Under such circumstances, diplomatic negotiations looking toward peace were difficult, and resulted only in disagreements and delay. Accordingly on April 11 the President laid before Congress a succinct account of Cuban affairs and earnestly called for forcible intervention. The grounds for this action he found in the sufferings of the people of Cuba, the injuries to Americans and to American property and trade, and the menace to American peace which was entailed by continuous conflict at our very threshold.[5] The transfer of the Cuban question from the hands of the President to those of Congress was equivalent to a decision in favor of war. On April 19 the Senate and House resolved that the people of Cuba were and ought to be independent, demanded that Spain withdraw from the island and directed the President to use the force of the nation to achieve the results desired. The approval of the Executive on the following day completed the severance of peaceful relations with Spain. At daylight on April 22 Admiral Sampson and his fleet were crossing the narrows between Florida and Cuba, on the way to establish a blockade of the greater part of the island. Within three days more, Commodore George Dewey, who was in command of a fleet at Hong-Kong, had been instructed to proceed at once to the Philippine Islands and capture or destroy the Spanish fleet there. On April 25 Congress formally declared war upon the kingdom of Spain.
It was not by mere chance, of course, that Admiral Sampson and Commodore Dewey were prepared to act with such celerity. Authorities in the Navy Department had long felt that a collision with Spain was inevitable and had been preparing for such an eventuality. With as little publicity as possible the Department completed and commissioned ships that were already under construction; it hastened the repair of vessels which were in any way defective; it ordered target practice and fleet manoeuvres; and it prepared plans for the conduct of a naval war. Commanders of squadrons were instructed to keep in service men whose terms of enlistment were about to expire; supplies of ammunition were procured and shipped to points where they would be needed; theOregon, which had been stationed on the Pacific coast, was ordered to return to Key West by way of the Straits of Magellan and so began a voyage whose closing days were watched with interest by a whole nation. A Northern Patrol Squadron was organized to guard New England; a Flying Squadron was assembled at Hampton Roads for service on the Atlantic coast or abroad; and a formidable array gathered at Key West under Rear-Admiral Sampson for duty in the West Indies. Foreign shipyards were scoured for vessels in process of building and several were purchased, completed and renamed for American service. Greater additions were made through the purchase of merchantmen and their transformation into auxiliary cruisers, gunboats and colliers. In these ways the attempt was made, with some success, to improvise a navy on the eve of war.
The people of the country had scarcely become accustomed to the thought that war with Spain had actually come to pass when word was received in Washington of the exploit of Commodore Dewey in the Philippine Islands. Attention for the moment was focussed on the Far East, and the press dilated upon the first test of the new American Navy.
The story of the test proved to have points of interest and importance. When Commodore Dewey received the orders already mentioned, on April 25, he finished immediately the preparations for conflict which had been initiated and turned his flagship, theOlympia, in the direction of Manila. His available force consisted of four protected cruisers, two gunboats, a revenue cutter, a collier and a supply ship. The city of Manila is on Manila Bay, a body of water twenty miles or more wide, and is reached only through a narrow entrance. Dewey judged that the channel was too deep to be mined successfully except by trained experts and that both contact and electrical mines would deteriorate so rapidly in tropical waters as to be effective only for a short time. He therefore decided to steam through the channel at night, disregarding the mines, and to attack the Spanish fleet which lay within. The plans worked out even better than he had hoped. With all lights masked and the crews at the guns, the squadron moved silently through the passage with no other opposition than three shots from a single battery. Once within the Bay Dewey steamed slowly toward the city of Manila and then back to a fortified point, Cavite, where he found his quarry arranged in an irregular crescent and awaiting the conflict. Oblivious of the hasty and inaccurate fire from the batteries on shore, he deliberately moved to a position within two and a half miles of the Spanish ships and said to the Captain of theOlympia, "You may fire when you are ready, Gridley."
[Illustration:The Philippines]
Three times westward and twice eastward the American squadron ran slowly back and forth, using the port and starboard batteries in turn, and in a short time the shore batteries and the Spanish fleet were masses of ruins. Of the American forces, only eight were injured, and they only slightly, while 167 of the Spanish were killed and 214 wounded. News of the victory was as unexpected as it was welcome in the United States. President McKinley appointed Dewey an acting Rear-Admiral and on all sides discussion began of the situation and possibilities of the Philippines.
In the meantime, the position of the American squadron was far from secure. To be sure, all resistance from the batteries in and around Manila was quickly suppressed by a threat to destroy the city; nevertheless Admiral Dewey was in command of too slight a force to enable him to occupy both the town and its environs. He accordingly notified Washington that more troops were necessary if it were intended to seize and retain Manila, and expeditionary forces were despatched, the first of which arrived on June 30. Indeed it was high time that assistance be forthcoming, for new possibilities of conflict had appeared in the presence of a powerful force of German warships.
As soon as the defeat of the Spanish squadron had been effected, Admiral Dewey established a blockade of Manila Bay and, according to custom, the war vessels of interested nations went thither to observe the effectiveness of the blockade and to care for the well-being of their nationals. Among the early arrivals were the British, the French and the Japanese, all of whom observed the formalities of the situation and reported to the American Admiral before venturing into the harbor. The Germans, however, omitted the proprieties until sharply reminded by a shot across the bow of theCormoran. By mid-June five German men-of-war under command of Vice Admiral von Diedrichs were in the Bay—a force nearly if not quite the match of the American squadron. When the Germans continued their disregard of the regulations controlling the blockade, indicating a potential if not an actual hostility, it became necessary for Admiral Dewey to have done with the Teutonic peril at once. He sent a verbal message to von Diedrichs which effectually ended all controversy. Admiral Dewey has not disclosed the exact phraseology of the message, nor did he send a record of it to the Navy Department. A newspaper correspondent who was acting as one of the Admiral's aides asserted that the protest was against von Diedrich's disregard of the usual courtesies of naval intercourse and that it closed with the words, "if he wants a fight he can have it right now." The disclosure by Captain Edward Chichester, in command of the English force, that he had orders to comply with Admiral Dewey's restrictions and that his sympathies were with the Americans, together with the arrival of the expeditionary force, assured American supremacy and a peaceful blockade. On August 13 a joint movement of the naval forces and the infantry under General Wesley Merritt resulted in the speedy surrender of the city of Manila. The Americans were now in control of the capital of the Philippine Islands and would, perforce, face the question of the ultimate disposition of the archipelago in case of the eventual defeat of Spain. In the meanwhile, popular attention turned toward stirring events which were taking place in the Caribbean Sea.
On April 28—a week after Admiral Sampson started for Cuba—the Spanish Admiral Cervera left the Cape Verde Islands. His force was a considerable one; his goal was unknown, although naturally believed to be some point in the Spanish West Indies. On the assumption that this hypothesis was a correct one, Sampson patrolled the northern coast of Cuba, extending his movement as far as Porto Rico, and scouts were placed out beyond Guadeloupe and Martinique. The entire nation anxiously awaited the outcome of the impending encounter.
