True to his promise to Roosevelt and the American people, Taft set out immediately to revise the tariff. On March 16, 1909, as he had pledged in his inaugural address, Taft invoked his constitutional authority to summon both Houses “on extraordinary Occasions” and convened a special session of Congress. The Senate and House waited expectantly as the clerk began to read Taft’s presidential message. But when the clerk finished reading after two minutes, the assembled members of Congress were astounded. They had anticipated a state paper of historic importance and presidential leadership, but Taft had sent them a 340-word message that he had composed in fifteen minutes that morning.38
The message urged Congress “to give immediate consideration to the revision of the Dingley Tariff Act.” Taft explained that the current tariff was insufficient to raise enough revenue to pay government expenditures; without adjustment, there would be a deficit of $100 million by the next July. Moreover, because the Republican Party had pledged to revise the tariff, and the business community and the country expected the pledge to be fulfilled, those expectations had created “an extraordinary occasion, within the meaning of the Constitution, justifying and requiring the calling of an extra session.”39 Taft reminded Congress that his inaugural address had outlined the principles of tariff revision and new taxation to avoid future deficits. “It is not necessary for me to repeat what I then said,” he concluded. “The less time given to other subjects of legislation in this session, the better for the country.”40
Read in light of Taft’s constitutional understanding of the limits of his own powers, his brief message is a masterpiece of concision. Taft believed that the Constitution gave him the power to recommend to Congress “consideration of … such measures as he shall judge necessary and expedient.”41 And that is precisely what he had done in his inaugural address, which many of the statesmen had heard and all could read. He believed that Congress alone could decide whether to accept or reject his suggestions. What more needed to be said?
In fact, Taft had stepped into a political minefield so explosive that even the ordinarily bellicose Roosevelt had been too fainthearted to approach it. Roosevelt believed, with the progressives, that high tariffs led to higher prices and more entrenched monopolies, but he feared igniting a tariff battle that would divide eastern manufacturers in protected industries, who favored the tariff, from western farmers, who paid higher prices for raw materials, such as oil and steel, and therefore opposed it.42
Moreover, the question of what kind of taxes should fund the national debt was one of the central constitutional debates of the American republic. Since the Founding era, most federal revenue had come from import taxes raised by the tariff and excise taxes on staples such as sugar and salt; by 1910, these taxes funded 90 percent of the federal budget. That’s because the Constitution required that all “direct taxes” be apportioned according to population rather than according to personal wealth or property. When the tariff failed to raise enough revenue, excise taxes on goods such as whiskey and carriages filled the gap. Although they were often unpopular with the consumers (and had provoked the 1791 Whiskey Rebellion), the Supreme Court had upheld the constitutionality of excise taxes in the 1796 Hylton decision, argued by Alexander Hamilton.43
One way to avoid contentious debates over tariffs, which had divided the North and South in the years leading up to the Civil War, was to adopt a temporary income tax. In 1861, after the South seceded from the Union, the Lincoln administration imposed the first federal income tax, a flat tax of 3 percent on all incomes over $300 a year, to fund the Civil War.44 Neither Abraham Lincoln nor his secretary of the treasury, Salmon Chase, whom Lincoln would later appoint chief justice, believed that an income tax was a “direct tax” that had to be apportioned among the states according to population.45 And after the war the unpopular income tax expired.
The idea of an income tax had support, however, among Democrats as well as Republicans. After the Panic of 1893, populist Democrats argued that tariffs and excise taxes were regressive instruments of economic tyranny that discriminated against farmers and the producing classes. The Democratic Congress, supported by a Democratic president, Grover Cleveland, passed a federal income tax bill in 1894 that included a 2 percent tax on incomes over $4,000, as well as tariff reductions. But the Supreme Court wasted no time in striking down the law by a 5–4 vote in the Pollock case (1895),46 on the ground that taxes on income were direct taxes that had to be apportioned among the states. In doing so, the Court disregarded the reasoning of the 1796 Hylton decision, which held that only taxes that could plausibly be apportioned according to population—such as taxes on land or head taxes—qualified as direct taxes. Taft, then a federal circuit court judge, agreed with Justice Harlan’s dissent in Pollock, which exhaustively reviewed the records of the Constitutional Convention to argue convincingly that the Framers intended direct taxes to encompass only taxes on land and slaves.
