THE changing phases of the Wilson diplomacyand of the Wilson domestic policy, as it bore upon the conflict overseasunerringly followed the changing interests of Wall Street. When the war trade could be expanded only if the war-traders would undertake loans to the Entente governments, Wilson reversed himself on the propriety of such loans. When, due to the piling up of their loans, the integrity of Entente credit became of overshadowing importance to our international bankers, Wilson reversed himself on the law of the submarine, the law of the armed merchantman, and the question of equal treatment as an attribute to neutrality, swinging America into a position of hostility toward the Central Powers and benevolence toward their enemies. Looking ahead to a possible war on behalf of the dominant Wall Street interest, Wilson reversed himself on the question of preparedness, and put through the great preparedness programme of 1916. Casting about for a casus belli with Germany, Wilson made of his preparedness tour a popular educational course in the identification of the national honor with the private business of certain exporters and shippers.
Said Robert N. Page, North Carolina Congressman, in explaining his opposition to the President on the question of warning Americans against traveling as passengers upon armed belligerent ships, February, 1916 :
Jesus Christ never uttered a more profound truth than when He declared, where your treasure is, there will be your heart also. The loan of $500,000,000 to England by American capitalists, to say nothing of the profits of munitions manufacturers, has destroyed the semblance even of neutrality in the United States, and will probably lead us into war. ... I will not stultify my conscience nor stain my hands with the blood of my countrymen.
Wall Streets heart was with the Entente. And Wilsons heart was with Wall Street. A day came when it was evident that the Entente could never score a decisive victory without the full assistance of America as a belligerent. The tightening of the submarine blockade furnished the pretext. So, guided by Wilson, America rushed into the war in a blaze of super-patriotism and profit-taking.
Coming down to the end of hostilities, both in reference to reconstruction at home, and in arranging the conditions of peace with our allies, it was our governments policy that Wall Street should retain every profit and advantage that it had already gained, as well as reap every available future benefit.
As soon as the armistice was signed, Secretary Baker and other department heads announced that the governments surplus supplies would be disposed of in such a way as not to break the marketmeaning that the government would cooperate with the profit-makers to keep up the cost of living. Six months after the fighting was ended, it was discovered that government and packers were acting together to hoard vast quantities of food, in order to protect the interests of the latter.
The same policy was followed in steel, copper, and other industries. After the armistice was signed, the government generously continued taking all the copper output at the guaranteed figure, 26 cents a pound, until it had accumulated a surplus of 140,000,000 pounds. When copper had dropped to fifteen cents, it was announced that the government would dispose of its surplus, in cooperation with the producers, at the existing market price. The government sold its surplus back to the copper producers at from fifty to seventy-five per cent, of the rate they had received for it; the latter then immediately boosted the figure again above 20 cents a pound.
The armistice found the job of giving new railroads for old, with the peoples money, far from finished. In resigning as Director General, McAdoo recommended an extension of government control as a part of the programme of rehabilitation. Hines, a private railroad executive, who succeeded McAdoo, seconded the scheme, while Wilson urged it upon Congress in his Railroad Bill, which was heavily weighted with new appropriations from the public treasury. When the Presidents Railroad Bill failed, the Stock Exchange registered a severe set-back in railroad securities. The President lost his temper, and in a public statement (Mar. 4, 1919) denounced the group of men in the Senate who had chosen to imperil the financial interests of the railway system of the country. Pending further legislation, the coffers of the War Finance Corporation were opened to the roads.
One reason acknowledged for the extension of government control was to give time for the enactment of some new element of policy, which, the President urged, was necessary for the protection of their security-holders. (Message to Congress, Dec. 2, 1918.) The new element of policy, ultimately enacted, and approved by Wilson, was a definite guarantee of profits, the last word in government gifts to business, a benefaction to private persons unparalleled in the history of the world, an act of generosity to special privilege, so bounteous that the mere suggestion of it would not have been tolerated in former days.
Government benevolence was again shown in the generous payments made for the cancellation of war contracts, and the losses cheerfully pocketed on the sale of war stocks.