[Illustration:The Spanish-American War in the West Indies]
On May 19 Cervera slipped into Santiago, a town on the eastern end of Cuba which had rail connection with Havana, the capital of the island. Commodore W.S. Schley who was in command of a squadron on the southern coast soon received information of the enemy's whereabouts and established a blockade of the city, while Sampson hastened to the scene and assumed command of operations. The American force now included four first-class battleships, one second-class battleship and two cruisers. They were arranged in semi-circular formation facing the harbor, and at night powerful search-lights were kept directed upon the channel which Admiral Cervera must take in case of an attempt to escape. The main part of Santiago Bay is between four and five miles long and is reached through a narrow entrance channel. Elevated positions at the mouth of the channel rendered the vigorous defence of the harbor a matter of some ease. Early in the progress of the blockade the Americans attempted to sink a collier across the entrance, but fortunately, as it turned out, this daring project failed, and Admiral Sampson settled down to await developments.
It was apparent that the capture of Santiago, and the destruction of the fleet could be brought about only through a joint movement of the army and navy. Hitherto the war had been entirely on the sea. Nevertheless over 200,000 volunteers had been called for, in addition to somewhat over 50,000 regular troops and the "Rough Riders"—the last a regiment of volunteer cavalry which had been raised by Colonel Leonard Wood and Theodore Roosevelt and which was largely composed of cowboys, ranchmen, Indians and athletes from eastern colleges. The regulars, together with a few volunteers and the Rough Riders, were sent to Tampa, Florida, while most of the volunteers were trained at Chicamauga Park, in Georgia. It had been expected that the important military operations would take place around Havana and for that reason the officer commanding the army, General Nelson A. Miles, with most of the regular troops, were retained for the larger service. The command of the expedition to Santiago fell to General William E. Shafter. Sixteen thousand eight hundred and eighty-seven officers and men set sail from Tampa on June 14 and began to disembark eight days later at Daiquiri, sixteen miles to the east of Santiago.
Advancing from this point General Lawton, commanding a division of infantry, moved parallel to the shore and seized Siboney. General Wheeler, a former Confederate who was now in command of the cavalry, met and defeated a Spanish force at Las Guasimas. Further advance met difficulties that were more serious. On the left of the American line was San Juan Hill, an eminence which commanded the country toward the east; on the right was El Caney, a fortified village held by a small force of Spaniards. The country between the two points was a jungle, the roads hardly better than trails, where troops frequently had to go in single file. The fight at El Caney was severe, the enemy being well-entrenched, well-armed and protected by wire entanglements and block houses, and General Lawton suffered a loss of more than 400 killed and wounded before driving the Spaniards out of their position. San Juan Hill was still more stubbornly defended, and an American advance was impeded by the heat, the tropical growth and the uneven character of the country. Under these circumstances officers became separated from their men and victory was gained through the determination and resourcefulness of the individual. The Spaniards then fell back upon Santiago.
[Illustration:Campaign about Santiago]
The continued success of the Americans compelled the Spanish authorities to make an immediate decision in regard to the fleet. To remain in the harbor seemed to mean being encircled and starved; to go out through the narrow channel seemed to lead to sure destruction. Yet the latter venture appealed to the commander-in-chief of Cuba, Captain-General Blanco, as the more honorable one and on July 2 orders were sent to Admiral Cervera to make the attempt. Early next morning, while Admiral Sampson was away at a conference with General Shafter, lookouts on the American battleships descried theInfanta Maria Teresafeeling her way out of the harbor, followed by the remainder of the Spanish fleet, three armored cruisers and two torpedo-boat destroyers. The Americans instantly closed in, directing their fire first against theTeresaand later against the rest of the fleet as they tried to follow their leader out to safety. Once out of the harbor the entire Spanish fleet dashed headlong toward the west, parallel to the coast, while the Americans kept pace, pouring a gruelling fire from every available gun. The Spaniards returned the fire and thus "the action resolved itself into a series of magnificent duels between powerful ironclads." One by one the enemy's vessels were sunk or forced to run ashore—theCristobal Colonlast, at two o'clock in the afternoon. The Spanish losses, besides the fleet, were 323 killed and 151 wounded; the Americans lost one killed and one wounded. The city of Santiago, deprived of its fleet, found itself in a desperate plight and surrendered on July 16. Shortly afterwards General Miles led an expedition into Porto Rico, but operations were soon brought to a close because of the suspension of hostilities, and from a military point of view the importance of the campaign was negligible.
The succession of overwhelming defeats drove home to Spain the futility of further conflict. The despatch of American troops to the Philippines and to Porto Rico, moreover, indicated that Spain would soon suffer other losses. Hence the Spanish government, acting through Jules Cambon, the French ambassador to the United States, sought terms for the settlement of the war. The President's reply of July 30 made the following stipulations: Spain to relinquish and evacuate Cuba and to cede Porto Rico and one of the Ladrone Islands; the United States to occupy the city and bay of Manila, pending the conclusion of peace and the determination of the final disposition of the Philippines. Spain wished to restrict negotiations to the Cuban question, but was forced to accept the conditions laid down by the victor. A preliminary agreement or protocol was therefore signed, which provided for a conference at Paris concerning peace terms.
The uniform success of the American arms could not obscure the popular belief that the Department of War had been guilty of many shortcomings. It will doubtless be always a subject for dispute as to whether the major portion of the blame is to be laid at the door of the traditional American disinclination to be prepared for warfare, or upon Secretary Alger and his immediate advisors. That the conduct of the military affairs was inexpert, however, is admitted on all sides. The facilities for taking care of the troops at Tampa were inadequate. When transports reached Tampa to take the troops to Santiago, officers wildly scrambled to get their men on board. The Rough Riders, for example, made their way into a transport intended for two other regiments, one of regulars and the other of volunteers, with the result that the volunteers and half of the regulars were left on shore. The clothing supplied for the Cuban campaign was better suited to a cold climate than to summer in the tropics. The health of the troops during the Santiago campaign was such that the general officers expressed the opinion that the army must immediately be removed from Cuba or suffer severe and unnecessary losses from malarial fever. When the men were removed, however, they were taken to Montauk Point on Long Island, where the climate was too cool and bracing. Unsanitary conditions in the training camps within the borders of the United States were the cause of fatalities estimated at several times the number killed in battle. A controversy over the quality of the beef supplied to the troops led to an executive commission of investigation. Both unnecessary and unfortunate was the Sampson-Schley controversy, which originated in a difference of opinion about the proportion of credit which each of these officers should have for the success of Santiago and which was continued in charges that the latter had made serious mistakes in the conduct of his share of the operations. Subsequently a Court of Inquiry investigated the accusations and made a decision which did not completely satisfy either side.
Despite these minor mistakes, however, the war increased the strength of the administration. The most lasting effects of the conflict on constitutional and political history demand detailed discussion at a later point, but the immediate results can be briefly stated.[6] The successful prosecution of a popular war, combined with widespread prosperity and the demoralization of the opposition party greatly heightened the prestige of the Republicans. McKinley appeared to have been in truth, the "advance agent of prosperity"; and his party obtained a dominating control of public policy.
H. Croly,Marcus A. Hanna(1912), and C.S. Olcott,William McKinley(2 vols., 1916), discuss the politics of the period, subject to the limitations already mentioned. W.D. Foulke,Fighting the Spoilsman(1919), describes the relation of the administration to the civil service; for the Dingley tariff, Stanwood, Tarbell and Taussig.
