He spoke for only ten minutes. He spoke of squaring tariff duties with the actual facts: “We must abolish everything that bears even the semblance of privilege … and put our business men and producers under the stimulation of a constant necessity to be efficient, economical, and enterprising, masters of competitive supremacy, better workers and merchants than any in the world.”
The speech was received with resounding applause. Driving back to the White House down the Mall, Ellen Wilson, delighted with the success of her husband’s defiance of tradition, said it was “the sort of thing Theodore Roosevelt would have liked to do if only he’d thought of it.”
The President laughed. “Yes I think I put one over on Teddy.”
The Most Momentous and Delicate Dealings
Foreign affairs had been T.R.’s personal playground during his presidency. Taft, trained in the Philippines and as Secretary of War, tended to see the world as a whole; in his quiet way he supported every move towards peace by arbitration. Although careful listeners could already detect the ticking of the time bomb in Europe, Woodrow Wilson had ignored all mankind outside of the borders of the United States in his pronouncements during the 1912 campaign. A few found it odd. In the four months between his election and his inauguration, many an unwanted foreign fowl came home to roost.
Twentyfive years after the French project ended in pestilence and bankruptcy the Panama Canal was nearing completion. T.R.’s manner of achieving it had left problems for his successors. The secession of Panama was admittedly a farce, but the brazenness of its buffoonery left hurt feelings. There was the little matter of Colombian sovereignty which T.R. had laughed off as the delusion of greedy Latin politicos. Taft had been trying to put a legal face on the proceedings by negotiating a treaty as a form of heart balm for the government in Bogotá. Three weeks before Wilson’s inauguration Colombia rejected the Taft proposals.
When Ambassador Bryce called on the newly elected President he may not have mentioned tolls, but he surely had tolls on his mind. The Hay-Pauncefote Treaty between Great Britain and the United States, replacing the earlier treaty calling for joint management of some future isthmian canal, had stipulated that all nations were to have equal treatment, but Congress had lightheartedly passed a bill exempting American coast to coast shipping from paying any tolls at all. The Foreign Office sent Bryce to Washington with the idea of using his unique prestige among Americans to secure the repeal of that measure. After that he was planning on retirement.
Roosevelt’s diplomacy had been all his own, a mixture of aggressive nationalism and shrewd sense. Under Taft the flag had followed the dollar. Now Wilson and Bryan were determined to extend the blessings of democratic justice to all the world. How to go about it?
Wrongdoing abounded abroad and at home. The California legislature was passing exclusion acts against the Japanese. President Wilson had hardly settled at his desk in the executive office before the Japanese ambassador appeared to present a protest. Since defeating the Russians the Japanese were in no mood to accept discrimination.
Western ideas were stirring in the Far East. In China a republic had been proclaimed. Wilson’s first conversations with his newly installed Secretary of State dealt with the terms of a loan the European powers were trying to force on the backward Chinese.
The Caribbean was uneasy. Trouble was popping everywhere. In Mexico a revolution was on the march. Rifles bristled out of every adobe hut. Two weeks before Wilson’s inauguration, Francisco Madero, whom American Democrats had hailed as a kindred spirit when he displaced the old Mixtec dictator, Porfirio Díaz, a few months before, was shot full of lead by a new strong man named Victoriano Huerta. The reform wave that had swept the United States was agitating the Mexicans, but south of the Rio Grande the revolt against the vested interests took the form of arson and murder.
“It would be the irony of fate,” Wilson told a Princeton friend when he heard the news, “if my administration had to deal chiefly with foreign affairs.”
The Tariff for Revenue Only
In spite of storms brewing on every frontier Wilson’s first duty was to his campaign commitments. In a rare burst of legislative energy, Congress, under the President’s skillful prodding, passed two basic measures during the first nine months of his administration.
Tariff for revenue only had long been a Democratic motto. The Underwood Tariff Act, pushed through the two houses during the summer, accomplished the first thoroughgoing downward revision of import duties since 1846.
For years the reformers had dreamed of an income tax to syphon off the guilty profits of the rich. A small progressive income tax, made possible by a constitutional amendment ratified by the states a couple of years before, was included ostensibly to make up for the loss of revenue. The bill was ready for signature by October 3.
“I have had the accomplishment of something like this at heart ever since I was a boy” the President cried out exultantly to the assembled cabinet members, congressmen and reporters who packed into the executive office to see him affix his Woodrow Wilson with two gold pens, “and I know men standing around me who can say the same thing, who have been waiting to see the things done which it was necessary to do in order that there might be justice in the United States.”
The Federal Reserve
At the same time a far more intricate and controversial measure was in the works.
Breaking up what Bryan and his followers called the money trust was a shibboleth of the southern and western uprising against Wall Street which had landed the new administration in Washington. The management of the currency of the United States, and consequently of credit and finance, was admittedly chaotic and outdated. Conservatives and progressives agreed that the state of affairs where some seven thousand banks could issue money under the vague direction of a Comptroller of the Currency was a breeder of panics. For some years Senator Aldrich, heading a committee that sought the guidance of the New York bankers, had been working for legislation which would centralize the banking system. Nobody denied the need. The question at issue was who would run the new system, the bankers or the representatives of the people.
