The Era of Expansion and Reform
"We must abolish everything that bears even the semblance of privilege."
Message to Congress, April 8, 1913
Between two great wars - the Civil War and the first World War -the United States of America came of age. In a period of less than fifty years, it was transformed from a rural republic to an urban state. The frontier had vanished. Great factories and steel mills, transcontinental railroad lines, flourishing cities, vast agricultural holdings marked the land. And with them came accompanying evils: monopolies tended to develop, factory working conditions were poor, cities developed so quickly that they could not properly house or govern their teeming populations, factory production sometimes outran practical consumption. Reaction against these abuses came from America's people and from her political leaders - Cleveland, Bryan, Theodore Roosevelt, Wilson. Their powerfully articulated reforms, idealistic in philosophy but realistic in execution, accepted the dictum that "legislation may begin where an evil begins." Indeed, the accomplishments of the period of reform served effectively to check the wrongs engendered in the period of expansion.
"The Civil War," says one writer, "cut a white gash through the history of the country; it dramatized in a stroke the changes that had begun to take place during the preceding twenty or thirty years. . . ." War needs had enormously stimulated manufacturing and had speeded up an economic process whose fundamental factors were the exploitation of iron, steam, and electrical power, and the forward march of science and invention.
The 36,000 patents granted before 1860 were but a pale forerunner of the flood of inventions to follow. From 1860 to 1890, 440,000 patents were issued, and in the first quarter of the twentieth century, the number reached nearly a million. The principle of the dynamo, which was developed as early as 1831, revolutionized American life after 1880, when Thomas Edison and others made its use practical. After Samuel F. B. Morse perfected electrical telegraphy in 1844, distant parts of the continent were soon linked by a network of poles and wires. In 1876, Alexander Graham Bell exhibited a telephone instrument and, within half a century, 16,000,000 telephones were accelerating the social and economic life of the nation. The tempo of business was quickened too by the invention of the typewriter in 1867, the adding machine in 1888, and the cash register in 1897. The linotype composing machine, invented in 1886, the rotary press, and paper-folding machinery made it possible to print 240,000 eight-page newspapers in an hour. After 1880, Edison's incandescent lamp brought to millions of homes better, safer, cheaper light than had ever been known before. The talking machine was also perfected by Edison who, in conjunction with George Eastman, developed the motion picture. These, and the many other applications of science and ingenuity, resulted in a new level of productivity in virtually all fields.
Concurrently, the basic industry of the nation-iron and steel-was forging ahead, protected by a high tariff. Previously concentrated near deposits in the eastern states, the iron industry moved westward as geologists discovered new ore deposits. Especially notable was the great Mesabi iron range at the head of Lake Superior which, within a short time, proved one Of the greatest ore producers in the world. The ore lay on the surface of the ground and was easy and cheap to mine. Remarkably free of chemical impurities, it could be processed under the new converter or open-hearth methods into steel of superior quality at a price of thirty-five dollars instead of the previously prevailing cost of three hundred dollars a ton.
Advances in steel production were, to a great extent, achieved by Andrew Carnegie, a major figure in the history of the industry. Coming to America from Scotland as a boy of twelve, he progressed from work as a bobbin boy in a cotton factory to a job in a telegraph office, and then to one on the Pennsylvania Railroad. Before be was thirty, he had made shrewd and farsighted investments, which by 1865 were concentrated in iron. Within a few years, he had organized or had stock in companies making iron bridges, rails, and locomotives. Ten years later, the steel mill be built on the Monongahela River in Pennsylvania was the greatest in the country. Year by year, Carnegie's business grew. He acquired commanding control not only, over new mills, but also over coke and coal properties, iron ore from Lake Superior, a fleet of steamers on the Great Lakes, a port town on Lake Erie, and a connecting railroad. His business was allied with a dozen others; it could command favorable terms from railroads and shipping lines; it had capital enough for expansion and a plentiful supply of labor. Nothing comparable in the way of industrial expansion had ever been seen before in America.
In many respects, the history of Carnegie is the story of big business in the United States. Although he long dominated the industry, he never succeeded in achieving a complete monopoly over the natural resources, transportation, and industrial plans involved in the making of steel. In the 1890's, companies rose to challenge his pre-eminence. Stung by competition, Carnegie at first threatened to acquire new mines and build an even more powerful business; but, as an old and tired man, he was finally willing to listen to the suggestion that he merge his holdings with the new organization which would embrace most of the important iron and steel properties in the nation.
The United States Steel Corporation which resulted from this merger in 1901, illustrated a process that had been under way for thirty years. This was the combination of independent industrial enterprises into federated or centralized companies. Begun during the Civil War, the trend gathered momentum after the seventies. Businessmen realized that if they could bring competing firms into a single organization, they could control both production and markets. Developed to achieve these ends were the "corporation" and the "trust" which were in many respects logical forms of organization for large-scale undertakings. For in a corporation a wide reservoir of capital could be tapped. Potential investors were attracted by the fact that they could expect profits from their purchase of stocks and bonds but were liable, in case of business failure, only to the extent of their investments. In addition,. incorporation gave business enterprises permanent life and continuity of control. The trust was, in effect, a combination of corporations whereby the stockholders of each placed their stocks in the hands of trustees who managed the business of all. Trusts made possible large-scale combinations, centralized control and administration, and the pooling of patents. By virtue of their capital resources, they had greater power to expand, to compete with foreign business companies, and to drive hard bargain,; with labor, which was at this time beginning to organize effectively. They could also exact favorable terms from railroads and to exercise influence in politics.