The Pollock case was the most controversial of its day. It made the federal income tax impossible to administer, since the people of Delaware, if they represented 4 percent of the U.S. population, would have had to pay 4 percent of the income tax.47 It also cleared the way for Congress to raise the tariff to fund the national debt. Goaded by the popularity of President William McKinley’s protectionist policies, Congress passed the Dingley Tariff of 1897, setting rates as high as 50 percent. (European rates were closer to 10 percent.) During the 1908 presidential campaign, Taft acknowledged, “One of the great policies to which the Republican Party has been pledged from the beginning has been the protective system.”48
Nevertheless, at the beginning of Taft’s presidency, this consensus among Republicans had begun to splinter. Recent articles by the muckraking journalist Ida Tarbell helped to galvanize a bipartisan political revolt against protectionism, as consumers came to recognize that they were paying higher prices for domestic as well as imported goods, because domestic manufacturers could jack up prices without fear of foreign competition. By March 1909, when Taft sent his terse message to Congress, he faced a three-way struggle among competing camps of tariff reformers within the Republican Party. Moderate Revisionists, like Taft himself, wanted to reduce but not eliminate tariffs, returning to the original Hamiltonian vision of modest import duties as sources of revenue.49 Insurgent Republicans, led by progressives such as Senator Robert La Follette of Wisconsin, wanted to reduce tariffs even further, to increase competition and lower consumer prices, although they did not go so far as free trade Democrats to argue that the tariff should be eliminated entirely. And standpat Republican protectionists, led by Speaker Joe Cannon, who controlled the majority of Republican votes in the House, and the powerful senator Nelson Aldrich of Rhode Island, wanted to maintain or even increase the rates of the Dingley Tariff. “Where did we ever make the statement that we would revise the tariff downward?” Aldrich asked Taft disingenuously, ignoring the fact that everyone understood the promise of tariff revision in the Republican platform as a pledge to reduce the rates, not simply to change them in one direction or the other.50
These warring Republican factions might have defeated even the shrewdest and most determined politician. But Taft in this case was no politician at all, insisting that the Constitution prohibited him from interfering with Congress’s deliberations. “I have no disposition to exert any other influence than that which it is my function under the Constitution to exercise,” he told Aldrich, unwittingly tipping his hand.51 He could have supported the effort by the insurgent Republicans to unseat Speaker Cannon, but he viewed the encouragement of an intraparty coup as beyond his constitutional authority as well. “I would be very severely criticized,” he protested, “if I should attempt to use executive power to control the election in the House.”52 In this way, Taft used his devotion to the Constitution, and to party unity above all, to justify his temperamental aversion to building congressional support for his legislative agenda. After submitting his brief to Congress, he was content to wait for Congress’s v
erdict.
