Contemporary American History, 1877-1913 Part 17

Revision of the tariff had always been a thankless task for any party.

The Democrats had found it such in 1894 when their bill had failed to please any one, including President Cleveland, and when for collateral or independent reasons a period of industrial depression had set in. The McKinley bill of 1890 had aroused a storm of protest which had swept the Republicans out of power, and it is probable that the Dingley tariff of 1897 would have created similar opposition if it could have been disentangled from the other overshadowing issues growing out of the Spanish War. The Payne-Aldrich tariff likewise failed to please; but its failure was all the more significant because its pa.s.sage was opposed by such a large number of prominent party members. The Democrats, as was naturally to be expected, made all they could out of the situation, and cried "Treason." Even what appeared to be a concession to the radicals, the adoption of a resolution providing for an amendment to the Const.i.tution authorizing the imposition of an income tax, was not accepted as a consolation, but was looked upon as a subterfuge to escape the probable dilemma of having an income tax law pa.s.sed immediately and submitted to the Supreme Court again.

Notwithstanding the dissensions within his party, Mr. Taft continued steadily to press a legislative policy which he had marked out. In a special message on January 7, 1910, he recommended the creation of a court of commerce to have jurisdiction, among other things, over appeals from the Interstate Commerce Commission. This proposal was enacted into law on June 18, 1910; and the appointments were duly made by the President. The career of the tribunal was not, however, particularly happy. Some of its decisions against the rulings of the Commission were popularly regarded as too favorable to railway interests; one of the judges, Mr. Archbald, of Pennsylvania, was impeached and removed on the ground that his private relations with certain railway corporations were highly questionable; and at length Congress in 1913 terminated its short life.

Acting upon a recommendation of the President, Congress, in June, 1910, pa.s.sed a law providing for the establishment of a postal savings system, in connection with the post offices. The law authorized the payment of two per cent interest on money deposited at the designated post offices and the distribution of all such deposits among state and national banks under the protection of bonds placed with the Treasurer of the United States. The scheme was applied experimentally at a few offices and then rapidly extended, until within two years it was in operation at more than 12,000 offices and over $20,000,000 was on deposit. The plan which had been branded as "socialistic" a few years before when advocated by the Populists was now hailed as an enlightened reform, even by the banks as well as business men, for they discovered that it brought out secret h.o.a.rdings and gave the banks the benefit at a low rate of interest--lower than that paid by ordinary savings concerns.

The postal savings system was shortly supplemented by a system of parcels post. Mr. Taft strongly advocated the establishment of such a system, and it had been urged in Congress for many years, but had been blocked by the opposition of the express companies, for obvious reasons, and by country merchants who feared that they would be injured by the increased compet.i.tion of the mail order departments of city stores.

Finally, by a law approved on August 24, 1912, Congress made provision for the establishment of this long-delayed service, and it was put into effect on January 1, 1913, thus enabling the United States to catch up with the postal systems of other enlightened nations. Although the measure was sharply criticized for its rates and cla.s.sifications, it was generally approved and regarded as the promising beginning of an inst.i.tution long desired.

While helping to add these new burdens to the post-office administration, Mr. Taft directed his attention to the urgent necessity for more businesslike methods on the part of the national administration in general, and, on his recommendation, Congress appropriated in 1910 $100,000 "to enable the President to inquire into the methods of transacting the public business of the Executive Department and other government establishments, and to recommend to Congress such legislation as may be necessary." A board of experts, known as the Economy and Efficiency Commission, was thereupon appointed, and it set to work examining the several branches of administration with a view to discovering wasteful and obsolete methods in use and recommending changes and practices which would result in saving money and producing better results. Among other things, the Commission undertook an examination of the problem of a national budget along lines followed by the best European governments, and it suggested the abandonment of the time-honored "log-rolling" process of making appropriations, in favor of a consistent, consolidated, and businesslike budget based upon national needs and not the demands of localities for Federal "improvements,"

regardless of their utility.

