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The United States Since The Civil War by Charles Ramsdell Lingley

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existing between them, and he set his heart upon its adoption.
Opposition appeared at once: the farmers' organizations protested
vigorously at the reduction of the tariff on agricultural products; the
high protectionists were fearful of an entering wedge which might lead
to further tariff reductions; and the paper and wood pulp interests
also objected. Although the agreement eventually passed both houses of
Congress by large majorities, the opposition was composed chiefly of
Republicans. Objection to the arrangement in Canada turned out to be
stronger than had been anticipated. The fear that commercial
reciprocity might make the Dominion somewhat dependent on the United
States seems to have caused a manifestation of national pride, and Sir
Wilfred Laurier, who had led the forces in favor of the agreement, was
driven out of power and reciprocity defeated. The result for the
administration was failure and further division in the party.

Democratic control of the House during the second half of Taft's term
effectually prevented the passage of any considerable amount of
legislation. A parcel-post law, however, was passed, a Children's
Bureau was established for the study of the welfare of children, and a
Department of Labor provided for, whose secretary was to be a member of
the cabinet. Aided by the insurgents, the Democrats attempted a small
amount of tariff legislation. Although a general revision of the entire
tariff structure would be a long and laborious task, specific schedules
could be revised which would indicate what might be expected in case of
Democratic success in 1912. The sugar, steel, woolen, chemical and
cotton schedules were taken up in accord with this plan and bills were
passed which were uniformly vetoed by the President.

In his attitude toward the regulation of big business, President Taft
was in harmony with his predecessor and was in thorough sympathy,
therefore, with suits brought under the Sherman law against the
Standard Oil Company, and the American Tobacco Company. In May, 1911,
the Supreme Court decided that both of these companies had been guilty
of combining to restrain and to monopolize trade, and ordered a
dissolution of the conspiring elements into separate, competing units.
The Court also undertook to answer some of the knotty questions that
had arisen in relation to section 1 of the act, which declares illegal
"every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade." Did the prohibition against every
contract or combination mean precisely _every_ contract, whether
important or not? Or did it refer merely to large and unreasonable
restraints? The phraseology of the statute seems to prohibit restraints
of all kinds, and the previous decisions of the Court had been in line
with this view. When, then, the decisions in these two cases erected
the "rule of reason" and declared that only those restraints were
forbidden that were unreasonable, the attention of some opponents of
the trusts was focussed on the _obiter dictum_, rather than upon the
decisions themselves. In taking this position, they had the support of
Mr. Justice Harlan who agreed to the decision but condemned the _obiter
dictum_, asserted that the exact words of the law forbade _every_
contract, and deprecated what he believed to be the amendment of
statutes by the courts. The dissolution of the companies into competing
units, however, had no apparent effect that was of benefit to the
public. In fact, immediate increases in the value of Standard Oil
stocks indicated that the decision was of slight consequence.

In the meantime the widening of the breach in the Republican party was
indicated by the formation of the National Progressive Republican
League on January 21, 1911. Its most prominent leaders were Senators
Bourne, Bristow and La Follette; and leading progressives in different
states were invited to join--among them ex-President Roosevelt. It was
the hope that if the latter joined the League, the step might help to
place him in more open opposition to the Taft administration. The
purpose of the organization was the passage of progressive economic and
political legislation, especially acts providing for the election of
senators by vote of the people, direct primaries for the nomination of
elective officers, direct election of delegates to national
conventions, the initiative, referendum and recall in the states, and a
thorough-going corrupt practices act.

Early in 1912 the factions in the Republican party began to consider
the question of a leader for the coming presidential campaign, some of
the progressive element looking to La Follette as the natural
candidate, and others to Roosevelt when it was seen that he would not
support Taft for a renomination. On February 21, Roosevelt addressed a
constitutional convention in Columbus, Ohio, and expressed a political
creed that closely resembled the program of the National Progressive
Republican League. In the meantime the demand for Roosevelt as a
candidate had been incessant on the part of numerous Republicans of
insurgent sympathies, who realized how many more progressive principles
he had accepted than Taft. Finally on February 24 he replied to an
appeal from a group of his supporters, including seven state governors,
that he would accept a nomination. Thereupon most of the progressives
transferred their allegiance from La Follette to the ex-President.
President Taft's fighting spirit had become aroused, in the meanwhile,
and he had declared that only death would keep him out of the fight.

The call had already been issued for the Republican Nominating
Convention to be held in Chicago, in June, and the contest began for
the control of the 1,078 delegates who would compose its membership.
The supporters of Taft, being in possession of the party machinery,
were able to dictate the choice of many of these delegates, especially
from the South, by means that had been usual in politics for many
years. The friends of Roosevelt, in order to overcome this handicap,
began to demand presidential preference primaries, in which the people
might make known their wishes, and in which his personal popularity
would make him a strong contender. During the pre-convention campaign,
twelve states held primaries and the others held the usual party
conventions. At first Taft did not actively enter the contest, but the
efforts of Roosevelt were so successful and his charges against the
President so numerous that he felt compelled to take the stump. The
country was then treated to the spectacle of a President and an
ex-President touring the country and acrimoniously attacking each
other. The progressives, Taft asserted, were "political emotionalists"
and "neurotics"; Roosevelt, he complained, had promised not to accept
another nomination, had broken his agreement, and had not given a fair
account of the policies which the administration had been following.
Roosevelt charged Taft with being a reactionary, a friend of the
"bosses" and with using the patronage in order to secure a
renomination. And he grated on the sensibilities of the nation by
referring to his influence in getting Taft elected in 1908 and
remarking, "it is a bad trait to bite the hand that feeds you." The
result of the presidential preference primaries in the few states that
held them was overwhelmingly in favor of Roosevelt; in the states where
conventions chose the delegates, Taft obtained a majority; in the case
of over 200 delegates, there were disputes as to whether Taft or
Roosevelt men were fairly chosen. These contests, as usual, were
decided by the National Republican Committee, with the right of appeal
to the Convention itself. The Committee decided nearly all the contests
in favor of Taft's friends, and since all the delegates thus chosen
would sit in the Convention and vote on one another's cases, the
decision seemed likely to be final.

The scene of action then shifted to Chicago where the Convention
assembled on June 18. Aroused by the action of the Committee in the
contests, Roosevelt went thither to care for his interests.[7] The
election of a temporary chairman resulted in the choice of Elihu Root,
who was favorable to Taft. The Roosevelt delegates, declaring that the
contests had been unfairly decided, enlivened the roll-call by shouts
of "robbers," "thieves"; and when Root thanked the Convention for the
confidence which it reposed in him, his words were greeted with groans.
Upon the failure of an attempt to revise the decision of the National
Committee in the cases of the contested delegates, Roosevelt announced
that he was "through." One of his supporters read to the Convention a
statement from him charging that the Committee, under the direction of
Taft, had stolen eighty or ninety delegates, making the gathering no
longer in any proper sense a Republican convention. Thereafter most of
the Roosevelt delegates refused to share either in the nomination of
the candidate or in the adoption of a platform. The choice of Taft as
the candidate was then made without difficulty.

The platform contained the usual planks concerning the party's past,
the protective tariff and the civil service; and it reflected something
of the rising interest in economic and political reforms in its
advocacy of laws limiting the hours of labor for women and children,
workmen's compensation acts, reforms in legal procedure, a simpler
process than impeachment for the removal of judges, additions to the
anti-trust law, the revision of the currency system, publicity of
campaign contributions and a parcel-post.

As the Republican convention was drawing its labors to a close, the
dissatisfied adherents of Roosevelt met and invited him to become the
candidate of a new organization. Upon his acceptance, a call was issued
for a convention of the Progressive Party, to be held in Chicago on
August 5. The discord among the Republicans was viewed with undisguised
content by the Democratic leaders, for it seemed likely to open to them
the doorway to power. Yet the same difference between liberals and
conservatives that had been the outstanding feature of the Republican
convention was evident among the Democrats, and nobody could be sure
that a schism would not take place.

There was no lack of aspirants for the presidential nomination. J.B.
("Champ") Clark, Speaker of the House of Representatives, Governor
Judson Harmon, of Ohio, O.W. Underwood, Chairman of the House Committee
on Ways and Means, and Governor Woodrow Wilson, of New Jersey, all had
earnest supporters. In contests in the state conventions and primaries,
Speaker Clark was most successful, although not enough delegates were
pledged to him to secure the nomination.

The convention met in Baltimore on June 25, and for the most part
centered about the activities of Bryan. On the third day he presented a
resolution declaring the convention opposed to the nomination of any
candidate who was under obligations to J.P. Morgan, T.F. Ryan, August
Belmont, or any of the "privilege-hunting and favor-seeking class." An
uproar ensued, but the resolution was overwhelmingly adopted. Balloting
for the candidate then began. Speaker Clark had a majority, but was far
from having the two-thirds majority which Democratic conventions
require; Governor Wilson was more than a hundred votes behind him.
While the fourteenth ballot was being taken, Bryan created a new
sensation by announcing that he should transfer his vote from Clark to
Wilson, on the ground that the New York delegates were in the hands of
Charles F. Murphy, the leader of Tammany Hall, and that Murphy was for
the Speaker. The relative positions of the two leading candidates
remained unchanged, however, for five ballots more. Then the tide began
to turn. At the thirtieth, Governor Wilson led for the first time, and
on the forty-sixth Clark's support broke and Wilson was nominated.

The platform resembled that of 1908. It called for immediate downward
revision of the tariff, the strengthening of the anti-trust laws,
presidential preference primaries, prohibition of corporation
contributions to campaign funds, a single term for the president and
the revision of the banking and currency laws.

The organization of the Progressive party, in the meantime, was rapidly
proceeding, and on August 5 the national convention was held. It was an
unusual political gathering both in its personnel--for women delegates
shared in its deliberations--and in the emotional fervor which
dominated its sessions. At the Democratic convention the delegates had
awakened the echoes with the familiar song "Hail! Hail! The gang's all
here"; the Progressives expressed their convictions in "Onward,
Christian Soldiers." Roosevelt's speech was called his "confession of
faith"; his charge that both of the old parties were boss-ridden and
privilege-controlled epitomized the prevailing sentiment among his
hearers. Without a contest Roosevelt was nominated for the presidency
and Hiram Johnson of California for the vice-presidency.

The platform adopted was distinctly a reform document. It advocated
such political innovations as direct primaries, the direct election of
senators, the initiative, referendum and recall, a more expeditious
method of amending the Constitution, women's suffrage, and the
limitation of campaign expenditures. A detailed program of social and
economic legislation included laws for the prevention of accidents, the
prohibition of child labor, a "living wage," the eight-hour day, a
Department of Labor, the conservation of the nation's resources, and
the development of the agricultural interests. The third portion of the
platform dealt with "the unholy alliance between corrupt business and
corrupt politics." It declared the test of corporate efficiency to be
the ability "to serve the public"; it demanded the "strong national
regulation of interstate corporations," a federal industrial commission
comparable to the Interstate Commerce Commission and the protection of
the people from concerns offering worthless investments under highly
colored and specious appearances.

The results of the election indicated how complete the division
in the Republican party had been. In the electoral college Wilson
received 435 votes to Roosevelt's 88 and Taft's 8. Yet Wilson's
popular vote--6,300,000--fell far short of the combined Roosevelt-Taft
vote--7,500,000--and was less than that of Bryan in 1896, 1900, and
1908.[8] The fact that the combined Roosevelt-Taft vote was less than
that received by Taft in 1908 seems to indicate that many Republicans
refused to vote. The control of Congress, in both houses, went to the
Democrats, even such a popular leader as Speaker Cannon failing of
reelection. In twenty-one of the thirty-five states where governors
were chosen, the Democrats were triumphant. Whether, then, the schism
in the Republican party was responsible for the success of the
opposition, or whether the electorate was determined upon a change
regardless of conditions in the party which had hitherto controlled
popular favor, the fact was that the overturn was complete. And
circumstances that could not have been foreseen and that affected the
entire world were destined to make the political revolution profoundly
significant.