He did not wait long. Sereno E. Payne, the chairman of the House Ways and Means Committee, was, like Taft, a Republican moderate who supported downward revision based on the difference between the costs of production at home and abroad.53 On the day Taft sent his brief message to Congress, Payne introduced a tariff revision bill, reflecting more than a year of hearings. In a nod to Taft, he proposed to eliminate duties on coal, hide, and iron ore, while more than doubling duties on gloves—an industry of Payne’s home state of New York.54 Taft praised the Payne bill, calling it “as near [to] complying with our promises as we can hope,” and the bill passed the House on April 9.55 In the Senate, however, the bill was eviscerated by nearly eight hundred amendments sponsored by Senator Aldrich, more than half of which restored rates to the levels of the Dingley law.56
Even if Taft had been inclined to intervene in this battle, which he was not, he was soon distracted at home. Nellie Taft had settled into her role as first lady with enthusiasm and style. She replaced the white ushers in frock coats at the front door of the White House with African American ushers in blue livery. She installed oriental furnishings (including the constitutionally controversial tapestry from Japan) and tropical plants throughout the executive mansion, prompting servants to refer to it as the Malacañan Palace.57 And she left a permanent and welcome mark on Washington, D.C., by accepting the gift of three thousand Japanese cherry trees from the mayor of Tokyo and planting them around the Tidal Basin in 1910. When the trees bloomed the following year, and she saw the cherry blossoms, Archie Butt reported, “Mrs. Taft actually clapped her hands in delight.”58
Soon after moving into the White House and achieving her most ardent dream, however, Nellie Taft collapsed during an outing on the presidential yacht.59 “I was permitted fully to enjoy only about the first two and a half months of my sojourn in the White House,” she wrote decorously in her memoir. “In May I suffered a serious attack of illness and was practically out of society through an entire season.”60 In fact, Nellie had suffered a terrible stroke, which deprived her of control of her right arm and leg, and her power of speech. Seeing his paralyzed wife carried into the salon, Taft “went deathly pale,” as Archie Butt recalled, adding that “the President looked like a great stricken animal. I have never seen greater suffering or pain shown on a man’s face.”61 During the year that it took Nellie to recover her ability to speak, Taft nursed her with patience and loving attention, working with her gently for hours a day. A housekeeper recalled that he was always full of laughter in an effort to ease her strain. “Now please, darling, try and say ‘the’—that’s it, ‘the,’” he would say. “That’s pretty good, but now try it again.”62 Nellie thrived under Taft’s tender ministrations, and after a substantial recuperation, she looked “lovely and happy,” as Archie Butt observed her during one of Taft’s speeches. “She always looks happy when listening to the President.”63
The Tafts had a summer home in Beverly, Massachusetts, which was known during Taft’s presidency as the “Summer Capital of the U.S.” As Nellie recuperated there, the president was left alone in the White House to observe the fight over the tariff bill from a distance. He drew one line in the sand: unless Congress revised the tariff downward, he would veto the bill.64 Always most comfortable as a conciliator presiding over a judicial conference, he then invited the House and Senate conference committees to the White House for dinner on the veranda—the press called it the “White House lovefeast”—where he scrupulously avoided discussing substantive issues, which he considered Congress’s prerogative.65
In the end, the wily Aldrich assured Taft that his views would be duly considered, and although Taft confessed he could not predict the outcome—“I am trusting a great many of them,” he told Nellie, “and I may be deceived”—he decided his duty to the Constitution and to the unity of the Republican Party required him to defer to Aldrich, who did indeed deceive him. When the conservative protectionists finally passed a bill that increased hundreds of duties while decreasing others, La Follette, the leader of the insurgents, rushed to the White House and urged the president to assert himself. “Well, I don’t much believe in a president’s interfering with the legislative department while doing its work,” Taft replied with judicial blandness. “They have their responsibility and I have mine.”66 On July 15, he rejected demands that he throw down the gauntlet and threaten a veto, declaring, “I could make a lot of cheap capital by adopting just such a course, but what I am anxious to do is to get the best bill possible with the least amount of friction. I owe something to the party, and while I would popularize myself with the masses with a declaration of hostilities toward Congress, I would greatly injure the party and possibly divide it.”67
