chapter 6 (Harper & Bros., New York, 1907).

The further scope of the treaty was announced by President Roosevelt in his Message to Congress, December 7, 1903, as follows: "It provides not only for the ordinary rights and privileges of diplomatic and consular officers, but also for an important extension of our commerce by increased facility of access to Chinese ports, and for the relief of trade by the removal of some of the obstacles which have embarrassed it in the past. The Chinese Government engages, on fair and equitable conditions, which will probably be accepted by the principal commercial nations, to abandon the levy of ‘liken’ and other transit dues throughout the Empire, and to introduce other desirable administrative reforms. Larger facilities are to be given to our citizens who desire to carry on mining enterprises in China. We have secured for our missionaries a valuable privilege, the recognition of their right to rent and lease in perpetuity such property as their religious societies may need in all parts of the Empire."

CHINA: A. D. 1904. Railways and Chinese travel on them. Unused British Concessions.

"It may not have passed out of the public mind that in February, 1899, Mr. Balfour came down to the House of Commons and paraded before it and the country the magnificent triumph England had won in China in respect of Railway Concessions.

See, in Volume VI., CHINA: A. D. 1898 (FEBRUARY-DECEMBER.).

They totalled up to 2,800 miles! The House cheered, the country indulged in a fit of self-complacency, and the critic who asked questions was an ignoramus or a nuisance. Well, five years have gone by, and not one mile of those railways is in existence except the Chinese Northern State Railway, which has passed out of our hands. Of the rest the two great trunk lines, one from Hankow to Canton, and the other in Yunnan, have been abandoned, while among those of shorter length the only one that still remains in active force is the subject of this paper. …

"In more than one recently published consular dispatch attention has been drawn to the fact that the Chinese, backward or hesitating in the adoption of every other European or Western innovation, have shown no reluctance to avail themselves of improved means of locomotion. The Northern Railway is used by several million passengers every year; the sections already open of the German railway in Shantung and of the Belgian in Shansi can complain of no lack of traffic. The fears of an earlier period as to what the Chinese would do with regard to railways have been dissipated by experience."

_D. C. Boulger, The Shanghai-Nanking Railway (Contemporary Review, June, 1904)._

CHINA: A. D. 1904. The Russo-Japanese War in Manchuria.

See (in this Volume) JAPAN: A. D. 1904 (FEBRUARY-JULY) and after.

CHINA: A. D. 1904-1909. The Hankau Sze-chuen Railway Loan. The question of American participation.

In 1904 the American Minister at Peking concluded an agreement with the Chinese Government to the effect that, when loans for the construction of a projected railway into the western province of Sze-chuen, from Hankau, should be negotiated, Americans should have an opportunity to subscribe to it. Nearly five years passed before arrangements for the loan were made, and then, in the spring of 1909, it was found that terms had been concluded with a group of British, German, and French bankers for the whole sum sought, of $27,500,000, while American capitalists had not been given the promised opportunity. On behalf of the latter the Government of the United States intervened, claiming fulfilment of the agreement of 1904. The matter was regarded as being both politically and financially important. "A precedent is what we want to establish," said Mr. Crane, the newly appointed Minister to China, in an interview on the subject at New York. "The task of this Government to maintain its position with the European Powers in the East will be less difficult. We are looking twenty years ahead." As the result of communications in July from Washington to Peking, in which President Taft took part personally, the loan arrangement was readjusted, and American capitalists became participant in it to the extent of one-fourth.

According to a despatch from Peking, August 17, the matter was settled definitely that day, on the following terms: "The loan to be increased from $27,500,000 to $30,000,000, and of this latter amount American bankers to get one-quarter, the other three-quarters going to British, French, and German interests. Americans are to have equal opportunity with the other nations to supply material for both the Sze-chuen and the Canton lines and the branches; they will appoint subordinate engineers, and they will have also one-half of all future loans of the Sze-chuen Railroad and its branches with the corresponding advantages."

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Subsequently, however, some difficulty in the readjustment of business details in the matter arose, which delayed the final settlement. The motives of the American Government in claiming a participation in the enterprise were stated as follows by President Taft in his Message to Congress, December 6, 1909: "By the treaty of 1903 China has undertaken the abolition of likin with a moderate and proportionate raising of the customs tariff along with currency reform. These reforms being of manifest advantage to foreign commerce as well as to the interests of China, this government is endeavoring to facilitate these measures with the needful acquiescence of the treaty Powers. When it appeared that Chinese likin revenues were to be hypothecated to foreign bankers in connection with a great railway project, it was obvious that the governments whose nationals held this loan would have a certain direct interest in the question of the carrying out by China of the reforms in question. Because this railroad loan represented a practical and real application of the open-door policy through coöperation with China by interested Powers, as well as because of its relations to the reforms referred to above, the Administration deemed American participation to be of great national interest. Happily, when it was as a matter of broad policy urgent that this opportunity should not be lost, the indispensable instrumentality presented itself when a group of American bankers, of international reputation and great resources, agreed at once to share in the loan upon precisely such terms as this government should approve. The chief of those terms was that American railway material should be upon an exact equality with that of the other nationals joining in the loan in the placing of orders for this whole railroad system. After months of negotiation the equal participation of Americans seems at last assured. It is gratifying that Americans will thus take their share in this extension of these great highways of trade, and to believe that such activities will give a real impetus to our commerce, and will prove a practical corollary to our historic policy in the Far East."

CHINA: A. D. 1905 (August). New agreement respecting China between Great Britain and Japan.

See (in this Volume) JAPAN: A. D. 1905 (AUGUST).

CHINA: A. D. 1905 (December). Treaty with Japan relative to Manchuria.

By a treaty with Japan, concluded December, 1905, China consented to lease to Japan the Kwangtung peninsula, at the southern extremity of which are Port Arthur and Dalny, formerly held by Russia under lease from China, and concede to Japan the control of the railway on the peninsula northward as far as Changchin. China also conceded to Japan the right to build a railway from Antung on the Yalu River to Mukden, the ancient capital of Manchuria, provided, however, that at the end of a certain period the road may be purchased by China. More important is the fact that China agreed in the treaty to open to the world’s commerce and trade sixteen principal ports and cities in Manchuria, including Harbin, or Kharbin, the modern Russian capital of the province and its most important railway center.

CHINA: A. D. 1905-1908. The stir of new ideas. Imperial Commission to study Representative Systems of Government. Signs of fruit from it. Reformative movements. The Constitutional Programme set forth in August, 1908. Nine years of approach to a Promised Constitution.

A significant token of the dawning in China of a changed state of mind respecting the western world of Europe and America, and its very different development of scientific knowledge and of social institutions, was afforded in the fall of 1905, when an imperial commission, headed by Prince Tsai-Tse, was sent abroad to study representative systems of government. The Commission returned in the following July, and in August a committee of high dignitaries, with Prince Ch’ing for its chairman, was appointed to consider the report it had submitted on administrative reforms. The outcome, soon afterwards, was an imperial edict which recognized a "lack of confidence between the highest and the lowest, between the throne and ministers and the masses," and went so far as to say that "foreign countries become wealthy and powerful by granting a constitution to the masses and allowing suffrage to all." While intimating that China must look forward to a similar admission of the masses to some voice in the government, the edict set forth the prior need of many reforms, in the official system, in the laws, in education, in the finances, and in the army and police. To begin the undertaking of such reforms, Prince Tsai-Tse was put at the head of a committee for dealing with the official system, and before the year closed there were several changes of importance introduced, tending towards more simplicity of methods in public business and more centering of responsibilities. Examinations in Western subjects of knowledge began to replace the old conventional examinations in classic Chinese literature, as tests for admission and promotion in official service, and eagerness was shown in the opening of schools and colleges that approached the European and American type. Simultaneously with these stirrings of a new consciousness and purpose in China, a great moral reform was taken in hand. This was no less than an attempt to rescue the nation from its opium curse. Some account of the opium edict issued in September, 1906, will be found elsewhere.

See, (in this Volume) OPIUM PROBLEM.

That these reformative steps were actually taken with a view to the ultimate granting of "a constitution to the masses and allowing suffrage to all" was proved in the summer of 1908, when a programme of gradual approach to constitutional government, by stages which extend through the next nine years, was promulgated at Peking on August 27th. According to Western ideas the document lacks definiteness, but it is not difficult to believe in the sincerity of its intent. There may be great wisdom of sincerity in the serial planning of successive measures that are to unfold and introduce a constitution at the end of nine years.

The edict of August 27 was summarized and partially translated in a communication to the New York _Tribune_, as follows:

"The preamble alone fills twenty large pages and is written in an incongruous mixture of Chinese Classical terms and new Japanese terminology invented to fit Western meanings. The efforts of the authors have been aimed at conveying to the Chinese mind an understanding of things hitherto beyond its comprehension. The explanations often convey nothing to the Western mind.

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"The subject is approached in an almost prayerful attitude. The fact that China obtains this constitution ‘by the imperial will’ is reiterated again and again. It is set forth that the imperial government, under the constitution, shall not be criticised, on the principle that the ‘sacred majesty of the sovereign may not be offended against,’ and that the leaders of the political parties are to be appointed by the throne. Full government under this constitution will become effective at the end of nine years. While the proposed system is called constitutional, it is far removed from Western constitutional government.

"Broadly speaking, the document follows the constitution of Japan. Some of its most striking clauses follow:

"‘We beg, as the condition of the country is perilous, and the hearts of the people are uneasy—trouble within and calamity from without, danger threatening, and no parliament at the side to investigate matters—that urgent measures may be taken to overcome half-heartedness and procrastination, that there may be peace above and completion below.

"‘We have therefore laid down the general principles of the constitution and the programme for the work of getting everything in readiness in nine years. These may not be changed in the least particular.

"‘There will be boundless daily improvement. May the "silken sounds" descend to inform the empire and fix the road for ten thousand years, comforting the hopes of the myriads who long for peace.’

"Fourteen laws are then submitted, as follows:

"1. The Ta Ch’ing Emperor will rule supreme over the Ta Ch’ing Empire for one thousand generations in succession, and be honored forever.

"2. Majesty of the sovereign.

"3. Right of promulgating laws.

"4. Convocation, suspension, extension and dissolution of parliament.

"5. Appointment, payment, promotion, degradation of officials.

"6. Command over army and navy.

"7. Power to make war, peace, treaties; to receive and appoint ambassadors.

"8. Martial law.

"9. Rewards and pardons.

"10. Right over judges and the administration of laws.

"11. Injunction.

" 12. Right of raising funds when parliament is not in session.

"13. Right of fixing the expenses of the imperial household.

"14. Respecting authority over the imperial clan.

"‘We look to our Empress Dowager and Emperor and see that they take the measure of heaven and earth as their measure and the heart of the people as their heart. The officials and people within the wide seas are reverently grateful.

"‘The people should earnestly fulfil all the duties without selfish reservations, which would hinder the public welfare, and without rash impatience, which would confuse the regulation; not looking on the matter as too easy, so that the deliberations become empty wrangling, not failing to understand the limitation of powers, so as to make laws which overstep authority.

"‘The sovereign has absolute power, which he exercises in constitutional form.’

"It is then set forth that on the dissolution of parliament the people shall be called on to elect a new parliament, and the document continues:

"‘Mercy is from above; officials, below, may not arrogate it to themselves.

"‘Officers and people who keep within the law will have freedom of speech, of the press and of assembly. They shall not be disturbed without cause in their possession of property, nor interfered with in their dwellings; and they have the obligation to pay taxes and render military service and the duty of obedience to the law of the land.

"‘Members of parliament shall not speak disrespectfully of the court or slander others. Violation of this law will be punished.’

"The nine year programme is as follows:

"‘Thirty-fourth year of Kwang Hsu, or 1908—Local self-government; rules for reorganization of finance; fusion of the Manchu and Chinese military; revision of criminal code.

"‘Thirty-fifth year, or 1909—Election of provincial assemblymen; election to constitutional commission; local self-government bureaus established; census; provincial budgets; determination of functions of Peking officials; issuing of school books.

"‘Thirty-sixth year, or 1910—Provincial assemblies opened; local self-government established; census reports; tax rate fixed; organization of provincial officials; courts of law at provincial capitals and treaty ports; publishing criminal code; extension of schools; preparation for organization of sub-prefecture; department and district police.

"‘Thirty-seventh year, or 1911—Local self-government continued; public account; imperial budget; rules on imperial taxation; rules governing appointments and salaries of civil officials; extension of schools; codes of municipal and commercial laws and civil and criminal procedure drawn up.

"‘Thirty-eighth year, or 1912—Completion of general arrangement of urban self-government; census reports; publication of taxation laws of empire; perfection of arrangements for provincial and lesser courts; extension of schools.

"‘Thirty-ninth year, or 1913—Police registration; imperial trial budget of variable expenses; Supreme Court; courts of law in prefectures, sub-prefectures, departments and districts; criminal code promulgated; urban self-government established; rules for rural self-government; rules for urban police.

"‘Fortieth year, or 1914—Imperial trial budget of fixed expenses; publication of system of national accounts; rural self-government established; rules for lower courts.

"‘Forty-first year, or 1915—Imperial household expenses fixed; organization of the Banners’ controller’s office; public accounting enforced; lower courts established; municipal and commercial laws and civil and criminal procedure rules established; police system complete.

"‘Forty-second year, or 1910—Promulgation of full constitution and the laws of the imperial clan; parliamentary rules and rules for parliamentary elections; budget for consideration of parliament; reorganized official system; appointment of a premier.’

"The document concludes with these words:

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"'In the forty-third year of Kwang Hsu, or 1917, China will be, by following this plan, a parliamentary country like Japan or Russia.'"

_China's Constitution (New York Tribune, October 19, 1908)._

Prince Ito, the veteran statesman of Japan, regards the constitutional experiment in China with more anxiety than hopefulness. Speaking on the subject in August, 1909, he expressed doubt of its success, and thought failure would imperil peace in the Far East. His reasoning in brief was this:

"First—the enormous area of the Empire and the defective facilities for communication would greatly impede the assembling of a Parliament, especially in time of emergency.

Secondly, the immovable character of Chinese conservatism forbade a change even of the system of taxation, notwithstanding the State’s urgent need of funds, and there was, therefore, still greater difficulty in effecting the radical alterations required by a constitutional system.

Thirdly, the Chinese were untrained in local administration, the institution of which was an essential prelude to a national Assembly. He said he was astonished at the silence of Occidental publicists on this question so vital to the peace of the Orient."

CHINA: A. D. 1905-1908. Chinese Exclusion Laws of the United States. Boycott of American goods in the Empire.

See (in this Volume) RACE PROBLEMS: UNITED STATES: A. D. 1905-1908.

CHINA: A. D. 1905-1909. Disputes with Japan. The Fa-ku-menn Railway and the Antung-Mukden Railway questions. Settlement of the latter by Japanese ultimatum.

It could hardly have been possible for cordially friendly relations to be maintained between China and Japan, in the circumstances which transferred to the latter the extensive rights and privileges in Southern Manchuria, which Russia had acquired in that Chinese province by treaty and lease. By a protocol of December, 1905, after the closing of the Russo-Japanese War, there was an attempt, between Peking and Tokyo, to define the effects of the Treaty of Portsmouth, especially in the bearings of that article of the Treaty which ceded to Japan, "with the consent of the Government of China, the lease of Port Arthur, of Talien, and of the adjacent territories and territorial waters, as well as the rights, privileges and concessions connected with this lease or forming part thereof," and likewise, of "all the public works and property within the territory over which the above lease extends"; but misunderstandings and differences of opinion were sure to arise. Whether it has been more by the fault of Japan than of China that they arose and increased until, in the past year, they became a serious estrangement, is a question on which the judgment of foreign observers is conflicting. The veteran representative of the London Times at Peking, whose friendship for the Chinese is fast-fixed by long residence among them, lays the greater weight of responsibility on Japan, though he finds a lack of reasonableness on both sides. Japan, he says (writing July 19, 1909), was welcomed in China with open arms after her victorious war. "No nation ever had a greater opportunity, and faulty must have been the policy which in so short a time has wrought so great a change. Japan is now regarded with a comprehensive distrust that is most disquieting. Not long ago more than 1,000 Japanese of different classes were employed in China, in schools and colleges, in the army and police, in law and prison reform, in agriculture and sericulture, in telephone and electric light companies, on railways, and in many other capacities. At present there are fewer than 400, 52 of whom are in Peking, and these numbers will be further reduced as existing contracts expire. Similar reductions are noted in the number of Chinese being educated in Japan. Three years ago there were more than 20,000; last year there were more than 10,000. The number now is 5,125, and only yesterday it was arranged that in the case of a body of 300 Government students just returned to China, only 88 would be sent to take their places."