BIBLIOGRAPHICAL NOTE

In the main, periodical literature written with more or less partisan
bias must be relied upon.

For the election of 1908, F.A. Ogg, _National Progress_ (1918), and the
better newspapers and periodicals. W.H. Taft may be studied in his
_Presidential Addresses and State Papers_ (1910), _Present Day
Problems_ (1908), and _Our Chief Magistrate and His Powers_ (1916).

On the Payne-Aldrich tariff: S.W. McCall in _Atlantic Monthly_, vol.
CIV, p. 562; G.M. Fisk in _Political Science Quarterly_, XXV, p. 35;
H.P. Willis in _Journal of Political Economy_, XVII, pp. 1, 589, XVIII,
1; in addition to Tarbell and Taussig.

The documents in the Pinchot-Ballinger controversy are in _Senate
Documents_, 61st Congress, 2nd session, vol. 44 (Serial Number 5643),
and 3rd session, vol. 34 (Serial Numbers 5892-5903).

For other incidents: C.R. Atkinson, _Committee on Rules and the
Overthrow of Speaker Cannon_ (1911); Canadian reciprocity in _Senate
Documents_, 61st Congress, 3rd session, vol. 84 (Serial Number 5942);
Appleton's _American Year Book_ (1911). The decisions in the Standard
Oil and American Tobacco cases are in _United States Reports_, vol.
221, pp. 1, 106; a good discussion will be found in W.H. Taft,
_Anti-Trust Act and the Supreme Court_ (1914). For the rise of the
insurgent movement and the election of 1912, F.E. Haynes, _Third Party
Movements_ (1916); R.M. La Follette, _Autobiography_; B.P. De Witt,
_Progressive Movement_ (1915); W.J. Bryan, _Tale of Two Conventions_
(1912); besides Ogg, Beard and Stanwood.

The _American Year Book_ (1910-), becomes serviceable in connection
with major political events. Its articles are usually non-partisan and
may be relied upon to bring continuing tendencies and practices up to
date.

* * * * *

[1] Above, p. 322.

[2] The cabinet was composed of: P.C. Knox, Pa., Secretary of State; P.
MacVeagh, III., Secretary of the Treasury; J.M. Dickinson, Tenn.,
Secretary of War; G.W. Wiekersham, N.Y., Attorney-General; F.H.
Hitchcock, Mass., Postmaster-General; G.L. Meyer, Mass., Secretary of
the Navy; R.A. Ballinger, Wash., Secretary of the Interior; J. Wilson,
Ia., Secretary of Agriculture; C. Nagel, Mo., Secretary of Commerce and
Labor. Meyer and Wilson had been in Roosevelt's cabinet.

[3] Other features of the act were the establishment of a Court for the
settlement of tariff disputes, provisions for a tariff commission and a
tax on corporation incomes.

[4] Mr. Dooley, who was well known as a humorous character created by
F.P. Dunne, made merry with the claim that the tariff had been reduced,
by reading to his friend Mr. Hennessy the "necessities of life" which
had been placed on the free-list and which included curling stones,
teeth, sea-moss, newspapers, nuts, nux vomica, Pulu, canary bird seed,
divy divy and other commodities.

[5] A sample of the jocosity that partially relieved the tension is the
following portion of the _Congressional Record_ for March 18:

The Speaker _pro tempore_: The House will be in order. Gentlemen
will understand the impropriety of singing on the floor, even though
the House is not at this moment transacting any business. The House
is not in recess.

Chorus. "There'll be a hot time in the old town to-night."

The Speaker _pro tempore_. That was last night, not to-night.
(Laughter.) The House will be in order.

Mr. Shackleford. Mr. Speaker, I make the point of order that the
tap-tapping of the Chair's gavel interferes with the music.
(Laughter.)

Cf. Atkinson, _Committee on Rules_, 115.

[6] A Commerce Court was also provided, so as to expedite the decision
of appeals from orders of the Commission. Its career was brief, for
Congress was not well-disposed toward the project, and the Court was
abolished in 1913.

[7] When Roosevelt arrived in Chicago, he remarked that he felt like a
"bull moose," an expression which later gave his party its popular
name.

[8] Roosevelt, 4,000,000; Taft, 3,500,000.

CHAPTER XXII

ECONOMIC AND POLITICAL TENDENCIES SINCE 1896

During the four decades between the opening of the Civil War and the
close of the nineteenth century, the United States became in many
respects an economic unit. The passage of the Interstate Commerce Act
in 1887, for instance, was an early recognition of the fact that the
transportation problem of the nation transcended state bounds; the
Sherman Anti-trust law of 1890 arose from the realization that
commercial and industrial unity were rapidly coming to pass; the
American Federation of Labor brought workmen from all states and many
trades into a single organization. The election of 1896 and the amazing
consolidation of business enterprises at the close of the century were
further proofs that the day had passed when any section of the United
States could live an isolated economic life without relation to other
parts of the country. Instead of remaining a federation of diverse
economic sections, we became increasingly homogeneous. Much of the
economic and political legislation enacted after 1896, and many of the
practices and standards which were adopted by leaders in economic and
political life were an outgrowth of the new conditions.

It will be remembered that the eighties and early nineties had been
years of labor unrest. Costly and bitter strikes on the part of the
workmen, and resolute and powerful resistance on the part of the
employers were the commonplaces of the history of labor. The
culmination was the Pullman strike of 1894.[1] Its cost in money and
suffering was appalling; it placed the federal military power in the
hands of the employers; and although it was a failure as far as the
strikers were concerned, yet an impartial investigation after the
struggle was over established the justice of much of which the men had
complained. If discriminating justice were to be measured out to both
sides, instead of victory to the side of the strongest battalions, and
if intolerable waste and discomfort were to be avoided, some remedies
for industrial unrest must be discovered which would replace strikes
and violence. Happily, signs were not wanting that such a change was
slowly taking place.

A combination of influences tended to place the labor problem on a new
footing after 1896. One of the most important of these forces was the
American Federation of Labor which greatly increased its size and
activities, especially about the opening of the new century, growing
from 950,000 members in 1901 to 4,302,148 in April, 1920. Its
president, Samuel Gompers, is an able, resourceful leader, who has
remained in control from 1882 to the present (1920), with the single
exception of the year 1895, so that the organization has had the
benefit of experienced leadership and continuity of purpose. Although a
radical, socialistic element broke away in 1905 and formed the
Industrial Workers of the World, yet the defection was not immediately
serious and in general schisms have been avoided. Several other labor
organizations, although unconnected with the Federation exerted a
strong influence; in particular the brotherhoods of railway employees,
by frequent threats to strike and thereby tie up the transportation
system, aided in bringing the demands of labor to public notice.

Moreover, after 1896 and especially after the coal strike of 1902 there
was an increasing recognition on the part of the public that a labor
problem existed and that it must be solved in some way other than by
force of arms. Physicians and scientific experts called attention to
the lack of proper care for the health of workmen in dangerous
industries; the movement for the preservation of the forests and
mineral supplies emphasized the need of efforts for the conservation of
human lives; social reformers, economists, writers and educators upheld
the needs and rights of the neglected classes; and the press and the
muck-rake periodicals found it profitable to expose extreme abuses.
Distress that had hitherto been unnoticed or disregarded became
important, and remedies were demanded. Change was in the air, and not
alone in America, for England and France were experiencing the same
problems, and attempting to devise new expedients to solve them. After
the beginning of the new century, also, the employing class came to a
better realization of the existence of the labor problem and sought
solutions in ways that must be mentioned later.[2] There was a more
widespread acceptance of the principle of trade agreements, whereby the
employer and the men determined the conditions of labor by means of
direct negotiations.

Although it had been the policy of the American Federation of Labor to
keep out of politics, it was almost inevitable that the policy should
receive some modifications. Organizations of employers were influential
at Washington, and had long been so. Accordingly in 1908 the Democratic
platform was endorsed on account of its labor planks, and again in 1910
and 1912. By the latter year all parties were earnestly striving to
capture the labor vote, and in particular the Democratic and
Progressive platforms embodied most of what the wage earner had been
demanding for the previous generation.

The major demands in the labor program of earlier years--higher wages,
shorter hours, settled conditions of employment, and the like--were not
altered after 1896, but a few striking advances were made. The attempt
to legislate concerning hours of employment, for example, had been
continually obstructed by the clauses in the Fifth and Fourteenth
Amendments forbidding any legislation depriving the individual of
"life, liberty, or property, without due process of law." The courts
had usually interpreted these phrases as prohibiting laws restricting
hours of labor, on the ground that the liberty of the workman to
contract freely regarding his own working hours was thereby infringed.
A Massachusetts law of 1874, nevertheless, which limited a day's work
for women and children to ten hours, had followed the long-continued
assertion that regulatory legislation could be based on the "police
power"--a somewhat indefinite authority which was gradually conceded by
the courts to the states and the federal government, and under which it
was possible to pass legislation concerning the conservation of the
health and morals of the people without violating the Constitution. Not
until 1908, however, was the constitutionality of such legislation
finally settled by the Supreme Court, in upholding an Oregon ten-hour
law. "As healthy mothers are essential to vigorous offspring," the
decision asserted, "the physical well-being of women becomes an object
of public interest and care in order to preserve the strength and vigor
of the race." In other words, the Court was prepared to approve
limitations on the freedom of contract in order to further the public
interest. The Massachusetts law was imitated far and wide, so that at
the present time an almost negligible number of states have failed to
restrict the length of the working day for women.

Recently, also, substantial progress has been made in restricting
working hours for children. As long ago as 1866 Massachusetts had
restricted the employment of children, but neither this law nor similar
laws passed by other states had been fully enforced. Greater progress
has been made since 1903, when Illinois, followed by the majority of
the important industrial states, established the eight-hour standard
for children under sixteen. Impressed with the need of federal
legislation to coerce backward states, the reformers took their case to
Congress where a federal act was passed in 1916. On account of
constitutional limitations, the measure was framed so as to forbid
shipment, on interstate railways, of the products of factories
employing children under fourteen years of age. It was estimated that
150,000 out of nearly 2,000,000 working children might be affected by
the act. Its fate, however, was that of many another piece of economic
legislation; by a vote of five to four, the Supreme Court declared the
law unconstitutional on the ground that it was not an attempt to
regulate commerce, but an attempt to regulate the conditions of
manufacture. Early in 1919 the effort to regulate child labor was
renewed through the imposition of a tax of ten per cent. on the net
profits of factories employing children under fourteen years of age.
The constitutionality of the law has not yet been tested (1920).

