BIBLIOGRAPHICAL NOTE

The early history of anti-trust agitation centers about Henry D. Lloyd. His earliest article, "The Story of a Great Monopoly," is in The Atlantic Monthly (Mar., 1881); his classic account of trust abuses is Wealth against Commonwealth (1894); consult also C.A. Lloyd, Henry D. Lloyd (2 vols., 1912). Early and valuable articles in periodicals are in Political Science Quarterly, 1888, pp. 78-98; 1889, pp. 296-319; W.Z. Ripley, Trusts, Pools, and Corporations (rev. ed., 1916), is useful; B.J. Hendrick, Age of Big Business (1919), is interesting and contains a bibliography. Ida M. Tarbell, History of the Standard Oil Company (2 vols., 1904), is carefully done and a pioneer work. Other valuable accounts are: S.C.T. Dodd, Trusts (1900), by a former Standard Oil attorney; Eliot Jones, The Anthracite Coal Combination in the United States (1914); J.W. Jenks, Trust Problem (1900), contains a summary of the economies of large scale production; J.W. Jenks and W.E. Clark, The Trust Problem (4th ed., 1917), is scholarly and complete; J.D. Rockefeller, Random Reminiscences of Men and Events (1916), is a brief defence of the Standard Oil Company; W.H. Taft, Anti-Trust Act and the Supreme Court (1914), summarizes a few important decisions on the Sherman law. Edward Bellamy, Looking Backward (1888), describes an economic Utopia. Early proposed anti-trust laws, together with the Congressional debates on the subject are in Senate Documents, 57th Congress, 2nd session, vol. 14, No. 147 (Serial Number 4428). No complete historical study has yet been made of the effects of industrial development, immediately after the Civil War, on politics and the structure of American society.

* * * * *

[1] Charles M. Schwab mentions an unusual example. Under the direction of Andrew Carnegie, the wealthy steel magnate, he had a new mill erected, which seemed likely to meet all the demands which would be placed upon it. But in the process of building it Schwab had seen a single way in which it could be improved. Carnegie at once gave orders to have the mill taken down before being used at all, and rebuilt on the improved plan.

[2] It was not until 1894 that Lloyd published Wealth Against Commonwealth, but his pen had been busy constantly between 1881 and 1894.

[3] Cf. above, pp. 89-93, on Fourteenth Amendment.

[4] The authorship of the Sherman law has often been a source of controversy. Senator John Sherman, as well as other members, introduced anti-trust bills in the Senate in 1888. Senator Sherman's proposal was later referred to the Judiciary Committee, of which he was not a member. The Committee thoroughly revised it. Senator Hoar, who was on the Committee, thought he remembered having written it word for word as it was adopted. Recent investigation seems to prove that the senator's recollection was faulty and that Edmunds wrote most of it, while Hoar, Ingalls and George wrote a section each and Evarts part of a sentence. If this is the fact, it seems most nearly accurate to say that Sherman started the enterprise and that almost every member of the Judiciary committee, especially Edmunds, shared in its completion.



CHAPTER XII

DEMOCRATIC DEMORALIZATION

In view of the fact that Harrison had been successful in 1888 and that Cleveland had been the most able Democratic leader since the Civil War, it seemed natural that their parties should renominate them in 1892. Yet the men at the oars in the Republican organization were far from enthusiastic over their leader. It is probable that Harrison did not like the role of dispenser of patronage and that he indicated the fact in dealing with his party associates; at any rate, he estranged such powerful leaders as Platt, Quay and Reed by his neglect of them in disposing of appointments. The reformers were no better satisfied; much had been expected of him because his party had taken so definite a stand in 1888, and when his choice of subordinates failed to meet expectations, the scorn of the Independents found forceful vent. Among the rank and file of his party, Harrison had aroused respect but no great enthusiasm.

The friends of Blaine were still numerous and active, and they wished to see their favorite in the executive chair. Perhaps Blaine felt that there would be some impropriety in his becoming an active candidate against his chief, while remaining at his post as Secretary of State; at any rate he notified the chairman of the National Republican Committee, early in 1892, that he was not a candidate for the nomination. The demand for him, nevertheless, continued and relations between him and Harrison seem to have become strained. Senator Cullom, writing nearly twenty years afterward, related a conversation which he had had with Harrison at the time. In substance, according to the senator, the President declared that he had been doing the work of the Department of State himself for a year or more, and that Blaine had given out reports of what was being done and had taken the credit himself. Cullom's recollection seems to have been accurate, at least as far as relations between the two men were concerned, for three days before the meeting of the Republican nominating convention Blaine sent a curt note to the President resigning his office without giving any reason, and asking that his withdrawal take effect immediately. The President's reply accepting the resignation was equally cool and uninforming. If Blaine expected to take any steps to gain the nomination, the available time was far too short. That the act would be interpreted as hostile to the interests of Harrison, however, admitted of no doubt, and it therefore seems probable that Blaine had changed his mind at a late day and really hoped that the party might choose him.[1]

Despite Blaine's apparent change of purpose, it seemed necessary to renominate Harrison in order to avoid the appearance of discrediting his administration, and on the first ballot Harrison received 535 votes to Blaine's 183 and was nominated. The only approach to excitement was over the currency plank in the platform. Western delegates demanded the free coinage of silver, which the East opposed. The plank adopted declared that

The Republican party demands the use of both gold and silver as standard money, with such restrictions and under such provisions, to be determined by legislation, as will secure the maintenance of the parity of values of the two metals.

It was a meaningless compromise, but it seems to have satisfied both sides.

Cleveland, during the Harrison administration, had been an object of much interest and not a little speculation. After seeing President Harrison safely installed in office, he went to New York city where he engaged in the practice of law. He himself thought that he was retiring permanently and not a few enemies were quite willing that this should be the case. The eminent Democratic editor, Henry Watterson, remarked that Cleveland in New York was like a stone thrown into a river, "There is a 'plunk,' a splash, and then silence.". He was constantly invited, nevertheless, to address public assemblies, which provided ample opportunity for him to express his thoughts to the country. Moreover, the McKinley Act of 1890 and the political reversal which followed brought renewed attention to the tariff message of 1887 and to its author. In February, 1891, Cleveland was asked to address a meeting of New York business men which had been called by the Reform Club to express opposition to the free coinage of silver. The question of the increased use of silver as a circulating medium, as has been seen, was a controverted one; neither party was prepared to take a definite stand, and, indeed, division of opinion had taken place on sectional rather than partisan lines. While the subject was in this unsettled condition Cleveland received his invitation to the Reform Club, and was urged by some of his advisors not to endanger his chances of renomination by taking sides on the issue. The counsel had no more effect than similar advice had produced in 1887 when the tariff was in the same unsettled condition. Although unable to attend, Cleveland wrote a letter in which he characterized the experiment of free coinage as "dangerous and reckless." Whether right or wrong, he was definite; people who could not understand the intricacies of currency standards and the arguments of the experts understood exactly what Cleveland meant. Little doubt now existed but that the name of the ex-president would be a powerful one before the nominating convention, for he would have the populous East with him on the currency issue—unless David B. Hill should upset expectations.

Hill was an example of the shrewd politician. Like Platt, whom he resembled in many ways, he was absorbed in the machinery and organization of politics, rather than in issues and policies. Beginning in 1870, when he was but twenty-seven years of age, he had held public office almost continuously. In the state assembly, as Mayor of Elmira, as Lieutenant-Governor with Cleveland and later as Governor, he developed an unrivalled knowledge of New York as a political arena. In 1892 he was at the height of his power and the presidency seemed to be within his grasp. The methods which he used were typical of the man—the manipulation of the machinery of nomination.

The national Democratic nominating convention was called for June 21, but the New York state Democratic committee announced that the state convention for the choice of delegates would meet on February 22. So early a meeting, four months before the national convention, was unprecedented, and at once it became clear that a purpose lay behind the call. It was to procure the election of members to the state convention who would vote for Hill delegates to the nominating convention, before Cleveland's supporters could organize in opposition. Furthermore, it was expected that the action of New York would influence other states where sentiment for Cleveland was not strong. Hill's plan worked out as he had expected—at least in so far as the state convention was concerned—for delegates pledged to him were chosen. Cleveland's supporters, however, denounced the "snap convention" and a factional quarrel arose between the "snappers" and the "anti-snappers"; outside of New York it was so obvious that the snap convention was a mere political trick that the Hill cause was scarcely benefited by it. Delegates were chosen in other parts of the country who desired the nomination of Cleveland.