The literature on the Spanish war is extensive. Most detailed and reliable is F.E. Chadwick,Relations of the United States and Spain; I,Diplomacy, II, III,The Spanish War(1909, 1911). J.H. Latané,America as a World Power(1907), has several good chapters; H.E. Flack,Spanish-American Diplomatic Relations Preceding the War of 1898(1906), and E.J. Benton,International Law and Diplomacy of the Spanish-American War(1908), take up the diplomatic side. On naval preparations, J.D. Long,New American Navy(2 vols., 1903), is by McKinley's Secretary of the Navy; see also E.S. Maclay,History of the United States Navy(rev. ed., 3 vols., 1901-1902). Good autobiographical accounts are: C.E. Clark,My Fifty Years in the Navy(1917); George Dewey,Autobiography(1913); Theodore Roosevelt,Autobiography; and W.S. Schley,Forty-five Years under the Flag(1914). See also A.T. Mahan,Lessons of the War with Spain(1899).
* * * * *
[1] Cf. Peck, 518.
[2] Other members of the cabinet were: Lyman J. Gage, Ill., Secretary of the Treasury; Joseph McKenna, Calif., Attorney-General; J.A. Gary, Md., Postmaster-General; J.D. Long, Mass., Secretary of the Navy, C.N. Bliss, Secretary of the Interior; James Wilson, Ia., Secretary of Agriculture.
[3] The National Civil Service Reform League estimated the changes at 10,000.
[4] In 1911 the wreck of theMainewas raised and examined. The evidence found was such as to substantiate the findings of the American court of inquiry.Scientific American, January 27, 1912.
[5] It has commonly been felt among certain classes in the United States since 1898 that the business interests whose property and trade were mentioned by President McKinley had an undue share in bringing about the declaration of war. While it can not be doubted that the President was swayed more by business interests than most of our executives since the Civil War have been, yet it is also true that the sufferings of the Cubans aroused genuine sympathy in the United States. The President himself was anxious to delay war as long as possible.
[6] Below, Chap. XVIII.
"The guns of Admiral Dewey did something more than destroy a Spanish fleet in the harbor of Manila. Their echo came back to us in a question new in the history of our government." The new problem was Imperialism—was it wise policy and was it constitutional to annex and govern territories outside the limits of continental North America? In colonial problems the United States had had no experience; and if the Philippines, Cuba or Porto Rico were annexed, it would be necessary to administer the affairs of peoples whose languages, racial characteristics and forms of government were utterly strange. Such objections arose in the minds of many Americans as the conference assembled at Paris on October 1 to settle the terms of peace.[1]
The chief controversies between the Spanish and the American negotiators related to Cuba and the Philippines. The Spanish commissioners early proposed to transfer Cuba to the United States, the latter to turn it over to the Cuban people in due time. With the sovereignty of Cuba was to go the debt of the island. On the refusal of the Americans to accede to this, the Spanish commissioners urged the transfer of Cuba to the United States without any promise as to its future. Instructions from Washington both on possession and on debt, however, were explicit and in the end Spain had to relinquish all claim to Cuba and assume responsibility for its indebtedness. The proper disposition of the Philippines presented far greater difficulty. Not only was there a difference of opinion between the two groups of commissioners, but the American government was in doubt about the wisest course to pursue, and grave diversity of opinion existed among the people and in the peace commission itself. Moreover the capture of the city of Manila had taken place after the protocol had been signed and after hostilities had been ordered suspended, but before news of these facts had reached Admiral Dewey. The original instructions of President McKinley to the peace commissioners were to the effect that the outcome of the war had placed new duties and responsibilities on the United States, that the commercial opportunity which possession of the Philippines would present could not be overlooked and that the island of Luzon at least must be ceded. So little was known about the people and the possibilities of the islands that the American commission was compelled to go far afield to obtain information from writers and investigators in regard to questions of defence, the political capacity of the inhabitants, the danger that another nation might step in if the United States should evacuate, commercial prospects, and so on. President McKinley soon came to the opinion that the proper course was to take the entire archipelago. To give them back to Spain seemed "dishonorable"; to turn them over to our commercial rivals, France or Germany, seemed "bad business"; to leave them to themselves would be to leave them to "anarchy and misrule"; hence there was nothing to do but to take all of them and attempt to spread American civilization among the Filipino people. The American commissioners therefore demanded the Philippines, but realizing the defect in their case, since the conquest of Manila had taken place after the conclusion of the protocol, agreed to pay Spain $20,000,000. The Spanish commissioners thereupon yielded to necessity and reluctantly agreed.
As finally signed, the treaty of December 10, 1898, contained the following points: Spain agreed to relinquish Cuba, and the United States was to protect life and property during its occupancy of the island; Spain also ceded Porto Rico and the other Spanish West Indies, Guam in the Ladrones, and the Philippines on payment of $20,000,000; the United States agreed to return to Spain, at its own cost, all Spanish prisoners taken at the time of the capture of Manila; the civil and political rights of the inhabitants of the ceded territories were to be determined by Congress; and freedom of religion was guaranteed.
The reference of the treaty to the Senate for ratification elicited many divergences of opinion, the ablest opposition being presented by members of the President's own party. In particular, the position taken by Senator Hoar, a rigid Republican and a close friend of President McKinley, made a strong impression. That there can be no just government without the consent of the governed, he asserted, was the central doctrine of the Declaration of Independence. Moreover, the acquisition of foreign lands, he believed, would lead us into competition with European powers for territory, and thus tempt us away from the international policy which had been laid down by the "fathers" and followed by the nation ever since. Most of the Democrats held similar views, but some of them heeded the advice of Bryan, who urged that the treaty be ratified in order to end the war, and that the ultimate disposition of the new possessions be decided in the next presidential campaign. The point of view which seems to have prevailed with most Republicans was that the United States, being a sovereign nation, possessed power to acquire territory and to determine its future status, and that as a matter of expediency it was better to take the Philippines than to risk the dangers which lay in leaving them alone. Shortly before the final vote was taken, an insurrection broke out in the Philippines against American control, which may have influenced some senators to accept the President's settlement. Even with this aid, however, ratification was brought about by the narrow margin of one vote more than the required two-thirds majority.[2]
Within the field of politics, the Republicans increased the advantage which they had gained in 1896. The congressional and state elections of 1893 continued their control of the House and strengthened it in the Senate; the world-wide prosperity which has already been mentioned and in which the United States shared, was in striking contrast with the business depression of the recent Democratic administration; discoveries of gold deposits in the Klondike and the improvement of methods of extracting the metal from the ore greatly increased the currency supply and assisted in raising the level of prices, thereby giving greater prosperity to the western farmer and lessening his complaints. The gold standard act of March 14, 1900, pleased the financial interests, for it fixed the standard of value, set the amount of the gold reserve at $150,000,000, and specified adequate means by which the Secretary of the Treasury could maintain other forms of money on a parity with the precious metal. Within the Republican organization, the President's soothing personality and Hanna's meticulous attention to the details of the party machinery continued undiminished the momentum which had been gathered. Defections on the imperialism issue, while affecting important party leaders, were numerically unimportant. Among the financial and industrial classes, therefore, confidence in President McKinley and his advisors was thoroughgoing. There was a strong bond of interest, moreover, between territorial expansion and industrial expansion, between Imperialism and the expansion of foreign markets. The primacy of business was assured.