It will be noted that all the foregoing legislative attempts to reduce
the working day affected women and children only; in general, little
attempt has been made to limit the working day for men. Nevertheless,
large numbers of cities, more than half the states, and the federal
government provide for an eight-hour day on public work; and western
states have followed the lead of Utah in passing eight-hour laws for
miners. Hours of labor for railway employees have also been the subject
of study and legislation. Cases had not been unknown where employees
were kept at their posts for thirty, fifty and even one hundred hours;
frequently such workmen fell asleep and disastrous accidents occurred.
In 1907 this situation was met by a congressional act limiting the
hours of railway engineers to sixteen and providing that periods of
work must be followed by specified rest periods. Train-despatchers,
telegraphers, and others were similarly protected. A majority of the
states imitated these federal statutes. In a few cases, state laws have
been passed which were intended to limit working hours in other
especial industries. The most famous of these was one in New York,
which restricted the working day in bakeries to ten hours. In the
decision Lochner _v._ New York, the Supreme Court declared the law
unconstitutional.[3]

The early twentieth century also saw progress on the subject of
compensation for industrial accidents. As far back as 1884 Germany had
enacted a law which put the blame for all accidents on the employers,
except when the victim was wilfully negligent; in 1897 England had
passed the British Workmen's Compensation Act which virtually made the
employer the insurer of his workmen against all accidents. The theory
underlying these laws was that accidents were like wear and tear and
should be made a charge on the industry, like the depreciation of
buildings and machinery. The United States, however, lagged behind all
other industrial nations, despite the astonishing number of accidents
which yearly occurred. In 1908, for example, it was estimated that two
million men were injured, of whom 200,000 were permanently disabled,
and 30,000 died--a larger number than the federal killed, wounded and
missing in the Gettysburg campaign. Under previous practice in this
country compensation for industrial accidents had been awarded in
accord with common law principles, under which the employer was not
responsible for an employee who was injured through the negligence of a
fellow servant. Any workman who entered hazardous employment was
assumed under the common law to know the dangers and be ready to run
the risks, and no compensation could be recovered unless it could be
shown that the master had been negligent and the employee had not also
been negligent. It came widely to be thought that the common law did
not justly apply to the complex industrial system of modern times. It
did not seem equitable, for example, that the fellow servant doctrine
should hold in case of a railway employee killed through the negligence
of a train despatcher many miles away, whom he did not know and had
never even seen.

The first workmen's compensation act in the United States was passed in
Maryland in 1902. Its scope was narrow and it came to nothing as it was
declared unconstitutional. In course of time, however, legislation was
framed in such language as to pass muster before the courts, and
moreover judicial decisions changed, as time went on, in the direction
desired by popular opinion. Beginning in 1911 there was an avalanche of
liability and compensation laws and by 1920 forty-two states, together
with Porto Rico, Alaska and Hawaii had passed acts that placed the
burden more or less completely on the employer, and provided schemes of
compensation. The federal government also took action. At the
suggestion of President Roosevelt an act was passed in 1908 making
interstate railroads responsible for injuries to employees and
expressly doing away with former common law practices.[4] At the same
time a similar liability was placed upon the United States for
accidents occurring to certain classes of government employees and a
plan of compensation was established. In 1916 another act brought all
civil servants under the system.

Several other types of social legislation have made considerable
progress in Europe, but have found little or no foot-hold in this
country, such as minimum wage laws, health insurance, old age and
widows' pensions, and unemployment insurance. The minimum wage law,
establishing a level below which wages must not go, has been adopted by
Massachusetts and a few other states in a restricted form. The
unemployment problem has hardly been touched, although the federal
Department of Labor since its establishment in 1913 has gathered and
made public information in regard to opportunities for work.

Recent years have likewise seen a vast number of laws which together
have made a new era in American industrial life, although separately no
one of them was revolutionary. For example, matches containing white
phosphorous were subjected to a prohibitive tax because of the harmful
effect of the phosphorous on workmen in match factories; greater care
was exercised in guarding dangerous machines, elevator wells and the
like; fire protection, harmful or poisonous fumes and dust, ventilation
and safety devices in mines, safety appliances on railway trains,
together with numberless other accompaniments of modern industry were
the subject of state legislation. Almost as important as legislative
enactments were the changes in working conditions voluntarily made by
the most progressive corporations. One who compares a factory built
within twenty-five years of the close of the Civil War with a building
erected since 1900 discovers revolutionary changes. Later buildings are
constructed with much more care for ventilation, light and convenience;
in some cases even the temperature of the work-rooms is a matter for
painstaking attention; "welfare" work is now a commonplace, with rest
rooms, lunch rooms, recreation fields and factory social activities.
Factory or store committees that confer with higher officers in
relation to hours and the needs and desires of the employees are by no
means uncommon, and some of the large corporations even provide pension
systems for their employees.

On the other hand, laws and statute books did not always guarantee
performance. Laws were continually avoided both by the employers and
the employees; workmen transgressed rules laid down for their welfare;
the passage and execution of many laws were hampered to the last degree
by short-sighted employers; the courts invalidated much legislation on
the ground of unconstitutionality; and progress was frequently confined
to leading states or corporations and was by no means universal. It
nevertheless is true that the tendencies in social and economic
legislation since 1896 have been widely different from those prevalent
before that year.

In several cases the influence of the labor element in federal
legislation has been decisive. The use of the injunction, it will be
remembered, was one of the grievances most frequently mentioned at the
time of the Pullman strike. In the campaign of 1908 both parties strove
to attract the labor vote by proposals of reform, but not until 1914
was the issuance of injunctions forbidden "unless necessary to prevent
irreparable injury to prosperity ... for which injury there is no
adequate remedy at law." At the same time the labor unions were
exempted from the operation of the anti-trust laws.[5] The influence of
the labor organizations was also a factor in the agitation for the
restriction of immigration which continued from 1897 to 1917. In the
former year a bill was passed which contained a literacy test--that is,
a provision excluding persons who were unable to read or write English
or some other language. President Cleveland exercised his veto, as did
later presidents when similar measures were carried in 1913, 1915 and
1917, but in the latter year Congress was able to muster sufficient
strength to pass the act over the President's veto. One of the main
purposes of the measure seems to have been the restriction of the labor
supply, and hence it enlisted the support of the American Federation of
Labor and other similar organizations.[6]

The ameliorative measures already mentioned have by no means prevented
the boycott and the strike. Indeed they have not, except in rare cases,
directly affected the two great causes of industrial disputes--hours
and wages for adult male laborers. Many formidable and violent strikes
have occurred since 1896, such as those of the shirt-waist makers in
New York in 1909, the textile operatives in Lawrence, Massachusetts, in
1912, and the Colorado coal miners in 1913. On the whole, however, it
seems that the labor unions have developed somewhat greater
conservatism and that their influence has been against violence in
strikes.

Few aspects of the labor problem have been the cause of more earnest
thought than the search for peaceful methods of settling industrial
controversies. In 1898, by the Erdman Act, the federal government
provided a means for arbitrating disputes on interstate railways. The
Newlands Act of 1913 superseded this by the creation of a formal Board
of Mediation and Conciliation, and many disputes were decided under the
terms of these laws. The Department of Labor mediated in many
industrial disputes, and in 1916 when the four railway brotherhoods
threatened to strike for an eight-hour day, Congress itself intervened
with a piece of special legislation, the Adamson law, which was framed
to settle the questions under dispute.[7] In some cases, profit-sharing
plans have been put into force; in others, disputes have been referred
to impartial boards of outsiders; and in yet others, machinery has been
established for continuous conference between representatives of the
employees and employers. Neither federal and state boards and
commissions, however, nor the efforts of individual employers have been
sufficient fully to insure industrial peace.

The increased activity of the state and federal governments in the
fields of economic legislation, as indicated in the passage of labor
laws, was also illustrated in two important measures passed in 1906.
The adulteration of foods had been brought to a state of dangerous
perfection, and drugs had been commonly advertised and sold all over
the country which had none of the powers ascribed to them by their
makers. Since the eighties, many states had forbidden the sale of
impure or tainted food, but the laws were varied and difficult to
enforce, and it appeared that reliance must be placed on the federal
government. As early as 1890 a federal law had provided for the
inspection of meats which were to be exported, but otherwise little
progress had been made. In 1906 Upton Sinclair published _The Jungle_,
a novel which purported to describe the ghastly conditions under which
the meat packers of Chicago conducted their business. Sinclair's book,
together with a campaign of education conducted by the muckrake
periodicals against harmful patent medicines aroused public interest to
such a degree, that two important laws were passed. One provided for
federal inspection of meats intended for interstate commerce, so as to
make sure that they were obtained from healthy animals and slaughtered
under sanitary conditions. The other act concerned foods and drugs, and
prohibited the sale of these commodities if they contained any
injurious drugs, chemicals or preservatives, while a later amendment
forbade false statements on labels attached to medical compounds. As a
result of the provisions of the law in regard to patent medicines, many
concerns which had been selling drugs that were falsely advertised as
having curative effects were compelled to retire from business.

Innovations in the field of politics and government since 1896 have
been as marked as in the field of social and economic legislation.
Possibly the most outstanding development has been the rapid expansion
of the range and variety of the activities of the federal government.
The unification of the economic life of the nation, as has been shown,
compelled a program of federal economic legislation, and helped
inculcate a feeling of greater political solidarity. When fires and
floods and other disasters occurred which were too great for a single
city or state to take care of, when state laws became confusing because
of their variety, when railroads crossed a dozen states and
corporations that were chartered in New Jersey did business in Maine,
Florida and California, only at the federal capital could the requisite
authority be found, which would give the needed relief. As the theory
of _laissez faire_ gradually broke down, moreover, giving way to the
belief that the government ought to be the servant of the mass of the
people, it was inevitable that the people should themselves turn more
to legislation as a remedy for their grievances. To Washington,
therefore, hurried the proponents of every reform.

This tendency was not only counter to the probable intention of the
framers of the Constitution, but it trenched upon the powers
specifically granted to the states. The tenth amendment stated in so
many words that "The powers not delegated to the United States ... are
reserved to the States." It was necessary for the federal government to
act, however, or else to leave problems that had become national in
character to the chaos that results from legislation in nearly fifty
states. State laws concerning railroads, for example, as well as
marriage and divorce, child labor and trusts are even now in a maze. No
solution of the problem seemed possible other than constant stretching
of the terms of the Constitution. In 1906, one of the most conservative
statesmen in the country, Elihu Boot, even went so far as to utter a
warning that if the states did not use their powers to better advantage
a "construction of the Constitution will be found to vest the power
where it will be exercised-in the National Government." The burden thus
shifted from state to nation was somewhat lightened by the appointment
of numerous commissions to which was entrusted the administration of
specific laws or the accumulation of specific data. The earliest of
these was the Interstate Commerce Commission; later, others were
appointed to administer laws concerning banking, the tariff and the
trusts.

With the expansion of the power of the federal government went the
elevation of the office of chief executive. Cleveland's use of the veto
power had given an indication of the possibilities of the presidential
office in obstructing undesirable legislation; his action in bringing
about the repeal of the purchase clause of the Sherman silver law in
1890 had shown the more positive force which a determined officer could
exert. Roosevelt's activity in carrying his anti-trust program to the
people, and his mediation in the coal strike carried the prestige of
the presidency to greater heights. President Taft was by no means
radical in his interpretation of the powers and possibilities of his
office; nevertheless his conception of it was far removed from the
conservative philosophy of President McKinley, and he even suggested in
a message to Congress that the cabinet officers be given seats,
although without votes, in the Senate and House. His successor
augmented rather than diminished the powers of the presidential office.

The Senate, on the contrary, lost both in power and in prestige. Many
reasons for the increasing popular distrust of the Senate after the
middle nineties can be given. There was a widespread belief that a
controlling fraction of the body had achieved membership through
wealth, through the assistance of corporate interests and because of
skill in the manipulation of political wires. The charge was common
that a small coterie of powerful strategists held the Senate in their
hands and with it the control of important legislation. Most of all,
and especially in the West, many thoughtful people believed that the
state legislatures were easily influenced to choose inferior or
untrustworthy men as senators. Whatever the reasons, however, there
grew increasingly after 1870 and particularly after 1893 a demand for
the popular election of senators. Between the latter year and 1911, at
six different times resolutions were presented to Congress proposing an
amendment to the Constitution which should secure popular election. At
length Congress gave way, adopted an amendment, and sent it to the
states. Within ten months thirty-six states had agreed, and after May
31, 1913, senators were elected by the people.

