It had become unmistakably plain that only under Government administration can the entire equipment of the several systems of transportation be fully and unreservedly thrown into a common service without injurious discrimination against particular properties; only under Government administration can absolutely unrestricted and unembarrassed common use be made of all tracks, terminal facilities and equipment of every kind. Only under that authority can new terminals be constructed and developed without regard to the requirements or limitations of particular roads. But under Government administration all these things will be possible—not instantly, but as fast as practical difficulties, which cannot be merely conjured away, give way before the new management.

AS LITTLE DISTURBANCE AS POSSIBLE

The common administration will be carried out with as little disturbance of the present operating organizations and personnel of the railways as possible. Nothing will be altered or disturbed which is not necessary to disturb. We are serving the public interest and safeguarding the public safety, but we are also regardful of the interest of those by whom these great properties are owned and glad to avail ourselves of the experience and trained ability of those who have been managing them. It is necessary that the transportation of troops and of war materials, of food and of fuel, and of everything that is necessary for the full mobilization of the energies and resources of the country, should be first considered; but it is clearly in the public interest also that the ordinary activities and the normal industrial and commercial life of the country should be interfered with and dislocated as little as possible, and the public may rest assured that the interest and convenience of the private shipper will be carefully served and safeguarded as it is possible to serve and safeguard it in the present extraordinary circumstances.

COMPENSATION SHOULD BE GUARANTEED

While the present authority of the Executive suffices for all purposes of administration, and while, of course, all private interests must for the present give way to the public necessity, it is, I am sure you will agree with me, right and necessary that the owners and creditors of the railways, the holders of their stocks and bonds, should receive from the Government an unqualified guarantee that their properties will be maintained throughout the period of Federal control in as good repair and as complete equipment as at present, and that the several roads will receive, under Federal management, such compensation as is equitable and just alike to their owners and to the general public. I would suggest the average net railway operating income of the three years ending June 30, 1917. I earnestly recommend that these guarantees be given by appropriate legislation, and given as promptly as circumstances permit.

I need not point out the essential justice of such guarantees and their great influence and significance as elements in the present financial and industrial situation of the country. Indeed, one of the strong arguments for assuming control of the railroads at this time is the financial argument. It is necessary that the values of railway securities should be justly and fairly protected, and that the largest financial operations every year necessary in connection with the maintenance, operation and development of the roads should, during the period of the war, be wisely related to the financial operations of the Government.

Our first duty is, of course, to conserve the common interest and the common safety, and to make certain that nothing stands in the way of the successful prosecution of the great war for liberty and justice; but it is an obligation of public conscience and of public honor that the private interests we disturb should be kept safe from unjust injury, and it is of the utmost consequence to the Government itself that all great financial operations should be stabilized and co-ordinated with the financial operations of the Government. No borrowing should run athwart the borrowings of the Federal Treasury, and no fundamental industrial values should anywhere be unnecessarily impaired. In the hands of many thousands of small investors in the country, as well as in national banks, in insurance companies, in savings banks, in trust companies, in financial agencies of every kind, railway securities—the sum total of which runs up to some ten or eleven thousand millions, constitute a vital part of the structure of credit, and the unquestioned solidity of that structure must be maintained.

SELECTION OF MCADOO AS DIRECTOR

The Secretary of War and I easily agreed that, in view of the many complex interests which must be safeguarded and harmonized, as well as because of his exceptional experience and ability in this new field of governmental action, the Hon. William G. McAdoo was the right man to assume direct administrative control of this new executive task. At our request, he consented to assume the authority and duties of organizer and director-general of the new railway administration. He has assumed those duties, and his work is in active progress.

It is probably too much to expect that, even under the unified railway administration which will now be possible, sufficient economies can be effected in the operation of the railways to make it possible to add to their equipment and extend their operative facilities as much as the present extraordinary demands upon their use will render desirable, without resorting to the national Treasury for the funds. If it is not possible, it will, of course, be necessary to resort to the Congress for grants of money for that purpose. The Secretary of the Treasury will advise with your committees with regard to this very practical aspect of the matter. For the present, I suggest only the guarantees I have indicated and such appropriations as are necessary at the outset of this task.

