Popular Science Monthly/Volume 32/April 1888/Sketch of David Ames Wells
DAVID AMES WELLS has long been the representative economist of the United States, and a thinker whose vast information, fearlessness, and thoroughly judicial mind, have won him fame among economists the world over. He has proved his ability and sagacity in the successful management of large business interests. While most economic teachers have been confined to class-room and text-book, it has been his exceptional good fortune to practically apply his science to the reform of fiscal errors. Since vacating his high office under the Federal Government, he has exerted wide and growing influence upon the legislators of the nation.
Mr. Wells was born in Springfield, Massachusetts, June 17, 1828, and is a lineal descendant on the father's side of Thomas Welles, Governor of the Colony of Connecticut, 1655-1658, and on the mother's side of David Ames, who, under Washington, built and established the National Armory at Springfield. He and his brother Oliver were the founders and progenitors of the well-known manufacturing and railroad-building family of Massachusetts. Afterat Williams College in 1847, and writing and publishing his first book, entitled "Sketches of Williams College" David Ames Wells was for a time (1848) an assistant editor with the late Samuel Bowles of the Springfield "Republican." While thus employed, Mr. Wells suggested the idea, and was associated in the invention, of folding newspapers and books by machinery in connection with power printing-presses; and the first machine ever constructed and
successfully operated was built at his expense and worked under his direction in the office of the "Republican." Having, however, a taste for scientific pursuits, and being now in the possession of some means through the sale of his interest in the above invention, he quitted the pursuit of journalism, and in 1849 entered the Lawrence Scientific School of Harvard University, becoming also at the same time a special pupil of Professor Agassiz, who had then recently arrived in this country. Graduating in the first class that completed a course of study in the Scientific School in 1851-'52, he immediately received the appointment of assistant professor in this institution and also that of lecturer on physics and chemistry in Groton Academy, Massachusetts. During his residence in Cambridge, Mr. Wells, in association with George Bliss (late United States District Attorney for New York), commenced in 1849 the publication of an annual report on the progress of science and the useful arts, which, under the name of the "Annual of Scientific Discovery," was continued for many years.
Between 1857 and 1863, Mr. Wells was engaged in the preparation of a series of scientific school-books, which at one time attained a very extensive circulation, two of the series having been translated by missionaries into the Chinese language, while a third — an ele- mentary treatise on chemistry — was adopted as a text-book at West Point.
Mr. Wells, however, first came prominently into public life in 18G4, while residing in Troy, New York, through the publication in that year of an essay on the resources and debt-paying ability of the United States, bearing the title of " Our Burden and Strength." This essay was first read at a literary and social club in Troy, then published privately, then reprinted and circulated by the Loyal Publi- cation Society of New York, and, receiving at the same time the ap- proval of the Federal Government, it became one of the most noted publications of the war period. It wns reprinted in England and translated into French and German, and had a circulation which is be- lieved to have been in excess of two hundred thousand copies. Coming at a period when the nation was beginning to be alarmed at the pro- spective magnitude of the public debt, and apprehensive of an impend- ing crushing burden of taxation, its publication and circulation proved a most effective agency for restoring public confidence and maintain- ing the credit of the Federal Government.