The Standard Oil Company, one of the earliest and strongest corporations, was followed rapidly by other trusts and combinations - in cottonseed oil, lead, sugar, tobacco, and rubber. Aggressive businessmen began to mark out industrial domains for themselves. Four great meat packers, chief among them Philip Armour and GustaVLIS Swift, established a beef trust. The MeCormicks established pre-eminence in the reaper business. The trend was clearly reflected in a survey made in t904 which showed that more than five thousand previously independent concerns had been consolidated into same three hundred industrial trusts.
In still other fields - in transportation and communication particularly-the trend toward amalgamation was spectacular. Western Union, earliest of the large combinations, was followed by the Bell Telephone System and eventually by the American Telephone and Telegraph Company. Cornelius' Vanderbilt had early seen that efficient railroading required the unification of lines. In the sixties be had knit some thirteen separate railroads into a single line connecting New York City and Buffalo, nearly 300 miles away. During the next decade he acquired lines to Chicago and Detroit, and the New York Central System came into being. Other consolidations were already under way, and soon the major railroads of the nation were organized into trunk lines and "systems" directed by half a dozen men.
In this new industrial order, the city was the nerve center. Within its borders were focused all the dynamic economic forces: vast accumulations of capital, business and financial institutions, spreading railroad yards, gaunt smoky factories, and armies of inanual and clerical workers. With populations recruited from the countryside and from lands across the sea, villages grew into towns and towns sprang Into cities almost overnight. In 1830, only one of every fifteen persons lived in communities of 8,000 or over, in 1860 nearly one out of every six, in 1890 three out of ten. No single city had as many as a million inhabitants in 1860, but thirty years later New York had a million and a half, and Chicago and Philadelphia each had over a million, In these three decades, Philadelphia and Baltimore doubled in population; Kansas City and Detroit grew fourfold, Cleveland sixfold, Chicago tenfold. Minneapolis and Omaha and many communities like them which were mere hamlets when the Civil War began, increased fifty times or more in population.
Vital as were these developments, their implications were not sufficiently understood to make a significant impact on the political life of the period. Although there was an abundance of issues before the American people, one distinguished historian has written, "between 1865 and 1897 there were put upon the federal law books not more than two or three acts which need long detain the citizen concerned only with those -manifestations of political power that produce essential readjustments in human relations."
Grover Cleveland, a Democrat, was elected to the presidency in 1884. He alone of the Presidents following the war had some understanding of the significance and direction of the changes that were transforming the country and made some effort to grapple with the problems resulting from them. In the question of railroads, for instance, many abuses demanded readjustment. Particularly pernicious was discrimination in rates against small shippers in the form of rebates to larger ones. In addition some railroads charged arbitrarily higher rates~ to some shippers than to others between certain points, irrespective of distance. While competition held down freight charges between cities having several rail connections, rates were excessive between points served by but one line. As a result therefore, it cost less to ship goods 800 miles from Chicago to New York than to places a few hundred miles east of Chicago. Railroads also tried plans of joint action to avoid competition. By one of these devices - pooling- rival companies divided the freight business according to a prearranged scheme placing the total earnings in a common fund for distribution. Popular resentment at these railroad practices deepened as time passed, and some efforts at regulation were made by the states. Although these had some salutary effect, the problem was, by its very nature, national in character and therefore demanded Congressional action. The result was the Interstate Commerce Act, which President Cleveland signed in 1887. This statute forbade excessive charges, pools, rebates, and rate discrimination, and created an Interstate Commerce Commission to guard against violations of the act and to regulate railroad charges and practices.
Cleveland was also an energetic champion of tariff reform. Adopted originally as an emergency war measure, the high tariff had come to be accepted as permanent national policy. Cleveland regarded this as unsound and responsible, in large measure, for a burdensome increase in the cost of living and for the rapid development of trusts. For years, the tariff had not even been a political issue. In 1880, however, the Democrats had demanded a "tariff for revenue only," and soon the clamor for reform became insistent. In his annual message in 1887, Cleveland, despite warnings to avoid the explosive subject, startled the nation by denouncing the fantastic extremes to which the principle of protecting American industry from foreign competition had been pushed.