The convention met in Chicago on June 21 and proceeded at once to adopt a platform of principles. The silver plank was hardly distinguishable from that of the Republicans, except that it was enshrouded with a trifle more of ambiguity. The adoption of a tariff plank elicited considerable difference of opinion, but the final result was an extreme statement of Democratic belief. Instead of adopting the cautious position taken in 1884, the convention declared that the constitutional power of the federal government was limited to the collection of tariff duties for purposes of revenue only, and denounced the McKinley act as the "culminating atrocity of class legislation."

Although it was evident when the convention met, that the chances of Hill for the nomination were slight indeed, the battle was far from over. Hill was a "straight" party man, a fact which he reiterated again and again in his famous remark, "I am a Democrat." Cleveland was not strictly regular, a fact which Hill apparently intended to emphasize by constant reference to his own beliefs. The oratorical champion of the Hill delegation was Bourke Cockran, an able and appealing stump speaker. For two hours he urged that Cleveland could not carry the pivotal state, New York, and that it was folly to attempt to elect a man who was so handicapped. Eloquence, however, was of no avail. The first ballot showed that the Hill strength was practically confined to New York, and Cleveland was easily the party choice. For the vice-presidency Adlai E. Stevenson, a partisan of the old school, was chosen.

Among the smaller parties there appeared for the first time the "People's Party," later and better known as the "Populists." Their nominee was James B. Weaver, who had led the Greenbackers in 1880. Their platform emphasized the economic burdens under which the poorer classes were laboring and listed a series of extremely definite demands.

The campaign was a quiet one as both Cleveland and Harrison had been tried out before. So unenthusiastic were the usual political leaders that Colonel Robert G. Ingersoll declared that each party would like to beat the other without electing its own candidates. Although the financial issue was kept in the background, the tariff was fought out again somewhat as it had been in 1888. The New York Sun shed some asperity over the contest by calling the friends of Cleveland "the adorers of fat witted mediocrity," and the nominee himself as the "perpetual candidate" and the "stuffed prophet"; and then added a ray of humor by advocating the election of Cleveland. The adoption of the Australian ballot, before the election, in thirty-four states and territories constituted an important reform; thereafter it was impossible for "blocks of five" to march to the polls and deposit their ballots within the sight of the purchaser. The Homestead strike near Pittsburg, Pennsylvania, somewhat aided the Democrats. The Carnegie Steel Company, having reduced wages, precipitated a strike which was settled only through the use of the state militia. As the steel industry was highly protected by the tariff, it appeared that the wages of the laboring man were not so happily affected as Republican orators had been asserting.[2]

The result of the election was astonishing. Cleveland carried not merely the South but Connecticut, New York, New Jersey, Indiana, Illinois, Wisconsin and California, while five of Michigan's fourteen electoral votes and one of Ohio's twenty-three went to him. In the last-named state, which had never gone against the Republicans, their vote exceeded that of the Democrats by only 1,072. For the first time since Buchanan's day, both Senate and House were to be Democratic. More surprising and more significant for the future, was the strength of the People's Party. Over a million ballots, twenty-two electoral votes, two senators and eleven representatives were included among their trophies. It was an important fact, moreover, that twenty-nine out of every thirty votes cast for the People's Party were cast west of Pennsylvania and south of Maryland. Something apparently was happening, in which the East was not a sharer. The politician, particularly in the East, was quite content to dismiss the Populists as "born-tired theorists," "quacks," "a clamoring brood of political rainmakers," and "stump electricians," but the student of politics and history must appraise the movement less provincially and with more information.

It was in the nature of things that the Populist movement should come out of the West. From the days of Clay and Jackson the westerner had been characterized by his self-confidence, his assertiveness and his energy. He had possessed unlimited confidence in ordinary humanity, been less inclined to heed authority and more ready to disregard precedents and experience. He had expressed his ideals concretely, and with vigor and assurance. He had broken an empire to the plow, suffered severely from the buffetings of nature and had gradually worked out his list of grievances. One or another of his complaints had been presented before 1892 in the platforms of uninfluential third parties, but not until that year did the dissenting movement reach large proportions.

It has already been seen that the people of the West were in revolt against the management of the railroads. They saw roads going bankrupt, to be sure, but the owners were making fortunes; they knew that lawyers were being corrupted with free passes and the state legislatures manipulated by lobbyists; and they believed that rates were extortionate. The seizure and purchase of public land, sometimes contrary to the letter of the law, more often contrary to its spirit, was looked upon as an intolerable evil. Moreover, the westerner was in debt. He had borrowed from the East to buy his farm and his machinery and to make both ends meet in years when the crops failed. In 1889 it was estimated that seventy-five per cent. of the farms of Dakota were mortgaged to a total of $50,000,000. Boston and other cities had scores of agencies for the negotiation of western farm loans; Philadelphia alone was said to absorb $15,000,000 annually. The advantage to the West, if conditions were right, is too manifest to need explanation. But sometimes the over-optimistic farmer borrowed too heavily; sometimes the rates demanded of the needy westerners were usurious; often it seemed as if interest charges were like "a mammoth sponge," constantly absorbing the labor of the husbandman. The demand of the West for a greater currency supply has already been seen, for it appeared in the platforms of minor parties immediately after the Civil War. Sometimes it seemed as if nature, also, had entered a conspiracy to increase the hardships of the farmer. During the eighties a series of rainy years in the more arid parts of the plains encouraged the idea that the rain belt was moving westward, and farmers took up land beyond the line where adequate moisture could be relied upon. Then came drier years; the corn withered to dry stalks; farms were more heavily mortgaged or even abandoned; and discontent in the West grew fast.

The complaints of the westerner naturally found expression in the agricultural organizations which already existed in many parts of the country. The Grange had attacked some of the farmer's problems, but interest in it as a political agency had died out. The National Farmers' Alliance of 1880 and the National Farmers' Alliance and Industrial Union somewhat later were both preceded and followed by many smaller societies. Altogether their combined membership began to mount into the millions. When, therefore, the Alliances began to turn away from the mere discussion of agricultural grievances and toward the betterment of conditions by means of legislation, and when their principles began to be taken up by discontented labor organizations, it looked as if they might constitute a force to be reckoned with.

The remedies which the Alliances suggested for current ills were definite. Fundamentally they believed that the government, state and federal, could remedy the economic distresses of the people and that it ought to do so. At the present day such a suggestion seems commonplace enough, but in the eighties the dominant theory was individualism—each man for himself and let economic law remedy injustices—and the Alliance program seemed like dreaded "socialism." The counterpart of the demand for larger governmental activity was a call for the greater participation of the people in the operation of the machinery of legislation. This lay back of the demand for the initiative, the referendum, and the popular election of senators. Currency ills could be remedied, the farmers believed, by a national currency which should be issued by the federal government only—not by national banks. They desired the free coinage of silver and gold until the amount in circulation should reach fifty dollars per capita. Lesser recommendations were for an income tax and postal savings banks. In relation to the transportation system, they declared that "the time has come when the railroad corporations will either own the people or the people must own the railroads." In order to prevent the waste of the public land and to stop its being held for speculative purposes, they urged that none be allowed to remain in the hands of aliens and that all be taken away from the railroads and corporations which was in excess of actual needs.

The power of the new movement first became evident in 1890 and distinctly disturbed both the Republican and the Democratic leaders. Determined to right their wrongs, the farmers deserted their parties in thousands, flocked to conventions and crowded the country schoolhouses for the discussion of methods and men. Perhaps it was true, as one of their critics asserted, that they put a "gill of fact and grievance into a gallon of falsehood and lurid declamation" so as to make an "intoxicating mixture." If so, the mixture took immediate effect. Alliance governors were elected in several southern states; many state legislatures in the South and West had strong farmer delegations; and several congressmen and senators were sent to Washington. Success in 1890 made the Alliances jubilant and they looked to the possibility of a countrywide political organization and a share in the campaign of 1892. The first national convention was held in Omaha in July, 1892, at which many of the farmers' organizations together with the Knights of Labor and other groups were represented. The name "People's party" was adopted, the principles just mentioned were set forth in a platform and candidates nominated. In the ensuing election the party exhibited the surprising strength which has been seen.

