Sec. 9. #The tariff, 1890-1896#.  The tariff act (known as the McKinley act) of October, 1890, followed.  This was a general extension of the principle of protection.  The rates on woolen goods were on the whole increased and made in more cases prohibitive.  The rates on wool were increased.  The rates on iron, which was already highly protected, were little changed except by the increase of the duty on tin-plates.  The duty on sugar (in the main a revenue duty, yielding $55,000,000 a year) was removed and a bounty was granted to domestic sugar producers.  In the next three (fiscal) years, 1892-1894, the average rate proved to be over 49 per cent on dutiable (4 per cent increase) and 22 per cent on free and dutiable (the remission of sugar duties accounting for the most of this fall of 8 per cent from the average under the preceding law—­4 per cent fall from the last year of its operation).  Particularly noticeable, however, was the increase in the proportion of goods entering free, which was nearly 55 per cent of all merchandise as contrasted with about 33 per cent between 1884 and 1890.

Again the political weather vane shifted.  The month after the McKinley bill became law, the Congressional elections (November, 1890) returned an overwhelming Democratic majority in the House, altho this was a period of business prosperity, a fact usually favoring the party in power.  In 1892, Cleveland, being again a candidate, was successful over Harrison by a largely increased plurality of the popular vote, and received almost double the electoral vote of his opponent.  The House was Democratic, and the Senate soon became so.  Business prosperity was rising again to a high level, but there were many features of financial and speculative weakness in the situation, intensified by growing fear of a cheap money (silver dollar) inflation under the act of 1878 providing for the annual purchase of silver.  A financial panic occurred in September, 1893, six months after Cleveland’s inauguration.

Nevertheless Congress enacted the next year, Aug. 28, 1894, the Wilson tariff act.  The changes made by this legislation were not on the whole very great, but were nearly all in the direction of the lowering of the tariff.  Most notable was the putting of raw wool upon the free list.  Some rates on woolen goods were reduced, but hardly more than enough to offset the effects, upon manufacturers’ costs, of the reduction of the tariff on raw wool.  Likewise small reductions were made on cotton and silk goods, on pig iron, steel and tin plate and many other articles; and larger reductions on coal, iron ore, chinaware, and glassware.  To make up for the expected reduction of receipts from other sources, a duty was laid again upon raw sugar, and an income tax law was passed (this soon, however, to be declared unconstitutional).

Under this law, for three fiscal years (1894-1897) the average rates were 41 per cent on dutiable and 21 per cent on free and dutiable,—­pretty high rates.  The proportion entering free under this act was actually less than under the McKinley act, partly because of the sugar item, and partly, probably, because of general business conditions.