"At present each country, through its Press, is protesting against the unreasonableness of the other. Contradictory statements on questions of fact are made on almost every point at issue."

The main contention has related to the projected extension by China of a railway to Fa-ku-menn from the terminus of an existing line at Hsin-min-tun, west of Mukden. It was in the agreement of December, 1905, that no railways in competition with the South Manchurian line, which Japan took from Russia, should be built. The Japanese assert that they had in view this very Fa-ku-menn extension when that stipulation was inserted. The Chinese declare that the negotiation on their part had reference solely to the area east of the Liao River. Japan made two alternative proposals for the settlement of this question: "One that the Chinese should build a railway from Fa-ku-menn to the South Manchurian Railway instead of to Hsin-min-tun, or that the Japanese should build a railway from the South Manchurian line to Fa-ku-menn and thence to the North, in which case Japan would withdraw her objection to the Fa-ku-menn-Hsin-min-tun railway, provided that China undertook not to extend the line beyond Fa-ku-menn without a previous agreement with Japan." China is said to have declined discussion of these proposals, but offered arbitration of the whole matter. Japan objected to arbitration without previous discussion of her new proposals. And so the dispute seemed deadlocked.

Another dispute turned on the interpretation of a clause in the Agreement of December, 1905, which reads: "China agrees that Japan has the right to improve the Antung-Mukden Railway so as to make it fit for the conveyance of commercial and industrial goods of all nations." Japan undertook, as a necessary "improvement" of the road, to reconstruct it, with a change of gauge to connect it with the standard gauge of the South Manchuria and Korean roads. China denied that the agreement gave a right to reconstruction. Several other questions arising between the two peoples have helped to raise hard feeling on both sides; but these have seemed to be at the front.

At length on the 6th of August, 1909, Japan brought discussion of the Antung-Mukden Railway question to a summary ending, by a note to the Chinese Government which announced that "the Imperial Government is now compelled to take independent action, and to proceed to carry out the necessary work of reconstruction and improvement according to treaty rights." {98} Before taking this decisive step, the Japanese Government is said to have consulted Great Britain and other powers, and to have had approval of her action from London, if not from elsewhere. China yielded to the ultimatum, and this leading cause of quarrel between the great nations of the East was removed on the 4th of September by the signing, at Mukden, of a memorandum of agreement, reported in substance as follows:

China agrees, first, not to construct the Hsin-min-tum-Fa-ku-men Railroad without consulting Japan; second, that half the capital required to extend the Kirin Railroad shall be borrowed in Japan; third, that Japan will be permitted to extend the Yinkow and improve and modernize the Antung-Mukden Railroads, to which China was bitterly opposed; fourth, that Japan may work the mines in the Fushun and Yentai districts, and have joint exploitation of the mines reached by the Antung and Manchurian Railroad lines.

In the Chientao boundary dispute Japan agrees to recognize China’s sovereignty, while China agrees to open four trade marts in the district.

In a letter to a London journal, a few days before this settlement of the Antung-Mukden Railway question, Lord Stanhope said:

"The Chinese have surely deeper reasons for opposing this scheme than the mere fact of reconstruction. They well realize that this railway, crossing narrow valleys, can have no commercial future, but is virtually a strategic railway to strengthen the Japanese grip on Manchuria."

CHINA: A. D. 1906. A Commission sent to America and Europe for the study of political and other institutions.

The new spirit astir in China was manifested in the early months of 1906 by the sending of a large Commission of carefully chosen men to the United States and Europe, for observations that would be helpful toward reforms in their own country. It was headed by two High Commissioners of distinction, Tai Hung-chi and Tuan Fang, and they were attended by thirty-five scholars and functionaries of note. They received much attention during their stay of five weeks in the United States, and were placed by the Government under the special charge of Professor J. W. Jenks. Writing subsequently of their mission Professor Jenks said:

"The purpose of the commission is, primarily, to make such a study of the political institutions of the various countries visited that they will be able, on their return, to offer valuable suggestions for the improvement of their own. There is even serious talk among the high officials in China of some form of a constitution. In consequence, the commissioners are as eager to learn regarding the working of some of our institutions as regarding their form of organization. Inasmuch as political reform necessarily involves social reform, even as a condition precedent, the commission is devoting special attention to the study of education, in universities and schools, and to methods of social amelioration, in prisons and asylums for the insane and the poor. They, however, are not neglecting the study of our large manufacturing plants, and have clearly in mind, also, the improvement of the industrial conditions of China. It is a matter of peculiar interest that the Empress-Dowager charged them to inquire especially into the education of girls in the United States, since she hoped, on their return, to be able to found a school for the education of the daughters of the princes."

CHINA: A. D. 1906. Sixty cities being opened to foreign settlement.

A memorandum on the subject of the foreign settlements at the open ports of China, prepared by the Chinese Secretary of the American Legation at Peking, was transmitted to the State Department at Washington in December, 1906. It conveyed the following information:

"In China proper and in Manchuria 46 cities and towns have been thrown open already to foreign residence and international trade. This does not include Dalny, in Manchuria, leased to Japan; Wei-hai-wei, in Shantung, leased to Great Britain; Kiaochow, in Shantung, leased to Germany; Kowloon, in Kuangtung, leased to Great Britain; nor Kuang-chou-wan, in Kuangtung, leased to France. Besides the above, there are 3 cities in Tibet thrown open to trade, making 49 ports in the Empire. In addition to these already declared open, there are 13 cities whose opening in the immediate future is arranged for, and 3 others whose opening depends upon the acceptance by other treaty powers of the provisions of Article VIII. of the last commercial treaty between China and Great Britain. No account is taken of the cities of Turkestan, Mongolia, and the Amur region, in which Russian subjects have for many years enjoyed privileges of trade and consular jurisdiction. It will be seen, therefore, that in the immediate future foreigners will enjoy the right of residence for purposes of trade at more than 60 cities of the Chinese Empire."

CHINA: A. D. 1906. Edict against the use of opium.

See (in this Volume) OPIUM PROBLEM.

CHINA: A. D. 1906 (January). Chinese students in Japan.

See (in this Volume) EDUCATION: CHINA: A. D. 1906.

CHINA: A. D. 1906-1907. Flood and famine in the region traversed by the Grand Canal.

One of the frequent destructive floods in China which produce famine befell the region that is traversed by the Grand Canal in the summer of 1906. Heavy rains covered its vast plains with lakes of water, which drowned out the crops throughout an area estimated at 40,000 square miles. From ten to fifteen millions of people were reduced to famine, and could only be kept alive until the harvests of another year by the generosity of the outside world. It was not vainly appealed to; but the suffering and death in the afflicted country were appallingly great.

CHINA: A. D. 1906-1907. Christian Missions.

See (in this Volume) MISSIONS: CHINA.

CHINA: A. D. 1907-1909. Restriction on Chinese immigration to Canada. Labor hostility. Riotous attacks. Lately modified regulations.

See (in this Volume) RACE PROBLEMS: CANADA.

CHINA: A. D. 1908. Expansion of the Postal Service.

According to a report from Peking on the working of the Imperial Chinese Post Office in 1908, "the operations show an unprecedented expansion." The postal routes cover 88,000 miles, of which 68,000 are courier lines. The number of post offices open in 1901 was 176. There were 2,803 open in 1907, and 3,493 in 1908. The number of postal articles handled in 1901 was 10,000,000. The number was 168,000,000 in 1907, and 252,000,000 in 1908. The number of parcels was 127,000, weighing 250 tons, in 1901; 1,920,000, weighing 5,509 tons, in 1907; and 2,445,000, weighing 27,155 tons, in 1908.

CHINA: A. D. 1908. Administration of the Department of Education.

See (in this Volume) EDUCATION: CHINA: A. D. 1908.

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CHINA: A. D. 1908. Chinese students in the United States.

See (in this Volume) EDUCATION: CHINA: A. D. 1908.

CHINA: A. D. 1908 (November). Death of the Emperor, Kuang-hsu, and of the Empress-Dowager, Tze-Hsi. Accession of the child-Emperor, Hsuan-Tung (Pu-Yi).

The circumstances of the death, almost simultaneously, of the late Emperor, Kuang-hsu, and of the Dowager-Empress, Tze-Hsi, who had been the real ruler of the Empire, are involved in considerable obscurity. The Emperor is said to have died on the 14th of November, 1908, and the Empress on the following day. The announcement of their decease was preceded by the publication of two imperial edicts, one of which made Prince Chun, of the royal family, Regent of the Empire, while the other named Pu-Yi, the Prince’s son, three years old, as the heir presumptive to the throne. As communicated later to foreign governments, the Regent was given, by another imperial rescript, full power over the civil and military departments of government, and the entire appointment and dismissal of officials. The promised creation of a Parliament was anticipated in the prescription of his duties, among which were the following:

"When a Parliament has been established the Prince Regent shall attend the same in place of the Emperor, but he need not attend the ordinary sessions. When the Constitutional Commission meets, the Prince Regent shall likewise represent the Emperor there.

"The Prince Regent shall have full authority in negotiating treaties and in appointing representatives abroad.

"The Prince Regent shall enter and leave his chair at the Ch’ien Ch’ing gate. The yamens, according to their duty, shall draw up and report on regulations modelled on the precedent established by Prince Jui-Chung regarding the equipage, escort, and general preparations for movements of the Prince Regent outside the palace.

"Every year the Board of Finance shall transfer to the Department of the Imperial Household the sum of taels 150,000 for disbursement. When the Emperor comes of age, his studies being completed, and his marriage takes place, the official body shall unite in asking him to assume personal direction of the government."

On the 21st of November the members of the Diplomatic Corps at Peking were received in a body at the palace, to present the condolences of the Governments they represent on the deaths of the late Emperor and Empress. As reported to the Associated Press, there were present on the occasion "every official or member of the imperial family who recently has been reported ill, dead by his own hand or estranged from the government, and the desired impression of official stolidity at Pekin which, it was most evident, this occasion was intended to convey, was imparted successfully. This was the answer of the government to the rumors of suicides and deaths current in Pekin for the last week.

"Prince Ching, for the first time since the passing away of their majesties, appeared officially as the head of the foreign board. The heads of the various governmental departments were present, with the members of the imperial clan, and, in addition, several thousand minor officials, all in white, had assembled at imperial command. At the conclusion of the functions, in honor of the dead, the diplomats paid homage to Prince Chun, the regent."

On the 2d of December the strict mourning observed at Peking was suspended briefly, to permit the ceremonies attending the ascension of the dragon throne by the child-Emperor, Pu-Yi, who, as Emperor, took the name of Hsuan-Tung. The ceremonies, described to the Associated Press, lasted but half an hour. "The function began by the princes of the imperial family and the high officials of the empire kowtowing to the memorial tablets of their late majesties. After this they all kowtowed in turn to Pu-Yi: Pu-Yi then offered a sacrifice before the tablets of the Emperor and the Dowager Empress. After this he was relieved of his dress of mourning and clad with much care in a diminutive imperial garment, embroidered with the imperial dragon. His nurses performed this duty with great attention and care. Thus arrayed, the toddling Emperor ascended the throne amid a fanfare of drums, bells and firecrackers. He made his way alone and showed no need of the assistance which willing hands would have given him had his little feet faltered. From the throne Pu-Yi kowtowed to his stepmother, the Dowager Empress Yiahonala. He then received the kowtows, while still on the throne, of all the princes and officials present. This over, he descended from the throne and was again clad in his little dress of mourning.

"The ceremony took place in the throne hall of the Forbidden City. The officials present were selected with great care and were the highest men in the empire. According to an old established custom, a number of humble coolies, men from the lowest walks of life, were brought into the sacred precincts of the Forbidden City to act as witnesses. The soldiery played but an inconspicuous part in the proceedings."

Following the ceremony, an imperial edict proclaiming the ascension was issued. This edict grants amnesty for certain specified offences; rewards all the imperial princes, princesses, and dukes; promotes all officials by one degree and bestows honors on their parents; erases the demerits entered against minor officials; advances the degree of scholars; dismisses all pending petty criminal cases; excuses certain liabilities, and grants bounties to the soldiers in the service of the empire.

CHINA: A. D. 1908 (December). Decree reaffirming the Constitutional Programme of the late Empress Dowager.

An imperial edict reaffirming the determination of the new government of China to carry out in its entirety the Constitutional programme laid down by the late Empress Dowager of China in August, 1908, was promulgated on the 4th of December. A literal translation was made public at Washington in January as follows:

"On the first day of the 8th moon (August 27, 1908), the late Emperor reverently received the excellent decree of the late great Empress Dowager strictly ordering the officials and people of Peking and of the provinces to carry out completely by the ninth year all the preparatory work, so that at the appointed time the Constitution may be proclaimed. Also proclamations for the members of Parliament to assemble, and other decrees brightly manifested the sacred instructions, and all between the seas applauded. {100} From ourselves down to the officials and people high and low all must sincerely obey the excellent decree previously issued. The eighth year of Hsuan T’ung [whose first year dates from January 22, 1909] is the limit of time. Let there be no ‘reabsorption of sweat’ in this matter. Our hope is that this will certainly be carried out. Let the officials of Peking and the provinces on no account look idly on, and procrastinate, delaying the opportune time. Let patriotism be shone forth. Exert yourselves that constitutional government may be established. And court and ‘wilds’ (people) may have peace; and so we may comfort the spirits of the late great Empress Dowager and the late Emperor in heaven, and make firm the foundations of countless years of peaceful government."

CHINA: A. D. 1909. Progress in the opium reform.

See (in this Volume) OPIUM PROBLEM.

CHINA: A. D. 1909. Progress in technical education.

See (in this Volume) EDUCATION: CHINA: A. D. 1909.

CHINA: A. D. 1909. Existing treaties with United States and existing laws in the latter country relative to the admission of Chinamen. The question of their consistency with each other. Present status of the question.

See (in this Volume) RACE PROBLEMS: IN THE UNITED STATES.

CHINA: A. D. 1909 (January). Abrupt dismissal of Viceroy Yuan Shih-kai from his offices.

Much disturbance of feeling and apprehension of a troublesome reaction in Chinese policy was excited among the foreign representatives in China, on the 2d of January, 1909, by the sudden dismissal of the able and powerful Viceroy of Chi-li, Yuan Shih-kai, from all his offices. He had been looked upon as the great leader of progress in China,—the statesman to be counted on for the most and best influence in the government of the Empire for some years to come. He had the confidence of foreign powers, and was supposed to have acquired a sure footing in the councils at Peking. Latterly, however, it is said to have become known in Peking that "a powerful Manchu cabal was working for his downfall, led by Tieh-liang, the Minister of War, and supported by the aged doctrinaire and Chinese ex-Viceroy, Chang Chih-tung," and the stroke which overthrew him at the beginning of the new year was ascribed to that source. "The cabal has been successful," was the wired message of the Peking correspondent of the London _Times_ to his paper; and he summarized the merits of the fallen statesman thus: "No man in China deserved better of his country. He has been in the forefront of progress, and is the best administrator China has produced in this generation. When Governor of Shantung in 1900 his action in resisting the Boxer insurrection and in safeguarding foreigners really saved the Empire from disruption. He created China’s modern army and was the leader of the modern educational movement in China, and his famous memorial of September 2, 1905, urging the summary abolition of the antiquated system of literary examination was epoch-making. Under his Viceroyalty the Metropolitan province became the most advanced in the Empire. With Tang Shao-yi he led the anti-opium movement. Since he entered the Ministry for Foreign Affairs China has attained a measure of respect among the Powers which was unknown before."

Some weeks after the blow had fallen, and when the peculiarly Oriental manner of its infliction had been learned, a letter from Peking to the New York _Evening Post_ told of it as follows:

"At 11 a. m. on Saturday, January 2, the grand councillors were summoned by the regent. Prince Ching had evidently heard a whisper of what was to come, and he pleaded illness. The other grand councillors answered the summons promptly, but when Yuan reached the door of the council chamber he was told that he was not wanted. Three grand councillors therefore went in and found the regent awaiting them with the edict dismissing Yuan Shih-kai already drawn up. ‘I want no discussion. Sign this edict!’ said the regent. Chang Chih-tung turned to reply. The regent repeated his words impressively, and the edict was signed without further demur.

