The rapid increase in the foreign trade of the United States created a demand for American shipping facilities. Before the Civil War the United States held a place as a maritime nation. Between the Civil War and the war with Spain the energies of the American people were devoted to internal improvement. With the advent of expansion that followed the Spanish-American War, came an insistent demand that the United States develop a merchant marine adequate to carry its own foreign trade.
The United States Commissioner of Navigation in his report for 1917 (p. 78) gives the net gross tonnage of steam and sailing vessels in 1914 as 45 million tons in all. The tonnage of Great Britain was 19.8 million tons; of Germany 4.9 million tons; of the United States 3.5 million tons; of Norway 2.4 million tons; of France 2.2 million tons; of Japan 1.7 million tons, and of Italy 1.6 million tons.
The war brought about great changes in the distribution of the world's shipping. Germany was practically eliminated as a shipping nation. The necessity of recouping the submarine losses, and of transporting troops and supplies led the United States to adopt a ship-building programthat made her the second maritime country of the world. Lloyd's Register of Shipping gives the steam tonnage of the United Kingdom as 18,111,000 gross tons in June, 1920. For the same month the tonnage of the United States is given as 12,406,000 gross tons. Japan comes next with a tonnage of 2,996,000 gross tons. According to the same authority the United Kingdom had 41.6 per cent of the world's tonnage in 1914 and 33.6 per cent in 1920; while the United States had 4.7 per cent of the world's tonnage in 1914 and 24 per cent in 1920.
The economic advantages of the United States enumerated in this chapter inevitably are reflected in the figures of national wealth and national income. While these figures are estimates rather than conclusive statements they are, nevertheless, indicative of a general situation.
During the war a number of attempts were made to approximate the pre-war wealth and income of the leading nations. Perhaps the most ambitious of these efforts was contained in a paper on "Wealth and Income of the Chief Powers" read before the Royal Statistical Society. (SeeThe London Economist, May 24, 1919, pp. 958-9.) This and other estimates were compiled by L. R. Gottlieb and printed in theQuarterly Journal of Economicsfor Nov. 1919. Mr. Gottlieb estimates the pre-war national wealth of Great Britain, France, Italy, Japan, Russia, Belgium, Germany, Austria-Hungary, Turkey and Bulgaria at 366,100 million dollars. At the same time the wealth of the United States was estimated at 204,400 million dollars. Thus the wealth of the United States was equal to about 36 per cent of the total wealth of the great nations in question.
The same article contains an estimate of pre-war national incomes for these great powers. The total is placed at 81,100 million dollars. The income for the United States is placed at 35,300 million dollars, or more than 43 per cent of the total.
The war has made important changes in the wealth and income of the principal powers. The wealth and income of Europe have been reduced, while the wealth and income of the United States have been greatly increased. This increase is rendered doubly emphatic by the demoralization in foreign exchange which gives the American dollar a position of unique authority in the financial world.
The latest wealth estimates (Commerce and Finance, May 26, and July 28, 1920) in terms of dollars at their purchasing-power value, makes the wealth of the whole British Empire 230 billions of dollars; of France, 100 billions; of Russia, 60 billions; of Italy, 40 billions; of Japan, 40 billions; of Germany, 20 billions, and of the United States, 500 billions. These figures are subject to alteration with the alteration of the exchange rates, but they indicate the immense advantage that is possessed by the business men of the United States over the business men of any or of all of the other nations of the world.
Before the war, the British were the chief lenders in the international field. In 1913 Great Britain had about 20 billions of dollars of foreign investments, as compared with 9 billions for France and about 6 billions for Germany. At the end of 1920, the British foreign investments had shrunk to a fraction of their former amount, while the United States, from the position of a debtor nation, had become the leading investing nation of the world, with over 9 billions of dollars loaned to the Allied governments; with notice loans estimated at over 10 billions; with foreign investments of 8 billions, and goods on consignment to the extent of 2 billions.
The United States therefore began the year 1921 with a greater financial lead, by several times over, than that which she held before the war, when she was credited with a greater wealth and a larger income than that of any other nation in the world. The extent of the advantage enjoyed by the United States at the end of 1920 cannot be stated with any final accuracy, but its proportions are staggering.
Economically the United States is a world power. She occupies one of the three great geographical areas in the temperate zone. If she were to include Canada, Mexico and Central America—the territory north of the Canal Zone—she would have the greatest unified body of economic advantage anywhere in the world.
The United States is rich in practically all of the important industrial resources. She has a large, relatively homogeneous population, a great part of which is directly descended from the conquering races of the world. Almost all of the essential raw materials are produced in the United States, and in relatively large quantities. The period since the Spanish War has witnessed a rapid increase in wealth production. The war of 1914 resulted in an even greater increase in shipping. The investable surplus is greater in the United States than in any other nation, and in amount as well as in percent the national debt is less than that in any other important nation except Japan. Economically the position of the United States is unique. The masters of her industries hold a position of great advantage in the capitalist world.
Economically the United States is a world power. Her world position in politics follows as a matter of course.
While the American people were busy with internal development, they played an unimportant part in world affairs. They were not competing for world trade, because they had relatively little to export; they were not building a merchant marine because of the smallness of their trading activities; they were not engaged in the scramble after undeveloped countries because, with an undeveloped country of their own, calling continually for enlarged investments, they had little surplus capital to employ in foreign enterprises.