It has taken more time to describe the Populist movement than its degree of success in 1892 would justify. But it deserves attention for a variety of reasons. Its reform demands were important; it was a striking indication of sectional economic interests; it gave evidence of an effective participation in politics by the small farmers, the mechanics and the less well-to-do professional people—the "middle class," in a word; it was a long step toward an expansion of the activities of the central government in the fields of economic and social legislation; and finally it emphasized the significance of the West, as a constructive force in American life. If the Populists should capture one of the other parties or be captured by it, nobody could foresee what the results would be on American political history.

The second administration of Grover Cleveland, from 1893 to 1897, was the most important period of four years for half a century after the Civil War. For twenty-five years after 1865 American politicians had been sowing the wind. Issues had rarely been met man-fashion, in direct combat; instead, they had been evaded, stated with skilful ambiguity, or beclouded with ignorance and prejudice. Politics had been concerned with the offices—the plunder of government. It could not be that the whirlwind would never be reaped.

The situation in 1893 was one that might well have shaken the stoutest heart. International difficulties were in sight that threatened unusual dangers; labor troubles of unprecedented complexity and importance were at hand; the question of the currency remained unsettled, the treasury was in a critical condition, and an industrial panic had already begun. Each of these difficulties will demand detailed discussion at a later point.[3]

To no small degree, the settlement of the political and economic issues before the country was complicated by the unmistakable drift toward sectionalism, and by the particular characteristics of the President. If the administration pressed a tariff reduction policy, it would please the South and West but bring hostility in the East. The demands of the West, so far as the Populists represented them, were for the increased use of the powers of the federal government and the application of those powers to social and economic problems; but the party in power was traditionally attached to the doctrine of restricted activity on the part of the central authority. The sectional aspects of the silver question were notorious; and only the eastern Democrats fully supported their leader in his stand on the issue.

The personal characteristics of President Cleveland have already appeared.[4] He had a burdensome consciousness of his own individual duty to conduct the business of his office with faithfulness; a courageous sense of justice which impelled him to fight valiantly for a cause that he deemed right, however unimportant or hopeless the cause might be; a reformer's contempt for hypocrisy and shams, and a blunt directness in freeing his mind about wrong of every kind. He had the faults of his virtues, likewise. Sure of himself and of the right of his position, he had the impatience of an unimaginative man with any other point of view; he was intransigent, unyielding, rarely giving way a step even to take two forward. It seems likely that his political experience had accentuated this characteristic. For years he had thrown aside the advice of his counsellors and had shown himself more nearly right than they. As Mayor of Buffalo he had used the veto and had been made Governor of the state; as Governor he had ruggedly made enemies and had become President; as President he had flown in the face of caution with his tariff message and his Reform Club letter and had three times received a larger popular vote than his competitor. And each time his plurality was greater than it had been before. If he tended to become over-sure of himself, it should hardly occasion surprise. Furthermore he looked upon the duties and possibilities of the presidential office as fixed and stationary, rather than elastic and developing. He was a strict constructionist and a rigid believer in the checks and balances of the Constitution. Although constantly aware of the needs and rights of the common people, such as composed the Populist movement, his adherence to strict construction was so complete that he was unable to advocate much of the federal legislation desired by them. It was only with hesitation and constitutional doubts, for example, that he had been able to sign even the Interstate Commerce Act. In brief, then, the western demand for social and economic legislation on a novel and unusual scale was to take its chances with an honest, dogged believer in a restricted federal authority.

The experience of the administration with the patronage question illustrates how much progress had been made in the direction of reform since the beginning of Cleveland's first term in 1885. In the earlier year it had required a bitter contest to make even the slightest advance; in his second term he retained Roosevelt, a Republican reformer, on the Commission and gradually extended the rules so as to cover the government printing office, the internal revenue service, the pension agencies, and messengers and other minor officials in the departments in Washington. Finally on May 6, 1896, he approved an order revising the rules, simplifying them and extending them to great numbers of places not hitherto included, "the most valuable addition ever made at one stroke to the competitive service." The net result was that the number of positions in the classified service was more than doubled between 1893 and 1897, making a total of 81,889 in a service of somewhat over 200,000.[5] By the latter year the argument against reform had largely been silenced. The dismal prediction of opponents who had feared the establishment of an office-holding aristocracy had turned out to have no foundation. Agreement was widespread that the government service was greatly improved. There were still branches of the service for the reformers to work upon but the great fight was over and won.[6]

Although the Democrats came into power in 1893 largely on the tariff issue, Cleveland felt that the most urgent need at the beginning of the administration was the repeal of the part of the Sherman silver law that provided for the purchase of 4,500,000 ounces of silver each month. The financial and monetary aspects of this controversy demand relation at another point.[7] Politically its results were important. Western and southern Democrats, friendly to silver, fought bitterly against the repeal, and became thoroughly hostile to Cleveland whom they began to distrust as allied to the "money-power" of the East. At the time, then, when the President was most in need of united partisan support, he found his party crumbling into factions.

Other circumstances which have been mentioned combined to make the time inauspicious for a revision of the tariff—the slight Democratic majority in the Senate, the deficit caused by rising expenditure and falling revenue, the imminent industrial panic and the prevailing labor unrest. Nevertheless it seemed necessary to make the attempt. If the results of the election of 1892 meant anything, they meant that the Democrats were commissioned to revise the tariff.

The chairman of the House Committee on Ways and Means was William L. Wilson, a sincere and well-read tariff reformer who had been a lawyer and a college president, in addition to taking a practical interest in politics. The measure which he presented to the House on December 19, 1893, was not a radical proposal, but it provided for considerable tariff reductions and a tax on incomes over $4,000. There was a slight defection in party support, but it was unimportant because of the large majority which the Democrats possessed, and the bill passed the House without unusual difficulty.

In the Senate a different situation presented itself. The Democratic majority over the Republicans, provided the Populists voted with the former, was only nine; and in case the Populists became disaffected, the Democrats could outvote the opposition only by the narrow margin of three, even if every member remained with his party. Such a degree of unanimity, in the face of prevailing conditions, was extremely unlikely. The Louisiana senators were insistent upon protection for their sugar; Maryland, West Virginia and Alabama senators looked out for coal and iron ore; Senator Hill of New York was unalterably opposed to an income tax; Senator Murphy, of the same state, obtained high duties on linen collars and cuffs; and Senators Gorman and Brice were ready to aid the opposition unless appeased by definite bits of protection which they demanded. Many years later Senator Cullom, a Republican, explained the practical basis on which the Senate proceeded: "The truth is, we were all—Democrats as well as Republicans—trying to get in amendments in the interest of protecting the industries of our respective States."

The 634 changes made in the Senate were, therefore, mainly in the direction of lessening the reductions made by the House. After the bill had passed the Senate, it was put into the hands of a conference committee, where further changes were made. At this stage of the proceedings, Wilson read to the House a letter from the President condemning the form which the bill had taken under Senate management, and branding the abandonment of Democratic principles as an example of "party perfidy and party dishonor." The communication had no effect except to intensify differences within the party, and senators made it evident that they would have their way or kill the measure. The House thereupon capitulated and accepted what became known as the Wilson-Gorman act—a law which was only less protectionist than the McKinley act. The President, chagrined at the breakdown of the party program, allowed the act to pass without his signature, but expressed his mingled disappointment and disgust in a letter to Representative T.C. Catchings:

There are provisions in this bill which are not in line with honest tariff reform.... Besides, there were ... incidents accompanying the passage of the bill ... which made every sincere tariff reformer unhappy.... I take my place with the rank and file of the Democratic party ... who refuse to accept the results embodied in this bill as the close of the war, who are not blinded to the fact that the livery of Democratic tariff reform has been stolen and worn in the service of Republican protection, and who have marked the places where the deadly blight of treason has blasted the counsels of the brave in their hour of might.

