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The Wilson-Gorman Act of 1894 had been passed under circumstances that had caused the Democratic President himself to express his shame and disappointment; the period of industrial depression following the panic of 1893 had been attributed so widely to Democratic tariff legislation that a Republican tariff act could be hailed as a harbinger of prosperity; and the annual deficit which had continued since 1893 indicated a genuine need of greater revenue, if the current scale of expenditures was to be continued.
Moreover the coincidence of instability in the currency system, business depression and the relatively high Wilson-Gorman tariff schedules of 1894 continued the decline of income from customs during the middle nineties. In the meantime the silver agitation, which had been somewhat repressed by the well-known attitude of Cleveland during his first administration revived with increased vigor.
Certainly in none has it seemed more swayed by class prejudice, and so insecure and vacillating in its opinion. Before the question regarding the constitutionality of the income tax was settled, the Democrats reaped the political results of the Wilson-Gorman tariff act. The law went into force on August 27, 1894; the congressional elections came in November.
At the same time the Pullman strike during the summer months, the Wilson-Gorman tariff fiasco and an unfortunate harvest seemed to indicate that man and nature were determined to make 1894 a year of ill-omen. By February, 1895, the treasury found itself confronted with a reserve of only $41,000,000.
The repeal, in 1893, of the purchase clause of the Sherman silver act had divided the Democrats into factions; the financial and industrial distress in the same year had been widely attributed to fear of Democratic misgovernment; the Wilson-Gorman tariff act of 1894 had discredited the party and aroused ill-feeling between the President and Congress; the Pullman strike and the use of the injunction had aroused bitterness in the labor element against the administration; the income tax decision of 1895 had done much to shake popular confidence in the Supreme Court; the Hawaiian and Venezuelan incidents had caused minor dissent in some quarters; and the bond sales had made Cleveland intensely unpopular in the West and South.
The communication had no effect except to intensify differences within the party, and senators made it evident that they would have their way or kill the measure. The House thereupon capitulated and accepted what became known as the Wilson-Gorman act a law which was only less protectionist than the McKinley act.
The panic of 1893 and the ill-fated Wilson-Gorman tariff act during the time when he was Governor caused the tide of popular favor to swing away from the Democrats; McKinley, as the apostle of protection, appeared in a more favorable light; and his partisans began to press him forward as the logical nominee for 1896 and as "the advance agent of Prosperity."
When the lobby appeared the group that had so mangled the Wilson-Gorman bill and discredited the Payne-Aldrich Act the President issued a public statement warning the country of the "extraordinary exertions" of a body of paid agents whose object was private profit and not the good of the public.
The other was a general tariff bill that proposed increases upon the then existing Wilson-Gorman bill. The first would put into the hands of the President a power that was not enjoyed by any ruler in Christendom; the second would add to the unfair and discriminatory tariff rates then in force, by making ad valorem increases in them.
By the narrow margin of five to four, then, and under such circumstances, the income tax provision of the Wilson-Gorman act was declared null and void. Probably no decision since the Dred Scott case, with the single exception of the Legal Tender cases, has put the Supreme Court in so unfortunate a light.
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