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

rates of interest.[5] The major items, as well as the smaller ones in

the Democratic program were in line with many of the proposals made by

the Progressives in their platform in 1912. Attracted by these

accomplishments and by the forceful leadership of the President large

numbers of the Progressives made the transition into the Democratic

party, and from 1913 to 1916 much of the political strategy of both

Democrats and Republicans was devoted to attracting the insurgent wing

of the Republican organization.

The enactment of such a body of legislation, with the resulting

appointment of many officials and clerks, brought the President face

to face with the same civil service problem that had caused so much

trouble for Cleveland. Upon their accession in 1913 the Democrats had

been out of power so long that they exerted the pressure, usual under

such circumstances, for a share in the offices. The merit system,

however, was even more firmly entrenched than in 1897 when Cleveland

had made such additions to the classified lists, for both Roosevelt

and Taft had extended the merit principle to certain parts of the

consular and diplomatic service. Roosevelt had also made considerable

extensions in the application of the system to deputy collectors of

internal revenue, fourth-class postmasters, and carriers in the rural

free-delivery service; Taft had also increased the number of employees

who were appointed under the merit system, notably about 36,000

fourth-class postmasters not touched by his predecessor. Some of the

acts passed early in President Wilson's administration--the Federal

Reserve law, for example--expressly excepted certain employees from

civil service examinations. Bryan, as Secretary of State, showed a

lack of devotion to the cause of reform in the conduct of his

department. On the other hand the President took a most important step

in relation to postmasters of the first, second and third classes,

which had always been appointed by the president with the advice and

consent of the Senate, and had been among the plums in the gift of the

executive that had been most sought after. On March 31, 1917, Wilson

announced that thereafter the nominees for postmasters of the first

three classes would be chosen as the result of civil service

examination.

While the United States was absorbed, in these various ways, in the

task of internal construction, an event was occurring in a town in

Bosnia which was destined to affect profoundly the course of American

history. On June 28, 1914, Archduke Franz Ferdinand, the heir-apparent

to the throne of the Austro-Hungarian monarchy was assassinated by a

youth of Serbian blood and sympathies in Sarajevo. In Austria the act

was looked upon as an incident in a revolutionary movement intended to

detach a part of the Austro-Hungarian monarchy and unite it with

Serbia. A month later Austria declared war on Serbia, and in a brief

time, such was the state of the European alliances, Austria and

Germany were opposed to Serbia, Russia, Belgium, France, Montenegro

and Great Britain in a devastating war. In August, Japan joined the

"Allies," as the nations on Serbia's side were known, and Turkey, in

November, took the side of the Teutonic powers. The act that brought

Belgium into the war was of interest to the United States. Germany had

declared war on Russia, the friend of Serbia, and expected that

France, Russia's ally, would step into the fray. Being thoroughly

prepared for war, Germany believed that she could crush France before

the latter could take any effective steps. The most convenient path

into France lay through Belgium, a small, neutral nation with no

interest in the conflict, and the German armies were thereupon poured

across the boundary. High German authority freely admitted the wrong

of the act, but excused it on the ground of military necessity.

Belgium felt that she could not do otherwise than resist the invader

and was thus drawn into the vortex. Her danger helped bring Great

Britain into the conflict.

The relation of the United States to the conflict seemed remote, and

President Wilson on August 4 issued a formal proclamation of

neutrality, which was soon followed by an address to the people of the

country urging them to be neutral both in thought and in act. For a

time it was not difficult for the country to obey the injunction.

Although stories of the ruthlessness, of the German soldiery in

Belgium poured into the columns of American periodicals, the people

found difficulty in believing them because they had long admired the

efficiency and virility of the Germans. Scarcely a year before the war

broke out, ex-Presidents Roosevelt and Taft had extolled the German

Emperor as an apostle of peace, and President Butler of Columbia

University had declared that the people of any nation would gladly

elect him as their chief executive. More than a month and a half after

the invasion of Belgium, Roosevelt published an article in _The

Outlook_ in which he expressed pride in the German blood in his veins,

asserted that either side in the European conflict could be sincerely

taken and defended, and continued:

When a nation feels that the issue of a contest in which ... it

finds itself engaged will be national life or death, it is

inevitable that it should act so as to save itself.... The rights

and wrongs of these cases where nations violate the rules of

abstract morality in order to meet their own vital needs can

be precisely determined only when all the facts are known and

when men's blood is cool.... Of course it would be folly to jump

into the gulf ourselves to no good purpose; and very probably

nothing that we could have done would have helped Belgium. We

have not the smallest responsibility for what has befallen her.