A few phases of the attempt at tariff reduction indicate the extent to which political decay and especially Democratic demoralization had gone. As it passed the House, the Wilson bill left both raw and refined sugar on the free list. This was unsatisfactory to the Louisiana sugar growers, who desired a protective duty on the raw product, and was objected to by the Louisiana senators. On the other hand, the American Sugar Refining Company, usually known as the "Sugar Trust," desired free raw materials but sought protective duties on refined sugar. In the Senate, a duty was placed on raw sugar, partly for revenue and partly to satisfy the Louisiana senators. On refined sugar, rates were fixed which were eminently satisfactory to the Trust. Rumors at once began to be spread broadcast over the country that the sugar interests had manipulated the Senate. The people were the more ready to believe charges of this sort because of experience with previous tariff legislation and because the Sugar Trust had been one of the earliest and most feared of the monopolies which had already caused so much uneasiness. A Senate committee was appointed, composed of two Democrats, two Republicans and a Populist, to investigate these and other rumors. Their report, which was agreed to by all the members, made public a depressing story. It appeared that one lobbyist had offered large sums of money for votes against the tariff bill on account of the income tax provision. Henry O. Havermeyer, president of the American Sugar Refining Company, testified that the company was in the habit of contributing to the campaign funds of one political party or the other in the states, depending on which party was in the ascendancy; that these contributions were carried on the books as expense; and that they were given because the party in power "could give us the protection we should have." Further, one or more officers of the company were in Washington during the entire time when the tariff act was pending in the Senate and had conferred with senators and committees. Senator Quay testified that he had bought and sold sugar stocks while the Senate was engaged in fixing the schedules and added: "I do not feel that there is anything in my connection with the Senate to interfere with my buying or selling the stock when I please; and I propose to do so." Finally the committee summarized the results of its investigation, taking the occasion to

strongly deprecate the importunity and pressure to which Congress and its members are subjected by the representatives of great industrial combinations, whose enormous wealth tends to suggest undue influence, and to create in the public mind a demoralizing belief in the existence of corrupt practices.

Yet one more drop remained to fill the cup of Democratic humiliation to overflowing. The constitutionality of the income tax had been assumed to have been settled by previous decisions of the Supreme Court, especially that in the case Springer v. United States, which had been decided in 1880, and in which the Court had upheld the law. The new tax was brought before the Court in 1894, in Pollock v. Farmers' Loan and Trust Company. The argument against the tax was pressed with great vigor, not merely on constitutional grounds, but for evident social and economic reasons. Important financial interests engaged powerful legal talent and it became clear that the question to be settled was as much a class and sectional controversy as a constitutional problem. Counsel urged the Court that the tax scattered to the winds the fundamental principles of the rights of private property. Justice Field, deciding against the tax, declared it an "assault upon capital" and a step toward a war of the poor against the rich. There was fear among some that the exemption of the smaller incomes might result in placing the entire burden of taxation on the wealthy. Justice Field, for example, felt that taxing persons whose income was $4,000 and exempting those whose income was less than that amount was like taxing Protestants, as a class, at one rate and Catholics at another. The sectional aspects of the controversy were brought out in objections that the bulk of the tax would fall on the Northeast. The most important point involved was the meaning of the word "direct" as used in the Constitution in the phrase "direct Taxes shall be apportioned among the several States ... according to their respective Numbers." If an income tax is a direct tax, it must be apportioned among the states according to population. Unhappily the framers of the Constitution were not clear as to what they meant by the word direct, and specifically they could not have told whether an income tax was direct or not, because no such tax existed in England or America at that time. Hence the Supreme Court was placed in the awkward position of defining a word which the framers themselves could not define, although the uniform practice hitherto had been to regard the income tax as indirect and therefore constitutional, even if not apportioned according to population.

The Pollock case was heard twice. The result of the first trial was inconclusive and on the central point the Court divided four to four. After a rehearing, Justice Jackson, who had been ill and not present at the first trial, gave his vote in favor of constitutionality, but in the meantime another justice had changed his opinion and voted against it. By the narrow margin of five to four, then, and under such circumstances, the income tax provision of the Wilson-Gorman act was declared null and void. Probably no decision since the Dred Scott case, with the single exception of the Legal Tender cases, has put the Supreme Court in so unfortunate a light. Certainly in none has it seemed more swayed by class prejudice, and so insecure and vacillating in its opinion.

Before the question regarding the constitutionality of the income tax was settled, the Democrats reaped the political results of the Wilson-Gorman tariff act. The law went into force on August 27, 1894; the congressional elections came in November. The Democrats were almost utterly swept out of the House, except for those from the southern states, their number being reduced from 235 to 105. Reed was replaced in the speaker's chair; tariff reform had turned out to be indistinguishable from protection; and the Democracy, after its only opportunity since 1861 to try its hand at government, was demoralized, discredited, and in opposition again.

BIBLIOGRAPHICAL NOTE

The election of 1892 is described in the standard histories of the period, and especially well in Peck.

The rise and growth of the Populist movement resulted in a considerable literature of which the following are best: S.J. Buck, The Agrarian Crusade (1920), is founded on wide knowledge of the subject and contains bibliography; F.J. Turner in The Atlantic Monthly (Sept., 1896), gives a brief but keen account; other articles in periodicals are F.E. Haynes, in Quarterly Journal of Economics, X, 269, W.F. Mappin, in Political Science Quarterly, IV, 433, and F.B. Tracy, in Forum, XVI, 240; F.E. Haynes, Third Party Movements (1916), is detailed; M.S. Wildman, Money Inflation in the United States (1905), presents the psychological and economic basis of inflation; J.A. Woodburn, Political Parties and Party Problems (1914); F.L. Paxson, New Nation (1915).

Cleveland's administration is well discussed by D.R. Dewey, National Problems (1907), and by H.T. Peck, who also presents an unusual analysis of Cleveland in The Personal Equation (1898). The income tax is best handled by E.R.A. Seligman, The Income Tax (1914). Cleveland's own account of the chief difficulties of the administration are in his Presidential Problems.

* * * * *

[1] Blaine died on Jan. 27, 1893.

[2] Below, p. 320, for an account of the strike as an industrial dispute.

[3] Below, Chaps. XIII, XIV, XV.

[4] Above, Chap. VIII.

[5] The sweeping reform order of Cleveland late in his second term illustrated the most common and effective method of making advance. Late in his administration the President adds to the classified service; his successor withdraws part of the additions, but more than makes up at the end of his term,—a sort of two steps forward and one backward process.

[6] Cleveland's second cabinet was composed of the following: W.Q. Gresham, Ill., Secretary of State; J.G. Carlisle, Ky., Secretary of the Treasury; D.S. Lamont, N.Y., Secretary of War; R. Olney, Mass., Attorney-General; W.S. Bissell, N.Y., Postmaster-General; H.A. Herbert, Ala., Secretary of the Navy; Hoke Smith, Ga., Secretary of the Interior; J.S. Morton, Neb., Secretary of Agriculture.

[7] Below, pp. 336-340.



CHAPTER XIII

THE TREND OF DIPLOMACY

After the international issues arising from the Civil War were settled, and before foreign relations began to become more important late in the nineties, our diplomatic history showed the same lack of definiteness and continuity that stamped the history of politics during the same years. Eleven different men held the post of Secretary of State during the thirty-four years from 1865 to 1898, one of them, Blaine, serving at two separate times. The political situation in Washington changed frequently, few men of outstanding capacity as diplomatists were in the cabinets, and most of the problems which arose were not such as would excite the interest of great international minds. That any degree of unity in our foreign relations was attained is due in part to the continuous service of such men as A.A. Adee, who was connected with the state department from 1878, and Professor John Bassett Moore, long in the department and frequently available as a counselor.[1]

Even before the Civil War, Americans had been interested in the affairs of the nations whose shores were touched by the Pacific Ocean. Missionaries and traders had long visited China and Japan. During the years when the transcontinental railroads were built, as has been seen, the construction companies looked to China for a labor supply, and there followed a stream of Chinese immigrants who were the cause of a difficult international problem. Our relations with Japan were extremely friendly. Until the middle of the nineteenth century the Japanese had been almost completely cut off from the remainder of the world, desiring neither to give to the rest of humanity nor to take from them. In 1854 Commodore Matthew C. Perry of the United States Navy had succeeded in obtaining permission for American ships to take coal and provisions at two Japanese ports. Townsend Harris shortly afterwards had been appointed consul-general to Japan and his knowledge of the East and his tactful diplomacy had procured increased trade rights and other privileges. In 1863 a Japanese prince had sought to close the strait of Shimonoseki which connects the inland sea of Japan with the outside ocean. American, French and Dutch vessels had been fired upon, and eventually an international expedition had been sent to open the strait by force. Seventeen ships of war had quickly brought the prince to terms. An indemnity had been demanded, of which the United States had received a share. The fund remained in the treasury untouched until 1883 when it was returned to Japan. The latter received the refund as "a strong manifestation of that spirit of justice and equity which has always animated the United States in its relations with Japan."