The renomination of McKinley at the Republican Convention in Philadelphia, on June 19, 1900, was unanimous. The vice-presidency, contrary to tradition, occupied the center of interest. Several men of prominence were mentioned in this connection but the name which evoked most enthusiasm was that of Theodore Roosevelt. Roosevelt's career during the war with Spain had been a prominent factor in making him Governor of New York. As Governor he had shown energy and independence, especially in connection with measures for taxing street railway and other franchises, and had come into conflict with Senator Thomas C. Platt, the boss of the state. Senator Platt, therefore, desired to divert the vigorous Governor into the vice-presidency, an office which usually casts a "species of political oblivion" over its occupant. McKinley was opposed to the plan and so were Hanna and Roosevelt himself. The latter desired to put into effect further plans which he had made as Governor, and the attempt to shelve him aroused his fighting spirit. In the convention, however, sentiment in behalf of Roosevelt, especially from the West, was so strong as to over-rule both the administration and the wishes of the Governor. McKinley sent emphatic word that he was neither for nor against any man, but would accept the decision of the delegates. Hanna then withdrew his objections and Roosevelt was nominated without opposition.
The Republican platform emphasized the prosperity which had resulted from the accession of the party to power; it pointed out the danger which would ensue if the opposition were allowed to conduct public affairs; and it dwelt upon the growth of the export trade, and the beneficence of the Dingley tariff. An antitrust plank deprecated combinations designed to create monopolies, and promised legislation to prevent such abuses. Imperialism was briefly dismissed: "No other course was possible than to destroy Spain's sovereignty throughout the West Indies and in the Philippine Islands. That course created our responsibility before the world … to provide for the maintenance of law and order, and for the establishment of good government and for the performance of international obligations."
The dissension which had existed within the Democratic party since the second administration of Cleveland was still the important fact about the organization. Having been out of power, the party could take only the negative position of hostile criticism; there had been no reorganization and clarification of purposes, and no new leader had appeared who combined the personal prestige of Bryan with those qualities of conservatism and solidity which the East demanded, so that from the beginning there was no doubt that Bryan would again be the candidate and that he would take the lead in framing the platform. The convention met in Kansas City, on July 4. The platform placed most emphasis upon three issues. The first, which was declared the "paramount" one, was imperialism. The reasons given for opposing territorial expansion were mainly those brought forward by Senator Hoar at the time when the peace treaty was under discussion.
We declare again that all governments instituted among men derive their just powers from the consent of the governed; that any government not based upon the consent of the governed is a tyranny; and that to impose upon any people a government of force is to substitute the methods of imperialism for those of a republic.
The second issue, the evils of big business, received renewed attention, although an old complaint, because of the many industrial consolidations of the years immediately preceding. The "trusts" were condemned for appropriating the fruits of industry for the benefit of the few, and the Republican party was charged with fostering them in return for campaign subscriptions and political support. The Dingley act was denounced as a "trust-breeding" measure. The remedies proposed were severely definite in comparison with the vague plank which had been offered by the Republicans: they included publicity as to the affairs of corporations doing an interstate business; the prohibition of stock-watering and attempts at monopoly; and the use of all the constitutional powers of Congress over interstate commerce and the mails for the enactment of comprehensive and effective legislation. That the silver issue was mentioned was due to the insistence of Bryan, who believed that the stand which had been taken by the party in 1896 was a right one. Notwithstanding the objections of many influential leaders, therefore, a free silver plank was inserted, although in brief terms and in an inconspicuous place.
As a political contest, the campaign of 1900 lacked life in comparison with that of 1896. Interest in anti-imperialism was difficult to arouse, and waned visibly as the weeks wore on. Prosperity and the increased money supply sapped the strength of earlier discontent with the currency situation, so that the choice presented to the voters simmered down to imperialism and Bryan. A bit of vigor was infused into the campaign through the energetic speaking tours of Roosevelt and the Democratic leader. Hanna, as Chairman of the Republican National Committee, organized everything with his usual skill, and raised, his biographer tells us, $2,500,000 from the important business men of the country—one-fifth of it from two companies. The result of the election was the choice of McKinley, whose plurality over Bryan exceeded 860,000 in a total vote of less than 14,000,000; Bryan received less support than had been accorded him in 1896.
While imperialism as a political issue was being discussed and decided, the history of American control in Cuba, Porto Rico and the Philippines was rapidly being written. Economic conditions in the first of these islands at the time of the American occupation were little short of appalling. The streets, houses and public institutions were filthy and in disrepair; anarchy ruled, for lack of any stable and recognized government; and the people were half-clothed, homeless and starving. At noon on January 1, 1899, the Spanish flag was hauled down in Havana, the American flag was hoisted in its place, and representatives of the former government relinquished all rights to the sovereignty and public property of the island. General John R. Brooke, and later General Leonard Wood controlled affairs as military governors.
The first task was to feed the hungry, and care for the sick and dying. The customs service was revived under command of Colonel Tasker H. Bliss and began to supply needed revenue. The penal institutions were investigated—noisome holes in which were crowded wretched prisoners, many of whom had been incarcerated for no ascertainable reason. Education was reorganized, equipment provided, teachers found, and schools repaired or rebuilt. Most remarkable, was the work of sanitation. Heaps of rubbish were cleared away; houses washed and disinfected; sewers were opened and streets cleaned. Scientific investigation disclosed the fact that the mosquito disseminated the yellow fever and steps were taken to prevent the breeding of these pests. So successful were the efforts that in a few years the fever had become a thing of the past.
It was seen that the economic rehabilitation of Cuba must come about mainly through the production of sugar, and since the United States was the chief purchaser of the product, the tariff schedule was of vital importance. In 1901 Congress was urged to reduce the tariff on imports from Cuba, but the opposition was formidable. The American Beet Sugar Association complained that their industry, which had been recently established, would be ruined by allowing reductions to Cuban growers; the cane-sugar planters of Louisiana were allied with them; and the friends of protection feared the effect of any break in the tariff wall. On the other hand, the American Sugar Refining Company, popularly called the "Sugar Trust," merely refined raw sugar and desired an increase in the supply. Lobbyists of all descriptions poured into Washington to influence committees and individuals, and General Leonard Wood, then the Governor of Cuba, even expended Cuban funds in the spread of literature favorable to a reciprocal reduction of duties. In the meantime, a reciprocity treaty was made and submitted to the Senate, where it hung fire for somewhat more than a year, and was finally ratified on December 16, 1903. It provided for the admission of Cuban products into the United States at a reduction of twenty per cent., and a reciprocal reduction on American goods entering Cuba of twenty-five to forty per cent.
The establishment of a policy in regard to permanent relations between the United States and Cuba was brought about in 1901-1902. When Congress had demanded the withdrawal of Spain from the island in 1898, its action had been accompanied by the Teller Resolution, disclaiming any intention of keeping Cuba and asserting a determination to leave the control of the island with its people. After the close of the war President McKinley and his closest advisors in Congress had determined that the pledge should be kept, and public sentiment had been in agreement with them. As soon, therefore, as American control was an established fact, plans were formulated for relinquishing Cuba to the people of the island. A constitutional convention was held, and a form of government, modelled on that of the United States, was framed and adopted on February 21, 1901.