"Within the next hour, while Yuan Shih-kai was hastily making plans for his personal safety, the news flew around Peking and the city throbbed with excitement. Every one but his immediate councillors was astounded at Prince Chun’s temerity. Never in the history of China had such a man as Yuan been thrown out of office at such short notice. To the Western mind, however, there was nothing very harsh in the edict; it said simply:

"‘Yuan Shih-kai, a member of the Grand Council and president of the Waiwupu, formerly received repeated offices and advancement under the late Emperor. After our enthronement we gave him great honors, because we considered that his talent certainly was one that could be made use of, if he exerted himself in the public service. Unexpectedly Yuan Shih-kai has now contracted rheumatism in the foot, which makes it hard for him to walk and difficult for him to attend to the duties of his offices. Yuan Shih-kai, therefore, is ordered to vacate his posts and return to his native place to nurse his disorder. Thus is our great mercy to him manifested.’"

Yuan Shih-kai left Peking in haste, evidently in fear of his life, and it was expected that his whole following of friends and supporters would be swept out of their offices and employments. But no such result followed, and credit began to be given to the assurances of the Imperial Government that the dismissal of Yuan meant no reversal of policy or reaction whatever. He was distrusted, it was intimated, because he had been disloyal to the late Emperor in 1898, when the latter attempted great reforms.

See, in Volume VI. of this work, CHINA: A. D. 1898 (JUNE-SEPTEMBER), and after.

Yuan Shih-kai was then the chief agent and instrument of the Dowager-Empress in overcoming the well-meaning but weak sovereign and annulling his reformative work. Hence, it was claimed, the present Government’s distrust of him.

The Ministers of Great Britain and the United States had ventured some questions as to the significance of the act, but their colleagues did not join them, and no further discussion of the matter diplomatically took place.

CHINA: A. D. 1909 (February). Meeting of the International Opium Commission at Shanghai.

See (in this Volume) OPIUM PROBLEM.

CHINA: A. D. 1909 (May). New Russo-Chinese Agreement concerning the Chinese Eastern Railway. Municipalities on the Line. The Kharbin question.

The Chinese Eastern Railway, so named, is the line which Russia, by Convention with China in August, 1896, obtained permission to construct, from a point on her Trans-Siberian Railway, through Northern Manchuria, to Vladivostok. {101} Under that agreement the Russian authorities claimed a right to institute certain organizations of municipal administration at Kharbin and other towns of rising importance on the line. This right was challenged in 1908 by the American Consul at Kharbin (sometimes written Harbin), Mr. Fisher, who refused to recognize some ordinances of the Russian administration, on the ground that he was accredited to China, only, and could know no other sovereignty in Manchuria than the Chinese. This led to a new Russo-Chinese Agreement, signed at Peking on the 10th of May, 1909, distinctly authorizing the "organization of municipalities on the lands" of the Chinese Eastern Railway. The "sovereign rights of China" are "not to be prejudiced in any way," says the new Agreement; but "municipal bodies are to be established in the commercial centres of a certain importance situated on the lands of the railway. The inhabitants of these commercial centres, according to the importance of the localities and the number of the residents, shall elect delegates by vote, who shall choose an Executive Committee; or else the residents themselves shall take part in the business of the municipality and a representative shall be elected from amongst them who will take upon himself to carry out the resolutions decided upon by meeting of all the residents.

"No difference shall be made on the lands of the railway between the Chinese population and that of other nationalities; all residents shall enjoy the same rights and be subject to the same obligations.

"The right to vote shall belong to every member of the community who owns real estate of a fixed value or who pays a fixed annual rental and taxes."

Reading no farther in the Agreement than this, imperial Russia and China would seem to have jointly planted a seed of democratic municipalities in Manchuria; but that impression is destroyed by qualifying provisions, such as this:

"The President of the Chiao-She-Chu [a Mixed Russo-Chinese Court, formerly created] and the director of the railway, occupying a position superior to the Presidents of the assemblies of delegates and of committees, have a right of control and personal revision, which they may exercise whenever they think fit. … in the event of decisions by the assembly of delegates not being approved by the President of the Chiao-She-Chu or the director of the railway, these decisions shall be returned to the assembly for further consideration. If the original decision is adopted by a majority of three-quarters of the members present, it becomes binding."

The effect of the whole agreement would undoubtedly be to give the Russian railway officials supreme authority in the so-called municipalities. Remonstrances against it by the Government of the United States have been supported by Great Britain, Germany, and Austria. The question remains open and troublesome. Dr. Morrison, of _The Times_, wrote of the situation in November as follows:

"The situation in Manchuria is receiving close attention from the Legations because of the increasing difficulty of the problems created by Russian and Japanese claims to territorial and administrative jurisdiction in connexion with their respective railways, claims which conflict with China’s unimpaired sovereignty and with the treaty rights of other nations. A tentative proposal was recently submitted to the consideration of the Diplomatic Body, with the approval of the Wai-wu-pu and M. Korostovetz, to create an international settlement at Kharbin on a separate site adjoining the railway settlement. The proposal was unacceptable to the Powers interested because it implied a fundamental discrimination in favour of the railway company, leaving it to exercise, in an important trade centre, powers which are incompatible with treaties and which are not conferred by its charter. …

"The Chinese Government entirely fails to avail itself of its opportunities at this juncture. The local authorities are unable, and the Peking Government is unwilling, to take any initiative. The Wai-wu-pu adheres to its policy of shifting opportunism, as shown by its proposal to the Russian Minister to cancel, in deference to the protests of the Powers, the agreement with regard to the Kharbin municipal regulations concluded on May 10, a proposal unaccompanied by any practical alternative whereby political requirements might be reconciled with the undeniable vested interests of the railway. In this connexion it is interesting to note that, whereas England, America, France, Germany, Italy, and Austria-Hungary refused an unqualified assent to the Kharbin agreement, yet no exception has been taken to the regulations of the Japanese railway settlements, although, without any reference to China, they confer the widest powers on the Japanese authorities, including the right of arbitrary taxation and forcible expulsion."

The Russian side of the question was presented in a semi-official statement, made public in October, 1909, as follows:

"The representatives of certain Powers which have trade interests in China have, both in Peking and St. Petersburg, expressed doubts as to the rights of authority exercised by the Kharbin municipality. These representatives have endeavoured, in notes presented to the Chinese and Russian Governments on the matter, and in verbal communications, to prove that certain paragraphs of the treaty which was signed at Peking on May 10, 1909, violated the extra-territorial rights granted to their nationals by treaty with China, and further that some of the measures taken by the Kharbin authorities were opposed to the regulations of the international concession which, in their opinion, has been recently established at Kharbin.

"It is easy to demonstrate that such a point of view is based on a misunderstanding. Extra-territorial rights, so far as they are secured by treaty, comprise exclusively the right of every foreigner to be judged by his own Consul. They do not, however, in any way exempt him from the obligation to pay town and other taxes, or to submit to established regulations. The difference between the pure Chinese open ports where there are no foreign concessions and places which lie in the territorial zone of the Chinese Eastern Railway, and are open to foreign trade, consists solely in the fact that in the former the Chinese authorities have the power to make administration rules at their own discretion, while in places in the territorial zone of the Eastern Railway the Chinese Government has, by the concession agreement signed on August 28, 1896, and the convention of May 10, 1909, transferred the rights of administration to the Chinese Eastern Railway Company, as a private concession, so that the company acts as the agent of the Chinese Government in supervising the administration of Kharbin and other places.

{102}

"Another misunderstanding has evidently given rise to the statement that Kharbin has recently been converted into an international concession. The contracting parties never had any such intentions. By reason of legal acts, as well as of traditions and conditions of a local character, under which Kharbin originated, it is clear that this is a special kind of concession, which is distinguished from other concessions by its exceptionally liberal and exceedingly hospitable regulations in regard to foreigners."

CHINA: A. D. 1909 (October). Naval plans.

See (in this Volume) WAR, THE PREPARATIONS FOR: NAVAL: CHINESE.

CHINA: A. D. 1909 (October). Opening of the Peking-Kalgan Line of Railway. A purely Chinese undertaking.

See (in this Volume) RAILWAYS: CHINA.

CHINA: A. D. 1909 (October). Death of Chang Chih-Tung.

Chang Chih-Tung, Grand Councillor of the Empire of China, died on the 4th of October, 1909, and Tai Hung-tze, President of the Board of Justice, was appointed his successor in office.

CHINA: A. D. 1909 (October-November). Election and opening of Provincial Assemblies. Beginnings of the institution of Constitutional and Representative Government.

The following, from the Peking reports to _The Times_, London, narrates the actual beginning of the series of proceedings planned and promised for the gradual institution of representative constitutional government. The first is of the date of October 14, 1909:

"To-day marks an era in the establishment of constitutional government in China. In obedience to the Imperial decrees of October 19, 1907, and of July 22, 1908, ordering the establishment, within one year of the latter date, in each of the 22 provinces of China proper and in Manchuria and the New Dominion of provincial deliberative assemblies, elections have been in progress for some time past, and the assemblies meet in accordance with the regulations for the first time to-day, the first day of the ninth moon. …

"The elections have taken place according to the regulations, and halls have been erected for the assemblies to sit wherever a Viceroy or a Governor has his seat. The number of members varies from 140 in Chih-li, 114 in Che-kiang, to 30 each in Kirin, Lchlun-chiang, and Hsin-kiang. The incomplete returns which have been published show nearly 1,000 voters for each representative.

"For weeks past reports have been coming in from provincial authorities asking for instructions and information concerning this new departure. An edict issued last night renews the Imperial admonitions to members of the assemblies as to their deliberations, and to Viceroys and Governors as to their supervision of the deliberations, and exhorts all to display a loyal patriotism so that the country may attain strength and prosperity. The event may be one of great historical importance."

The next was sent from Peking on the 6th of the following November:

"Already, in the opening debates of these Provincial Assemblies, one apprehends the coming chaos, one hears the first whispering of the approaching storm. Peking, panoplied in ignorance and petrified in medieval statecraft, trifles with Demos at its doors, evidently hoping that the Assemblies will consume their own smoke, and that the Mandarin may be preserved by the time-honoured device of holding the balance between contending classes. But the spirits which the Vermilion Pencil has called from the Celestial deep, though elected with all possible precautions of ‘silkcoated’ franchise, and under the close direction of Viceroys and Governors, show signs of scant respect for the Central Government and of little sympathy for its difficulties. Already, within a fortnight of their birth, many of the Assemblies have passed resolutions denouncing several of the Government’s pet proposals—e. g., the opium monopoly, the stamp tax, and the foreign loan for the Hankau-Canton and Hankau-Szechuan Railways. In the case of the stamp tax, 15 provinces have expressed the opinion, and have induced the local officials in many cases to endorse it, that the proposed levy is impracticable, so that, in the words of the native Press, 'its imposition is deferred and the Ministry of Finance is at its wits’ end.’ Concerning the vexed question of the railway loan, the Hupei Assembly is reported to have endorsed, without a dissentient, their chairman’s declaration that the Government’s scheme should be resisted ‘to the death.’

"The spirit which animates these Assemblies is evidently very similar to that which speaks through the vernacular Press; iconoclastic, patriotic—in the sense that it denounces everything foreign—but lacking, so far, in intelligent leadership and constructive policy. Their attitude towards the Central Government is generally one of scarcely veiled contempt. I cannot illustrate better its general tendency than in the words of a native journalist who, in a recent criticism of the Grand Council, congratulated these rulers of China on their remarkable longevity, but observed that ‘there is little hope of longevity for an Empire that is governed by such incompetent survivals.’"

A few weeks later, after the forty days’ session of the new Provincial Assemblies had ended, this writer had changed his view. Writing on the 22d of December, he said: "A study of the reports of the proceedings so far available of the first session of the Provincial Assemblies supports the contention that the Throne has been justified in granting the subjects of the Empire a limited right of speech through their chosen representatives. The programmes of debate have been strictly in accordance with the Imperial edict, and the proceedings have been marked with dignity and decorum. The net result justifies the declaration made by a high authority, who has been given special opportunity of forming a judgment, that the ‘members have fulfilled their appointed task of working in harmony with the executive authorities in the interests of their respective provinces.’"

CHINA: A. D. 1909-1910. Proposal of the United States for the neutralization of Manchurian Railways. Proposed Chinchow-Aigun Railway.

Late in December, 1909, the United States Government submitted to that of China, and to the interested Powers, a proposition which contemplated the neutralization of the railways in Manchuria, now partly under Russian and partly under Japanese control, and which looked, also, to an international undertaking of the construction of a Chinchow-Aigun line, to tap the Russian Trans-Siberian road at Tsitshar. {103} In a published statement subsequently, the American Secretary of State, Mr. Knox, explained that his Government, during the recent railway loan negotiations, had pointed out to the interested Powers that the greatest danger to the policy of the open door in China and the development of her foreign trade arose from disagreements among the great Western nations, and had expressed the opinion that nothing would afford so impressive an object-lesson to China and the world as the spectacle of the four great capitalist nations—Great Britain, Germany, France, and the United States—standing together for equality of commercial opportunity. The American Government believed that one of the most effective steps to this end in order to secure for China the enjoyment of all political rights in Manchuria and to promote the normal development of the Eastern provinces was to take the Manchurian railroads out of Eastern politics and to place them under an economic and impartial administration by vesting in China herself the ownership of the railways. Such a policy would require the cooperation, not only of China, but of Russia and Japan, both of whom it would enable to shift their onerous responsibilities in connexion with those railways on to the shoulders of the combined Powers, including themselves, and would effect a complete commercial neutralization of Manchuria.

The proposal of a neutralization of the existing Manchurian railways was not received with favor in either Japan or Russia, and the other Powers concerned have manifested a disposition to defer to the view taken by those two Governments, which are most immediately touched by it. The position of the Japanese Government on the question was stated publicly in an address to the Diet on the 27th of January by Baron Komura, Minister for Foreign Affairs, who said:

"The United States government recently proposed a plan regarding the neutralization of Manchurian railways. The Imperial government, in view of the important Japanese interests involved, and considering that the proposal came from a friendly Power with which the empire was on terms of close intimacy, submitted the question to the most careful examination. While determined to adhere scrupulously to the policy of the open door and equal opportunity, it should be recognized that the realization of the proposed plan would involve radical changes in the condition of affairs in Manchuria which were established by the treaties of Portsmouth and Peking. The change must be attended by serious consequences. In the region affected by the South Manchurian Railway numerous undertakings have been promoted in the belief that the railway would remain in our possession. As a consequence, the Imperial government, with regret, was obliged to announce its inability to consent to the proposal. I trust that the United States will appreciate our position and that the other Powers will equally recognize the justice of Japan’s attitude."

The Russian Government is understood to have taken substantially the same ground, on the general question of a neutralization of Manchurian railways. There and elsewhere, however, there is said to be a readiness to consider the incidental proposition of an internationally financed Chinchow-Aigun road.

----------CHINA: End--------

CHINA EMERGENCY APPEAL COMMITTEE.

See (in this Volume) EDUCATION: CHINA: A. D. 1909.

CHINCHOW-AIGUN RAILWAY, Proposed.

See (in this Volume) CHINA: A. D. 1909-1910.

CHINESE HIGHBINDER ASSOCIATIONS: Their dangerous character.

See (in this Volume) SAN FRANCISCO: A. D. 1902.

CHINESE IMMIGRATION: The Resistance to it in America, Australia, and South Africa.

See (in this Volume) RACE PROBLEMS.

CH’ING, Prince of.

See (in this Volume) CHINA: A. D. 1901-1908.

CHOATE, Joseph H.: Commissioner Plenipotentiary to the Second Peace Conference.

See (in this Volume) WAR, THE REVOLT AGAINST: A. D. 1907.

CHRISTENSEN, Jens Christian.

See (in this Volume) DENMARK: A. D. 1901, and 1905-1909.

CHRISTIAN IX., King of Denmark: Death.

See (in this Volume) DENMARK: A. D. 1906.

CHRISTIAN MISSIONS.

See (in this Volume) MISSIONS, CHRISTIAN.

CHUN, Prince: Regent of China.

See (in this Volume) CHINA: A. D. 1908 (NOVEMBER).

CHURCH OF SCOTLAND: Act of Parliament authorizing change of the Formula of Subscription required from its ministers.

See (in this Volume and Volume 4.) SCOTLAND: A. D. 1904-1905.

CHURCH, Roman Catholic.

See (in this Volume and Volume 4.) PAPACY.

CHURCH AND STATE: The French Separation Law and its execution.

See (in this Volume) FRANCE: A. D. 1905-1906, 1906, and 1907; also, PAPACY.

CHURCH AND STATE: Russia: Emancipation of the Church urged by M. Witte.

See (in this Volume) RUSSIA: A. D. 1905 (APRIL-AUGUST).

CHURCH SCHOOL CONTROVERSIES.