I take the liberty of expressing the hope that the Congress may grant these promptly and ungrudgingly. We are dealing with great matters, and will, I am sure, deal with them greatly.



XXI

THE TERMS OF PEACE

(January 8, 1918)

In an address to both Houses of Congress, assembled in joint session, President Wilson enunciated the war and peace program of the United States in fourteen definite proposals. The President spoke as follows:

* * * * *

Gentlemen of the Congress,—Once more, as repeatedly before, the spokesmen of the Central Empires have indicated their desires to discuss the objects of the war and the possible basis of a general peace. Parleys have been in progress at Brest-Litovsk between Russian representatives and representatives of the Central Powers to which the attention of all the belligerents has been invited for the purpose of ascertaining whether it may be possible to extend these parleys into a general conference with regard to terms of peace and settlement.

The Russian representatives presented not only a perfectly definite statement of the principles upon which they would be willing to conclude peace, but also an equally definite program of the concrete application of those principles. The representatives of the Central Powers, on their part, presented an outline of settlement which, if much less definite, seemed susceptible of liberal interpretation until their specific program of practical terms was added. That program proposed no concessions at all, either to the sovereignty of Russia or to the preferences of the population with whose fortunes it dealt, but meant, in a word, that the Central Empires were to keep every foot of territory their armed forces had occupied—every province, every city, every point of vantage—as a permanent addition to their territories and their power. It is a reasonable conjecture that the general principles of settlement which they at first suggested originated with the more liberal statesmen of Germany and Austria, the men who have begun to feel the force of their own people's thought and purpose, while the concrete terms of actual settlement came from the military leaders who have no thought but to keep what they have got. The negotiations have been broken off. The Russian representatives were sincere and in earnest. They cannot entertain such proposals of conquest and domination.

SIGNIFICANCE IN PARLEYS

The whole incident is full of significance. It is also full of perplexity. With whom are the Russian representatives dealing? For whom are the representatives of the Central Empires speaking? Are they speaking for the majorities of their respective parliaments, or for the minority parties—that military and imperialistic minority which has so far dominated their whole policy and controlled the affairs of Turkey and the Balkan states, which have felt obliged to become their associates in this war? The Russian representatives have insisted, very justly, very wisely, and in the true spirit of modern democracy, that the conferences they have been holding with the Teutonic and Turkish statesmen should be held within open, not closed, doors, and all the world has been audience, as was desired.

To whom have we been listening, then? To those who speak the spirit and intention of the resolution of the German Reichstag of the 9th of July last, the spirit and intention of the Liberal leaders and parties of Germany, or to those who resist and defy that spirit and intention and insist upon conquest and subjugation? Or are we listening, in fact, to both, unreconciled and in open and hopeless contradiction? These are very serious and pregnant questions. Upon the answer to them depends the peace of the world.

But, whatever the results of the parleys at Brest-Litovsk, whatever the confusions of counsel and of purpose in the utterances of the spokesmen of the Central Empires, they have again attempted to acquaint the world with their objects in the war and have again challenged their adversaries to say what their objects are and what sort of settlement they would deem just and satisfactory. There is no good reason why that challenge should not be responded to and responded to with the utmost candor. We did not wait for it. Not once, but again and again, we have laid our whole thought and purpose before the world, not in general terms only, but each time with sufficient definition to make it clear what sort of definitive terms of settlement must necessarily spring out of them.

LLOYD GEORGE'S AIMS APPROVED

Within the last week Mr. Lloyd George has spoken with admirable candor and in admirable spirit for the people and Government of Great Britain. There is no confusion of counsel among the adversaries of the Central Powers, no uncertainty of principle, no vagueness of detail. The only secrecy of counsel, the only lack of fearless frankness, the only failure to make definite statement of the objects of the war lies with Germany and her allies. The issues of life and death hang upon these definitions. No statesman who has the least conception of his responsibility ought for a moment to permit himself to continue this tragical and appalling outpouring of blood and treasure unless he is sure beyond a peradventure that the objects of the vital sacrifice are part and parcel of the very life of society, and that the people for whom he speaks think them right and imperative, as he does.

