In the two succeeding political campaigns the Republicans were overwhelmingly defeated, and the Democrats returned to power pledged to tariff reduction. Party quarrels over the silver ques tion, however, together with the narrowness of the party majority in the Senate and the determination of certain Democratic sen ators to maintain protection for particular interests, resulted in the emasculation of the tariff measure passed by the House, and the Wilson act of 1894 was allowed to become law without the president's signature. Even so, it constituted a break in the series of increasingly protective measures enacted since the Civil War. First, and most important, wool was made free, and the compli cated duties on woollens were replaced by simple ad valorem duties, which, however, afforded the manufacturers a protection equal to the full amount that they had nominally enjoyed under the McKinley act. Rates on the finer cottons were lowered some what. Iron and steel duties were lowered, though not in any significant manner, and the rate on tin-plate was cut in two. Coal and iron ore, as raw materials, were made free by the House, but the Senate restored both to the dutiable list, though at re duced rates. The great battle was waged over sugar; the outcome was a duty of 40% ad valorem on raw sugar, and of 40% plus one-eighth of a cent a pound, plus an extra tenth of a cent a pound on sugar coming from any country that gave an export bounty, on refined sugar. This result was commonly regarded as a victory for the "sugar trust" and a violation of party pledges. The meas ure as a whole was a great disappointment to the tariff reformers. It went into effect, moreover, in the early stages of a period of business depression.
The money question carried the Republicans back into power in 1897, but political conditions made monetary legislation impos sible, and President McKinley called Congress in extra session for the sole purpose of tariff revision. A new bill was promptly re ported, and the Dingley act was passed without delay, restoring essentially the system of 189o. The wool and woollens duties of that year were re-established, with some changes, mostly upward. Specific duties, even higher than the previous high ad valorem ones, were laid on silks, and linens were treated likewise. The farmer got a duty on flax, and the ranchman, for the first time in 25 years, a tax on hides. As the iron and steel industry was largely beyond reach of foreign competition, rates were left in good part where they had been put in 1894, but certain specialties, like razors and cutlery, which continued to be imported, were raised by changes in classification, while tin-plate, the manufacture of which in the United States had been greatly aided by the rela tive cheapening of American steel sheets in the years immediately preceding, was given rates little in advance of those of Rates on raw sugar were pushed above those of the Wilson act, thus at once increasing revenue and giving added protection to the beet-growing industry, and the refiners kept the cent differential of 1894. The Dingley act, it will thus be seen, gave up no part of the protective structure of 189o, and at a number of points extended it beyond its previous limits.
The rapid growth of ter 1898 of industrial combinations, popu larly supposed to be special beneficiaries of the tariff, and the rise in the cost of living, led in time to increasing criticism of the protective system, and aided, along with the restiveness of the Middle-West farmers and the growth of manufactured exports, in putting the protectionists more or less on the defensive. The Re
publican Party, accordingly, in the campaign of 1908 enunciated the so called "true principle" of protection, that duties should equal the difference between cost of production at home and abroad, plus a reasonable profit to American industries. Theoret ically and practically impossible as the principle is, it yet indicated the line of defense to be adopted in the tariff revision promised by Taft as a presidential candidate. The Payne-Aldrich act of 1909 was in fact written along the same lines as its predecessors, with little more than lip-service to the "true principle." The House committee proposed to admit coal, lumber, iron ore and hides free. Hides were freed in fact, bringing some reductions in leather and shoes ; the other materials continued to pay duties, though at re duced rates. As usual, practically important upward changes were made in the textile schedules, as in the rates on mercerized cot ton, cheap hosiery and silks. The iron and steel duties, most of which had long since ceased to have practical significance, were generally reduced; but razors were given another upward turn, as were also pliers, cheap cotton gloves, asbestos fabrics, and other particular articles whose claims were effectively presented by their producers to the legislators. Figs, prunes and lemons were pro tected. The act brought no substantial modification of the protec tive system, but the whole tone of its supporters indicated inability or unwillingness to push much farther the aggressive protectionist policy of the '9os.
The back-handed reciprocity provisions of the acts of 1890 and 1897, authorizing the president by proclamation to impose duties on certain goods otherwise free, if coming from countries that discriminated against products of the United States, were omitted from the Act of 1909. Instead, the rates of 1909 were declared the minimum tariff and those rates plus 25% (of the value of the goods) the maximum. After March 31, 1910, the maximum rates were to go into effect automatically, except in the case of those countries where the president had satisfied himself that "no undue discrimination" was exercised against the United States. By strenuous exertions the administration managed to avoid the im position of the maximum rates in any case, though tariff wars with France, Germany, and especially Canada, were narrowly averted. The president also construed a provision of the maxi mum and minimum clause as authorizing him to appoint a tariff board, which proceeded to make studies on the basis of the "true principle," the moderate protectionists believing that its findings might serve as a second line of defense against the reduction of genuinely protective duties. The same moderate group, under the leadership of President Taft, were eager to do something for the export manufacturers, whose eagerness for foreign markets had been recognized in the Act of 1909 only in the ill-judged maximum and minimum provisions. A measure was accordingly driven through Congress, against the bitter opposition of the extreme protectionists, approving a treaty for a moderate measure of reciprocity with Canada, and freeing wood-pulp irrespective of Canadian action. To the disappointment of the moderates, Canada rejected the treaty.