The purchase of Alaska in 1867, stretched a long, curved finger out towards the Asiatic coast, but there was little interest in the new acquisition and no knowledge of its size or resources.[2]

The first tangible and permanent indication that the United States might extend its interests into the sphere of the Pacific Ocean appeared as early as 1872, when an arrangement with a Samoan chief gave us the right to use the harbor of Pagopago on the island of Tutuila. Tutuila is far from American shores, being below the equator on the under side of the world, but the harbor of Pagopago is an unusually good one and its relation to the extension of American commerce in the South Pacific was readily seen. Not long afterward, similar trading privileges were granted to Germany and Great Britain. Conditions in the islands had by no means been peaceful even before the advent of the foreigners with their intrigues and jealousies, and in 1885 the Germans, taking advantage of a native rebellion, hauled down the Samoan flag on the government building in Apia and seemed about to take control. In the following year, at the request of the Samoan king, the American consul Greenebaum proclaimed a protectorate and hoisted the United States flag. The act was unauthorized and was disavowed at once by the government at Washington. In the hope of establishing order in the islands, Bayard, Secretary of State in President Cleveland's first administration, suggested a triple conference of Germany, Great Britain and the United States in Washington. During a recess in the conference a native rebellion overturned the Samoan government and Germany assumed virtual control. While civil war raged among native factions, the Germans landed armed forces for the protection of their interests. The American and British governments, fearful of danger to their rights, already had war vessels in the harbor of Apia and armed conflict seemed almost inevitable when a sudden hurricane on March 16, 1889, destroyed all the vessels except one. The Calliope, (English), steamed out to sea in the teeth of the great storm and escaped in safety. In the face of such a catastrophe all smaller ills were forgotten and peace reigned for the moment in Samoa.

Meanwhile, just as Cleveland was retiring from office for the first time, another conference of the three powers was arranged which provided a somewhat complicated triple protectorate. After a few years of quiet, another native insurrection called attention to the islands. Cleveland was again in the presidential chair, and in a message to Congress he expressed his belief that the United States had made a mistake in departing from its century-old policy of avoiding entangling alliances with foreign powers. A year later he returned to the subject more earnestly than ever. A report from the Secretary of State presented the history of our Samoan relations and ventured a judgment that the only fruits which had fallen to the United States were expense, responsibility and entanglement. The President thereupon invited an expression of opinion from Congress on the advisability of withdrawing from our engagements with the other powers. For the time nothing came of Cleveland's recommendation, but the continuance of native quarrels later necessitated another commission to the islands. The American member reported that the harbor of Apia was full of war vessels and the region about covered with armed men, but that "not the sail or smoke of a single vessel of commerce was to be seen there or about the coasts of these beautiful islands." In 1899, the triple protectorate was abandoned, as it had complicated the task of governing the islands. The United States received Tutuila with the harbor of Pagopago, Germany took the remainder of the group, and England retired altogether. The trend of Samoan relations was significant: our connection with the islands began with the desire to possess a coaling station; the possession first resulted in entanglements with other nations, and later in the question whether we ought not to withdraw; and eventually we withdrew from some of the responsibilities, but not from all. Despite its traditional policy of not contracting entangling alliances, the United States was in the Pacific to stay.

When Cleveland came into power the first time, he found a long-standing disagreement with Canada over the fisheries of the northeastern coast. An arrangement which had resulted from the Treaty of Washington in 1871 came to an end in 1885, and the rights of American fishermen in Canadian waters then rested upon a treaty of 1818. This treaty was inadequate owing to various changes which had taken place during the nearly seventy years that had elapsed since it was drawn up. Several difficulties lay in the way of the arrangement of a new treaty, an important one being the readiness of the Republican Senate to embarrass the President and thus discredit his administration. Matters came to a critical point in 1886 when Canadian officials seized two American vessels engaged in deep-sea fishing. Cleveland then arranged a treaty which provided for reciprocal favors, and when the Senate withheld its assent the administration made a temporary agreement, (modus vivendi), under which American ships were allowed to purchase bait and supplies and to use Canadian bays and harbors by paying a license fee.[3]

The peculiar geographical configuration of Alaska was, meanwhile, bringing the United States into another diplomatic controversy. An arm or peninsula of the possession extends far out into the Pacific and is continued by the Aleutian Islands, which resemble a series of stepping-stones reaching toward Siberia.[4] The Bering Sea is almost enclosed by Alaska and the Islands. Within the Sea and particularly on the islands of St. Paul and St. George in the Pribilof group, large numbers of seals gathered during the spring and summer to rear their young. In the autumn the herds migrated to the south, passing out through the narrow straits between the members of the Aleutian group, and were particularly open to attack at these points. As early as 1870 the United States government leased the privilege of hunting fur seals on St. Paul and St. George to the Alaska Commercial Company, but the business was so attractive that vessels came to the Aleutian straits from many parts of the Pacific, and it looked as if the United States must choose between the annihilation of the herds and the adoption of some means for protecting them. The revenue service thereupon began the seizure in 1886 of British sealing vessels, taking three in that year and six during the next. The British government protested against the seizures on the ground that they had taken place more than three miles from shore—three miles being the limit to the jurisdiction of any nation, according to international law. The Alaskan Court which upheld the seizures justified itself by the claim that the whole Bering Sea was part of the territory of Alaska and thus was comparable to a harbor or closed sea (mare clausum), but Secretary Blaine disavowed this contention. The United States then requested the governments of several European countries, together with Japan, to cooperate for the better protection of the fisheries, but no results were reached.

Continuance of the seizures in 1889 brought renewed protests from Lord Salisbury, who was in charge of foreign affairs. Blaine retorted that the destruction of the herds was contra bonos mores and that it was no more defensible even outside the three mile limit than destructive fishing on the banks of Newfoundland by the explosion of dynamite would be. Lord Salisbury replied that fur seals were wild animals, ferae naturae, and not the property of any individual until captured. An extended diplomatic correspondence ensued, which resulted in a treaty of arbitration in 1892.[5]

A tribunal of seven arbitrators was established, two appointed by the Queen of England, two by the President, and one each by the rulers of France, Italy and Sweden and Norway, the last two being under one sovereign at that time. Several questions were submitted to the tribunal. What exclusive rights does the United States have in the Bering Sea? What right of protection or property does the United States have in the seals frequenting the islands in the Sea? If the United States has no exclusive rights over the seals, what steps ought to be taken to protect them? Great Britain also presented to the arbitrators the question whether the seizures of seal-hunting ships had been made under the authority of the government of the United States.

The decisions were uniformly against the American contention. It was decided that our jurisdiction in the Bering Sea did not extend beyond the three mile limit and that therefore the United States had no right of protection or property in the seals. A set of regulations for the protection of the herds was also drawn up. Another negotiation resulted in the payment of $473,000 damages by the United States for the illegal seizures of British sealers.[6]

Relations with the Latin American countries south of the Mexican border had been unstable since the Mexican War, an unhappy controversy that left an ineradicable prejudice against us. John Quincy Adams and Henry Clay had hoped for a friendly union of the nations of North and South America, led by the United States, but this ideal had turned out to have no more substance than a vision. Moreover, the increasing trade activity of Great Britain and later of Germany had made a commercial bond of connection between South America and Europe which was, perhaps, stronger than that which the United States had established. Yet some progress was made. Disputes between European governments and the governments of Latin American countries were frequently referred to the United States for arbitration. An old claim of some British subjects, for example, against Colombia was submitted for settlement in 1872 to commissioners of whom the United States minister at Bogota was the most important. The problem was studied with great care and the award was satisfactory to both sides. In 1876 a territorial dispute between Argentina and Paraguay was referred to the President of the United States. In the case of a boundary controversy between Costa Rica and Nicaragua, President Cleveland appointed an arbitrator; Argentina and Brazil presented a similar problem which received the attention of Presidents Harrison and Cleveland.