After the Kaiser was gone and the German people were under our heel, the government loans to our allies did not cease. Taxes could have been reduced by stopping these huge loans. It was urged that our allies had to be sustained. Did the obligation to sustain the imperialistic governments of England, France, and Italy, with money taxed from the American public, have anything to do with the fact that the money was used in financial and commercial operations in which our international bankers were interested, and that every dollar of it represented a profit to these gentlemen ? We even waived immediate payment of the huge sums, due as interest on these loans, making it easier for our allies to continue their traffic with our financing and exporting firms.
Millions of innocent persons had been led to believe that the merchant marine, built at such infamous cost with the peoples money, was to belong to the people. But we soon find the Shipping Board offering the ships for sale, and on scandalous terms. Immediately after the armistice, the shipping interests had formed an association whose avowed purpose was to see that the government ships should be handed over to private enterprise. The failure of the Shipping Board, during the Wilson regime, to sell more vessels than it did sell, was apparently due to an agreement of the shipping companies to hold out for lower prices than the government dared, for the time being, to accept. Meanwhile, many of the most extravagant hopes of the shipping interests were realized in the Jones Merchant Marine Act, enacted by a Republican Congress with the approval of a Democratic President.
Not only did we proceed to part with the government ships, but the funds of the War Finance Corporation were opened to the hastily formed export trusts. The acknowledged purpose was to stimulate exports, and this was done regardless of the needs of the people at home. The governments tom-tom chase of the small profiteer was staged in such a way as only to protect and benefit the large. While feigning a campaign to reduce the cost of living, the Administration was doing everything possible to assist n getting the products of the country out of the country and away from the people. The sugar shortage and the oil shortage of 1920, the shortage of many other commodities, and the continued rise in the prices of common necessities, were in part due to this policy. Had the Administration deliberately conspired with Wall Street to keep up the cost of living, for the benefit of a few at the expense of the many, it could not have chosen a better course. Notwithstanding the defeat of the Versailles Treaty, the 66th Congress, at the instigation of Wilson, both Republicans and Democrats concurring, enacted the most remarkable collection of special-privilege laws in American history.
Our illegal war in Russia was pleasing not only to Paris and London bankers, but to New York bankers as well. The price of the Czars bonds rose and fell on the Stock Exchange, depending on the news of the military reverses or successes of the Bolsheviki. American financiers held some 50,000,000 rubles of the Czars bonds. When it appeared that we would be unable to overthrow the Soviet Government, even with the sacrifice of American lives, money from the public treasury was used to pay the interest on these bonds, as well as to liquidate the accounts of the defunct Kerensky Government, and to promote the Kolchak revolution. More than fifty million dollars were paid out for such purposes. (Hearings of House Committee on Expenditures in the State Department, 1919.)
At Paris, two American financiers were closer in the confidence of the President, and had more to do in shaping the treaties, than the Senate, or any part or member of it. Senator Knox disclosed the fact (Mar. 3, 1920) that on file, in the office of a firm of New York lawyers, was the complete data of the Peace Conference, access to which the President had steadfastly refused the treaty-advising, treaty-ratifying body. Mr. Lamont, a partner of Morgan and at the same time a Peace Conference official, was permitted to send an advance copy of the peace conditions to his Wall Street associates. While acting for the American people at Paris, Lamont participated in the organization of the China Consortium and the International Committee of Bankers on Mexico. So, along with the peace arrangements, we find the beginnings of the definite plan of international cooperation in the financing of foreign enterprises, advocated by President Farrell of the U.S. Steel Corporation, a year before.
President Wilson procured from our allies an express recognition of the Monroe Doctrine, which means that we were promised a freer hand in the western hemisphere in the protection of American lives and property. As a part of the Monroe Doctrine plan, it was reported that arrangements were under way for the United States to take over the British and French loans to Latin American republics. A characteristic Latin American interpretation of this action was voiced by a Brazilian journalist, Madeiros de Albuquerque, as follows :
Brazil is considered by the United States only as a possible future colony. ... The United States wants to obtain, as part of the payment of the debt of France and England, a bond for Brazils debts to those powers. On the day this is realized. Brazil will be sold to the United States, which, on the first occasion, will do to us as she has done to Central American nations. ... The United States is incontestably the Prussia of to-morrow. (New York Times, May 13, 1919.)