This economic isolation of the United States was reflected in an equally thoroughgoing political isolation. With the exception of the Monroe Doctrine, which in its original form was intended as a measure of defense against foreign political and military aggression, the United States minded its own affairs, and allowed the remainder of the world to go its way. From time to time, as necessity arose, additional territory was purchased or taken from neighboring countries—but all of these transactions, up to the annexation of Hawaii (1898) were confined to the continent of North America, in which no European nation, with the exception of Great Britain, had any imperative territorial interest.
The economic changes which immediately preceded the Spanish War period commanded for the United States a place among the nations. The passing of economicaloofness marked the passing of political aloofness, and the United States entered upon a new era of international relationships. Possessed of abundant natural resources, and having through a long period of peace developed a large working capital with which these resources might be exploited, the United States, at the beginning of the twentieth century, was in a position to export, to trade and to invest in foreign enterprises.
The advent of the World War gave the United States a dramatic opportunity to take a position which she must have assumed in any case in a comparatively short time. It had, however, one signal, diplomatic advantage,—it enabled the capitalist governments of Europe to accept, with an excellent grace, the newly acquired economic prominence of the United States and to recognize her without question as one of the leading political powers. The loan of ten billions to Europe; the sending of two million men at double quick time to the battle front; the immense increases in the production of raw material that followed the declaration of war by the United States; the thoroughness displayed by the American people, once they had decided to enter the war, all played their part in the winning of the victory. There were feelings, very strongly expressed, that the United States should have come in sooner; should have sacrificed more and profiteered less. But once in, there could be no question either of the spirit of her armies or of the vast economic power behind them.
When it came to dividing the spoils of victory, the United States held, not only the purse strings, but the largest surpluses of food and raw materials as well. Her diplomacy at the Peace Table was weak. Her representatives, inexperienced in such matters, were no match for the trained diplomats of Europe, but her economic position was unquestioned, as was her right to take her place as one of the "big five."
The Peace Conference, for purposes of treaty making, separated the nations of the world into five classes:
1. The great capitalist nations.2. The lesser capitalist states.3. Enemy nations.4. Undeveloped territories.5. The socialist states.
1. The great capitalist nations.2. The lesser capitalist states.3. Enemy nations.4. Undeveloped territories.5. The socialist states.
The great capitalist states were five in number—Great Britain, France, Italy, Japan and the United States. These five states dominated the armistice commission and the Peace Conference and they were expected to dominate the League of Nations. The position of these five powers was clearly set forth in the regulations governing procedure at the Peace Conference. Rule I reads: "The belligerent powers with general interests—the United States of America, the British Empire, France, Italy and Japan—shall take part in all meetings and commissions." (New York Times, January 20, 1919.) Under this rule the Big Five were the Peace Conference, and throughout the subsequent negotiations they continued to act the part.
The same concentration of authority was read into the revised covenant of the League of Nations. Article 4 provides that the Executive Council of the League "shall consist of the representatives of the United States of America, of the British Empire, of France, of Italy and of Japan, together with four other members of the League." The authority of the Big Five was to be maintained by giving them five votes out of nine on the executive council of the League, no matter how many other nations might become members.
It was among the Big Five, furthermore, that the spoils of victory were divided. The Big Five enjoyed a full meal; the lesser capitalist states had the crumbs.
The enemy nations were stripped bare. Their colonies were taken, their foreign investments were confiscated, their merchant ships were appropriated, they were loaded down with enormous indemnities, they were dismembered. In short, they were rendered incapable of future economic competition. The thoroughgoing way in which this stripping was accomplished is discussed in detail by J. M. Keynes in "The Economic Consequences of the Peace" (chapters 4 and 5).
The undeveloped territories—the economic opportunities upon which the Big Five were relying for the disposal of their surplus products and surplus capital, were carved and handed about as a butcher carves a carcass. Shantung, which Germany had taken from China, was turned over to Japan under circumstances which made it impossible for China to sign the Treaty—thus leaving her territory open for further aggression. The Near East was divided between Great Britain, France and Italy. Mexico was not invited to sign the treaty and her name was omitted from the list of those eligible to join the League. The German possessions in Africa and in the Pacific were distributed in the form of "mandates" to the Great Powers. The principle underlying this distribution was that all of the unexploited territory should go to the capitalist victors for exploitation. The proportions of the division had been established, previously, in a series of secret treaties that had been entered into during the earlier years of the war.
With the Big Five in control, with the lesser capitalist states silenced; with the border states made or in the making; with the enemy reduced to economic impotence, and the unexploited portions of the world assigned for exploitation, the conference was compelled to face still another problem—the Socialist Republic of Russia.
Russia, Czar ridden and oppressed, had entered the war as an ally of France and Great Britain. Russia, unshackled and attempting self-government on an economic basis, was an "enemy of civilization." The Allies therefore supported counter-revolution, organized andencouraged warfare by the border states, established and maintained a blockade, the purpose of which was the starvation of the Russian people into submission, and did all that money, munitions, supplies, battleships and army divisions could do to destroy the results of the Russian Revolution.