The construction of the Federal Reserve Act out of a welter of conflicting interests and conflicting dogmas was one of the great successes of the congressional system.
It would never have come to pass if Woodrow Wilson had not managed to make himself the leader of the whole Democratic Party, instead of merely its progressive wing; and if he had not shown, during that first summer of his administration, an unexpected ability to learn by doing. Finance was not his special province, but he eagerly soaked up information from such men as the reforming Louis D. Brandeis, who was then considered a dangerous firebrand by the conservatives, and from banker friends McAdoo smuggled into the White House when Bryan wasn’t looking. It was the President himself who suggested the Federal Reserve Board, which made control in the public interest a workable proposition.
At first the bare notion of such a board horrified both sides. Bryan’s followers claimed it would create “an oligarchy of boundless wealth … to govern the financial destiny of the nation, operating under governmental protection.” Conservatives were equally revolted. The New York Sun described the President’s project as “the preposterous offspring of ignorance and unreason … The provision for a government agency and an official board to exercise absolute control over the most important of banking functions is covered all over with the slime of Bryanism.”
Virginia Representative Carter Glass, who, starting from a printshop in Lynchburg, became publisher and owner of his smalltown papers, and developed into the southern congressman best qualified to deal with fiscal matters, steered the bill through the House. Robert L. Owen, a stockman and banker from Oklahoma, who had been a careful student of European banking systems, steered it through the Senate. Secretary Bryan did yeoman service keeping his radicals in order once the President had convinced him the measure was the nearest thing to public control of banking that could
be achieved at that time. Secretary McAdoo, meanwhile, whose promotion of the Hudson tubes had won the admiration of the business community, cajoled the conservatives.
Throughout the hot summer and the long fall the President managed to simulate an air of coolness and equanimity while he conducted the general strategy from the White House. In private he blew off steam:
“Why should public men, senators of the United States, have to be led and stimulated to do what all the country knows is their duty—” he wrote Mrs. Peck, finding it hard, as usual, to imagine that any man in his right mind could honestly disagree with him on any topic whatsoever. “Why should they see less clearly, apparently, than anyone else what the straight path of service is? To whom are they listening? Certainly not to the voice of the people, when they quibble and twist and hesitate … A man of my temperament, and my limitations will certainly wear himself out on it … the danger is that he may lose his patience and suffer the weakness of exasperation.”
The Carabao
When President Wilson did lose his patience “and suffer the weakness of exasperation” his wrath found an unexpected target. There existed in Washington a branch of an organization of veterans of the Philippine insurrections know as the Military Order of the Carabao. The Carabao’s annual celebrations were bibulous affairs with skits and spoofing of public officials in the spirit of the Gridiron dinners conducted by the press. They were accompanied by the singing of old warsongs like “There’s Many a Man Been Murdered in Luzon,” and “Damn Damn Damn the Filipinos.” No one had ever taken their jollifications seriously until one December morning while the tug of war over the Currency Bill which was to set up the Federal Reserve was still undecided on Capitol Hill, the Schoolmaster in Politics read a facetious account of the antics of the local corral of the Carabao in his morning paper.
He was not at all amused. He decided to give the military a lesson.
Wilson’s policy towards the Philippines was a cautious advance in the direction of selfgovernment and his pronouncements on the subject had been received with jubilation in Manila. The oldtime jingos of the regular army viewed independence for the little brown brethren with derision.
Though not a prohibitionist himself Wilson had appointed two prohibitionists to his cabinet. Bryan was refusing to allow wine to be served at his state dinners and Josephus Daniels would soon go so far as to cut off the Navy’s traditional grog.
Here was a bunch of army officers poking fun at the Democratic Party’s Philippine policy, insulting the Filipinos with slanderous ditties and holding Secretary Bryan’s grape juice suppers up to ridicule. Wilson went after them like a college president cracking down on student pranksters. It was all Daniels and Garrison could do to argue him out of hauling the general officers involved up before a courtmartial. They compromised on a reprimand.
The President administered the chastisement personally in a letter which, to the embarrassment of all concerned, he gave to the press. “What are we to think of officers of the Army and Navy of the United States who think it fun to bring their official superiors into ridicule and the policies of the government … into contempt? If they do not hold their loyalty above all silly effervescences of childish wit, what about their profession do they hold sacred?”
The Days Go Hard with Me
Wilson had stuck to his desk for nine solid months with only a few short breathers in the country. His nerves were taut to the breaking point. During the summer he poured out his feelings in a letter to Mrs. Reid, another of the sympathetic matrons he liked to tell his troubles to:
“The days go hard with me just now. I am alone. My dear ones went away almost at my command. I could not have been easy about them had they not gone; and we have found a nest for them in New Hampshire … where they have just the right airs, a beautiful country around them, and most interesting neighbors … These are stern days, and this all but empty house fits well with them. My secretary [Tumulty] is living with me and the young naval doctor who is of my staff [Grayson] … I work hard of course (the amount of work a President is supposed to do is preposterous) but it is not that that tells on a fellow. It’s the anxiety of handling such ‘things’ as that scoundrel Huerta … I play golf every afternoon—[this was part of Dr. Grayson’s regime of ‘preventive medicine’]—because while you are playing golf you cannot worry and be preoccupied with affairs … I have myself well in hand. I find that I am often cooler in my mind than some of those about me. And of course I find a real zest in it all … So far things go very well and my leadership is most loyally and graciously accepted even by men of whom I did not expect it. I hope that this is in part because they perceive that I am pursuing no private and selfish purposes of my own. How could a man do that with such responsibilities resting on him!”