There is, moreover, a voice calling for these definitions of principle and of purpose which is, it seems to me, more thrilling and more compelling than any of the many moving voices with which the troubled air of the world is filled. It is the voice of the Russian people. They are prostrate and all but helpless, it would seem, before the grim power of Germany, which has hitherto known no relenting and no pity. Their power apparently is shattered. And yet their soul is not subservient. They will not yield either in principle or in action. Their conception of what is right, of what it is humane and honorable for them to accept, has been stated with a frankness, a largeness of view, a generosity of spirit and a universal human sympathy which must challenge the admiration of every friend of mankind; and they have refused to compound their ideals or desert others that they themselves may be safe.

WOULD LIKE TO AID RUSSIA

They call to us to say what it is that we desire—in what, if in anything, our purpose and our spirit differ from theirs; and I believe that the people of the United States would wish me to respond with utter simplicity and frankness. Whether their present leaders believe it or not, it is our heartfelt desire and hope that some way may be opened whereby we may be privileged to assist the people of Russia to attain their utmost hope of liberty and ordered peace.

It will be our wish and purpose that the processes of peace, when they are begun, shall be absolutely open, and that they shall involve and permit henceforth no secret understandings of any kind. The day of conquest and aggrandizement is gone by; so is also the day of secret covenants entered into in the interest of particular governments and likely, at some unlooked-for moment, to upset the peace of the world. It is this happy fact, now clear to the view of every public man whose thoughts do not still linger in an age that is dead and gone, which makes it possible for every nation whose purposes are consistent with justice and the peace of the world to avow now, or at any other time, the objects it has in view.

We entered this war because violations of right had occurred which touched us to the quick and made the life of our own people impossible unless they were corrected and the world secured once for all against their recurrence. What we demand in this war, therefore, is nothing peculiar to ourselves. It is that the world be made fit and safe to live in; and particularly that it be made safe for every peace-loving nation which, like our own, wishes to live its own life, determine its own institutions, be assured of justice and fair dealing by the other peoples of the world as against force and selfish aggression. All the peoples of the world are in effect partners in this interest, and for our own part we see very clearly that unless justice be done to others it will not be done to us.

THE DEFINITE PROGRAM

The program of the world's peace, therefore, is our program, and that program, the only possible program, as we see it, is this:

I. Open covenants of peace, openly arrived at, after which there shall be no private international understandings of any kind, but diplomacy shall proceed always frankly and in the public view.

II. Absolute freedom of navigation upon the seas, outside territorial waters, alike in peace and in war, except as the seas may be closed in whole or in part by international action for the enforcement of international covenants.

III. The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.

IV. Adequate guarantees given and taken that national armaments will be reduced to the lowest point consistent with domestic safety.

V. A free, open-minded and absolutely impartial adjustment of all colonial claims, based upon a strict observance of the principle that in determining all such questions of sovereignty the interests of the populations concerned must have equal weight with the equitable claims of the Government whose title is to be determined.

VI. The evacuation of all Russian territory and such a settlement of all questions affecting Russia as will secure the best and freest co-operation of the other nations of the world in obtaining for her an unhampered and unembarrassed opportunity for the independent determination of her own political development and national policy and assure her of a sincere welcome into the society of free nations under institutions of her own choosing; and, more than a welcome, assistance also of every kind that she may need and may herself desire. The treatment accorded Russia by her sister nations will be the acid test of their good will, of their comprehension of her needs as distinguished from their own interests and of their intelligent and unselfish sympathy.

BELGIUM MUST BE RESTORED

VII. Belgium, the whole world will agree, must be evacuated and restored, without any attempt to limit the sovereignty which she enjoys in common with all other free nations. No other single act will serve as this will serve to restore confidence among the nations in the laws which they have themselves set and determined for the government of their relations with one another. Without this healing act the whole structure and validity of international law is forever impaired.

VIII. All French territory should be freed and the invaded portions restored, and the wrong done to France by Prussia in 1871 in the matter of Alsace-Lorraine, which has unsettled the peace of the world for nearly fifty years, should be righted, in order that peace may once more be made secure in the interest of all.