While the Cuban convention was deliberating, it became apparent that the constitution would not include any statement of a policy in regard to future relations with the United States. The American Senate, therefore, under the leadership of Senator O.H. Platt, passed the so-called "Platt Amendment." Its several provisions were as follows: the Cuban government shall never enter into agreements with other powers which tend to impair the independence of the island; it shall not contract public debts of such size that the ordinary revenues would be inadequate to pay interest charges and provide for a sinking fund; it shall permit the intervention of the United States when needed to preserve Cuban independence and the maintenance of an adequate government; and it shall sell or lease necessary coaling stations to the United States. When satisfied that the purpose of the Amendment was not to enable the United States to meddle in affairs in Cuba, but merely to secure Cuban independence and set forth a definite understanding between the two nations, the convention incorporated it in the final constitution. On May 20, 1902, the control of Cuba was formally relinquished to the people of the island, with the good wishes of the people of the United States. Only once since that time has the United States intervened. During the summer of 1906, an insurrection against the Cuban government took place during which the president of the Republic requested American assistance. A small army was despatched, which remained until March, 1909, when quiet was restored and an orderly election was held.
The task of the United States in Porto Rico was far simpler than in Cuba. The island was small; the people homogeneous, predominantly white, and well-disposed toward American occupation; and only slight damage had been done by the troops during the war because of the cessation of hostilities at the outset of the Porto Rican expedition. The development of a system of education, therefore, the improvement of roads and the betterment of health conditions through vaccination and the control of yellow fever presented a problem which was relatively simple.
On October 18, 1898, United States officials assumed control of the island, and until May 1, 1900, the government was in the hands of the War Department. On the latter date a civil government was established under the "Foraker Act," an organic law or constitution passed by Congress on April 12, 1900. Under the provisions of the Act a governor was to be appointed by the President of the United States, to be the chief executive officer of the island. The people of Porto Rico were allowed a voice in the government through the power to elect the lower house of the legislature; but control by the United States was assured by giving the President authority to choose the members of the upper house, and by giving both the governor and Congress a veto on legislation passed by the island legislature. In the course of time the Porto Ricans desired larger self-government. This was granted by the act of March 2, 1917, which made the islanders citizens of the United States and gave them power to elect both houses of the legislature.[3]
The first difficulty met by the United States in the Philippines was an inheritance from Spanish rule. In 1896 the Filipinos, led by Aguinaldo, had risen against the government in order to secure more liberal treatment and to eliminate the influence of the Catholic friars from politics. The "embers of dissatisfaction" were still aglow when the American war intervened. Relations between the revolutionists and the United States forces became strained when the former were not allowed to cooperate with the Americans against the Spanish, and in February, 1899, open warfare followed. Not until July, 1902, was quiet restored, and during the process enough cruelties were practiced by American soldiers to make the anti-imperialists doubly fearful of military control.[4]
McKinley and his Secretary of War—at this time Elihu Root—desired to supplant military government with civil rule as quickly as possible and to this end the President appointed the first Philippine Commission on January 20, 1899, with Jacob G. Schurman, of Cornell University, as Chairman. It was instructed to investigate the situation in the islands and to recommend any action that seemed wise. The unsettled condition of affairs seriously hampered the work of the Commission but it gathered a fund of information which it later published. A second Commission was sent out in 1900, with Judge William H. Taft at the head. The instructions given to the Commission by President McKinley embodied an enlightened colonial policy, the core of which was that the government being established was "designed not for our satisfaction, or for the expression of our theoretical views, but for the happiness, peace, and prosperity of the people of the Philippine Islands." The Commission wielded such large powers that gradually the area controlled by the civil government increased at the expense of the military authorities, and by 1902 only the wild Moros were under military control.
By this time a definite form of government could be planned for, built upon the labors of the second Commission. The Philippine Act of July 1, 1902, provided for a governor appointed by the President, with the advice of the Senate, executive departments, and a legislature, the lower house of which was elected by the people. From the beginning the Filipinos, like the Porto Ricans, have desired a greater range of self-government, and in 1916 long steps were taken in the direction desired by them. The Jones act of that year materially increased the powers of the Philippine government and gave the Filipinos power to elect the upper as well as the lower house of the legislature. The passage of the law met with enthusiastic approval in the islands.
The purpose of American rule in the Philippines has been to fit the people for self-government, although opinions have differed as to how soon the final outcome could be brought about. An early and bothersome problem was found in the friars' lands, which consisted of about 425,000 acres, for the most part in the vicinity of Manila. The possession of so great an area, together with the religious power and the considerable political authority which the friars exercised under Spanish rule, gave the Church a domination which might threaten trouble after the American occupation. The solution of the problem was found in the purchase of the lands for about $7,000,000 by the United States. Efforts have been made to introduce a complete system of education—physical and industrial, as well as academic—with such success that when the Jones bill was being discussed in Congress in 1916 it was asserted that every member of the Philippine legislature at that time was a college graduate. In 1917 the Filipino student body numbered 647,256, with 11,822 teachers. Political education has also been a part of the American idea. Elementary self-government was gradually introduced, starting in the more civilized local municipalities and provinces and confining the suffrage to the educated people, the official classes and property owners. The preservation of order has been more and more entrusted to a Philippine constabulary; civil service officers and school teachers have been increasingly chosen from the Filipinos; and the courts have been partly manned with native judges. Work in sanitation has followed the lines marked out in Cuba and Porto Rico. First and last over 10,000,000 vaccinations were performed before 1914; small-pox has been controlled; attention has been paid to the building of highways and railroads, water supply, the disposal of sewage and allied problems. The precise time, if ever, when independence should be granted to the Philippines is the one great question remaining.
The first attempt to revise the customs laws in the Philippines was made by the Commission during the governorship of William H. Taft. These schedules were revised in Washington in such a way as to discriminate against Philippine interests, but they had remained in force only a short time when Congress passed the act of March 8, 1902, allowing goods grown or produced in the Philippines to enter the United States under a twenty-five per cent. reduction. In 1909, the tariff makers were induced to relent to the extent of allowing the free importation of goods grown, produced or manufactured in the Philippines, except that only a specified annual amount of Philippine sugar and tobacco might be brought in. In 1913 the wall was entirely removed on all trade between the United States and the Philippines in articles made or grown in either of the two countries.
While Congress and the President were concerning themselves with the practical problems of military control, sanitation and the like, the Supreme Court was laboriously considering the less tangible but equally perplexing question of the constitutionality of the several acts which the legislative and executive departments had committed. The power of Congress to acquire territory and the right of the executive to control new territory under the war power had long been conceded. Admittedly, however, government under the war power was temporary and transitional. In earlier times such acquisitions as those effected by the Louisiana purchase and the annexation of Texas had been consummated with the distinct understanding that these regions should immediately or eventually become territories or states in the Union. The status of Porto Rico and the Philippines was novel. "The civil rights and political status of the native inhabitants of the territories hereby ceded to the United States," ran the words of the treaty of peace closing the war with Spain, "shall be determined by the Congress." Did this mean that Congress might govern the new acquisitions independently of the Constitution? Could it abridge freedom of speech, and permit cruel and unusual punishments, or establish slavery? Could Congress permanently govern these lands without giving their citizens the rights of citizens of the United States, and with no intention of ever making them territories or states? On the other hand, if Congress must act within the limits prescribed by the Constitution, would the wild Moros of the Philippines be the beneficiaries of the amendment preserving the right of trial by jury? In the popular language of the day, did the Constitution follow the flag?