The Big Five—assuming to speak for all of the twenty-three nations that had declared war on Germany—manipulated the geography of Europe, reduced their enemies to penury, disposed of millions of square miles of territory and tens of millions of human beings as a gardener disposes of his produce, and then turned their united strength to the task of crushing the only thing approaching self-government that Russia has had for centuries.
A more shameless exhibition of imperial lust is not recorded in history. Never before were five nations in a position to sit down at one table and decide the political fate of the world. The opportunity was unique, and yet the statesmen of the world played the old, savage game of imperial aggression and domination.
This brutal policy of dealing with the world and its people was accepted by the United States. Throughout the Conference her representatives occupied a commanding position; at any time they would have been able to speak with a voice of almost conclusive authority; they chose, nevertheless, to play their part in this imperial spectacle. To be sure the Senate refused to ratify the Treaty,—not because of its imperial iniquities, but rather because there was nothing in it for the United States.
The shares of spoil falling to Italy and France as a result of the treaty are comparatively small although both countries—and particularly France—carried a terrific war burden. Japan, the least active of any of the leading participants in the war, received territory of vast importance to her future development.
Italy,—under the secret treaty of London, signed April 26, 1915, by the representatives of Russia, France, Great Britain and Italy,—was to receive that part of Austria known as the Trentine, the entire southern Tyrol, the city and suburbs of Trieste, the Istrian Islands and the province of Dalmatia with various adjacent islands. Furthermore, Article IX of the Treaty stipulated that, in the division of Turkey, Italy should be entitled to an equal share in the basin of the Mediterranean, and specifically to the province of Adalia. Under Article XIII, "In the event of the expansion of French and English colonial domains in Africa at the expense of Germany, France and Great Britain recognize in principle the Italian right to demand for herself certain compensations in the sense of expansions of her lands in Erithria, Somaliland, in Lybia and colonial districts lying on the boundary, with the colonies of France and England." Substantially, this plan was followed in the Peace Treaty.
The territorial claims of France were simple. The secret treaties include a note from the French Minister of Foreign Affairs to the French Ambassador at Petrograd, dated February 1-14, 1917, which stated that under the Peace Treaty:
"(1) Alsace and Lorraine to be returned to France."(2) The boundaries will be extended at least to the limits of the former principality of Lorraine, and will be fixed under the direction of the French Government. At the same time strategic demands must be taken into consideration, so as to include within the French territory the whole of the industrial iron basin of Lorraine and the whole of the industrial coal-basin of the Saar."
"(1) Alsace and Lorraine to be returned to France.
"(2) The boundaries will be extended at least to the limits of the former principality of Lorraine, and will be fixed under the direction of the French Government. At the same time strategic demands must be taken into consideration, so as to include within the French territory the whole of the industrial iron basin of Lorraine and the whole of the industrial coal-basin of the Saar."
The Peace Treaty confirmed these provisions, with the exception of the Saar Valley, which is to go to France for 15 years under conditions which will ultimately cause its annexation to France if she desires it. France also gained some slight territorial concessions in Africa. Her realadvantage—as a result of the peace—lies in the control of the three provinces with their valuable mineral deposits.
The territorial ambitions of Japan were confined to the Far East. The former Russian Ambassador to Tokio, under date of February 8, 1917, makes the statement that Japan was desirous of securing "the succession to all the rights and privileges possessed by Germany in the Shantung province and for the acquisition of the islands north of the Equator." In a secret treaty with Great Britain, Japan secured a guarantee covering such a division of the German holdings in the Pacific.
These concessions are of great importance to Japan. By the terms of the Treaty one of her rivals for the trade of the East (Germany) is eliminated, and the territory of that rival goes to Japan. With the control of Port Arthur and Korea and Shantung, Japan holds the gateway to the heart of Northern China. The islands gained by Japan as a result of the Treaty give her a barrier extending from the Kurile Islands, near Kamchatka, through the Empire of Japan proper, to Formosa. Farther out in the Pacific, there are the Ladrones, the Carolines and the Pelew Islands, which, in combination, make a series of submarine bases that render attack by sea difficult or impossible, and that lie, incidentally, between the United States and the Philippine Islands. Japan came away from the Peace Conference with the key to the East in her pocket.
The lion's share of the Peace Conference spoil went to Great Britain. To each of the other participants, certain concessions, agreed upon beforehand, were made. The remainder of the war-spoil was added to the British Empire. This "remainder" comprised at least a million and half square miles of territory, and included some of the most important resources in the world.
The territorial gains of Great Britain cover four areas—the Near East, the Far East, Africa, and the South Pacific.
The gains of Great Britain in the Near East include Hedjez and Yemen, the control of which gives the British possession of virtually all of the territory bordering on the Red Sea. The Persian Gulf is likewise placed under British control, through her holding of Mesopotamia and her control over Persia and Oman. The eastern end of the Mediterranean is held by the British through their control of Palestine.