It fell to James. G. Blaine to revive the idea of a Pan-American conference which had been first conceived by Adams and Clay. As a diplomat, Blaine was possessed of outstanding patriotism and enthusiastic imagination, even if not of vast technical capacity or of an international mind. As Secretary of State under President Garfield in 1881 he invited the Latin American countries to share with the United States in a conference for the discussion of arbitration. The early death of Garfield and the ensuing change in the state department resulted in the abandonment of the project for the time being. Blaine, however, and other interested persons continued to press the plan and in 1888 Congress authorized the President to invite the governments of the Latin American countries to send delegates to a conference to be held in Washington in the following year. By that time President Harrison was in power. Blaine was again Secretary of State and was chosen president of the conference. Among the subjects for discussion were the preservation of peace, the creation of a customs union, uniform systems of weights, measures and coinage, and the promotion of frequent inter-communication among the American states. Little was accomplished, beyond a few recommendations, except the establishment of the International Bureau of American Republics. This was to have no governmental power, but was to be supported by the various nations concerned and was to collect and disseminate information about their laws, products and customs. The Bureau has become permanent under the name Pan American Union and is a factor in the preservation of friendly relations among the American republics. The reciprocity measure which Blaine pressed upon Congress during the pendency of the McKinley tariff bill was designed partly to further Pan-American intercourse.

In the case of a disagreement with Chile, Blaine was less successful. A revolution against the Chilean President, Balmaceda, resulted in the triumph of the insurgents in 1891. The American minister to Chile was Patrick Egan, an Irish agitator who sympathized with President Balmaceda against the revolutionists and who was persona non grata to the strong English and German colonies there. While Chilean affairs were in this strained condition, the revolutionists sent a vessel, the Itata, to San Diego in California for military supplies, and American authorities seized it for violating the neutrality laws. While the vessel was in the hands of our officers, the Chileans took control of it and made their escape. The cruiser Charleston was sent in pursuit and thereupon the revolutionists surrendered the Itata. Not long afterward, however, a United States Court decided that the pursuit had been without justification under international law and ordered the release of the Itata. The result was that the United States seemed to have been over-ready to take sides against the revolutionists, and the latter became increasingly hostile to Americans.

Relations finally broke under the strain of a street quarrel in the city of Valparaiso in the fall of 1891. A number of sailors from the United States ship Baltimore were on shore leave and fell in with some Chilean sailors in a saloon. A quarrel resulted—just how it originated and just who was the aggressor could not be determined—but at any rate the Americans were outnumbered and one was killed. The administration pressed the case with vigor, declining to look upon the incident as a sailors' brawl and considering it a hostile attack upon the wearers of an American uniform. For a time the outbreak of war was considered likely, but eventually Chile yielded, apologized for its acts and made a financial return for the victims of the riot. Later students of Chilean relations have not praised Egan as minister or Blaine's conduct of the negotiations, but it is fair to note that the Chileans were prejudiced against the American Secretary of State because of an earlier controversy in which he had sided against them, and that the affair was complicated by the presence of powerful European colonies and by the passions which the revolution had aroused.

Blaine was compelled to face another embarrassing situation in dealing with Italy in 1891-1892. In October, 1890, the chief of police of New Orleans, D.C. Hennessy, had been murdered and circumstances indicated that the deed had been committed by members of an Italian secret society called the Mafia. A number of Italians were arrested, of whom three were acquitted, five were held for trial and three were to be tried a second time. One morning a mob of citizens, believing that there had been a miscarriage of justice, seized the eleven and killed all of them. The Italian government immediately demanded protection for Italians in New Orleans, as well as punishment of the persons concerned in the attack, and later somewhat impatiently demanded federal assurance that the guilty parties would be brought to trial and an acknowledgment that an indemnity was due to the relatives of the victims of the mob. Failing to obtain these guarantees, the Italian government withdrew its minister. When a grand jury in New Orleans investigated the affair it excused the participants and none of them was brought to trial.

The government at Washington was hampered by the fact that judicial action in such a case lies with the individual state under our form of government, whereas diplomatic action is of course entirely federal. If the states are tardy or derelict in action, the national government is almost helpless. President Harrison urged Congress to make offenses against the treaty rights of foreigners cognizable in the federal courts, but this was never done. Diplomatic activity, however, brought better results, and an expression of regret on the part of the United States, together with the payment of an indemnity of $24,000 closed the incident.

Among the many troublesome questions that faced President Cleveland when he entered upon the Presidency in 1893 for the second time, the status of the Hawaiian Islands was important. Since the development of the Pacific Coast of the United States in the forties and fifties, there had been a growing trade between the islands and this country. Reciprocity and even annexation had been projected. In 1875 a reciprocity arrangement was consummated, a part of which was a stipulation that none of the territory of Hawaii should be leased or disposed of to any other power. In this way a suggestion was made of ultimate annexation. Moreover the commercial results of the treaty were such as to make a friendly connection with the United States a matter of moment to Hawaii. The value of Hawaiian exports had increased, government revenues enlarged, and many public improvements had been made. In 1884 the grant of Pearl Harbor to the United States as a naval station made still another bond of connection between the islands and their big neighbor.

The King of Hawaii during this period of prosperity was Kalakaua. During a visit to the United States, and later during a tour of the world he was royally received, whereupon he returned to his island kingdom with expanded theories of the position which a king should occupy. Unhappily he dwelt more on the pleasures which a king might enjoy than upon the obligations of a ruler to his people. At his death in 1891 Princess Liliuokalani became Queen and at once gave evidence of a disposition to rule autocratically. Because of her attempts to revise the Hawaiian system of government so as to increase the power of the crown, the more influential citizens assembled, appointed a committee of public safety and organized for resistance. On January 17, 1893, the revolutionary elements gathered, proclaimed the end of the monarchical regime and established a provisional government under the leadership of Judge S.B. Dole. The new authorities immediately proposed annexation to the United States and a treaty was promptly drawn up in accord with President Harrison's wishes, and presented to the Senate. At this point the Harrison administration ended and Cleveland became President.

Cleveland immediately withdrew the treaty for examination and sent James H. Blount to the islands to investigate the relation of American officials to the recent revolution. The appointment of Blount was made without the advice and consent of the Senate and was denounced by the President's enemies, although such special missions have been more or less common since the beginning of our history.[7] Blount reported that the United States minister to Hawaii, J.L. Stevens, had for some time been favorably disposed to a revolution in the islands and had written almost a year before that event asking how far he and the naval commander might deviate from established international rules in the contingency of a rebellion. "The Hawaiian pear is now fully ripe," Stevens had written to the State Department, early in 1893, "and this is the golden hour for the United States to pluck it." Blount also informed the President that the monarchy had been overturned with the active aid of Stevens and through the intimidation caused by the presence of an armed naval force of the United States.

The blunt language which Cleveland employed in his message to Congress on the subject, left no doubt about his opinion of the transaction. "The control of both sides of a bargain acquired in such a manner is called by a familiar and unpleasant name when found in private transactions." Believing that an injustice had been done and that the only honorable course was to undo the wrong, he sent A.S. Willis as successor to Stevens to express the President's regret and to attempt to make amends. One of the conditions however which President Cleveland placed upon the restoration of the Queen was a promise of amnesty to all who had shared in the revolution. The Queen was at first unwilling to bind herself and when she later agreed, a new obstacle appeared in the refusal of the provisional government to surrender its authority. Indeed it began to appear that the President's sense of justice was forcing him to attempt the impossible. The provisional government had already been recognized by the United States and by other powers, the deposition of the Queen was a fait accompli and her restoration partook of the nature of turning back the clock. Moreover, force would have to be used to supplant the revolutionary authorities,—a task for which Americans had no desire. The President, in fact, had exhausted his powers and now referred the whole affair to Congress. The House condemned Stevens for assisting in the overturn of the monarchy and went on record as opposed to either annexation or an American protectorate. Sentiment was less nearly uniform in the upper chamber. The Democrats tended to uphold the President, the Republicans to condemn him. Although a majority of the committee on foreign relations exonerated Stevens, yet no opposition appeared to a declaration which passed the Senate on May 31, 1894, maintaining that the United States ought not to intervene in Hawaiian affairs and that interference by any other government would be regarded as unfriendly to this country.

