in the necessity for revision of the revenue laws which had become confused in consequence of frantic efforts to tap new sources of funds to prosecute the War. By Act of March 3, 1865 (13 Stat. L., 487) it was provided that:

The Secretary of the Treasury is hereby authorized to appoint a Commission, consisting of three persons, to inquire and report at the earliest practicable moment upon the subject of raising by taxation such revenue as may be necessary in order to supply the wants of the government, having regard to and including the sources from which such revenue should be drawn and the best and most efficient mode of raising the same and to report the form of a bill.

The termination of the War shortly after the passage of the bill caused the Revenue Commission, consisting of David A. Wells, Stephen Colwell, and S. S. Hayes, to adopt a different view point as to its proper functions than that contemplated by Congress, and in its report submitted on January 29, 1866 5 the commission confined itself to advising modifications in existing tariff and internal revenue laws. The Committee of Ways and Means followed the recommendations of the commission in large measure in the bills which it reported to the first session of the 39th Congress. Subsequently the Act of July 13, 1866 ( 14 Stat. L., 170) was enacted which provided for the appointment by the Secretary of the Treasury of a special Commissioner of the Revenue, to hold office to the close of the fiscal year 1869-70:

from time to time to report through the Secretary of the Treasury, to Congress, either in the form of a bill or otherwise, such modifications of the rates of taxation, or of the methods of collecting the revenues, and such other facts, pertaining to the trade, industry, commerce, or taxation of the country, as he may find, by actual observation of the operation of the law to be conducive to the public interest.

The work of the first body which was created in the United 539 Cong. I sess., H. ex. doc. 34.

States to assist Congress in tariff legislation was thus fruitful in two directions: its recommendations had been reflected in legislation and there had been established what appeared to be a permanent office to carry on the work begun by it.

7

The Commissioner of Revenue. Mr. David A. Wells, who had been chairman of the Revenue Commission of 1865, was appointed Special Commissioner and served until 1870. Of his work, Professor Davis R. Dewey writes that while he had "executed his commission with conscientious faithfulness and industry and collected a large amount of valuable data" he lost such opportunity as was afforded to influence legislation constructively because he urged tariff reform in the direction of free trade at a time when controlling opinion was becoming identified with the protectionist movement and thereby "brought commission expert service into disrepute.' Another authority criticizes the Commissioner's reports on the ground that they were "characterized by passionate partisanship and a controversial spirit unbecoming a public officer' and points out that the Commissioner was suspected and accused of unworthy motives in his change of opinions from protectionist to free trader.

8

Whatever may have been the true status of his influence, the outcome of this early experiment in expert study of tariff problems was not of a nature to promote its continuance. It was not until 1882, eighteen years later, that another attempt was made with a Commission.

The Tariff Commission of 1882. Just as a specific situation demanding immediate relief brought forth the Revenue Commission of 1865, so also a special situation led to the creation of the Tariff Commission of 1882. This special

On Sept. 10, 1866, the Secretary of the Treasury wrote a letter to the Revenue Commissioner instructing him "to give the subject of the revision of the tariff especial attention."

7 Cyclopedia of American Government, III, p. 472.

8 Stanwood, American Tariff Controversies, II, 161.

cause was the plethoric condition of the Federal Treasury. Between the fiscal years 1874-75 and 1877-78, the public debt had been reduced more than a hundred million dollars and in addition nearly half a million six per cent bonds were refunded, while in the two fiscal years 1878–79 and 79-80 there was a further reduction in debt of almost a hundred million. Such rapid reduction in the public debt was not deemed desirable, and it was recognized that a reduction of taxes and a revision of the tariff was necessary.

While the condition of the Treasury was the primary cause for the advocacy of a commission, other influences were beginning to shape themselves, which in later years became relatively more important. First of all, maladjustments in tariff rates due to rapid current transformations in the technique and economics of industry were manifesting themselves. Secondly, there was much confusion in the revenue laws. One Senator, complaining of this situation, said in 1881

I wish any Senator would take Heyl's Digest of the Revenue Laws and the decisions upon them and if he attempts to gather from it anything like a definite idea of the system he will be afflicted worse than vertigo twenty times over.