Thus the gateway to the East,—both by land and by sea, the eastern shores of the Mediterranean, the valleys of the Tigris and the Euphrates and the basin of the Red Sea all fall into the hands of the British, who now hold the heart of the Near East. The gains of Great Britain in Africa include Togoland, German Southwest Africa and German East Africa. With these accessions of territory, Great Britain holds a continuous stretch of country from the Cape to Cairo. A British subject can therefore travel on British soil from Cape Town via the Isthmus of Suez, to Siam, covering a distance as the crow flies of something like 10,000 miles.
The British gains in the South Pacific include Kaiser Wilhelm Land and the German islands south of the Equator.
What these territorial gains mean in the way of additional resources for the industries of the home country, only the future can decide. Certain it is, that outside of the Americas, Central Europe, Russia, China and Japan, Great Britain succeeded in annexing most of the important territory of the world.
TheChicago Tribune, in one of its charmingly frank editorials, thus describes the gains to the British Empire as a result of the war. "The British mopped up. They opened up their highway from Cairo to the Cape. They reached out from India and took the rich lands of the Euphrates. They won Mesopotamia and Syria in the war. They won Persia in diplomacy. They won the east coast of the Red Sea. They put protecting territory aboutEgypt and gave India bulwarks. They made the eastern dream of the Germans a British reality.
"The British never had their trade routes so guarded as now. They never had their supremacy of the sea so firmly established. Their naval competitor, Germany, is gone. No navy threatens them. No empire approximates their size, power, and influence.
"This is the golden age of the British Empire, its Augustan age. Any imperialistic nation would have fought any war at any time to obtain such results, and as imperialistic nations count costs, the British cost, in spite of its great sums in men and money was small." (January 4, 1920.)
Two significant facts stand out in this record of spoils distribution. One is that Great Britain received the lion's share of them in Asia and Africa. The other, that there is no mention of the Americas. Outside of the Western Hemisphere, Great Britain is mistress. In the Americas, with the exception of Canada, the United States is supreme.
There are two reasons for this. One is that Germany's ambitions and possessions included Asia and Africa primarily—and not America. The other is that the Peace Conference recognized the right of the United States to dominate the Western Hemisphere.
The representatives of the United States declared that their country was asking for nothing from the Peace Conference. Nevertheless, the insistent clamor from across the water led the American delegation to secure the insertion in the revised League Covenant of Article XXI which read: "Nothing in this covenant shall be deemed to affect the validity of international engagements, such as treaties of arbitration or regional understandings like the Monroe Doctrine for securing the maintenance of peace." This article coupled with the first portion of Article X, "Themembers of the League undertake to respect and preserve as against external aggression the territorial integrity and existing political independence of all members of the League," guarantees to the United States complete authority over Latin America, reserving to her political suzerainty and economic priority.
The half of the earth reserved to the United States under these provisions contains some of the richest mineral deposits, some of the largest timber areas, and some of the best agricultural territory in the world. Thus at the opening of the new era, the United States, at the cost of a comparatively small outlay in men and money, has guaranteed to her by all of the leading capitalist powers practically an exclusive privilege for the exploitation of the Western Hemisphere.
In the partition of the earth, one-half was left under the control of the United States. Among the great nations, parties to the war and the peace, the United States alone asked for nothing—save the acceptance by the world of the Monroe Doctrine. The doctrine, as generally understood, makes her mistress of the Western Hemisphere.
The Monroe Doctrine originated in the efforts of Latin America to establish its independence of imperial Europe, and the counter efforts of imperial Europe to fasten its authority on the newly created Latin American Republics. President Monroe, aroused by the European crusade against popular government, wrote a message to Congress (1823) in which he stated the position of the United States as follows:
"The American continents, by the free and independent condition which they have assumed and maintained, are henceforth not to be considered as subjects for future colonization by any European powers."
Monroe continues by pointing out that the United States must view any act which aims to establish European authority in the Americas as "dangerous to our peace and safety."
"The United States will keep her hands off Europe; she will expect Europe to keep her hands off America," was the essence of the doctrine, which has been popularly expressed in the phrase "America for the Americans." The Doctrine was thus a statement of international aloofness,—a declaration of American independence of the remainder of the world.
The Monroe Doctrine soon lost its political character. The southern statesmen who were then guiding the destinies of the United States were looking with longing eyes into Texas, Mexico, Cuba and other potential slave-holding territory. Later, the economic necessities of the northern capitalists led them in the same direction. Professor Roland G. Usher, in his "Pan-Americanism" (New York, The Century Company, 1915, pp. 391-392) insists that the Monroe Doctrine stands "First, for our incontrovertible right of self-defense. In the second place the Monroe Doctrine has stood for the equally undoubted right of the United States to champion and protect its primary economic interest against Europe or America."
Through the course of a century this statement of defensive policy has been converted into a doctrine of economic pseudo-sovereignty. It is no longer a case of keeping Europe out of Latin America but of getting the United States into Latin America.
The United States does not fear political aggression by Europe against the Western Hemisphere. On the contrary, the aggression to-day is largely economic, and the struggle for the markets and the investment opportunities of Latin America is being waged by the capitalists of every great industrial nation, including the United States.
