CHAPTER VIII.

AMERICA.

I. THE UNITED STATES OF AMERICA AND ITS DEPENDENCIES.

Apart from the effects of the cataclysm in Europe, the year was marked by financial disturbances and trade depression, which combined with the apparent results of the President's policy in Mexico to react unfavourably on the position of the Administration.

At the opening of the year the President was popular in the country, and had an unusual control over Congress. The solution of the tariff and currency problems had cleared the way for anti-Trust legislation, and the effect of the Report of the Pujo Committee was seen in the voluntary resignation by the members of the great banking firm of J. P. Morgan & Co. of thirty out of their thirty-nine directorships in railroad and other companies. Those resigned by Mr. J. P. Morgan included directorships of the New York Central and other Vanderbilt lines, and of the Western Union Telegraph Company, while his partners retired, _inter alia_, from the United States Steel Corporation, the Guaranty and other Trust Companies, and the Westinghouse Electric and Manufacturing Company. Other members of banking firms followed the Morgan example.

Congress reassembled on January 12, and on January 20 President Wilson read to it in joint session his Message dealing with "the very difficult and intricate matter of trusts and monopolies." Disclaiming any desire "to unsettle business or anywhere seriously to break its established course athwart," he recommended (1) the effectual prohibition of interlocking directorates of banks, railroads, industrial, commercial and public service bodies; (2) a law empowering the Interstate Commerce Commission to superintend the issue of stocks and bonds of railways needing money for their development; (3) more specific definition of "restraints of trade" under the Sherman Law; (4) the creation of an Interstate Commission to aid the Courts and provide information enabling business to conform to the Sherman Law; (5) Legislation ensuring the punishment of persons responsible for unlawful business practices; (6) prohibition of "holding companies" [_i.e._ companies controlling others by owning large amounts of their stock]; and (7) the grant to private persons of the right to bring suits for redress based on the results of Government suits. The Message was conciliatory in tone, and its favourable reception, especially in financial circles, showed that the business world was ready to meet public opinion in attenuating the features of "big business" most resented by the public.

These recommendations were embodied in four Bills: (_a_) prohibiting interlocking directorates, but allowing two years for their holders to resign; (_b_) creating an Interstate Trade Commission of five members, with wide and inquisitorial powers of investigating the business of companies (other than railroads) engaging in interstate and foreign commerce, and designed to aid the Attorney-General in inquiries into offences against the anti-Trust law; (_c_) a Trade Relations Bill, prohibiting certain unfair trade practices and enabling persons injured by them to recover damages by the aid of the proofs established by Government inquiries; (_d_) a Bill further defining unlawful monopoly and restraint of trade as dealt with under the anti-Trust law, and imposing penalties for violation. Among other items in the programme for the session were a Rural Credits Bill facilitating advances to farmers, and a Bill for leasing the Alaska coal lands, designed to prevent the growth of a monopoly in them.

The President now turned his attention to foreign policy, which gave cause for anxiety in more than one direction. A settlement of the dispute with Colombia was already pending, but the friction with Japan was aggravated by a Japanese Exclusion Bill (shelved eventually through the influence of the Administration), by a drastic Immigration Bill, and by rumours that Japan was assisting Huerta in Mexico. The Spanish-American countries were obviously hostile to any sort of financial protectorate by the United States, Hayti and the Dominican Republic were seriously disturbed, and the Mexican problem still awaited solution. The Senate was adverse to the Arbitration Treaties (A.R., 1913, p. 459), and the Panama tolls question was pressing. On January 26 the President conferred with the Senate Committee on Foreign Relations, and on February 5 he stated what had already been intimated, that he would press for the suspension of the exemption of coastwise shipping in the current session. But the most serious difficulty was in Mexico. Early in the year preparations had been made for the possibility of enforced intervention by the purchase of stores of ammunition and the order that the warships, after their pending Southern cruises, should meet off the Mexican coast; and the alleged attitude both of General Huerta and of Japan gave force to the demands made for an increased Army and Fleet. But Huerta seemed likely to have to retire, and on February 4 President Wilson issued a proclamation removing the embargo on the export of arms to Mexico, on the ground that, as there was now no constitutional government, the embargo interfered with the settlement by Mexico of her own affairs--a view which overlooked the danger that the arms imported would partly go to Zapata and other leaders who were brigands rather than politicians, and so might intensify the disorder. The step, nevertheless, was favourably received by the American Press, as likely to hasten a settlement; and public attention was temporarily diverted to other matters. The new banking system was to be supported by banks representing some 99 per cent. of the banking capital in the country; and business seemed to be improving.

The President's announcement regarding the Panama tolls, however, had set up some opposition, primarily among the shipbuilding interests, the ultra-Protectionists and the Irish-Americans, but extending also to his own Democratic followers; and it and his advocacy of the arbitration treaties were attributed to a desire to establish better relations with the European Powers in the face of possible complications in Mexico, owing to the Benton case (p. 483), and of danger from Japan. On March 5 he sent a Message to Congress strongly urging the repeal of the exemption. In his own judgment, he said, exemption was a mistaken economic policy from every point of view, and a plain breach of the Anglo-American Treaty of 1901; it was only in the United States that there was any doubt about the language of the Treaty, and the nation was "too big and powerful and self-respecting" to put a strained interpretation on its promises just because it had power enough to read them as it pleased. "The large thing to do is the only thing we can do--voluntary withdrawal from a position everywhere questioned and misunderstood." Were his request not granted, he would not know "how to deal with other matters of even greater delicacy and nearer consequence." This appeal was effective, and the Commerce Committee of the House favourably reported the Bill on March 6. It was, however, strongly opposed by a number of Democrats, among them Mr. Underwood, of Alabama, leader of the party in the House, and Senator O'Gorman, of Maryland; by the _New York American_ and Mr. Hearst's other papers, and by the Irish-American Press, whose chronic suspicions of Great Britain were excited by the Ulster crisis. It was a sign of the disquiet aroused by the Bill that Mr. Page, the American Ambassador to Great Britain, was called to account by a resolution of the Senate for his speech at the London dinner of the Associated Chambers of Commerce, in which he was reported to have minimised the Monroe doctrine; but his explanation proved satisfactory.

While the House was busy with the Bill the Senate dealt with a proposed amendment to the Constitution, introducing women's suffrage on the lines of the famous 15th Amendment, and providing that the right of citizens to vote shall not be denied or abridged by the United States or by any State on account of sex. This was voted on March 19, by 35 to 34, and thus failed to obtain the necessary two-thirds majority. Amendments offered respectively by Senator Vardaman, of Mississippi, rescinding the franchise granted to negroes under the 15th Amendment to the Constitution, and by Senator Williams, of Mississippi, excluding negro women, were rejected by 19 to 48 and 21 to 44. Apart from the stock arguments against the proposal it departed from the practice, hitherto broken only by the 15th Constitutional Amendment, of leaving suffrage regulation to the separate States.

Another issue which now became temporarily prominent was that of the restriction of the consumption of alcoholic liquors. Early in April, the Secretary of the Navy, Mr. Daniels, took the final step in enforcing teetotalism on the Navy by issuing an order prohibiting the introduction from July 1, 1914, of alcoholic liquor of any kind into any naval vessel, establishment, or station, and holding commanding officers responsible for infringements of the rule. The men had long been deprived of their grog, and this order, which was issued on the advice of the Surgeon-General, extended prohibition to the officers, who would now be unable to offer wine when entertaining guests from foreign fleets. But a resolution was also introduced into Congress demanding prohibition throughout the United States of the manufacture of intoxicants "for beverage," or of their sale, by means of an amendment to the Constitution (p. 467), and this resolution was the subject of more memorials, for and against, than any other issue before Congress.

To the Panama Tolls Bill the House showed itself favourable by passing a special closure rule limiting debate on it to fifteen hours (March 1), and defeating by 200 to 179 an attempt to rescind this rule (March 27). The Bill, however, aroused much opposition among the Democratic majority, notably from Mr. Underwood (Alabama), the Democratic leader in the House, Speaker Clark, Mr. Wilson's most formidable rival in 1912 for the Presidential nomination, and Senator O'Gorman in the Senate, while Senator Lodge and some other Republicans strongly supported it. The President's attitude was regarded in some quarters as the result of a bargain designed to conciliate Great Britain in view of the Benton case (_post_, p. 483), and of British dissatisfaction with the results of his policy of watchful waiting in Mexico; a view expressly repudiated by the President himself and by the Under-Secretary for Foreign Affairs in the House of Commons (March 29, 30). President Wilson's foreign policy in general, including the Colombian treaty (signed April 8, _post_, p. 461), was adversely criticised, and Mr. Roosevelt's friends urged him to attack the Administration on his return from his exploration in Brazil. However, the Bill was finally passed by the House on April 1 by 247 votes to 162. It went to the Senate, and was first dealt with by the Committee on Interoceanic Canals. The temporary unpopularity of the Administration seemed to be indicated by the success of Mr. Underwood in obtaining the nomination for Senator in Alabama, and by the return at Congressional bye-elections of a Republican in New Jersey and an anti-repeal Democrat in Boston. The New Jersey contest had been described by the President as giving the people an opportunity to express themselves as to his policy.

But public attention was now diverted to a new crisis in Mexico. A portion of the Atlantic Fleet had concentrated, after its winter cruise, off the Mexican coast; several ships had then left to refit, or for other reasons, and four remained: the _Florida_ and _Utah_ at Vera Cruz, the _Connecticut_ and _Minnesota_ at Tampico. On April 10 a party of bluejackets landed at the latter port to obtain gasolene; they were arrested by a Federal (Huertist) colonel and marched through the streets, but were eventually released with an apology. Admiral Mayo, the United States commander, demanded that, by way of reparation, the Mexican authorities should hoist the American flag and give it a salute of twenty-one guns. President Huerta replied by a proposal that the United States and Mexican flags should be hoisted together and saluted reciprocally, gun for gun, and that an agreement to that effect should be recorded in a protocol. The United States Government regarded this course as a recognition of the Huerta Government, and were willing only that the American firing should follow the Mexican. A time-limit (6 P.M. on April 19) was eventually fixed for General Huerta's compliance. The United States had also to complain of the arrest of a naval mail-carrier at Vera Cruz. On April 20 President Wilson read a message to Congress asking it to approve the use of "the armed forces of the United States in such ways and to such extent as may be necessary to obtain from General Huerta and his adherents the full recognition of the rights and dignity of the United States." This, he said, would not mean war with the Mexican people, but only with General Huerta and his supporters, and the object of the United States would only be to restore to the Mexicans freedom to set up their own laws and Government.

A joint resolution was introduced into both Houses embodying the President's demand, declaring that he was justified in the employment of the armed forces of the United States to enforce the demand on Huerta for unequivocal amends to its Government. It was passed in the House by 337 to 37, but before it had passed the Senate Rear-Admiral Fletcher was ordered (April 21) to seize the Vera Cruz custom house, so as to prevent the landing of munitions for the Huertists, expected from Havre by the German steamer _Ypiranga_. He first demanded, through the United States Consul, the surrender of the town; on receiving a refusal he landed a body of marines, who were fired on by snipers, and were assisted by the guns of the United States warship _Prairie_. Shells were fired also from the _Utah_, and eventually most of the Mexicans retreated to the west of the town, the rest sniping the invaders from the housetops. Next day, April 22, the American ships shelled other buildings occupied by snipers, together with the Naval Academy and the artillery barracks, and practically took the town.

The American people, as a whole, rallied to the support of the President. There was some war feeling, though hardly among the politicians; the President was generally backed by the Press, the Churches, and even the labour unions, though the Industrial Workers of the World threatened a general strike in the event of war. The joint resolution was passed, in a modified form, substituted in the Senate and accepted by the House; but the insult to the flag was an occasion for trying to end the anarchy in Mexico. A force of some 4,000 was embarked at Galveston, troops were also sent to defend the Mexican border against raids, the United States warships _Louisiana_ and _Mississippi_ were despatched to Vera Cruz, and a Bill was passed by Congress authorising the mustering of the National Guard and the Regular Army. General Carranza, however, disappointed American hopes by declaring that the seizure of Vera Cruz was an affront to the Mexican people, and demanding its evacuation; and in view of his attitude, the United States Government hesitated to seize Tampico. British and German subjects meanwhile were warned to leave Mexico, and General Huerta facilitated their departure; and gave Mr. Nelson O'Shaughnessy, the American _charge d'affaires_, his passport.