Although he was sharply attacked by the advocates of conservation for appointing and supporting as Secretary of the Interior, Mr. R. A.

Ballinger, who was charged with favoring certain large corporations seeking public land grants, Mr. Taft devoted no little attention to the problem of conserving the natural resources. In 1910, Congress enacted two important laws bearing on the subject. By a measure approved June 22, it provided for agricultural entries on coal lands and the separation of the surface from the mineral rights in such lands. By another law, approved three days later, Congress made provision for the withdrawal of certain lands for water-power sites, irrigation, cla.s.sification of lands, and other public purposes. These laws settled some questions of legality which had been raised with reference to earlier executive action in withdrawing lands from entry and gave the President definite authority to control important aspects of conservation.

From the opening of his administration Mr. Taft used his influence in every legitimate way to a.s.sist in the development of the movement for international peace. In his acceptance speech, at the opening of his campaign for election, he had remarked upon the significance and importance of the arbitration treaties which had been signed between nations and upon the contribution of Mr. Roosevelt's administration to the cause of world peace. Following out his principles, Mr. Taft signed with France and England in August, 1911, general arbitration treaties expanding the range of the older agreements so as to include all controversies which were "justiciable" in character, even though they might involve questions of "vital interest and national honor." The treaties, which were hailed by the peace advocates with great acclaim, met a cold reception in the Senate which ratified them on March 7, 1912, only after making important amendments that led to their abandonment.

Among the most significant of Mr. Taft's acts were his appointments of the Supreme Court judges. On the death of Chief Justice Fuller, in 1910, he selected for that high post a.s.sociate Justice White. In the course of his administration, Mr. Taft also had occasion to select five a.s.sociate justices, and he appointed Mr. Horace H. Lurton, of Tennessee, Charles E. Hughes, governor of New York, Mr. Willis Van Devanter, of Wyoming, Mr. Joseph R. Lamar, of Georgia, and Mr. Mahlon Pitney, of New Jersey. Thus within four years the President was able to designate a majority of the judges of the most powerful court in the world, and to select the Chief Justice who presided over it.

It was hardly to be expected that the exercise of such a significant power would escape criticism, particularly in view of the nature of the cases which are pa.s.sed upon by that Court. Mr. Bryan was particularly severe in his attacks, charging the President with deliberately packing the Court. "You appointed to the Chief Justiceship of the Supreme Court," he said, "Justice White who thirteen years ago took the trusts'

side of the trust question.[81] ... You appointed Governor Hughes to the Supreme Court bench after he had interpreted your platform to suit the trusts." Mr. Bryan also demanded that Mr. Taft let the people know "the influences" that dictated his appointments. Mr. Bryan attacked particularly the selection of Mr. Van Devanter, declaring that the latter, by his decisions in the lower court, was a notorious favorite of corporation interests. Mr. Taft looked upon these attacks as insults to himself and the judges, and treated them with the scant courtesy which, in his opinion, they deserved. The episode, however, was of no little significance in stirring up public interest in the const.i.tution of a tribunal that was traditionally supposed to be "non-political" in its character.

_The Anti-Trust Cases_

Mr. Taft approached the trust problem with the pre-conceptions of the lawyer who believes that the indefinite dissolution of combinations is possible under the law. His predecessor had, it is true, inst.i.tuted many proceedings against trusts, but there was a certain lack of sharpness in his tone, which was doubtless due to the fact that he believed and openly declared that indiscriminate prosecutions under the Sherman law (which was, in his opinion, unsound in many features) were highly undesirable. Mr. Taft, on the other hand, apparently looked at the law and not the economics of the problem. During Harrison's administration there had been four bills in equity and three indictments under the Sherman law; during Cleveland's administration, four bills in equity, two indictments, two informations for contempt; during McKinley's administration, three bills in equity. Mr. Roosevelt had to his record, eighteen bills in equity, twenty-five indictments, and one forfeiture proceeding. Within three years, Mr. Taft had twenty-two bills in equity and forty-five indictments to his credit.