Four of the Latin American countries, viewed from the standpoint of population and of immediately available assets, rank far ahead of the remainder of Latin America. Mexico, with a population in 1914-1915 of 15,502,000, had an annual government revenue of $72,687,000. The population of Brazil is 27,474,000. The annual revenue (1919) is $183,615,000. Argentine, with a population of 8,284,000, reported annual revenues of $159,000,000 (1918); and Chile, with a population of 3,870,000, had an annual revenue of $77,964,000 (1917). These four states rank in political and economic importance close to Canada.
Great Britain holds a number of strategic positions in the West Indies. Other nations have minor possessions in Latin America. None of these possessions, however, is of considerable economic or political importance. There remain Bolivia, Uruguay, Colombia, Ecuador, Paraguay, Peru, Venezuela, and the Central American states. The most populous of these countries is Peru (5,800,000 persons). All of the Central American states combined have a population of less than 6,000,000. The annual revenues of Uruguay (population 1,407,000) are $30,453,000 (1918-19). The combined government revenues of all Central America are less than twenty-five millions. (Statistical Abstract of the U. S., 1919, p. 826ff.)
Compared with the hundred million population of the United States; its estimated wealth (1918) of 250 billions; and its federal revenues of a billion and a half in 1916, the Latin American republics cut a very small figure indeed. The United States, bristling with economic surplus and armed with the Monroe Doctrine, as accepted and interpreted in the League Covenant, is free to turn her attention to the rich opportunities offered by the undeveloped territory stretching from the Rio Grande to Cape Horn. What is there to hinder her movements in this direction? Nothing but the limitation on her own needs and the adherence to her own public policies. This vast area, containing approximately nine million square miles (three times the area of continental United States), has a population of only a little over seventy millions. The entire government revenues of the territory are in the neighborhood of six hundred million, but so widely scattered are the people, so sharp are their nationalistic differences, and so completely have they failed to build up anything like an effective league to protect their common interests, that skillful maneuvering on the part of American economic and political interests should meet with no effectual or thoroughgoing opposition.
The "hands off America" doctrine which the United States has enunciated, and which Europe has accepted,means first that none of the Latin American Republics is permitted to enter into any entangling alliances without the approval of the United States. In the second place it means that the United States is free to treat all Latin American countries in the same way that she has treated Cuba, Hayti and Nicaragua during the past twenty years.
The United States is the chief producer—in the Western Hemisphere—of the manufactured supplies needed by the relatively undeveloped countries of Latin America. At the same time, the undeveloped countries of Latin America contain great supplies of ores, minerals, timber and other raw materials that are needed by the expanding manufacturing interests of the United States. The United States is a country with an investible surplus. Latin America offers ample opportunity for the investment of that surplus. Surrounding the entire territory is a Chinese wall in the form of the Monroe Doctrine—intangible but none the less effective.
Before the outbreak of the Great War, European capitalists dominated the Latin American investment market. The five years of struggle did much to eliminate European influence in Latin America.
The situation was reviewed at length in a publication of the United States Department of Commerce "Investments in Latin America and the British West Indies," by Frederick M. Halsey (Washington Government Printing Office, 1918):
"Concerning the undeveloped wealth of various South American countries," writes Mr. Halsey, "it may be said that minerals exist in all the Republics, that the forest resources of all (except possibly Uruguay) are very extensive, that oil deposits have been found in almost every country and are worked commercially in Argentine, Colombia, Chile, Ecuador, Peru and Venezuela, and that thereare lands available for the raising of live stock and for agricultural purposes" (p. 20).
As to the pre-war investments, Mr. Halsey points out that "Great Britain has long been the largest investor in Latin America" (p. 20). The total of British investments he places at 5,250 millions of dollars. A third of this was invested in Argentine, a fifth in Brazil and nearly a sixth in Mexico. French investments are placed at about one and a half billions of dollars. The German investments were extensive, particularly in financial and trading institutions. United States investments in Latin America before the war "were negligible" (p. 19) outside of the investments in the mining industry and in the packing business.
Just how much of a shift the war has occasioned in the ownership of Latin American railways, public utilities, mines, etc., it is impossible to say. Some such change has occurred, however, and it is wholly in the interest of the United States.
Generalizations which apply to Latin America have no force in respect to Canada. The capitalism of Canada is closely akin to the capitalism of the United States.
Canada possesses certain important resources which are highly essential to the United States. Chief among them are agricultural land and timber. There are two methods by which the industrial interests of the United States might normally proceed with relations to the Canadian resources. One is to attack the situation politically, the other is to absorb it economically. The latter method is being pursued at the present time. To be sure there is a large annual emigration from the United States into Canada (approximately 50,000 in 1919) but capital is migrating faster than human beings.
The Canadian Bureau of Statistics reports (letter of May 20, 1920) on "Stocks, Bonds and other Securities held by incorporated and joint stock Companies engaged in manufacturing industries in Canada, 1918," as owned by 8,130,368individual holders, distributed geographically as follows: Canada, $945,444,000; Great Britain, $153,758,000; United States, $555,943,000, and other countries, $17,221,322. Thus one-third of this form of Canadian investment is held in the United States.
The close economic inter-relations that are developing in the Americas, naturally have their counter-part in the political field. As the business interests reach southward for oil, iron, sugar, and tobacco they are accompanied or followed by the protecting arm of the State Department in Washington. Few citizens of the United States realize how thoroughly the conduct of the government, particularly in the Caribbean, reflects the conduct of the bankers and the traders.
