Beginning in 1861, Republicans made high tariffs the centerpiece of their economic policy. These tariffs were designed to go beyond raising revenue and protect American industry. The iron and steel industrial capitalists had very well-organized interest groups that demanded and usually obtained high tariffs through the support to the Republican party. American industrial workers enjoyed much higher wages than their counterparts in Europe and they credited this to the high tariffs.
Andrew Carnegie was one of those capitalists that argued for high tariffs. In the infant years of the American steel industry, Andrew Carnegie argued that the tariff was needed to nurture the industry and help it compete with it's European steelmakers. By the mid 1880's the American steel industry was booming, yet as late as 1890 Carnegie continued to argue that the tariff was still needed. Not just Carnegie, but also the Pittsburgh steelworkers who believed that the tariff protected their high wages. Accordingly, workers at the Homestead Steel Works in Pittsburgh had recently won a three year contract that recognized the Amalgamated Association union and provided a favorable wage scale tied to profits of the company.
Yet, the times were changing. Democrats were gaining support for lower tariffs, the industry was in a downturn, and labor unions were growing world-wide. So as the union's three year contract was coming to an end the company was to demand wage cuts for it's 325 employees. Andrew Carnegie quietly retired to his vacation home in Scotland and left Homestead in the hands of his partner, an industrialist Henry Clay Frick. Carnegie was publicly in favor of the unions, but left direct messages with Frick to "do whatever it takes".
Frick dug in for war, and despite the union's willingness to negotiate, he closed down the mill and locked out 3800 men. Two days later, workers seized the mill and sealed of the town from strike-breakers. To battle the union, Frick hired the Pinkerton National Detective Agency to infiltrate the union. On July 6th, Frick plotted with Pinkerton to sneak 300 agents on river barges into town just before dawn. But when word spread across town, thousands of workers and their families rushed to the river to keep them out. Gunfire broke out and the Pinkertons surrendered. They surrendered and came ashore, but then were beaten by angry workers. Three Pinkertons died in the battle. Four days later, at the request of Frick, 8,500 National Guard forces were sent in to take over the town and plant. Henry Clay Frick would not budge, and announced "Under no circumstances will we have any further dealing with the Amalgamated Association as an organization. This is final." By November the Amalgamated Association collapsed.
These were tumultuous times. Republicans lost the battle of high tariffs against the Democrats and labor unions. Now the political fighting was over, and as Harrison pointed out, "The result of the recent election must be accepted as having introduced a new policy." Yet, there still was much uncertainty surrounding the change in tariff policy, And as, the Homestead strike demonstrated, "the strained and too often disturbed relations" between employee and employers has not been calm. Yet, only time would tell if lower tariffs will work. Would America's economy remain strong? Would wages remain high? Or would the 'Society of the Unemployed' begin marching in the streets of America as they have in foreign cities.
Benjamin Harrison admitted defeat at the polls, but not in practice or theory. In his last address to congress, and in light of recent strikes like that of Homestead, he spoke at length about the change in tariff policy and what it might mean to America.
"I believe that the protective system, which has now for something more than thirty years continuously prevailed in our legislation, has been a mighty instrument for the development of our national wealth and a most powerful agency in protecting the homes of our workingmen from the invasion of want. I have felt a most solicitous interest to preserve to our working people rates of wages that would not only give daily bread but supply a comfortable margin for those home attractions and family comforts and enjoyments without which life is neither hopeful nor sweet ...
It is not my purpose to renew here the argument in favor of a protective tariff. The result of the recent election must be accepted as having introduced a new policy. We must assume that the present tariff, constructed upon the lines of protection, is to be repealed and that there is to be substituted for it a tariff law constructed solely with reference to revenue; that no duty is to be higher because the increase will keep open an American mill or keep up the wages of an American workman, but that in every case such a rate of duty is to be imposed as will bring to the Treasury of the United States the largest returns of revenue ....
The strained and too often disturbed relations existing between the employees and the employers in our great manufacturing establishments have not been favorable to a calm consideration by the wage earner of the effect upon wages of the protective system. The facts that his wages were the highest paid in like callings in the world and that a maintenance of this rate of wages in the absence of protective duties upon the product of his labor was impossible were obscured by the passion evoked by these contests. He may now be able to review the question in the light of his personal experience under the operation of a tariff for revenue only. If that experience shall demonstrate that present rates of wages are thereby maintained or increased, either absolutely or in their purchasing power, and that the aggregate volume of work to be done in this country is increased or even maintained, so that there are more or as many days' work in a year, at as good or better wages, for the American workmen as has been the case under the protective system, everyone will rejoice. A general process of wage reduction can not be contemplated by any patriotic citizen without the gravest apprehension. It may be, indeed I believe is, possible for the American manufacturer to compete successfully with his foreign rival in many branches of production without the defense of protective duties if the pay rolls are equalized; but the conflict that stands between the producer and that result and the distress of our working people when it is attained are not pleasant to contemplate. The Society of the Unemployed, now holding its frequent and threatening parades in the streets of foreign cities, should not be allowed to acquire an American domicile."
http://www.presidency.ucsb.edu/ws/index.php?pid=29533
https://en.wikipedia.org/wiki/Tariffs_in_United_States_history
http://www.pbs.org/wgbh/amex/carnegie/peopleevents/pande04.html
http://www.aflcio.org/About/Our-History/Key-Events-in-Labor-History/1892-Homestead-Strike
https://en.wikipedia.org/wiki/Homestead_Strike
http://explorepahistory.com/hmarker.php?markerId=1-A-235
https://upload.wikimedia.org/wikipedia/commons/8/8a/Homestead_Strike_-_Mob_attacking_Pinkerton_men.jpg
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