A temporary lull in the warlike preparations was now set up by the offer of mediation made by Argentina, Brazil, and Chile, which was cordially welcomed by President Wilson and took shape in the Conference at Niagara Falls (_post_, p. 484). An armistice was arranged meanwhile, and General Funston took over Vera Cruz from the naval authorities on May 1. The public funeral of some of the marines and bluejackets killed in the fighting (May 11) afforded the President another opportunity to emphasise his purpose. Going with the procession from Battery Park, New York, to the Brooklyn Navy Yard, he delivered an address, paying a tribute to the patriotism of the slain, and adding: "We have gone down to Mexico to serve mankind if we can find a way. We do not want to fight the Mexicans; we want to serve them if we can." In a war of service, he proceeded, it was a proud thing to die; and it was as hard, he thought, to do one's duty when men were sneering at one as when under fire. "When they shoot at you they can only take your natural life. When they sneer at you they can wound your heart." But a man ought to regard his conscience and the conscience of mankind.

During this lull in Mexican affairs attention was again directed to domestic problems. The anti-Trust Bills (p. 453; consolidated, with some omissions, into one measure) made some progress, and were supplemented by a Railway Capitalisation Bill, providing that railroad stock and bond issues should require authorisation by the Interstate Commerce Commission, that facts concerning the issue should be made public by that body, and that "interlocking directorates" should require its authorisation. In financial quarters this measure was regarded as far too drastic. But the railroad interests were somewhat reassured by the favourable decision of the Interstate Commerce Commission on an application by the Southern railroads regarding an increase of rates. Further increases were permitted by the same body later in the year.

The Naval Appropriation Bill, passed by the House on May 7, and subsequently by the Senate, authorised a building programme of two battleships, six destroyers, and eight submarines. A third battleship, it was eventually arranged, was to be provided out of the proceeds of the sale of the _Mississippi_ and _Idaho_ to Greece (p. 459).

While the majority in Congress struggled with the anti-Trust programme, the Republican Opposition was provided by the disappointing financial results of the new tariff with fresh material for attacking the Administration. The value of imports of manufactured articles from October 1, 1913, to April 1, 1914, as compared with the corresponding period of 1912-13 had increased from $215,000,000 to $228,000,000; exports of such articles had fallen to $541,000,000 against $582,000,000; materials for manufacture imported had fallen from $517,000,000 to $409,000,000; Customs receipts had fallen from $165,000,000 to $140,000,000. The deficit for the year had already reached $37,000,000, and a few weeks later the new income tax proved to be likely to yield only $30,000,000 for the first ten months of its operation, as against estimates before its introduction by its projectors and the Treasury respectively of $80,000,000 and $54,000,000.

The position of the Administration was not bettered by the course of events in Mexico. The Constitutionalists, whose success it favoured as the more legitimate claimants of authority, committed excesses at Saltillo, Tampico and elsewhere; and the alleged murder after torture of Private Parks, who had strayed into the Huertist lines at Vera Cruz, stimulated the cry for drastic intervention. The Constitutionalists' refusal to accept an armistice or to submit to the findings of the Niagara Conference, together with the growing differences among their leaders, gave little hope of a permanent pacification; and ultimately, at the end of June, the conference broke up, leaving the Huertists and Constitutionalists to arrange for another conference composed of their representatives, which should deal with the establishment, composition, and programme of a provisional Government.

However, the Administration obtained some success elsewhere. The Panama Tolls Bill was debated in the Senate at considerable length; but some waverers were conciliated by an amendment moved by Senator Simmons (North Carolina), providing that the repeal should not impair American rights under the Hay-Pauncefote treaty, and on June 11 the Bill passed by 50 to 35--the majority consisting of 37 Democrats and 13 Republicans, the minority of 23 Republicans, 11 Democrats, and a Progressive. Among the rejected amendments was one referring the Hay-Pauncefote treaty to the Hague Court for interpretation. The Bill was accepted by the House as amended, and signed by the President on June 15. The honour of America was thus vindicated in the view of Europe; and the way was cleared for the completion of the programme of anti-Trust legislation and for the adjustment of relations with Colombia and other Spanish-American States.

Another success for the Administration was the authorisation by Congress of the sale to Greece of the battleships _Idaho_ and _Mississippi_, launched in 1905, and considerably inferior, of course, both to the newer battleships of the United States and to the Dreadnought just purchased by Turkey from Brazil. They were, however, of 14,465 tons each, could steam nearly seventeen knots, and carried twelve-inch guns. They were to be sold at cost price ($11,726,000) to pay for a Dreadnought; and the sale was partly intended to enable Greece to be a match for Turkey, and so to avert a Greco-Turkish war. The sale was sanctioned by Congress owing mainly to President Wilson's influence.

Meanwhile the anti-Trust legislation had been partly postponed and considerably modified by the Senate--notably by an amendment designed to exempt labour unions and agricultural and mutual aid associations from being treated as combinations in restraint of trade under the Sherman Law; and business did not improve. It was true that the railroad world was encouraged by the decision of the United States Supreme Court (June 8) that a State must not impose, even within its own borders, rates which conflicted with the fair operation of those fixed by the Inter-State Commission for similar services in traffic crossing the State border; but the general depression was ascribed to the uncertainty of legislation, and the President's repeatedly expressed view that the depression was "merely psychological" was not generally shared. A fresh shock was given to the hopes of revival by the largest failure on record in the dry goods trade (June 27), that of H. B. Claflin & Co., an immense wholesale house, with liabilities of $35,000,000, though the assets awaiting liquidation were estimated at $44,000,000. The failure, however, was mainly caused by financing retail customers and inability to raise money on the debts due to it, and a reorganisation scheme was arranged later.

The situation in politics and business gave Mr. Roosevelt an excellent opportunity for attack. On his arrival from Spain (June 25) he denounced the President's Colombian and Mexican policy; and a few days later (June 30) he spoke at Pittsburg in favour of the candidature for the Senate of Mr. Gifford Pinchot, who was standing against Senator Penrose, Republican. After attacking the Democrats for tariff reduction, and for their "wretched" foreign policy, he denounced the Republican managers for splitting the party, and promised that the Progressives would have a scientific Tariff Commission, and would recognise that big business was not necessarily purely pernicious. The tone of his speech was less Radical than in former years, and seemed to hint at a possible fusion of the Progressives with a reformed Republican party.

The passing of the Panama Tolls Act had cleared the way for the settlement of other foreign questions. Mr. Bryan was anxious to obtain the ratification of his "Peace Commission" Treaties, supplementing the existing Arbitration Treaties by providing for the submission of disputes between the countries who were parties to them to a permanent International Commission (which was allowed a year within which to report) before going to arbitration before the Hague Court. This Commission would be composed of five members, two appointed by the respective Governments from their subjects, two from another country, the fifth from another neutral country by agreement between them. The Commission's Report would not be final, as in that case the prerogatives of the Senate would have been infringed. The British treaty was to be delayed for submission to the Dominion Governments, but a number of similar treaties with the minor Powers on both sides of the Atlantic were submitted to the Foreign Relations Committee of the Senate.

But there were more troublesome questions ahead. The Mexican tangle was somewhat simplified a little later by the retirement of General Huerta (July 23, _post_, p. 485), but the Colombian Treaty, which gave Colombia $25,000,000 as compensation for her loss of Panama in 1903, and contained words which looked like an apology for the action of the United States Government on that occasion, was regarded by many politicians on both sides as both costly and humiliating; while the Nicaragua Treaty provided for the loan to that State (in return for the right of constructing a canal by the San Juan route and of using certain islands as a naval base) of $3,000,000 for certain urgent items of expenditure and the establishment of a sort of financial Protectorate. This was regarded as doubtful policy, and as likely to benefit certain financiers more than either of the Powers concerned, while the Diaz Government in Nicaragua was believed to be merely the creature of the United States. There was trouble, moreover, in Santo Domingo, for which the United States had a certain responsibility through having lent it financial administrators, and in Hayti, where German creditors were pressing the Government, and revolution was impending; and marines were sent in the middle of July to Cuba, for use if necessary in either Republic.

The anti-Trust legislation, however, was not passed yet, and, while business men feared its effects, the need of further regulation, especially in the matter of interlocking directorships and stock and bond issues, was exhibited by the report of the Interstate Commerce Commission on the affairs of the New York, Newhaven, and Hartford Railroad, once among the best managed systems in America, now, by agreement with the Government, in voluntary liquidation. The inquiry had been undertaken at the direction of the Senate, and the evidence, especially that of Mr. Mellen, the President, had been sensational. Substantially the Directors were found to have used illicit and corrupt means, including bribery, extortionate commissions, and excessive payment for properties purchased, to obtain a complete monopoly of traffic in New England. They had increased the Company's liabilities between 1903 and 1912 from $93,000,000 to $410,000,000, and had lost from $60,000,000 to $90,000,000 of the stockholders' money. The directorate contained representatives of the New York Central and Pennsylvania Railroads, of the United States Steel Corporation, the Standard Oil and Pullman Companies, and the stockholders seemed to have less representation than any other interest.

Meanwhile the President had completed the arrangements necessary for giving effect to the Currency Act (A.R., 1913, p. 459). In April the twelve cities in which the district banks were to be were determined as follows: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas (Texas), and San Francisco. The selection of Dallas instead of New Orleans or Galveston, and of Cleveland instead of Cincinnati, caused some comment, but it was explained that considerations of the wealth and commercial importance of a city might have to be overridden by that of the direction of trade. The Presidency of the Board was declined by Mr. Olney (Attorney-General in the Cleveland Administration of 1893-97), probably in view of his age; and ultimately (June 15) the nominations were sent to the Senate as follows: Charles S. Hamlin, Boston, first Assistant-Secretary to the Treasury, two years; Paul M. Warburg, of Kuhn, Loeb & Co., an important banking firm, four years; Thos. D. Jones, Chicago, six; W. Harding, Birmingham, Ala., eight, and A. C. Miller, San Francisco, ten years. Mr. Warburg and Mr. Jones, however, were objected to by the Senate, on the ground that they were too closely connected with "big business," Mr. Warburg being a financier and Mr. Jones a director of the International Harvester Company, against which proceedings were pending under the anti-Trust Law; and Mr. Warburg resented being cross-questioned by the Senate Committee. They requested the President to withdraw their nominations, though Mr. Warburg afterwards gave way and was confirmed; so that by the end of July the Board had not yet got to work.

The war took America by surprise as it did Europe, and almost produced a tremendous financial crisis. Practically all markets were closed, and shipping and exchange, for a short time, were utterly disorganised. On July 31 the Stock Exchange did not open, the news received during the night indicating that an immense amount of stock would be offered not only from American but from European holders, and that consequently a drain of gold would be set up from the United States.[29] Cargoes accumulated at the ports, inasmuch as the banks would not negotiate bills of lading on uninsured freight, and insurance was paralysed. Five hundred million dollars of emergency currency was at once printed, for use under the Aldrich-Vreeland Act of 1908, which permitted sudden expansion in emergencies (A.R., 1908, p. 446), and the Secretary of the Treasury promised the assistance of his Department to the utmost extent of its powers. A Bill was hastily passed by the Senate, authorising the Secretary of the Navy to establish naval lines to carry mails, passengers and freight to South America and Europe, a course, however, which proved unnecessary owing to the activity of the British Fleet in recovering command of the sea.

But the _Mauretania_ and _Cedric_ had to put into Halifax; the German liner _Kronprinzessin Cecilie_, with a large consignment of gold on board for London, was stopped on her way by wireless orders, and crept back without lights to Bar Harbour, Maine, where she remained for some months through fear of capture; eventually she made her way through coastal waters to Boston. The plight of Americans in Europe was serious (p. 187). Even more completely than British tourists, they were held up by the worthlessness, for the moment, of all drafts and means of credit, and were stranded, not only on the Continent, but in Great Britain. The Administration, the Embassies, the Consulates, and private and voluntary effort, worked hard to get them home; the American cruiser _Tennessee_ brought $250,000 in gold to facilitate the process (Aug. 20); and special trains (Aug. 26 and 29) took 3,000 from Geneva to Paris; these were required to stay in specified hotels, and to leave Havre for New York on appointed dates. An American Committee in London did admirable work in advising and repatriating others, and special trains were also run from Germany to Rotterdam and from Austria to Genoa, whence special steamers were despatched to New York.

