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November 1, 2012

Taft’s fight is your Fight!

(A Republican fight against free trade and an out of control financial industry)William Howard Taft from newspaper clipping

Because
Do you remember 1893-4 — the free soup houses, bank failures, thousands of men out of work and the bread line?
Do you remember at this time we had a democratic President, Grover Cleveland?
Woodrow Wilson, the Democratic candidate and his free trade doctrine will bring this condition on again and it is your duty to see that he is not elected.
How can this calamity be prevented? Don’t throw away your vote on Theodore Roosevelt, because it is utterly impossible for him to be elected and a vote for him is a vote for Wilson, as it splits up the Republican Party.
Can Wilson be prevented from being elected? Yes, there is but one way, put a cross on your ballot as follows
[ X ] Republican.

(The Coconino Sun, Arizona, page 3, November 1, 1912.)

This plea to vote for Taft looks prophetic today, and historians almost unanimously agree that Wilson won because the Republican party was split.  It’s not surprising either to see Republicans blame Democrats for a poor economy, and to warn of the economic troubles brewed by that other party’s policies.

What is interesting is to see how much we forget about true financial conservatism.  Wilson’s “free trade doctrine” was seen as the danger that would bring the country back to financial ruin, and perhaps economic collapse.  In fact, out of all Wilson’s policies, free trade was singled out as the most dangerous.

Now, it’s funny today to see Republicans attack Democrats as liberals, socialists, progressives, and segregationists and roll those all into one ball, from Lincoln’s time to today.  It’s funny to see them pretend like their party was always the party of the free market, and pretend that has something to do with meritocracy and concern for American business.

Wilson is attacked by neo-conservatives today as a “progressive”, but what does progressive mean?  100 years ago, Wilson was feared by Republicans for his “free trade doctrine.”

These Republicans were not socialists, they were conservatives.  Free trade is a liberal doctrine, it was not considered very American at the time.  Wilson was a dangerous academic with strange ideas, ideas like free trade.

But, there was dissatisfaction with Taft as well.  A lifelong Republican from Grand Rapids, Michigan, writing to Republican National Committee, reminded Taft of his promise to cut the tariff downward, a part of the 1908 Republican platform.  So even then, Republicans were for tax cuts, or at least gave lip service to the principal, but these weren’t income tax cuts for the wealthy.  This was reducing taxes that hit consumers.

But Taft countered that he did bring taxes downward, and blamed a resentful press.  This resentful press, he claimed, misrepresented the facts after the government reformed (or raised) postage rates to prevent what he claimed was a $50 million a year government “clear subsidy” of “magazines” due to the artificially low prices the post office was charging.

The Grand Rapids voter had been voting straight Republican for 30 years, or since about 1882.  One can guess that this voter was born about the time that the first Republican President, Abraham Lincoln, won his election against a field of candidates.  So in a way, he was born with the Republican party, and he would have witnessed its history up to the time of that historic 1912 election.

In his letter, the Grand Rapids voter did not speak about civil rights, the military or foreign policy, but complained about other economic issues, like low wages, allegedly driven down by immigrants.  According to the Coconino Sun, his letter states that “the large majority of workers in the woolen mills are foreigners instead of Americans, and are employed at starvation wages instead of being paid wages upon which the people of this country can live decently.”

In addition to complaining about the lack of a living wage, this lifelong Republican feared that “English automobile companies are forming a trust to compete with American companies that are said to be competing with the English market.”  I wonder what he would have made of the automotive industry today, and the large companies that seem to be working together in strange ways.

Concluding, the letter wanted to know more about “the panic of 1807.”

In reply to these Concerns, the Republicans blamed Democrats for the wool crisis (even though there hadn’t been a Democratic President for four terms), not foreigners.   “The very presence of these foreigners is evidence that labor conditions are better here [in the United States of America] than in other countries.”  The mills were operated by foreigners, and furthermore, the Grand Rapids voter must understand that those selling the shirts have to make a profit.  If the mill men get paid more, the prices will surely be passed on to their customers.

And here is where Taft seems like a modern Republican.  The crisis in Lawrence Massachusetts was blamed on “anarchist protest.”

“The recent disturbances, you may have observed, do not grow out of any wage dispute, but without doubt are due solely to the anarchistic protest against the trial of two men charged with murder or some other violent crime.  It may be that wages in these mills are lower than they should be, but I do not possibly see how a reduction in the duty which would necessarily reduce the profits of the mill owners, could result in advancing wages.”

So the Republican party of Taft cared about profits as well as the workers.  It did not attack unions or manufacturing businesses or put the blame on foreigners.

And, there was a tinge of patriotism in Taft’s response as well.

“If American goods find a big market abroad, as a rule, it is because they are better than foreign goods, not because they are cheaper.”

One wonders, if Taft had spoken today, and saw American made goods losing their ground, would he say that it is not because they have grown more expensive, but because they have reduced in quality?

But, again, when addressing the panic of 1907, Taft sounds more like a traditional Conservative than the neocons who have taken over the party of today.  The panic of 1893 was due to lack of confidence in measures made by the Democrats (dangerous ideas like Wilson’s “free market doctrine.”)  The panic of 1907 had other roots, outside of politics and within the United States, in the financial industry no less.

“As to the panic of 1907, it cannot be properly charged to the Republican Party, because it arose not through loss of confidence in measures, but through distrust of men.  The panic of 1893 came because the country feared the result of Democratic measures, the tariff bill and others.  The panic of 1907 came because the country lost confidence in some high financiers who were gambling on the countries prosperity in Wall Street.”

In reaction to this panic, the Republicans issued the “emergency currency law.”  This law was soon used to pay foreign creditors, who demanded their money back, and eventually led to the creation of the Fed.  (Yes, nearly 100 years ago America’s foreign creditors demanded a payment on the debt, and it could happen again.)

And who supported this monster of inflation and financial uncertainty?  Most of the Republicans in the House of Representatives voted for the predecessor to the Fed, with every Democrat voting against it.  (But, it was under a soon-to-be-elected Democratic President, Woodrow Wilson, that it was first used.)

It seems to me that in 1912, the Democrats were the party of what we now call financial “conservatism”, and the free market, while the Republicans were more in favor of government intervention and a controlled economy.

But Republicans saw themselves as the party of industry, the party of both business and the working man.  Wall Street was not seen as part of industry, however, but a separate institution.

I’ll close with an ad from 100 years ago, which points to Republican confidence in their economic policy as the issue, and the only issue.

Some Republican facts

  • Business never better.
  • Wages never higher.
  • Factories running full time.
  • Railroads crowded with traffic.
  • Bank Deposits increasing.
  • Everybody busy and hopeful.

Why change when all’s Well?

Some Democratic facts

  • Bread lines a mile long.
  • Soup houses everywhere.
  • Banks mostly busted.
  • Three million men idle.
  • Ten million children hungry.
  • Homes plastered with Mortgages.
  • Nobody making any money.

Why have hard times again?

It’s pretty obvious that Newt Gingrich, while not a traditional Republican, was not being original when he called a Democrat the “food stamp President.”