This question became the issue of the next presidential election campaign, and the Republican candidate, Benjamin Harrison, defending the concept of protectionism, won. His administration set about fulfilling its campaign promises by new legislation, and the McKinley tariff bill was passed in 1890. This measure sought not only to protect established industries, but also to foster infant industries and, by prohibitory duties, to create new ones. The generally high rates prescribed by the new tariff were shortly reflected in high retail prices, and before long there was widespread dissatisfaction,
During this period, public concern was increasingly directed at the trusts. Subjected to bitter attack through the eighties by such reformers as Henry George and Edward Bellamy, the gigantic corporations became not only an object of antagonism but also a political issue. In 1890, the Sherman Antitrust Act was passed. Its primary intention was to break the monopolies; it forbade all combinations in restraint of interstate trade and provided several methods of enforcement with severe penalties. The law itself accomplished little immediately after its passage, for it was couched in general and indefinite terms. A decade later, however, in the administration of Theodore Roosevelt, its effective application earned the President the nickname of "trust-buster."
Despite these significant trends, the political picture of the period from the end of the Civil War until the turn of the century was, generally, a negative one. The vitality of the American people in these years was concentrated elsewhere; its impact was perhaps most clearly reflected in the history of the west. In 1865, the frontier line followed generally the western limits of the states bordering the Mississippi River, bulging outward to include the eastern sections of Kansas and Nebraska. Behind this thin edge of pioneer farms was still much unoccupied land, and beyond that stretched the unfenced prairies, merging finally in the sagebrush plains that extended to the foothills of the Rockies, Then, for nearly a thousand miles loomed the huge bulk of mountain ranges, many richly stored with silver, gold, and other metals. On the Pacific side, new plains and deserts stretched to the wooded coast ranges and the ocean. Apart from the settled districts in California and scattered outposts, the vast inland region was peopled only by Indians.
Yet a quarter of a century later, virtually all the country had been carved into states and territories. Settlement was spurred by the Homestead Act of 1862 which granted free farms of 160 acres to citizens who would occupy and improve the land. By 1880, nearly 56,000,000 acres had thus found their way into private hands. The wars with the Indians had come to an end. Miners had ranged over the whole of the mountain country, tunneling into the earth, establishing little communities in Nevada, Montana, and Colorado. Cattlemen, taking advantage of the enormous grasslands, had laid claim to the vast region stretching from Texas to the upper Missouri River. Sheepmen, too, had found their way to the valleys and mountain slopes. Then the farmers swarmed into the plains and valleys and closed the gap between the east and west. By 1890, the frontier had disappeared. Five or six million men and women now farmed where buffalo had roamed only two decades before.
Speeding the process of colonization were the railroads. In 1862, Congress voted a charter to the Union Pacific Railroad which pushed its track westward from Council Bluffs, Iowa. At the same time, the Central Pacific began to build eastward from Sacramento, California, toward an undetermined junction point. The whole country was stirred as the two lines steadily approached each other, finally meeting on May 10, 1869, at Promontory Point in Utah. The month of laborious travel hitherto separating the Atlantic and Pacific oceans was now cut to a fraction of that time. The continental rail network grew steadily, and by 1884 four great lines joined the central Mississippi Valley area with the Pacific.
The first great rush of population to the far west was drawn to the mountainous regions. Gold was found in California in 1848, in Colorado and Nevada ten years later, in Montana and Wyoming in the sixties, and in the Black Hills of the Dakota country in the seventies. Throughout these areas, miners opened up the country, established communities, and laid the foundations for more permanent settlements. Yet even while they were digging in the hills, some settlers perceived the farming and stock-raising possibilities of the region. Some few communities continued to be devoted almost exclusively to mining but the real wealth of Montana, Colorado, Wyoming, and Idaho as of California was ultimately proved to be in the grass and in the soil.
Cattle raising had long been an important industry in Texas. After the war, enterprising men began to drive their Texas longhorns north across the unfenced public domain. Feeding as they went, the cattle arrived at railway shipping points in Kansas larger and fatter than when they started. Soon this "Long Drive" became a regular event and, for hundreds of miles, trails were dotted with herds of cattle moving northward. Cattle raising spread rapidly into the trans-Missouri region, and immense ranches appeared in Colorado, Wyoming, Kansas, Nebraska, and the Dakota territory. Western cities flourished as centers for the slaughter and dressing of meat.
Ranching introduced a colorful mode of existence with the picturesque cowboy as its central figure. "We led a free and hardy life, with horse and with rifle," wrote Theodore Roosevelt, twenty-fifth President of the United States, in his reminiscences of his own experiences in Dakota. "We worked under the scorching midsummer sun when the wide plains shimmered and wavered in the beat; and we knew the freezing misery of riding night guard round the cattle in the late fall roundup.... But we felt the beat of hardy life in our veins and ours was the glory of work and the joy of living."
Altogether some six million cattle were driven up from Texas to winter on the high plains of Colorado, Wyoming and Montana between 1866 and 1888. The cattle boom, in fact, reached its peak in about 1885. By then, the range had become too heavily pastured to support the long drive and it was beginning to be criss-crossed by railroads. Not far behind the rancher creaked the prairie schooner of the farmers bringing their womenfolk and children, their draft horses, cows, and pigs. Under the Homestead Act they staked off their claims and fenced them in with barbed wire, ousting the ranchmen from lands they had possessed without legal title. During the two terrible winters of 1886 and 1887, herds were annihilated in the open ranges by the freezing weather. The romantic "wild west" gave way to settled communities, to fields of wheat, corn, and oats.
