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 Latané; 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 Latané, 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 Jetté, 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