It was not long before the Supreme Court was called upon in the "Insular Cases" to express itself upon these constitutional questions. The first case was De Limav.Bidwell. It was a suit to recover duties paid on goods sent from Porto Rico to the United States during the interval between the cession of the island and the passage of the Foraker Act. The duties had been paid under the Dingley law, which levied customs of specified amounts upon all goods imported "from foreign countries." Was Porto Rico a "foreign" country? The majority of the nine members of the Court thought that it was not foreign, that there was scarcely a "shred of authority" for the view that a "district ceded to and in the possession of the United States remains for any purpose a foreign country." Since Porto Rico was not a foreign country, the duties were wrongfully collected and must be returned. The remaining four justices dissented. One of them delivered a dissenting opinion in which he held that Porto Rico occupied middle ground between that of a foreign country and domestic territory. As such its status could be determined by Congress only and therefore its products were subject to duties levied by the Dingley act.
In Downesv.Bidwell the Court was compelled to determine the constitutionality of the part of the Foraker Act which provided for a tariff between Porto Rico and the United States equal to fifteen per cent. of that levied by the Dingley act. Again the Court divided five to four. Mr. Justice Brown delivered the majority opinion. It was to the effect that the Constitution applied only to States; that Congress possessed unlimited power over the political relations of the territories; that Porto Rico was a "territory appurtenant to and belonging to the United States"; and that the part of the Constitution which says that duties shall be uniform throughout the United States did not apply to Porto Rico unless Congress so willed. Hence the customs clause of the Foraker Act was valid. Four of the majority, however, who agreed with Mr. Justice Brown in his conclusion that the tariff clause of the Foraker Act was constitutional did so for reasons which they asserted to be "different from, if not in conflict with, those expressed" by him.
From the point of view of constitutional law, the decisions were unsatisfactory, because of the balanced division of opinion. Yet to have declared all the provisions of the Constitution in force in all the acquisitions would have been embarrassing. Logic and the Constitution went to the winds, while the executive and legislative departments administered the territories on the convenient and flexible theory that certain constitutional provisions must be heeded and that others need not.
While the colonial policy of the United States was being developed, the possession of the Philippines added interest in the United States to an unusual international situation in China which immediately involved several European nations and eventually affected America. The Chinese-Japanese War, which came to a close in 1895, had uncovered to the world the weakness of China as a military power and had weakened the hold of the reigning monarch upon the people of the Empire. Thereupon the leading commercial nations of Europe began to seize portions of China in order to extend their trade relations in the Far East. Russia first attempted to obtain a seaport, but retired when an uproar of protest arose from the remainder of Europe. Not long afterwards, two German missionaries in the province of Shantung were murdered. The outrage formed a sufficient pretext for aggressive action, as a result of which China leased Kiaochau to Germany for ninety-nine years, including in the grant railway and mining privileges and an indemnity; Russia then renewed her attempt and succeeded in leasing Port Arthur and Talienwan for twenty-five years. Great Britain followed with the acquisition of rights in Weihaiwei similar to those of Russia in Port Arthur; Japan found its share in the province of Fukien, and France in Kwangchaouwan. In each case, moreover, the leasing power designated a large area around its holdings as a "sphere of influence," in which its economic and political mastery was complete. In this way, thirteen of the eighteen provinces of China, including the most desirable harbors, waterways and mines, were partially controlled by the powers.
American foreign affairs had been, since October 1, 1898, in the skilful hands of John Hay, who was possessed of an intimate knowledge of conditions in Europe. Hay perceived the danger to American commercial interests in China, and accordingly in September, 1899, he addressed a circular note to the powers requesting each of them to give formal assurances that in its sphere of influence: (1) it would not interfere with any treaty port or vested interest; (2) it would agree that the Chinese tariff should apply equally to all goods shipped to ports in the spheres, and be collected by the Chinese officials; and (3) it would charge no higher harbor and railroad rates for citizens of other nations than for its own. The powers having agreed more or less directly, Hay informed them by a note of March 20, 1900, that all had acceded to his propositions and that the United States considered their assent as "final and definitive." There could be, of course, no effectual guaranty that the powers would fully observe this "Open-Door" policy, but the economic penetration of China, which would soon result in complete political possession, was at least retarded for the moment.
Domestic affairs in China, meanwhile, had been seething under the surface. An ill-starred reform movement, initiated by the Emperor, had failed, the government was discredited, and the Empress Dowager seized the throne for herself. All China interpreted the event to presage a return to the old order of things—a general anti-foreign movement. Economic distresses, bad crops, a disastrous flood and hatred of foreign missionaries, combined with a deep resentment at the European partition of their country, caused the Chinese to break out in a score of scattered attacks on the hated aliens. The culmination was the Boxer Rebellion. The Boxers was a society which had long existed in China for various religious, patriotic and other purposes. It took up the cry "Drive out the foreigners and uphold the dynasty." Government officials by their disinclination to quell the Boxer uprising, showed that their sympathies were with the rioters.
The climax of the outbreak came in and around Pekin, the capital of China. The railroad from the city to the coast was seized, telegraphic connection cut off, and the representatives of the foreign powers were compelled to fortify themselves within the city. On June 19, 1900, all foreigners were ordered to leave within twenty-four hours, and the German minister was shot when he attempted to visit the proper officer in order to protest. The Chinese army poured out to surround the quarter of the city where the legations were situated and cut them off from the rest of the world. All foreigners fled to the British legation, where they constructed bomb proof cellars, raised barricades and planted artillery.[5] The powers, including the United States, combined to send a punitive expedition to Pekin, while the legationers settled down to a state of siege, determined to hold out as long as possible. At last on August 14, when the surviving foreigners were reduced to eating horse flesh and when scores had been killed or wounded, the relief column reached the capital. It was high time. The foreign quarters and much of the business portion, the banks, and the theatres had been burned, and the entire city threatened with destruction.
By the time that the uprisings in Pekin and elsewhere had been suppressed, it was evident that the powers would have a stern accounting with China. Hay had already openly announced the policy of the United States in his note of July 3, 1900; it was that the United States would seek a solution which should bring about permanent safety and peace to China, preserve the territorial entity of the country, protect the rights of friendly powers and insure an equal opportunity for all nations in the commerce of China. Hay continued through the negotiations to urge joint action on the part of the powers, and procured from them a statement disclaiming any purpose to acquire any part of China. At length in December, 1900, the demands upon China were formulated, to which that unhappy nation was compelled to accede. The most important were, punishment for the guilty rioters, safeguards for the future, indemnities for losses and the improvement of commercial relations. The financial indemnity finally placed upon China was $333,000,000, of which $24,000,000 was for the United States. The latter sum proved to be more than sufficient to satisfy all claims and China was relieved from the payment of about $11,000,000. As a mark of appreciation for this act, the Chinese government determined to use the fund in sending students to the United States for education.
While the problems concerning China and the colonial possessions of theUnited States were reaching a settlement, on September 6, 1901,President McKinley attended the Pan-American Exposition in Buffalo,where he was shot by a young fanatic. He died eight days later andVice-President Roosevelt succeeded him.
The framing, contents and ratification of the treaty of 1898 are well described in Chadwick, Latané and Olcott. The treaty itself is conveniently found in William MacDonald,Documentary Source Book of American History(new ed., 1916).