In the west as throughout the country, agriculture remained the country's basic industry, at which the largest number of people worked, despite the giant strides of industry. And as manufacturing had developed in the decades following the war, so was agriculture now undergoing a revolution. This involved a shift from husbandry to machine farming and from subsistence to commercial farming. Indeed, in the fifty years from 1860 to 1910, the number of farms in the United States trebled, increasing from 2,000,000 to 6,000,000; the area more than doubled from 400,000,000 acres to 880,000,000 acres. The production of wheat rose from 173,000,000 to 635,000,000 bushels, corn from 838,000,000 to 2,886,000,000 bushels, and cotton from 3,841,000 to 11,609,000 bales. More land was brought under cultivation in the thirty years after 1860 than in all the previous history of the United States. In the same period, the population of the nation more than doubled. Most of the increase was in the cities, but the American farmer grew enough grain and cotton, raised enough beef and pork, and clipped enough wool not only to supply American workers but to export ever increasing surpluses.
The expansion into the west largely explains this extraordinary achievement. Another factor was the application of machinery and science to the processes of farming. The farmer of 1800, using a hand sickle, could hope to cut half an acre of wheat a day. With the cradle, thirty years later, he might cut two acres a day. In 1840, Cyrus McCormick performed the miracle of cutting five or six acres a day with the curious machine he had been developing for nearly a decade. Farsighted, he headed west to the young prairie town of Chicago and established a reaper factory there. By 1860, a quarter of a million reapers had been sold.
In rapid succession, other farm machines were developed - the automatic wire binder and the threshing machine, the reaper-thresher or combine. lndeed, in every sphere, machinery came to the aid of the farmer. Mechanical corn planters, corn cutters, huskers, and shellers; the cream separator, the manure spreader, the potato planter, the hay drier, the poultry incubator, and a hundred other inventions lightened the farmer's labor and increased his efficiency. The west absorbed most of the new harvesters and threshers and tractors. Eastern farms were too small, agriculture too diversified to justify investment in expensive machinery; southern cotton and tobacco were not readily adaptable to mechanized cultivation.
Scarcely less important than machinery in the agricultural revolution was science. In 1862, with the passage of the Morrill Land-grant College Act, Congress appropriated public land to each state for the establishment of agricultural and industrial colleges. These were to serve both as educational institutions and as centers of research in scientific farming. Subsequently Congress appropriated funds for the creation of agricultural experiment stations throughout the country and also granted funds directly to the Department of Agriculture for research. By the beginning of the new century, scientists throughout the land were at work on agricultural research projects.
One of these scientists, Mark Carleton, traveled for the Department of Agriculture to Russia. There he found and imported the rust- and drought-resistant winter wheat which now makes up more than half of the United States wheat crop. Other agricultural scientists made scarcely less important contributions over the years. Marion Dorset conquered the dread hog cholera, George Mohler, the menacing hoofand-mouth disease. From North Africa, one researcher brought back Kaffir corn; from Turkestan, another imported the yellow-flowering alfalfa. Luther Burbank in California produced scores of new fruits and vegetables-, in Wisconsin, Stephen Babcock invented a milk test for determining the butter-fat content of milk; at Tuskegee Institute in Alabama, the great Negro scientist, George Washington Carver, found hundreds of new uses for the peanut, the sweet potato, and the soybean.
Yet despite these advances, the American farmer in the nineteenth century was subject to recurring periods of critical hardship. Indeed, at the close of the century of greatest agricultural expansion, the dilemma of the farmer had become a major problem. Several basic factors were involved - soil exhaustion, the vagaries of nature, overproduction of staple crops, decline in self-sufficiency, and lack of adequate legislative protection and aid. Southern soil had long been exhausted by tobacco and cotton culture, but in the west, and on the plains too, soil erosion, wind storms, and insect pests ravaged the land.
The swift mechanization of agriculture west of the Mississippi had not proved an unmixed blessing. It encouraged many farmers to expand their holdings unwisely; it stimulated concentration on staple crops, it gave large farmers a distinct advantage over small ones and hastened, at once, the development of tenancy and of farming on an extremely large scale. These problems were to remain largely unsolved until the widespread acceptance of modern soil conservation techniques many years later.
Even more complex, but more readily susceptible to swift remedial action, was the problem of prices. The farmer sold his product in a competitive world market but purchased his supplies, equipment, and household goods in a market protected against competition. The price he got for his wheat or cotton or beef was determined abroad; the price he paid for his harvester, his fertilizer, his barbed wire was fixed by trusts setting prices behind a protective tariff. From 1870 to 1890 prices of most farm products moved irregularly downward, and the value of American farm products increased only half a million dollars. In the same period, however, the value of manufactures increased by six billion dollars.