The statement was frequently made, sometimes self-righteously, sometimes complainingly, that America gets nothing out of the peace. But in a speech in the Senate, September 3, 1919, Senator Hitchcock, the Administrations spokesman in the treaty debates, urged ratification, on the ground of the enormous benefits and advantages which the United States derives from this treaty, wrung from Germany at the cannons mouth. The Democratic minority of the Senate Foreign Relations Committee, in submitting its report, said :
To adopt an amendment or to reject the treaty means that the United States will sacrifice all the concessions secured from Germany by a dictated peace. While these concessions are not as large as those which other nations associated with us secure in reparations, they are nevertheless of tremendous importance and could only be secured under a dictated peace.
The report then goes into detail, the American advantages from the treaty being arranged under twelve heads. Upon the twelfth point, which sets forth the financial and commercial advantages to be derived from our membership on the Reparations Commission, President Wilson himself enlarged somewhat in his speech at St. Louis (Sept. 5):
Some of you gentlemen know we used to have trade with Germany. All of that trade is going to be in the hands and under the control of the Reparations Commission. I humbly begged leave to appoint a member to look after our interests, and I was rebuked for it. I am looking after the industrial interests of the United States. I would like to see the other men who are. They are forgetting the industrial interests of the United States, and they are doing things that will cut us off, and our trade off, from the normal channels, because the Reparations Commission can determine where Germany buys, what Germany buys, how much Germany buys. ... It is going to stand at the centre of the financial operations of the world. ... Under the League plan, the financial leadership will be ours, the industrial supremacy will be ours, the commercial advantage will be ours.
Although, in the beginning, the autocrat of our war policies had said : We look for no profit. We look for no advantage. We will accept no advantage out of this war (May 12, 1917), yet here we have a direct confession that he was moved by the same solicitude for business after the war as during the war, before the war, and when getting into war; that at Paris he was a patron saint of the privileged class, just as were Lloyd George and Clemenceau.
The theories of a war of defense, a war for international law, a war for democracy, a war for permanent peace, all break down before examination. The theory of a war for business alone harmonizes with the facts.
1 In a report submitted May 9, 1921, James C. Davis, Director General of the Railroad Administration under President Harding, estimated that the net loss to the government, in operating the railroads during Federal control, would came to $1,200,000,000. In other wards, not only do we yield enormous increases in freight and passenger rates, but we pay one and one-fifth billion dollars of cold cash out of the Treasury besides. By the political and journalistic henchmen of the railroads, this vast loss is attributed to the failure of Federal control. But if there was really a failure of, Federal control, this, in turn, is attributable to the failure of the railroad executives themselves to function honestly as public servants, For, in general, these gentlemen retained, throughout the period of Federal control, the same positions of trust and of power which they had held when the railroads were running without a government guarantee. From 1918 on, the Railway Brotherhoods, or experts connected with them, made repeated charges tending to beat out this view.
2 When the Republican party came into power, it was as anxious to serve big business as any collection of politicians had ever been in the history of the world. It did not find the sailing easy, as the Wilson Administration had so satisfied the greed of capital that little more could be done without choking to death the goose that laid the golden egg. Railroad freight rates were higher than the traffic would bear, and the great railroads found it expedient, in certain instances, to effect voluntary reductions. Although the Republican party was willing enough to boost the protective tariff even higher, warning voices were heard from the seats of the mighty themselves that there was danger of the tariffs becoming a boomerang to the injury even of the protected interests. The new Administration was able to do little more than stand pat on the business policies of the old. One of the potent causes of the depression of 1921 was the margin that had prevailed during the years 1917-20 between the earnings of the working population and the prices of the necessaries of life. The public was unable to buy back the goods that it had produced and needed, and the business classes were slow to let go of those goods except on the basis of the profiteering war prices.
THE ENEMY AT HOME
IN serving business, and acknowledging himself a servant of business, President Wilson never, of course, acknowledged serving big business at the expense of small business, or of the general public; but invariably held that his service to business was service to the nation. Said Wilson on one occasion :
Nothing can be for the interest of capital that is not for the interest of labor; and nothing can be in the interest of labor that is not in the interest of capital. (Indianapolis, Oct. 12, 1916.)
This brilliant pronouncement, if true, would perhaps justify any course that any politician might wish to follow at any time. It is almost equal to saying that what is good for any given group of us is good for all the rest of us.