The demand for greater popular control over the choice of senators was
a part, merely, of a somewhat general political trend. Distrust of the
state legislatures had long been observable, and new state
constitutions had been notable for detailed prohibitions placed upon
law-making bodies. The West, which had gone to greatest extremes in
framing new state constitutions, was also the testing-ground for the
initiative, referendum and recall. The first of these devices--the
initiative--is a plan by which a specified percentage of the voters may
initiate legislation--that is, propose a law and require the officials
of the state to submit it to the electorate. If the people accept the
proposal, it becomes law as if enacted by the legislature. Under the
referendum system, any measure already accepted by the legislature is
held in abeyance on petition of a specified number of voters, until
presented to the people for approval or rejection. Both the initiative
and the referendum had been commonly used in Switzerland before being
adopted in South Dakota in 1898. In less than two decades they had been
accepted in twenty-one states, all but four of which were west of the
Mississippi, and in one of the four eastern states, Maryland, only the
referendum was tried. In Oregon, which made the most complete trial of
these methods of legislation, both the initiative and the referendum
were extended to the municipalities. The reasons for the innovation
were to be found in the determination to discover a means of compelling
negligent or boss-controlled state legislatures to respond to public
opinion.[8]

The recall is a process by which any public official may be withdrawn
from his office by popular vote before the expiration of his term. Los
Angeles adopted the plan in 1903 and was imitated by a small number of
other western cities; Oregon in 1908 applied the device to all state
officers, and in one form or another it has been adopted in ten states
(1920). During the campaign of 1912 Roosevelt proposed that the voters
be allowed to ratify or reject the decision of the courts on the
constitutionality of legislation. The results of the suggestion were
negligible.

More significant than the recall as an indication of the prevailing
desire to increase popular control over the processes of government was
the adoption of direct primaries. Under this expedient the nominees of
a party for office are chosen directly by the party voters, rather than
by a party convention. Wisconsin first used the system in 1903 and from
that state it spread rapidly. At the present time most states have some
form of direct nomination. The peculiar circumstances surrounding the
campaign for the Republican nominations in 1912 gave force to the
demand for presidential preference primaries which were held in about a
fourth of the states. Only the future can tell with assurance whether
the demand is more than temporary.

The agitation for women's suffrage was another example of the
increasing desire for popular control of government. Suffrage for women
was first granted by Wyoming in 1869 when its territorial government
was organized, but the movement lagged thereafter until the early years
of the twentieth century. At that time increasing numbers of states
began to grant political privileges to women, and finally in 1919
Congress passed a proposed constitutional amendment expressly stating
that sex should not be a bar to the suffrage.[9]

Accompanying the increased popular control of government after 1896 was
a gradual demand for a higher level of political ethics. The
revelations of the insurance investigations of 1905 were significant of
this change. Early in that year certain newspapers made charges against
the Equitable Life Assurance Company which were taken up by the New
York legislature and referred to a committee for investigation. The
committee's task was the examination of the affairs of life insurance
companies doing business in the state of New York; its attorney was
Charles E. Hughes. The results of the investigation amazed the country.
The exorbitant salaries paid to officers, the unreasonable expenses
incurred and the disregard of the rights of the policy holders were of
concern chiefly to persons doing business with the companies. But it
also appeared that several of the larger concerns had divided the
country into districts, and had systematically influenced legislation
affecting either insurance or financial interests to which they or
their officers were related; enormous sums were expended and records
not kept, or so kept as to conceal the real purposes of the
expenditure. The report of the committee showed that Chauncey M. Depew,
a member of the United States Senate, was paid $20,000 a year for legal
services, without his rendering any return that seemed to warrant the
payments made. The contributions of the companies to the Republican
campaign funds were very heavy--$50,000 by one company in 1904. It
appeared from testimony that Democrats also sought contributions from
the companies but were refused. The final report of the committee
unsparingly condemned these abuses and embodied a program of
legislation for their reform, which was put into effect. The public
received an education in the connection of corporations with politics,
and Hughes himself at once became a figure of national importance, the
favorite of the reform element, and was launched upon a career that
made him governor of New York, a member of the United States Supreme
Court and candidate for the presidency.[10]

Laws regulating campaign expenditures had long been on the statute
books although they had been little heeded, but as the result of the
insurance investigation, New York in 1906 forbade contributions by
corporations for political purposes. In 1907 Congress passed a similar
law concerning federal campaigns, and most of the states have since
passed laws placing restrictions on the use of campaign funds. In the
campaign of 1908 Bryan requested that the Democratic National Committee
receive no contributions from corporations, that no sums in excess of
$10,000 be received from any source and that a list of contributors be
published in advance of the election. By a law enacted in 1911 Congress
compelled a statement of the amounts of money spent by committees, and
limited the amounts which might be spent by candidates for Congress. In
1919 the Chairman of the Republican National Committee announced that
the party would raise funds for the next campaign in amounts from $1 to
$1,000. Both parties were discovering that public sentiment opposed
large contributions from individuals and corporations, because they
expect a _quid pro quo_ after the election.[11]

BIBLIOGRAPHICAL NOTE

The best brief general accounts of recent conditions are in F.A. Ogg,
_National Progress_, with an excellent bibliography, which may be
supplemented by the _American Year Book_. On hours and conditions of
labor, J.R. Commons and J.B. Andrews, _Principles of Labor Legislation
_(1916). The decision in Lochner _v._ New York is in _United States
Reports_, vol. 198, p. 45. For the courts and economic legislation,
C.G. Haines, _American Doctrine of Judicial Supremacy _(1914), already
referred to. An excellent historical account of the workmen's
compensation idea is by A.F. Weber in _Political Science Quarterly_
(June, 1902). Ida M. Tarbell, _New Ideals in Business_ (1917),
describes the accomplishments of the industrial leaders rather than of
the rank and file.

Some of the political innovations are discussed in A.L. Lowell, _Public
Opinion and Popular Government_ (1913); _Proceedings of the American
Political Science Association_, V, 37, "The Limitations of Federal
Government"; Elihu Boot, _Addresses on Government and Citizenship
_(1916), "How to Preserve the Local Self-Government of the State." The
most complete account of the historical development of the power of the
president is in Edward Stanwood, _History of the Presidency, II
_(1916), Chap. V. The fullest account of the movement for popular
election of senators is G.H. Haynes, _The Election of Senators _(1906).
The initiative, referendum and recall have given rise to a literature
of their own. Convenient volumes are: C.A. Beard and B.E. Shultz,
_Documents on the State-wide Initiative_, _Referendum and Recall_
(1912); W.B. Munro, _The Initiative, Referendum and Recall_ (1912);
J.D. Barnett, _Operation of the Initiative, Referendum, and Recall in
Oregon_ (1915).

_American Political Science Review _(Aug., 1915), "Presidential
Preference Primaries." The articles in A.C. McLaughlin and A.B. Hart,
_Cyclopaedia of American Government_ (3 vols., 1914), are a convenient
source on most topics considered in this chapter.

On the use of money in politics: _Report of the Legislative Insurance
Investigating Committee _(10 vols., 1905-1906), Armstrong-Hughes
committee; _Testimony before a Sub-committee of the Committee on
Privileges and Elections, United States Senate, 62d Congress, 2d
session, pursuant to Senate Resolution 79_ (Clapp Report).

* * * * *

[1] Above, pp. 320-323.

[2] Below, p. 508.

[3] Above, p, 442.

[4] An act of 1906 had been declared unconstitutional.

[5] It should be said, however, that the meaning of this law is far
from clear and is yet (1920) to be interpreted by the courts.

[6] Presidents McKinley and Roosevelt also favored it. See Ogg,
_National Progress_, 123-130.

[7] Below, p. 571.

[8] By 1920 twenty-three states had adopted the referendum or the
initiative and referendum.

[9] The amendment reads: Section 1. The right of citizens of the United
States to vote shall not be denied or abridged by the United States, or
by any State, on account of sex. Section 2. Congress shall have power,
by appropriate legislation, to enforce the provisions of this article.
The amendment was ratified by the required number of states and
proclaimed in force August 26, 1920.

[10] The election of Senator Isaac Stephenson of Wisconsin occasioned
another outbreak of reform sentiment. Investigation betrayed the fact
that he had expended $107,793.05 in his primary campaign. The salary of
a senator at that time was $7,500 per annum.

[11] An investigation of federal campaign expenditures conducted in
1912-1913 by a committee headed by Senator Moses Clapp uncovered much
that had hitherto been only the subject of rumor. The Standard Oil
Company, for instance, contributed $125,000 in 1904. Archbold, the
vice-president of the company, testified that he told Bliss, the
Republican treasurer, "We do not want to make this contribution unless
it is thoroughly acceptable and will be thoroughly appreciated by Mr.
Roosevelt"; and that Bliss "smilingly said we need have no possible
apprehension on that score." Archbold complained later when the
administration attacked the company, but Roosevelt declared that he was
unaware of the contribution at the time. The Republican fund in 1908
was $1,655,000. The testimony of Norman E. Mack, Chairman of the
Democratic National Committee, indicated his perfect willingness to
accept money wherever he could get it, and that he refused to receive
contributions from corporations only because of Bryan's scruples.
Roosevelt declared, on the authority of an insurance officer, that the
Democrats in the campaign of 1904 were after all the corporation funds
they could get.

CHAPTER XXIII

LATER INTERNATIONAL RELATIONS[1]

At the close of the war with Spain it was commonly remarked that the
United States had become a world power; books and periodicals written
on the history of the period were based upon the assumption that
America had swung out into the current of international affairs and
that the traditional isolation of this country had become a thing of
the past. Time must be appealed to, however, for answers to fundamental
questions concerning the character of this change. Did the United
States become a world power in the sense that the majority of its
people threw off that policy of steering clear of permanent alliances
which had been expressed by Washington in his farewell address, in
favor of the policy of participation in world affairs on a footing with
the larger European states? Did the people of the United States after
1898 take a constant and informed interest in world politics and
international relations? Or did the people, after a slight excursion
into the West Indies and the Philippines, return to the traditional
attitude of "splendid isolation"? Was the extent to which the United
States became a world power sufficient to make probable its entry into
a European war?

A cardinal principle of the foreign policy of the United States has
always been its attachment to international peace, particularly through
the practice of arbitration. The great hopes raised by the two Hague
Conferences were striking proofs of this fact. In 1899, at the
suggestion of Czar Nicholas II of Russia, twenty-six leading powers
conferred at The Hague, in order to discover means of limiting
armaments and ensuring lasting peace. A second conference was held in
1907 at the suggestion, in part, of President Roosevelt. At this
gathering forty-four states were represented, including most of the
Latin-American republics. During the two conferences many questions
relating to international law were discussed, and the conclusions
reached were expressed in the form of "Conventions," which the several
powers signed. In the main these agreements related to the rights and
duties of nations and individuals in time of war. Most important among
the agreements was one for the pacific settlement of international
disputes, according to which, in certain less important controversies,
the states concerned would appoint a "commission of inquiry" which
would study the case and give its opinion of the facts involved. It was
also agreed to organize a Permanent Court of Arbitration to be
available at all times for the peaceful settlement of differences.
Strictly speaking this body was not a Court, but a list of judges to
which each nation was to contribute four, and when any countries became
involved in a controversy they could draw arbitrators from the list.
Moreover the powers agreed "if a serious dispute threatens to break out
between two or more of them, to remind these latter that the Permanent
Court is open to them."

The United States was a party to four of the fifteen cases presented to
the Court between 1902 and 1913. The first controversy was between the
United States and Mexico and involved "The Pious Fund," a large sum of
money which was in dispute between Mexico and the Roman Catholic Church
of California, and the second concerned claims of the United States,
Mexico and eight European countries against Venezuela. As the Court was
successfully appealed to in case after case, high hopes began to be
entertained that the "Parliament of Man" had at last been established.
Elihu Root, the Secretary of State, asserted in a communication to the
Senate in 1907 that the Second Conference had presented the greatest
advance ever made at a single time toward the reasonable and peaceful
regulation of international conduct, unless the advance made at The
Hague Conference of 1899 was excepted.