At the outset of the war President Wilson tendered his services for mediation at once or at any future time to all the European Powers involved; but the offer was premature and brought no definite response. Strict neutrality was observed, though a few German liners, anticipating the declaration of war, put to sea with stores and coal for the converted liner-cruisers; the coast was patrolled by destroyers, and care was taken that wireless stations should not be used for communicating with the German Fleet. From the first, except among German-Americans and a few Irish extremists, American sympathy was with the Allies, and in spite of the persistent but extremely maladroit propaganda carried on by the German Ambassador, Count Bernstorff, Professor Münsterberg of Harvard, Dr. Dernburg, the former German Colonial Secretary, who was well acquainted with American business circles, and some German financiers, it became more and more positively anti-German, especially after the news of the atrocities in Belgium and the destruction of Louvain. The Belgian Mission (p. 371) was received by the President, and the statements of its members made a profound impression and set up a great movement to relieve Belgian distress. The German Emperor telegraphed early in September to President Wilson, protesting against the use imputed to the Allies of dum-dum bullets, a use of which President Poincaré telegraphed a denial. But President Wilson declined to commit himself in his replies, whether to the Belgians or to the Emperor, and this reserve was strongly condemned in view of the German atrocities. An active agitation for peace was initiated by Mr. Hearst, which culminated in a meeting (Sept. 20) in New York addressed by the Vice-president, the Speaker of the Lower House of Congress, and the President of the Steel Corporation, but it was, of course, without result. Later a shipload of Christmas gifts for soldiers' children in the belligerent countries was sent to Great Britain by the United States naval auxiliary vessel _Jason_. An immense amount of Red Cross work was also done, and relief sent to sufferers in practically all the countries most affected by the war. By Presidential proclamation, October 4, was appointed as a day of prayer for the peace of Europe.

On September 4 the President read a Message to Congress, advising additional taxation to the extent of $100,000,000, of which $20,000,000 would be spent on war insurance, ship purchase, and bringing home Americans in Europe. A loan of $100,000,000 was raised without difficulty by New York City in short-term notes to meet foreign obligations maturing in the near future.

Gradually the economic disturbance righted itself, with some assistance. The Government undertook to insure cargoes against war risks, appropriating by Act of Congress $1,000,000 for that purpose. The difficulty of sending gold abroad was met, partly by the shipment on the _Tennessee_ to Paris (p. 463), and more fully by depositing a large sum in gold at Ottawa on account of the Bank of England, so that bills could then be drawn against it as usual; and the enormous wheat crop, followed by immense supplies of munitions of war and stores to Great Britain and France (and even to Russia, _via_ Seattle and Vladivostok), facilitated a readjustment of the situation. The product most depressed was cotton, in view of the shortage of factory labour caused in Europe by the war, though its export to Germany was not hindered before the new year, and a "Buy a Bale" movement was started to relieve the producers. The Ship Purchase Bill encountered unexpected difficulties, partly because the Seamen's Bill, also pending, would make the working of American ships more costly, still more because the Allies objected to the purchase by the United States of the interned German liners, the only shipping available, and the question was not settled at the end of the year.

Some temporary difficulty arose in October through the seizure by British cruisers of ships belonging to the Standard Oil Corporation. The _Brindilla_ had been transferred since the war began from the German to the American flag, but Great Britain treated the transfer as invalid, and the vessel was taken into Halifax; the _John D. Rockefeller_ (which had always been American), bound under the American flag for Copenhagen, was also stopped, but released, as Denmark had prohibited the export of oil to Germany. At the end of the year the United States Government made a temperate protest against the British detention of American ships and seizure of cargo on them (Dec. 30).

The war served Mr. Roosevelt as an example of the futility of such engagements as the arbitration treaties just signed by the Administration. His own plan for maintaining the peace of the world was an improved Hague Court, whose decisions the nations should pledge themselves to carry out by force.

The session of Congress closed on October 24. As there had been no break between the session of 1914 and the ordinary session preceding it, Congress had been sitting continuously (with very brief recesses) for the longest period on record. The record of work was remarkable. Following the Tariff and Currency Acts of 1913, there were the two Acts representing President Wilson's anti-Trust programme--the Trade Commission Act, creating a tribunal to arbitrate between commercial disputants, and the Clayton anti-Trust Bill, preventing interlocking directorates and otherwise controlling monopolies; the Panama Tolls Act, the Alaska Railroad Act, providing for the construction and working by the Government of 1,000 miles of railroad, telephones and telegraphs; an Act regulating dealings in cotton "futures," and the conclusion not only of twelve arbitration treaties (p. 460) but of twenty-three Peace Commission treaties with Great Britain, Norway, the Netherlands, Portugal, Switzerland, Denmark, Italy, Salvador, Guatemala, Honduras, Nicaragua, Bolivia, Persia, Costa Rica, Venezuela, Chile, Argentina, Brazil, Peru, Paraguay, France, and Spain. Besides this there was the emergency war legislation, comprising the Emergency Currency Act (p. 462); the insurance of war risks, to which $1,000,000 was devoted; the appropriation of $1,000,000 for special diplomatic and consular services and the transport home of American citizens whose return was hindered by the war; and the emergency war taxation, which was estimated to produce from $94,000,000 to $107,000,000 annually. This included taxes on beer ($1.75 a barrel), whisky (5 cents a gallon), American still wines, champagne (25 cents a quart), bankers ($1 per $1,000 of capital, surplus, and undivided profits), pawn-brokers, commercial brokers, commission merchants, proprietors of places of amusement, dealers in leaf tobacco, and cigar and cigarette manufacturers. There were also internal revenue (stamp) taxes on a few articles such as perfumery, on bonds, promissory notes, bills of lading, conveyances, telegrams, telephone messages, marine, fire, and casualty insurance, steamship tickets to foreign ports, and parlour-car berths and seats.

Among the measures left over to the next Congress were the Immigration Bill (p. 454), the Philippine Government Bill, and the Rural Credits Bill (p. 453), which had not passed the Senate; a Bill empowering the Treasury to deposit $250,000,000 in banks in the tobacco and cotton States (to facilitate loans to the planters); constitutional amendments respectively establishing women's suffrage throughout the Union, which had been reintroduced after its failure in the Senate, and prohibiting throughout the Union the sale or manufacture of intoxicants "for beverage" (p. 455); and the Bill empowering the regulation of railroad stock issues by the Interstate Commission. So were the treaties with Colombia and Nicaragua, which the Senate had not yet ratified, and Peace Commission treaties with China, Panama, the Dominican Republic, and Russia.

The President and the Democratic majority in Congress had thus held together--except, to some extent, on the Panama Tolls Bill--and had carried much of their programme. But the November Congressional and State elections showed a very marked reaction against the Administration, and a rally in the Republican party, emphasised by the disappearance of the semi-independent "Progressive Republicans," and a general return of the Progressives to the Republican fold. The Democratic majority over all the other parties in the House together fell from 141 to 31; and in some of the Eastern and Middle-Western States there was a Republican "landslide." New York State, New Jersey (the President's own State), Illinois, Wisconsin, and eleven other States which had been Democratic in 1912 went Republican; Michigan, Pennsylvania and Washington reverted from the Progressives to the Republicans; New York, to the general surprise, elected a Republican Governor. The Progressive numbers in the House fell from fifteen to seven, though Governor Hiram Johnson secured a personal triumph by his re-election in California. Women's suffrage was voted on in seven States and defeated in five, in spite of much agitation just before the election. A Socialist was elected to Congress from New York City, the first from any Eastern State.

This sixty-third Congress, however, would not assemble earlier than the following spring in any case, and meanwhile the sixty-second met on December 7. Besides the legislative programme just mentioned, the European War forced on its attention the question of national defence. The Army League and the Navy League were agitating for an increase, and Congressman Gardner (Republican), of Massachusetts, was pressing for an inquiry into the "preparedness" of the nation for war. Before the session opened President Wilson let it be known that he deprecated such an inquiry, as likely to create an unfavourable impression abroad; and he took the same line in his Message (Dec. 8). He dealt mainly with the war, declaring the dearest hope of the nation to be that its own character as the champion of peace and concord would shortly, in God's providence, bring it an opportunity such as had seldom been vouchsafed to any nation--"an opportunity to counsel and obtain peace in the world and the reconciliation and healing settlement of many matters that have hitherto cooled and interrupted the friendship of nations." He urged the country to develop its resources so as to supply the needs set up by the appalling destruction wrought by the war; and he specially recommended the Ship Purchase Bill. He urged also a larger measure of self-government for the Philippines, and a survey of the Alaska coasts. He declared that, as regarded national defence, they must depend, not on a standing army or a reserve army, "but upon the citizenry, trained and accustomed to arms." They must, in short, develop the Volunteer National Guard--the State militia system. "More than this would merely mean that we had lost our self-possession, been thrown off our balance by a war with which we have nothing to do. A powerful Navy we have always regarded as our proper and natural means of defence, but who shall tell us now what sort of Navy to build?... We have not been negligent of national defence." They would profit by current experience, and what was needed would be adequately done.

The War Secretary's annual Report next day, however, declared the Army inadequate. The total maximum force available--Regulars and National Guard--would be but 158,000, and it would take six months to train additional volunteers; the delay, with a prepared enemy, would be fatal. He recommended the immediate filling up of the existing organisation, and fresh legislation dealing with enlistment and the reserve, both in the Union and in the States. Artillery ammunition was inadequate, and the aviation corps should be largely increased. The Secretary of the Navy recommended a building programme for the coming year of two Dreadnoughts, six destroyers, eight or more submarines, one gunboat, and one oil fuel ship; he declared that expert opinion favoured the continuance of building Dreadnoughts, and recommended that five million dollars should be spent on the air service.

A vigorous agitation was now started for and against the increase of armaments, but more interest was taken in the debate and division in the Lower House of Congress (Dec. 22) on the constitutional amendment, imposing "nation-wide prohibition" of the sale or transport of alcoholic liquors for "beverage purposes" in the United States and all territory subject to the jurisdiction thereof. Provision, however, was made for continuing the supply of intoxicants for sacramental, medicinal, and industrial purposes. The resolution proposing this amendment (which would have had to be ratified by the legislatures of two-thirds of the States to become valid) opened with a preamble strongly denunciatory of alcohol as demonstrated by scientific research to be a narcotic poison, imposing a "staggering economic burden" on the people, and leading to crime, pauperism, insanity, disease, and national degeneracy. The resolution was moved by Mr. Hobson, of Alabama, and received 197 votes against 189, but it required the support of a two-thirds majority of those present, or 258, and therefore fell through. It divided all the parties; the Ayes comprised 114 Democrats, 67 Republicans, 12 Progressives, and 4 Independent Republicans, the Noes 141 Democrats, 46 Republicans, 1 Independent Republican, and 1 Progressive. Two alternatives were defeated, one to submit the amendment to the States instead of the Legislatures, the other prohibiting the importation of liquor into any State, thus localising liquor manufacture. Both sides professed themselves satisfied with the result.

The celebration of the completion of a century of peace with Great Britain fell through, owing to the war. Committees for its promotion had been established in both countries, and the Sulgrave Manor House, the old house of the Washington family in Northamptonshire, had been purchased in January by the British Committee. The persistent British refusal to participate officially in the Panama Exhibition at San Francisco hampered the movement, and on June 30 the House of Representatives refused by 187 to 52 to vote money for the celebration.

In State politics--a subject of great interest to students of political science--very few points can be mentioned here. The "eugenic" marriage law in Wisconsin, requiring a medical certificate of sound health as a condition of marriage, was declared unconstitutional by a State Court; so was an ordinance of a North Carolina city (Winston-Salem) segregating the coloured population. The November elections showed the activity of reformers: twenty-three States voted on one or more amendments to their Constitutions; seven on women's suffrage; six on liquor traffic prohibition; in each of the two latter cases five States decided against change.