In view of the mass of conflicting rumors concerning the war, which

reached American attention, it was natural to take the neutral

position adopted by Roosevelt, but it was inevitable, because of our

racial diversities, that sympathies and opinions should soon differ

widely. Within a short time, pamphlets were published containing the

correspondence among the several European powers which had taken place

just before the outbreak of the war. These and other documents were

widely studied in the United States and led to the belief that

England, France and Russia had been the real peace lovers and that

Germany had been the aggressor.

The immediate economic effect of the war, in the meanwhile was the

unsettlement of American financial and industrial affairs, but when

the English navy obtained the mastery of the seas, the vessels of the

Teutonic powers were driven to cover in neutral ports or kept

harmlessly at home, and American trade with neutral nations and the

Allies took on new life. Moreover the latter were in need of food,

munitions and war materials of all kinds and they turned to American

factories. Manufacturers who could accept "war orders" began at once

to make fortunes; wages and prices rose, and it became evident that

the United States would be profoundly affected by the struggle.

England's control of the sea, moreover, early presented other

problems. According to international practice, both sides in the

European conflict might purchase munitions from neutrals, of which the

United States was the largest, but on account of her weakness on the

sea Germany was unable to take advantage of this opportunity, while

the Allies constantly purchased whatever supplies were needed. At

first, the German government protested through diplomatic channels,

but our government was able to show not only that international

practice approved the course followed by the United States, but also

that Germany had herself followed it in previous wars.

There then followed propaganda on a large scale by German agents

under the direction of Dr. Bernhard Dernburg, which was intended to

influence public opinion to demand the prohibition of the shipment of

munitions to the Allies. As this activity failed of its purpose,

resort was then had to fraudulent clearance papers by which military

supplies for German use were shipped from the United States without

conforming to our customs regulations; bombs were placed in ships

carrying supplies to England; fires were set in munitions factories;

strikes and labor difficulties were fomented by German agents and at

length the government had to ask for the recall of the Austrian

Ambassador, Dr. Dumba, and the German military and naval _attaches_

at Washington, Captain Franz von Papen and Captain Karl Boy-Ed.

Relations with the Allies, in the meantime, were far from

satisfactory. The unprecedented scale on which the war was being

fought made huge supplies of munitions, food and raw materials such as

copper and cotton absolute necessities. England was able to shut off

the direct shipment into Germany of stores having military value, but

this advantage was of little use so long as the ports of Holland and

the Scandinavian countries were open to the transit of such supplies

indirectly to Teutonic soil. When England attempted to regulate and

restrict trade with these countries, the United States was the chief

sufferer. Ships were held up and their cargoes examined-during 1915,

for example, copper valued at $5,500,000 was seized while on the way

from the United States to neutral nations. On December 26, 1914, the

United States protested against the number of vessels that were

stopped, taken into British ports and held, sometimes, for weeks; and

in reply England pointed out the large increase in the amount of

copper and other materials sent to countries near Germany, and

declared that the presumption was strong that these stores were being

forwarded to the enemy.

With her navy driven from the seas, Germany began to feel the effects

of the blockade, and accordingly turned to the submarine as the hope

for victory. On February 4, 1915, Germany declared the English channel

and the waters around Great Britain a war zone, in which enemy

merchant vessels would be destroyed "even if it may not be possible

always to save their crews and passengers." Great Britain replied on

March 11 by an order that merchant vessels going into Germany or out

of her ports, as well as merchant vessels bound for neutral countries

and carrying goods bound for the enemy, must stop at a British or

allied port. At these points the cargoes were looked over and any war

materials or goods which were regarded as "contraband" were seized.

Even though the owners were eventually reimbursed for the cargoes

taken, the delay and the interference with trade were burdensome, and

the United States accordingly protested that England was establishing

an illegal blockade and that the United States would champion the

rights of neutrals. Some slight retaliatory legislation aimed at the

Allies was passed by Congress, but for the most part interest in this

controversy died in the face of the growing irritation with Germany.