In the meantime, in 1904, under President Roosevelt's leadership,
treaties were arranged with France, Germany, Great Britain and other
nations, under which the contracting parties agreed in advance to
submit their disputes to The Hague Court, although excepting questions
involving vital interests, independence or national honor. While the
Senate was discussing the treaties, it fell into a dispute with the
President in regard to its constitutional rights as part of the
treaty-making power, and although there was general agreement on the
value of the principle of arbitration, yet the Senate insisted upon
amending the treaties, whereupon the President refused to refer them
back to the other nations. Secretary Root revived the project, however,
in 1908 and 1909 and secured amended treaties with a long list of
nations, including Austria-Hungary, France and Great Britain. President
Taft signed treaties with France and England in 1911 which expanded the
earlier agreements so as to include "justiciable" controversies even if
they involved questions of vital interest and honor, but again the
Senate added such amendments that the project was abandoned. Bryan,
Secretary of State from 1913 to 1915, undertook still further to expand
the principles of arbitration, and during his term of office many
treaties were submitted to the Senate, under which the United States
and the other contracting parties agreed to postpone warfare arising
from any cause, for a year, in order that the facts of the controversy
might be looked into. Many of these treaties were ratified by the
Senate.

The attitude of the American people toward the pacific settlement of
international disputes found expression in many ways in addition to the
arrangement of treaties. At Lake Mohonk, yearly conferences were held
at which leading citizens discussed phases of international peace.
Andrew Carnegie and Edwin Ginn, the publisher, devoted large sums of
money to countrywide education and propaganda on the subject. The
leaders of the movement and the membership of the organizations
included so many of the most prominent persons of their time--public
officials, university presidents and men of influence as to prove that
the traditional American reliance upon international arbitration was
more firmly rooted in 1914 than ever before in our history.

The attitude of the United States toward purely European controversies
was illustrated in our action on the Moroccan question. In 1905-1906 a
controversy broke out between Germany and France in relation to
Morocco, and in January of the latter year a conference was held at
Algeciras in southern Spain in which ten European nations and the
United States took part. The result of the meeting was an "Act" which
defined the policy of the signatory powers toward Morocco. The Senate,
in ratifying the Act, asserted that its action was not to be considered
a departure from our traditional policy of aloofness from European
questions.

[Illustration:
Caribbean interests of the United States]

The outstanding incident in our relations with that part of America
south of the republic of Mexico was the controversy with Colombia over
the Panama Canal strip. The project for a canal across the Isthmus of
Panama was as old as colonization in America. For present purposes,
however, it is not necessary to go farther into the past than the
Clayton-Bulwer treaty of 1850, by the terms of which the United States
and Great Britain agreed that neither would obtain any control over an
isthmian canal without the other. As time went on, however, American
sentiment in favor of a canal built, owned and operated by the United
States alone grew so powerful that the Hay-Pauncefote treaty of 1901
was arranged with Great Britain. This agreement permitted a canal
constructed under the auspices of the United States. Sentiment in
Congress was divided between a route through Nicaragua and one through
that part of the Republic of Colombia known as Panama, but in 1902 an
act was passed authorizing the President to acquire the rights of the
New Panama Canal Company, of France, on the isthmus for not more than
$40,000,000, and also to acquire a strip of land from Colombia not less
than six miles wide.[2] In case the President was unable to obtain
these rights "within a reasonable time and upon reasonable terms," he
was to turn to the Nicaragua route. President Roosevelt was himself in
favor of the Panama project.

The Hay-Herran convention with Colombia was accordingly drawn up and
signed in January, 1903, giving the United States the desired rights on
the isthmus, but the Senate of Colombia rejected the treaty. Thereupon
the New Panama Canal Company became alarmed because it would lose
$40,000,000 in case the United States turned from Panama to Nicaragua,
and its agents busied themselves on the isthmus in the attempt to
foment a break between Colombia and its province of Panama; the people
of Panama became aroused because their chief source of future profit
lay in their strategic position between the two oceans; and the
President was concerned because Congress would soon meet and might
insist on the Nicaragua route or at least greatly delay progress. He
hoped for a successful revolt in Panama which would enable him to treat
with the province rather than with Colombia, and he even determined to
advise Congress to take possession forcibly if the revolt did not take
place.

The administration meanwhile kept closely in touch with affairs in
Panama, and having reason to suspect the possibility of a revolution
sent war vessels to the isthmus on November 2, 1903, to prevent troops,
either Colombian or revolutionary, from landing at any point within
fifty miles of Panama. Since the only way by which revolution in Panama
could be repressed was through the presence of Colombian troops, the
action of the American government made success highly probable in case
a revolt was attempted. On the next day the plans of the Canal Company
agents or of some of the residents of Panama came to a head; early in
the evening a small and bloodless uprising occurred; and while the
United States kept both sides from disturbing the peace, the insurgents
set up a government which was recognized within two days, and Philippe
Bunau-Varilla, a former chief engineer of the Company, was accredited
to the United States as minister. A treaty was immediately arranged by
which the United States received the control of a zone ten miles wide
for the construction of a canal, and in return was to pay $10,000,000
and an annuity of $250,000 beginning nine years later, and to guarantee
the independence of Panama. The Secretary of State, John Hay, described
the process of drawing up the treaty in a private letter of November
19, 1903:

Yesterday morning the negotiations with Panama were far from
complete. But by putting on all steam, getting Root and Knox and
Shaw together at lunch, I went over my project line by line, and
fought out every section of it; adopted a few good suggestions:
hurried back to the Department, set everybody at work drawing up
final drafts--sent for Varilla, went over the whole treaty with him,
explained all the changes, got his consent, and at seven o'clock
signed the momentous document.

Although the Senate ratified the treaty, the action of the President
was the cause of a storm both in that body and throughout the nation.
In self-defence Roosevelt condemned Colombia's refusal to ratify the
Hay-Herran treaty and asserted that no hope remained of getting a
satisfactory agreement with that country; that a treaty of 1846 with
Colombia justified his intervention; and that our national interests
and the interests of the world at large demanded that Colombia no
longer prevent the construction of a canal. On the other hand the
President's critics called attention to the unusual haste that
surrounded every step in the "seizure" of Panama; condemned the
disposition of war vessels which prevented Colombia from even
attempting to put down the uprising; and insinuated that the
administration was in collusion with the insurgents. Roosevelt's
successors in the presidency felt there was some degree of justice in
the claim of Colombia that she had been unfairly treated by her big
neighbor and several different attempts were made to negotiate treaties
which would carry with them a money payment to Colombia. On July 29,
1919, the Foreign Relations Committee of the Senate unanimously
reported to that body the favorable consideration of a treaty providing
for a money payment of $25,000,000, but other matters intervened and no
further progress resulted.[3]

The work of constructing the waterway was delayed by changes of plan
until 1906, when a lock canal was decided upon, and shortly afterward a
start was made. So huge an undertaking--the isthmus is forty-nine miles
wide at this point--was an engineering task of unprecedented size, and
involved stamping out the yellow fever, obtaining a water supply,
building hospitals and dwellings and finding a sufficient labor force,
as well as the more difficult problems of excavating soil and building
locks in regions where land-slides constantly threatened to destroy
important parts of the work. At length, however, all obstacles were
overcome and on August 15, 1914, the canal was opened to the passage of
vessels.

The final diplomatic question relating to the canal concerned the rates
to be charged on traffic passing through. By the terms of the
Hay-Pauncefote treaty with Great Britain, the United States agreed that
the canal should be free and open to all nations "on terms of entire
equality." In 1912 Congress enacted legislation exempting American
coast-wise vessels from the payment of tolls, despite the protest of
Great Britain. As President Wilson was of the opinion that our action
had been contrary to our treaty agreement, he urged the repeal of the
act upon his accession in 1913, and succeeded in accomplishing his
purpose.

The construction of the Canal under American auspices committed the
United States to new responsibilities in the Caribbean. Her coaling
station in Cuba, the possession of Porto Rico and the protection of the
isthmus made it a matter of national safety to preserve stable
governments in Central America and the West Indies. The infiltration of
American capital into the region served to ally economic with political
interest, for like European investors, our capitalists have taken a
part in the exploitation of South American sugar, fruit, coffee, oil
and asphalt. With the islands and shores of the Caribbean Sea alone,
American trade doubled in the decade after 1903. Orderly government
south of the United States became accordingly essential to the welfare
of our outlying possessions, and to the commercial interests of a group
of investors. The most important international questions that have
arisen in Spanish America related to Venezuela in 1902 and Santo
Domingo in 1905.

Venezuela had long granted concessions to foreign investors--Germans,
English, Italians and others--in order to develop her mines, timber and
railroads, but unsettled conditions in the country frequently resulted
in the non-fulfillment of the obligations which had been entered into.
Germany, for example, claimed that the government of Venezuela had
guaranteed dividends on the stock of a railroad built by German
subjects and had failed to live up to the contract. Having in mind the
possible use of force to compel Venezuela to carry out her alleged
obligations, Germany consulted our state department to discover whether
our adherence to the Monroe Doctrine would lead us to oppose the
contemplated action. The attitude of President Roosevelt in 1901 was
that there was no connection between the Monroe Doctrine and the
commercial relations of the South American republics, except that
punishment of those nations must not take the form of the acquisition
of territory. In 1902 Germany, Great Britain and Italy proceeded to
blockade some of the ports of Venezuela, and the latter thereupon
agreed to submit her case to arbitration. Apparently, however, Germany
was unwilling to relinquish the advantage which the blockade seemed to
promise, and in the meantime Roosevelt became fearful that the result
of the blockade might be the more or less permanent occupation of part
of Venezuela. He therefore told the German ambassador that unless the
Emperor agreed to arbitration within ten days, the United States would
send a fleet to Venezuela and end the danger which Roosevelt feared.
The pressure quickly produced the desired results, and during the
summer of 1903 many of the claims were referred to commissions. The
three blockading powers believed themselves entitled to preferential
treatment in the settlement of their claims, over the non-blockading
nations, while the latter held that all of Venezuela's creditors should
be treated on an equality. This portion of the controversy was referred
to the Hague tribunal, which subsequently decided in favor of the
contention raised by Germany, Great Britain and Italy, and eventually
all the claims were greatly scaled down and ordered paid.[4]

The Venezuela case made evident the possibility that European creditors
of backward South American nations might use their claims as a reason
for getting temporary control over harbors or other parts of these
countries. There was also ground for the fear that temporary control
might become permanent possession. Hence in the Santo Domingo case, the
United States adopted a new policy. The debts of Santo Domingo were far
beyond its power to pay; its foreign creditors were insistent. An
arrangement was accordingly made by which the United States took over
the administration of the custom houses, turned over forty-five per
cent. of the income to the Dominican government for current expenses,
and used the remainder to pay foreign claims. The plan worked so well
that its main features were continued and imitated in the protectorates
over Haiti (1915) and Nicaragua (1916).

The progress which has been made in composing the jarring relations
among the American states is due in part to the Pan American Union and
to the Pan American Conferences. The Union is an organization of
twenty-one American republics which devotes itself to the improvement
of the commercial and political relations of its member states. The
first Pan American Conference, held at Washington in 1889, has already
been mentioned.[5] At the second, at Mexico City in 1901, the American
republics which had not already done so agreed to the conventions
signed at The Hague in 1899. At the third conference at Rio de Janeiro
in 1906 and the fourth in Buenos Aires in 1910, its field of effort was
further broadened, and in the latter year a recommendation was passed
that the Pan American states bind themselves to submit to arbitration
all claims for pecuniary damages.