Throughout the year the mining region of Colorado was almost in a state of civil war, owing to a coal-miners' strike. In September, 1913, the Miners' Union had called out some 11,000 men, on the masters refusing their demands, which included liberty to buy provisions and supplies where they pleased, and to choose their own doctors, the right to elect their own check-weighers, better working conditions and pay, an eight hours' day, and recognition of the union. Strike-breakers had been imported and the State militia (which was said to be controlled by the owners) called out to preserve order, and in April it destroyed and burnt tent colonies sheltering the strikers and erected on land leased by the union; women and children were killed, and order was restored by Federal troops. Congress attempted to promote a settlement, but ineffectually; President Wilson (May 10) ordered the disarmament of all civilians; the State Legislature did nothing beyond authorising a bond issue to pay the militia, closing saloons, and forbidding the carrying of arms; mediation failed; and in September President Wilson wrote to both sides urging a settlement on specified conditions--the enforcement of the mining laws, the prohibition of intimidation whether of union or of non-union labour, the continuance of work during the investigation of grievances, and an elaborate plan for such investigation with an ultimate appeal to a Commission of three which was to see that the conditions were maintained. The owners made difficulties, but the President appointed the Commission, and the unions ended the strike. In connexion with it, the Industrial Workers of the World raised a disturbance in New York, and Mr. John D. Rockefeller, junior, one of the leading owners, had his residence picketed by Socialists.

Strikes of engineers and firemen on the Western and Eastern railways was averted respectively at the end of July, when President Wilson induced both sides to accept a plan proposed by the Federal Board of Mediation, and in December by arbitration. The murderers of Rosenthal in New York were executed on April 13, and Becker was again convicted after a second trial (A.R., 1913, p. 467). Their lives had been prolonged by the ingenuity of their lawyers. Thaw's extradition was also confirmed in December by the Supreme Court (A.R., 1913, p. 468).

The Cape Cod Ship Canal, connecting Buzzard's Bay with Barnstable Bay, was opened on July 29. It was a joint-stock undertaking, and had cost $12,000,000. [For the Panama Canal see _post_, p. 486.]

_Dependencies._ From _Cuba_ there was no news of importance. In _Porto Rico_ the November elections--the quietest on record--resulted in large gains for the Republican party, which desires American citizenship and eventual admission to the Union. It obtained sixteen seats in the Lower House of the Legislature against nineteen held by the anti-American party. The United States Government had previously appointed two natives of the island to the Executive Council, giving the natives the majority in it, and a Bill for giving the island popular Government had been favourably reported in the Congress. In the _Philippines_ Governor Burton Harrison's concessions to the natives, and the reductions of official salaries, which drove many Americans to retire from the service, roused severe criticism in the United States, and a Bill promoted by the Administration, promising the islands independence, "as soon as a stable Government shall be established in the Archipelago," was passed by the House of Representatives (Oct. 14) by 211 to 59, but was not taken up by the Senate. At Christmas an unimportant and abortive rising, promoted by an agitator named Ricarti, was reported to have been suppressed at Manila.

II. CANADA.

Parliament met on January 14. Seven new members were introduced, six of them supporters of the Government. Among them was Hon. Arthur Meighan, the new Solicitor-General.

In his speech from the Throne, H.R.H. the Duke of Connaught expressed his gratitude for the public sympathy extended to himself and the Duchess during her serious illness. Reference was also made to the financial stringency from which the country had been suffering, but which was passing away. The necessity for readjusting the representation of the people in Parliament, after the last Census, was stated. An increase in the number of Senators from Manitoba, Saskatchewan, Alberta and British Columbia was foreshadowed. No mention was made of any Naval programme. The debate on the Address began on January 19. Sir Wilfrid Laurier, the Opposition leader, moved an amendment regretting that, while the Speech admitted that business is in a depressed condition, there was no indication on the part of Ministers of a determination to take any steps towards relieving the situation. Replying to him on January 20, the Finance Minister, Hon. W. T. White, so far indicated the policy of the Government as to point out, (1) that "Free Food," as advocated by the Opposition, meant Free Trade; (2) that Free Trade had long been abandoned by both parties in Canada; (3) that the Government did not propose to depart from a policy of reasonable Protection; (4) that the remedy for the high cost of living--which was universal--was an increased universal production; (5) that the Government had voted $10,000,000 for the purpose of increasing production.

On January 21 the two Houses adjourned in token of respect to the memory of Lord Strathcona (see _post_, Obit.). The Prime Minister and the leader of the Opposition joined in eulogising the late Peer; and the Prime Minister read to the House of Commons a despatch from the Colonial Secretary conveying the deep sympathy of the Imperial Government, and closing as follows:--

His name has been for many years a household word among us embodying to all the thought of Canada and her marvellous progress, as well as of his own notable career distinguished by large public usefulness and magnificent liberality, and his memory is assured of an honoured and abiding place in the annals of the Dominion, to which he devoted his faithful service to the end.

Laudatory speeches were delivered also in the Senate.

The absence of any mention of a Navy Bill in 1914 was commented on by the Opposition as proof that no "emergency" existed to justify the Government's Bill of 1913 (A.R., 1913, p. 473). The Government replied in effect that it was useless to bring in a Bill in 1914 in the face of a determinedly hostile Senate; but that the policy and promise of 1913 would be carried out in due time by the Government.

The first division on the Amendment to the Address was taken on January 27, giving the Government a majority of 44. A second amendment was at once moved, regretting that the Speech gave no indication of any intention to take steps to secure free access to the markets of the United States for the wheat and wheat products of Canada, by removing the duty on wheat and wheat products coming into Canada from the United States. This was defeated (Jan. 29) by a majority of 45.

On January 27 the Postmaster-General announced that the Parcels Post system, which had been long under consideration, would be put into operation on February 10. The first parcel was mailed to the Duke and Duchess of Connaught at midnight on February 9.

On January 29 the Estimates for the year ending March 31, 1915, were tabled. A general reduction of $12,000,000 was a marked feature. The total was $190,735,176; there was a decrease on the Naval item of $150,000 and of $71,905 on Militia. Subsequently, on May 27, an additional sum of $17,438,000 was brought down, making the total $208,173,176.

On February 10 the Bill for the Redistribution of Seats in the House of Commons was brought down by the Prime Minister. This had been looked for as probably the most important measure of the session. It had been in the hands of a large Committee for some weeks, and had been reported unanimously. The general result of the Act (Chap. 51, 1914) is as follows: Ontario is to have 82 members; Quebec 65; Nova Scotia 16; New Brunswick 11; Manitoba 15; British Columbia 13; Prince Edward Island, 3; Saskatchewan 16; Alberta, 12; Yukon Territory, 1; in all 234 members. On the existing representation, Ontario lost 4 seats; Quebec (under the British North America Act of 1867) remained at 65; Nova Scotia lost 2; New Brunswick lost 2; Manitoba gained 5; Saskatchewan gained 6; Alberta gained 5; British Columbia gained 6; Prince Edward Island lost 1; Yukon remained with one seat as before. The figures show how population and political power are shifting to the West.

On February 12 the Minister of Railways laid on the table of the House the report of a Commission to investigate the construction of the Transcontinental Railway, under the previous Government. The report was long and sensational in character. The conclusions of the Commissioners were substantially that the Transcontinental Railway Commission, the Grand Trunk Pacific Railway and those having charge of the construction did not consider it desirable or necessary to practise or encourage economy in construction, and that, without including the money unnecessarily expended in building the railway east of the St. Lawrence River, $40,000,000 at least was needlessly expended in the building of this road. The cost of the unnecessary Eastern Section was estimated at $35,000,000; and thus the sum total of undue expenditure was stated at $75,000,000. The Eastern Section of the road was held by many persons on both sides to be a needless duplication of the Intercolonial Railway. The road was taken from the control of the Special Commission which had thus over-expended on it, and was completed and finally handed over to the Minister of Railways by Major Leonard, C.E., whose successful labours were highly appreciated by the public.

The Opposition were not satisfied with the report of the Commission, and on March 25 the former Minister of Railways moved, declaring that the Report was "so wilfully partisan and misleading as to be wholly unreliable," that the manifest object of the Commissioners was "to misrepresent for party purposes rather than to investigate in the public interest, without regard to the serious consequences to the country or this great national undertaking; and that for the appointment of such Commissioners, and for accepting and endorsing their report, the Government deserved the severe censure of this House." This motion was vehemently debated till Thursday, April 2, when it was rejected by 105 to 67.

On April 7 the Budget speech was delivered by Hon. W. T. White, the Minister of Finance. Many minor tariff changes were announced, but in general, as indicated by the Minister in his speech on the Address (p. 470), the Protective policy was maintained. The demand made from various quarters for "Free Wheat" was refused. The Government asked for power to increase the existing surtax to 20 per cent, if needed. The duty on agricultural implements was reduced from 17-1/2 to 12-1/2 per cent. The large revenue and unusual surplus of 1912-13 was not maintained; and the revenue for the year ending March 31, 1914, would therefore be less and a large capital expenditure would have to be provided for. The sum of $56,404,231 had been borrowed on satisfactory terms. (The events of the next few months, of course, confounded all calculations. The revenue to the end of December, 1914, was only $99,635,943, as against $127,571,762 at the same date in 1913, a shortage of $27,935,819. The total net debt to the end of 1914 had increased by $73,182,060. The borrowings of the Government under the authority of the legislation of the War Session in August must have been large; but no full account would be given until the presentation of the Budget of 1915.)

The trade of the Dominion was, of course, subject to some fluctuations. The total aggregate trade of the year ending March 31, 1913, was $1,085,264,449. For the year ending at the same date 1914, the amount was $1,129,744,725. For the seven months of the fiscal year 1914-15 (_i.e._ from March 31 to Oct. 31) the total aggregate trade was $640,171,557. The effect of the war on the aggregate trade cannot be seen accurately till the Budget is delivered or the Customs statistics published in the spring of 1915.

The debate on the Budget was not concluded before the Easter recess. On the reassembling of the House on April 15 it was resumed, and continued till April 23, when the leader of the Opposition moved an amendment declaring that "in view of the prevailing economic conditions of the country, it is advisable to place wheat, wheat products, and agricultural implements on the free list, and, without doing injustice to any class, steps should be taken to alleviate the high cost of living by considerate removal of taxation." This amendment was defeated by a majority of 42.

The serious question of relief to the shareholders of the defunct Farmers' Bank was the subject of prolonged debate. On April 24 it was announced that the Government would satisfy all the depositors. The bank had been started on insufficient capital; and official recognition was given to it on what turned out to be false pretences. The results were disastrous, and the general manager was prosecuted and imprisoned. The new Government issued a Royal Commission to investigate the affairs of the bank, and, as a result, decided to pay the depositors. Resolutions and a Bill based on them were carried in the Commons by the usual Government majority. But on June 8 the Bill was thrown out in the Senate by a non-party vote of 32 to 25, several Government supporters voting against the measure.

One of the most serious questions of the session related to the affairs of the Canadian Northern Railway. Aid had become necessary to enable the company to carry on its great and varied industries. The Government of Canada had already assumed large responsibilities in guaranteeing the mortgage debenture stock of the company, and in payments for construction. On April 28 the Government brought down its proposals for relief (see _Journals of Commons_, 1914, p. 489; and _Hansard Debates_, May 13, _sqq._). The proposal of the Government was to guarantee the payment of principal and interest on securities of the company to the extent of not more than $45,000,000; taking security by means of a Trustee and Trust Deed over all the property and interests of the company and all its subsidiary companies. Some reluctance to agree to these terms was visible among the Government's supporters, and two prominent Conservatives refused to support them. Some time elapsed before the complicated series of statements made by the company, including railways, steamships, bonds, shares, terminals, etc., could be understood (see Votes and Proceedings, 1914, p. 859). The total liabilities of the company to the Government were calculated at about $197,000,000. The actual debate began on May 13. The Prime Minister's speech was marked by the quotation for public use of messages of approval from the Premiers of Alberta, Saskatchewan and Nova Scotia, all Liberals, but in whose Provinces the Canadian Northern had large interests. The "six months' hoist" (equivalent to rejection) was moved by Mr. E. M. McDonald for the Opposition. The debate was maintained till May 19, when the Opposition motion was rejected by 111 to 64. In Committee various other amendments were moved, all of them defeated by majorities of from 40 to 44. A Bill was introduced based on the Government resolutions; it was passed in the Commons on June 2 by 85 to 38; and in the Senate on June 9 by a non-party majority of 40 to 17.