The perusal of this pamphlet made a great impression upon Presi- dent Lincoln, and in January, 1865, he sent for Mr. Wells to come to Washington and confer with hira and Mr. Fessenden, then Secretary of the Treasury, on the best methods of dealing, after the termination of the war, then evidently at hand, with the enormous debt and bur- den of taxation that the war had entailed upon the nation. The result of this conference was the passage by Congress of a bill, in March, 1865, creating a commission of three persons for the purpose of inquiring into and reporting " on the subject of raising by taxation such revenue as may be necessary in order to supply the wants of the Government, having regard to and including the sources from which such revenue should be drawn, and the best and most effectual mode of raising the same." Of this commission, Mr. Wells was appointed chairman by the then Secretary of the Treasury, Hon. Hugh McCulloch ; and its re- port in 1866, which was mainly the work of Mr. Wells, presented for the first time a full and exact statement of the curious and complex system of internal and customs revenue which had grown up during the war, when the necessities for raising immense sums of money with the utmost promptness and regularity were so great as to transcend all ordinary considerations, and justify the maxim, "Whenever you find an article, a product, a trade, a profession, or a source of income, tax it." How wonderfully successful this system of taxation proved, is shown by the circumstance, that for the last year of its full operation — 1865-'66 — it yielded from internal-revenue sources alone 6310,000,- 000, and from internal revenue, customs, and other sources, the aggre- gate sum of 8559,000,000, drawn from a tax-paying population not much in excess of twenty-two millions. In addition to this feature of the Revenue Commission Report in 1806, it also contained elaborate reports on sugars, tea, coffee, cotton, spices, proprietary articles — pat- ent medicines and the like — petroleum, fermented liquors, and distilled spirits as sources of revenue, with estimates as to the amount of reve- nue which the Treasury might expect if taxation on them, at various rates, was to be continued ; the whole being really the first practical attempt in the United States to gather and use national statistics for great national purposes.
On the termination of the Revenue Commission in January, 1800, by limitation of service. Congress was so well satisfied with the work that Mr. Wells had performed, that he was immediately appointed, for a terra of four years, to an ofiice created for him, under the title of
- ' Special Commissioner of the Revenue," the duties of which were thus
defined by the enacting statute : "He shall from time to time report, through the Secretary of the Treasury, to Congress, either in the form of bill, or otherwise, such modifications of the rates of taxation, or of the methods of collecting the revenues, and such other facts pertaining to the trade, industry, commerce, or taxation of the country as he may find by actual observation of the operation of the law to be conducive to the public interest."
In this office, and invested with large powers, Mr. Wells entered with ardor upon the work of reconstructing and repealing the com- plex system of internal taxation, which had become terribly oppressive, and the longer continuance of which had become unnecessary ; and, under his initiation and supervision were originated nearly all the re- forms of importance in our national-revenue system — internal and cus- toms — that were adopted by Congress between the close of the war in 1865 and the year 1870, namely : the redrafting of the whole system of internal-revenue laws, the reduction and final abolition of the cotton- tax, and the taxes on manufactures and crude petroleum ; the creation of supervisory districts and the appointment of supervisors ; the ori- gination and the use of stamps for the collection of taxes on tobacco, fermented liquors, and distilled spirits, and the creation of the Bureau of Statistics. To the head of this Bureau Mr. Wells called, from the office of the Springfield " Republican," its assistant editor General F. A. Walker ; and under his management the Bureau was first efficiently organized.
In one of his earliest official reports, Mr. Wells took earnest ground against the attempt to collect a tax of two dollars per gallon, or 1,000 per cent on the first cost, on distilled spirits, and maintained that fifty cents per gallon was the rate of tax certain to be the most productive of revenue, and little oppressive to manufacturing indus- tries. This report, made in 1866, although attracting much attention, by reason of its detailed narration of the singular experiences of the Government in attempting to enforce so high a tax, found little favor in respect to its recommendation for tax abatement. But, in the winter of 1867-'68 Congress, becoming alarmed at the increasing frauds, and steadily diminishing receipts of revenue, acceded to Mr. Wells's recommendation and fixed the tax at fifty cents per proof gallon. The result was one of the most remarkable in all economic or fiscal experiences, for the total collections rose at once from $18,665,000 during the last year of the $2 tax in 1867-'68, to $45,071,000 in the first year of the 50-cent tax, 1868-'69, and to $55,606,000 in the suc- ceeding year, 1869-70 ; a gain to the Government in two years of over sixty millions of dollars in revenue, with great diminution of fraud and great relief to the industries of the country.