Professor Hart in his "New American History" (American Book Co., 1917, p. 634) writes, "In addition the United States between 1906 and 1916 obtained a protectorate over the neighboring Latin American States of Cuba, Hayti, Panama, Santo Domingo and Nicaragua. All together these five states include 157,000 square miles and 6,000,000 people." Professor Hart makes this statement under the general topic, "What America Has Done for the World."
The Monroe Doctrine, logically applied to Latin America, can have but one possible outcome. Professor Chester Lloyd Jones characterizes that outcome in the following words, "Steadily, quietly, almost unconsciously the extension of international responsibility southward has become practically a fixed policy with the State Department. It is a policy which the record of the last sixteen years shows is followed, not without protest from influential factions, it is true, but none the less followed, by administrations of both parties and decidedly different shades within one of the parties.... Protests will continue but the logic of events is too strong to be overthrown by traditionalargument or prejudice." ("Caribbean Interests." New York, Appleton, 1916, p. 125.)
Latin America is in the grip of the Monroe Doctrine. Whether the individual states wish it or not they are the victims of a principle that has already shorn them of political sovereignty by making their foreign policy subject to veto by the United States, and that will eventually deprive them of control over their own internal affairs by placing the management of their economic activities under the direction of business interests centering in the United States. The protectorate which the United States will ultimately establish over Latin America was forecast in the treaty which "liberated" Cuba. The resolution declaring war upon Spain was prefaced by a preamble which demanded the independence of Cuba. Presumably this independence meant the right of self-government. Actually the sovereignty of Cuba is annihilated by the treaty of July 1, 1904, which provides:
"Article I. The Government of Cuba shall never enter into any treaty or compact with any foreign power or powers which will impair or tend to impair the independence of Cuba, nor in any matter authorize or permit any foreign power or powers to obtain by colonization or for military or naval purposes, or otherwise, lodgement in, or control over any portion of said island."
The most drastic limitations upon Cuba's sovereignty are contained in Article 3 which reads, "the Government of Cuba consents that the United States may exercise the right to intervene for the preservation of Cuban independence, the maintenance of a government adequate for the protection of life, property and individual liberty, and for discharging the obligation with respect to Cuba imposed by the Treaty of Paris on the United States now to be assumed and undertaken by the Government of Cuba." Under this article, the United States, at her discretion, may intervene in Cuba's internal affairs.
Under these treaty provisions the Cuban Government is not only prevented from exercising normal governmentalfunctions in international matters, but if a change of internal government should take place which in the opinion of the United States jeopardized "life, property and individual liberty" such a government could be suppressed by the armed forces of the United States and a government established in conformity with her wishes. Theoretically, Cuba is an independent nation. Practically, Cuba has signed away in her treaty with the United States every important attribute of sovereignty.
The fact that Cuba was a war-prize of the United States might be advanced as an explanation of her anomalous position, were it not for the relations now existing between the Dominican Republic, Hayti and Nicaragua on the one hand and the United States on the other. The United States has never been at war with any of these countries, yet her authority over them is complete.
The Convention between the United States and the Dominican Republic, proclaimed July 25, 1907, gave the United States the right to appoint a receiver of Dominican customs in order that the financial affairs of the Republic might be placed on a sound basis. This appointment was followed in 1916 by the landing of the armed forces of the United States in the territory of the Dominican Republic. On November 29, 1916, a military government was set up by the United States Marine Corps under a proclamation approved by the President. "This military government at present conducts the administration of the government" (Letter from State Department, September 29, 1919).
The proclamation issued by the Commander of the United States Marine Corps and approved by the President, cited the failure of the Dominican government to live up to its treaty obligations because of internal dissensions and stated that the Republic is made subject to military government and to the exercise of military law applicable to such occupation. Dominican statutes "will continue in effect insofar as they do not conflict with the objects of the Occupation or necessary relations established thereunder, and their lawful administration will continue in the hands of suchduly authorized Dominican officials as may be necessary, all under the oversight and control of the United States forces exercising Military Government." The proclamation further announces that the Military Government will collect the revenues and hold them in trust for the Republic.
Following this proclamation Captain H. S. Knapp issued a drastic order providing for a press censorship. "Any comment which is intended to be published on the attitude of the United States Government, or upon anything connected with the Occupation and Military Government of Santo Domingo must first be submitted to the local censor for approval. In case of any violation of this rule the publication of any newspaper or periodical will be suspended; and responsible persons,—owners, editors, or others—will further be liable to punishment by the Military Government. The printing and distribution of posters, handbills, or similar means of propaganda in order to disseminate views unfavorable to the United States Government or to the Military Government in Santo Domingo is forbidden." (Order secured from the Navy Department and published by The American Union against Militarism, Dec. 13, 1916.)