On June 1 notice was also given of a guarantee of interest on $16,000,000 bonds of the Grand Trunk Pacific Railway to aid in the completion of the road, the Government taking sufficient security. Owing to the outbreak of the war in August, these various guarantees are understood to have been of little value on a money market where all available funds were wanted for war purposes; but the actual results had not been made public at the close of 1914.

On May 8 it was announced from England that H.S.H. Prince Alexander of Teck was to succeed Field-Marshal H.R.H. the Duke of Connaught as Governor-General. The announcement was received with general approval. The speech which the Prince made at the Canada Club, in London, on May 28, was widely copied in the Canadian Press. Owing to the war, the Duke of Connaught consented to remain at the head of affairs, while Prince Alexander went on duty to the front.

An important Act passed during the session was the British Nationality, Naturalisation and Aliens Act (Chap. 44, 1914). This Act remedies a state of things which caused inconvenience throughout the Empire. After some years of discussion with the Home Authorities and the other Colonies, it is now provided that a colonial certificate of naturalisation shall be effective throughout the British Dominions. The applicant for a certificate must have a complete knowledge of English or French, The Canadian Act is based on the British Act (p. 209), 4 and 5 Geo. V. cap. 17.

On May 29 the announcement was made of the terrible disaster to the steamship _Empress of Ireland_, and the loss of over a thousand lives (Chron., May 29). The Government at once began a Canadian investigation; and a Royal Commission, including a British representative, was appointed to make a searching inquiry. There was the usual crop of reports, assertions, contradictions and explanations. The subject was however dealt with prudently in Parliament and there was no useless debate. The Royal Commission consisted of Lord Mersey, Sir Adolph Routhier and Chief Justice McLeod of New Brunswick. The sittings were held at Quebec; and many counsel, English, American and Canadian, were engaged. The Report of the Commission placed the blame for the collision on the officers of the _Storstad_ (see p. 599, Sess. Paper No. 21_b_, 1915). Extensive litigation has been going on since the Report was presented, and the amounts involved are large.

The session closed on June 12 with a degree of excitement and confusion which continued for some days after. There had been much discussion between the two parties regarding the Representation Bill, which was eventually passed in both Houses. But the increase in the number of Senators from the West had to be provided for by Resolution, praying the Imperial Parliament to alter the British North America Act, 1867, so as to enable the new Senators to be appointed. When the measure went to the Senate, the Act relating to the increase in the membership of the House of Commons was accepted. But the proposals regarding the increase of the Senate did not meet with the approval of the majority in that House, which was still opposed to the Administration. An amendment to the effect that the increase in the number of Senators should not take place till after the next general election, was refused by the Government. An accusation of bad faith was made by the Government against the Opposition in regard to an alleged agreement to pass this Bill and Resolution at the same time as the Representation Bill. This accusation was denied. Controversial statements as to this agreement were issued after the close of the session, by the Premier and the leader of the Opposition. And there the matter ended, to be taken up no doubt in the session of 1915.

On June 11, the day before the close of the session, both houses agreed unanimously on an address to H.R.H. the Duke of Connaught, Governor-General, on what was at the time thought to be his last official appearance in Parliament. This address was presented subsequently to the proceedings at the close of the session. The following paragraphs may be quoted:--

In visiting every portion of our Dominion, and in the earnest endeavour to acquire by personal contact with all classes of the community a full and accurate knowledge of the varied conditions prevailing in this country, and of the purpose and aspirations which animate our national life, Your Royal Highness has but given another evidence of that high devotion to duty which has always inspired your actions and has ever been associated with your career.

The Canadian people will not fail to cherish a happy remembrance of the deep and practical interest which Your Royal Highness has invariably manifested in literature, art and industrial pursuits in the Dominion, as well as in all philanthropic and charitable undertakings; and they recognise most fully that Your Royal Highness has always been ready to associate yourself with every movement designed to improve the conditions and add to the happiness of those to whom has been entrusted the great task and duty of possessing and developing this portion of the Empire.

His Royal Highness, in reply, after expressing his cordial thanks and his profound appreciation of the kindly sentiments of the representatives of the Canadian people, said:--

During my three years of office it has been my earnest endeavour to become acquainted with the many problems affecting the welfare and progress of this great Dominion. Nothing has struck me more than the energy and tenacity shown in all circumstances by its people, and I hope that a strong sense of duty will always pervade those to whom its destinies are entrusted.

Of their loyalty and devotion to the King and to the Empire I have had many proofs, and I hope that Canadians will always be true to themselves and to that great Dominion with which it has been my pride to be connected.

He concluded by a renewed assurance of heartfelt thanks for the generous expressions towards himself, the Duchess, and their daughter, and of their prayers for the continued happiness, peace and prosperity of Canada.

=The War Session.=--When the disturbances in Europe resulted on August 4 in open war, and Great Britain was precipitated into the conflict in defence of treaties, of her allies, of international morality and of national honour, Canada lost little time in contributing to the defence of the Empire.

Parliament was summoned to meet on Tuesday, August 18. H.R.H. and his staff appeared in service uniform and with few of the forms of ceremonial display. The Speech from the Throne was brief and practical:--

Estimates will be laid before you to provide for expenditure which has been or may be caused by the outbreak of hostilities.

The critical period into which we have just entered has aroused to the full the patriotism and loyalty which have always actuated the Canadian people.

From every province and indeed from every community the response to the call of duty has been all that could be desired. The spirit which thus animates Canada inspires also His Majesty's Dominions throughout the world; and we may be assured that united action to repel the common danger will not fail to strengthen the ties that bind together those vast Dominions in the possession and enjoyment of the blessings of British liberty.

As representative of His Majesty the King, I must add my expression of thanks and admiration for the splendid spirit of patriotism and generosity that has been displayed throughout the length and breadth of the Dominion.

The Prime Minister laid on the table the correspondence of the Imperial Government with foreign Powers (Cd. 7467, No. 6, 1914)--which were ordered to be printed and to be publicly distributed. Sir Wilfrid Laurier, the Opposition leader, rose after the formal speeches in moving the address, and delivered a very eloquent and patriotic speech. He said:--

It is our duty, more pressing upon us than all other duties, at once, on this first day of this extraordinary session of the Canadian Parliament, to let Great Britain know, and to let the friends and foes of Great Britain know, that there is in Canada but one mind and one heart, and that all Canadians stand behind the Mother Country, conscious and proud that she has engaged in this war, not from any selfish motive, for any purpose of aggrandisement, but to maintain untarnished the honour of her name, to fulfil her obligations to her allies, to maintain her treaty obligations, and to save civilisation from the unbridled lust of conquest and power.

And in special reference to his French-Canadian fellow-citizens, he said:--

If my words can be heard beyond the walls of this House in the province from which I come, among the men whose blood flows in my own veins, I should like them to remember that in taking their place to-day in the ranks of the Canadian Army, to fight for the cause of the allied nations, a double honour rests upon them. The very cause for which they are called upon to fight is to them doubly sacred.

The Prime Minister then followed in a necessarily more elaborate address. He complimented Sir Wilfrid Laurier on his patriotic address. He spoke earnestly of the efforts made by Mr. Asquith and Sir Edward Grey to preserve the peace of Europe. He discussed all the treaties by which the peace of Europe had been guaranteed. And with regard to the action of Germany in Belgium, he said:--

I cannot resist the conclusion, and I do not think that any man who reads these documents can resist the conclusion, that it was the deliberate intention of the Government of Germany, formed many years ago, to violate the neutrality and independence of Belgium in case war should break out with France. I say that because every man in this country, every man throughout the world, knows that plans of campaign are not made after war breaks out. Plans of campaign are made long in advance, and the German plan of campaign which has been carried out in the present war is one which involved as a first step in their warlike operations the absolute violation of the independence of Belgium.

On the subject of the value of the British Navy to the Colonies and the world, he made the following statement, which is likely to become part of the future policy of Canada:--

It is barely two weeks since war broke out. Already nearly every pathway across the ocean has been cleared. Our foreign commerce has been but little interfered with, very little indeed. The splendid organisation of the British Navy has enabled this to be accomplished. Those who are familiar with the religious service used at sea will remember that prayer goes up from the men of the Navy, in peace as in war, that they may be a safeguard to their Sovereign and his dominions and a security for such as pass upon the seas upon their lawful occasions. The quaint words of that old prayer express as perfectly as may be that which is most essential for the security and integrity of this Empire, a safe pathway across the seas. Surely that prayer has been fulfilled even in this appalling war, for already the silent victory on the sea has been won. The Atlantic now is, and we have every reason to believe that the Pacific shortly will be, practically as safe and secure for those under the protection of the flag as in times of peace.

The Prime Minister outlined the steps that had already been taken to make the action of Canada prompt and efficient. The sum of $50,000,000 was for the present voted for war purposes. Authority was taken to issue Dominion notes to a limited extent, and to enable the Government to act on the general interest of the country in regard to banks, etc. In the Senate, the proceedings were equally prompt, unanimous and patriotic. The session closed on August 22.

Meanwhile every form of public and private patriotism was stimulated. Volunteers came forward in larger numbers than could be handled. A camp for 30,000 men was formed at Valcartier in Quebec. The Province of Ontario gave $500,000 to the Imperial Government, the Province of Nova Scotia, 100,000 tons of coal for the Navy. A large sum was instantly raised for a hospital, or hospital ship, at the request of H.R.H. the Duchess of Connaught. The Patriotic Fund for the maintenance of those dependent on Volunteers was swollen to a very large amount. The province of Prince Edward Island gave 100,000 bushels of oats, Saskatchewan 1,500 horses. Manitoba sent a million bags of flour. A regiment was offered by Major Hamilton Gault of Montreal, who, with his wife, went to the front with his men. H.R.H. the Duke of Connaught went to live among the troops at the camp, where his presence was inspiring, and his experience valuable. The Volunteers embarked about the end of September, under convoy, and were in training under hard weather conditions till towards the close of the year, when at least a portion of the contingent was sent to the front; the results had not been officially stated at the close of the year.

_The Provinces._--The Legislature of Ontario met on February 18. Two Bills only, of any consequence, were promised, a Redistribution Bill and a Workmen's Compensation Bill. An amendment to the Address, regretting the absence of any effort to remedy the conditions of labour in the Province, was defeated by 58 to 19. A surplus of $230,000 was announced by the Treasurer. New taxes were imposed on business corporations, to provide about $600,000 extra revenue. The total expenditure for the fiscal year ending October 31, 1914, was calculated at $17,437,738. A general election (June 29) resulted in the success of the Whitney (Conservative) Government by a majority of 55 members, a decrease of 9 from the majority at the close of the session. During the early autumn the Ontario Premier (Sir James Whitney) died; and he was succeeded by the Hon. W. H. Hearst, who was first elected in 1908. The new Premier reorganised his Ministry (Oct. 2); but no session had been held at the close of 1914.

The _Quebec_ Legislature, which was sitting at the close of 1913, resumed business on January 7, 1914. On January 23, charges having been made against certain members of corruption, a House Committee was appointed to investigate them. A somewhat sordid state of affairs was revealed. Acrimonious and prolonged debates took place. Finally the Committee reported on February 12 against one member of the Lower and two of the Upper House; these latter resigned their seats. The Legislature was prorogued on February 19.

The _Nova Scotia_ Legislature met on February 19. The Speech from the Throne was a review of the year very favourable in character. A Bill for redistribution of seats and for changing the character of the franchise was promised. Some disagreeable episodes regarding slanders on members, and some accusations of members trafficking in public lands, occurred; but nothing came of them in the end. The Prime Minister of Nova Scotia later in the year made active and successful efforts to provide help for the Belgians.

The _New Brunswick_ Legislature met on February 26. It was announced that the financial claims of the Province against the Dominion had been settled, and that the Province would receive a revenue of $66,382 in addition. On April 6 charges of corrupt dealing with revenues from public lands were made against the Hon. J. K. Flemming, the provincial Prime Minister. An investigation was ordered by the Government itself. The result was a report unfavourable to the Minister, who accordingly resigned.