The German declaration of February 4, 1915, in regard to submarine

warfare caused an energetic protest by the United States on the ground

that an attack on a vessel made without any determination of its

belligerent character and the contraband character of its cargo would

be unprecedented in naval warfare. The American note declared Germany

would be held to a "strict accountability" for any injury to American

lives and property. Nevertheless, the results of the submarine

campaign began to appear at once, and in ten weeks sixty-three

merchant ships belonging to various nations were sunk, with a loss of

250 lives. On May 7 the United States was astounded to hear that the

passenger ship _Lusitania_ had been torpedoed, and 1,153 persons

drowned, including 114 Americans. The allied and neutral nations were

profoundly stirred, and from that moment there grew an increasing

demand in the United States for war with Germany. The President called

for a disavowal of the acts by which the _Lusitania _and other vessels

had been sunk, all possible reparation, and steps to prevent the

recurrence of such deeds.

Within a few days of the _Lusitania _catastrophe and before the

protest of our government was made public, President Wilson spoke in

Philadelphia, and in the course of his remarks said, "There is such a

thing as a man being too proud to fight." The address had no relation

to the international situation, and moreover the objectionable phrase

carried an unexpected and different meaning when separated from its

context and linked to the _Lusitania_ affair. The words were seized

upon by the President's critics, however, as an indication of the

policy of the government in the crisis and were severely condemned. On

the other hand the formal protest was received with marked

satisfaction. It was understood to be the work of Wilson himself, who

practically took over the conduct of the more important foreign

affairs. When the German government replied without meeting the

demands of the President, he framed a second note which brought the

possibility of war so near that Secretary Bryan resigned rather than

sign it.[6] A second reply merely prolonged the controversy and Wilson

thereupon renewed his demands and declared that a repetition of

submarine attacks would be regarded as "deliberately unfriendly." The

statement brought the nation appreciably nearer war, but if the

comments of the newspaper press may be relied upon as an index of

public opinion, the President had again expressed the feelings of the

people. In the meanwhile German submarine warfare was modified in the

direction desired by the United States. Instead of sinking merchant

vessels on sight and without warning, the commanders of submarines

stopped them, visited and searched them, and gave the passengers and

crews opportunity to escape. On August 19, 1915, the _Arabic _was sunk

without warning, but the German government in conformity with its new

policy disavowed the act, apologized and agreed to pay an indemnity

for American lives lost. The negotiations concerning the _Lusitania_

continued to drag on, but otherwise relations between Germany and the

United States had reached the point where peace could be maintained if

no further accident or provocation intervened.

Despite the general approval of the President's firm stand against

Germany, there was an inclination in some quarters to do everything

possible to avoid a conflict, even if the effort necessitated the

relinquishment of rights that had hitherto been well recognized. In

February, 1916, Representative McLemore introduced a resolution

requesting the President to warn American citizens to refrain from

traveling on armed belligerent vessels, whether merchantmen or

otherwise and to state that if they persisted they would do so at

their own peril. The House, according to the Speaker, was prepared to

pass the resolution. The positions taken on this subject by the

administration had not been entirely consistent, but the President was

now holding that Americans had the right under international law to

travel on such vessels and that the government could not honorably

refuse to uphold them in exercising their right. "Once accept a single

abatement of right," he asserted, "and many other humiliations would

certainly follow, and the whole fine fabric of international law might

crumble under our hands piece by piece." Moreover he felt that the

conduct of international relations lay in the hands of the executive

and that divided counsels would embarrass him in dealing with Germany.

He therefore asked the House to discuss the McLemore resolution at

once and come to a vote. Under this pressure the House gave way and

tabled the resolution, ninety-three Republicans joining with 182

Democrats against thirty-three Democrats and 102 Republicans.

On March 24 the French channel steamer _Sussex_ was sunk, with the

loss of several Americans, and the submarine issue was thus brought

forward again. The President accordingly appeared before Congress and

reviewed the entire controversy. "Again and again," he reminded his

hearers, "the Imperial German Government has given this Government its

solemn assurances that at least passenger ships would not be thus

dealt with, and yet it has again and again permitted its undersea

commanders to disregard those assurances with entire impunity." He

asserted that America had been very patient, while the toll of lives

had mounted into the hundreds, and informed Congress that he was

presenting a warning that "unless the Imperial German Government

should now immediately declare and effect an abandonment of its

present methods of warfare against passenger and freight carrying

vessels this Government can have no choice but to sever diplomatic

relations with the Government of the German Empire altogether." The

_Lusitania _notes, the _Sussex_ address and other speeches made by the

President wore read all over the United States and, indeed, throughout

a great part of the world. He was attempting the novel and daring

experiment of framing a foreign policy in public view, and was thus

becoming the recognized spokesman of the neutral world.