President Wilson continued unbroken the policy of protectorates which
President Roosevelt had initiated in the case of San Domingo. His
statements of general policy were conciliatory and evidently designed
to allay suspicion, and he constantly expressed the view that the
American states were cooperating equals. And having asserted that the
United States had no designs upon territory, and nothing to seek except
the lasting interests of the peoples of the two continents, he gave
practical evidence of his purposes by urging that all unite to
guarantee one another their independence and territorial integrity,
that disputes be settled by investigation and arbitration, and that no
state allow revolutionary expeditions against its neighbors to be
fitted out on its territory.[6]

American relations with Great Britain between 1896 and 1914 were such
as to lend themselves to amicable settlement. The question of the
boundary between Alaska and Canada, to be sure, contained some of the
elements of trouble. The treaty of 1825, between Russia and Great
Britain, had established the boundary between Alaska and Canada in
terms that were somewhat ambiguous, the most important provision being
that the line from the 56th degree of north latitude to the 141st
degree of west longitude should follow the windings of the coast, but
should be drawn not more than ten marine leagues inland. The coast at
this point is extremely irregular, and the few important towns of the
region are at the heads of the bays. With the discovery of gold in the
Klondike region in 1897 and the consequent rush of population to the
coast settlements, the question of jurisdiction became important.

The claim of Great Britain was that the word "coast" should be
interpreted to include adjacent islands. Hence the ten league line
would follow the general direction of the shore but would cut across
the inlets and headlands and thus leave the towns in the possession of
Canada. The American contention was that the line should follow closely
the windings of the shore of the mainland, thus giving the United
States a continuous strip of coast. The controversy was referred in
1903 to a board composed of three Americans, two Canadians and the Lord
Chief Justice of England. On all the important points the English
representative concurred with the Americans and a line was subsequently
drawn in general conformity with our contention.[7]

The most complicated negotiation of the period, as well as one of the
most complicated in our history, concerned the North Atlantic Coast
fisheries. Under the treaty of 1818 relating to matters remaining over
from the War of 1812, the United States possessed certain rights on the
fishing grounds off Newfoundland and Labrador. From then on there was
intermittent negotiation concerning the meaning of the terms of the
treaty and the justice of fishing regulations made by Canada. In 1908
the United States and Great Britain made a general arbitration treaty,
under the terms of which the fisheries question was referred to members
of the Court of Arbitration at The Hague.[8] The award, made in 1910,
upheld the rights of American fishermen on the coasts of Newfoundland,
and recommended the establishment of a permanent fishery commission to
settle all future controversies. This was accomplished in 1912 and an
irritating and long-standing dispute was put to rest.

"Dollar diplomacy" was the chief novelty in our relations with China.
The expression was used in President Taft's administration, when his
Secretary of State, P.C. Knox, devoted much attention to promoting
loans, contracts and concessions in Central and South America, and more
particularly in China. The argument for dollar diplomacy was that it
opened new fields for the use of American capital, and thus indirectly
benefited the whole people. The President also believed that
investments in China would further American influence there and react
favorably in continuing the open-door policy which had been initiated
by Secretary Hay. The objection most commonly made was that the
government became bound up in the interests of investors and might be
compelled to interpose with armed force when difficulties arose between
the investor and the state where the investment was made.

An opportunity for large investments in China was presented during
1912-1913. In the former year a revolution in that distracted country
had come to an end and a republic had been set up with Yuan Shih-kai as
President. Since the new government was in need of funds, it undertook
to borrow through an associated group of bankers from six foreign
nations, the United States among them. The financial interests agreed
to the loan, but insisted on having a hand in the administration of
Chinese finance, so as to ensure repayment. At this point President
Wilson's administration began. The bankers at once asked him whether he
would request them to participate in the "six-power" loan, as President
Taft had done. Wilson declined to make the request, fearing that at
some future time the United States might be compelled to interfere in
Chinese financial and political affairs, whereupon the American bankers
withdrew and the six-power group subsequently disintegrated.

Relations with Japan have been a cause for negotiation on several
occasions. During the Russo-Japanese War, which came to a close in
1905, American sympathies were mainly with the Japanese. The
correspondence which brought about a cessation of hostilities was
initiated by President Roosevelt, and the peace conference was held in
Portsmouth, New Hampshire. During the course of the sessions American
sympathies shifted somewhat to the Russian side, and when the Japanese
did not receive all that they demanded of Russia they felt somewhat
dissatisfied.

A subject which seemed at times to contain unpleasant possibilities was
the restriction of Japanese immigration into the United States. The
western part of the country, especially California, has objected
vigorously to the presence of the Japanese on the coast, and as Japan
refused to agree to such a treaty as that which restricts Chinese
immigration, recourse was had to the Root-Takahira agreement of 1908,
by which the Japanese government itself undertook to prevent the
emigration of laborers to the United States. It was more difficult to
reach an agreement concerning Japanese who were already living in the
United States. In 1913 the legislature of California had before it a
law forbidding certain aliens from holding land in the state. As the
act would apply almost solely to the Japanese, the federal government
was placed in an embarrassing position. Under existing treaties the
Japanese were granted equal rights with other aliens, but the states
were able to modify the practical operation of treaty provisions, as
California planned to do, by declaring certain aliens ineligible to
citizenship and then placing particular restrictions upon them. The
Secretary of State, William J. Bryan, went to California and attempted
to persuade the state authorities to alter their land laws. Although
the law was eventually passed, it was modified to the extent of
allowing Japanese to lease agricultural lands for terms not greater
than three years.

In 1917, Robert Lansing, the American Secretary of State, and Viscount
Ishii, special ambassador of Japan, reached an important agreement
concerning American relations in the Orient. By it the United States
admitted the interest of Japan in China, but the two placed themselves
on record as mutually opposed to the acquisition by any government of
special rights in China that would affect the independence or the
territorial integrity of that country. Nevertheless Japan had already
forced China in 1915 to grant her territorial and economic concessions
that constituted a grave menace to Chinese independence, and final
settlement between the two awaited later events.

It is impossible at the present time to give an accurate account of
American relations with Mexico during the decade preceding 1920. Mexico
and Mexican affairs are but ill understood in the United States; and
the purposes and acts of the chief figure in the most important events,
President Wilson, will not be fully known until papers are made public
and explanations presented that only he can give. His conduct of
Mexican affairs, moreover, had to face constant change on account of
the outbreak and progress of a European war in 1914, and many critical
decisions had to be arrived at during 1915-1916 when political
partisanship in the United States was at fever heat and when the most
bitter opponents of the administration were ready to pounce upon every
act and hold it up to public scorn. Nor is the exact character of some
of the pressure brought to bear upon the President fully known.
American capital in vast amounts had gone into Mexico as into other
parts of Latin America. Mining companies, railroad, ranching and
plantation companies, and private individuals had invested in a land
that has been called "the storehouse of the world," because of its
fabulous resources in mineral wealth and fertile soil. In 1912
President Taft said that American investments had been estimated at one
billion dollars. President Wilson in 1916 warned the public that agents
of American property owners in Mexico were scattered along the border
originating rumors which were unjustified by facts, in order to bring
about intervention for the benefit of investors. For these reasons most
accounts of Mexican relations, whether they uphold or condemn the steps
taken by the administration, are rendered defective by prejudice or
lack of information. It is possible, therefore, to give only a bare
narrative of a few of the most important events following 1910.

The strong hand of Porfirio Diaz ruled Mexico from 1877 to 1880 and
from 1884 to 1911. The government was autocratic; the resources of the
country were in the hands of foreigners; and while a few magnates were
wealthy, the mass of the people were poor and ignorant. The country was
infested with bands of robbers, but Diaz managed to control them and
even made some of the leaders governors of states. Such was the country
that is separated from Arizona and New Mexico by an imaginary line and
from Texas by a narrow river that shrinks in summer almost to a bed of
sand.

In 1910 Francisco Madero organized a revolt, compelled Diaz to flee to
Europe in 1911, and was himself chosen President. Taft meanwhile had
sent troops to the border, stray bullets from across the line killed a
few American citizens and the demand for intervention began. Madero was
soon overthrown by General Victoriano Huerta, who became provisional
president. Shortly afterward Madero was shot under circumstances that
pointed to Huerta as the instigator of the assassination, but his
friends kept the fires of revolt alive, and Governor Carranza of
Coahuila, the state across the border from northwest Texas, refused to
recognize the new ruler. It was at this juncture that Wilson succeeded
Taft. General Huerta was promptly recognized by the leading European
nations but President Wilson refused to do so, on the ground that the
new government was founded on violence, in defiance of the constitution
of Mexico and contrary to the dictates of morality. He then sent John
Lind to Mexico to convey terms to Huerta--peace, amnesty and a free
election at which Huerta himself would not be a candidate. When the
latter refused the proposal, President Wilson warned Americans to leave
Mexico and adopted the policy of "watchful waiting," hoping that Huerta
would be eliminated through inability to get funds to administer his
government. In the meanwhile the destruction of lives and property
continued.

War was barely avoided in the spring of 1914 when a boat's crew of
American marines was imprisoned in Tampico. An apology was made, but
General Huerta refused to order a salute to the United States flag, and
troops were accordingly landed at Vera Cruz, where slight encounters
ensued. At this juncture Argentina, Brazil and Chile, "the ABC powers"
made a proposal of mediation which was accepted. The conference averted
war between the United States and Mexico, although failing to solve the
questions at issue. Shortly afterward, however, Huerta retired from the
field unable to continue his dictatorship, and the American troops were
withdrawn.

The end was not yet however. Carranza and his associate, Villa, fell to
quarreling. Bands of ruffians made raids across the border, and Mexico
became more than before a desolate waste peopled with fighting
factions. At President Wilson's suggestion six Latin-American powers
met in Washington in 1915 for conference, and decided to recognize
Carranza as the head of a _de facto_ government. Diplomatic relations
were then renewed after a lapse of two and a half years. In a message
to Congress the President reviewed the imbroglio, but expressed doubts
whether Mexico had been benefited.

His fears soon proved to be well founded. In 1916 Villa crossed into
New Mexico and raided the town of Columbus. With the consent of
Carranza the United States sent troops under General Pershing across
the line to run down the bandits, but the only result was to drive the
Villistas from the region near the border. Renewed raids, this time
into Texas, indicated the need of larger forces and the state militia
were called upon, but after nearly a year of service they were
withdrawn early in 1917. Not long afterward Carranza was elected
president for a term of four years, but in 1920 another revolt ended in
his assassination. The country is in a condition of wretchedness, and
neither life nor property is safe from bands of marauders, President
Wilson has patiently attempted to give Mexico a chance to work out her
own salvation without hindrance from other countries and without
exploitation by investors,--but the problem remains unsettled.[9]

In view of some aspects of the foreign relations of the United States
since 1914, it is apparent that such diplomatic incidents as those
concerned with boundaries, fisheries and Latin-American protectorates
were not the most important forces in determining the outlook of
America upon Europe. In spite of the huge immigration of Europeans into
America since the Civil War, the United States has seldom drawn upon
European experience and has never sought to model itself on European
lines. American legislators have not commonly studied either English or
continental practices; our institutions and our constitutional
limitations have been so peculiarly our own that slight attention has
been paid to the outside world. Even the ancient resentment against
England had dwindled by 1914, leaving the United States without any
traditional "enemy." Tradition, as well as geographical isolation,
tended to keep us apart from the currents of European action.