On August 5, 1909, convinced that the Payne-Aldrich bill was consistent with the promise in the Republican platform to revise the tariff, Taft signed it into law. Although disappointed that the bill didn’t go further, Taft viewed it with equanimity. “I hope that my attitude will have so reconciled the people of this country as to make them believe, what is a fact, that the bill really is a good bill,” Taft wrote to Nellie. “It does not go far enough in certain respects, but it goes far in others; and a tariff bill no one can be entirely satisfied with.”68 With judicial precision, he gave several speeches emphasizing that, all things considered, the bill represented a downward revision: there were 654 decreases, 220 increases, and 1,150 unchanged items, and the average duty on imports was 21.09 percent, whereas under the Dingley law it had been 24.03 percent.69
Taft argued plausibly that the bill—the first downward revision of the tariff since the Cleveland administration—was the best he could have achieved, given the explosiveness of the politics.70 The Washington Post agreed. “It is easy to pick flaws in the bill, but it cannot be denied that, as a whole, it is as good as any tariff legislation that has preceded it,” the editors declared.71 But the progressive press attacked the bill as a capitulation to big business, reinforcing the public perception that Taft had sided with the conservatives over the insurgents.72 And it’s true that Taft was sometimes willing to veto bills that offended that Republican orthodoxy—such as the populist Democratic free trade bill—but he refused to veto the Payne bill after it was diluted by Aldrich’s amendments. In the end, Taft was more devoted to preserving the unity of the Republican Party than to offering presidential leadership. But instead of uniting the party, his insistence that the Constitution precluded him from interfering with the details of legislation ultimately divided it.
Nevertheless, Taft achieved the tariff revision that eluded Roosevelt, and he shaped the tax reforms of the Payne-Aldrich bill as well. In a fiscally responsible search for additional federal revenue to balance the loss of funding from the tariff, the House proposed a graduated federal inheritance tax, which Taft had endorsed in his inaugural address. The Senate objected on the ground that some states viewed a federal inheritance tax as a form of double taxation, since they already imposed state inheritance taxes of their own.73 Taft then called on Congress to adopt an ingenious compromise: a 2 percent tax on corporate net profits and the constitutional amendment authorizing an individual income tax that would not require apportionment. He had criticized the Supreme Court’s Pollock decision in 1895 as depriving the federal government “of a power which, by reason of previous decisions of the court, it was generally supposed that Government had.”74 But he also believed that passing another income tax statute would embarrass the Court, since the justices were unlikely to reverse themselves, and his devotion to the Court’s legitimacy trumped his own constitutional views. In the meantime, Taft viewed the 2 percent excise tax on corporate income as a temporary solution that would allow Congress to raise revenue and regulate corporations at the same time.75
As Taft told Congress, “It is the constitutional duty of the President from time to time to recommend to the consideration of Congress such measures as he shall judge necessary and expedient.”76 And on this front, Taft’s recommendations were la
rgely successful. In July 1909, Congress passed a resolution calling for an amendment to the Constitution authorizing Congress to collect income taxes. And in 1911 the Supreme Court would unanimously uphold the corporate tax as an indirect tax on the privilege of doing business as a corporation, rather than a direct tax on income.77 All in all, despite criticism from extreme reformers, Taft had cause for wan satisfaction with the Payne-Aldrich bill. He had set the United States down a path of tax reform that, in time, would lead to a bipartisan consensus favoring relatively free trade and a federal government funded by an income tax rather than by protective tariffs.
In the late twentieth century, the journalist Michael Kinsley observed that a gaffe in Washington involves a politician inadvertently telling the truth. The compulsively honest Taft wrote many of his own speeches without editing, and he often embarrassed himself when his truth-telling gaffes were taken out of context. In a Memorial Day appreciation of Ulysses S. Grant delivered during the 1908 campaign, Taft scandalized an audience of veterans by declaring that, before the Civil War, Grant had “resigned from the Army because he had … yielded to the weakness of a taste for strong drink.”78 (A few sentences later, Taft added that Grant eventually had “overcome in a great measure his weakness for strong drink,”79 but the qualification was lost in the uproar.) And shortly after he signed the tariff bill, Taft committed what proved to be the most politically damaging gaffe of his career.
William Howard Taft Page 7