Our international relations were in a disturbed and critical condition

when the presidential campaign of 1916 came on. The Republicans and

the Progressives planned to meet in Chicago on June 7 for the

nomination of candidates, in the hope that the two parties might unite

upon a single nominee and platform, and thus defeat Wilson who was

sure to be the Democratic candidate. At first, however, the two wings

of the Republican party were in complete disagreement. As far as

principles went they had not thoroughly recovered from the schism of

1912. For their candidate the Progressives looked only to Roosevelt,

whom the Republicans would not have. Roosevelt himself refused to

enter any fight for a nomination and announced, "I will go further and

say that it would be a mistake to nominate me unless the country has

in its mood something of the heroic." After conferences between

Republican and Progressive leaders which failed to bring about

unanimity, the Republican convention nominated Justice Charles E.

Hughes of the Supreme Court, and the Progressives chose Roosevelt.

Hughes was a reformer by nature, recognized as a man of high

principles, courageous, able and remembered as a vigorous and popular

governor of New York.

The Republican platform called for neutrality in the European war;

peace and order in Mexico, preparedness for national defence, a

protective tariff and women's suffrage. It also advocated some of the

economic legislation favored by the-Progressives in 1912. The

Progressive platform laid most emphasis on preparation for military

defence-a navy of at least second rank, a regular army of 250,000 and

a system for training a citizen soldiery. It also urged labor

legislation, a protective tariff and national regulation of industry

and transportation. The Republican platform severely denounced the

administration, but the Progressives stated merely their own

principles.

In the course of his actions after the nomination, however, Roosevelt

indicated his belief that the public welfare demanded the defeat of

the Democrats. He declared that he did not know Hughes's opinions on

the vital questions of the day and suggested that his "conditional

refusal" be put into the hands of the National Progressive Committee

and that a statement of the Republican candidate's principles be

awaited. If these principles turned out to be satisfactory then

Roosevelt would not run; otherwise a conference could be held to

determine future action. Subsequently Roosevelt issued a declaration

expressing his satisfaction with Hughes, condemning Wilson and urging

all Progressives to join in defeating the Democrats. Such an action

would, of course, spell the doom of the Progressives as a political

organization, but he declared that the people were not prepared to

accept a new party and that the nomination of a third party candidate

would merely divide the Republicans and ensure a Democratic victory.

The action of Roosevelt commended itself to a majority of the National

Committee, but a minority were displeased and supported Wilson.

The Democrats met at St. Louis on June 14 and renominated President

Wilson in a convention marked by harmony and enthusiasm. For the first

time in many years the party could point to a record of actual

achievement and it challenged "comparisons of our record, our keeping

of pledges, and our constructive legislation, with those of any party

at any time." After recalling the chief measures passed during the

administration, the party placed itself on record as favoring labor

legislation, women's suffrage, the protection of citizens at home and

abroad, a larger army and navy and a reserve of trained citizen

soldiers.[7]

The campaign turned upon the question whether the country approved

Wilson's foreign policy, rather than upon the record of the Democratic

party and its platform of principles, and in such a contest each side

had definite advantages. As the candidate of the party which had been

in power most of the time for half a century, Hughes had the support

of the two living ex-presidents and the backing of a compact

organization with plenty of money. He had been out of the turmoil of

politics for six years as a member of the Supreme Court and hence had

not made enemies. His party was strong in the most populous portions

of the country and in the East where dissatisfaction with the

President's foreign policy was strongest. In particular the unhappy

Mexican difficulty, which has already been mentioned, had not been

settled, and it was an easy matter for Hughes to point out real or

alleged inconsistencies and mistakes in his opponent's acts. Wilson

had been elected four years before by a minority vote and had served

through a term of years that had brought forward an unusual number of

perplexing questions on which sincere men disagreed, and had,

therefore, aroused a host of enemies. On the other hand, he had the

advantage of being in power, and his supporters could urge the danger

of "swapping horses while crossing a stream." He had a foreign policy

which the people knew about, experience in the Presidency and a record

for leadership in constructive accomplishment.[8]