Nevertheless America was being inter-related with the rest of the world
through means with which the diplomats had little to do. In 1867 the
Atlantic cable had finally been placed in successful operation, and
forty years afterward the globe was enmeshed in 270,000 miles of
submarine telegraph wires. In 1901 wireless telegraphic messages were
sent across the ocean, and within a few years private and press notices
were being sent across the Atlantic, vessels were commonly equipped
with instruments, and international regulations concerning
radio-telegraphy were adopted by the chief powers of the world. Most
important of all was the constant passage of merchant vessels shuttling
back and forth between America and Europe, and weaving the two into one
commercial fabric. With Great Britain, with Germany, with France, Italy
and the Netherlands, during 1913, the United States exchanged products
valued at nearly two and a half billion dollars. This was an amount
more than twice as great as the entire trade with Europe twenty years
before. Over half a billion dollars' worth was with Germany, to which
country we sent cotton, copper, food-stuffs, lard and furs in return
for fertilizers, drugs, dyes, cotton manufactures and toys. American
corporations had branches in Germany, while German manufacturers
invested hundreds of millions of dollars in factories here. So huge a
volume of commerce concerned the welfare not only of the ordinary
commercial classes--ship owners, exporters and investors--but the much
larger number of producers, manufacturers, miners, meat-packers, and
farmers who directly and indirectly supplied the materials for export.

In the meantime a change was taking place in the attitude of America
toward world affairs. Inaccurate as it was to describe the United
States as a world power at the time of the Spanish War, nevertheless
the war itself and the colonial responsibilities which it entailed
helped to a small degree to break down the isolation of America;
frequent communication with Europe, and the expansion of American
commerce tended in the same direction.

The international relations of the United States for the twenty years
immediately preceding 1914 may then be briefly summarized. The one
international problem which interested the greatest numbers of people
was the best method of arriving at international peace. Other problems,
except the Mexican question, were simple and inconspicuous, and the
majority of Americans knew little of European politics or international
relations. Only in the fields of communication and commerce was the
United States becoming increasingly and intimately related to the
remainder of the world, and the extent to which this change
supplemented the effect of the war with Spain in broadening the
American international outlook was a matter of conjecture.

BIBLIOGRAPHICAL NOTE

The general texts mentioned at the close of Chapter XIII continue to be
useful.

On the Hague Conferences reliance should be placed upon G.F.W. Holls,
_The Peace Conference at the Hague_ (1900), by the secretary of the
American delegation; A.D. White, _Autobiography of Andrew D. White_ (2
vols., 1905), by a member of the delegation; J.W. Foster, _Arbitration
and the Hague Court_ (1904); P.S. Beinsch, in _American Political
Science Review_, II, 204 (Second Conference).

The best brief account of the acquisition of the canal strip is in
Latan; Theodore Roosevelt's story is in his _Autobiography_ and his
_Addresses and Presidential Messages_. On the Caribbean, C.L. Jones,
_Caribbean Interests of the United States_ (1916). The Venezuela
arbitrations are in _Senate Documents_, 58th Congress, 3rd session, No.
119 (Serial Number 4769). The Alaskan boundary question is clearly
discussed in Latan, with a good map, and J.W. Foster, _Diplomatic
Memoirs_ (2 vols., 1909). _The Proceedings in the North Atlantic Coast
Fisheries Arbitration_ are in _Senate Document_ No. 870, 61st Congress,
3rd session (12 vols, 1912-1913): more briefly in G.G. Wilson, _Hague
Arbitration Cases_ (1915). S.K. Hornbeck, _Contemporary Politics in the
Far East_ (1916), is useful for Asiatic relations. Ogg, Fish, and the
_American Year Book_ provide material on Mexican affairs.

* * * * *

[1] The Presidents and Secretaries of State during this period were as
follows:

McKinley, 1897-1901; John Sherman, William R. Day, John Hay.
Roosevelt, 1901-1909; John Hay, Elihu Root, Robert Bacon.
Taft, 1909-1913; P.C. Knox.
Wilson, 1913-1921; W.J. Bryan, Robert Lansing, B. Colby.

[2] The French company had a concession on the isthmus and had already
done considerable work.

[3] Roosevelt, after his retirement from office was widely reported as
having said in an address at the University of California: "If I had
followed traditional, conservative methods, I would have submitted a
dignified state paper of probably two hundred pages to Congress, and
the debate on it would have been going on yet; but I took the Canal
Zone and let Congress debate." Cf. Jones, _Caribbean Interests_,
238-239.

[4] For the Roosevelt "threat," together with another version of the
story, cf. Thayer, _Hay_, II, 284-289 and _North American Review_,
Sept., 1919, 414-417, 418-420.

[5] Above, p. 289.

[6] The latest acquisition of the U.S. in the Caribbean Sea was the
Virgin Islands which were purchased from Denmark in 1916.

[7] The American members of the Commission were Elihu Root, who was
then Secretary of War, Senator H.C. Lodge, and ex-Senator George
Turner. The English member was the Lord Chief Justice, Baron
Alverstone; the Canadians were Sir Louis Amable Jett, Lieutenant
Governor of Quebec, and Allen B. Aylesworth of Toronto.

[8] The American member of the tribunal was Judge George Gray. The
closing argument for the United States was made by Elihu Root. Robert
Lansing was one of the associate counsel.

[9] The number of Americans killed in Mexico as given by the ambassador
in 1919 was as follows: 1911, 10; 1912, 6; 1913, 24; 1914, 30; 1915,
26; 1916, 46; 1917, 39; 1918, 31. N.Y. _Times_, July 20, 1919. For the
revolution of 1920 consult N.Y. _Times_, May 16 ff.

CHAPTER XXIV

WOODROW WILSON

A definite account of the eventful years following 1913 can be written
only after time has allayed partisanship; after long study of the
social, economic and political history has separated the essential
from the trivial; after papers that are now locked in private files
have been opened to students; and after the passage of years has given
that perspective which alone can measure the wisdom or the folly of a
policy. It will be little less difficult to make a just appraisal of
the chief American participants in those years, and particularly of
President Woodrow Wilson. At present it is possible only to avoid
partisanship so far as it can be done, read with open mind whatever
documents are available, and refrain from either praise or condemnation.
On all sides it is agreed that during his administration Wilson
became one of the three or four world-figures, and for that reason
his characteristics, as well as the events of his presidency demand
unusual attention.

Woodrow Wilson was born in Staunton, Virginia, in 1856. His ancestors
were Scotch-Irish and his father an educator and Presbyterian
clergyman. After graduating from Princeton College he practiced law,
studied history and politics, and taught these subjects at several
different institutions. Subsequently he became a professor at
Princeton and later its President. He was a prolific and successful
writer. His book on _Congressional Government_, for example, went
through twenty-four impressions before he became President of the
United States. _The State_, an account of the mechanism of government
in ancient and modern times, and some of his portrayals of American
history were hardly less in demand. His election as Governor of New
Jersey in 1910 and his election to the presidency two years later have
already been mentioned.

The outstanding characteristic of Wilson is a finely-organized,
penetrating intelligence. Somewhat like a silent chess-player he
thinks many moves in advance, a fact which makes it difficult to judge
a single act of his without a knowledge of the whole plan. Before
coming to the presidency he had long pondered on the proper and
possible function of that office, and had drawn in imagination the
outlines and many of the details of the role which he was to play.
Years of careful study had drilled him in the accumulation of facts.
As a specialist in polities and history he was accustomed to make up
his mind on the basis of his own researches, and to change his
judgments without embarrassment when new facts presented themselves.
His literary style is characterized by precision, a close texture and
frequently by suppressed emotion. He thinks on an international scale
and with a profundity that often dwarfs associates who are by no means
pygmies themselves. An unbending will, an alert conscience, stubborn
courage, restrained patience, political sagacity, a thoroughgoing
belief in democracy and above all an instinctive understanding of the
spiritual aspirations of the common people made him the most powerful
political figure in America within a brief time after his accession to
the presidency. On the other hand, his aloofness from counsel during
the later part of his presidency exceeded that of Cleveland, and his
abnormal self-reliance was greater than that of Roosevelt.

In reviewing the history of the years following 1913, it is necessary
to have a sense of the immensity of the problems involved, as well
as a restrained judgment and some knowledge of the chief actors.
Beginning in 1914, the great nations of Europe were constantly menaced
by appalling dangers; their leaders were daily confronted with
decisions of the utmost importance. Because of the close commercial,
industrial and financial bonds between the two continents, America
could not fail to be affected. She too was compelled to take her part
in a drama which was far greater than any in which she had before
engaged. Both the President and Congress were confronted with problems
the solution of which would vitally affect not only the people of
America, but the people of the world; never before had their decisions
been so subject to the possibilities of mistakes which would certainly
be momentous and might be tragic.

When Wilson and his party came into power in 1913, as the result of
the schism among the Republicans, their position was by no means
secure. The President had been elected by a distinct minority in the
popular vote and his practical political experience had been less than
that of any chief executive since Grant. His party had been in power
so little since the Civil War that it had no body of experienced
administrators from which to pick cabinet officers, and no corps of
parliamentary leaders practiced in the task of framing and passing a
constructive program. The party as a whole was lacking in cohesion
and had perforce played the role of destructive critic most of the
time for more than half a century; its principles were untested in
actual experience, and although its majority in the House was large,
in the Senate its margin of control was so narrow as to suggest the
near possibility of the failure of a party program. Wilson was under
no illusions as to the circumstances of his election and he realized
that both he and his party were on probation.

The appointment of the cabinet occasioned unusual interest. Bryan, the
one Democrat who had a large and devoted personal following, became
Secretary of State. His influence in nominating Wilson had been very
great and the adherence of his admirers was necessary if the party was
to be welded into an effective organization. Several of the other
members of the cabinet proved themselves to be men of unusual
capacity, and their ability to cooperate with one another provided
the "teamwork" which the President was anxious to obtain.[1]

His conception of the part which the chief executive ought to play
was a definite one. He looked upon the President as peculiarly the
representative of the whole people in the federal government, as the
leader of the party in power and as commissioned by the voting
population to carry out the platform of principles upon which the
party and its leader were elected. He believed that the unofficial
leaders who are better known as "bosses" existed partly because of the
absence of official leaders. As Governor of New Jersey he had acted on
the principles that he had outlined for the chief executive of the
nation, and upon his accession to the presidency he began at once to
put into effect a similar program.

Congress was called for a special session on April 7, 1913, in order
to revise the tariff. It was a dangerous task--one which had
discredited the Democrats in 1894 and divided the Republicans in
1909--but plans had been laid with care in order to avoid previous
mistakes. The Chairman of the Committee on Ways and Means in the
House, Oscar W. Underwood, had begun the preparation of a bill during
the session before and had discussed it with Democratic members of the
Senate Committee on Finance, and with the President.

At the opening of the session Wilson broke the precedent established
by Jefferson in 1801, and read his message personally to Congress,
instead of sending it in written form to be read by a clerk. In
substance the message expressed the President's conviction that the
appearance of the chief executive in Congress would assist in
developing the spirit of cooperation, and outlined the tariff problem
which they were together called upon to settle. He declared that the
country wished the tariff changed, that the task ought to be completed
as quickly as possible and that no special privileges ought to be
granted to anybody. He advocated a tariff on articles which we did not
produce and upon luxuries, but he urged that otherwise the schedules
be reduced vigorously but without undue haste. Other considerations
were more important, however, than the substance of the message.
Previous documents of this kind had been long and filled with a wide
variety of recommendations concerning both international and domestic
relations; Wilson's speech occupied but a few moments, it focused the
attention of Congress upon one subject, and fixed the eyes of the
country upon the problem. The nation knew that one task was in hand,
and knew where to lay the blame if delay should ensue. It was a great
responsibility that the President had assumed, but he assumed it
without hesitation.