See (in this Volume) FRANCE: A. D. 1903; ENGLAND: A. D. 1902, and 1906; CANADA: A. D. 1905.

CHURCHILL, Winston L.: Under Secretary for the Colonies.

See (in this Volume) ENGLAND: A. D. 1905-1906.

CHURCHILL, Winston L.: President of the Board of Trade.

See ENGLAND: A. D. 1908 (April).

CHURCHILL, Winston L.: To the British Suffragettes.

See (in this Volume) ELECTIVE FRANCHISE: WOMAN SUFFRAGE.

CHURCHILL, Winston L.: On the Budget of 1909 and the House of Lords.

See ENGLAND: A. D. 1909 (APRIL-DECEMBER).

CITIZENSHIP, American: Principles of Naturalization defined. The New Law.

See (in this Volume) NATURALIZATION.

CITY GOVERNMENT.

See (in this Volume) MUNICIPAL GOVERNMENT.

CITY PLANNING.

See (in this Volume) SOCIAL BETTERMENT; also, CHICAGO: A. D. 1909.

CIVIC FEDERATION, The National.

See (in this Volume) SOCIAL BETTERMENT: UNITED STATES; also, NATIONAL CIVIC FEDERATION.

{104}

CIVIL SERVICE REFORM: CANADA: A. D. 1908. Introduction of Competitive Examinations and the Merit System of appointment and promotion.

An "Act to Amend the Civil Service Act," which came into force September 1, 1908, divides the Civil Service of the Dominion into the Inside Service and the Outside Service, the former embracing "that part of the public service in or under the several departments of the Executive Government of Canada and in the offices of the Auditor General, the Clerk of the Privy Council, and the Governor-General’s Secretary, employed at the City of Ottawa, or at the Experimental Farm Station or the Dominion Astronomical Observatory near Ottawa." The employés of this Inside Service are required to be classified according to their salaries, in three divisions, and all appointments to positions in it are (except as otherwise provided in the Act) to "be by competitive examination, which shall be of such a nature as will determine the qualifications of candidates for the particular positions to which they are to be appointed, and shall be held by the Commission from time to time in accordance with the regulations made by it and approved by the Governor in Council."

For the administration of the Act a Civil Service Commission is created, consisting of two members appointed by the Governor in Council, who are to have no other office or employment, and who may employ necessary assistance for the examinations they conduct. The following are provisions of the Act:

"No person shall be admitted to such an examination unless he is a natural-born or naturalized British subject, and has been a resident of Canada for at least three years, and is, at the time of the examination, of the full age of eighteen years and not more than thirty-five years, and presents the required certificates as to health, character and habits.

"Before holding any such examination the Commission shall require each head of a department to furnish it with the number of additional permanent officers or clerks likely to be required in his department within the next six months.

"On this basis, and having regard also to the requirement of the several departments for temporary services, a computation shall be made by the Commission of the number of competitors to be selected at the next ensuing examination.

"If there remain from a previous examination successful competitors who have not received appointments, their number shall be deducted in making the computation, and their names, in the order of merit, shall be placed at [the top of the list] to be prepared in accordance with section 17 of this Act.

"Thereupon due notice of the examination shall be given by the Commission, stating the character and number of the positions to be competed for.

"Immediately after the examination the Commission shall make out a list of the successful competitors thereat for each position, in the order of merit, up to the number computed in accordance with Section 15.

"From the said list the Commission, on the application of the deputy head, with the approval of the head, of any department, shall supply the required clerks, whether for permanent or temporary duty. …

"The selections shall be, so far as practicable, in the order of the names on the list, but the Commission may select any person who in his examination shows special qualifications for any particular subject. …

"The cause of the rejection shall be reported by the deputy head to the Commission, who shall thereupon select another person to take the place of the one rejected, and decide whether the latter shall be struck off the list or allowed a trial in another department.

"After a person so selected has served a probationary term of six months, [he shall be deemed] to be permanently accepted for the service. …

"The head of the department, on the report in writing of the deputy head, may, at any time after two months from the date of assignment, and before the expiration of six months, reject any person assigned to his department. …

"Promotion, other than from the third to the second division, shall be made for merit by the Governor in Council upon the recommendation of the head of the department, based on the report in writing of the deputy head and accompanied by a certificate of qualification by the Commission to be given with or without examination, as is determined by the regulations of the Commission.

"Except as herein otherwise provided, vacancies in the first division shall be filled by promotions from the second division."

Regulations prepared by the Civil Service Commission appointed under the Act require fees, ranging from $2 to $10 to be paid by the candidates for examination.

CIVIL SERVICE REFORM: United States: A. D. 1901-1909. Progress of reform under President Roosevelt.

At the close of the administration of President Roosevelt, the journal published by the National Civil Service Reform League, entitled _Good Government_, bore the following testimony to the fidelity with which the principles of the reform had been upheld and promoted by the retiring executive:

"One of the first acts of President Roosevelt was the reorganization of the civil service commission, which, under the administration of President McKinley, had become lax and ineffective. Since then the enforcement of the law and rules by the commission has been sincere, vigorous and impartial. Particularly strict has been the enforcement of the prohibition against political assessments. Twice in the midst of political campaigns has the President ordered the removal of prominent officials for levying assessments on their subordinates.

"During his administration President Roosevelt has extended the scope of competition to many new and important offices. Notable among these extensions have been the restoration of the field service of the War Department (withdrawn by President McKinley) and the classification of the rural free delivery service (now numbering some 40,000), the forestry service, deputy collectors of internal revenue, deputy collectors of customs, deputy naval officers, and cashiers and finance clerks in post offices. Prevented by the civil service law from ‘classifying’ unskilled laborers, President Roosevelt, under general executive authority, has prescribed a system of examination for laborers in Washington and the principal cities. By executive order of June 27, 1906, he provided a system of examination and promotion for the consular service which has done away with the more flagrant evils of that service. His latest and most striking extension has been the classification of over 15,000 fourth-class postmasters, thereby taking them out of politics.

{105}

"He has prohibited the participation of competitive officials in politics further than to vote as they please and to express privately their opinions, and has made this prohibition effective by incorporating it in the civil service rules, thus giving to the commission the power to investigate. He has by vetoing the Crumpacker census bill defeated the attempt by Congress to obtain as spoils some 4,000 clerkships for the next census.

"This is a brief record of President Roosevelt’s service to civil service reform during his administration. In considering the criticisms of his course which have been made from time to time by the League and the press, this service should be kept in mind and carefully weighed. For instance, against this record of constant advancement, the suspension of the rules in individual cases—in all about 370—although in our opinion arbitrary and dangerous as precedents, are of comparatively minor importance. A few have been made for political reasons; the far greater number, however, were acts of charity or personal impulse, and President Roosevelt himself realized the danger in this practice and took steps to curtail it.

"In passing on the justice of the other criticisms of President Roosevelt’s course regarding the civil service one should keep in mind the distinction which he has so sharply drawn between the classified and the unclassified service. This is clearly set forth in a reply to a letter from the civil service commission calling his attention to the omission from the postal regulations of President Cleveland’s ‘pernicious activity’ order, and quoting a passage from the 11th report of the commission. President Roosevelt said:

‘I personally drew the paragraph which you quote. The paragraph was drawn with a view to making a sharp line between the activity allowed to public servants within the classified service and those without the classified service—the latter under our system are as a rule chosen largely with reference to political considerations, and as a rule are, and expect to be, changed with the change of parties. … It seemed to me at the time, and I still think, that the line thus drawn was wise and proper.’

"In considering such appointments to positions in the unclassified service as that of James C. Clarkson as surveyor of the Port of New York for instance, a just analysis must take into account these frankly expressed views. President Roosevelt drew a line between the classified and unclassified service, and as to the latter recognized and availed himself to some extent of existing conditions. He believed that so long as positions remained in the unclassified service it was impractical to eliminate political considerations and that any attempt to do so led to hypocrisy. His remedy was to place the positions in the classified service, wherever practicable. And he has extended the line of the classified service higher than ever before. The League does not believe this theory is ideal, but in carrying it out the President has certainly not set the reform back. Criticism based only on the fact that one who has rendered great service to a cause has not accomplished all that its ardent supporters wish to accomplish can be properly set down as captious.

"In performing its duty to the public, the League has at various times during his administration frankly criticised certain acts of President Roosevelt, which in its opinion were not in line with the best interests of the service. But this does not prevent us from recognizing that during his entire administration President Roosevelt has been loyal to the reform with which he has been so prominently identified. We do not believe that any act of his was intended to injure the reform. Wherever he has thought it practicable to extend the reform he has done so. A President less devoted to the reform would not have been criticised for what President Roosevelt has failed to do."

_Good Government, March, 1909._

The following exhibit of the whole progress in civil service reform, from its beginning to the end of 1908, was made in the annual report of the Council of the National Civil Service Reform League, presented at the meeting of the League, on the 17th of December in that year:

"The whole United States civil service, in 1883, consisted of 110,000 persons, and of these 14,000 were put under the civil service law. Now the federal civil service has grown to 352,000 positions, and, including the last extension, those under the competitive system have increased from 14,000 to about 222,000. Not only in numbers but in proportion to the total has the competitive service increased from 12.7% in 1883 to 63% now."

CIVIL SERVICE REFORM: A. D. 1902-1903. Extension of classification to the Rural Free Delivery Service. Order concerning unclassified laborers.

"During the year ended June 30 [1903], 25,566 persons were appointed through competitive examinations under the civil-service rules. This was 12,672 more than during the preceding year, and 40 per cent of those who passed the examinations. This abnormal growth was largely occasioned by the extension of classification to the rural free-delivery service and the appointment last year of over 9,000 rural carriers. A revision of the civil-service rules took effect on April 15 last, which has greatly improved their operation. … Executive orders of July 3, 1902; March 26, 1903, and July 8, 1903, require that appointments of all unclassified laborers, both in the Departments at Washington and in the field service, shall be made with the assistance of the United States Civil Service Commission, under a system of registration to test the relative fitness of applicants for appointment or employment. This system is competitive, and is open to all citizens of the United States qualified in respect to age, physical ability, moral character, industry, and adaptability for manual labor: except that in case of veterans of the civil war the element of age is omitted. This system of appointment is distinct from the classified service and does not classify positions of mere laborer under the civil-service act and rules. Regulations in aid thereof have been put in operation in several of the Departments and are being gradually extended in other parts of the service. The results have been very satisfactory, as extravagance has been checked by decreasing the number of unnecessary positions and by increasing the efficiency of the employees remaining."

_President’s Message, December 7, 1903._

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CIVIL SERVICE REFORM: A. D. 1906. Excellent legislation in Pennsylvania.

See (in this Volume) PENNSYLVANIA.

CIVIL SERVICE REFORM: A. D. 1906-1909. The Reform of the Consular Service.

A great and greatly needed reformation of the consular service of the United States was begun in 1906, by the passage of an Act of Congress, approved April 5, which provided for the reorganization of the service, primarily by the classifying and grading of the consuls-general and the consuls, and the fixing of salaries in each class. Consuls-general were placed by the Act in seven classes, with salaries as follows:

Class one, twelve thousand dollars. London, Paris.

Class two, eight thousand dollars. Berlin, Habana, Hongkong, Hamburg, Rio de Janeiro, Shanghai.

Class three, six thousand dollars. Calcutta, Cape Town, Constantinople, Mexico City, Montreal, Ottawa, Vienna, Yokohama.

Class four, five thousand five hundred dollars. Antwerp, Barcelona, Brussels, Canton, Frankfort, Marseilles, Melbourne, Panama, Saint Petersburg, Seoul, Tientsin.

Class five, four thousand five hundred dollars. Auckland, Beirut, Buenos Ayres, Callao, Chefoo, Coburg, Dresden, Guayaquil, Halifax, Hankau, Mukden, Munich, Niuchwang, Rome, Rotterdam, Saint Gall, Singapore.

Class six, three thousand five hundred dollars. Adis Ababa, Bogota, Budapest, Guatemala, Lisbon, Monterey, San Salvador, Stockholm, Tangier.

Class seven, three thousand dollars. Athens, Christiania, Copenhagen.

Consuls were divided among nine classes, receiving salaries that range from $8000 in the first class and $6000 in the second, down to $2000 in the ninth. The first and second classes hold but one incumbent each, at Liverpool and Manchester, respectively. There are eight places in the third class, twelve in the fourth, and then the numbers mount rapidly, up to the sixty-nine included in the ninth class.

All fees allowed to be collected for services rendered in connection with the duties of the consular office (which the President may prescribe) are directed by the Act to be accounted for thereafter and paid into the Treasury of the United States. All consular officers whose salaries exceed $1000 are forbidden to be interested in or to transact any business as a merchant, factor, broker, or other trader, or a clerk or other agent of one, or to practice as a lawyer for compensation, or to be interested in the fees or compensation of any lawyer. The whole service is placed under inspection by five inspectors, to be appointed from the members of the consular service; and each consular office must be inspected at least once in every two years.

In June following this important enactment, the Secretary of State, Mr. Root, submitted to President Roosevelt the draft of a recommended executive order, which prescribed new rules to be followed in filling the consular offices, as classified by the recent Act. In doing so, the Secretary made this explanation: "The main features of the order were embodied in the early forms of the Consular Reorganization Bill passed at this session of Congress, but they were dropped out, largely for the reason that their enactment by Congress would appear to be an infringement upon the President’s constitutional power to appoint consuls. Your adoption of these rules by executive order will be free from that objection, and judging from the very positive commendation which many members of both Houses have expressed for the proposed change in the method of appointing consuls, I do not doubt that the new system will receive the hearty approval of the Senate and of Congress whenever occasion may arise for an expression upon the subject."

The recommended order was approved and issued by the President. "Subject to the advice and consent of the Senate," it declared in substance as follows:

(1) Vacancies in the office of Consul-General and in the office of Consul above class 8 (salary, $2500) shall be filled by promotion from the lower grades of the service, based upon "ability and efficiency, as shown in the service";

(2) vacancies in the office of Consul of these two remaining classes, 8 and 9, are to be filled

(a) by promotion, "on the basis of ability and efficiency, as shown in the service," of consular clerks, vice-consuls, and consular agents, and

(b) by new appointments from candidates who have passed an examination;

(3) officials in the service of the Department of State, with salaries of $2000 or upward, shall be eligible for promotion, always on the basis of ability and efficiency, as shown in the service, to any grade of the consular service above the eighth class;

(4) the board of examiners for admission to the service shall consist of the Secretary of State (or such other officer of the department as the President shall designate), the chief of the Consular Bureau, and the chief examiner of the Civil Service Commission (or such other officer, as this commission shall designate);

(5) this board of examiners shall formulate the rules for examinations;

(6) among the compulsory subjects shall be at least one modern language other than English, the natural industrial and commercial resources and commerce of the United States, political economy, and the elements of international, commercial, and maritime law;

(7) 80 per cent. shall be necessary for eligibility;

(8) candidates must be over twenty-one and under fifty years of age, citizens of the United States, and of good character and physique. They must also have been specially designated by the President for examination.

Other significant provisions of the order are to the effect that no promotion shall be made except for efficiency and conduct, that "neither in the designation for examination or certification or appointment will the political affiliations of the candidate be considered"; and that "due regard should be had to the rule that, as between candidates of equal merit, appointments should be made so as to secure in the service proportional representation of all the States and Territories."

The first examination of candidates for appointment under this order was held on the 14th and 15th of March, 1907, since which time no one has entered the consular service of the United States without satisfying that test.

In June, 1908, Secretary Root announced the promotion or transfer of nearly sixty consular offices, setting in motion the desirable advancement of these officials from post to post, to make the best use of their proved capacity and acquired experience. About a year later, Mr. Root’s successor, Secretary Knox, made public the promotion of twenty-seven incumbents of consular office, and the appointment of twenty-three new recruits to the service from his eligible list. So the long striven-for reform of the American consular service may safely be said to have arrived.

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A bill introduced in the Senate, providing for a permanent consular service, based on competitive examinations, was decided by the Committee on Foreign Relations to be unconstitutional, for the reason that the Constitution itself confers the power of appointment of consular officers upon the President, and that Congress has no right to limit this power in any way. President Taft, by an executive order, has practically put the scope of the proposed bill into effect, thereby, in part, limiting the power conferred upon himself. This, in the opinion of the Senators, is all that can be done legally.

CIVIL SERVICE REFORM: A. D. 1908. Extension of the Merit System to nearly one-third of the Fourth Class Postmasters of the country.