The proposition that the interests of businessmeaning very big businessare identical with the interests of the nation, did not, of course, originate with Woodrow Wilson. It is upon this assumption that an important share of past governmental policies has been based. Our time-honored protective tariff is indefensible under any other theoryalso our various currency systemsalso a major share of the activities of our Departments of State and of Commerce. All agitation for government subsidy, or other aid to a privately owned merchant marine, has been based upon this theory. The doctrine of the protection of private enterprises abroad, with the public armed forces, necessarily rests upon the assumption that such enterprises are in some way bound up in the general welfare.
If the position can be maintained, that what is for the interest of big business is for the interest of the country, then the Wilson policies, in peace and in war, are possibly vindicated. But can it be maintained ? The question is doubly importantand timelybecause this is the position now taken by the dominant element in both the Democratic and Republican parties. It is, in the main, the position of Wilsons successor in office. The leaders of both the big political parties heartily approve of the general policy which Wilson pursued toward American business, in getting into war, in the conduct of war, in negotiating peace, and in reconstruction. The Administration which succeeded Wilsons did not abate a single American business benefit which Wilson arranged for at Paris or elsewhere, no matter how questionable the means, and it did not wish to do so. It has to be said that any business President would have been willing to follow about the course that Wilson followed between 1915 and 1921and if, as has been suggested, American history might have been different had Wilsons opponent been elected in 1916, it would have been due altogether to the circumstances mentioned.* Wilson as a statesman was singular only in his unusual ability to mislead the public as to his motives and intentions.
Very well, our captains of industry have long tried to convince their workmen that nothing can be for the interest of capital that is not for the interest of labor, while our professional labor leaders have long tried to convince our captains of industry that nothing can be in the interest of labor that is not in the interest of capital. Unhappily, employers have seldom succeeded in persuading employees that low wages are good for employees; while employees have seldom succeeded in convincing employers that high wages are good for employers.
True, it is in the interest of workmen that they shall have employment, but it is not in the interest of workmen that the employers shall take any more of the product than is economically necessary to maintain operationsalthough it is in the interest of the latter to do so.
Likewise, it is in the interest of the farmer that there shall be a market for his product, but it is not in the interest of the farmer that he should be forced to sell to a monopoly which skims the cream of the profit, nor that he should pay exorbitant rent for his land, or usurious interest on borrowed money, or excessive prices for supplies. Yet it is in the interest of some other social group that the farmer should be exploited in each of these various ways.
It is in the interest of the public that there shall be railroads, but it is not in the interest of the public that charges should be assessed to cover dividends on watered stock, or that rates should be higher than economically necessary to provide the desired service.
It is in the interest of the public that food supplies should be well distributed and easy to obtain, but it is not in the interest of the public that the supply and distribution of food should rest in the hands of a monopoly which exacts prices in excess of those economically necessary.
It is in the interest of the public that manufactured goods should be obtainable, but it is not in the interest of the public that manufacturers should be protected by a tariff wall, enabling them to charge higher prices at home than those for which they can profitably sell abroad.
The proposition that nothing can be for the interest of capital that is not for the interest of labor, or that what is good for any given group of us is good for all the rest of us, might possibly be true if taken in some farfetched spiritual sense, but in no practical sense is it true. Dollars constitute the only accepted measure of interest in this material world, and the dollar interests of individuals and groups everywhere conflict.
Buyer and seller, employer and employee, farmer and middleman, carrier and consumer, packer and public, may have interests in common, but they have opposing interests also. It is the function of democratic government to serve only the common interests of the majority. The prosperity of the majority alone represents the prosperity of the country.
Officially, the countrys prosperity is measured by corporation profits, the prices of commodities, banking statistics, and trade statistics. Such figures do not measure the prosperity of the majority. It has long since been proven that the profits of a corporation tell nothing of the standard of living of its employees; that industries protected by the tariff and yielding the greatest profits frequently pay the lowest wages. High prices usually mean that somebody is making a lot of money; they do not mean that everybody is making a lot of money. High food prices do not always mean, even, that the farmer is making a lot of money, but often the opposite.
On the other hand, large profits in any quarter signify a one-sided transaction, in which somebody suffers, usually a numerically large group. Wherever one party to a transaction becomes inordinately rich, it means that some other party to the transaction is getting the worst of the deal. An economic structure, or a governmental policy, that makes millionaires of a few of us, necessarily sacrifices the interests of most of us. Prosperity of any numerically small group represents, not national prosperity, but national exploitation. In general, what is for the interest of big business, is against the interest of the country. Is it possible that the interest of big business in the war furnishes an exception to the rule ?
