21 had been imported,1o and a bill passed the House "to remit the duties upon locomotive steam engines. ''20 This measure failed to pass the Senate. Various unsuccessful efforts were made also to have duties remitted on car wheels and iron parts of cars. Finally, in October, 1836, an act explanatory of the act of July 14, 1832, was passed, according to which spikes, pins, and chains used in the construction of railways were not to be included in that description of iron which was released from the payment of duties. In a word, there was an attempt to include railway iron other than bar iron for rails, 22 which attempt failed. In the third place, there was a long series of memorials and bills for the purpose of securing the remission or repayment of duties on importations prior to the acts of 1832 or 1836, or of securing an extension of time beyond the three year limit for laying down the rails; many of these bills were passed. These bills and memorials became extremely numerous about the time of the crisis of 1837. Two concrete cases may be given to illustrate. In 1836 the committee on ways and means reported23 on a memorial of the Lexington & Ohio Railroad Company for relief. The company had been chartered in 1830 by the legislature of Kentucky to construct a road from Lexington to the Ohio river near Louisville, and during the years 1832 and 1833 had imported iron from England, paying part of the duty, and giving bonds-according to law-for the remainder. The duty paid had been refunded to the company after the act of 1832, and bond was given to pay duty on all iron not laid down within three years. The company was unable to complete the road in that time, and so much iron remained unused that $1,984 became due on its bonds, which amount was paid under order of the Treasury department. The railway proceeded with its 19 S. J., 1832-33, p. 158. Little Schuylkill Nav. R. R. & Coal Co. 20 H. J., 1833-34, p. 254; S. J., 1833-34, p. 385, reported in Senate. 22 That there was doubt as to the meaning of the act is shown by the passage of the explanatory act and by the fact that certain duties paid on spikes imported from England previous to the explanatory act were remitted in 1836, 1838, 1839. (See Statutes at Large, 25th Cong., 2 sess., c. 257, and Ibid., 3 sess., c. 6.) 23 Rep. of Com., 1835-36, I, No. 152. work and by 1836 had completed 28 miles of road. It then memorialized Congress asking that the $1,984 be refunded upon assurance that the iron was to be used for railway purposes, and the committee reported favorably. A bill (Ho. Bill No. 160) was introduced for the company's relief, which passed both houses and became a law on July 2, 1836.24 This is a typical case of aid granted to a railway through extension of time for laying down imported rails, though here the amount involved was small. One of several releases of duties paid prior to the explanatory act of 1836 was "an act to refund to the New Castle & Frenchtown Turnpike and Railroad Company certain duties paid by them," etc.,25 according to which the secretary of the treasury was ordered to refund duties paid on shipments of spikes, clamps, and bolts made in 1836 and 1837 amounting to $2,003.85. The railway had to prove that the duty was not covered by a reduction in the price paid for the iron, and that the orders had been placed prior to the act of 1836. At about this time similar acts were passed in aid of the Baltimore & Susquehanna and the Philadelphia & Wilmington railway companies. 20 26 Toward the close of the decade, 1832-41, however, signs of a growing opposition to remissions begin to appear. The House called for a statement of the amount of duties refunded since 1832,27 and several bills for extending time to railroads failed to pass. 28 In 1840 a bill was introduced the object of which was to repeal the act of 1832,29 and though it did not pass, it may be taken to indicate the turn of the tide. 24 H. J., 1835-36, pp. 83, 1203. See H. J., 1837-38, p. 554. Statutes at Large, 25th Cong., 2 sess., Index. 27 H. J., 1838-39, p. 284. 23 H. J., 1838-39, pp. 428, 499, 725, etc.; S. J., 1839-40, pp. 53, 57, 127. H. J., Feb. 4, 1840. CHAPTER XII IMPORT DUTIES AND RAILWAY IRON (Continued) THE ACT OF 1832 REPEALED On August 30, 1841, Mr. Buchanan (Pa.) offered an amendment to the revenue bill then before the Senate. The amendment was to the effect that the act of July 14, 1832, which had released from duty iron used in railway construction, be repealed, and that a duty of 20 per cent. ad valorem be imposed on such iron.1 In debate upon the amendment the statement was made that an English monopoly in iron manufactures had been fostered by allowing free importation, and that payments for railway iron had been the cause of a serious drain upon our supply of specie. On a par with this argument was the cry of favoritism toward corporations, Mr. Walker saying that "he would prefer to discriminate in favor of the planters and farmers, and not tax them