In the Annual Report of the Council of the National Civil Service Reform League, presented at the annual meeting of the League in December, 1908, it was said:

"The great event of the year, which so aptly commemorates the 25th anniversary of the passage of the Pendleton bill, is the extension of the competitive system to all fourth class postmasters in the part of the country north of the Ohio and east of the Mississippi, that is, in the New England States, New York, New Jersey, Pennsylvania, Ohio, Indiana, Illinois, Wisconsin, and Michigan. This is an extension covering more positions than suggested by the civil service commission. It is an extension large enough to be of present advantage, is made in the more thickly settled portions of the country, where it is easiest to carry it out, and yet it is not on so large a scale as to invite mistakes or perhaps partial failure. This extension covers about 15,000 positions. The order of President Cleveland of May 26, 1896, covered about 31,000 places; and yet, from the point of political significance, this present extension is the most important, we believe, in the history of civil service reform since January 16, 1883, and when its purpose is fully carried out it will include some 53,000 places."

_See, in Volume VI. of this work, Civil Service Reform: United States._

The report then reviewed the efforts that had been in progress since 1889, with the support of Presidents Cleveland and Roosevelt, to bring about the inclusion of this class of postmasters, at the least, under the rule of appointment subject to competitive examination. President Roosevelt, in his annual Message of 1907, had said:

"The fourth-class postmasters’ convention has passed a very strong resolution in favor of placing the fourth-class postmasters under the civil-service law. The Administration has already put into effect the policy of refusing to remove any fourth-class postmasters save for reasons connected with the good of the service; and it is endeavoring so far as possible to remove them from the domain of partisan politics. It would be a most desirable thing to put the fourth-class postmasters in the classified service. It is possible that this might be done without Congressional action, but, as the matter is debatable, I earnestly recommend that the Congress enact a law providing that they be included under the civil-service law and put in the classified service."

Congress refused the desired legislation. The law committee of the League was unanimous in the opinion that the President held authority already to make the change by Executive Order, and Mr. Roosevelt gave a hearing on the subject to Messrs. McIlhenny and Greene, of the National Civil Service Commission, and the Honorable Richard Henry Dana, Chairman of the Council of the League. Evidently he became persuaded that his authority was sufficient, and was prepared to act accordingly. About the middle of November, 1908, the National League of Postmasters of the United States, which had been organized in 1905, sent a Committee, with its President, Mr. A. K. Hoag, of Orchard Park, New York, to present to the authorities at Washington their claim to a footing of non-political appointment under civil service rules. By good fortune they met at Washington Mr. Dana and Mr. Goodrich, of the National C. S. R. League, who were visiting the Capital on the same errand, and the doubled appeal had quick success. In an interview with President Roosevelt, the Committee of the Postmasters’ League received assurances that he would issue an order on the subject, provided that the President-elect, Mr. Taft, would approve his taking that step. The Committee went at once to the Hot Springs in Virginia, where the President-elect was then sojourning, received his ready endorsement of the plan, and conveyed it to the President in power. A fortnight later, on the 1st day of December, the memorable order was proclaimed. On the 1st of the following February a plan of filling vacancies was put into effect.

It was wise, no doubt, to apply the extension of the reform in post-office appointments to one large and important section of the country, and obtain a showing of practical results, before attempting to overturn the old system as a whole. That more will follow in due time is reasonably sure. Mr. Hoag, the President of the National League of Postmasters, in a private note, remarks:

"It is already evident that the change is to redound to a better service. Scores of new buildings, new quarters and new equipments are being installed by the emancipated postmasters; which shows that postmasters of this class dare, for the first time, to invest their money in better equipment, feeling that they are likely to remain postmasters long enough to make the investment a paying one, now that their tenure of office does not depend upon their relations to a political faction or boss."

CIVIL SERVICE REFORM: A. D. 1909. The Census Bill. Inveteracy of Spoils-seeking in Congress. Veto of the bill in its first form by the President. The Amended Bill which became law.

The greatness of the advance of civil service reform in the United States, within the quarter century since its beginning, is one of the most hopefully inspiring facts in recent American history. But, by the side of it stands the warning and shaming fact, that it has been achieved, from first to last, by forces outside of Congress, and outside of all other legislative bodies which supposedly represent the political will of the people. Every measure of legislation that has promoted it has been wrung from unwilling majorities in those bodies,—yielded only when they feared to refuse. That Congress, in both Houses, would wreck with eagerness, to-day, if it dared, the bettered public service of the nation, to recover for its members and their party henchmen the old "spoils" of office and place, was shown unmistakably, within the last year of this record, by its action on the bill to provide for the taking of the Census of 1910.

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The President, and every responsible official connected with the Census Bureau, had borne testimony to the inefficiency and wasteful costliness of previous census-taking under the old system of appointment, and had besought Congress to provide in the bill for an effective test of qualification for the employment by competitive examination. Considerable majorities in both House and Senate turned an equally deaf ear to all considerations of public interest in the matter, and passed a bill which enabled Senators and Representatives to parcel out between themselves the large number of appointments to be made.

President Roosevelt did not hesitate to veto the bill, and gave it a thorough dissection in the Message which explained his disapproval. In part, his comments on the Act offered to him were as follows:

"Section 7 of the act provides in effect that appointments to the census shall be under the spoils system, for this is the real meaning of the provision that they shall be subject only to non-competitive examination. The proviso is added that they shall be selected without regard to political party affiliations. But there is only one way to guarantee that they shall be selected without regard to politics and on merit, and that is by choosing them after competitive examination from the lists of eligibles provided by the Civil Service Commission. The present Director of the Census in his last report states the exact fact about these non-competitive examinations when he says:

‘A non-competitive examination means that every one of the many thousands who will pass the examinations will have an equal right to appointment, and that personal and political pressure must in the end, as always before, become the determining factor with regard to the great body of these temporary employments. I cannot too earnestly urge that the Director of the Census be relieved from this unfortunate situation.’

"To provide that the clerks and other employés shall be appointed after non-competitive examination, and yet to provide that they shall be selected without regard to political party affiliations, means merely that the appointments shall be treated as the perquisites of the politicians of both parties, instead of as the perquisites of the politicians of one party. I do not believe in the doctrine that to the victor belongs the spoils; but I think even less of the doctrine that the spoils shall be divided without a fight by the professional politicians on both sides; and this would be the result of permitting the bill in its present shape to become a law. Both of the last censuses, the eleventh and the twelfth, were taken under a provision of law excluding competition; that is, necessitating the appointments being made under the spoils system. Every man competent to speak with authority because of his knowledge of and familiarity with the work of those censuses has stated that the result was to produce extravagance and demoralization."

The veto went to Congress on the 5th of February, 1909, one month before the expiration of President Roosevelt’s term of office. His successor-to-be was well known to be in sympathy with his views of the public service, and no attempt was made either to pass the bill over the veto, or to proffer its spoils-seeking provisions to the new occupant of the Presidency when he came in. Congress was compelled, in this case, as in many before, to surrender its cherished spoils of salaried public employment to civil service reform, simply because public interests and public sentiment are better represented, as a rule, in the White House than in the Capitol, which is not a pleasing fact.

During the extra session that was called by President Taft, in March, an amended bill was passed which came near to satisfying the demands of reform. It kept a little opening for political favoritism, in a proviso, that the director of the Census may, "when the exigencies of the service require," make his selections from the list of eligibles, not by the candidates’ rating, but on the ground of "immediate availability" or previous experience in census work; but this was so small a loophole that the President’s signing of the bill was generally approved. "The act empowers the director of the census to appoint special agents to whom will be assigned principally the work of obtaining statistics from manufacturing establishments, mines and quarries. While no qualifying test is required by law for the appointment of these agents, Director Durand has nevertheless provided for their selection subject to a carefully worked out scheme of _competitive_ examinations, to be conducted by the United States civil service commission. In rating the candidates the experience declaration and practical test are to be given equal credit. All candidates who receive a combined rating of 70 will be placed on an eligible list, from which selection will be made as the needs of the service require. Eligibility, according to the instructions, ‘is not of itself a guarantee of appointment, but selection will be made solely with reference to equipment and availability for appointment.’"

_Good Government, October, 1909._

CIVIL VETO, in Papal Elections.

See (in this Volume) PAPACY: A. D. 1904.

CIVILISTAS, The.

See (in this Volume). PERU.

CLANRICARDE ESTATE, Evicted tenants of the.

See (in this Volume) IRELAND: A. D. 1907.

CLARION FELLOWSHIP.

See (in this Volume) SOCIALISM: ENGLAND: A. D. 1909.

CLARK, Edgar E.: On the Anthracite Coal Strike Arbitration Commission.

See (in this Volume) LABOR ORGANIZATION: UNITED STATES: A. D. 1902-1903.

CLEMENCEAU, Eugene: In the Sarrien-Clemenceau Ministry, and as Prime Minister.

See (in this Volume) FRANCE: A. D. 1906, and after.

CLEMENCEAU, Eugene: Disclaims for France the desire to revenge the German conquest of Alsace.

See (in this Volume) WAR, THE REVOLT AGAINST: A. D. 1907-1908.

CLEMENCEAU, Eugene: Triumph in the senatorial elections of 1909.

See FRANCE: A. D. 1909 (JANUARY).

CLEMENCEAU, Eugene: His downfall from Premiership produced by an intemperate speech.

See (in this Volume) FRANCE. A. D. 1909 (JULY).

CLERICAL PARTY.

See (in this Volume) FRANCE: A. D. 1903; BELGIUM: A. D. 1904; GERMANY: A. D. 1906-1907.

CLEVELAND, Grover: Trustee of stock controlling the Equitable Life Assurance Society.

See (in this Volume) INSURANCE, LIFE.

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CLEVELAND, Ohio: A. D. 1901-1908. The Farm Colony Experiment.

See (in this Volume) CRIME AND CRIMINOLOGY, PROBLEMS OF.

COAL, Wasteful mining and use of.

See (in this Volume) Conservation of Natural Resources.

COAL AND COKE CARTELS.

See (in this Volume) COMBINATIONS, INDUSTRIAL (IN GERMANY).

COAL COMBINATION, Alleged Anthracite: Proceedings of Government against it.

See (in this Volume) COMBINATIONS, INDUSTRIAL: UNITED STATES: A. D. 1907-1909, AND RAILWAYS: UNITED STATES: A. D. 1906-1909.

COAL MINES EIGHT HOURS ACT.

See (in this Volume) LABOR PROTECTION: HOURS OF LABOR: ENGLAND.

COAL MINING STRIKES.

See (in this Volume) LABOR ORGANIZATION.

COBALT SILVER MINES.

See (in this Volume) CANADA: A. D. 1903, and 1906-1907.

COLLECTIVISM.

See (in this Volume) SOCIALISM.

COLLEGES.

See (in this Volume) EDUCATION.

COLOGNE: Insurance against unemployment.

See (in this Volume) POVERTY, PROBLEMS OF: UNEMPLOYMENT.

COLOMBIA: A. D. 1898-1902. Castro, of Venezuela, and the Liberals (Yellows) of Colombia. How they helped one another.

The following passages are from an article in the _American Review of Reviews_ on "South American War Issues," by Edwin Emerson, Jr., who spent some time with the Colombian insurgents in 1902 and acquired a good knowledge of the troubled political conditions in that republic and its near neighbors. It adds something to what is told in Volume VI. of this work concerning the revolt started in 1899 by Rafael Uribe-Uribe, and about its relation to the beginnings of the career of Cipriano Castro, in Venezuela

See, in Volume VI, COLOMBIA, and VENEZUELA).

"At the time when Spain was losing Cuba, the last Congress of Colombia sat in Bogota. The Liberal party had but one spokesman in the Congress—to wit, Rafael Uribe-Uribe. The government majority championed the cause of Spain. Many of the more ardent Liberals were fighting in the field for ‘Cuba Libre.’ Uribe-Uribe was the only man in the Congress who spoke for America as against Spain. He was hissed down. Next, the Panama Canal question came up. The French concession was to be extended for ten years. Again Uribe-Uribe spoke for America as against France. The project was voted down. The Congress was dissolved. President San Clemente, on his own motion, extended the French concession. For this he is said to have received one million dollars, cash. Then the revolution broke out, and Uribe-Uribe took the field, in Santander, the richest coffee-growing state of Colombia. He fell upon the town of Cúcuta and took it, only to be driven out again after a disastrous rout at Palo Negro. To make things worse for the rebels, the Bishop of Santander ordered the excommunication of those who would not renounce liberalism or all connection with Liberals. It was a crushing blow, aimed at the wives and daughters of the fighting insurgents.

"While affairs were thus disturbed in Santander, Cipriano Castro, a Venezuelan exile living in Cúcuta, profited by the occasion to lead a small band of Colombian Liberals into Venezuela. They dashed across the border by night, and fell into Castro’s native town, Capachio Viejo. Castro’s father and five brothers, with other townsfolk, joined his standard and helped him win his first battle over a small detachment of Venezuelan government troops. Now the number of his adherents grew, especially as he won battle after battle or bought over his rival leaders. After a crushing defeat at Valencia, President Andrade fled the country, and Castro entered Caracas in triumph. His early Colombian adherents got Venezuelan government jobs.

"All went well for a while, especially after the prompt suppression of a counter-revolution, until Castro’s sympathies with the Colombian Liberals in the field began to tell on his foreign policy. Uribe-Uribe had been badly beaten in Colombia. He was made welcome by Castro in Venezuela, and was intrusted with the command of a division on the Colombian frontier. The command was recruited from Colombians across the border. At the same time, Castro arbitrarily stopped all navigation on the Zulia and Catacumbo rivers, running from Colombian Cordillera to the Lake of Maracaibo, in Venezuela. This was a death-blow to the coffee industry of the Colombian state of Santander, which has no other outlet to the sea. Cúcuta was ruined. A German house failed for half a million dollars, an American hacienda lost $200,000, and other foreign merchants suffered in proportion. All commerce in Cúcuta and Maracaibo coffee almost came to a standstill. Then it was that the government forces in Santander, to bring relief to the stricken district, tried to open the closed rivers by a sudden armed invasion into that region. For the sake of appearances, they were led by Ranjel Garbiras, a Venezuelan revolutionist. They made for the prosperous town of San Cristobal, but Uribe-Uribe had managed to gather his corps of insurgents, and beat off the attack in a three days’ battle. Some two thousand men fell on both sides. Uribe-Uribe promptly prepared a counter invasion. He was aided in this by Castro, who practically put all Venezuelan forces in the Cordillera at his disposal.

"President Castro, who was furious at so overt an act of war on the part of his old enemies, the Colombian Clericals, furthermore sent another expedition across the Goajira desert to aid his Colombian insurgent friends in that peninsula to take the Colombian port of Rio Hacha. Venezuelan gunboats appeared before Rio Hacha to do their part in the capture. Unfortunately for the Liberal cause, the Venezuelan army in the Goajira was taken unawares while on the march, and was all but annihilated. The gunboats chose to retire without firing a shot. Castro never recovered from this reverse. The expenses of his various armed expeditions ate up all his ready finances. When he could no longer maintain Uribe-Uribe’s troops, Uribe cut loose and recrossed the border, to join forces with other insurgent leaders in the interior of Colombia. Uribe’s cousin proceeded to Panama, and the civil war there broke out with fresh vigor. By their recent brilliant stroke in the harbor of Panama, the Colombian Liberals have won the command of the sea on the Pacific side. To assist them in doing the same on the Atlantic side, Castro has now supplied them with a torpedo-boat and a small gunboat."

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These last mentioned successes of Uribe-Uribe had no permanent effectiveness, for his surrender, with 1300 men and 10 pieces of artillery, was announced presently as having occurred on the 25th of October, 1902. It seemed unfortunate that he did not succeed in overthrowing the Conservatives, or "Blues," who held the government, since most accounts of their rule represented it as hopelessly bad; but a change for the better came without revolution after no long time.

The state of civil war was closed by a treaty of peace, signed on board the United States battleship Wisconsin, November 21.

COLUMBIA: A. D. 1901-1906. Participation in Second and Third International Conferences of American Republics, at Rio de Janeiro.

See (in this Volume) AMERICAN REPUBLICS.

COLUMBIA: A. D. 1903. Rejection of Treaty with the United States for the building of the Panama Canal. Revolt and independence of Panama.

See (in this Volume ) PANAMA CANAL.

COLUMBIA: A. D. 1903-1906. Feeling toward the United States.