This economic imbalance led to the formation of farmers' organizations to consider common grievances and propose means of relief. Most of these were patterned after the Grange established in 1867. Within a few years, there were Granges in almost every state, and membership exceeded three-quarters of a million. These groups began chiefly as social organizations designed to lessen the farmer's isolation. Inevitably, however, their members turned to discussions of business and politics. Talk led to action, and soon many of the Granges set up cooperative marketing organizations, cooperative stores, and even factories. In a number of midwestern states, they elected members to the legislature and passed laws regulating railroads and warehouses. Many of the Grange business enterprises failed, however, and at the same time, the farms enjoyed a resurgence of prosperity in the late seventies. In consequence, the Grange dwindled in importance. The movement it had started, however, revived in the Farmers' Alliances which began in the late eighties and early nineties. Times were once more hard; drought had descended on the stricken plains; the price of wheat and cotton plunged. Thus stimulated, the Alliance movement spread quickly and by 1890 it had nearly two million members. In addition to an extensive educational program, these groups made active demands for political reform. Before long, the Alliances were metamorphosed into a crusading political party. Known as the Populists, they vigorously opposed the old Democratic and Republican parties.
There had never before in American politics been anything like the Populist fever which swept the prairies and cotton lands. After a hard day in the fields, farmers hitched up their buggies and, with their wives and children, jogged off to the meeting house and applauded the impassioned oratory of their leaders. The elections of 1890 swept the new party into power in a dozen southern and western states and sent a score of Senators and Representatives to Congress. Encouraged by this success, the Populists drew up a progressive platform demanding extensive reforms, including an income tax, a national system of loans for farmers, government ownership of railroads, an eight-hour day for labor, and an increase in the supply of currency by the free and unlimited coinage of silver.
In the election of 1892, the Populists showed impressive strength in the west and south. Their presidential candidate polled more than a million votes. However, the Democratic candidate, Grover Cleveland, was elected. Four years later, the dynamic Populists were fused nearly everywhere with the Democratic Party. Influenced by the Populists, the new Democratic leaders prepared to make a major political issue of the money question.
The United States, from the country's founding, had been on a bimetallic standard, that is, the government stood ready to coin into dollars all the gold and silver that might be brought to the mint. In 1873, Congress reorganized the monetary system and, among other things, omitted the standard silver dollar from the list of authorized domestic coins. The act excited little attention at the time for silver metal was scarce. Indeed no silver dollars had actually been in circulation for forty years. This situation changed precipitously. New silver mines were discovered in the mountain states of the west. At the same time, several European countries demonetized silver. Suddenly, a tremendous supply of silver was available.
During this period, the country was experiencing hard times. Convinced that their troubles stemmed from a shortage of money in circulation, agrarian spokesmen in the west and south, supported by labor groups in the eastern industrial centers, demanded a return to the unlimited coinage of silver. Enlarging the volume of money in use they believed would indirectly result in higher prices for farm crops and better wages in industry. It was also argued that debts could be more readily paid off. Conservatives on the other hand were convinced that such a policy would be financially disastrous. Inflation, once begun, could not be stopped, and the government itself would be forced into bankruptcy. Only the gold standard, they asserted, offered stability.
The Silverites - Democrats and old Populists together-found a leader in William Jennings Bryan of Nebraska, their candidate for President in the 1896 election. Spectacular in appearance and a magnetic orator, he captured the devotion of millions. But his party was divided, and his opponents were strong. In only one respect did the Democrats have a clear advantage and that was in Bryan himself. But he was not enough, and William McKinley won the election by more than half a million votes. Bryan's campaign, nevertheless, was to become legendary, and except for their monetary policies most of the ideas of the Populists and the agrarian Democrats have subsequently been written into legislation.
This campaign bore striking testimony to the solidity which the Union had achieved since the Civil War. Though the farmers' grievances were no less real than had been those of the slaveholders, there was no talk of nullification or of secession. This national unity was made clearly manifest in the conflict with Spain that burst upon the country in 1898. The Spanish government had learned nothing from the revolt of her major colonies in the western hemisphere earlier in the century. Unchanged, she continued her despotic rule of the little island of Cuba, where trade with the United States was now flourishing. In 1895, the Cubans' kindling wrath burst forth into a war for independence. The course of the uprising was watched in the United States with growing concern, for America had traditional interest in Latin-American struggles for independence. Resolved not to be stampeded into war, President Cleveland put forth every effort to preserve neutrality. However, three years later, during the McKinley administration, the United States warship Maine was destroyed while lying peacefully at anchor in Havana harbor and 260 men were killed. An outburst of patriotic fervor resulted. For a time McKinley sought to preserve the peace, but within a few months, believing further delay futile, he recommended armed intervention.
The actual hostilities proved swift and decisive, lasting four months in all. Not a single American reverse of any importance occurred. A week after the declaration of war, Commodore George Dewey, then at Hong Kong, proceeded with his squadron of six vessels to the Philippines. His orders were to prevent the Spanish fleet based there from operating in American waters. Before dawn, he ran the batteries of Manila Bay and, by high noon, he had destroyed the entire Spanish fleet without losing an American life. Meanwhile in Cuba, troops equivalent to a single army corps were landed near Santiago; they won a rapid series of engagements and fired on the port. Four armored Spanish cruisers plunged out of Santiago Bay and a few hours later were reduced to smashed hulks.
