a bill was prepared, the specific list largely increased, and passed the House May 14, 1789; and the Senate June 12, with some amendments. A conference was had and the bill finally passed in both Houses, and was approved by the President July 4. It was to continue until June 1, 1796. It is this act which has the oftquoted preamble:

"Whereas it is necessary for the support of the Government, for the discharge of the debts of the United States, and the encouragement and protection of manufactures," &c.

The ad valorem rates of this act ranged from 5 to 15 per cent. The specific rates were such as would now be considered enormous, as boots 50 cents per pair, tallow candles 2 cents per pound, coal 2 cents per bushel, cordage 75 and 90 cents per hundred weight (112 pounds), salt 6 cents per bushel, steel 56 cents per hundred weight, manufactured tobacco 6 cents per pound, &c.

HAMILTON'S REPORTS.

Under the act of September 2, 1789, Alexander Hamilton was appointed Secretary of the Treasury. January 14, 1790, he submitted his first financial report, stating the public debt to be: Foreign, $11,710,378, and domestic, $42,414,086; total, $54,124,464; and the annual interest charges, $2,239,163; and recommending some increase of duties. This was made to the extent of about 24 per cent., by the act of August 10, on wines, spirits, tea, and coffee.

December 5, 1791, Mr. Hamilton made his famous report on manufactures, in which he says: "The expediency of encouraging manufactures in the United States, which was not long since deemed very questionable, appears at this time to be pretty generally admitted," and taking high ground for protection. Seven tariff acts were passed before 1800 and five more before 1812, and from thence on tariff legislation has occupied a large share of the time and attention of Congress.

TARIFF THE SOURCE OF REVENUE.

From the first tariff act to the present time the Government has collected the principal part of its revenues from duties on foreign importations, and in every tariff act the principle of protection has been recognized. Internal taxes have only been resorted to as an emergency, and those of the Revolutionary and war of 1812 periods were repealed as soon as the needs of the Treasury permitted, and the propriety of repealing the present internal-revenue laws as soon as practicable has been taken for granted.

CONTROVERSY FROM THE BEGINNING.

The controversy between the principles of protection and of free tradebegan with the First Congress, and has continued ever since. Mr. Madison laid down the maxim that "commerce ought to be as free as the policy of nations will admit." But this sort of "freedom" allows so much to "the policy of nations" that both sides readily accept it. Certainly Mr. Madison advocated protection before, during, and after his Presidency. No free-trader in this country has proposed to abolish the customhouse; and no protectionist proposes tariff duties beyond the policy of the nation. The practical result has been a tariff for revenue, with discriminations for protection.

TARIFFS ARE COMPROMISES.

Our own tariffs have never at any time been in exact accord with either theory. Being passed by a legislative body derived from a wide constituency, representing very diverse opinions and interests, there have been mixed elements in them all. Conflicts of individual opinion, of sectional prejudices, and of diverse occupations have led to compromises and crudities as an inevitable result. Tendencies in particular acts have been towards one or the other theory, as one or the other has predominated amongst the members of Congress.

THE PARTY DIFFERENCE.

What, then, is the practical difference between the parties as protectionists and free traders? It seems to be this: Protectionists say that tariff duties in such amounts as will provide necessary revenues shall be levied on foreign products, whether of field, mine, or manufactory, entering into competition with like products of our own country. They would admit without duty all foreign products which do not compete with home products, unless the demands of revenue require otherwise. Not prohibition but revenue is the purpose; but revenue derived from competing, not from non-competing foreign products. Free traders say that the tariff should be laid with sole reference to revenue, and that any discrimination in favor of any product is to be avoided. Whether the tariff shall be laid at an equal rate on all importations, or solely on such as do not compete with American products, or on a few specified articles of general consumption and easily accessible, is not determined. England, the practical exemplar of the free-trade theory, adopts the last method.

PARTY PRINCIPLES UNDERLYING THE TARIFF.

The attitude of the two parties on the tariff issue is not accidental nor arbitrary, but grows out of a fundamental difference as to the character' of the Government of the United States. Republicans hold that the United States is a nation, deriving its sovereignty from the people, and hence that its Constitution and laws are the supreme law of the land. They therefore believe in the constitutional right to make necessary internal improvements, to provide a national currency, and to develop and protect the industries of the country. Democrats believe the United States to be a confederacy, that the States are the sovereign political powers, and hence that systems of internal improvements, of paper currency, and of protective tariffs are alike unconstitutional. A tariff for revenue only is the limit of right in a confederacy. A tariff for protection also is the right of a nation. Out of this doctrine of State sovereignty came nullification, secession, and the Confederate constitution. This constitution was the full flower of Democratic doctrine, and eliminated all those provisions of the Constitution of the United States which were interpreted to constitute a nation. A Confederate Democrat is a free-trader because he denies the constitutional right to protect. A National Republican affirms the constitutional right of protection. The final political issue is, therefore: Is the United States a Nation or a Confederacy? Is the Union or the State the sovereign?

THE MILLS BILL.

As to the Mills bill and the present tariff controversy, the debates and the actions of parties clearly indicate a line of demarkation not to be mistaken by any intelligent and candid person. The bill is not a clean freetrade measure, because no such measure could have a hope of success. But all the tendencies of the bill are dominated by free-trade and sectional influences. All free-trade theorists, at home and abroad, accept it as a long stride in their direction; all arguments in its favor are permeated with free-trade maxims, and the heaviest concessions to protection are to consolidate in its favor a sectional and party vote. The Demccratic party, therefore, has planted itself on distinctly free-trade ground. On the other hand, the Republican party plants itself as distinctly on protection grounds; opposes the bill because of its free trade, sectional, and party principles, and declares that any revision of the present protective tariff required by the public interests shall be made by its friends and not its enemies.

TARIFF DISCUSSION.

1,254 SELECTIONS.

ARRANGED IN ALPHABETICAL AND NUMERICAL ORDER.

NOTE. Each selection has a number.

A.

Adams, J. Q. (Pres.), for protection.

No. 1.-As yet no symptoms of diminution are perceptible in the receipts of the Treasury. As yet little addition of cost has even been experienced upon the article burdened with heavier duties by the last tariff. The domestic manufacturer supplies the same or a kindred article at a diminished price, and the consumer pays the same tribute to the labor of his own countryman which he must have otherwise paid to foreign industry and toil.

Ad valorem frauds.

No. 2.-I ask the Clerk to read the extract from Secretary Manning's report to which I have referred.

The Clerk read as follows:

"Whatever successful contrivances are in operation to-day to evade the revenue by false invoices, or by undervaluations, or by any other means, under an ad valorem system, will not cease even if the ad valorem rates shall have been largely reduced. They are incontestably, they are even notoriously inhérent in that system.

"One advantage, and perhaps the chief advantage of a specific over an ad valorem system, is in the fact that, under the former, duties are levied by a positive test, which can be applied by our officers while the merchandise is in possession of the Government, and according to a standard which is altogether national and domestic. That would be partially true of an ad valorem system levied upon 'home value;' but there are constitutional impediments in the way of such a system which appear to be insuperable. But under an ad valorem system the facts to which the ad valorem rate is to be applied must be gathered in places many thousand miles away, and under circumstances most unfavorable to the administration of justice. One hears it often said that if our ad valorem rates did not exceed 25 or 30 per cent. undervaluation and temptation to undervaluation would disappear; but the records of this Department for the years 1817, 1810, and 1857 do not uphold that conclusion."

-DINGLEY, Record, 6420.