The very vigor with which Mr. Taft pressed the cases against the trusts did more, perhaps, to force a consideration of the whole question by the public than did Mr. Roosevelt's extended messages. As has been pointed out, the members of Congress who enacted the Sherman law were very much confused in their notions as to what trusts really were and what combinations and practices were in fact to be considered in restraint of trade.[82] And it must be confessed that the decisions and opinions of the courts, up to the beginning of Mr. Taft's administration, had not done much to clarify the law. In the Trans-Missouri case, decided in 1897, the Supreme Court had declared in effect that all combinations in restraint of trade, whether reasonable or unreasonable, were in fact forbidden by the law, Justice White dissenting.[83]

This was not done by the Court inadvertently. Mr. Justice Peckham, speaking for the majority of the Court, distinctly marked the fact that arguments had been directed to that tribunal, "against the inclusion of all contracts in restraint of trade, as provided for by the language of the act ... upon the alleged presumption that Congress, notwithstanding the language of the act, could not have intended to embrace all contracts, but only such as were in unreasonable restraint of trade.

Under these circ.u.mstances we are, therefore, asked to hold that the act of Congress excepts contracts which are not in unreasonable restraint of trade, and which only keep rates up to a reasonable price, notwithstanding the language of the act makes no such exception. In other words, we are asked to read into the act by way of judicial legislation an exception that is not placed there by the lawmaking branch of the government.... It may be that the policy evidenced by the pa.s.sage of the act itself will, if carried out, result in disaster to the roads.... Whether that will be the result or not we do not know and cannot predict. These considerations are, however, not for us. If the act ought to read as contended for by the defendants, Congress is the body to amend it, and not this Court by a process of judicial legislation wholly unjustifiable."

It was no doubt fortunate for the business interests of the country that no earlier administration undertook a searching and drastic prosecution of combinations under the Sherman law; for in the view of the language of the Court it is difficult to imagine any kind of important interconcern agreement which would not be illegal. This very delay in the vigorous enforcement of the law enabled the country at large to take a new view of the trusts and to throw aside much of the prejudice which had characterized politics in the eighties and early nineties. The lawless practices of the great combinations and their corrupting influence were extensively discovered and understood; but it became increasingly difficult for demagogues to convince the public that any good could accrue to anybody from the ruthless attempts to disintegrate all large combinations in business. The more radical sections, which had formerly applauded the platform orator in his tirades against trusts, were turning away from indiscriminate abuse and listening more attentively than ever to the Socialists who held, and had held for half a century, to the doctrine that the trusts were a natural product of economic evolution and were merely paving the way to national ownership on a large scale.

Consequently, between the two forces, the representatives of corporate interests on the one hand and the spokesmen for socialistic doctrines on the other, the old demand for the immediate and unconditional destruction of the trusts was sharply modified. Corporations came to see that undesirable as "government regulation" might be, it was still more desirable than destruction. They, therefore, drew to themselves a large support from sections of the population which did not share socialistic ideas, and still could see nothing but folly in attempting to resist what seemed to have the force of nature. Many working-cla.s.s representatives ceased to wage war on the trusts as such, for they did not expect to get into the oil, copper, or steel business for themselves; and the farmers, on account of rising prices and a large appreciation in land values, listened with less gladness to the "war-to-the-hilt" orator. Nevertheless, a large section of the population, composed particularly of business men and manufacturers of the lesser industries, hoped to "reestablish" what they called "fair conditions of compet.i.tion" by dissolving into smaller units the huge corporations that dominated industry.

In response to this demand, Mr. Taft pushed through the cases against the Standard Oil Company and the American Tobacco Company; and in May, 1911, the Supreme Court handed down decisions dissolving these combinations. In the course of his opinions, Chief Justice White, who had dissented in the Trans-Missouri case mentioned above, gave an interpretation of the Sherman Act which was regarded quite generally as an abandonment of the principles enunciated by the Court in that case.