On imperialism: L.A. Coolidge,An Old-Fashioned Senator, O.H. Plat(1910); G.F. Hoar,Autobiography of Seventy Years, contains a strong argument against imperialism; A.C. Coolidge,United States as a World Power(1916).
The best accounts of the election of 1900 are in Stanwood, Croly andLatané.
The island possessions have given rise to a considerable body of special volumes of a high order. Especially useful are: (Cuba), Elihu Hoot,Military and Colonial Policy of the United States(1916), by McKinley's Secretary of War; L.A. Coolidge,O.H. Platt(1910); A.G. Robinson,Cuba and the Intervention(1905); C.E. Magoon,Republic of Cuba(1908), by the provisional governor during the second intervention. (Porto Rico), W.F. Willoughby,Territories and Dependencies of the United States(1905), by a former treasurer of Porto Rico; L.S. Rowe,United States and Porto Rico(1904). The most complete work on the Philippines is D.C. Worcester,Philippines: Past and Present(2 vols., 1914), by a member of the Commission; the valuable report of Commissioner Taft is inReport of the Philippine Commission, 1907, part 3, printed also asSenate Document 200, 60th Congress, 1st session, vol. 7, (Serial Number 5240).
The legal and constitutional aspects of imperialism are best followed in theHarvard Law Review, vols. XII, XIII; W.W. Willoughby,Constitutional Law of the United States(2 vols., 1910); C.F. Randolph,The Law and Policy of Annexation(1901); the "insular cases" are inUnited States Reports, vol. 182, pp. 1, 244.
The most complete account of affairs in China is P.H. Clements,The Boxer Rebellion(1915); J.B. Moore,Digest, vol. V (1906), is useful, as always; J.W. Foster,American Diplomacy in the Orient(1903), is clear and concise; W.R. Thayer,John Hay(2 vols., 1915), is disappointing.
* * * * *
[1] The American commissioners were W.R. Day, Secretary of State; Whitelaw Reid, editor of the New YorkTribune; and Senators C.K. Davis, W.P. Frye and George Gray. Senator Hoar remonstrated with McKinley for placing senators on such commissions as this, on the ground that the independence of the Senate was thereby lessened when the question of ratifying the treaty came before that body. He declared that McKinley admitted that the practice was wrong. Cf.Autobiography, II, 46-51.
[2] Of the President's party, T.B. Reed, the powerful Speaker of the House, retired from public life for personal reasons and because of his dissent from the imperialist policy of his party. McCall,Reed, 237-8.
[3] Under the provisions of the Foraker Act only fifteen per cent. of the usual duties were to be paid on goods passing between the island and the United States, and since July 25, 1901, complete free trade has existed.
[4] The Philippine group is about 7,000 miles southwest of San Francisco; the chief island, Luzon, is almost exactly the size of Ohio, 40,000 sq. miles; the largest city, Manila, contained over 250,000 people at the time of the American occupation.
[5] It was on the occasion of despatching troops to avenge the death of Von Ketteler, the German minister, that the Emperor gave instructions to "give no quarter and to (act) so like Huns that for a thousand years to come no Chinese would dare to look a German in the face."
Most of the tendencies which characterized the growth of population, the expansion of the West, the concentration of the people in cities, the development of manufacturing and agriculture, and the extension of the railway system, from 1870 to 1890, were equally significant during the two decades following the latter year. Nevertheless there were important differences of detail in the tendencies of the later period; and about the year 1900 in particular there occurred changes that were far-reaching.
[Illustration:The chief foreign elements in the population of the United States, 1910]
The rate of growth of population slowed up slightly after 1890, being twenty-one per cent. per decade, as contrasted with twenty-five per cent. from 1870 to 1890. The increases were distributed over a larger area during the later two decades, and aside from the industrial states, those which showed the greatest growth were Oklahoma, Texas and California. Immigration continued to be large, and concentrated in the north, especially in the cities. In New York city, for instance, forty per cent. of the inhabitants in 1910 were foreign born, and thirty-eight per cent. more were of foreign, or mixed foreign and native parentage. The chief European contributors to the population of America in 1910 in the order of their importance were Germany, Austria-Hungary, Russia, Ireland, Italy and England. Moreover the foreign elements had frequently become concentrated in especial states: the Germans in Wisconsin, Minnesota and Illinois; the Russians in New York, North Dakota and Connecticut; the Austrians in Pennsylvania and New Jersey; and the Irish in Massachusetts, Connecticut and New York. The immigration of Canadians, which had been of importance before 1900, appreciably slowed down after that year; and instead there was a distinct movement in the opposite direction, especially from Minnesota, North Dakota and Washington. The emigration was caused mainly by the desire to take up fertile lands which had been widely advertised by the Canadian government. The migration from the eastern states toward the West continued as in earlier years. It was noticeable, however, that whereas previous migration had been almost wholly on east and west lines, there was in later years a greater tendency to seek favorable openings wherever they were found. Oklahoma, for example, in 1910 contained 71,000 natives of Illinois, 101,000 Kansans and 162,000 Missourians. The trend of population toward the cities was so rapid between 1890 and 1910 as to suggest the likelihood that by 1920 half the people of the country would be living in communities of 2,500 persons or more. Of the twenty-three towns that more than doubled in numbers during the two decades after 1890, seventeen were in the South and on the Pacific Coast, indicating that the tendency toward urban life was no longer confined to the North and East.
Manufacturing increased its importance as the greatest economic activity in the Northeast, and was moving westward so rapidly that Ohio, Michigan, Indiana and Illinois found their interests becoming increasingly like those of the eastern states. Parts of the South, also, developed considerable industrial interests. The manufacture of cotton goods, for example, increased with such rapidity that three of the first five states in the value of their product in 1909 were southern states—North Carolina, South Carolina and Georgia. Since 1889 the production of lumber has taken a prominent place. Louisiana doubled its activity from 1889 to 1899 and had tripled this record by 1909. Almost the entire South from Virginia to Louisiana produced large amounts during the twenty years under consideration. The iron and steel industry in Alabama, and the production of turpentine, resin and fertilizers were other important southern interests. Throughout the country at large the number of wage earners engaged in manufacturing grew somewhat more rapidly than the population, being about twenty-five per cent. per decade from 1890 to 1910.
The center of agriculture continued to be in the Middle West, in which was to be found nearly fifty-three per cent. of the improved farm lands and fifty-eight per cent. of the value of all farm property. It was in this part of the country that the greatest increases in the amount of improved land took place, and particularly in the prairie country west of the Mississippi. By 1890 the Plains had lost their earlier unique and picturesque characteristics as a cattle country, and had given way to the homesteader. Hence the greatest expansion in agriculture took place in the tier of states from North Dakota to Texas. It appeared, therefore, that manufacturing was driving agriculture farther and farther to the west: New England cultivated less farm land in 1910 than in 1850; the improved area in New York, New Jersey and Pennsylvania declined after 1880; Ohio tilled fewer acres in 1910 than in 1900, and the gradual replacement of agriculture by manufacturing was observable in Indiana and Illinois. Oklahoma and Texas, on the other hand, together opened to cultivation between 1890 and 1910 nearly 24,000,000 acres, an expanse almost equivalent to the combined areas of New Hampshire, Vermont, Massachusetts and Maryland.