Of the feeling in Colombia toward the United States, consequent on what occurred in Panama, Mr. Barrett, American Minister at Bogota, reported in 1906 as follows:

"The question is continually asked me: What is the attitude of the Colombian Government and people toward Americans and American interests on account of the Panama affair? Without entering upon any political discussion, I wish, in answering this pertinent inquiry, to take advantage of the opportunity to pay a just and frank tribute to Colombia. Speaking in the first place for myself as minister, I can truthfully say that, ever since my arrival here seven months ago, I have been treated with a generous kindness and sincere hospitality that have made a deep impression on me and increased my respect for Colombians in particular and Latin Americans in general. The United States minister has been extended invitations official and personal, and the United States legation in turn has been continually frequented by leading men of all parties, as if nothing had ever happened to mar the _entente cordiale_ of the two countries.

"In the granting of concessions and in the hearing of claims the Government has treated Americans with as much consideration as Europeans. During my stay here, and up to this writing, there has not been one complaint lodged by Americans in this legation of unkind treatment by Colombians due to any political anti-American feeling. In my own travels in various parts of the country, officials and peons alike have everywhere accorded me polite and even gracious attention. To let it be known that I was United States minister has always led to extra courtesies rather than to any lack of them.

"I could not, however, have it understood abroad that there is not still strong feeling against the United States. It does exist, but the passing of years, and generous, fair treatment of Colombia and Colombians by the United States and its citizens, in international relations and friendly social and commercial intercourse, can effect its gradual disappearance. Such feeling does not take the attitude of personal enmity toward Americans. The Colombians, high and low, are too polite and sensible for that. It is a feeling in the minds and hearts, based on high political and patriotic grounds, which, however, with commendable philosophy, recognizes the inevitable and now turns to the future to bring blessings that will counterbalance the losses and sorrows of the past. The very courage and nobility of this attitude of Colombia is one of the chief reasons why I predict for her a magnificent future. Already this policy—if I may call it a policy—is bearing fruit in the development of a greater and more friendly and sympathetic interest throughout the United States in Colombia, which is destined to lead to a mutually favorable understanding and settlement of all differences in the near future."

COLUMBIA: A. D. 1904. Arbitration of boundary dispute with Equador.

A treaty for the arbitration of boundary questions with Equador was concluded November 4, 1904 .

COLUMBIA: A. D. 1905. Arbitration Treaties with Peru.

See (in this Volume) PERU: A. D. 1905.

COLUMBIA: A. D. 1905-1906. A New Era, under President Reyes.

"The New Era in Colombia" is the title of an article in the _American Review of Reviews_, May, 1906, by Francis P. Savinien, writing from the country in question.

"By judicious, if not generous, action," says the writer, "President Rafael Reyes [who became President in the previous year] has succeeded in harmonizing nearly all elements of the population. His administration is neither Liberal nor Conservative. It is Nationalist. Placed in power by Conservatives and sustained by Liberals, his favors to the former preserve order in the center of the country, and his implicit trust in the latter insures peace on the frontiers. He has made General Uribe-Uribe minister to Chile, Argentina, and Brazil, and General Herrera commander along the Venezuelan border, thus bestowing the highest diplomatic and military honors on Liberals. From Conservatives he chose all his ministers (except Dr. Modesto Garees, of the Department of Public Works), the governor of the capital district, and other high officials for the center of government. His government is like that of Panama, the secession of which made a policy of reconciliation predominant in both countries. … The Colombian army has become a body of laborers. Troops are converted into sappers and employed in building or improving ways of communication. Idleness, as well as agitation, is beginning to receive general condemnation. It is true that there is little liberty. There is, however, less persecution than formerly. Journals are abject and individuals mute. There is no free speech or press. But there are few persons in prison or exile for political reasons. The policy of the government has become that of abstention rather than restraint."

General Reyes had represented Colombia at the Pan-American Conference in the City of Mexico, in 1902, and had made a most favorable impression on the delegates from the United States. Referring to the occasion long afterwards, Mr. Sylvester Baxter said of him: "It is notable that in that Conference Colombia was represented by General Rafael Reyes, a high type of man—gentleman by birth and education, of scientific attainments, a natural leader, one of the strong characters of Spanish America; a man whose existence makes things seem hopeful when else they might look hopeless; a soldier-statesman in whom many see the potentialities of a second Diaz."

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A similar expression of admiration appears in an interesting special report, entitled "Colombia, a Land of Great Possibilities," made in June, 1906, by the Honorable John Barrett, then American Minister to Colombia, more recently the Director of the International Bureau of American Republics. "Great credit," wrote Mr. Barrett, "is due to General Rafael Reyes, President of this Republic, for his untiring efforts to restore the prosperity of his country to the position it occupied before the last civil war and the loss of Panama. If he succeeds, he will deserve a place in history like that of President Diaz in Mexico. He has so far effectually stopped revolutions, and, if his life and health are spared, Colombia would seem to be assured of peace at least during his administration."

COLUMBIA: A. D. 1905-1909. Troubles with Venezuela over the navigation of rivers flowing through both countries.

The arbitrary action begun by the ill-tempered and arrogant Castro, of Venezuela, in 1902, when he stopped navigation on the rivers which flow from Colombia to Lake Maracaibo, in Venezuela, and thus open communication to the sea (see above), was continued or resumed in subsequent years, and was a distressing trouble to his Colombian neighbors.

In July, 1905, the Colombian Government appealed to that of the United States for its good offices in maintaining the principle of free navigation on rivers that are common to neighboring countries. "From the time of the award which decided the boundary dispute between the two countries," said the Colombian Minister to the United States, in a communication to the American Secretary of State, "the policy of Venezuela in matters relating to the transit trade of Colombia and the navigation of the common rivers, has been marked by a conspicuous spirit of hostility. … Neither logical arguments nor historic precedents, such as those submitted by the Colombian chancellery to the Government of Venezuela for the recognition by the latter of the principle of free trade over the natural waterways placed by God at the disposal of all nations, have availed."

The writer then reviewed at considerable length the arguments with which the Government of the United States had contended in the past with Spain and Great Britain for the free navigation of the Mississippi and the St. Lawrence, and said in conclusion: "It would be desirable, and I would ask that it be done if this note were favorably received by the Government of the United States, that the American minister at Caracas be appropriately instructed in the sense of declaring on behalf of the commercial interests of the citizens of the United States his desire that the Government of Venezuela make the navigation of the Zulia and Orinoco rivers free, and urging, by persuasion, that the principle be solemnly consecrated in its public treaties. My Government will join in such an action, which comes within its traditional policy in the matter, and will interpose no obstacle or delay to the meeting of an international mixed commission for the framing of regulations concerning the use of the above-named rivers without detriment to the legitimate interests of the countries through which they flow."

To this request the then Acting Secretary of State, Mr. Adee, made a favorable reply, August 5, saying:

"The principle of the free navigation of rivers has been advocated by the United States and maintained in its relations with its neighbors for many years. This government is ready, therefore, to use its good offices in the sense requested, and Mr. Russell has been instructed upon arriving at his new post in Venezuela to take advantage of fitting occasion to express to the minister for foreign affairs the great satisfaction with which the United States would view the adoption and proclamation by Venezuela of the general principle of the free navigation of rivers and fluvial arteries of communication common to neighboring countries.

"It is of course to be understood that in touching upon this matter this government does not seek to intervene or mediate in any way in the relations between Colombia and Venezuela, but is merely interested in the universal recognition of a policy beneficial to the commerce of the world."

In the following December, the endeavor seemed promising; for the American Minister to Colombia was able to report the signing, at Bogota, of a protocol, preparatory to a new treaty of amity, commerce, and navigation, to be concluded at Caracas. Four months later, on the 27th of April, 1906, Minister Russell, at Caracas, announced the arrival there of the Colombian plenipotentiary, General Benjamin Herrera, appointed for the negotiation of the treaty agreed upon, but reported further that the Venezuelan Government had refused to receive him, demanding that somebody else be sent. No settlement of the matter could be obtained while Castro controlled Venezuela. Since his elimination it has been reported that President Gomez, his successor, has annulled his decrees of hostility to Colombian commerce.

COLUMBIA: A. D. 1906-1909. Efficient but arbitrary Government produces discontent. Opposition to treaty with Panama and the United States. Vacation of President Reyes which ends in resignation. Revolt. Elections.

While the Government organized under President Reyes was undoubtedly efficient and effective in restoring order and prosperity to the country, it was not satisfactory to the people; and perhaps it speaks well for them that they showed discontent. It was not a representative government, the existing Congress not being an elective body, but a provisional legislature made up by appointment. As admitted in the quotation above from a friendly Colombian writer, the citizens under it were tongue-tied subjects, having no free speech or Press. The political situation and the differing states of feeling produced by it were discussed in April, 1909, by a special correspondent of the New York Evening Post, who wrote from Bogotá:

"It seems to be confessed by the great majority of the people here that the country has not entered on that stage of political development in which the people can govern themselves by parliamentary methods. The history of their nearly one hundred years of independent national life has been that of almost continual civil strife, and of frequent civil wars, which have interrupted and almost destroyed all efforts at self-government; so that the present system of government by executive decrees, to be ratified by an appointed ‘Constitutional and Legislative Assembly,’ is about the only one that can preserve the peace and direct the country into the line of prosperity and progress.

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"Under this system of government the country has enjoyed almost perfect internal peace during the year. This is the political theory that is most widely accepted at the present time in Colombia. Of course, there are those who do not agree with this theory, which they consider as the natural action of men who are more anxious to preserve order than they are to establish truth and justice, and there are not lacking those who say that in the long run it will be found to be a foolish system.

"It is pointed out that the idea that grievances can be done away with by forbidding men to complain, or that the criticisms can be met by excommunicating the critics, or that changes can be prevented by putting the troublers to silence, is contradicted by the experience of the rest of the world. The kind of effort that is being made in Colombia to prevent the liberty of the press, of public speech, and of personal opinion, is like the effort to prevent the escape of steam by the safety valve, and is very likely to result in an explosion."

The state of public feeling in Colombia became further complicated, no doubt, when, early in January, 1909, a tripartite treaty was negotiated, with Panama and the United States, for the settlement of questions connected with the secession of Panama in 1903. Panama, in this treaty, agreed to pay Colombia the sum of $3,500,000, as her share of the Colombian public debt, receiving recognition of her independence in return. The treaty was submitted to the Colombian Congress by President Reyes on the 24th of February, with a special message of recommendation; but public feeling was said to be bitterly against it, for the reasons that no wrongfulness in the transaction was recognized and the indemnity was insufficient. Disturbances which broke out at Bogota and in the provinces about the middle of March were attributed mostly to this cause of discontent. For some reason of discouragement or disgust, the President was reported to have resigned his office on the 13th, but was persuaded to resume it next day.

It was now decided to suspend consideration of the tripartite treaty, until it could be submitted to an elected National Congress, the election for which would be held on the 20th of the coming July. In June, a few weeks before the appointed election, President Reyes made a sudden departure for Europe. Rumors that he had gone because tired of political strife and would not return were contradicted by the Colombian Consul at New York, in a published note which said: "His departure, the causes of which are well known throughout Colombia, was due to the fact that after five years’ strenuous labor he desired a rest, and last March to the National Assembly expressed his desire to retire temporarily from the Presidency, but, owing to the opposition of public sentiment and the strong desire of the people to have him remain, he determined not to leave the Presidency until elections to the coming Congress had been made. To this Congress, about to be convened, and in which all parties are represented, President Reyes confides many of the cares of government, left by law under his jurisdiction until Congress should assemble, and withdraws, temporarily only, from the discharge of his Presidential duties, leaving in his stead General Jorge Holguin, his most intimate friend and former minister of war, who will continue to pursue in all matters the same policy as that adopted by his predecessor. General Reyes during his stay in Europe, whence he has gone, will perfect plans for developing railroad and other industries in Colombia. There is absolute peace and tranquillity in all parts of the country."

But the "absolute peace and tranquillity" of the country was shaken in the first week of July by a revolutionary outbreak at Barranquilla, soon suppressed, and the resignation of President Reyes was received soon thereafter, from abroad. The election of his successor now devolved on the new National Congress, elected by the people on the 20th of July. It gave the office, for the remainder of the unfinished term (which expires August 7, 1910) to Señor Gonzales Valencia, who had been proclaimed by the Barranquilla revolutionists the month before, though he disavowed their movement.

COLONIAL CONFERENCES, British.

See (in this Volume) BRITISH EMPIRE.

COLONIAL DOMINION, The passing of the age of.

See (in this Volume) WORLD MOVEMENTS.

COLONIZATION: The colonizable regions of Africa.

See (in this Volume) AFRICA.

COLORADOS.

See (in this Volume) PARAGUAY: A. D. 1902.

COLUMBIA UNIVERSITY: Interchange of Professors with German and Scandinavian universities.

See (in this Volume) EDUCATION: INTERNATIONAL INTERCHANGES.

COMBES, Justin Louis Émile: Head of French Ministry.

See (in this Volume) FRANCE: A. D. 1902 (April-October; also 1903, and 1905-1906.

COMBES, Justin Louis Émile: Vindication under scandalous charges.

See (in this Volume) FRANCE: A. D. 1904 (JUNE-JULY).

--------COMBINATIONS, INDUSTRIAL AND COMMERCIAL: Start------

COMBINATIONS: AUSTRALIA: A. D. 1909. Decision of the Federal High Court on the Anti-Trust Law. Prosecutions by the Government.

"The first case brought under the Federal Anti-Trust Law ended in June last in a decision of the High Court to the effect that two important sections of the Act were ultra vires, as the Constitution only empowered the Commonwealth to regulate foreign and inter-State trade and gave it no authority to interfere with trade within a State. The Federal Government is now instituting proceedings against 27 firms which are alleged to belong to a coal combine trading with other countries and among the States of the Commonwealth. Each firm has been called upon to answer certain questions under the Act in question."

_Reuter Telegram, Melbourne, September 27, 1909._

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COMBINATIONS: Canada: A. D. 1909. Merger of Dominion Iron, Steel, and Coal Companies. Cement Combination.

The following is a Press despatch from Halifax, Nova Scotia, November 13, 1909:

"The formation of the Canada Steel Corporation, the proposed $70,000,000 merger of the Dominion Iron and Steel Company and the Dominion Coal Company, was made possible by the agreement of James Ross of Montreal, president of the Dominion Coal Company, to transfer to a syndicate of Toronto capitalists a portion of his holdings of the coal company stock. Final arrangements regarding the stock transfer will be made here to-day. President Ross owns coal company stock of a par value of $5,000,000, and, although he does not dispose of all this, he is to transfer enough to give control of the coal company to the Toronto capitalists, who have already acquired a controlling interest in the steel company. The plants of the Dominion Iron and Steel Company and the Dominion Coal Company are in Cape Breton, where they give employment to thousands of men, and where they have caused little fishing villages to spring up into flourishing cities."

Announcement of the completion of the merger was made in December.

COMBINATIONS: CANADA: A. D. 1910. Anti-Trust Bill in the Dominion Parliament.

A strongly constructed measure for controlling and regulating commercial and industrial combinations, to check restraints of trade and undue enhancement of prices, was brought into the Dominion House of Commons on the 18th of January, 1910, by the Minister of Labor, Mr. Mackenzie King, and its passage was said to be assured. Mr King’s explanation of the Bill, as summarized for the Associated Press, was as follows:

"The Bill, Mr. King stated, was not designed to interfere with trade, but to protect the public from the operation of monopolies. The bill provides that if six or more persons show prima facie evidence to a superior court judge that a combine exists, which has unduly enhanced the price of a manufactured article, unduly limited the production of any commodity, or unduly restricted trade in any way, the judge shall order the minister of labor to have an investigation made. This shall be done by a board of three, one member to be appointed by those who complain, one by those complained against, and a chairman by the first two, and if they fail to select the judge who has heard the complaint shall act.

"This board has the full powers of a court to compel the attendance of witnesses and the production of evidence. The board must report to the minister and he must give the report the fullest publicity.

"Two remedies are provided where a combination is reported to exist. The government may withdraw the tariff protection from the articles produced by the combine and bring the manufacturers into competition with the world.

"The other remedy is a provision that if the combine persists in its course after ten days there shall be a fine of $1,000 a day imposed until the abuse is remedied. There is also provision that when a patentee makes use of the protection of the patent act to restrict trade or unduly enhance prices his patent may be revoked.

"The act provides for its expeditious and thorough enforcement, and all expenses of investigation are to be borne by the government.

"Where question is raised as to the scope of the investigation, the board shall make it as thorough and complete as public interest requires. Boards are to conduct their investigations in public and the decision of two members shall be the decision of the board. Whenever the minister of labor believes that counsel should aid the investigation, the board may retain the services of a lawyer upon the consent of the minister of justice. Witnesses are to be allowed the same fees and traveling expenses allowed at the present in civil suits. With the consent of the minister of labor a board may employ experts to examine books and to report upon technical questions."

