The Payne–Aldrich Tariff Act of 1909 (ch. 6, 36 Stat. 11), named for Representative

Sereno E. Payne Sereno Elisha Payne (June 26, 1843 – December 10, 1914) was a United States representative from New York and the first House Majority Leader, holding the office from 1899 to 1911. He was a Republican congressman from 1883 to 1887 and the ...

(R– NY) and Senator

Nelson W. Aldrich Nelson Wilmarth Aldrich (/ ˈɑldɹɪt͡ʃ/; November 6, 1841 – April 16, 1915) was a prominent American politician and a leader of the Republican Party in the United States Senate, where he represented Rhode Island from 1881 to 1911. By the 1 ...

(R– RI), began in the

United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...

as a bill raising certain

tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...

s on goods entering the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

. The high rates angered Republican reformers, and led to a deep split in the

Republican Party Republican Party is a name used by many political parties around the world, though the term most commonly refers to the United States' Republican Party. Republican Party may also refer to: Africa * Republican Party (Liberia) *Republican Party ...

History

Protectionism Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulation ...

was the ideological cement holding the Republican

coalition A coalition is a group formed when two or more people or groups temporarily work together to achieve a common goal. The term is most frequently used to denote a formation of power in political or economical spaces. Formation According to ''A Gui ...

together. High

s were used by Republicans to promise higher sales to business, higher wages to industrial workers, and higher demand for farm products. Progressive insurgents said it promoted

monopoly A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...

. Democrats said it was a tax on the little man. It had greatest support in the

Northeast The points of the compass are a set of horizontal, radially arrayed compass directions (or azimuths) used in navigation and cartography. A compass rose is primarily composed of four cardinal directions—north, east, south, and west—each sep ...

, and greatest opposition in the

South South is one of the cardinal directions or compass points. The direction is the opposite of north and is perpendicular to both east and west. Etymology The word ''south'' comes from Old English ''sūþ'', from earlier Proto-Germanic ''*sunþa ...

and

West West or Occident is one of the four cardinal directions or points of the compass. It is the opposite direction from east and is the direction in which the Sun sets on the Earth. Etymology The word "west" is a Germanic word passed into some ...

. The

Midwest The Midwestern United States, also referred to as the Midwest or the American Midwest, is one of four Census Bureau Region, census regions of the United States Census Bureau (also known as "Region 2"). It occupies the northern central part of ...

was the battle ground. President

William Howard Taft William Howard Taft (September 15, 1857March 8, 1930) was the 27th president of the United States (1909–1913) and the tenth chief justice of the United States (1921–1930), the only person to have held both offices. Taft was elected pr ...

called Congress into a

special session In a legislature, a special session (also extraordinary session) is a period when the body convenes outside of the normal legislative session. This most frequently occurs in order to complete unfinished tasks for the year (often delayed by confli ...

in 1909 shortly after his inauguration to discuss the issue. Thus, the

House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entitles. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often c ...

immediately passed a tariff bill sponsored by Payne, calling for reduced tariffs. However, the

United States Senate The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and po ...

speedily substituted a bill written by Aldrich, calling for fewer reductions and more increases in tariffs. It was the first change in tariff laws since the

Dingley Act of 1897 The Dingley Act of 1897 (ch. 11, , July 24, 1897), introduced by U.S. Representative Nelson Dingley Jr., of Maine, raised tariffs in United States to counteract the Wilson–Gorman Tariff Act of 1894, which had lowered rates. The bill came int ...

. Progressive Republicans wanted to lower tariffs but Conservative leader Senator Aldrich prevailed by winning over some Democrats (despite the Democratic national platform calling for lower tariffs). These Democrats represented states with industry facing imports of iron ore, lumber, hides, coal, and other items. Senator Joseph Bailey of Texas defended the votes but Democrats

William Jennings Bryan William Jennings Bryan (March 19, 1860 – July 26, 1925) was an American lawyer, orator and politician. Beginning in 1896, he emerged as a dominant force in the History of the Democratic Party (United States), Democratic Party, running ...

Henry Watterson Henry Watterson (February 16, 1840 – December 22, 1921), the son of a U.S. Congressman from Tennessee, became a prominent journalist in Louisville, Kentucky, as well as a Confederate soldier, author and partial term U.S. Congressman. A Demo ...

, and

Josephus Daniels Josephus Daniels (May 18, 1862 – January 15, 1948) was an American newspaper editor and publisher from the 1880s until his death, who controlled Raleigh's '' News & Observer'', at the time North Carolina's largest newspaper, for decades. A ...

denounced them. In response the

Democratic caucus A congressional caucus is a group of members of the United States Congress that meet to pursue common legislative objectives. Formally, caucuses are formed as congressional member organizations (CMOs) through the United States House of Represent ...

imposed more discipline before the Democrats took control of the House in 1911. An additional provision of the bill provided for the creation of a tariff board to study the problem of tariff modification in full and to collect information on the subject for the use of Congress and the President in future tariff considerations. Another provision allowed for free trade with the

Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...

, then under American control. Congress passed the bill officially on April 9, 1909. The bill states it would "take effect the day following its passage." President Taft officially signed the bill at 5:05 PM on August 5, 1909.

Impact

The Payne Act had the immediate effect of frustrating proponents of reducing tariffs. In particular, the bill greatly angered Progressives, who began to withdraw support from President Taft. Because it increased the duty on print paper used by publishers, the publishing industry viciously criticized the President, further tarnishing his image. Although Taft met and consulted with Congress during its deliberations on the bill, critics charged that he ought to have imposed more of his own recommendations on the bill such as that of a slower schedule. However, unlike his predecessor (

Theodore Roosevelt Theodore Roosevelt Jr. ( ; October 27, 1858 – January 6, 1919), often referred to as Teddy or by his initials, T. R., was an American politician, statesman, soldier, conservationist, naturalist, historian, and writer who served as the 26t ...

), Taft felt that the president should not dictate lawmaking and should leave Congress free to act as it saw fit. Taft signed the bill with enthusiasm on 5 August 1909, expecting it would stimulate the economy and enhance his political standing. He especially praised the provision empowering the president to raise rates on countries which discriminated against American products, and the provision for free trade with the Philippines. The defection of insurgent Republicans from the Midwest began Taft's slippage of support. It heralded conflicts over conservation, patronage, and progressive legislation. The debate over the tariff thus split the Republican Party into

Progressives Progressivism holds that it is possible to improve human societies through political action. As a political movement, progressivism seeks to advance the human condition through social reform based on purported advancements in science, techn ...

and Old Guards and led the split party to lose the 1910 congressional election.

Corporate Income Tax

The bill also enacted a small

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Ta ...

on the privilege of conducting business as a corporation, which was affirmed in the Supreme Court decision '' Flint v. Stone Tracy Co.'' (also known as the Corporation Tax case).John D. Buenker, ''The Income Tax and the Progressive Era'' (Routledge, 2018).

History

Impact

Corporate Income Tax

References

Further reading