A similar situation exists in Hayti. The treaty of May 3, 1916, provides that "The Government of the United States will, by its good officers, aid the Haitian Government in the proper and efficient development of its agricultural, mineral and commercial resources and in the establishment of the finances of Hayti on a firm and solid basis." (Article I) "The President of Hayti shall appoint upon nomination by the President of the United States a general receiver and such aids and employees as may be necessary to manage the customs. The President of Hayti shall also appoint a nominee of the President of the United States as 'financial adviser' who shall 'devise an adequate system of public accounting, aid in increasing revenues' and take such other steps 'as may be deemed necessary for the welfare and prosperity of Hayti.'" (Article II.) Article III guarantees "aid and protection of both countries tothe General Receiver and the Financial Adviser." Under Article X "The Haitian Government obligates itself ... to create without delay an efficient constabulary, urban and rural, composed of native Haitians. This constabulary shall be organized and officered by Americans." The Haitian Government under Article XI, agrees not to "surrender any of the territory of the Republic by sale, lease or otherwise, or jurisdiction over such territory, to any foreign government or power" nor to enter into any treaty or contract that "will impair or tend to impair the independence of Hayti." Finally, to complete the subjugation of the Republic, Article XIV provides that "should the necessity occur, the United States will lend an efficient aid for the preservation of Haitian independence and the maintenance of a government adequate for the protection of life, property and individual liberty."
A year later, on August 20, 1917, theNew York Globecarried the following advertisement:—
Fortune in Sugar"The price of labor in practically all the cane sugar growing countries has gone steadily up for years, except in Hayti, where costs are lowest in the world."Hayti now is under U. S. Control."The Haitian-American corporation owns the best sugar lands in Hayti, owns railroads, wharf, light and power-plants, and is building sugar mills of the most modern design. There is assured income in the public utilities and large profits in the sugar business. We recommend the purchase of the stock of this corporation. Proceedings are being taken to list this stock on the New York Stock Exchange."Interesting story 'Sugar in Hayti' mailed on request."P. W. Chapman & Co., 53 William St., N. Y. C."
"The price of labor in practically all the cane sugar growing countries has gone steadily up for years, except in Hayti, where costs are lowest in the world.
"Hayti now is under U. S. Control.
"The Haitian-American corporation owns the best sugar lands in Hayti, owns railroads, wharf, light and power-plants, and is building sugar mills of the most modern design. There is assured income in the public utilities and large profits in the sugar business. We recommend the purchase of the stock of this corporation. Proceedings are being taken to list this stock on the New York Stock Exchange.
"Interesting story 'Sugar in Hayti' mailed on request.
"P. W. Chapman & Co., 53 William St., N. Y. C."
Hayti remained "under United States control" until the revelations of the summer of 1920 (seeThe Nation, July 10 and August 28, 1920), when it was shown that the natives were being compelled, by the American forces of occupation, to perform enforced labor on the roads and to accept a rule so tyrannous that thousands had refused to obey the orders of the military authorities, and had been shot for their pains. On October 14, 1920, theNew York Timesprinted a statement from Brigadier General George Barnett, formerly Commandant General of the Marine Corps, covering the conditions in Hayti between the time the marines landed (July, 1915) and June, 1920. General Barnett alleges in his report that there was evidence of "indiscriminate" killing of the natives by the American Marines; that "shocking conditions" had been revealed in the trial of two members of the army of occupation, and that the enforced labor system should be abolished forthwith. The report shows that, during the five years of the occupation, 3,250 Haytians had been killed by the Americans. During the same period, the losses to the army of occupation were 1 officer and 12 men killed and 2 officers and 26 men wounded.
The attitude of the United States authorities toward the Haytians is well illustrated by the following telegram which the United States Acting Secretary of the Navy sent on October 2, 1915, to Admiral Caperton, in charge of the forces in Hayti: "Whenever the Haytians wish, you may permit the election of a president to take place. The election of Dartiguenave is preferred by the United States."
The Cuban Treaty established the precedent; the Great War provided the occasion, and while Great Britain was clinching her hold in Persia, and Japan was strengthening her grip on Korea, the United States was engaged in establishing protectorates over the smaller and weaker Latin-American peoples, who have been subjected, one after another, to the omnipotence of their "Sister Republic" of the North.
Protectorates have been established by the United States, where such action seemed necessary, over some of the weaker Latin-American states. Their customs have been seized, their governments supplanted by military law and the "preservation of law and order" has been delegated to the Army and Navy of the United States. The United States has gone farther, and in Porto Rico and Panama has appropriated particular pieces of territory.
The Porto Ricans, during the Spanish-American War, welcomed the Americans as deliverers. The Americans, once in possession, held the Island of Porto Rico as securely as Great Britain holds India or Japan holds Korea. The Porto Ricans were not consulted. They had no opportunity for "self-determination." They were spoils of war and are held to-day as a part of the United States.
The Panama episode furnishes an even more striking instance of the policy that the United States has adopted toward Latin-American properties that seemed particularly necessary to her welfare.
Efforts to build a Panama Canal had covered centuries. When President Roosevelt took the matter in hand he found that the Government of Colombia was not inclined to grant the United States sovereignty over any portion of its territory. The treaty signed in 1846 and ratified in 1848 placed the good faith of the United States behind the guarantee that Colombia should enjoy her sovereign rights over the Isthmus. During November 1902 the United States ejected the representatives of Colombia from what is now the Panama Canal Zone and recognized a revolutionary government which immediately made the concessions necessary to enable the United States to begin its work of constructing the canal.