We have seen how, while the war was being fought, Wall Street gathered in enormous profits, while the lot of the majority was unrelieved sacrifice. We have seen how the American commerce which Wilson essayed to protect, in approaching war, while a source of gain to Wall Street, was an injury to the public. We have seen how the Presidents reconstruction policy, while immediately protecting the Wall Street pocketbook, did so at the expense of the masses. The last possible justification for our war and our war policies, therefore, would have to lie in the proposition that what has herein been termed the permanent advantages accruing to Wall Street, from American belligerency, will ultimately enhance the wellbeing of the nation as a whole; that, as Mr. Vanderlip, Mr. Farrell, and Mr. Wilson maintained, the interest of Wall Street and the public in foreign trade, in a large merchant marine under the American flag, in foreign enterprise and government protection thereof, is identicalthat, in a word, imperialism is a wise, democratic, and nationally profitable policy.
After the lessons that have been spread before the world in the past half-dozen years, it seems almost an insult to the intelligence of the reader to set aside any space, however brief, for an examination of this question. Yet, as these lines are written, big business and the government are cooperating in a strenuous and intensive propaganda to convince the public that the answer should be affirmative.
Begin with the question of simple trade. The primary interest of the majority in foreign trade is in imports, and arises from a desire, first, for goods not produced in this country, and, second, for goods produced here, but obtainable only at prices higher than the cost of purchasing and importing similar goods from other countries. But the interest of the big business minority in the first class of imports is secondary, while it is not interested at all in the second class, but only desires its complete strangulation, by means of protective tariffs and anti-dumping laws.
The primary interest of the big business minority in foreign trade is in exports. But the interest of the majority in exports is limited to exporting sufficient goods to balance the desired imports. Nothing pleases Wall Street more than a balance of trade in our favormeaning an excess of exports over imports. But the majority has no interest whatever in a balance of trade in our favor. On the other hand, every dollar of such a balance represents an economic loss to the country as a whole. Where is the benefit in always giving a greater value than is received ?
There is a benefit to the minoritycollected chiefly at the expense of the majority. Why is the minority so pleased by a large balance of trade in our favor? One important reason is that it tends to limit the home supply of goods, and so facilitates the boosting of home prices. The profit on foreign sales themselves is small in comparison with the enhanced profit on domestic sales, which a large volume of export makes possible.
In his report to the Mayor of New York on the food situation, in the spring of 1917, Health Commissioner Emerson declared that the first cause of the rise in food prices is the increase in the exportation of staple articles. The war trade was employed as a lever to boost domestic prices, with the result that, even before America became a belligerent, the American public was paying a larger cash tax to the war monster than some of the belligerent countries themselves.
Mr. Hoover himself told the Senate Committee on Agriculture that in the last five months, $250,000,000 has been extracted from the American consumer in excess of normal profits of manufacturers and distributors, and that the average prices to consumers of our own food in the fighting countries of Europe are lower than those prevailing in the United States. In England the price of bread is even 25 per cent. lower than the price we pay. (June 18, 1917.)
In the year preceding our declaration of war, according to Department of Labor reports, average food prices advanced 32 per cent. The operation is the same, whether in war or peace, in any period of inflated exports. After the armistice had been signed, the cost of living did not fall, as had been predicted and promised, but continued to increase. Exports continued to increase. In a statement on the economic situation (Sept. 9, 1919), in which it urged speeding up in the factories and a reduced standard of living in the home, the Federal Reserve Board admitted :
Looking at the matter from the point of view of the ordinary American consumer, however, the effect of such a favorable balance of trade is far from favorable to him. ... The immediate present effect of it ... is to curtail the supplies available for the American consumer, and thereby to become a factor of considerable importance in our price level. ... Buying in competition with export demand undoubtedly has been a major cause of rising prices in the post-war period of the United States.
Which means that the government policy of promoting our foreign trade simply tends to establish high living costs on a permanent basis.
Of course, the foreign trade propagandists put forward a series of propositions intended to convince the majority that it shares in the benefits. Otherwise the minority would be unable to put through its programme.