He said: "The statute, under this view, evidenced the intent not to restrain the right to make and enforce contracts, whether resulting from combinations or otherwise, which did not _unduly restrain_ interstate and foreign commerce, but to protect the commerce from being restrained by methods, whether new or old, which would const.i.tute an interference that is an _undue_ restraint." Thus the Chief Justice restated the doctrine of "reasonableness" which he had formulated in his dissenting opinion in the earlier case, but this time as the spokesman of the Court. It is true, he attempted with great dialectic skill to reconcile the old and the new opinions, and make it appear that there had been no change in the theories of the Court; but his attempt was not convincing to every one, for many shared the view expressed by Justice Harlan, to the effect that the attempt at reconciliation partook of the nature of a statement that black is white and white is black.

The effect of these decisions was the dissolution of the two concerns into certain const.i.tuent parts which were supposed to reestablish compet.i.tion; but no marvelously beneficial economic results seem to have accrued. The inner circles of the two combinations made huge sums from the appreciation of stocks; the prices of gasoline and some other oil products mounted with astonishing speed to a higher rate than ever before; and smaller would-be compet.i.tors declared that the const.i.tuent companies were so large that compet.i.tion with them was next to impossible. No one showed any great enthusiasm about the results of the prosecution and decisions, except perhaps some eminent leaders in the business world, who shared the opinion of Mr. J. P. Morgan that the doctrines of the Court were "entirely satisfactory," and to be taken as meaning that indiscriminate a.s.saults on large concerns, merely because of their size, would not be tolerated by the Court. Radical "trust-breakers" cried aloud that they had been betrayed by the eminent tribunal, and a very large section of the population which had come to regard trusts as a "natural evolution" looked upon the whole affair as an anticlimax. Mr. Taft, in a speech shortly after the decisions of the Court, expressed his pleasure at the outcome of the action and invited the confidence of the country in the policy announced. He had carried a great legal battle to its conclusion, only to find those who cheered the loudest in the beginning, indifferent at the finish.

_The Overthrow of Speaker Cannon_

From the beginning of his administration, it was apparent that Mr.

Taft's party in Congress was not in that state of harmony which presaged an uneventful legislative career. The vote on the tariff bill, both in the Senate and the House, showed no little dissatisfaction with the way in which the affairs of the party were being managed. The acrimony in the tariff debate had been disturbing, and the attacks on Speaker Cannon from his own party colleagues increased in frequency and virulence inside and outside of Congress.

Under this astute politician and keen parliamentary manager, a system of legislative procedure had grown up in the House, which concentrated the management of business in the hands of a few members, while preserving the outward signs of democracy within the party. The Speaker enjoyed the power of appointing all of the committees of the House and of designating the chairmen thereof. Under his power to object to a request for "unanimous consent," he could refuse to recognize members asking for the ear of the chamber under that privilege. He, furthermore, exercised his general right of recognition in such a manner as to favor those members who were in the good graces of the inner circle, which had naturally risen to power through long service.

In addition, there had been created a powerful engine, known as the "rules committee" which could, substantially at any time, set aside the regular operations of the House, fix the limits of debate, and force the consideration of any particular bill. This committee was composed of the Speaker and two colleagues selected by himself, for, although there were two Democratic representatives on the committee, they did not enjoy any influence in its deliberations. The outward signs of propriety were given to this enginery by the election of the Speaker by the party caucus, but the older members and shrewd managers had turned the caucus into a mere ratifying machine.

Under this system, which was perfected through the long tenure of power enjoyed by the Republicans, a small group of managers, including Mr.

