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 ill.u.s.trated 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 a.s.sociates 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of the Knickerbocker Trust Company, and depositors in the latter bank thereupon became frightened, and $8,000,000 were withdrawn in three hours.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of the Trust Company of America--the president of the Knickerbocker was one of its directors--and $34,000,000 were withdrawn by the now thoroughly anxious depositors, who stood in line at night in order to be ready for the next day.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 inst.i.tutions 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 inst.i.tution 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 const.i.tute 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 embarra.s.s 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 pa.s.s the task along to Wilson.

As has been seen, President Wilson seized the opportunity at once.

Senator Owen and Carter Gla.s.s, 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 a.s.sisting the Democrats in pa.s.sing the bill; on the following day the Senate pa.s.sed it, one Progressive and three Republicans voting with the majority. In many details the act as pa.s.sed 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 pa.s.sed 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 acc.u.mulated 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 pa.s.sed. 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 a.s.sistance 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 compet.i.tion; 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 Ca.n.a.l act of 1912 had exempted American coast-wise traffic through the ca.n.a.l from the payment of tolls. The law had been pa.s.sed 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 ca.n.a.l 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 circ.u.mstances, 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 cla.s.sified 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-cla.s.s 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-cla.s.s postmasters not touched by his predecessor. Some of the acts pa.s.sed 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 cla.s.ses, 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 cla.s.ses 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 a.s.sa.s.sinated 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, j.a.pan 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, a.s.serted 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 ma.s.s 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 doc.u.ments 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 Amba.s.sador, 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 pa.s.sengers." 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 pa.s.sed 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 pa.s.senger 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 repet.i.tion 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 pa.s.sengers 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 pa.s.s 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 a.s.serted, "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 embarra.s.s 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 _Suss.e.x_ 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 a.s.surances that at least pa.s.senger ships would not be thus dealt with, and yet it has again and again permitted its undersea commanders to disregard those a.s.surances with entire impunity." He a.s.serted 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 pa.s.senger 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 _Suss.e.x_ 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 pa.s.sed 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 a.s.serted 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 const.i.tutional 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, a.s.sisted 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 a.s.serted 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 ma.s.sacres 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 att.i.tude 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 att.i.tude 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 att.i.tude 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 pa.s.sed, 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 pa.s.sed 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.

[Ill.u.s.tration: 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 a.n.a.lysis 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. Gla.s.s, 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.