The wage-worker is informed that a large volume of exports means that home industry will travel along at full blast, and so jobs will be available for all. This stock argument, lifted bodily from the propaganda of the protective tariff, may appear good and sufficient to anyone who holds, with the minority, that the interest of labor is adequately served so long as the working population is permitted to exist and work at any price.
So, also, might industry travel along at full blast if the goods representing the balance of trade in our favor were offered for sale at home, and the workers of the country were paid enough more for their labor to enable them to purchase these goods for themselves. The interests of labor would really be served by such an arrangement. But of course that would mean restricted profits to our captains of industry; the real incentive of business patriots would disappear; they would sabotage their beloved country by shutting down their plants, and panic would stalk through the land.
The bland assertion that labor is bound to benefit by a large export trade may, or may not, convince the employee working at a fixed salary which he is unable to raise, who only knows that the rising living cost is a terrible reality. There is a suggestion, of course, that wages will he raised. Who will raise wages ? Did any important fraction of the employing class ever consent to wage increases except in case of necessity, due to strikes, threats of strikes, or scarcity of labor arising from some unusual condition ?
The wage increases in 1915 and 1916 were not due to war-trade prosperity, or the benevolence of employers, or even to higher living costs. They were due to a restricted labor market, arising from the stoppage of immigration, which made it possible for workmen to demand and get more money for their labor. After America entered the war, the draft was a prime factor in wage increases. But neither in 1915, 1916, 1917, 1918, 1919, nor 1920, did wage increases equalon the averageincreases in living costs. In February, 1920, the Department of Labor informed us that food prices had increased 105 per cent. in seven years. This estimate, based upon figures furnished by retail dealers on certain staple commodities, told only a part of the story.
As in April, 1917, the Department of Labor had informed us that the effect of the European war upon America had been to force up prices faster than wages, so, again, in May 1920, another government agency, the Federal Reserve Board, admitted : Wages have apparently fallen behind the advance in prices and cost of living.
Do our foreign trade propagandists mean to assert that the employing class will voluntarily share the proceeds with the workers ? How can any workman be foolish enough to expect anything of the kind, especially when he hears the voices of millionaires warning the country that wages must be kept down, and strikes prevented as a part of the foreign trade programme itself-indeed, that the producing classes in general must work harder and consume lessif we are to meet the competition of other countries?
Again, the farmer is told in glowing terms of the expanded market for his products, and is told he can command higher prices. But how can he command higher prices as long as he remains subject to extortion by the middlemens trusts ?
Said Mr. Hoover, in a statement to the Associated Press, May 10, 1917:
I am assured that the American farmer did not realize $1.30 per bushel for the 1916 wheat harvest. Yet the price of wheat in N.Y. to-day is $3.25 per bushel, and flour is $14 per barrel, with all its attendant hardships and dislocation of social and industrial life.
Of what value to the farmer is a government subsidized merchant marine, so long as grain exchange gamblers, packer monopolies, and other rings of middlemen determine the price he shall receive, without reference to the selling price abroad or the conditions of ocean carriage ?
What evidence, indeed, is there that ships flying the American flag, operated for the private profit of a few men in Wall Street, backed by a government peculiarly devoted to the interests of big business, will charge lower rates than ships flying any other flagor that a large number of ships under the American flag will tend to break either the private shipping monopoly, the transportation monopoly on land, or the middlemens monopolies ?
On the other hand, one of the first moves of the Shipping Board under the Jones Merchant Marine Act was taken with a deliberate purpose of producing the opposite effect. Early in August, 1920, it was disclosed that the Shipping Board was holding conferences with foreign shipping interests, in an effort to reach an understanding, and through the operation of a world monopoly, to establish as a permanent evil, the scandalous carriage charges reached during the war.
As to the small business man, he is assured that the proceeds of the export trade will find their way into all the channels of the countrys business, and so, in some manner, he is certain to share in the benefits. But what becomes of this argument when our rich fellow-citizens are going in for the export trade, frankly with a view to reinvesting the proceeds not in America, but in foreign countries ?
For another important reason why Wall Street is pleased with a balance of trade in our favor is that it makes practicable the export of capital. During the fiscal year ending June 30, 1919, the balance of trade in our favor was $4,129,200,000. The nation gave away a four billion greater value of goods than it received in return.