COMBINATIONS: GERMANY: Corporation Reform as the Germans have handled it.

"Thirty years ago the German people went through corporation experiences much like our own. There, as here, the corporation, as originally designed, was a mere shell. There, as here, under the shelter of that shell, the property of the country was being transferred from the German people at large, even the little they had, to the few. There, thirty years ago, as here now, great corporate scandals were exposed. And there, as here, the human nature that is everywhere behind civilization eventually began to recoil. It began there before it began here, only because conditions reached a climax there earlier than here, and because we as a people were too prosperous and too busy to look even a little way beneath the surface of things.

"But when the work of reform did come there, it was a genuine reform. It did not content itself with indiscriminate denunciation, or with mere lawsuits. Nor did it die out, leaving the door still open to every character of corporation the cunning of men might conceive. Before a corporation can be organized in that country, it must prove, as in a court proceeding, its rightful title to a corporate existence. In the same way it must establish the amount and the character of the capitalization it is allowed to put out. When property is turned in, its value must be judicially ascertained. Upon officers and directors is not conferred supreme power; in the German corporation the shareholders’ meeting is the counterpart of our New England town meetings—a genuine assembly intended to do something more than pass resolutions of approval. And every violation of trust, not merely to the public, but to the shareholder as well, is quickly punished with punishment that smarts. There is in the German corporation no room for one to do, with impunity, in his capacity as a corporation officer or promoter, what if done individually would land him in the penitentiary."

_Judge Peter S. Grosscup, The Corporation and the People (The Outlook, January 12, 1907)._

COMBINATIONS: The Cartels. Industrial combinations, quite as effective as the Trusts of the United States, have been created in Germany on a wholly different plan. The constituent organizations in them, of capital and industry, are simply knitted or tied together by hard and fast agreements, instead of being fused into huge corporations, as the Trusts are. For the kind of covenant which unites them a military term has been borrowed, and they are called Cartels. The difference between the Cartel and the Trust is described by a Scottish writer, D. H. Macgregor, in his work on Industrial Combinations, as follows:

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"The Cartel is an agreement for a time, the Trust is a permanent structure; the former is therefore a factor in industry full of speculative possibilities, both as regards its actual operation, and because the 'residual' competition of parties who break away at the end of the period is considerably to be feared. … The principle of the pure Cartel is compensatory action. It is an organization in which certain producers deal with themselves, and exist for that purpose in a double relation; they are producers of goods, and purchasers of their own produce. What they stand to lose in one aspect they stand to gain in the other. …

"The operation is broadly as follows. The members of the Cartel, meeting as producers in general assembly, determine a price for their product which covers cost of production, being in fact practically a competitive price. This is the base or normal price (_Richtpreis_). Thus they assure themselves, in this capacity, of adequate remuneration. They then sell to the Syndicate, that is to themselves as members of the Syndicate, for what is called the ‘taking over’ or ‘accounting’ price (_Verrechnungspreis_) which is usually on the average higher than the base price, so that they have now created for themselves as producers a ‘Cartel advantage.’ The Syndicate then resells to the consumer, for a price which will be as high as it can get, but which varies with the competition to be met in different parts of the market; this price (_Verkaufspreis_) may not in some cases be so high as the taking-over price, or may not exceed it by more than the margin necessary to cover the Syndicate’s expenses of management. … It is the Syndicate which figures in the public eye; and while it itself offers no sign of monopoly profit it shelters the companies which gain by its handling of their goods. It conceals monopoly dividends."

_D. H. Macgregor, Industrial Combination (G. Bell & Sons, London, 1906)._

COMBINATIONS: The Coal and Coke Cartels. Their influence.

An elaborate history and description of the "Monopolistic Combinations in the German Coal Industry," by Francis Walker, was published for the American Economic Association in 1904. These are treated as representative, because, says Mr. Walker, "the most important and fundamental of all German castellated industries" are those in mining and metallurgy. He traces their development from a beginning in 1858, when an association of the mining interests of the mining district of Dormund was founded. In part, his conclusions as to the effect of the coal cartels are as follows:

"The German coal cartels have not had an injurious influence, in general, on the production of coal. More particularly they cannot be accused, justly, of unduly limiting production among themselves. Nor have they attempted to accomplish the same end by crushing outside competition, by unfair methods. It would be preposterous to say that they have hindered technical progress. The cost of production, on the other hand, probably has been somewhat increased by the preservation of weak and costly mines through participation in the cartels. In regard to prices, the policy of the coal cartels, on the whole, has been moderate, taking circumstances into consideration, while the policy of the coke cartel may be fairly pronounced extortionate. The prices of coal have been more stable than they would have been under free competition; during the _hausse_ they were not screwed up so high as they might easily have been, but, on the other hand, they have not declined so quickly with the _baisse_. The like may be said of the coke prices, but, at the same time, they were exorbitant considered from the point of view of costs and profits. … The _déroute_ of the iron industry was not due to the coal or coke cartels in any important degree, i. e., even with low prices, disaster to the iron industry would have been inevitable. No other industry was affected so much as iron, and it is at least very questionable whether the cartels in general (excluding the coal cartels in particular) are to be blamed for the crisis. … That they are to be blamed for the ill-judged over-development of certain industries, which was apparently the real cause of the crisis, does not seem to be a just conclusion. On the other hand, the cartels may be accused, with more probability of truth, of retarding the convalescence of German industry by not reducing prices, and if this is true, the coal and coke cartels are specially to blame."

F. Walker, Monopolistic Combinations in the German Coal Industry (American Economic Association), 1904.

COMBINATIONS: Growing magnitude of companies. Industrial concentration.

"The tendency to industrial concentration is shown by the returns of public companies, which point to the growing domination of large undertakings. Of 4,749 registered public companies in 1895, 13.6 per cent. had a share capital not exceeding £5,000, but in 1906, of 5,000 such companies, only 9.6 per cent. had a capital of that amount; the companies with a capital of from £5,000 to £12,500 decreased from 14.0 to 10.4 per cent., and those with a capital of from £12,500 to £25,000 decreased from 16.9 to 14.2 per cent. On the other hand the companies with a capital of from £25,000 to £50,000 increased from 20.7 to 21.3 percent.; those with a capital of from £50,000 to £250,000 increased from 28.5 to 35.0 per cent.; those with a capital of from £250,000 to £500,000 increased from 3.4 to 5.4 per cent., and those with a capital exceeding £500,000 increased from 2.9 to 4.1 per cent. In 1896 there were only two companies with a capital exceeding five millions; in 1906 there were nine such companies, and their combined capital was over seventy millions, having been more than doubled since 1896. In spite of this tendency towards the concentration of capital and the multiplication of large undertakings, however, Germany is still an interesting illustration of an industrial country which has not yet entirely gone over to the factory system of production. The handicrafts, the characteristic feature of which is the small, independent master-workman, surrounded by his handful of journeymen and apprentices, contend tenaciously, yet unfortunately with only partial success, against the on-coming tide of ‘great capitalism’ (private joint stock, and cooperative), and the house industries continue to afford employment to a multitude of workers of both sexes, estimated at half a million."

_William H. Dawson, The Evolution of Modern Germany, pages 59-60 (Unwin, London; Scribner's, New York, 1909)._

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"Among the home interests of the country nothing loomed up so large last year [1904] as the subject of industrial combinations. The process of consolidating industries and banks into powerful organizations again made gigantic strides; and the public mind, dazed and disquieted, is wondering what will be its final outcome. All the largest steel manufacturers have united in an association that shall have complete control of the steel and iron products of the country; and it is already effecting agreements with manufacturers of other countries for parceling out the world’s markets. At the same time the Coal Syndicate was reorganized to include all the independent producers of the West; and in connection with it, a great shipping and selling company was formed for the purpose of controlling the retail trade and eliminating recalcitrant dealers. These steel and coal combinations are working in complete harmony, and no independent manufacturer can exist against their will.

"In that great industrial region many large iron companies had come into possession of coal mines. In order to induce these to put their mines into the Syndicate, they were given the right to produce, over and above their allotments, all the coal that they might need for their own furnaces. A new impetus was thus given to the process of consolidation. Strong coal companies hastened to absorb iron establishments, in order to earn larger profits by consuming their own coal in indefinite quantities. Furthermore, as the allotments were fixed absolutely for a long period, the strongest companies proceeded to buy weaker, less economically worked collieries, in order to shut them down and produce their allotments elsewhere at lower cost. This movement assumed large proportions. Miners by the thousand had to betake themselves to other parts of the country, and entire communities were threatened with depopulation. Industrial towns held indignation meetings, to protest, and to demand the nationalization of the mines; and excited operatives are still holding conferences to discuss a general strike. The Government has sent a commission to inquire into the movement; and the Minister of Commerce has urged the coal magnates to proceed as mildly as possible.

"This powerful concentric movement of industries has taken a strong hold upon the thoughts of people and Government alike. The public is deeply concerned at the growth of private monopolies, and many persons who had hitherto favored letting economic development take its own course now call for drastic measures of prevention and repression. Country squires of the most conservative type advocate the nationalization of all coal deposits; and it is already asserted that a majority of the Prussian Diet would vote for such a measure. This convergence of the views of extreme Conservatism and radical Socialism is certainly one of the oddest results of the movement under discussion,—and one of the most instructive. The natural trend of events is unquestionably in the direction of some form of socialism. The Social Democracy clearly perceives this, and so hails every industrial consolidation as but another milestone on the way to state collectivism."

_W. C. Dreher, Recent Events in Germany (Atlantic Monthly, March, 1905)._

COMBINATIONS: International: Of Transatlantic Shipping Companies. Agreements with the British Government.

Announcement was made in October, 1902, of the incorporation on the 1st of that month, under a New Jersey charter, of the International Mercantile Marine Company, with a capital of $120,000,000, and an issue of 4½ per cent. bonds to the amount of $75,000,000. The combination included the American, the Red Star, the White, the Atlantic Transport, the Leyland and the Dominion lines. Both American and British capitalists were represented in the board of directors, the former in the majority. Several partners in the firm of J. Pierpont Morgan & Company were included, and Mr. Morgan was understood to be the architect of the combination; but he did not appear personally in its organization.

The first step towards such a shipping combination had been taken sixteen years before, when the British Inman steamship line was taken over by the International Navigation Company, made up of Americans, at the head of whom was Mr. Clement A. Griscom, of Philadelphia. "The British Government promptly withdrew the liberal subsidy which it had been paying to the Inman liners; but Mr. Griscom and his comrades brought the _New York_ and _Paris_ beneath the Stars and Stripes, built the St. Louis and _St. Paul_, secured a subsidy from the United States and gave the first-class British lines a most formidable competitor. Indeed, commercial rivalry in high grade ships on the North Atlantic soon became too keen to permit of reasonable dividends and Mr. Griscom found British ship-owners in a responsive mood when he broached anew the great idea of an international combination.

"This union was made all the easier by the fact that meanwhile another important British steamship concern, the Leyland line, had been acquired by Mr. J. Pierpont Morgan in the spring of 1901. This line, itself the fruit of several consolidations, controlled the largest British tonnage in the North Atlantic trade. It owned no fast mail ships, no greyhounds. But it did possess forty or fifty good, useful steamships of moderate speed, many of them of large tonnage, and fit for passengers as well as freight. The main Leyland service lay between Boston or New York on this side, and Liverpool or London on the other, and the business of the company had been so profitable for a long term of years that its shares were quoted at a handsome premium. Mr. Morgan paid a generous price for his maritime investment. It is said that he gave £14 10s. for each £10 share, or a bonus of 45 per cent. But amazement at Mr. Morgan’s ‘liberality’ ceased when the next stage in the great, far-sighted negotiation was unfolded.

"This was the dramatic uniting of the Leyland line with the American and Red Star lines of the International Navigation Company, and the Atlantic Transport line, another British steam fleet owned by American capital. Later still it transpired that the famous White Star line of fast mail, passenger, and freight ships and the smaller but excellent Dominion line were embraced in the huge consolidation. The White Star was one of the two lines—the Cunard was the other—which performed the British mail service between Queenstown and New York. Its fleet included the great liners _Oceanic_ and _Celtic_, the swift _Teutonic_ and _Majestic_, and the favorite _Britannic_ and _Germanic_ which had held ocean records in their day, together with a considerable number of large and efficient freighters. The American purchase of the White Star line was long disputed, and when it was finally confirmed, something like consternation seized the British press and people, for the White Star fleet had been regarded as distinctively a British institution as the Bank of England. Its fast ships received not only the mail pay of the post-office, but the subventions of the Admiralty, and were enrolled on the ‘merchant cruiser’ list."

Winthrop L. Marvin, The Great Ship "Combine" (American Review of Reviews, December, 1902).

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The anxieties with which the combination was regarded at first in Great Britain were allayed materially by Mr. G. Balfour, President of the Board of Trade, who made public, in a speech at Sheffield, the terms of an arrangement that had been made by the Government with the Cunard Company, on one hand, and the Combination on the other. The Cunard Company, he said, "pledged themselves to remain in every respect a British company, managed by British directors—the shares not to be transferred to any but British subjects. Their ships were to be officered by British officers. They also engaged to construct two vessels of twenty-four to twenty-five knots which, as well as the entire Cunard fleet, the Admiralty would have the right to charter or purchase at any time on terms fixed in the agreement. The money for the construction of the fast steamers would be advanced to the company at the rate of 2¾ per cent. interest, while in lieu of the present Admiralty subvention—£28,000 a year for the contingent use of three ships—the company would receive £150,000 a year. With Mr. Pierpont Morgan, the head of the Shipping Combination, who had shown the utmost readiness to meet the wishes of His Majesty’s Government, it had been agreed that the British companies in the Combination should remain British, not merely in name but in reality. The majority of their directors were to be British subjects. All their ships now flying the British flag were to continue to fly it, and at least one-half of those hereafter to be built for the Combination would likewise fly British colours, be commanded by British officers, and manned in reasonable proportion by British sailors. On the other hand, the combined companies would continue to be treated, as heretofore, on a footing of equality with other British companies in respect of any services, whether postal, or military, or naval, which His Majesty’s Government might require from the British mercantile marine. It had been further stipulated that in the event of the Combination pursuing a policy hostile to our mercantile marine or to British trade, the King’s Government should have the right to terminate the agreement."

COMBINATIONS: United States: A. D. 1900. Definition of the term Industrial Combination formulated at the Census Bureau. Statistics as collected in 1900.

"The officials of the Census Office, in order to prevent misconceptions and insure consistency in the plan and system of tabulation, formulated the following definition of the term ‘industrial combination’:

"‘For the purpose of the Census, the rule has been adopted to consider no aggregation of mills an industrial combination, unless it consists of a number of formerly independent mills which have been brought together into one company under a charter obtained for that purpose. We therefore exclude from this category many large establishments comprising a number of mills, which have grown up, not by combination with other mills, but by the erection of new plants or the purchase of old ones.’ …

"So far as can be ascertained from the data in the Census Office, the number of these industrial consolidations is 183. They control 2203 separate plants, scattered throughout the United States, 2029 being active and 174 idle during the census year. For 56 of the idle plants no returns could be obtained, making the total number of reporting plants 2147. The 183 combinations extend to almost all lines of industry, producing articles of luxury, materials essential to the upbuilding and growth of the country, and even the very necessities of life. Fully 50 per cent. of these combinations were chartered just prior to or during the census year; and it is noteworthy that the epidemic of industrial consolidation, as far as the so-called monopolies are concerned, has been practically confined to the past four years. It is evident, therefore, that the disease—if it be regarded as such—has spread very rapidly.

"Naturally enough, iron and steel, with 69 combinations, heads the list. The number of reporting plants engaged in this industry is 469, and the capital invested, consisting of land, buildings, machinery, tools and implements, and cash and sundries, is valued at $348,000,000."

_W. R. Merriam, "Trusts" in the Light of Census Returns (Atlantic Monthly, March, 1902)._

COMBINATIONS: A. D. 1901-1903. The question of Federal Control and Regulation. Urgency of President Roosevelt for effective legislation.