Up to the year 1867, Mr. Wells, who was born and reared a member of one of the largest manufacturing and Whig families of New England, was an extreme advocate and believer in the economic theory of protection. In 1867, Congress having instructed the Secre- tary of the Treasury to present at its next session a draft of a new tariff looking to reductions of war-rates, and the business of preparing the same having been turned over to the office of the Special Com- missioner, Mr. Wells, with a view of qualifying himself for the work, visited Europe under a Government commission, and investigated, under almost unprecedented advantages, nearly every form of indus- try, competitive with the United States, in Great Britain and on the Continent. The results of this visit and investigation enlight- ened him in respect to two salient and fundamental points : First, that no country, with the exception of the United States, which had adopted in a greater or less degree the policy of pi-otection through duties or restrictions on imports, had ever regarded the taxa- tion of the importation of crude, or partially manufactured articles to be subsequently used for larger manufacturing, as a feature of protec- tion to its domestic industry, but ratber as antagonistic to and destruc- tive of such industry ; and that while such taxation in the United States had undoubtedly built up some industries and enriched their owners, it had been a great restraint on the development of a much larger and higher class of industries, employing many more workmen and paying much higher average wages ; a taxation imposed then and now, for example, of from thirty to forty millions per annum on the importation of crude and partially manufactured articles, being a tax of ten per cent on a product of three or four hundred mill- ions of finished products, thereby excluding them from all sales in the markets of the world, in competition with similar products not subject to such pi-ice enhancement. And, second, that the countries of Europe — like Russia and Austria — in which the average rates of wages are lowest, were the most clamorous for protective duties on foreign imports ; and that high wages in any country, conjoined with the extensive and skillful use of machinery, instead of being evidences of industrial weakness, were evidences of great industrial strength ; inasmuch as no employer can continuously pay high wages unless bis product is large, his labor most effective, and his cost of product, measured in terms of labor, low. These per- sonal experiences in respect to European industry, coupled with a subsequent study of our customs system, and a complete re- drafting of our whole tariff rates under instructions from Congress through the Secretary of the Treasury, gradually, and greatly against all his preconceived ideas, led Mr. Wells to a complete abandonment of his original position as a strong protectionist, and to the adoption of the belief that free trade, made subordinate to revenue and pro- gressively but tentatively entered upon, was for the best interest of the whole country.
The announcement of these views, and especially the publication of his report for 1869, created great opposition among the protection- ists, and Horace Greeley publicly charged that Mr. Wells had been corrupted through British gold distributed through the agency of Mr. A. T. Stewart. Mr. Stewart, exceedingly angry at being brought into this matter, desired that Mr. Wells should at once institute proceed- ings for libel, and several leading members of the New York bar vol- unteered to take charge of the case. But Mr. Wells felt that it was not necessary to vindicate his public or private character by any such action, and refused to become a party to it. The story, nevertheless, found extensive credence, and is undoubtedly believed by many per- sons at the present time who are unable otherwise to account for such a change in the economic opinions of the Commissioner so shortly after his return from Europe.
A draft for a very complete revision of the tariff, prepared by Mr. Wells in accordance with instructions, together with a full and elaborate report on the existing revenue resources and condition of the country, submitted to Congress through Secretary McCulloch, and with his hearty indorsement, in December, 1867, nevertheless found great favor, and, embodied in a bill, with slight modifications, came very near being successful. The Senate passed it by a vote of 27 to 10. In the House it failed, in the closing hours of the session, by a very few votes — and not by a direct vote, but on a motion to suspend the rules, take the bill from out the Committee of the Whole, and " put it on its passage," This motion, which required a two-thirds vote, was defeated — 106 in the affirmative to 64 in the negative. It was thus made evident that, could the bill as it came from the Senate have been brought directly before the House, it Avould have passed by a large majority, and probably have quieted for years all tariff agi- tation.