By 1890 it was clear that the future of the Far West lay in agriculture, rather than in the mining of the precious metals. Between that date and 1910, the amount of improved farm land in the section increased sixty-five per cent. In the states of Washington, New Mexico, Colorado, Idaho and Montana, large areas were placed under cultivation. In Washington the amount of improved farm land increased about 350 per cent. The growing of fruits and nuts was brought to a high state of excellence in the coast states. The timber industry developed after 1880 and particularly after 1900. About the close of the nineteenth century the great lumber companies began to seek sources of supply to take the place of those around the Great Lakes. They turned to the South and the Far West. The methods which were used for getting control of the land, and the recklessness with which the supplies of timber were cut off became of importance as causes of the conservation movement. The main handicap in the way of the development of trade between the Far West and the East was the great distances involved. Hence arose the interest of the Coast in transcontinental railway rates and the project for a canal across the isthmus of Panama.
An economic fact of no little importance was a change in the downward tendency of the price level after 1896. It will be remembered that the constant fall in prices from 1873 to 1896 had brought distress to the farmers of the West and had been one of the causes of the Populist revolt. After 1896 the process was reversed. Between that year and 1913 the quantity of gold in circulation considerably increased, as has been seen; bank deposits subject to check trebled in volume, and the use of checks became more common; altogether it was estimated by Professor Irving Fisher that the quantity of money in circulation increased two-fold. Prices were fifty per cent. higher in 1913 than in the earlier year, and accordingly the complaints of the farmer were less frequently heard. The wage earner in the factories, however, was differently affected. The price which he had to pay for the necessities of life increased faster than his wages, so that his standard of living was going down. Inasmuch as the number of wage earners in the factories was rapidly increasing, it seemed inevitable that the problem of rising prices after 1896 would constitute as great a problem as the problem of falling prices had done before that year.
[Illustration:The Cost of Food, 1900-1912]
In industrial enterprise the close of the nineteenth century and the opening of the twentieth were characterized by a mad rush toward consolidation. To a milder degree the process had, of course, been under way for many years, during which the Standard Oil Company and other trusts were the subject of much study and legislation. In the course of time some of these concerns made such great profits that their leaders sought attractive openings for the investment of their surplus. They began to appear on the boards of directors of railways, banks, electric lighting companies and other industrial organizations. Before 1900 two powerful groups had definitely formed. The Standard or Rockefeller group was obtaining large interests in such railroads as the Missouri, Kansas and Texas, the Delaware, Lackawanna and Western, and the Chicago, Milwaukee and St. Paul. It was reaching out to the gas and electric companies in New York, had an alliance with the National City Bank and others, and was in touch with great life insurance companies such as the Equitable and the Mutual of New York. Such connections enabled them to determine the policies and direct the investments of these important concerns. The Morgans extended their influence over the Philadelphia and Reading, the New York, Lake Erie and Western, the Lehigh Valley and others. Morgan himself also entered the industrial field as organizer of the Federal Steel Company and the National Tube Company.
The mania for organizing large corporations came to a climax about 1900. The census taken in that year noted ninety-two that had been formed between January 1, 1899, and June 30, 1900. Early in 1904 the editor of Moody'sManual of Corporation Securitiesnoted the existence of 440 large industrial and transportation combinations whose capitalization as measured by the par value of their stocks and bonds was nearly $20,500,000,000. The securities—stocks and bonds—of the new companies were eagerly taken up by the investing public. Prosperity was wide-spread and the financial strength behind the organizations seemed unlimited. Speculation became common. A few individuals amassed wealth through the shrewd purchase and sale of stocks, and countless others sought unsuccessfully to imitate them. Where sales of 400,000 shares on the stock exchange had formerly been looked upon as a good day's business, the record jumped to a million, then two, and even three.[1]
A threatened competitive struggle among certain steel manufacturers in 1901 led to the formation of the United States Steel Corporation, the most famous consolidation of the period. It was, strictly speaking, a "holding corporation" which did not manufacture at all, but merely held the securities and directed the policies of the group of companies of which it was composed. It integrated all the elements of the industry—ore deposits, coal mines, limestone, a thousand miles of railroads, ore vessels on the Great Lakes, furnaces, steel works, rolling mills and other related interests. The value of the tangible property which was thus brought under the control of a single group of men was estimated by the United States Commissioner of Corporations at about $700,000,000. The company issued securities, however, to somewhat over twice this amount. In other words, about $700,000,000 of the capitalization was "water," that is, securities issued in excess of the value of the tangible properties owned. The prices paid to those who controlled the constituent companies were such as to make them multi-millionaires over night, and the commission given to the financiers who organized the Corporation was unparalleled in size, amounting to $62,500,000.
The appreciation of the value of the ore deposits controlled by the Steel Corporation later replaced some of the water in its securities, but in many cases no such process came about. Investors therefore discovered that the paper which they had purchased did not represent real property, but merely the hope of a company that its profits would be large enough to provide returns upon all its securities. One hundred of the leading industrial stocks shrank in value $1,750,000,000 within eighteen months. In the case of the Steel Corporation it was noticeable that its supremacy depended to a large extent on the possession of resources of ore on land much of which had originally belonged to the public, a fact which, the Commissioner of Corporations remarked, made the affairs of the company a matter of public interest.
The growth and consolidation which characterized the history of industry were also taking place in the railway system, although somewhat more slowly. It has already been noted that the length of the railroads had reached 160,000 miles by 1890. For the next two decades the rate of construction diminished slightly, yet the total in 1914 was 252,231 miles, and the par value of all railroad securities was estimated at $20,500,000,000. Nearly four and a half million persons, a railroad president estimated in 1915, were at that time interested in the industry as employees, as workmen in shops making railroad supplies, or through the ownership of stocks and bonds.
The management of the roads is, of course, continually changing; alliances are made and broken; groups form and dissolve. About the time that the United States Steel Corporation was being organized, however, about ninety-five per cent. of the important lines were in the control of six groups of influential persons, which were dominated by fourteen individuals. Each group had obtained the upper hand in the roads of one or more sections. The Morgan-Hill group, for example, held the Chicago, Burlington and Quincy, the Northern Pacific, the Great Northern, the Southern, the Atlantic Coast Line, the Erie and others, amounting to 47,206 miles. E.H. Harriman, chairman of the board of directors of the Union Pacific, succeeded in obtaining control of so many lines that by 1901 the Interstate Commerce Commission asserted that the consummation of plans which he then had in mind would subject nearly one-half the territory of the United States to the power of a single will. Before his death in 1909 he had obtained practical control of a system of roads running from coast to coast and passing through the most important cities of the country and had planned to continue indefinitely the process of acquiring new lines.
[Illustration:Morgan-Hill railroads as listed shortly after 1900]
The concentration of the banking interests of the country went hand in hand with consolidation in industry and railway control. The unprecedented operations which have just been mentioned demanded unprecedented amounts of capital and credit, and the concentration of these necessities occurred in New York City. The Standard Oil group and the Morgan group dominated the banking interests to such an extent that it was doubtful whether any great business enterprise demanding large capital could be started without the aid of one or the other of them. Some years later a congressional investigation was started, to discover whether the control of a few men over the financial affairs of the nation amounted to a "money trust," and at that time it was found that the members of four allied financial institutions in New York City held 341 directorships in banks, insurance companies, railroads, steamship companies and trading and public utility corporations, having aggregate resources of $22,245,000,000.