From Boston to San Francisco, whistles blew and flags waved on the hot July day when word came that Santiago had fallen. Newspapers rushed their correspondents to Cuba and the Philippines, and these writers trumpeted the renown of the nation's new heroes. Chief among them were George Dewey of Manila fame and Theodore Roosevelt, leader of the "Rough Riders," a volunteer cavalry regiment he had recruited for service in Cuba. Before long, Spain sued for peace, and a treaty was signed on December 10, 1898. By its terms, Spain transferred Cuba to the United States for temporary occupation preliminary to insular independence. It ceded Porto Rico and Guam in lieu of war indemnity, and the Philippines on payment of $20,000,000.
Newly established in the Philippines, the United States now had high hopes of a vigorous trade with China. Since China's defeat by Japan in 1894-95, however, various European nations had acquired naval bases, leased territories, and established spheres of influence there. They had secured not only monopolistic trade rights, but usually also exclusive concessions for the investment of capital in railway construction and mining development in adjoining regions. In its own earlier diplomatic relations with the Orient, the American government had always insisted upon equality of commercial privileges for all nations. If this principle were now to be preserved, a bold course was necessary. In September 1899, Secretary of State John Hay addressed a circular note to the powers concerned. They agreed to the doctrine of the "open door" for all nations in China - that is, equality of trading opportunities (including equal tariffs, harbor duties, and railway rates) in the areas they controlled.
In 1900, however, the Chinese struck out against the foreigners. In June, insurgents seized Peiping and besieged the foreign legations there. Hay promptly announced to the powers that the United States would oppose any disturbance of Chinese territorial or administrative rights or of the It open door." Once the rebellion was quelled, however, it required all of his skill to carry through the American program and to protect China from crushing indemnities. In October, however, Great Britain and Germany once more signified their adherence to the open-door policy and the preservation of Chinese independence, and the other nations presently followed.
Meanwhile, the presidential election of 1900 gave the American people a chance to pass judgment on the McKinley administration, especially its foreign policy. Meeting at Philadelphia, the Republicans expressed jubilation over the successful outcome of the war with Spain, the restoration of prosperity, and the effort to obtain new markets through the "policy of the open door." McKinley's election, with Theodore Roosevelt as his running mate, was a foregone conclusion. The President, however, did not live long enough to enjoy his victory. In September 1901, while attending an exposition in Buffalo, New York, he was shot down by an assassin. McKinley's death brought Theodore Roosevelt to the presidential chair.
In domestic as well as international affairs, Roosevelt's accession coincided with a new epoch in American political life. At the turn of the century, America could look back over three generations of progress. The continent was peopled, the frontier was gone. From a small, struggling republic menaced on all sides, the nation had advanced to the rank of a world power. Its political foundations had endured the vicissitudes of civil and foreign war, the tides of prosperity and depression. In agriculture and industry, immense strides had been made. The ideal of free public education had been realized. The ideal of a free press had been maintained. The ideal of religious freedom had been cherished. Yet thoughtful Americans did not look with complacency upon their social, economic, and political situation. For big business was now more firmly entrenched than ever. Often, local and municipal government was in the hands of corrupt politicians. A spirit of materialism was infecting every branch of society.
Against these evils arose the full-throated protest which gave American politics and thought its peculiar character from approximately 1890 to the first World War. Since the early days of the industrial revolution, the farmers had been fighting a battle against the cities and against the rising industrial magnates. As far back as the 1850's, reformers had leveled heavy criticism at the prevailing system of patronage whereby successful political figures distributed government positions to their supporters. After a thirty-year struggle, the reformers achieved the passage in 1883 of the Pendleton Civil Service Bill. This law establishing a merit system in government service marked the beginning of political reform. Industrial workers had also spoken up against injustices. They had first organized to protect themselves through the Knights of Labor. Founded in 1869, its membership rose in spectacular fashion to a total of 700,000 adherents in the middle eighties. This organization declined, but it was soon effectively replaced by the American Federation of Labor, a powerful combination of craft and industrial unions. By 1900, labor was a force in America that no statesman could ignore.
Almost every notable figure in this period, whether in politics, philosophy, scholarship, or literature, derives his fame, in part, from his connection with the reform movement. The heroes of the day were all reformers, voicing the needs of the times. For the practices and principles inherited from an eighteenth-century rural republic had proved inadequate for a twentieth century urban state. The confusions which beset America in the industrial age resulted chiefly from the growing complexity and interdependence of society and the diffusion of personal responsibility through the growth of huge corporations. To correct this situation a group of young writers turned their talents. Newspapers and popular magazines led the van; novelists took up the theme, and presently the crusade was given a practical turn by aspiring political reformers, including the new President of the United States. The period of greatest reformist activity extended from 1902 to 1908. Years before, in 1873, Mark Twain had exposed American society to his careful scrutiny in The Gilded Age. Now trenchant articles appeared in McClure's, Everybody's, and Collier's magazines on trusts, finance, impure foods, railways. Upton Sinclair, using fiction as his medium, published a novel entitled The Jungle, which exposed unsanitary conditions in the great Chicago packing houses and told of the grip of the beef trust on the nation's meat supply. Theodore Dreiser's The Financier and The Titan made it easier to understand the machinations of big business. Frank Norris's The Pit clarified much of the agrarian protest. Lincoln Steffens' The Shame of the Cities bared political corruption. This "literature of exposure" had a vital effect in rousing the people to action.