When the office of Special Commissioner expired by limitation in 1870, President Grant, giving the personal dislike of the Secretary of the Treasury at that time — Mr. Boutwell — to the Commissioner as a reason, refused to reappoint Mr. Wells in case of a renewal of his office. On his retirement in July, 1870, a large number of members of both Houses of Congress, without distinction of party, united in a letter headed by Messrs. Sumner, Trumbull, Carpenter, Henry Wilson, Buck- ingham, Anthony, Thurman, Schurz, Bayard, Edmunds, Fenton, and others, on the part of the Senate, and Messrs. Blaine, Garfield, Logan, Allison, Cox, Hooper, B. F. Butler, Kerr, Dawes, Eugene Hale, Banks, Poland, Oakes Ames, Niblack, Randall, Brooks, Beck, J. A. Griswold, James Brooks, A. A. Sargent, J. F. Wilson, F. Wood, Noah Davis, D, W. Voorhees, W. H. Barnura, and others, on the part of the House — of which the following is an extract: The undersigned, mem- bers of the Forty-first Congress, who have been cognizant of your labors as Special Commissioner of the Revenue, take the occasion of your retirement from public duties to express to you their appreciation of the work you have accomplished, and the great ability with which you have discharged the duties of your office. How much soever they may perhaps have differed with you touching the matter of your conclusions upon particular points, they desire nevertheless to bear testimony to the great value of your work, and to the honesty and the faithful and untiring zeal which have characterized your whole public career." At the same time a committee of citizens of different States, members of both parties, presented to Mr, Wells several testimonials of great value ; one of which, a superb bronze statuette, some thirty inches high, representing " Labor," in the form of a fully-developed workman, leaning upon his sledge-hammer, bears upon a silver platethe following inscription:
Hon. DAVID A. WELLS,
SPECIAL COMMISSIONER OF THE REVENUE,
BY CITIZENS OF NEW YORK AND NEW ENGLAND,
AS A TOKEN OF ESTEEM FOE HIS UNSULLIED INTEGRITY
AND HIGH PERSONAL CHARACTER; AND AS A SLIGHT
Commenting on the discontinuance of the office of Special Commissioner of Revenue, the "North American Review" used at the time the following language: "The system of taxation, by which the Government has been in receipt of its enormous income, was established during the war; and the man who deserves the most credit for its reform is Mr. David A. Wells, whom General Grant and Secretary Boutwell united in bowing coldly out of the public service. It was he who proved the capacity of the country to stand an enormous taxation, and pointed out the most convenient and legitimate sources of revenue; and the most continuous changes and improvements in our revenue system, including even those under the Administration that dismissed him, were but the following out of the suggestions and the line of argument which he had presented while in the Treasury Department. To him and to Congress, and to a generous and patriotic people, does the country owe the proud exhibition of debt and tax reduction."
General Garfield, in a debate in the House of Representatives, July 13, 1868, also paid the following handsome tribute to the work of Mr. Wells as Revenue Commissioner, saying: "I do not believe that any man appointed by the Government in the civil service has done for this country more work, and more valuable work, than David A. Wells. Into the financial chaos resulting from the war he threw the whole weight of a strong, clear mind, guided by an honest heart, and during the last three years he has done more, in my judgment, to bring order out of chaos than any one man in the United States."
As soon as it was known that Mr. Wells was to retire from his office at Washington, the appointment as chairman of a State commission for investigating the subject and the laws relating to local taxation was tendered him by the Governor (Hon. John T. Hoffman) of the State of New York and accepted; and in this new position Mr. Wells prepared and submitted to the Legislature two reports (in 1872 and 1873) and a draft of a code of laws. Both of these reports were subsequently reprinted in the United States and in Europe; and one of the first acts of the French Minister of Finance (M. Wolowski), after the conclusion of the Franco-German War, was to order the translation and official publication of Mr. Wells's report as Special Commissioner of Revenue for 1869. This compliment was further supplemented in the spring of 1874 by the election of Mr. Wells, by the French Academy, to fill the chair made vacant by the death of John Stuart Mill, and also in the same year by the voting to him of the degree of D, C. L. by the University of Oxford, England. The honorary degree of LL. D. had been previously given to him by the college of his graduation (Will- iams), and that of M. D. by the Berkshire Medical College in 18G3. In 1873, on invitation of the Cobden Club, Mr, Wells visited England and delivered the address at the annual meeting and dinner of the club. In 1872 he was invited to lecture on economic subjects at Yale College. In 1875 he was elected. President of the Democratic State Convention of Connecticut ; and he has served twice as delegate at large from Con- necticut to Presidential nominating conventions, i. e., in 1872 and 1880. In 1876, Mr. Wells, after refusing to accept a regular nomination for Congress in the third district of Connecticut, was put upon the course by resolution of the Democratic convention, with the result, in the face of conditions otherwise wholly favorable to the Republicans, of reducing a hitherto impregnable Kepublican majority from 1,176 to 40.