Two days before Christmas the President had his reward. He triumphantly signed the Federal Reserve Act in the presence of the ladies of the family in their billowing frocks and of the Speaker of the House and members of the congressional committees and his cabinet officers, with tall giraffenecked McAdoo towering above them grinning in his tight stiff collar. There was the usual distribution of gold pens to the deserving. Wilson spoke modestly of his satisfaction “… that I played a part in completing a work which I think will be of lasting benefit.”
This was statebuilding as he had dreamed of it. The New York Times reporter spoke of the look of radiant happiness on Mrs. Wilson’s face. She had reason to feel exultant. The establishment of the Federal Reserve system was possibly the most lasting achievement of her husband’s career.
The New Freedom Abroad
Immediately after the ceremony the Wilson family embarked on a private car for a much needed holiday at Pass Christian on the Gulf of Mexico. They had hardly time to enjoy their Christmas tree and to wish each other a Happy New Year before the President became thoroughly preoccupied with new complications in his campaign to oust “that scoundrel Huerta” from the presidency of Mexico. His disinterestedness was not appreciated south of the Rio Grande. The Mexican politicians were not accepting his leadership as “loyally and graciously” as did the Democratic politicians on Capitol Hill.
On January 2, 1914, the cruiser Chester, after dashing at full steam across the Gulf from Vera Cruz, dropped anchor off Gulfport, Mississippi. Under conditions of considerable secrecy the President went out on a launch to confer for some hours with a large blond civilian on board the warship. This gentleman was the Honorable John Lind, Swedishborn retired governor of Minnesota, Bryan supporter and deserving Democrat, who had been chosen for no reason that anyone could imagine, unless his ignorance of Spanish and his lack of any Mexican experience qualified him as unprejudiced, to be the President’s personal representative in Mexico. At that conference Mr. Lind and Mr. Wilson decided to back the northern Mexican revolutionaries against Huerta. For a pacifist John Lind had remarkable faith in the efficacy of arms.
Ever since the inauguration the President had been carrying out a policy described as of “watchful waiting” towards the revolutions and counterrevolutions in Mexico. To implement that policy he had been using every possible means to bypass the Embassy in Mexico City. Wilson was even more suspicious of professional diplomats than of professional military men.
In this case there was some justification for his suspicions. When the unfortunate Madero called on General Huerta, who had grown up as a career man in Díaz’s army, to suppress a cuartelazo engineered by members of the old regime, Huerta joined with Díaz’s nephew Felix, to suppress Madero instead. This act of treachery was carried out with the blessing of Taft’s ambassador, Henry Lane Wilson. In fact the written agreement between the two counterrevolutionaries was known as “the pact of the Embassy.”
Neither Wilson nor Bryan had personal experience with any but Englishspeaking people. Their Mexican policy consisted of trying to find Americanstyle reformers in the Democratic tradition among the warring bands which Madero’s assassination and Huerta’s assumption of power had launched on the wa
rpath.
There was Zapata pillaging the haciendas of the sugar barons in the south under the banner of “land and schools for the peons.”
In Chihuahua, Francisco Villa, recent convert from professional banditry to revolutionary idealism, was showing a genius for guerrilla fighting and building himself a small empire out of the ruined holdings of the cientificos.
In Coahuila, Venustiano Carranza, maderista governor, whose long white beard added respectability to his cause, proclaimed himself First Chief of the constitutionalist forces pledged to reestablish law and order and to continue Madero’s program of rational reform. After talking to Lind, Wilson decided that Carranza was his man.
“That scoundrel Huerta,” idolized as chief by the regular army, held the capital and central Mexico and the railroads to Vera Cruz and to the oil port of Tampico. He had the support of most of the foreign powers, and the sympathy of Mexican and American business interests. Seventeen nations had recognized his government. Particularly the British looked to Huerta to protect their investments and keep order as old Díaz had for forty years.
The British had reason to be anxious about Tampico. His Majesty’s fleet had recently switched from coal to oil and Mexico was its main source of supply. With such support Huerta remained unmoved by admonitions from Washington to retire and hold free elections.
When Huerta did announce elections he got ready for them by dissolving the largely maderista congress and arresting a hundred and ten of its members. For Wilson this was the last straw. Forcing out Huerta became an obsession.
The Foreign Office was amazed; but Sir Edward Grey was willing to make sacrifices to keep the good will of the new administration in Washington. The British began to intimate in their sly unspoken way that they might reconsider their support of Huerta in exchange for the President’s help in doing away with the exemption of American shipping from paying tolls in the Panama Canal which, in spite of landslides in the Culebra cut, was well on its way to completion.