The Legislature of _Prince Edward Island_ met on March 11. The Speech declared that the prosperity of the Province during the past year had been unequalled. The business of fur-farming had proved abnormally successful, and further enterprise in that business was expected. The Budget was encouraging. The public accounts showed a surplus of $15,500 for the first time in many years; and a surplus was estimated in the current year. The question of the representation of the Province in the Federal Parliament was discussed. This question has been settled by the Representation Act passed by the Federal Parliament.

The Legislature of _Manitoba_ met on December 11, 1913, but did not begin business till the close of the holidays in 1914. The Legislature asked the Dominion Government to transfer to Manitoba all the natural resources of the Province. A redistribution Bill was passed. An appropriation of $2,500,000 was made for the improvement of roads; and a Commission was appointed to conduct the expenditure. The Budget showed a surplus of $473,221. A general election on June 10 resulted in the support of the Roblin (Conservative) Government, but by a very largely reduced majority, owing to the prominence given to delicate questions like temperance and separate schools.

On September 15-18 a special session was held to express the loyalty of the Province, to encourage enlistment, and to provide for the continuance and safety of the public business.

The _Alberta_ Legislature met on October 7. The Prime Minister announced a surplus of $100,000, in spite of the general stringency. The response of the people of Alberta to the call for troops was pointed to with pride, in the speech of the Lieut. Governor. The surplus for the coming fiscal year was estimated at $1,176,967. The speeches on the Address were all of a loyal character, and no partisanship disturbed the short session.

The _Saskatchewan_ Legislature met in special session on September 15. The special business was of a practical character; to grant extension of time to railway companies engaged in construction work; to regulate transactions of foreign companies; to enforce the closing of places where liquor was sold; to take power to regulate executions and debts in real estate transactions; to grant aid to the Patriotic Fund.

The _British Columbia_ Legislature met on January 15. The principal item in the speech related to the long-discussed question of better financial terms for the Province. The public accounts, ending March 31, 1913, showed a deficit of $1,846,228, due to expenditure on public works. A measure for raising a loan of $10,000,000 was passed. Further aid, much discussed, was granted to the Canadian Northern Railway, and other railroads. The session closed on March 5. [For the attempted immigration from India in the _Komagata Maru_, see p. 407.]

III. NEWFOUNDLAND.

The general depression which prevailed throughout the world was severely felt in Newfoundland during the year. One of the large iron mines on Bell Island closed down early in the year, and since the war commenced the other company has also stopped operations. The ice conditions prevailing early in the year hindered trade and commerce, and the fishery operations were seriously impeded by the late ice blockade of the coasts.

The reduction of the tariff in 1912 and the trade and business depression affected the revenue of the Colony, which, for the first time for several years, was below the expenditure by $301,849.

At the outbreak of the war a feeling of uncertainty and distinct uneasiness was manifested among all sections of the community, especially as to the probable effect on trade, and more particularly with regard to the fish markets; but by the close of the year Newfoundland had--so far--not suffered to any great extent. At first the most serious problems were those of exchange and war risk insurance, and for a time these caused considerable anxiety. These difficulties, however, were overcome by the statesmanlike action of the Home Government, with the result that confidence was restored and the prices of the Colony's chief export, codfish, rose from the low figure of about $5.00 to its present unprecedented figure of 7.50 per quintal (112 lb.).

The increased cost of imports was heavy. This especially applies to food stuffs, such as flour, which was comparatively cheap early in the year, and the increased price of this commodity alone cost the people of the colony nearly $250,000.

The following comparative statement shows the falling off in the Colony's productiveness, due largely to the abnormal ice conditions in the early part of the year. Fortunately the enhanced prices helped to make up to some extent for the shortages.

1914. 1913. Cod-fishery, quintals 1,265,565 1,408,582 Seal-fishery, seals 233,719 272,965 Lobster pack, cases 11,017 16,565 Canned Salmon, cases 1,492 2,995 Whale Fishery, whales 168 222 Herrings, salt and frozen, barrels 78,923 68,432 Iron Ore exports--tons 1,245,797 1,243,200 Pulp exports-- " 51,605 51,487 Paper " " 40,077 44,424

The values of the products exported were:--

Fishery $10,907,677 Agriculture 23,702 Forests 315,430 Mines 1,551,803 Manufactures 2,183,611 Miscellaneous 152,320 ----------- Total, 1913-14 $15,134,543 ===========

The debt of the Colony was $30,450,765, as against $29,470,060 at the close of 1913. The public Revenue $3,618,329. Expenditure $3,920,178.

The imports and exports were respectively as follows:--

Value of Value of Countries. Imports. Exports. $ $ United Kingdom 3,826,529 3,256,446 Dominion of Canada 4,861,047 1,971,809 Other British Possessions 331,415 549,418 United States 5,796,906 1,679,362 Portugal 19,970 888,930 Brazil 31 3,240,487 Spain 113,541 1,260,649 Other Countries 244,287 2,287,442 ----------- ----------- Totals 1913-14 $15,193,726 $15,134,543 " 1912-13 16,012,365 14,672,889 =========== ===========

The shore fishery was about 150,000 quintals less than that of 1913 (which was also below the average). The Bank fishery showed a shortage of about 28.00 quintals, and it is estimated that the Labrador fishery was slightly in excess of the catch of 1913.

The demand for codfish has been brisk, and though the late shipments to Brazil did not realise well, yet the markets in Spain, Italy and Greece have been good, though the risks in shipping and marketing it have materially increased. The green fish trade to the United States and Canada was not so brisk as in 1913. The export of this commodity so far has not suffered much from the effects of the war. Most of the catch has been shipped and marketed in the Latin countries and in the Mediterranean without loss.

The Government has been able this year to get the Government of Portugal to remove the discriminating duty of 35 cents per quintal on Newfoundland codfish entering that country. This will be a great benefit to the trade, and will permit the colony to sell on equal terms with the Norwegians.

The lobster catch was the shortest in the history of that fishery. It was estimated at 11,000 cases as against 16,500 in the preceding year and no less than 43,500 in 1904, the year of the biggest catch. The German market, which has always consumed about 90 per cent. of the catch, was closed at the end of the season, and the price went down from $24.00 per case to $13.00, and when the year finished only about 3,000 cases had been exported, the rest being in the hands of the merchants and packers who do not wish to sell at such a low figure.

The Board of Trade has recommended, in view of the falling catch and to preserve the fishery, that 1915 be made a close season and the Legislature will be asked to provide for this at the next meeting.

At the outbreak of the war British colliery owners were faced with the problem of securing a suitable supply of pit-props, and a commission visited Newfoundland to ascertain the practicability of securing supplies. Several cargoes were exported and it is likely that twenty-five to thirty cargoes will be obtained in 1915.

The mining companies operating in Bell Island were forced to shut down early in the year and at the beginning of the war, and the loss of employment to so many men caused much suffering in the part of the country affected.

At the invitation of the Government, Professor Dunstan, of the Imperial Institute, visited the colony in the summer to report on the coal and shale areas in the interior. These were inspected and favourably reported on, and it was hoped that a beginning would be made in these new industries at an early date.

The copper mines in Notre Dame Bay will probably be opened up in the spring of 1915.

During the year the colony was visited by His Royal Highness the Duke of Connaught.

The Dominion Royal Commission held meetings in St. John's and took evidence upon such subjects as "The Newfoundland fisheries," "Steam communication," "Possibilities of increasing the Colony's imports from other parts of the Empire," "Oil shale areas" and "Lumber exports." The Commission also visited Bell Island and Grand Falls and took evidence in relation to the mining and paper industries respectively of these two places. The seal fishery showed a decrease of nearly 40,000 seals, but the value was greater than in 1913 because of the greater size of the seals and the higher value of the oil and the skins. This industry was attended with two great disasters; the first occurred to the crew of the _Newfoundland_, who were caught in a blizzard some miles from the vessel, and seventy-eight were frozen to death, while others were maimed for life. The other disaster occurred to the _Southern Cross_, which was on her way home with a full load of seals when she was caught in the blizzard of March 31 and foundered. There were 174 persons on board and all perished. No traces have been found of either vessel or crew. The disasters attracted the attention of the whole civilised world and subscriptions came freely in from Canada and England, while the people of the Colony gave well. There is now a fund of $300,000 which is being faithfully administered and which will be sufficient to meet all cases of want.

The Herring fishery was large and on account of the high price of fish was well marketed.

At the ordinary session of the Colonial Parliament twenty-six Acts were passed all affecting the internal economy of the Colony; they included one giving power to borrow 400,000_l._ for the completion of the new branch railways and a second to raise a loan of $360,000 for the extension of the telegraph system, the erection of lighthouses and fog alarms, and for the construction and improvement of public buildings.

In September a special war session of the Legislature was called and twelve measures were passed. These measures provided for the raising of a volunteer force of 1,000 men, for increasing the number of the Naval Reserve from 600 to 1,000 men, and for raising a loan, which was afterwards provided by the Imperial Government, for fitting out and keeping up the contingents. To meet the extra cost of maintaining these men, some new duties were imposed, and Acts imposing stamp duties and death duties were passed.

In the same session a Wireless Telegraphy Act was passed, requiring steamers engaged in the seal fishing to be fitted with wireless telegraphs. It was felt that, had the _Newfoundland_ had wireless on board, no one would have been lost.

The call of the Empire was well answered in "the loyal and ancient colony"; 750 men were sent to the Army and 500 more would be sent early in 1915. The full number of the Naval Reserve was easily made up, and already forty-nine have given their lives in the _Viknor_ and the _Clan McNaughton_ (in 1915). There were fully 200 Newfoundlanders in the Canadian contingent.

Archbishop Howley, Roman Catholic Bishop of St. Johns, died in October, and Monsignor Roche, a native of the Colony, was appointed in his place.

IV. MEXICO AND CENTRAL AMERICA.

The new year in _Mexico_ opened with President Huerta as Dictator, a Bank Moratorium, and furious fighting at Ojinaga, the issue for several days being in doubt. On January 11 it was reported that the Federal Army, which numbered 4,000 but had sustained heavy loss, had abandoned the town, crossed the Rio Grande and been disarmed by the United States authorities. General Villa took possession of Ojinaga, and his star was in the ascendant. The Government defaulted in the payments of the National Debt, and the Moratorium was extended to March 31. A plot against the Government was discovered in the capital and there were many arrests of prominent citizens. On February 4 President Wilson issued a Proclamation raising the embargo on the exportation of arms and ammunition to Mexico. Keen resentment was exhibited by the Huerta party, and General Villa, who had been inactive after Ojinaga except for the execution of "bandits," resumed his campaign. British marines and machine guns were sent from Vera Cruz to guard the Legation. On February 20 news came that an Englishman, Mr. William A. Benton, an extensive ranch-owner in the North, had been shot at El Paso by order of General Villa. He had lived in Mexico for twenty-five years and knew Villa personally. It was stated that damage having been done by Villa's men to his property, he had gone to Villa and had remonstrated with him. There was an altercation between the two. By Villa's orders Benton was tried by court martial and shot out of hand. The United States, having undertaken the obligation of protecting British subjects in places where we had no Consular representative, pressed for an inquiry. The "official" record of the court martial alleged that Mr. Benton was condemned for attempting armed violence against General Villa, and for assisting General Huerta; but the friends of the murdered man alleged that he did not carry arms and had none when he entered Villa's quarters. Sir Edward Grey sent Mr. Perceval, the British Consul at Galveston, to El Paso to investigate the crime. Yielding to United States representations, Villa allowed the body to be exhumed. Sir Edward Grey had meanwhile made a statement (1) reserving the right to secure reparation "whenever there is an opportunity" should United States action fail or not be proceeded with further; (2) dismissing the idea of a British punitive expedition to Mexico, on the ground that it would be worse than futile, seeing that it would "positively help those from whom we demand reparation, simply for the sake of appearing to do something"; and, (3) the matter would not be allowed to rest, "and as soon as, by any change of circumstances, it is in our power to carry the matter further we shall take whatever steps may be practicable." Villa telegraphed that "Benton was tried by Council of War and found guilty and shot for having tried to assassinate me." Mr. Consul Percival arrived at El Paso and an Anglo-American Commission met to investigate the crime. General Carranza also appointed a Commission of his own. But by this time Benton had been buried three weeks. Mr. Percival and the Anglo-American Commission were refused facilities to cross the frontier, and Sir Edward Grey therefore found it necessary, on Mr. Percival's advice, to drop the question of an examination of the body. There the matter had to be left, nor had any reparation been obtained by the end of the year.

