Sec. 10. #The Dingley tariff, 1897-1909.# The campaign of 1896 was waged almost solely on the issue of free silver.  Undoubtedly great numbers of voters supported William McKinley rather despite of, than because of, his high protectionist beliefs.  But his inauguration was promptly followed by the passage of the Dingley act of July 24, 1897, which embodied a marked increase of protective rates.  A duty was again levied on wool, and also on hides which had been untaxed since 1872.  High rates were made for woolens, linens, silks, chinaware, and the rate on sugar was doubled.  Provision was made for some reduction of rates by reciprocity agreements, but the conditions were so complex that the effect could not be great.  This high protective tariff, thus enacted without popular discussion, remained almost unchanged for twelve years, the longest life, by one year, of any tariff act in our history,[7] The rate under the first full fiscal year of the law’s operation, 1899, was the highest on dutiable in our history, 52 per cent, and was nearly 30 per cent on free and dutiable.  In practical operation, however, the average rate steadily became more moderate because of the rapid rise of the general price level that was in progress throughout this period, amounting to 35 per cent from 1898 to 1909.[8] The average rate of duties collected for the period of 12 years was 47 per cent on dutiable and 26 per cent on free and dutiable.  It was steadily falling and the last year, 1909, was 43 per cent on dutiable and 23 per cent on free and dutiable.

Sec. 11. #Sentiment favoring lower rates.# While the Dingley act was thus in operation showing declining average rates, sentiment was developing in every part of the country in favor of a further moderation of the tariff.  This was due partly to the discontent resulting from steadily rising general prices, in which change the rise in the prices of food and of many other necessities was not fully compensated by the rise of the wages and incomes of the masses.  Partly the growth of this sentiment accompanied the agitation against trusts and the belief that protective duties in some cases were an aid to the formation of domestic monopolies.  But more fundamentally, this changing sentiment was the result of the changing industrial conditions in America.  The character of our foreign trade had altered greatly since the early nineties.  We were importing relatively less and less of manufactured and finished products, and more of raw materials; and we were exporting less and less of raw materials and more of finished products.  A growing number of manufacturers were feeling the need of cheaper raw materials and were looking hopefully toward an enlargement of their foreign trade.

The Republican platform in 1908, in view of the changing public sentiment, formulated a new rule for maintaining “the true principle of protection,” namely, that it “is best maintained by the imposition of such duties as will equal the difference between the cost of production at home and abroad, together with a reasonable profit to American industries.”  This rule is very attractive in its suggestion at the same time of the idea of a moderation of the tariff and of an exact practical (not to say scientific) standard for the determination of the proper rate in every case.