In the outcome, these events merely delayed annexation; they could not prevent it. In Hawaii the more influential and the propertied classes supported the revolution and desired annexation. In the United States the desire for expansion was stimulated by the fear that some other nation might seize the prize. The military and naval situation in 1898 increased the demand for annexation, and in the summer of that year the acquisition was completed by means of a joint resolution of the two houses of Congress.[8] While negotiations were in progress Japan protested that her interests in the Pacific were endangered. Assurances were given, however, that Japanese treaty rights would not be affected by the annexation and the protest was withdrawn. The United States was now "half-way across to Asia."

Most dangerous in its possibilities was the controversy with Great Britain over the boundary between British Guiana and Venezuela. British Guiana lies on the northern coast of South America, next to Venezuela and extends inland, with its western boundary roughly parallel to the valley of the Orinoco River. A long-standing disagreement had existed about the exact position of the line between the two countries—a disagreement which harked back to the claims of the Dutch, who had acquired Guiana in 1613 and had turned it over to the British in 1814. In 1840 England commissioned a surveyor named Schomburgk to fix the boundary but his decision was objected to by the Venezuelans who claimed that he included a great area that rightfully belonged to them. Gradually the British claims included more and more of the territory claimed by Venezuela, and the discovery of gold in the disputed region not only drew attention to the necessity of a settlement of the boundary but also attracted prospectors who began to occupy the land. In 1876 Venezuela began negotiations for some means of deciding the dispute and came to the conclusion that arbitration was her only recourse. On the refusal of Great Britain to heed her protests, the Venezuelan government suspended diplomatic relations in 1887, although the United States attempted to prevent a rupture by suggesting the submission of the difference to an arbitral tribunal. This offer was not accepted by Great Britain, and repeated exertions on the part of both Venezuela and the United States at later times failed to produce better results. When Cleveland returned to the presidency in 1893 he again became interested in the Venezuelan matter and Secretary of State Gresham urged the attention of the British government to the desirability of arbitration.

President Cleveland was a man of great courage and had a very keen sense of justice. In his opinion a great nation was playing the bully with a small one, and the injustice stirred his feelings to the depths. With the President's approval Secretary Olney, who had succeeded Gresham on the death of the latter, drew up an exposition of the Monroe doctrine which was communicated to Lord Salisbury. This despatch, which was dated July 20, 1895, brought matters to a climax. In brief the administration took the position that under the Monroe doctrine the United States adhered to the principle that no European nation might deprive an American state of the right and power of self-government. This had been established American policy for seventy years. The Venezuelan boundary controversy was within the scope of the doctrine since Great Britain asserted title to disputed territory, substantially appropriating it, and refused to have her title investigated. At the same time Secretary Olney disclaimed any intention of taking sides in the controversy until the merits of the case were authoritatively ascertained, although the general argument of the despatch seemed to place the United States on the side of Venezuela. Moreover, Secretary Olney adopted a swaggering and aggressive, not to say truculent tone. He drew a contrast between monarchical Europe and self-governing America, particularly the United States, which "has furnished to the world the most conspicuous ... example ... of the excellence of free institutions, whether from the standpoint of national greatness or of individual happiness." The United States, he asserted, is "practically sovereign on this continent" because "wisdom and justice and equity are the invariable characteristics" of its dealings with others and because "its infinite resources combined with its isolated position render it master of the situation ... as against any or all other powers."

Lord Salisbury did not reply to Secretary Olney for more than four months. He then asserted that President Monroe's message of 1823 had laid down two propositions: that America was no longer to be looked upon as a field for European colonization; and that Europe must not attempt to extend its political system to America, or to control the political condition of any of the American communities. In Lord Salisbury's opinion Olney was asserting that the Monroe doctrine conferred upon the United States the right to demand arbitration whenever a European power had a frontier difference with a South American community. He suggested that the Monroe doctrine was not a part of international law, that the boundary dispute had no relation to the dangers which President Monroe had feared and that the United States had no "apparent practical concern" with the controversy between Great Britain and Venezuela. He also raised some objections to arbitration as a method of settling disputes and asserted the willingness of Great Britain to arbitrate her title to part of the lands claimed. The remainder, he declared, could be thought of as Venezuelan only by extravagant claims based on the pretensions of Spanish officials in the last century. This area he expressly refused to submit to arbitration. The language of the Salisbury note was diplomatically correct, a fact which did not detract from the effect of the patronizing tone which characterized it.

President Cleveland doggedly proceeded with his demands. On December 17, (1895), he laid before Congress the correspondence with Lord Salisbury, together with a statement of his own position on the matter. Disclaiming any preconceived conviction as to the merits of the dispute, he nevertheless deprecated the possibility that a European country, by extending its boundaries, might take possession of the territory of one of its neighbors. Inasmuch as Great Britain had refused to submit to arbitration, he believed it incumbent upon the United States to take measures to determine the true divisional line. He suggested therefore that Congress empower the executive to appoint a commission to investigate and report. His closing words were so grave as to arouse the country to a realization of the dangerous pitch to which negotiations had mounted:

When such report is made and accepted it will in my opinion be the duty of the United States to resist ... the appropriation by Great Britain of any ... territory which after investigation we have determined of right belongs to Venezuela. In making these recommendations I am fully alive to the responsibility incurred, and keenly realize all the consequences that may follow. I am nevertheless firm in my conviction that while it is a grievous thing to contemplate the two great English-speaking peoples ... as being otherwise than friendly ... there is no calamity ... which equals that which follows a supine submission to wrong and injustice.

Congress at once acceded to Cleveland's wishes and appropriated $100,000 for the proposed investigation. For a brief moment neither Great Britain nor America quite realized the meaning of the President's warlike utterance. In America it had generally been felt previously that his foreign policy was conciliatory rather than aggressive and, besides, the Venezuelan dispute had but little occupied popular attention. When it became evident that war was a definite possibility, public interest followed every step with anxiety. Newspaper sentiment divided. The press generally judged Cleveland's stand strong and "American." On the other hand, a few periodicals like the Nation insinuated that the President was actuated by the desire to make political capital for a third term campaign and characterized his action as "criminally rash and insensate," "ignorant and reckless," "impudent and insulting." Influential citizens in both countries made energetic attempts to prevent anything that might make war inevitable. The Prince of Wales and Lord Roseberry threw their influence on the side of conciliation. A.J. Balfour declared that a conflict with the United States would carry something of the "horror of civil war" and looked forward to the time when the country would "feel that they and we have a common duty to perform, a common office to fulfill among the nations of the world."

The President appointed a commission which set to work to obtain the information necessary for a judicial settlement of the boundary, and both Great Britain and Venezuela tactfully expressed a readiness to cooperate. Their labors, however, were brought to a close by a treaty between the two disputants providing for arbitration. A prominent feature of the treaty was an agreement that fifty years' control or settlement of an area should be sufficient to constitute a title, a provision which withdrew from consideration much of the territory to which Venezuela had laid claim. In October, 1899, the arbitration was concluded. The award did not meet the extreme claims of either party, but gave Great Britain the larger share of the disputed area, although assigning the entire mouth of the Orinoco River to Venezuela.

Besides giving new life to the Monroe doctrine as an integral part of our foreign policy, the incident served to illustrate the dangers of settling international disputes in haphazard fashion. In January, 1897, therefore, Secretary Olney and the British Ambassador at Washington, Sir Julian Pauncefote, negotiated a general treaty for the settlement of disputes between the two countries by arbitration. Even with the example of the possible consequences of the Venezuelan controversy before it, however, the Senate failed to see the necessity for such an expedient, defeated the treaty by a narrow margin and left the greatest problem of international relations—the settlement of controversies on the basis of justice rather than force—to the care of a future generation.