In 1870 Mr. W^ells was elected a member of the Cobden Club ; in 1871, honorary member of the Royal Statistical Society of Eng- land ; in 1875, President of the American Social Science Association, succeeding Dr. Woolsey, of New Haven ; in 1877, a foreign associate member of the Regia Academic dei Lincei, of Italy ; in 1880, Presi- dent of the New London County (Conn.) Historical Society ; and in 1881, President of the American Free-Trade League. In 1878, Mr. Wells was appointed by the President a member and subsequently elected President of the National Board of Visitors to the United States Military Academy at West Point. In 1876 he was appointed by the United States court one of three trustees and receiver£; of the Alabama and Chattanooga Railroad, and in the course of the fol- lowing fourteen months rescued the corporation from bankruptcy, and expended a considerable sum for improvements and repairs, without incurring an additional dollar of indebtedness. In 1877 he was appointed by the State Board of Canal Commissioners chairman of a commission to consider the subject of tolls on the New York canals, and in the next year made an exhaustive and acceptable report.
In 1879, in connection with the late E. D. Morgan, of New York, and J. Lowber Welsh, of Philadelphia, and as trustees of the bond- holders, he bought under foreclosure and sale, and reorganized the New York and Erie Railroad, and served for some time as a member of the finance committee of the board of direction of the new company. In 1879 he was elected by the associated railways of the United States, in connection with Charles Francis Adams, of Massachusetts, and John M. Wright, of Philadelphia, a member of a board of arbitration, to which the associated railroads agreed to refer all their disputes and all arrangements for pooling or apportioning their respective competitive earnings. For two years the efforts of this board were successful and acceptable ; but, at the commencement of the third year, from causes to which the board was not a party, arbitration was refused by certain roads, and the arrangement was first suspended, and finally terminated. Pending final action as to the continuance of the board, Messrs. Wells and Adams voluntarily relinquished the sum of ten thousand dollars each, that was due them, on the ground that no service having been required of them or given, they were not honorably entitled to com- pensation for doing nothing.
During the last twenty years few Americans have written and spoken more frequently and more acceptably to the public on subjects connected with the industry, commerce, finance, shipping, railroads, taxation, and labor of the country, than Mr. Wells ; and some of his productions in pamphlet form, as " The Primer of Free Trade," " Why we Trade and How we Trade," and "The Dollar of the Fathers vs. The Dollar of the Sons," have attained a wide circulation. Of books, the following are well known : "Robinson Crusoe's Money," illustrated by Nast, or the experiences of an island people in using different kinds of money, 1876 ; " Our Merchant Marine ; How it Rose, Increased, Became Great, Declined, and Decayed," 1882 ; " Practical Economics," 1885: "A Study of Mexico," 1887. Concerning the latter work, M. Romero, the Minister of Mexico to the United States, writes : " Al- though I differ with you on several points, and in respect to some of your conclusions, it is surprising to me how well you have understood the condition of Mexico and its difficult problems, especially so far as its relations with the United States are concerned." To which the Rev. George B. Hyde, one of the leading and oldest missionaries of the Methodist Episcopal Church in Mexico, adds, under date, at the Mission of Puebla, of May, 1887 : " I have, I think, read all works of importance relating to the social and political economy of Mexico ; and the ' Study ' is the only one that has not either looked with eyes that saw a paradise or a desert. I consider the book the most valuable yet published on the real condition of Mexico."
The series of papers " On the Economic Disturbances since 1873," now publishing in the "Popular Science Monthly," being also reprinted concurrently in Europe, are regarded both in this country and Europe as among the most instructive and valuable contributions that have been made in recent years to any department of economic science.
Mr. Wells's present residence is at Norwich, Connecticut, where he is the owner of one of the most pleasant old-fashioned houses in New England, and one of the best private economic libraries in the country.