Wall Street invests its foreign trade profits in Mexico, Cuba, Central America, China, and other countries, not only in anticipation of greater profits from the exported money, but also in order to enable the money remaining behind to collect greater profits here.
Hand in hand with the export of goods, goes the export of capital. As the export of goods tends to increase the price of home goods, so the export of capital tends to increase the price of home capitaland, in the last analysis, of home goods also. So the majority paysand pays. Financiers and captains of industry are enabled to demand a higher return on the investment. They refuse, for example, to reinvest in their own railroads any part of the profits, until the investment is made more attractive. So the public is forced to pay higher rates for poorer service. The small business man, whose enterprises require frequent borrowing, must pay more for borrowed money. The farmer does the same. Domestic enterprise, instead of being expanded, is restricted. The capital that was promised to give jobs to American workmen is found in foreign countries employing foreigners. The development of constructive projects, recognized as essential to material progress at home, is pushed aside for the exploitation of China. The undeveloped western States, which have been begging for more capital for decades, are told to wait a while longer.
All this begins from an artificially stimulated export trade, and an artificially restricted import trade. Another result of an artificially stimulated export trade is the impoverishment of the natural resources of the country. An Associated Press dispatch from Washington, dated March 20, 1919, reads :
Original supplies of pine in the south will be exhausted in ten years, and at least 3,000 mills will go out of existence within five years, according to Henry S. Graves, chief of the United States Forest Service. ... Our country is progressively destroying its forests, declared Colonel Graves. The consequences are very far-reaching. The exhaustion of the forest is followed by the closing of industries, the steady increase of waste lands, the abandonment of farms that depended for their market on the lumber communities, and the impoverishment of many regions.
No section of the country can afford to have a large part of its land an unproductive waste, with the loss of taxation value, of industries, and of population, that would be supported if these lands were productive. No section can afford to be dependent for its supply of wood products on another section from 1,000 to 3,000 miles away.
More or less the same story is told of oil, coal, and other natural resources. Viscount Cowdray, the British oil king, in a letter to the Westminster Gazette, (in 1917) remarked :
According to American scientific estimates, there is only oil in sight in that great continent for another twenty-nine years. This situation is causing serious disquietude to the government of the United States.
Yet at the very time that Cowdray was uttering these words, the American government was using the money and authority of the American people to stimulate the export of such resources, and so hasten their exhaustion.
If the government policy of serving the minoritys foreign business by building ships for it, loaning it money to stimulate exports, subsidizing trade routes, negotiating monopolistic rate agreements with foreign shippers, raising tariff walls, enacting anti-dumping laws, Webb laws, Edge laws, Jones laws, promoting the establishment of foreign banks, trade-spying, and other peaceful activitiesall at the expense of the publicis of questionable value, what can be said of that policy when it is carried so far as to jeopardize the peace of the nation and the lives of its young men ?
For, government assistance in the expansion of our merchant marine has its corollary in the building of a great navy to protect our ships in their peaceful pursuits upon the high seas. Government encouragement of our foreign investments has its corollary in the protection of such investments against confiscation by the country in which the investment is made, as well as against the machinations of other powerful governments, committed to the protection of the investments of their nationals.
No part of the foreign trade programme is innocent. Business groups strong enough to command peaceful government service are also strong enough to command public diplomacy and public arms. Public officials who are won to the advocacy of reaching out for our proper place in world trade are also won to the advocacy of compelling countries like Mexico to observe their international obligations, as well as compelling countries like Japan to respect the Morganized Monroe Doctrinein other words, our right to coerce Mexico as we see fit, and for our interests.
The United States is not in danger of invasion, and has not been for generations. It is not in danger of war except as it chooses to perpetrate aggressions upon the weak, or except as it arouses the animosity of other business governments by its aggressive pursuit of imperialistic spoils.
As government service to Wall Streets foreign business carried America into the war against Germany, so a continuation of that policy is certain to carry it into future wars. There is no course to imperialistic greatness except through seas of blood, and the American people have no interest whatever in imperialistic greatness, or in any part of the programme of imperialism.
During the decades when America was without a merchant marine or foreign investments, the American people were as prosperous as the people of the countries boasting the largest merchant marines and the most valuable foreign investments. Foreign ships have always been glad to carry American cargoes, and to charge no more for the service than American ships. Foreign trade, within certain limits, is desirable, and there is no objection to American ships as such.