IX. A readjustment of the frontiers of Italy should be effected along clearly recognizable lines of nationality.

X. The peoples of Austria-Hungary, whose place among the nations we wish to see safeguarded and assured, should be accorded the freest opportunity of autonomous development.

XI. Rumania, Serbia, and Montenegro should be evacuated; occupied territories restored; Serbia accorded free and secure access to the sea; and the relations of the several Balkan states to one another determined by friendly counsel along historically established lines of allegiance and nationality; and international guarantees of the political and economic independence and territorial integrity of the several Balkan states should be entered into.

XII. The Turkish portions of the present Ottoman Empire should be assured a secure sovereignty, but the other nationalities which are now under Turkish rule should be assured an undoubted security of life and an absolutely unmolested opportunity of autonomous development, and the Dardanelles should be permanently opened as a free passage to the ships and commerce of all nations under international guarantees.

INDEPENDENCE FOR POLAND

XIII. An independent Polish state should be erected which should include the territories inhabited by indisputably Polish populations, which should be assured a free and secure access to the sea, and whose political and economic independence and territorial integrity should be guaranteed by international covenant.

XIV. A general association of nations must be formed under specific covenants for the purpose of affording mutual guarantees of political independence and territorial integrity to great and small states alike.

In regard to these essential rectifications of wrong and assertions of right, we feel ourselves to be intimate partners of all the Governments and peoples associated together against the imperialists. We cannot be separated in interest or divided in purpose. We stand together until the end.

For such arrangements and covenants we are willing to fight, and to continue to fight, until they are achieved; but only because we wish the right to prevail and desire a just and stable peace, such as can be secured only by removing the chief provocations to war, which this program does remove. We have no jealousy of German greatness, and there is nothing in this program that impairs it. We grudge her no achievement or distinction of learning or of pacific enterprise, such as have made her record very bright and very enviable. We do not wish to injure her or to block in any way her legitimate influence or power. We do not wish to fight her either with arms or with hostile arrangements of trade, if she is willing to associate herself with us and the other peace-loving nations of the world in covenants of justice and law and fair dealing. We wish her only to accept a place of equality among the peoples of the world—the new world in which we now live—instead of a place of mastery.

GERMANY'S SPOKESMEN AN ISSUE

Neither do we presume to suggest to her any alteration or modification of her institutions. But it is necessary, we must frankly say, and necessary as a preliminary to any intelligent dealings with her on our part, that we should know whom her spokesmen speak for when they speak to us, whether for the Reichstag majority or for the military party and the men whose creed is imperial domination.

We have spoken now surely in terms too concrete to admit of any further doubt or question. An evident principle runs through the whole program I have outlined. It is the principle of justice to all peoples and nationalities and their right to live on equal terms of liberty and safety with one another, whether they be strong or weak. Unless this principle be made its foundation, no part of the structure of international justice can stand. The people of the United States could act upon no other principle, and to the vindication of this principle they are ready to devote their lives, their honor and everything that they possess. The moral climax of this, the culminating and final war for human liberty, has come, and they are ready to put their own strength, their own highest purpose, their own integrity and devotion to the test.



APPENDIX

STATE DEPARTMENT'S REVISED LIST OF NATIONS AT WAR WHICH HAVE BROKEN RELATIONS

DECLARATIONS OF WAR

The country declaring war is named first.