The particular characteristics of the campaign were mainly the results

of the activities of Hughes, Roosevelt and Wilson. In his speech

accepting the nomination Hughes attacked the record of the

administration in regard to the civil service, charged the President

with interfering in Mexican affairs without protecting American

rights, and asserted that if the government had shown Germany that it

meant what it said by "strict accountability" the Lusitania would not

have been sunk. He also announced that he favored a constitutional

amendment providing for women's suffrage. Later he made extended

stumping tours in which he reiterated his attacks on the

administration, but he disappointed his friends by failing to reveal a

constructive program. Roosevelt, meanwhile, assisted the Republican

candidate by a series of speeches, one of the earliest of which was

that of August 31, in Maine. That state held its local elections on

September 11 and it was deemed essential by both parties to make every

effort to carry it so as to have a good effect on party prospects

elsewhere. Roosevelt's speech typified his criticisms of the

administration. He declared that Wilson had ostensibly kept peace with

Mexico but had really waged war there; he asserted that the President

had shown a lack of firmness in dealing with Mexico and had kissed the

hand that slapped him in the face although it was red with the blood

of American women and children; he compared American neutrality in the

European War with the neutrality of Pontius Pilate and believed that

if the administration had been firm in its dealings with Germany there

would have been no invasion of Belgium, no sinking of vessels and no

massacres of women and children.

Wilson followed the example of McKinley in 1896 and conducted his

campaign chiefly through speeches delivered from the porch of "Shadow

Lawn," his summer residence in New Jersey. In this way he emphasized

the legislative record of the Democrats, defended his foreign policy

and attacked the Republicans as a party, although not referring to

individuals. An important part of his strategy was an attempt to

attract the Progressives to his support. He met his opponent's

vigorous complaints in regard to his attitude toward Mexico and the

European War by pressing the question as to the direction in which the

Republicans would change it. As Hughes was apparently unwilling to

urge immediate war on Germany, he could only retort that a firm

attitude in the beginning would have prevented trouble, and there the

matter rested throughout the campaign. Supporters of Wilson also

defended his foreign policy, summing up their contentions in the

phrase, "He kept us out of war."

Foreign policy as a political issue was pressed temporarily into the

background by the sudden demand of the railroad brotherhoods for

shorter hours and mote pay, threatening a nation-wide strike if their

plea was unheeded. Neither party wished to risk the labor vote by

opposing the unions, and the public did not desire a strike, much as

it deprecated the attitude of the labor leaders in threatening trouble

at this juncture. The President took the lead in pressing a program of

railroad legislation, part of which was a law granting the men what

they desired. This was immediately passed, although the remaining

recommendations were laid aside. In the House the Republicans joined

with the Democrats in putting the law through, although nearly thirty

per cent. of the members refrained from voting at all, but in the

Senate party lines were more strictly drawn. In many quarters the

President was vigorously condemned on the ground that he had

"surrendered" to a threat. Hughes joined in the dissent, but somewhat

dulled its effect by giving no evidence of opposition until the law

was passed and by stating that he would not attempt to repeal it if

elected. During the closing days of the campaign Hughes issued a

statement declaring that he looked upon the presidency as an executive

office and stated that if chosen he would consider himself the

administrative and executive head only, and not a political leader

commissioned with the responsibility of determining policies. At the

close of the campaign, also, the benefits of a protective tariff were

urged as a reason for electing Hughes.

[Illustration:

Election of 1916, by Counties]

The result of the balloting on November 7 was in doubt for several

days because the outcome hinged on the votes of California and

Minnesota, either of which would turn the scale. In the end Wilson was

found to have received 9,128,837 votes and Hughes, 8,536,380. The vote

in the electoral college was 277 to 254. The outcome was remarkable in

several respects. Each candidate received a larger popular vote than

had ever before been cast; Wilson won without New York or any of the

other large eastern states, finding his support in the South and the

Far West; each side was able to get satisfaction from the result, the

Republicans because their party schism was sufficiently healed to

enable them to divide the House of Representatives evenly with their

opponents, and the Democrats because their candidate was successful in

states which elected Republican senators and governors by large

majorities.