Underwood presented his bill at once and it passed the House without
difficulty, but in the Senate the Democratic majority of six was too
small to guarantee success in the face of the objections of Louisiana
senators to the proposal for free sugar, and the usual bargaining for
the protection of special interests. 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. So
vigorous an action resulted in hostility to Wilson, but Congress found
itself unusually free from objectionable pressure. Hence while experts
differed in regard to the wisdom of one part or another of the bill,
it was not charged that its schedules bore the imprint of favoritism
for any particular private interests. Discussion in the Senate was so
extended that the Underwood act did not finally pass and receive the
President's signature until October 3.

The general character of the measure is indicated by the number of
changes made in the tariffs as they existed at the time of the passage
of the act. On 958 articles the duties were reduced; on 307 they were
left unchanged; and on eighty-six (mainly in the chemical schedule),
they were increased. Despite the numerous reductions, the Underwood
law retained much of the protective purpose of preceding enactments.
Attempts were made to decrease the cost of living by considerable
reductions on certain agricultural products and by placing others on
the free list; wool was to be free after December 1, 1913, and the
duty on sugar was to be reduced gradually and taken off completely on
May 1, 1916; duties on cotton goods and on woolens ("Schedule K") were
heavily reduced. Underwood represented an iron manufacturing section
of Alabama, but he showed an uncommon attention to the general
interest by favoring large reductions on pig-iron and placing iron ore
and steel rails on the free list. An important part of the law was a
provision for an income tax, which had been made possible by the
Sixteenth Amendment to the Constitution proclaimed on February 25,
1913. Incomes over $3,000 ($4,000 in the case of married persons),
were to be taxed one per cent., with an additional one per cent. on
incomes of $20,000 to $50,000, and similar graded "surtaxes" on higher
incomes, reaching six per cent. on those above $500,000. The board
which the Republicans had established for the scientific study of the
tariff had been allowed to lapse by the Democrats, but was revived in
1916 through the appointment of a bi-partisan Commission of six
members with twelve-year terms.

On June 23, 1913, after the tariff bill had been piloted around the
chief difficulties in its way, the President again addressed
Congress-this time on currency legislation. Again he laid down certain
principles-a more elastic currency, some means of mobilizing bank
reserves, and public control of the banking system. Before mentioning
the further history of this recommendation, however, it is necessary
to have in mind the main facts in the development of the monetary
issue since 1900. Complaint had been common since that year. One
difficulty lay in the fact that the volume of the currency could not
quickly increase and decrease as busy times demanded more or quiet
times required less of the circulating medium. At those parts of the
year, for example, when the crops were being moved there was a greater
demand for currency than the banks could conveniently meet. They
could, to be sure, buy United States bonds and issue national bank
notes upon them as security, but this was a slow and costly process.
The dangers of the existing inelastic arrangement were illustrated in
the panic of 1907.

In that year occurred a financial crisis which resulted in business
failures, unemployment and the indictment of prominent figures in the
commercial world; it was precipitated by a gamble in copper stocks. An
unsuccessful attempt to corner the stock of a copper company led to
the examination of the Mercantile National Bank of New York, with
which the speculators had intimate connections. Meanwhile the
president of the bank and all the directors were forced to resign. One
of the associates of a director in the Mercantile was the president of
the Knickerbocker Trust Company, and depositors in the latter bank
thereupon became frightened, and $8,000,000 were withdrawn in three
hours. The alarm then spread to the depositors of the Trust Company of
America--the president of the Knickerbocker was one of its
directors--and $34,000,000 were withdrawn by the now thoroughly
anxious depositors, who stood in line at night in order to be ready
for the next day. The panic spread to other parts of the nation;
country banks withdrew funds from the city banks, and they from New
York; and at length the government came to the aid of the distressed
institutions and deposited $36,000,000 between October 19 and 31.
Nevertheless, at the time when depositors were trying to get their
money there was sufficient currency in existence to satisfy all needs.
The defect lay in the lack of machinery for pooling resources in such
a way as to relieve any institution that was in temporary straits. The
experts pointed also to the unscrupulous manipulation of the supplies
of currency by New York financiers. There was widespread comment on
the fact that if the magnates did not actually constitute a "money
trust" they were nevertheless able to expand and contract the
available supply to such an extent as to serve their own ends and
embarrass the public.

In the meanwhile many experts, among them Senator Nelson W. Aldrich,
had been studying the entire banking system. The result of this work
was the Aldrich-Vreeland Act of 1908 providing a temporary method for
making the supply of currency more flexible and also arranging for a
National Monetary Commission to investigate the currency and banking
systems in this and other countries. The Commission published
thirty-eight volumes of information and recommendations, which were a
storehouse of facts concerning the problem, although no legislation
resulted. All that Taft did was to pass the task along to Wilson.

As has been seen, President Wilson seized the opportunity at once.
Senator Owen and Carter Glass, Chairmen of the Senate and House
Committees on Banking and 'Currency, together with William G. McAdoo,
the Secretary of the Treasury, and the President himself drafted the
Federal Reserve bill. This measure received careful attention, being
the cause of extended hearings and debate in Congress and of
discussion in banking circles. The special session wore on and came to
an end, but the regular session began at once (December 1), and
consideration of the measure continued without interruption. At length
on December 22 the House acted favorably, thirty-four Republicans,
eleven Progressives, and one Independent assisting the Democrats in
passing the bill; on the following day the Senate passed it, one
Progressive and three Republicans voting with the majority. In many
details the act as passed differed from the original plan, but in its
essential points it was not amended. Although its precise form was the
work of a few men, the project in general, of course, represented the
labors of many persons extending over many years, and for that reason
embodied the best that American experts could give.

The Act provided for the establishment of Federal Reserve Banks, to be
placed in districts--the number being eventually fixed at twelve. The
capital for each Reserve Bank was to be supplied by the banks in its
district which became member banks. In other words the Reserve Banks
were to act as banks for their members, but not for private
individuals. In control of the twelve was a Federal Reserve Board,
composed of the Secretary of the Treasury, the Comptroller of the
Currency and five persons appointed by the president for terms of ten
years. It was at this point that the chief controversies raged between
the bankers and the proponents of the administration measure. The
bankers desired one central bank, which the administration opposed
because it feared centralized control over the currency supply; and
the bankers disliked the proposal for a Reserve Board appointed by the
president, because they apprehended the entrance of politics into the
appointments. The President and his supporters were determined,
however, not to allow the bankers to appoint the Board or any portion
of it, because they wished the system to be operated solely in the
public interest.

Greater elasticity was given to the currency supply through the
issuance of federal reserve notes, at the discretion of the Federal
Reserve Board, to the several regional Federal Reserve Banks. These
notes were to be obligations of the government and were expected to
replace the former national bank notes. When a local bank requires
more currency it may deposit with the Federal Reserve Bank such
valuable commercial paper as may be acceptable--for example,
promissory notes of reliable business firms--and receive at once a
supply of federal reserve notes. When business is brisk and large
supplies of currency are demanded, the local banks will deposit
whatever paper may be necessary to meet their needs; when the
emergency has passed they will withdraw notes from circulation, return
them to the reserve bank and receive their paper again.[2] The second
great purpose of the new system was to supply central reservoirs for
the storage of the reserves of the member banks. Each local bank is
required to keep certain prescribed balances in the reserve bank of
its district, and the federal government may also deposit funds in it.
In conformity with strict regulations the reserves thus accumulated in
a Federal Reserve Bank may be directed here and there in the district
as needed, and even from district to district, under the control of
the Federal Reserve Board. Moreover they are not available for those
speculative ventures which have caused so much trouble in the past.[3]
The operation of the law has apparently more than met the expectation
of its friends. It had hardly been established when a war broke out in
Europe, but the unusual financial situation which resulted in America
was cared for without great strain.

The third major plank in the Democratic platform of 1912 called for
legislation concerning trusts, and the President accordingly turned
his attention to that topic in his address to Congress on January 20,
1914. He declared that there was no intent to hamper business as
conducted by enlightened men, but that, on the contrary, the
antagonism between business and government had passed. He recommended
the prohibition of interlocking directorates by which railroads, banks
and industrial corporations became allied in one monopolistic group,
and he suggested that the processes and methods of harmful restraint
of trade be forbidden item by item in order that business men might
know where they stood in relation to the law. Finally, he believed
that the country demanded a commission which should act as a clearing
house for facts relating to industry and which should do justice to
business where the processes of the courts were inadequate. The
results of this undertaking were the Federal Trade Commission act of
September 26, 1914, and the Clayton Anti-trust act of October 15.

The former of these laws created a Commission of five persons to
administer the anti-trust laws and to prevent the use of unfair
methods by any persons or corporations which were subject to the
anti-trust laws. Whenever it had reason to believe that such
expedients were being used, the Commission was to issue an order
requiring the cessation of the practice. If the order was not obeyed,
the Commission was to apply for assistance to the circuit court of
appeals in the district where the offense was alleged to have been
committed. The purpose of the provision was evidently to prevent
unfair practices rather than to punish them. Another section of the
law empowered the Commission to gather information concerning the
practices of industrial organizations, to require them to file reports
in regard to their affairs, and to investigate the manner in which
decrees of the Courts against them were carried out. Under direction
of the president or Congress, the Commission could investigate alleged
violations of the law, and on its own initiative it might report
recommendations to Congress for additional legislation.[4]

The Clayton act specifically prohibited many of the practices common
to industrial enterprises. Sellers of commodities were forbidden to
discriminate in price between different purchasers--after making due
allowance for differences in transportation costs; corporations were
forbidden to acquire any of the stock of other similar industries,
where the effect would be substantially to lessen competition; and
directors of banks and corporations were prohibited, with stated
exceptions, from serving in two or more competing organizations. The
Clayton act also settled, at least for the time, several of the
complaints raised by the labor interests, especially at the time of
the Pullman strike. Labor and agricultural organizations were
specifically declared not to be conspiracies in restraint of trade;
injunctions were not to be granted in labor disputes unless necessary
to prevent irreparable injury; and trials for contempt of court were
to be by jury, except when the offense was committed in the presence
of the court. The law also prohibited the railroads from dealing with
concerns in which their directors were interested, except under
specified conditions.

The success of the President in pushing his party program made his
prestige the outstanding fact in politics. His leadership was
indisputable and it was evident that he regarded a party platform as a
serious program, to the fulfilment of which the party was committed by
its election. While the trust legislation was under discussion,
however, he asked for an act which required all the strength that he
could muster.

It will be remembered that the Panama Canal act of 1912 had exempted
American coast-wise traffic through the canal from the payment of
tolls. The law had been passed under a Republican, President Taft, and
both the Progressive and Democratic platforms of 1912 had favored
exemption. On March 5, 1914, Wilson appeared before Congress and urged
the repeal of the act on the ground that it was a violation of that
part of the treaty with Great Britain in which this country agreed
that the canal should be open to all nations upon an equality, and
that it was based on a mistaken economic policy. He was opposed by
Underwood and Champ Clark, two of the most powerful Democratic
leaders, but he had the aid of Senator Root, a distinguished
Republican who had been Secretary of State under President Roosevelt,
and in the end he was victorious. The division in the party was
quickly healed and forgotten.

The Congressional elections of 1914 greatly reduced the Democratic
majority in the House, although leaving control with that party, but
they slightly increased its margin in the Senate. European affairs and
the election of 1916 occupied political attention during the second
half of the administration, nevertheless the President and Congress
proceeded with their program of legislation. Important acts were those
providing for the development of the resources of Alaska, the Newlands
act for the arbitration of disputes among railway employees, a law
providing for federal aid in the building of state highways, measures
giving a larger amount of self-government to the Philippines and Porto
Rico, and one establishing a series of Federal Farm Loan Banks
intended to enable the agricultural population to get capital at low

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