Cannon, came to a substantial control over all the business of the House. A member could not secure recognition for a measure without "seeing" the Speaker in advance; the older members monopolized the important committees; and a measure introduced by a private member had no chance for consideration, to say nothing of pa.s.sage, unless its sponsor made his peace with the party managers. This system was by no means without its advantages. It concentrated authority in a few eminent party spokesmen and the country came to understand that some one was at last responsible for what happened in the House. The obvious disadvantage was the use of power to perpetuate a machine and policies which did not in fact represent the country or the party. Furthermore, the new and younger members could not expect to achieve anything until they had submitted to the proper "party discipline."

If anything went wrong, it soon became popular to attribute the evil to "Cannon and his system." Attacks upon them became especially bitter in the campaign of 1908 and particularly venomous after the pa.s.sage of the Aldrich-Payne tariff act. At length, in March, 1910, by a clever piece of parliamentary manipulation, some "insurgent" Republicans were able to present an amendment to the rules ousting the Speaker from membership in the rules committee, increasing the number, and providing for election by the House. Mr. Cannon was forced to rule on the regularity of this amendment, and he decided against it. On appeal from the decision of the chair, the Speaker was defeated by a combination of Democrats and insurgent Republicans, and the committee on rules was reconstructed. A motion to declare the Speakership vacant was defeated, however, because only eight insurgents supported it, and accordingly Mr. Cannon was permitted to serve out his term. Although this was heralded as "a great victory," it was of no consequence in altering the management of business in that session; but it was a solemn portent of the defeat for the Republican party which lay ahead in the autumn.

_Dissensions_

The second half of Mr. Taft's administration was marked by the failure to accomplish many results on which he had set his mind. The election of 1910 showed that the country was swinging back to the Democratic party once more. In that year, the Democrats elected governors in Ma.s.sachusetts, Connecticut, New York, New Jersey, Indiana, and some other states which had long been regarded as Republican. The Democrats also carried the House of Representatives, securing 227 members to 163 Republicans and 1 Socialist, Mr. Berger, of Wisconsin. Although many conservative Republican leaders, like Mr. Cannon, Mr. Payne, and Mr.

Dalzell, were returned, their position in the minority was seriously impaired by the election of many "insurgent" Republicans from the West, who were out of harmony with the old methods of the party.

In view of this Democratic victory, it was inevitable that Mr. Taft should have trouble over the tariff. In accordance with the declarations of the Republican platform, he had recommended and secured the creation, in 1909, of a tariff board designed to obtain precise information on the relation of the tariff to production and labor at home and abroad. The work of this board fell into three main divisions. It was, in the first place, instructed to take each article in the tariff schedule and "secure concise information regarding the nature of the article, the chief sources of supply at home and abroad, the methods of its production, its chief uses, statistics of production, imports and exports, with an estimate of the ad valorem equivalent for all specific duties." In the second place, it was ordered to compile statistics on the cost of production at home and abroad so that some real information might be available as to the difference, with a view to discovering the amount of protection necessary to accomplish the real purposes of a "scientific" tariff. Finally, the board was instructed to secure accurate information as to prices at home and abroad and as to the general conditions of compet.i.tion in the several industries affected by the tariff.

If there was to be any protection at all, it was obvious that an immense amount of precise information was necessary to the adjustment of schedules in such a manner as not to give undue advantages to American manufacturers and thus encourage sloth and obsolete methods on their part. Such was the view taken by Mr. Taft and the friends of the tariff board; but the Democratic Congress elected in 1910 gave the outward signs of a determination to undertake a speedy and considerable "downward revision," regardless of any "scientific" information that might be collected by the administration. There was doubtless some demand in the country for such a revision, and furthermore it was "good politics" for the leaders of the new House to embarra.s.s the Republican President as much as possible. The opportunity was too inviting to be disregarded, particularly with a presidential election approaching.