Meanwhile General Huerta protested against the cancellation of the embargo on arms, and relations with the United States became more strained. On April 21, in view of the outrage on the United States flag at Tampico (April 10, p. 456), the American Admiral at Vera Cruz, on instructions from Washington, seized the Customs House, and intervention on a great scale seemed inevitable. Steps were taken for the protection of foreign residents in Mexico city and British subjects elsewhere had been ordered to seek safety at once.

There was, however, a lull and diplomacy was active with the object of inducing the various parties in Mexico to arrange an armistice between the Federalist and Constitutional or "rebel" forces as a step to agreement on a Provisional Government, the assumption being that Huerta would be eliminated, by consent or otherwise. General Carranza, for the Constitutionalists, accepted this idea, or was reported to have done so at first. After confusing negotiations the facts emerged that Huerta had no intention of resigning, and that Generals Carranza and Villa would not agree to an armistice. A Conference was arranged to meet at Niagara Falls, on the Canadian side, in May, and Huerta despatched his Commissioners. The Constitutionalists resumed operations and drove the Federalists out of Tampico with ease, the Federalists taking to flight when cannon and machine guns were brought into position, commanding the town and harbour. There were other rebel successes. Simultaneously the Mediation Conference, consisting of representatives of Argentina, Brazil, Chile, the United States, and the Mexican Commissioners, began their work at Niagara and after eloquent opening speeches sat in private. The Constitutionalists then decided to send a representative to Niagara, but General Carranza stoutly refused an armistice. In the early part of June it became evident that his military position was such that General Huerta's dictatorship had almost disappeared. In this situation General Huerta let it be known at Niagara that he was willing to resign if at the time of withdrawal the country was "politically pacified." A scheme was mooted by a provisional Government nominated and agreed upon by both parties in Mexico, and it was in principle accepted by General Huerta. But General Carranza still declined the terms on which the Conference would admit his delegate, and he acted with rigour towards Federalists in his power. Many executions were reported. General Villa quarrelled with him and the Constitutionalists thus broke into two military parties. The cause of the rupture was obscure, but it was alleged that General Villa had demanded full control of the Army in return for his recognition of Carranza as dictator. The feud still further diminished the already slender chances of success at the "A.B.C," Conference at Niagara. Affairs in the Republic fell into worse chaos, and thus they continued until mid-July when the name of Francisco Carbajal, Foreign Minister in the Huerta regime in succession to Señor Rojas, was discussed as that of a suitable Provisional President. At this time the Constitutionalists under General Carranza were threatening to descend on Mexico city and the situation seemed desperate. On July 16 it was announced that General Huerta, with other officials, had left Mexico city for Puerto Mexico, and that Señor Carbajal had taken the oath before Congress as Provisional President. General Huerta's resignation was presented to Congress and accepted by a vote of 121 to 17. In his message of resignation, he reviewed his assumption of office at the call of Congress. He recalled his efforts to bring about peace, noting that in seventeen months he had formed an army to carry out his promise of peace. He reviewed the difficulties of the Government in doing this, "owing to scarcity of funds as well as to the manifest and decided protection which a Great Power in this continent has afforded to the rebels," and which culminated "in the outrage committed at Vera Cruz by the American Fleet" at the moment "when the revolution had been broken up" by the division among its leaders. He also recounted the success of the mediation negotiations, adjusting the Tampico incident, but noted that "the revolution continued, with the support of whom we all know." Rebutting the allegations that his personal interest was predominant, he offered his resignation as a proof that interest in the Republic was his chief thought. The message aroused prolonged applause, and General Huerta had a hearty popular farewell. He left for Europe, _via_ Havana, landing at Avonmouth and proceeding to Spain.

The new President had been a Judge of the Supreme Court under Diaz, Minister in London under Huerta, and then Foreign Minister. He had the reputation of being a man of peace and distinction of mind,--qualities that made him unacceptable to General Carranza. Negotiations between the two chiefs broke down over the question of the punishment of the Huertist leaders, and ultimately Señor Carbajal fled to Vera Cruz, and the Carranzists entered Mexico city on August 20. The United States Government in September began to contemplate withdrawing its troops from Vera Cruz, but it demanded (1) that the Customs duties and taxes collected by it on Mexican account during the occupation should not be required a second time from the payers; (2) that Mexicans employed by it should not suffer in consequence; (3) that United States citizens and priests and members of religious orders should be protected from harm by the Mexican Government. General Carranza would not give definite assurances to this effect. Villa, whose allegiance to Carranza had long been doubtful, broke with him early in October, ostensibly because Carranza was supposed to be delaying agrarian reform, and a Peace Conference was summoned at Aguas Calientes (364 miles north of the capital on the line to El Paso), which was intended to eliminate both Villa and Carranza and to substitute a Provisional President. Carranza, backed by some of his subordinate Generals in Southern Mexico, refused to attend the Conference, but offered to resign if a Provisional Government were set up and Villa and Zapata would retire also. Villa had come to terms with Zapata, and controlled the Conference; and on October 31 it deposed both Carranza and Villa from their commands--Villa's deposition, however, being only nominal--and elected General Carlos Gutierrez Provisional President (Nov. 2) for twenty days, subject to renewal. It then declared Carranza to be a rebel. President Wilson now decided to withdraw the United States troops in order to leave Mexico free to settle her own affairs, and they left Vera Cruz on November 23, taking with them the Customs duties they had collected, to hold till a stable Government was established, and also some clerical refugees. It was occupied by a Carranzist force under General Aguilar. Villa, however, suspected Gutierrez, and the capital was occupied early in December by a Zapatist force. Carranza had offered to confer with Villa at Havana, but the year ended amid a fresh civil war. A tramway strike in the capital and a dearth of food in Northern Mexico also marked the end of the year.

An agreement was arrived at in June between Great Britain, the United States and Holland to withhold support from any of their respective nationals claiming, directly or indirectly, "any right or title or interest in oil properties acquired since April 24 by reason of the cancellation of contracts or leases, or by reason of the confiscation by _de facto_ authorities of properties on the ground of default of contractual obligations or non-compliance with legal requirements, provided that such default or non-compliance is unavoidable because of military operations or political disturbances."

In _Panama_ the Canal was unofficially opened for general traffic on August 15, the United States War Department steamer _Ancon_, of 6,000 tons net, going through the locks at the head of a procession of vessels. Barge traffic had passed through earlier, and a number of ocean steamers did so later, but a landslide in October blocked the waterway for a few days and other interruptions occurred in November and December. A report on the work of the Sanitation Department showed a steady improvement in the sickness and death rates among the employees on the Canal and the Panama Railway. Yellow fever and plague had disappeared, malaria had diminished greatly. The death rate of the whole population of the zone, including the towns of Colon and Panama, was 49.94 per 1,000 in 1905, and was reduced to 20.49 in 1912 and 23.57 in 1913. The expenditure on the Canal by the end of 1913 stood at 65,000,000_l._ In November rules were promulgated on the use of the Canal by belligerents.

In his Message to the Assembly of _Guatemala_, in March, President Estrada Cabrera announced that the Government had replied to the representations of the British Foreign Office, requesting the restoration of the revenue given as a guarantee for the service of the 4 per cent. external debt, by an agreement made direct with the representatives of the bond-holders.

A treaty between _Nicaragua_ and the United States was before the U.S. Senate at the close of the year (p. 461). The other Central American Republics had little history except that of financial distress consequent upon the war.

V. WEST INDIES AND THE GUIANAS.

The West India Islands and British Guiana had an uneventful and fairly prosperous year until the outbreak of war, nor do their commercial interests seem since then to have been materially affected. The war stimulated the loyalty of the people and caused less apprehension than might have been expected, having regard to the concentration of the Fleet in home waters and the defenceless condition of the archipelago, in which there were German cruisers late in July, which are believed to have cut the cable on August 3. It was at first thought that the cable had broken owing to an earthquake at Jamaica on that day, but the view of the repairers was that it had undoubtedly been cut. On the defect being remedied the West Indies learned that war had been declared. On October 20 the Governor of Jamaica was able to report that matters had proceeded normally. That had been the case elsewhere. There had been no excitement and no unrest; the bank returns showed an increase of deposits since the opening of hostilities,--one of many signs that the island was recovering from the depression of 1913. The people had displayed a spirit of the greatest loyalty and he had received a large number of offers of personal service. His language is applicable to other islands and the mainland colony. Many West Indians came to England and enlisted in the new army. Though the tide of war did not reach our possessions in the Caribbean and the Guianas, the fact that Germany was at war with France and Great Britain opened up new possibilities in the Western world south of the United States, in the event of German success. So far as can be judged the normal life of the colonies was pursued, but the war checked development projects. Thus no progress has been made with the scheme for opening up the hinterland of British Guiana by a railway. The proposal of the Governor, Sir Walter Egerton, awaits the decision of the Colonial Office. A loan would be required and the chances of such legislation in the Imperial Parliament at an early date may have diminished to vanishing point since August. The need of railway enterprise in this long-neglected colony--the El Dorado of Raleigh--was illustrated during the year by the authenticated discovery of a new gold area between the head waters of the Takutu River and the Tucurutu Mountains. The British route to the field would be partly by existing steamboat and railway services and thence by canoe, with many portages past rapids, then across the Savannah and again by canoe. The journey is commercially impracticable unless the deposits are exceptionally rich. The new gold area is sparsely inhabited by Macusi Indians, who speak the Carib language but are not pure Caribs, and there is no food in the region other than what the aborigines grow for themselves. On this account and because of the long and difficult journey the Government issued a warning notice to those fitting out expeditions. The discovery greatly strengthens Sir Walter Egerton's case for a hinterland railway, without which "the largest undeveloped auriferous area in the world"--to quote the Government expert--cannot be developed.

_Hayti_ and _Santo Domingo_ had another revolutionary year, tempered by the occasional intervention of United States warships for the protection of foreign property.

VI. SOUTH AMERICA.

A commercial crisis occurred in _Brazil_ early in the year, owing to the fall in the prices of rubber and coffee, and it culminated on the outbreak of war in a general default. It was complicated in February by a rebellion in the State of Ceara, which started among rubber collectors who could no longer get employment. It was led by an ex-priest, Padre Cicero, and quickly reached proportions beyond the resisting power of the State authorities, the political opponents of the President of Ceara, Colonel Rabello, apparently using the movement to get rid of him. In this they succeeded, the Federal authorities failing to respond to his requests for support. The rising, however, being economic rather than political in origin, became so extensive and so menacing to the Republic that the Federal Government had to proclaim martial law and reinforce the Federal troops at Fortaleza, the State capital. The administration of the State was taken over by the Federal Government and a military officer, Colonel Setembrino, put in charge. This meant the elimination of Colonel Rabello and an easement of the political tension. The disarmament of rioters was proceeded with and the State thus quieted. Meanwhile there had been ominous signs of trouble in Rio Janeiro, but these were promptly suppressed by the Government, by the usual methods of arrest and control of the Press. A leading paper at Rio gave an indication of the acuteness of this crisis by publishing in the place of its leading articles the story of Ali Baba and the Forty Thieves. But the trouble in the Federal capital--a week's journey from Ceara by sea--passed off. As fears of a revolution diminished the financial situation became more acute. The Budget law for 1914 put the expenditure at 435,773 contos of reis paper and 95,469 contos gold and the estimated revenue at 130,219 contos gold and 367,571 paper, leaving a deficit of 9,621 contos paper. In June Congress authorised the Government to contract a loan to enable Treasury obligations to be met, and passed resolutions prohibiting expenditure not yet entered upon though lawfully authorised. Whatever effects this belated zeal for economy may have had, a heavy deficit on the Budget proposals put before Congress in July was not avoided, and when war broke out in Europe the Republic defaulted. In October the Brazilian Government promulgated a Funding Scheme by which interest on all the foreign loans, except the Funding Bonds of the 1903 loan, became payable in scrip for three years, while the redemption of nearly all securities was postponed for thirteen years. The Budget estimates for 1915 were dislocated by the effects of the war.