Austria—Belgium, Aug. 28, 1914. Austria—Japan, Aug. 27, 1914. Austria—Montenegro, Aug. 9, 1914. Austria—Russia, Aug. 6, 1914. Austria—Serbia, July 28, 1914. Brazil—Germany, Oct. 26, 1917. Bulgaria—Serbia, Oct. 14, 1915. China—Austria, Aug. 14, 1917. China—Germany, Aug. 14, 1917. Cuba—Germany, April 7, 1917. France—Austria, Aug. 13, 1914. France—Bulgaria, Oct. 16, 1915. France—Germany, Aug. 3, 1914. France—Turkey, Nov. 5, 1914. Germany—Belgium, Aug. 4, 1914. Germany—France, Aug. 3, 1914. Germany—Portugal, March 9, 1916. Germany—Rumania, Sept. 14, 1916. Germany—Russia, Aug. 1, 1914. Great Britain—Austria, Aug. 13, 1914. Great Britain—Bulgaria, Oct. 15, 1915. Great Britain—Germany, Aug. 4, 1914. Great Britain—Turkey, Nov. 5, 1914. Greece—Bulgaria, Nov. 28, 1916. (Provisional Government.) Greece—Bulgaria, July 2, 1917. (Government of Alexander.) Greece—Germany, Nov. 28, 1916. (Provisional Government.) Greece—Germany, July 2, 1917. (Government of Alexander.) Italy—Austria, May 24, 1915. Italy—Bulgaria, Oct. 19, 1915. Italy—Germany, Aug. 28, 1916. Italy—Turkey, Aug. 21, 1915. Japan—Germany, Aug. 28, 1914. Liberia—Germany, Aug. 4, 1917. Montenegro—Austria, Aug. 8, 1914. Montenegro—Germany, Aug. 9, 1914. Panama—Germany, April 7, 1917. Panama—Austria, Dec. 10, 1917. Portugal—Germany, Nov. 23, 1914. (Resolutions passed authorizing military intervention as ally of England.) Portugal—Germany, May 19, 1915. (Military aid granted.) Rumania—Austria, Aug. 27, 1916. (Allies of Austria also consider it a declaration.) Russia—Bulgaria, Oct. 19, 1915. Russia—Turkey, Nov. 3, 1914. San Marino—Austria, May 24, 1915. Serbia—Bulgaria, Oct. 16, 1915. Serbia—Germany, Aug. 6, 1914. Serbia—Turkey, Dec. 2, 1914. Siam—Austria, July 22, 1917. Siam—Germany, July 22, 1917. Turkey—Allies, Nov. 23, 1914. Turkey—Rumania, Aug. 29, 1916. United States—Austria-Hungary, Dec. 7, 1917. United States—Germany, April 6, 1917.

SEVERANCE OF DIPLOMATIC RELATIONS

Austria—Japan, Aug. 26, 1914. Austria—Portugal, March 16, 1916. Austria—Serbia, July 26, 1914. Austria—United States, April 8, 1917. Bolivia—Germany, April 14, 1917. Brazil—Germany, April 11, 1917. China—Germany, March 14, 1917. Costa Rica—Germany, Sept. 21, 1917. Ecuador—Germany, Dec. 7, 1917. Egypt—Germany, Aug. 13, 1914. France—Austria, Aug. 10, 1914. Greece—Turkey, July 2, 1917. (Government of Alexander.) Greece—Austria, July 2, 1917. (Government of Alexander.) Guatemala—Germany, April 27, 1917. Haiti—Germany, June 17, 1917. Honduras—Germany, May 17, 1917. Nicaragua—Germany, May 18, 1917. Peru—Germany, Oct. 6, 1917. Turkey—United States, April 20, 1917. United States—Germany, Feb. 3, 1917. Uruguay—Germany, Oct. 7, 1917.

—From the Official Bulletin of the Committee on Public Information.

POPULATION OF THE NATIONS

Austria (including Hungary) 50,000,000 Belgium 7,571,387 Bolivia 2,520,538 Brazil 22,992,937 Bulgaria 4,755,000 China 413,000,000 Costa Rica 427,604 Cuba 2,406,117 Ecuador 1,500,000 Egypt 12,170,000 France 39,601,509 Germany 66,715,000 Great Britain 40,834,790 Greece 5,000,000 Guatemala 2,092,824 Haiti 2,030,000 Honduras 592,675 Italy 35,598,000 Japan 53,696,358 Liberia 2,060,000 Montenegro 520,000 Nicaragua 689,891 Panama 386,891 Peru 4,500,000 Portugal 5,857,895 Rumania 7,600,000 Russia 175,137,000 San Marino 10,655 Serbia 4,600,000 Siam 6,000,000 Turkey 21,274,000 United States 102,826,309 Uruguay 1,255,914



THE END