by grants of exclusive privileges for the benefit of corporations,”-virtually half a million dollars a year was being granted to these wealthy companies. Mr. Clay's reasons for supporting the amendment are very illuminating. In 1832, said he, when railway iron had been exempted from duty, the treasury had been full to overflowing; this was not now the case, and consequently a duty should be imposed. Henry Clay was not one to make a measure unpalatable and abrupt, however, and he suggested that companies which had already undertaken their work ought to have equal benefits of the present law. One cannot but be impressed with the fact that tariff policy is more often the result of industrial and financial conditions than their cause. The state of the 1 Cong. Globe, 1841, X, 402. nation's finances, the existence or absence of a surplus, has always colored the views of "statesmen" toward tariffs and internal improvements, and the influence of this element is to be seen in the congressional history of railways as recorded in the preceding pages2 and will appear again. Here Mr. Clay gives clear evidence of the operation of this factor in at least one instance. The chief resistance to the amendment came from the South, Mr. Calhoun and Mr. Cuthbert speaking strongly in favor of continuing free iron. In the South railway construction was not far advanced and consequently that section had not profited by the remission of duties to such an extent as had the northern States. Out of justice to the South, it was urged, "the law ought not yet to be repealed." Mr. Calhoun referred to the work of connecting the southern coasts, both Atlantic and Gulf, with the interior, upon which "depended in a great degree the commercial prosperity of the South," arguing that the work should not be burdened with taxes. It is worthy of note that at least two of the speakers emphasized the idea that this exemption from duties was equivalent to a grant of money: Congress "had virtually made large appropriations for internal improvements" by the act of 1832. As a result of the debate thus briefly recorded the amendment was so modified as to postpone the repeal until March 3, 1843, and thus modified it became law, being approved September 11, 1841.3 THE TARIFF ACT OF 1842 The last general tariff act mentioned above was that of 1828,* which considerably increased the duties on iron products. In 1833, however, so serious did the opposition of the South become, E. g., pp. 268, 364. be Acts of Congress, 1841, c. 24, sec. 5: And be it further enacted, That the act entitled "An act to release from duty, iron prepared for, and actually laid on railways and inclined plains" repealed, and there paid, on such iron hereafter imported, a duty of 20 per cent. ad valorem: Provided, That such repeal shall not operate prior to the third day of March, 1843. shall be • • Above, p. 299. that a "compromise tariff" was enacted, according to which duties were to be reduced by degrees during the following decade till a general 20 per cent. ad valorem level was reached in 1842. The act of 1841, then, which put an end to the free importation of railway iron, obviously aimed to put such iron on the same footing with other imports, and hence the adoption of a 20 per cent. duty to go into effect after 1842. When the 20 per cent. level was finally reached, however, it was not maintained, and in the same year, 1842, a tariff act was passed by the Whig majority then in power which was avowedly protective." Section four of the act contains its provision concerning railway iron: "Provided, also, That iron imported prior to the third day of March, 1843, in bars or otherwise, for railways or inclined planes, shall be entitled to the benefit of the provisions of existing laws, exempting it from the payment of duty * and all such iron imported from and after the date aforesaid shall be subject to and pay the duty on rolled iron." By this act the low duty of 20 per cent. ad valorem was replaced by a specific duty of $25 per ton, to take effect in 1843. CONDITIONS BETWEEN 1843 AND 1846: RAILS VERSUS RAILWAYS A situation now ensued which was quite similar to that existing between 1828 and 1832: on the one hand, there were those interested in a rapidly spreading net of railways; on the other were the iron manufacturers, who maintained that they were able to meet any demand if only they were given protection. But in the condition of the iron industry there had recently come a change. In 1828 charcoal had been entirely depended upon for smelting, and the concomitant necessity for great forest areas and the cost of cutting and hauling timber had placed restrictions all but insuperable on the industry. By 1843, however, anthracite coal was fast coming into use, and in 1844 we find Mr. Bialack (Pa.) saying, "Previous to the successful experiments made with our anthracite coal as a fuel in the manufacture of iron, there was perhaps some reason for Acts of Congress, 1841-42, c. 270. |