Consequently, the House, in 1911, pa.s.sed three important tariff measures: a farmers' free list bill placing agricultural implements, boots and shoes, wire fence, meat, flour, lumber, and other commodities on the free list; a measure revising the famous "Schedule K," embracing wool and woolen manufactures; and a law reducing the duties on cotton manufactures, chemicals, paints, metals, and other commodities. With the support of the "insurgent" Republicans in the Senate these measures were pa.s.sed with more speed than was expected by their sponsors, and Mr. Taft promptly vetoed them on the ground that some of them were loosely drawn and all of them were based upon inadequate information. The following year, an iron and steel measure and a woolens bill were again presented to the President and as decisively vetoed. In his veto messages, Mr.

Taft pointed out that the concise information collected by the tariff board was now at the disposal of Congress and that it was possible to undertake a revision of many schedules which would allow a considerable reduction without "destroying any established industry or throwing any wage earners out of employment." These last veto messages, sent in August, 1912, received scant consideration from members of Congress already engaged in a hot political campaign.

Mr. Taft was equally unfortunate in his attempt to secure reciprocity with Canada. In January, 1911, through the Secretary of State, he concluded a reciprocity agreement with that country by the exchange of notes, providing for a free list of more than one hundred articles and a reduction of the tariff on more than four hundred articles. The agreement was submitted to the legislatures of the two countries. A bill embodying it pa.s.sed the House, in February, by a Democratic vote, the insurgent Republicans standing almost solidly against it, on the ground that it discriminated against the farmers by introducing Canadian compet.i.tion, while benefiting the manufacturers who had no considerable compet.i.tion from that source. The Senate failed to act on the bill until the next session of the new Congress when it was pa.s.sed in July with twelve insurgent and twelve regular Republicans against it. After having wrought this serious breach in his own party in Congress, Mr. Taft was sorely disappointed by seeing the whole matter fall to the ground through the overthrow of the Liberals in Canada at the election in September, 1911, and the rejection by that country of the measure for which he had so laboriously contended.

During the closing days of his administration, Mr. Taft was seriously beset by troubles with Mexico. Under the long and severe rule of General Porfirio Diaz in that country, order had been set up there (at whatever cost to humanity) and American capital had streamed into Mexican mines, railways, plantations, and other enterprises. In 1911, Diaz was overthrown by Francisco Madero and the latter was hardly installed in power before he was a.s.sa.s.sinated and a dictatorship set up under General Huerta, in February, 1913. After the overthrow of Diaz in 1911, Mexico was filled with revolutionary turmoil, and American lives and property were gravely menaced. In April, 1912, Mr. Taft solemnly warned the Mexican government that the United States would hold it responsible for the destruction of American property and the taking of American life, but this warning was treated with scant courtesy by President Madero.

The disorders continued to increase, and demands for intervention on the part of the United States were heard from innumerable interested quarters, but Mr. Taft refused to be drawn into an armed conflict. The Mexican trouble he bequeathed to his successor.

FOOTNOTES:

[79] Congress by an act of 1907 forbade campaign contributions by corporations, in connection with Federal elections, and in 1910 and 1911 enacted laws providing for the publicity of expenses in connection with elections to Congress.

[80] The Sixteenth Amendment was proclaimed in force on February 25, 1913.

[81] See below, p. 332.

[82] See above, p. 135.

[83] United States _v._ Trans-Missouri Freight a.s.sn., 166 U.

S. 290.

CHAPTER XIII

THE CAMPAIGN OF 1912

Long before the opening of the campaign of 1912, the dissenters in the Republican party who had added the prefix of "Progressive" to the old t.i.tle, began to draw together for the purpose of resisting the renomination of Mr. Taft and putting forward a candidate more nearly in accord with their principles. As early as January 21, 1911, a National Progressive Republican League was formed at the residence of Senator La Follette in Washington and a program set forth embracing the indors.e.m.e.nt of direct primaries, direct elections, and direct government generally and a criticism of the recent failures to secure satisfactory legislation on the tariff, trusts, banking, and conservation. Only on the changes in our machinery of government did the League take a definite stand; on the deeper issues of political economy it was silent, at least as to positive proposals. Mr. Roosevelt was invited to join the new organization, but he declined to identify himself with it.