The hammering impact of uncompromising writers and an increasingly aroused public spurred political leaders to practical measures. Several states began to enact laws designed to ameliorate the conditions under which people lived and worked. Indeed, more social legislation was passed in the first fifteen years of the century than in all previous American history. Child labor laws were strengthened and new ones adopted, raising age limits, shortening hours, restricting night work, requiring school attendance. By this time also, most of the larger cities and more than half the states had established an eight-hour day on public works. In hazardous employment, the workday was likewise subjected to legislative regulation. Hardly less important were the workmen's compensation laws which made employers legally responsible for injuries sustained by employees in the course of their work. New revenue laws were also enacted which, by taxing inheritances, incomes, and the property or earnings of corporations, sought to place the burden of government on those best able to pay.
Admirable as were these moves, it was clear that most of the problems to which the reformers addressed themselves could not be solved unless they were projected on a national scale. This was clearly seen by President Theodore Roosevelt who was himself passionately interested in reform. Roosevelt was, at the same time, a political realist, an ardent nationalist, and a faithful Republican. After Thomas Jefferson, he was the most versatile of Presidents. He had been a rancher and a state governor. He had hunted big game, written books, served in the New York state legislature, administered the New York city police, directed the navy, and fought in Cuba. He read omnivorously and had opinions on everything. Like Andrew Jackson, he had a genius for winning the confidence of the people and for dramatizing all his battles. Within a year he had shown that he understood the great changes sweeping over America; he was determined to give the people a "square deal."
In his enforcement of the antitrust laws, Roosevelt initiated his policy of increased government supervision. The extension of such supervision over the railroads was one of the notable achievements of his administration. He himself called railroad regulation the "paramount issue," and two major regulatory bills were passed. The Elkins Act of 1903 made published rates the lawful standard and made shippers equally liable with railroads for rebates. Under its provisions the government successfully prosecuted erring companies. Subsequently Congress created a new Department of Commerce and Labor with membership in the cabinet. One of its bureaus was empowered to investigate the affairs of large business aggregations. In 1907 it was discovered, for instance, that the American Sugar Refining Company -had defrauded the government of a large amount of import duties. The resulting legal actions led to the recovery of over $4,000,000 and the conviction of several of the company's officials. In the same year, the Standard Oil Company of Indiana was indicted for receiving secret rebates on shipments over the Chicago and Alton Railroad. The spirit of the times was reflected in the fine imposed amounting to $29,240,000 on 1,462 separate counts.
Already in 1904, Theodore Roosevelt had become the Republican idol. His striking personality and his "trust-busting" activities captured the imagination of the man in the street. Progressive Democrats were also drawn more to him than to their own party candidate. The abounding prosperity of the country was another influence which made for Republican victory in the 1904 election. Emboldened by his sweeping triumph, the President returned to office with fresh determination to advance the cause of reform. In his first annual message, he called for more drastic regulation of the railroads, and in June 1906, the Hepburn Act was passed. This gave the Interstate Commerce Commission real authority in rate regulation, extended the jurisdiction of the Commission, and forced the railroads to surrender their interlocking interests in steamship lines and coal companies. By the end of the Roosevelt administration, rebates had practically disappeared and public regulation of railroads was an accepted principle.
Other Congressional measures carried still further the principle of federal control. In response to the reformist crusade, the pure-food law of 1906 prohibited the use of any "deleterious drug, chemical, or preservative" in prepared medicines or foods. This was presently reinforced by an act requiring federal inspection of all concerns selling meats in interstate commerce.
Unquestionably, one of the most important achievements of the Roosevelt administrations was in the conservation of the natural resources of the nation. Exploitation and waste of raw materials had to be stopped, and wide stretches of land regarded as worthless needed only proper attention to become fit for use. In 1901, in his first message to Congress, Roosevelt called the forest and water problems "perhaps the most vital internal problems of the United States." He called for a far-reaching and integrated program of conservation, reclamation, and irrigation. Where his predecessors had set aside 47,000,000 acres of timberland, Roosevelt increased the area by 148,000,000 acres and began systematic efforts to prevent forest fires and to retimber denuded tracts. In 1907, he appointed an Inland Waterways Commission to canvass the whole question of the relation of rivers and soil and forest, of water-power development, and of water transportation. Out of the recommendations of this Commission grew the plan for a national conservation conference and, in the same year, Roosevelt invited all state governors, cabinet members, and notables from the fields of politics, science, and education to such a conference. This conference focused the attention of the nation upon the problem of conservation. It issued a declaration of principles stressing not only the conservation of forests, but of water and minerals and the problems of soil erosion and irrigation as well. Its recommendations included the regulation of timber-cutting on private lands, the improvement of navigable streams, and the conservation of watersheds. As a result, many states established conservation commissions, and in 1909 a National Conservation Association was formed to engage in wide public education on the subject. In 1902, the Reclamation Act was passed authorizing large dams and reservoirs. Soon great arid tracts were rendered green and arable.