The issue is made clear by a statement of Mr. Roosevelt frequently reiterated by him (seeThe Outlook, October 7, 1911) and appearing in theWashington Postof March 24,1911, as follows:—"I am interested in the Panama Canal because I started it. If I had followed the traditional conservative methods I would have submitted a dignified state paper of probably two hundred pages to the Congress and the debate would have been going on yet. But I took the Canal Zone and let the Congress debate, and while the debate goes on, the Canal does also."
Article 35 of the Treaty of 1846 between the United States and Colombia (then New Grenada) reads as follows,—"The United States guarantees, positively and efficaciously to New Grenada, by the present stipulation, the perfect neutrality of the before mentioned Isthmus ... and the rights of sovereignty which New Grenada has and possesses over said territory."
In 1869 another treaty was negotiated between the United States and Colombia which provided for the building of a ship canal across the Isthmus. This treaty was signed by the presidents of both republics and ratified by the Colombian Congress. The United States Senate refused its assent to the treaty. Another treaty negotiated early in 1902 was ratified by the United States Senate but rejected by the Colombian Congress. The Congress of the United States had passed an act (June 28, 1902) "To provide for the construction of a canal connecting the waters of the Atlantic and the Pacific Oceans." Under this act the President was authorized to negotiate for the building of the canal across the Isthmus of Panama. If that proved impossible within a reasonable time, the President was to turn to the Nicaragua route. The treaty prepared in accordance with this act provided that the United States would pay Colombia ten millions of dollars in exchange for the sovereignty over the Canal Zone. The Colombian Congress after a lengthy debate rejected the treaty and adjourned on the last day of October, 1902.
Rumor had been general that if the treaty was not ratified by the Colombian Government, the State of Panama would secede from Colombia, sign the treaty, and thus secure the ten millions. In consequence of these rumors, whichthreatened transportation across the Isthmus, American war vessels were dispatched to Panama and to Colon.
On November 3, 1902, the Republic of Panama was established. On November 13 it was recognized by the United States. Immediately thereafter a treaty was prepared and ratified by both governments and the ten millions were paid to the Government of Panama.
Early in the day of November 3, the Department of State was informed that an uprising had occurred. Mr. Loomis wired, "Uprising on Isthmus reported. Keep Department promptly and fully informed." In reply to this the American consul replied, "The uprising has not occurred yet; it is announced that it will take place this evening. The situation is critical." Later the same official advised the Department that (in the words of the Presidential message, 1904) "the uprising had occurred and had been successful with no bloodshed."
The Colombian Government had sent troops to put down the insurrection but the Commander of the United States forces, acting under instructions sent from Washington on November 2, prevented the transportation of the troops. His instructions were as follows,—"Maintain free and uninterrupted transit if interruption is threatened by armed force with hostile intent, either governmental or insurgent, at any point within fifty miles of Panama. Government forces reported approaching the Isthmus in vessels. Prevent their landing, if, in your judgment, the landing would precipitate a conflict."
Thus a revolution was consummated under the watchful eye of the United States forces; the home government at Bogota was prevented from taking any steps to secure the return of the seceding state of Panama to her lawful sovereignty, and within ten days of the revolution, the new Republic was recognized by the United States Government.[57](Ten days was the length of time necessary to transmit a letter from Panama to Washington. Greater speed would have been impossible unless the new state had been recognized by telegraph.)
The people of the United States are the logical exploiters of the Western Hemisphere—the children of destiny for one half the world. They are pressed by economic necessity. They need the oil of Mexico, the coffee of Brazil, the beef of Argentine, the iron of Chile, the sugar of Cuba, the tobacco of Porto Rico, the hemp of Yucatan, the wheat and timber of Canada. In exchange for these commodities the United States is prepared to ship manufactured products. Furthermore, the masters of the United States have an immense and growing surplus that must be invested in some paying field, such as that provided by the mines, agricultural projects, timber, oil deposits, railroad and other industrial activities of Latin-America.
The rulers of the United States are the victims of an economic necessity that compels them to seek and to find raw materials, markets and investment opportunities. They are also the possessors of sufficient economic, financial, military and naval power to make these needs good at their discretion.
The rapidly increasing funds of United States capital invested in Latin-America and Canada, will demand more and more protection. There is but one way for the United States to afford that protection—that is to see that these countries preserve law and order, respect property, and follow the wishes of United States diplomacy. Wherever a government fails in this respect, it will be necessary for the State Department in coöperation with the Navy, to see that a government is established that will "make good."
Under the Monroe Doctrine, as it has long been interpreted, no Latin-American Government will be permittedto enter into entangling alliances with Europe or Asia. Under the Monroe Doctrine, as it is now being interpreted, no Latin-American people will be permitted to organize a revolutionary government that abolishes the right of private interests to own the oil, coal, timber and other resources. The mere threat of such action by the Carranza Government was enough to show what the policy of the United States must be in such an emergency.
The United States need not dominate politically her weaker sister republics. It is not necessary for her to interfere with their "independence." So long as their resources may be exploited by American capitalists; so long as the investments are reasonably safe; so long as markets are open, and so long as the other necessities of United States capitalism are fulfilled, the smaller states of the Western Hemisphere will be left free to pursue their various ways in prosperity and peace.