BIBLIOGRAPHICAL NOTE

In the nature of the case, any bibliography which concerns the events

of so recent and important a period is of temporary value only. Ogg

presents an excellent one, but many important volumes have been

printed since 1917, his date of publication.

A reliable account of the chief events is contained in the _American

Year Book_. The numerous biographies of President Wilson are written

under the difficult conditions that surround the discussion of recent

events. Available ones are: E.C. Brooks, _Woodrow Wilson as President_

(1916), eulogistic, but contains extracts from speeches; W.B. Hale,

_Woodrow Wilson, The Story of His Life_ (1912); H.J. Ford, _Woodrow

Wilson_ (1916); A.M. Low, _Woodrow Wilson, an Interpretation_ (1918),

a friendly and substantial analysis by an English newspaper

correspondent; W.B. Dodd, _Woodrow Wilson and His Work_ (1920),

sympathetic, written in the spirit of the investigator, and the best

life up to the time of its publication. Better than any biography is a

careful study of Wilson's addresses and speeches, editions of which

have been prepared by A.B. Hart, J.B. Scott, A. Shaw and others.

Periodical literature concerning the legislative program of the first

Wilson administration is especially abundant. On the tariff, in

addition to Taussig, consult: _Quarterly Journal of Economics_ (1913),

"The Tariff Act of 1913"; _Journal of Political Economy_ (1914), "The

Tariff of 1913." On the federal reserve system, _Political Science

Quarterly_ (1914), "Federal Reserve System"; _Quarterly Journal of

Economics_ (1914), "Federal Reserve Act of 1913"; _American Economic

Review_ (1914), "Federal Reserve Act"; _Journal of Political Economy_

(1914), "Banking and Currency Act of 1913"; H.P. Willis, _The Federal

Reserve_ (1915); E.W. Kemmerer, _The A B C of the Federal Reserve

System_ (1918). On the anti-trust acts, _Political Science Quarterly_

(1915), "New Anti-Trust Acts"; _Quarterly Journal of Economics_

(1914), "Trust Legislation of 1914"; _American Economic Review_

(1914), "Trade Commission Act." For the early stages of the European

conflict see the references under Chapter XXV.

The best accounts of the election of 1916 are in the _American Year

Book_, and in Ogg. Other readable accounts are: _Nineteenth Century_

(Dec., 1916), "The Re-Election of President Wilson"; W.E. Dodd,

_Woodrow Wilson_ (1920).

* * * * *

[1] The cabinet, 1913-1920, was as follows: Secretary of State, W.J.

Bryan (to 1915), R. Lansing (to 1920), B. Colby; Secretary of the

Treasury, W.G. McAdoo, C. Glass, D.F. Houston; Secretary of War, L.M.

Garrison, N.D. Baker; Attorney-General, J.C. McReynolds, T.W. Gregory,

A.M. Palmer; Postmaster-General, A.S. Burleson; Secretary of the Navy,

J. Daniels; Secretary of the Interior, F.K. Lane, J.B. Payne;

Secretary of Commerce, W.C. Redfield, J.W. Alexander; Secretary of

Labor, W.B. Wilson.

[2] On Apr. 23, 1920, the amount of federal reserve notes outstanding

was $3,068,307,000.

[3] On Apr. 23, 1920, the reserves deposited by member banks reached a

total of $2,083,568,000.

[4] The Commission superseded the Bureau of Corporations.

[5] The appointment of Louis D. Brandeis to the Supreme Court brought

to that body a well-known proponent of the newer types of social and

economic theory. At first the opposition to confirming his nomination

in the Senate, based upon certain facts in his career and allegations

concerning them, was uncommonly pronounced. Dissent diminished,

however, in the face of investigation, and the nomination was

confirmed by a large majority on June 1, 1916.

[6] Bryan remained in sympathy with the administration in other

respects, and aided in the campaign of 1916.

[7] Despite Roosevelt's refusal to run, the Progressive

Vice-Presidential candidate continued the campaign. The Socialist

Labor party, the Socialist party and the Prohibitionists also

presented candidates.

[8] The Republican campaign fund was $2,445,421 contributed by 34,205

persons; the Democratic fund, $1,808,348 given by 170,000 persons.

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