As the campaign of 1908 drew near, Roosevelt was at the peak of his popularity. He hesitated, however, to challenge the tradition by which no President 'had ever held office for more than two terms. Instead, he supported William Howard Taft, who became the next President. Anxious to continue the Rooseveltian program, Taft made some forward steps. He continued the prosecution of trusts, further strengthened the Interstate Commerce Commission, established a postal-savings bank and a parcel-post system, expanded the civil service, and sponsored the enactment of two amendments to the federal Constitution. The Seventeenth Amendment, ratified in 1913, replaced the constitutional requirement for election of Senators by state legislatures by providing for their direct election by the people; the Sixteenth Amendment authorized a federal income tax. Yet balancing the scales against these achievements was his acceptance of a tariff with protective schedules which outraged liberal opinion, his opposition to the entry of the state of Arizona into the Union because of her liberal Constitution, and his growing reliance on the ultraconservative wing of his party.
By 1910, Taft's party was divided and an overwhelming vote swept the Democrats back into control of Congress. Two years later, in the presidential election, Woodrow Wilson, governor of New Jersey, campaigned against Taft, the Republican candidate. Roosevelt, who was rejected for the candidacy by the Republican convention, organized a third party, the Progressives, and ran for the presidency on their ticket. Wilson defeated both his rivals in a spirited campaign. His election was a victory for liberalism, for he felt a solemn mission to commit the Democrats unalterably to reform. Under his leadership, the new Congress proceeded to carry through a legislative program which, in scope and importance, was one of the most notable in American history, Its first task was tariff revision. "The tariff duties must be altered," Wilson said. "We must abolish everything that bears even the semblance of privilege." The Underwood tariff, signed on October 3, 1913, provided substantial reductions in the rates on important raw materials and foodstuffs, cotton and woolen goods, iron and steel, and other commodities, and removed the duties from more than a hundred other items. Although the act retained many protective features, it was a real attempt to lower the cost of living.
The second item on the Democratic program was a reorganization of the banking an currency system. The nation had long suffered from inflexibility of credit and currency. Stopgap legislation had permitted the national banks to issue emergency currency, but a thorough overhauling of the banking system was long overdue. "Control," said Wilson, "must be public, not private, must be vested in the government itself, so that the banks may be the instruments, not the masters, of business and of individual enterprise and initiative." The Federal Reserve Act of December 23, 1913, filled these requirements. Upon the existing banks it imposed a new system of organization. The country was divided into twelve districts with a federal reserve bank in each. These were to serve as depositories for the cash reserves of those banks which joined the system. Their primary function was to act as a bank for banks. It was made possible, therefore, for the funds thus accumulated to be used to assist individual local banks in moments of temporary embarrassment. To accomplish the second object - greater flexibility of the money supply - provision was made for the issuance of federal reserve notes to meet business demands. Finally, the plan was to be supervised by a Federal Reserve Board.
The next important task was trust regulation. Experience suggested a system of control similar to that of the Interstate Commerce Commission over the railways. Thus, the power of investigating corporate abuses was given to a Federal Trade Commission authorized to issue orders prohibiting "unfair methods of competition" by business concerns in interstate trade. A second law, the Clayton Antitrust Act, forbade many corporate practices that had thus far escaped specific condemnation - interlocking directorates, price discrimination among purchasers, and the ownership by one corporation of the stock in similar enterprises.
Labor and the farmers were not forgotten. A Federal Farm Loan Act made credit available to farmers at low rates of interest. One provision of the Clayton Act specifically prohibited the use of the injunction in labor disputes. The Seamen's Act of 1915 provided for the improvement of living and working conditions of employees on ocean-going vessels and on lake and river craft. The Federal Workingman's Compensation Act in 1916 authorized allowances to civil service employees for disabilities incurred in the course of their work. The Adamson Act of the same year established an eight-hour day for railroad labor.
This record of reform reflected the temper of the people which found its voice through the leadership of President Wilson. A remarkable figure in the annals of the American presidency, he lacked the robust qualities usually indispensable to success in the rugged arena of competitive politics. Wilson was essentially a student and a philosopher of political institutions. His writings in the field of political science, in fact, were a notable contribution to the study of that subject in America. Wilson surveyed the world with singular mental detachment, with the eyes of a student accustomed to probe beneath the immediate flux of events and to seek for guiding principles. His hold on the people rested more on their confidence in his disinterested and penetrating intelligence than on a devotion to his personality, though he was deeply loved by his intimates. Wilson's place in history, however, has been measured not by his scholarship nor his devotion to social reform, but by the strange destiny which catapulted him into the role of wartime president and architect of the uneasy peace which followed World War 1. The great forces unleashed during Wilson's second term of office were likewise destined to effect fundamental changes on the American nation, confronted for the first time with the full responsibilities and hazards of a major world power.