Mr. Theodore Roosevelt published in December a volume under the title of "Through the Brazilian Wilderness," in which he described his travels with Colonel Rondon and other Brazilian officers in the hinterland of the Republic, and gave an account of the previously unexplored tributary of the Madeira River--an affluent of the Amazon--which is now officially known as Rio Teodoro or Roosevelt River. Mr. Roosevelt gives the credit for the discovery to Colonel Rondon and his associates of the Telegraph Commission during six years' work in the interior prior to his own journey. "It was their scientific exploration of the Chapado, their mapping of the basin of the Juruena, and their descent of the Gy-Parana that rendered it possible for us to solve the mystery of the River of Doubt"--a river some 1,500 kilometres in length, of which the upper course was utterly unknown, and the lower course, though used by rubber collectors, unknown to cartographers (see _post_, Science, Part II., p. 54).

The new President of Brazil is Dr. Wenceslao Braz and the Vice-President Señor Urbano Dos Santos. The President was Vice-President under Marshal Hermes da Fonseca.

The economic condition of _Argentina_ was unsatisfactory in the early months of the year and the effects of the war were severe. The Presidential Message at the opening of Congress on May 27 stated that the expenditure for 1913 had amounted to 39,128,000_l._ and the Treasury receipts to 34,897,000_l._ The total external and internal debts of the National Government amounted to 108,800,000_l._ Drastic economies had to be made in the Budget for 1914 owing to the decrease of customs. It was claimed that the unfavourable state of business could not affect the stability of the country, seeing that agriculture continued to expand. Weather conditions proved to be bad and an immense area of the country was waterlogged in July. The financial and agricultural outlook was unfavourable at the outbreak of the war, which produced an economic crisis in the Argentina as elsewhere in Latin America. In presenting the Budget for 1915 a Presidential message forecasted a saving in the 1914 Budget of 5,000,000_l._ and prophesied the subsidence of the economic troubles before the new year--calculations dissipated by the war.

In _Peru_ the political disorders of 1913 resulted in February in the downfall of President Billinghurst, who had attempted to break down the rule of the ring of governing families, much as Balmaceda had in Chile in 1891. On the 4th of that month Colonel Benavides, with a body of infantry, seized the palace at Lima and made the President prisoner. The immediate issue which produced this _coup d'état_ was an attempt by the President to bring about a general election on the plea that the existing Congress was invalid because of illegalities. Colonel Benavides acted as the instrument of Congress, which represented that it had acted constitutionally in deposing a President who had himself contumaciously violated the Constitution. An aspect of legality was thus given to the movement. The affair at the Palace was bloodless, but General Farela, Prime Minister and Minister of War, was killed at Santa Catalina arsenal "while endeavouring to impose his authority" on the troops, and there were other casualties. The ex-President was lodged in jail and political offenders he had himself imprisoned set free. Lima was reported quiet the next day, a provisional government having been formed with Colonel Benavides in control. The official account said that "public opinion and the patriotism of the Army having enforced respect for the Constitution, President Billinghurst resigned." The Government was being "carried on under normal conditions and in the enjoyment of general confidence." On February 18 Señor Billinghurst was escorted from prison to a cruiser and exiled with his son George, and one of his Ministers. Many weeks passed in controversy and manoeuvres on the issue whether Señor Roberto Leguia, as first Vice-President, had the right to succeed ex-President Billinghurst, or whether there should be a general election. Señor Leguia's party was on one occasion forcibly excluded from Congress and on another the Opposition absented themselves, the effect being that Señor Leguia's claim could not receive Congressional sanction. The Provisional Government used the military in the interests of the opponents of Señor Leguia. Señor Don Augusto B. Leguia, a former President of Peru, was then in London and gave an account of the matter favourable to Señor Roberto Leguia. The Junta under Colonel Benavides, he pointed out, was called into existence to exercise authority until Congress met and decided what was to be done. Their conduct was that of a dictatorship, masked by the vote of a minority in Congress--a party which came to be known as the Bloquistas. Attempts to compose the differences failed. Señor Roberto Leguia appears to have been willing to resign if the Junta also resigned, and there was a general election, by which, according to the Constitution, a President is elected. On May 18 it was reported that a majority of the Congress had met at Señor Leguia's house and accepted his oath as President by virtue of his right as Vice-President to succeed Señor Billinghurst. The acceptance was by a legal quorum of the Congress. A manifesto was issued to the nation and Señor Leguia invited the diplomatic body to recognise his status. There were thus two Presidents of Peru; but Señor Benavides also claimed to have been duly elected by Congress, and his election was eventually confirmed by the Supreme Court.

_Uruguay_ shared to the full the economic misfortunes of the larger Republics. The year opened with a monetary crisis, attributed by the Minister of Finance to depletion in the stock of gold and the difficulty of borrowing in Europe. The Bank of the Republic restricted credit. President Batlle y Ordoñez, in opening the Legislature in February, asserted that notwithstanding the monetary crisis the country had made substantial progress and was on the road to recovery. The imports for 1913 amounted to 9,600,000_l._ and the exports to 12,600,000_l._ Of the Public Debt 609,517_l._ had been redeemed and 1,210,260_l._ of the Internal debt issued. The annual statement on the Public Debt showed the total on December 31, 1913, to be 28,999,737_l._--an increase of 639,088_l._ The Budget for 1914-15 showed an expenditure of 6,976,526_l._; the revenue was estimated to be in excess. A new loan of 2,000,000_l._ was issued and further loans were sought. The project of a "Pan-American" railway, which was to give a direct route from Buenos Ayres to the Brazilian system, did not materialise. The Uruguayan Government rescinded its concession and in April initiated a policy of new State lines to link up the Brazilian system. The principle was to secure the economic independence of the Republic in railway matters and it was officially denied that there was any hostility towards the Central Uruguay Railway Company.

Except for commercial depression and the effects of the war the affairs of _Paraguay_ were uneventful.

The war brought about the like financial crisis in _Chile_ as elsewhere in Latin America. Early in the year it was announced by the President that having regard to economies then effected, the expenditure for 1914 would be covered by the revenue. The Legislature passed a Bill for reorganising and extending the railway system at a cost of 4,710,000_l._ A proposal to convert the paper peso at the rate of twelve pence gold met with much obstruction and the war came before it could be carried through the Senate. At the time of the war Chile had a warship of the Dreadnought class building in England. In view of rumours that warships building would be sold, the Chilian Government formally declared that they would not cede the vessels, which were contracted for "solely to fulfil the exigencies of Chile's geographical position and of her international rank. The said units will only leave British waters to be incorporated into the Chilian navy." The Anglo-German naval engagement off the coast of Chile is narrated elsewhere (p. 227). It was reported from Santiago after the loss of H.M.S. _Good Hope_ that German merchant vessels had misused Chilian territorial waters for the supply of stores and sending wireless messages to German warships. The Chilian Government authorised the statement that from the first Chile had strictly carried out her neutrality and had effectively used her warships for convoying within territorial waters merchant vessels threatened by cruisers. Regulations were cited to show that not only was the taking of abnormal stores by belligerent merchantmen prohibited but that vessels carrying wireless had to dismantle the installation. In the Chilian Parliament the Minister for Foreign Affairs made an elaborate statement showing that there was no ground for the insinuation that there had been a departure from neutrality. Incidentally he stated that the action in which H.M.S. _Good Hope_ was lost (Nov. 1) took place at "a very considerable distance outside the territorial limit." The British Government was satisfied that there had been no lack of good faith or vigilance by Chile and that reports to the contrary were "not in accordance with the facts and do not in any way represent the opinion of His Majesty's Government." An anti-German outbreak was reported from Valparaiso in December owing to the German controllers of the tramways raising the passenger rates.

Mr. and Mrs. Scoresby Routledge left the Chilian coast in the yacht _Maria_ in January for Easter Island, where they are making a study of the gigantic stone figures and other antiquities.

_Bolivia_--the land-locked Republic of South America--has maintained good relations with her neighbours and her record until the war was one of economic progress. Her external debt in March, 1913, amounted to 3,000,000_l._ only, nearly all contracted with the Credit Mobilier Français, and her productiveness was increasing. A thorough study of this Republic by M. Paul Wallé on the instructions of the French Ministry of Commerce is embodied in his book "Bolivia, its People and its Resources, its Railways, Mines and Rubber Forests" (T. Fisher Unwin, 1914). New railway schemes were projected during the year for regions still dependent on mule transport. A decree was issued from La Paz requiring the registration of labour contracts for the interior and making provisions, under penalties, for the prevention of abuses of the peonage system, common throughout Latin America and not infrequently resulting in the practical enslavement of the labourer. There had been scandals in Bolivia affecting Colombian nationals in the Beni rubber region; and perhaps no rubber-producing area on the continent is free from them. Since the exposure of the horrors in the Putumayo region Governmental opinion in other Republics has been stimulated to take corrective action where conditions more or less comparable had arisen, and the action of Bolivia is indicative of a desire to protect the forest worker. In this connexion it should be observed that the Foreign Office has sent a Circular despatch [Cd. 7148] to its consular officers, calling attention to the Putumayo report and giving directions for more energetic action in cases of maltreatment of natives where British subjects and companies are responsible. They are to make themselves cognisant of labour conditions in concessions partly or wholly controlled by British subjects, and to embody in their annual reports the result of their studies, besides making special reports in serious cases, thus enabling the Foreign Office to warn the persons and companies concerned. Following the precedent of the Putumayo case the policy of the British Foreign Office is to encourage consular vigilance, and on the receipt of reports of serious ill-treatment of natives where British subjects may be held to account, to authorise special consular journeys of investigation.

In _Ecuador_ there was a revolutionary movement in the north, under the leadership of Colonel Concha, who was credited with a desire to overthrow President Plaza, who himself gained office by expelling General Alfaro from the Presidency. Colonel Concha held the port of Esmeraldas, which was shelled by Government war craft. The revolutionary movement was officially represented to be unimportant. Breaches of neutrality in the German interest were alleged also against Ecuador, which with Colombia was called to account by the British and French Governments (p. 237). The Ecuadorean Government issued an absolute denial of this and of the charge that the wireless installations had been allowed to be used by Germany. The charges were "pure inventions concocted in the United States." It is noticeable that both in the case of Colombia and Ecuador the representations of the Allied Powers were made through and by the United States Government.

In _Colombia_ Don José Vicente Concha, a Clerical and Conservative, and former Financial Agent of the Republic in Paris, was elected President for four years from July. The country was in the proud position of being able to announce that, notwithstanding the dislocation of business caused by the war, the interest on her external debt was being and would be punctually paid. The gold industry of this Republic is progressing. As in the case of Chile, but apparently with more justification, complaints were made (p. 237) that Colombia had permitted acts in assistance of the Germans and had violated her neutrality. Colombia denied the charges, through the _Chargé d'Affaires_ at the Legation in London, who cited a decree of September 1, "enforcing" all measures required to safeguard the neutrality of the Republic in connexion with the operations of the wireless stations at Cartagena and Santa Maria, the only two wireless stations in the country. A decree of September 11 was quoted to the effect that in the absence, of properly qualified experts who could satisfy the Government as to the way in which the censorship and transmission of messages would be conducted, the station at Cartagena "should be closed." There were also decrees of August 12 and 22 to ensure strict observance of neutrality rules by shipping and users of ports. The existence of these decrees was not in dispute. Later on the _Chargé d'Affaires_ reported that official cables from Colombia of November 19 stated that the French Minister at Bogota and His Majesty's Naval _Attaché_ in Washington had expressed their thanks to the Colombian Government and their satisfaction with the action taken to carry out the requests of the Allied Governments. The representations of the latter had, in fact, been effective. A treaty was under consideration by the United States Congress for the payment to Colombia of 5,000,000_l._ as indemnity for the loss of Panama territory by the revolution of 1903. The treaty had not been ratified by the United States Senate at the close of the year.

From _Venezuela_ there is nothing more novel to record than a frontier raiding difficulty with Colombia.

FOOTNOTES:

[29] It reopened for general business on December 12, and for dealings in bonds a fortnight earlier.