On the whole, as has already been noted, the history of American diplomacy from 1877 to 1897 is scarcely more than an account of a series of unrelated incidents. Not only did the foreign policy of Blaine differ sharply from that of Cleveland, but there was no great question upon which public interest came to a focus, except temporarily over the Venezuelan matter, and no lesser problems that continued long enough to challenge attention to the fact that they remained unsolved. There were visible, nevertheless, several important tendencies. Our attitude toward Samoa and Hawaii indicated that the instinctive desire to annex territory had not disappeared with the rounding out of the continental possessions of the United States; American interest in arbitration as a method of settling disputes was expressed again and again; the place of the Monroe doctrine in American international policy was clearly shown; and the determination of the United States to be heard in all affairs that touched her interests was demonstrated without any possibility of doubt.

BIBLIOGRAPHICAL NOTE

The most complete and reliable authority is J.B. Moore, A Digest of International Law (8 vols. 1906), by one who was intimately connected with many of the incidents of which he wrote; the text of the treaties is in W.M. Malloy, Treaties, Conventions, International Acts, etc., between the United States of America and other Powers (2 vols., 1910). Valuable single volumes are: J.B. Moore, American Diplomacy (1905); and C.B. Fish, American Diplomacy (1915). W.F. Johnson, America's Foreign Relations (2 vols., 1916), is interesting but somewhat marred by the author's tendency to take sides on controversial points; see also J.B. Henderson, American Diplomatic Questions (1901). J.S. Bassett, Short History of the United States (1913), contains a brief and compact chapter.

Essential material on particular incidents is found in the following. On Japan, "Our War with One Gun" in New England Magazine, XXVIII, 662; J.M. Callahan, American Relations in the Pacific and the Far East (1901); W.E. Griffis, Townsend Harris (1896). On Samoa, J.W. Foster, American Diplomacy in the Orient (1903); R.L. Stevenson, Eight Years of Trouble in Samoa (1892). On the seal fisheries, J.W. Foster, Diplomatic Memoirs (2 vols., 1909). On Hawaii, Cleveland's message in J.D. Richardson, Messages and Papers of the Presidents, IX, 460. On Venezuela, Grover Cleveland, Presidential Problems, Chap. IV.

* * * * *

[1] The development of the United States as a commercial power was seen in the increased use of consuls as agents for procuring and publishing industrial and commercial information.

[2] Cf. Fish, American Diplomacy, 398.

[3] For later aspects of the controversy, see below, pp. 532-533.

[4] Cf. map p. 10.

[5] J.W. Foster, who was intimately connected with the case, suggests that the defects in the American argument were due partly to following briefs prepared by an agent of the Alaska Commercial Company in Washington. The agent was interested in getting everything possible for his company but his knowledge of the law in the case was slight. Cf. Foster, Memoirs, II, 26 f.; Moore, American Diplomacy, 97-104.

[6] The attempts to protect the herds by government regulation failed to have any important results. An international arrangement was made in 1911, but the slaughter had proceeded so far that grave question arose whether any agreement would be effective short of absolute prohibition. In 1912 Congress passed a law forbidding any killing on the land for a term of five years; in 1917 when the restrictions were released the herds had greatly increased. In 1918 the seals numbered 530,480. American Year Book, 1918, 503-4.

[7] Cf. Political Science Review, Aug., 1916, 481-499.

[8] Cf. below, p. 387 ff. Hawaii was brought into the Union as a territory in 1900.



CHAPTER XIV

THE RISE OF THE WAGE EARNER

In their handling of the labor problem, the governments of the states and the nation showed greater ignorance and less foresight than characterized their treatment of any of the other issues of the quarter century following the Civil War. Yet the building of the railroads and their consolidation into great systems, the development of manufacturing and its concentration into large concerns, and the growth of an army of wage earners brought about a problem of such size and complexity as to demand all the information and vision that the country could muster.

The phenomenal accumulation of wealth in the fields of mining, transportation and manufacturing which characterized the new industrial America formed the basis of a powerful propertied class. Some of the wealth was amassed by such unscrupulous methods as those which caused the popular demand for government regulation of the railroads and trusts. The prizes of success were big. The men who made their way to the top—men like Gould, Fisk, Vanderbilt, Rockefeller and Carnegie—were pioneers whose courage, foresight, and daring were combined with sufficient ruthlessness to enable them to triumph where others failed. A few of them, like Carnegie, had some slight conception of the meaning of the labor problem; most of them did not. Linked to the industrial pioneer by community of interest was the holder of the war bonds of the federal government. These securities were purchased with depreciated paper currency but increased very greatly in value after the successful outcome of the struggle, and formed an investment whose value it is extremely difficult to estimate. The owners of the stocks and bonds of the railroads and manufacturing combinations further swelled the ranks of the propertied class. Stability, continuous business and large earnings were the immediate considerations to this group. Anything which interfered was, naturally, a thing to be fought. Never before, unless in the South in slavery days, had a more powerful social class existed in the United States. A large fraction of the group was composed of men who had risen from poverty to wealth in a short time. From one point of view such a man is a "self-made" man, industrious, frugal, able, energetic, bold. From another point of view he is a parvenu, narrow, overbearing, ostentatious, proud, conceited, uncultivated. The relatively small size of the propertied class and an obvious community of interest tended to make its members reach a class consciousness even during the Civil War. The success of the group in preventing all tariff reduction after 1865 was a striking example of the solidarity of its membership and its readiness for action.

Class consciousness among the wage earners developed much more slowly, and in the nature of things was much less definite. Nevertheless the history of the industrial turmoil of the quarter century after the Civil War is the history of a class groping for political, social and economic recognition.

At the close of the war the labor situation was confused and complicated. A million and a half of men in the North and South had to be readmitted to the ranks of industry. Approximately another million had died or been more or less disabled during the conflict. A stream of immigrants, already large and constantly increasing, was pouring into the North and seeking a means of livelihood. As has been seen, most of these settled in the manufacturing and mining sections of the northern and eastern states, helped to crowd the cities, and overflowed into the fertile, free lands of the mid-West. Nearly 800,000 of them reached the United States in one year, 1882. Most of them were men—an overwhelming portion of them men of working age, unskilled, frequently illiterate and hence compelled to seek employment in a relatively small number of occupations. Both the chances of unemployment and the danger of a lowered standard of living were increased by the immigrants.

The greater use of machinery during the progress of the war has already been alluded to, but some of its results demand further mention.[1] Most evident was the huge increase in the volume and value of the products of the factories. The labor of a single worker increased in effectiveness many times; in other words, the labor cost of a unit of production greatly diminished with the improvement of mechanical devices. The labor cost of making nails by hand in 1813 was seventy fold the cost of making them by machinery in 1899; loading ore by hand was seventy-three times as expensive in 1891 as machine loading was in 1896. Increased production encouraged greater consumption, enhanced competition for markets, and opened the world to the products of American labor. Moreover, the introduction of machinery emphasized the importance of capital. When iron was rolled by hand, when cloth was produced by the use of the spinning wheel and hand-loom, when fields were tilled by inexpensive plow and hoe, relatively small amounts of capital were needed by the man who started in to work. Mechanical inventions revolutionized the situation. A costly power-loom enabled its owner to eliminate handworking competitors. If a workman could raise sufficient money or credit to purchase a supply of machines he could "set up in business," employ a number of "hands" and merely direct or manage the enterprise. Under such a system the employer must make enough profit to pay interest on his investment and to repair and replace his equipment. His attention was fixed on these elements of his industrial problem and the well-being of the laborer sank to a lower plane of importance. If the employer found the labor supply plentiful he had the upper hand in setting the wage-scale; the unorganized employee was almost completely at his mercy, because the employer could find another workman more easily than the workman could find another job. Meanwhile the workman knew the increased product which he was turning out, and became discontented because he did not see a corresponding increase in his remuneration.

From about 1830, when the rapid development of the use of mechanical appliances began, to the late eighties and early nineties when the new regime was meeting its sternest conflicts in the trust problem and the militant labor unions, the army of the wage earner was growing faster than the population. Between 1870 and 1890, for example, the population increased 63 per cent., while the number of laborers engaged in manufacturing increased nearly 130 per cent. By the latter year, 6,099,058 persons, about a tenth of the total population, were employed in transportation, mining and manufacturing.