In his first Message to Congress, three months after his succession to the Presidency, President Roosevelt expressed his mind frankly and clearly on the then increasing demand in the country for more stringent measures of government, to control and regulate the exercise of the power which great aggregations of incorporated capital have created in recent times. In part, he then said:

"The tremendous and highly complex industrial development which went on with ever accelerated rapidity during the latter half of the nineteenth century brings us face to face, at the beginning of the twentieth, with very serious social problems. The old laws, and the old customs which had almost the binding force of law, were once quite sufficient to regulate the accumulation and distribution of wealth. Since the industrial changes which have so enormously increased the productive power of mankind, they are no longer sufficient. The growth of cities has gone on beyond comparison faster than the growth of the country, and the up building of the great industrial centers has meant a startling increase, not merely in the aggregate of wealth, but in the number of very large individual, and especially of very large corporate, fortunes. … The process has aroused much antagonism, a great part of which is wholly without warrant. It is not true that as the rich have grown richer the poor have grown poorer. On the contrary, never before has the average man, the wage-worker, the farmer, the small trader, been so well off as in this country and at the present time. There have been abuses connected with the accumulation of wealth; yet it remains true that a fortune accumulated in legitimate business can be accumulated by the person specially benefited only on condition of conferring immense incidental benefits upon others. … {117} The captains of industry who have driven the railway systems across this continent, who have built up our commerce, who have developed our manufactures, have on the whole done great good to our people. Without them the material development of which we are so justly proud could never have taken place. … It cannot too often be pointed out that to strike with ignorant violence at the interests of one set of men almost inevitably endangers the interests of all. … Much of the legislation directed at the trusts would have been exceedingly mischievous had it not also been entirely ineffective. In accordance with a well-known sociological law, the ignorant or reckless agitator has been the really effective friend of the evils which he has been nominally opposing.

"All this is true; and yet it is also true that there are real and grave evils, one of the chief being over-capitalization because of its many baleful consequences; and a resolute and practical effort must be made to correct these evils. There is a widespread conviction in the minds of the American people that the great corporations known as trusts are in certain of their features and tendencies hurtful to the general welfare. This springs from no spirit of envy or uncharitableness, nor lack of pride in the great industrial achievements that have placed this country at the head of the nations struggling for commercial supremacy. … It is based upon sincere conviction that combination and concentration should be, not prohibited, but supervised and within reasonable limits controlled; and in my judgment this conviction is right. … The first essential in determining how to deal with the great industrial combinations is knowledge of the facts—publicity. In the interests of the public, the Government should have the right to inspect and examine the workings of the great corporations engaged in interstate business. …

"When the Constitution was adopted, at the end of the eighteenth century, no human wisdom could foretell the sweeping changes, alike in industrial and political conditions, which were to take place by the beginning of the twentieth century. At that time it was accepted as a matter of course that the several States were the proper authorities to regulate so far as was then necessary, the comparatively insignificant and strictly localized corporate bodies of the day. The conditions are now wholly different and wholly different action is called for. I believe that a law can be framed which will enable the National Government to exercise control along the lines above indicated; profiting by the experience gained through the passage and administration of the Interstate-Commerce Act. If, however, the judgment of the Congress is that it lacks the constitutional power to pass such an act, then a constitutional amendment should be submitted to confer the power."

_President’s Message to Congress, December 3, 1901._

In the following summer, during a tour which he made through some of the New England States the President gave prominence to the same subject in his addresses, emphasizing the necessity of federal legislation to arm the General Government with more effective authority for regulating the action of corporations engaged in interstate trade. In speaking at Providence especially, his remarks caused a great stir of feeling in the country, and seem to have signalled the beginning of an open array of hostile corporate interests against him. On that occasion he spoke partly as follows:

"Those great corporations containing some tendency to monopoly, which we have grown to speak of rather loosely as trusts, are the creatures of the State, and the State not only has the right to control them, but is in duty bound to control them wherever the need for such control is shown. There is clearly a need of supervision—need to exercise the power of regulation on the part of the representatives of the public, wherever, as in our own country at the present time, business corporations become so very strong, both for beneficent work and for work that is not always beneficent. It is idle to say that there is no need for such supervision. A sufficient warrant for it is to be found over and over again in any of the various evils resulting from the present system, or, rather, lack of system.

"There is in our country a peculiar difficulty in the way of exercising such supervision and control because of the peculiar division of governmental power. When the industrial conditions were simple, very little control was needed, and no trouble was caused by the doubt as to where power was lodged under the constitution. Now the conditions are complicated, and we find it difficult to frame national legislation which shall be adequate, while as a matter of practical experience State action has proved entirely insufficient, and in all human probability cannot or will not be made sufficient, to meet the needs of the case. Some of our States have excellent laws—laws which it would be well indeed to have enacted by the national legislature. But the wide differences in these laws, even between adjacent States, and the uncertainty of the power of enforcement result practically in altogether insufficient control.

"I believe that the nation must assume this power of control by legislation, and if it becomes evident that the constitution will not permit needed legislation, then by constitutional amendment. The immediate need of dealing with trusts is to place them under the real, not nominal, control of some sovereign to which, as its creature, the trusts shall owe allegiance, and in whose courts the sovereign’s orders may with certainty be enforced. That is not the case with the ordinary so-called 'trust’ to-day, for the trust is a large State corporation, generally doing business in other States also, and often with a tendency to monopoly. Such a trust is an artificial creature not wholly responsible to or controllable by any legislature, nor wholly subject to the jurisdiction of any one court. Some governmental sovereign must be given full power over these artificial and very powerful corporate beings. In my judgment this sovereign must be the national government. When it has been given full power, then this full power can be used to control any evil influence, exactly as the government is now using the power conferred upon it under the Sherman Anti-Trust law.

"Even when the full power has been conferred it would be highly undesirable to attempt too much or to begin by stringent legislation. The mechanism of modern business is as delicate and complicated as it is vast, and nothing would be more productive of evil to all of us, and especially to those least well off in this world’s goods, than ignorant meddling with this mechanism, and, above all, if the meddling was done in a spirit of class or sectional rancor. {118} It is desirable that this power should be possessed by the nation, but it is quite as desirable that the power should be exercised with moderation and self-restraint. The first exercise of that power should be the securing of publicity among all great corporations doing an interstate business. The publicity, though non-inquisitorial, should be real and thorough as to all important facts with which the public has concern. The full light of day is a great discourager of evil. Such publicity would by itself tend to cure the evils of which there is just complaint, and where the alleged evils are imaginary, it would tend to show that such is the case. When publicity is attained it would then be possible to see what further should be done in the way of regulation.

"Above all, it behooves us to remember not only that we ought to try to do what we can, but that our success in doing it depends very much upon our neither attempting nor expecting the impossible. …

"I see no promise of a complete solution for all the problems we group together when we speak of the trust question. But we can make a beginning in solving these problems, and a good beginning if only we approach the subject with a sufficiency of resolution, of honesty and of that hard common sense which is one of the most valuable, and, unfortunately, not one of the most common, assets in the equipment of any people. I think the national administration has shown its firm intention to enforce the laws as they now stand on the statute books without regard to persons, and I think that good has come from this enforcement. I think, furthermore, that additional legislation should be had, and can be had, which will enable us to accomplish much more than has been accomplished along these same lines."

_Theodore Roosevelt, Address at Providence, August 23, 1902 (New York Tribune, August 24, 1902)._

In his next Message to Congress, President Roosevelt renewed his urgency for the needed legislation. "No more important subject can come before the Congress," he said, "than this of the regulation of interstate business. This country cannot afford to sit supine on the plea that under our peculiar system of government we are helpless in the presence of the new conditions, and unable to grapple with them or to cut out whatever of evil has arisen in connection with them. The power of the Congress to regulate interstate commerce is an absolute and unqualified grant, and without limitations other than those prescribed by the Constitution. The Congress has constitutional authority to make all laws necessary and proper for executing this power, and I am satisfied that this power has not been exhausted by any legislation now on the statute books."

_President’s Message to Congress, December 2, 1902._

A year later, when the President addressed his Message to the next Congress, at the opening of its first session, he was able to say:

"The country is especially to be congratulated on what has been accomplished in the direction of providing for the exercise of supervision over the great corporations and combinations of corporations engaged in interstate commerce. The Congress has created the Department of Commerce and Labor, including the Bureau of Corporations, with for the first time authority to secure proper publicity of such proceedings of these great corporations as the public has the right to know. It has provided for the expediting of suits for the enforcement of the Federal anti-trust law; and by another law it has secured equal treatment to all producers in the transportation of their goods, thus taking a long stride forward in making effective the work of the Interstate Commerce Commission."

_President’s Message to Congress, December 1, 1903._

COMBINATIONS: A. D. 1901-1906. A summary of governmental action against corporate wrongdoers, by Elihu Root. Legislation. Litigation. Court decisions.

"The act creating the bureau of corporations, the act expediting the trial of trust cases, the anti-rebate act, the act for the regulation of railroad rates, have made possible redress which was impossible before. Under the direction of two successive Attorney Generals of the first order of ability, sincerity and devotion, in hundreds of courts, incessant warfare has been waged and is being waged under the federal laws against corporate wrongdoers.

"The Northern Securities Company, which sought to combine and prevent competition between two great continental railroads, has been forced to dissolve by the judgment of the Supreme Court of the United States. The methods of the Beef Trust in combining to suppress competition in the purchase of livestock and the sale of meat have been tried and condemned, and the trust has been placed under injunction to abandon these practices by judgment of the Supreme Court. The combination of paper manufacturers in the territory from Chicago to the Rocky Mountains has been dissolved by the judgment of the Supreme Court, and the combination has been abandoned, and the price of white paper in that territory has gone down 30 per cent. The Retail Grocers’ Association in this country has been dissolved by decree of the court. The elevator combination in the West has been dissolved in like manner. The salt combination west of the Rocky Mountains has been dissolved by decree of the court. The Wholesale Grocers’ Association in the South, the meat combination and the lumber combination in the West, the combination of railroads entering the city of St. Louis to suppress competition between the bridges and ferries reaching that city; the Drug Trust, which suppresses competition all over the country, are being vigorously pressed in suits brought by the federal government for their dissolution. The salt combination has been indicted and convicted and fined for failing to obey the judgment of dissolution. The Beef Trust has been indicted for failing to obey the injunction against them, and have been saved so far only by a decision that they had secured temporary immunity by giving evidence against themselves. One branch of the Tobacco Trust is facing an indictment of its corporations and their officers in the federal court in New York, and the other branches are undergoing investigation. The lumber combination in Oklahoma is under indictment. The Fertilizer Trust, a combination of thirty-one corporations and twenty-five individuals to support and fix prices, has been indicted, the indictments have been sustained by the courts, and the combination has been dissolved. The ice combination of the District of Columbia is facing criminal trial. Special counsel are investigating the coal combination, and special counsel are investigating the Standard Oil combination.

{119}

"Three of the causes won in the Supreme Court of the United States have furnished decisions of the utmost importance. In the Tobacco Trust case of Hale agt. Henkel, the Supreme Court denied the claim of the trust corporations to be exempt under the Constitution from furnishing testimony against themselves by the production of their books and papers before a federal grand jury. Thus, the protection of secrecy for corporate wrongdoing is beaten down. In the Northern Securities case the Supreme Court held that a wrong accomplished by means of incorporating in accordance with the express provision of the New Jersey statute was just as much a violation of federal law as if there had been no incorporation. Thus, the state rights defence of protection from favoring state statutes is beaten down. In the Beef Trust case the Supreme Court held that, although the business of manufacture was carried on within the limits of a single state, yet the purchase of the raw material in different states and the sale of the finished product in different states brought the business within the interstate commerce clause of the Constitution and gave the federal government authority over it. Thus, the defence that the state alone can deal with manufacturing corporations, however widespread their business, is beaten down.

"The obstacles to the enforcement of the federal anti-trust act thus removed are obstacles which stood in the way of all proceedings, and they had to be cleared away before any proceedings of the same character against the same classes of corporations could be successfully maintained. They have been removed, not by newspaper headlines and denunciation, but by skill, ability, and energy of the highest order.

"After the Elkins anti-rebate law was passed by Congress in 1903 it was supposed, and the Interstate Commerce Commission reported, that the railroads had substantially abandoned giving rebates. Their good resolutions do not seem, however, to have lasted. The struggle for business enabled the shippers soon to secure a renewal of rebates, or, by ingenious devices advantages equivalent to rebates. Thereupon the Department of Justice began active prosecutions for the enforcement of the law. Fifty-three indictments have been found against hundreds of defendants and covering many hundreds of transactions. There have been fourteen criminal convictions. Fourteen individuals have been fined, to the gross amount of $66,125. Nine corporations have been fined to the amount of $253,000. Thirty-five indictments are ready for trial in their regular order upon the court calendar. The original statute provided only for punishment by fine. Last winter it was amended by providing for punishment by imprisonment, and, if the lines imposed under the original law shall not prove to have stopped the practice, we shall see whether fear of the penitentiary under the amendment will not do so.

"Under this statute also it was necessary to sweep away defences which stood as barriers to general prosecution, and in the New York, New Haven & Hartford Railroad case, decided by the Supreme Court February 19 of this year, and the Milwaukee Refrigerator Transit case, decided in the Seventh Circuit on May 31 of this year, the courts have held that the substance and not the form is to control in the application of the statute, and that, however the transaction may be disguised, an unlawful discrimination can be reached and punished. The way is therefore cleared for all other prosecutions.

"The Railroad Rates act, which was the subject of such excited discussion during the last session of Congress, has already justified itself. Since the passage of the act, less than five months ago, there have been more voluntary reductions of rates by our railroads than during the entire nineteen years of the previous life of the Interstate Commerce Commission. On the single day of the 29th of August, 1906, two days before the act went into force, over five thousand notices of voluntary reduction of rates were filed with the Interstate Commerce Commission by the railroads of the United States."

_Elihu Root, Speech at Utica, November 1, 1906 (New York Tribune, November 2, 1906)._

COMBINATIONS: A. D. 1903-1906. The "Beef Trust" suits and investigations. The United States v. Swift & Co. et al. Commissioner Garfield’s investigation. Indictment of Armour & Co. and others. Immunity decision of Judge Humphrey. Fines for receiving rebates from railways.

In the case known as that of the United States v. Swift & Company et al., the defendants were seven corporations, one copartnership, and twenty-three other persons (commonly styled "the Beef Trust"), charged with violations of the anti-trust law, by combination in restraint of the trade which they conducted, namely, the buying of live stock, slaughtering the same in different states and selling the meats thus produced. It was affirmed by the Government that they, together, controlled about sixty per cent. of the total Volume of that trade in the country, and that if the alleged combination among them did not exist they "would be and remain in competition with each other"; but that by such "unlawful combination and conspiracy" they were directing and requiring their agents (1) not to bid against one another in the live-stock markets of the different States; (2) to bid up prices for a few days so as to induce cattlemen to send their stock to the stock-yards; (3) to fix prices at which they would sell, and hence, when necessary, to restrict shipments of meat; (4) to establish a uniform rule of credit to dealers and to keep a blacklist; (5) to make uniform and improper charges for cartage; and (6) to obtain less than lawful rates from the railways to the exclusion of all competitors.

The case, on motion for injunction, was tried first in the Circuit Court of the Northern District of Illinois, Judge Peter S. Grosscup. The Opinion of the Court, given April 18, 1903, held that, under the definition of the term by the Supreme Court in the Trans-Missouri Freight Association Case (see, in this Volume, Railways: United States: A. D. 1890-1902), "there can be no doubt that the agreement of the defendants to refrain from bidding against each other in the purchase of cattle is combination in restraint of trade: so also their agreement to bid up prices to stimulate shipments, intending to cease from bidding when the shipments have arrived. {120} The same result," continued the judge, "follows when we turn to the combination of defendants to fix prices upon and restrict the quantities of meat shipped to their agents or their customers. Such agreements can be nothing less than restriction upon competition, and, therefore, combination in restraint of trade; and thus viewed, the petition, as an entirety, makes out a case under the Sherman Act. … The demurrer is overruled, and the motion for preliminary injunction granted."

On appeal, the case went to the Supreme Court, where it was argued in January, 1905, and decided on the 30th of the same month. The Opinion of the Court, rendered by Justice Holmes, with no dissent, affirmed, but modified, the decree of injunction issued by Judge Grosscup; the aim of the modifications being to give more definiteness to the decree. "The defendants," said Justice Holmes, for example, "cannot be ordered to compete, but they properly can be forbidden to give directions or to make agreements not to compete. The injunction follows the charge. No objection was made on the ground that it is not confined to the places specified in the bill. It seems to us, however, that it ought to set forth more exactly the transactions in which such directions and agreements are forbidden. The trade in fresh meat referred to should be defined somewhat as it is in the bill, and the sales of stock should be confined to sales of stock at the stock-yards named, which stock is sent from other States to the stock-yards for sale or is bought at those yards for transport to another State."

_Federal Anti-Trust Decisions, 1900-1906,