Payne-Aldrich Tariff Act
Encyclopedia
The Payne-Aldrich Tariff Act of 1909 (ch. 6, 36 Stat. 11), named for Representative Sereno E. Payne
(R-NY
) and Senator Nelson W. Aldrich
(R-RI
), began in the United States House of Representatives
as a bill lowering certain tariff
s on goods entering the United States
. It was the first change in tariff laws since the Dingley Act of 1897. President William Howard Taft
called Congress into a special session in 1909 shortly after his inauguration to discuss the issue. Thus, the House of Representatives immediately passed a tariff bill sponsored by Payne, calling for reduced tariffs. However, the United States Senate
speedily substituted a bill written by Aldrich, calling for fewer reductions and more increases in tariffs.
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, then under American control. Congress passed the bill officially on April 9, 1909.
Taft promptly appointed members to serve on the tariff board.
Taft signed the bill in an attempt to preserve party unity; however, it had the opposite effect. The debate over the tariff split the Republican Party into Progressives
and Old Guards
and led the split party to lose the 1910 congressional election. In the 1912 presidential elections
, because of the split votes amongst Republicans in most states, Democratic candidate Woodrow Wilson
was elected as president.
The bill enacted an income tax
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).
By 1915, tobacco
exports from the Philippines to America had annually increased as a result of the bill passing.
Sereno E. Payne
Sereno Elisha Payne 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 then from 1889 to his death in 1914. He was chairman of the House Ways and Means Committee for 12...
(R-NY
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
) and Senator Nelson W. Aldrich
Nelson W. Aldrich
Nelson Wilmarth Aldrich was a prominent American politician and a leader of the Republican Party in the Senate, where he served from 1881 to 1911....
(R-RI
Rhode Island
The state of Rhode Island and Providence Plantations, more commonly referred to as Rhode Island , is a state in the New England region of the United States. It is the smallest U.S. state by area...
), began in the United States House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
as a bill lowering certain tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s on goods entering the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. It was the first change in tariff laws since the Dingley Act of 1897. President William Howard Taft
William Howard Taft
William Howard Taft was the 27th President of the United States and later the tenth Chief Justice of the United States...
called Congress into a special session in 1909 shortly after his inauguration to discuss the issue. Thus, the House of Representatives immediately passed a tariff bill sponsored by Payne, calling for reduced tariffs. However, the United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
speedily substituted a bill written by Aldrich, calling for fewer reductions and more increases in tariffs.
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, then under American control. Congress passed the bill officially on April 9, 1909.
Taft promptly appointed members to serve on the tariff board.
Impact of the bill
The Payne–Act, in its essence a compromise bill, had the immediate effect of frustrating both proponents and opponents of reducing tariffs. In particular, the bill greatly angered Progressives, who were beginning to stop supporting President Taft. Because it increased the duty on print paper used by publishers, the publishing industry viciously criticized Taft, further tarnishing his image. Although Taft consulted Congress during its deliberations on the bill to a certain extent, critics charged that he ought to have imposed more of his own recommendations (that is, more lowered schedules) on the bill. However, unlike Roosevelt, Taft felt that the president should not dictate lawmaking and should leave Congress free to act as it saw fit.Taft signed the bill in an attempt to preserve party unity; however, it had the opposite effect. The debate over the tariff split the Republican Party into Progressives
Fourth Party System
The Fourth Party System is the term used in political science and history for the period in American political history from about 1896 to 1932 that was dominated by the Republican party, excepting the 1912 split in which Democrats held the White House for eight years. History texts usually call it...
and Old Guards
Old Right (United States)
The Old Right was a conservative faction in the United States that opposed both New Deal domestic programs and U.S. entry into World War II. Many members of this faction were associated with the Republicans of the interwar years led by Robert Taft, but some were Democrats...
and led the split party to lose the 1910 congressional election. In the 1912 presidential elections
United States presidential election, 1912
The United States presidential election of 1912 was a rare four-way contest. Incumbent President William Howard Taft was renominated by the Republican Party with the support of its conservative wing. After former President Theodore Roosevelt failed to receive the Republican nomination, he called...
, because of the split votes amongst Republicans in most states, Democratic candidate Woodrow Wilson
Woodrow Wilson
Thomas Woodrow Wilson was the 28th President of the United States, from 1913 to 1921. A leader of the Progressive Movement, he served as President of Princeton University from 1902 to 1910, and then as the Governor of New Jersey from 1911 to 1913...
was elected as president.
The bill enacted an income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
on the privilege of conducting business as a corporation, which was affirmed in the Supreme Court decision Flint v. Stone Tracy Co.
Flint v. Stone Tracy Co.
Flint v. Stone Tracy Co. 220 U.S. 107 was a United States Supreme Court case challenging the validity of an income tax on corporations...
(also known as the Corporation Tax case).
By 1915, tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
exports from the Philippines to America had annually increased as a result of the bill passing.