10

Members of Congress were also beginning to realize that the existing method of framing tariff legislation imposed too great a burden 11 upon the committees of Congress and that blunders were consequently unavoidable.

By act of May 15, 1882 (22 Stat. L., 64) Congress pro

Thus the Secretary of the Treasury wrote in 1881 in illustration of the difficulties "that specific duties which had been imposed by the Act of 1864 on iron and steel no longer had a proper relation to ad valorem duties on articles manufactured from these metals while new articles were being imported constantly not mentioned in the tariff."

10 Congressional Record, LI, 73. (47 Cong. I sess., 1881).

11 At a later date statements were made by members of Congress who participated in tariff legislation that they believed their lives had been shortened by the strain to which they were subjected as members of committees preparing tariff bills. (See e.g. Congressional Record, May 9, 1912: Vol. 283, p. 6187.)

vided for the appointment of nine Commissioners from civil life whose duty it should be

to take into consideration and to thoroughly investigate all the various questions relating to the agricultural, commercial, mercantile, manufacturing, mining, and industrial interests of the United States, so far as the same may be necessary to the establishment of a judicious tariff, or a revision of the existing tariff, upon a scale of justice to all interests, and for the purpose of fully examining the matters which may come before it.

The Tariff Commission was empowered in the prosecution of its investigations to visit the different sections of the country if it should find it advisable to do so, and a final report was to be made to Congress "of the results of its investigations and the testimony taken not later than the first Monday of Dec. 1882."

The commission was forbidden from proposing “a radical or subversive change in the present general economical policy of the country." A revision on a scale of justice to all interests, not a destruction of existing tariff laws, was desired.12 In its investigations, the commission followed the method of congressional committees, conducting hearings in twenty-nine different places and examining 604 witnesses in sessions upon seventy-eight days. The results of the investigations were embodied in a report presented to Congress in December, 1882.18 The report contained recommendations for reductions in duties, estimated to average 25 per cent, and suggested many changes in the administration of the customs service. In addition, the creation of a customs court was proposed to assume jurisdiction of all cases originating in conflicting interpretations of the tariff laws, and the adoption was urged of the rule that the addition of costs of inland transportation to the invoice value of imported merchandise should not be permitted in determination of the ad valorem duty.

12 Appleton's Annual Cyclopedia, 1882, p. 778. 13 $47 Cong. 2 sess., H. misc. doc. 6.

Congress practically disregarded the commission's recommendations and each Chamber proceeded to draft a bill independently, accompanied by the usual sectional and industrial controversy as each interest attempted to gain the maximum benefit from the proposed legislation. It seemed therefore at the time that the work of the commission had been fruitless. The outcome of this apparent failure was the discouragement for a long period of any renewed effort to utilize a commission or board to assist Congress in tariff legislation, although it has become clear in the light of historical perspective that a valuable service was rendered by the Tariff Commission of 1882 since, as one writer has expressed it, "the tariff of 1883 was a better piece of legislation because of the recommendations of the Commission than it would have been without them." 14

Cost of Production Study by Department of Labor. Attention has been called to the fact that both the Revenue Commission of 1865 and the Tariff Commission of 1882 were created as a result of special causes, although such general factors as the growing complexity of industry, confusion in revenue laws, etc., were of cumulative but yet subordinate significance. The direct cause for the third attempt to provide a body for study of tariff problems, was the increasing significance of the theory of international comparative production costs in tariff controversy. Protectionists had maintained that any tariff rate was satisfactory if high enough to exclude foreign competition, since domestic competition would automatically operate to reduce prices to a reasonable level. When it was charged, however, that monopolies were frequently the effect of a tariff protection greater than warranted by conditions of international competition, attention was inevitably directed toward the study of international production costs. 15

14 Taussig, Free Trade, Reciprocity, and the Tariff, p. 187. 15 Robinson, in American Economic Review, Supplement to Vol. II, no. 1, p. 38 (1912).