The point is that subsidized trade and ships are not worth the price, and that the trade of the vessel that requires a warship to protect it is a national calamity. Had there not been a handful of ships flying the American flag between 1915 and 1917, it would have been more difficult to find a pretext for involving America in the world war on the side of the Entente governments. So long as the imperialistic madness lasts, America would be safer and more prosperous without merchant ships than with them.
As to foreign investments, every adventuring dollar that calls back to the United States government to protect it is a traitor dollar. It would be a saner economic policy for the nation to buy out the foreign investments of its citizens, paying them dollar for dollar, and paying them expected profits besides, to the end of time, than to continue in the policy of aiding, encouraging, and protecting such investments.
One stroke of government service to the minority leads on to another and bolder stroke. At each stroke the minority collects another profit, while the majority paysthe protective tariffinflated export of goodsthe export of capitalthe building and operation of a merchant marinearmy and navy contractswar.
The foreign trade propaganda, like our war for democracy, is a national swindle whose success can be explained only by the almost complete control by the minority of all the great opinion-forming agencies of the country, and especially of the press. Had this control been any less complete, the simple fact that the rich favored the war would have been sufficient in the beginning to make the public quite certain that it was not for democracy. For our millionaire class was created by the desecration of democracy, and can be perpetuated only by its continued desecration.
The Congressional Library at Washington, and the archives of the Department of Justice, the records of courts and official bodies everywhere, are packed with sworn testimony proving that the accumulation of Americas great private fortunes was accomplished by the corruption of government, national, State, and local, and the habitual commission of crimes of almost every known character; that these fortunes are to-day maintained and expanded by similar practices; that the lives of our rich super-patriots, and the corporations which they represent, are a standing offense against every democratic principle; even that many of these gentlemen were in the past personally involved in operations peculiarly unpatriotic.
There is nothing either about the recent war or any previous one to indicate that Wall Street has ever had any more concern for the national welfare in war time than in peace time. Our richest fellow-citizens have made money out of the blood of their countrymen in all our wars. Big business supported the recent war because the war was in support of big business, and only for that reason. The great financiers and their banks gave the same support to the Liberty Loans as they were in the habit of giving to a bond issue of a railroad owned by themselves; it meant the same kind of satisfaction to them; the proceeds were intended to go into their pockets. During the war, it was treason to denounce the great profit-makers. That was logical, for the war was for their sake. It would have been quite impossible for President Wilson to have begun a war really intended to make the world safe for democracy without facing the united opposition of Wall Street.
The real enemy of America is not autocracy abroad. It is not kings or kaisers or czars. The real enemy of America is our rich fellow-citizen who is willing to plunge our country into war for his own selfish purposeshis political servant, without whose voluntary cooperation public war for private profit would be impossiblehis intellectual henchman, of the press, the pulpit, and the college, whose function is to identify the national honor with the business ambitions of a small but powerful minority.
1 In defense of government benevolence to the Transportation Trust, great stress has been laid upon the large number of small security-holders. But, unless a major share of the latters income is from railroad profits, his interest is rather that of the public than that of the trust; he loses more by high rates than he gains. As the history of railroad financing is one long story of the robbery of the small investor by the big insider, the railroad kings pretense of consideration for the small security-holder cannot be accepted as genuine.
2 Of the American ships for whose protection we quarreled with Germany, manyas those of the International Mercantile Marinebelonged to British-controlled corporations. An overwhelming number of the others became legally American only after the European war began. Previously, a majority of them had flown the British flag and had been built in England. Their owners changed them from British registry as a means to procuring the Protection of the American government. The British government permitted these vessels to be changed to the American flag in order to furnish the American government a convenient excuse for getting into a quarrel with Germany.
PROOF OF THE PUDDING
But what good came of it at last?
Quoth little Peterkin.
Why, that I cannot tell, said he ;
But twas a famous victory.
DISILLUSIONMENT must be final when one faces the results. One hundred thousand young Americans died on European battlefields and in army camps. Nearly as many more are permanently insane from the shocks and horrors of war. Half a million are mutilated for life. The direct money cost, disbursed by the government alone, was in excess of thirty billion dollarsand this was only a beginning. What have we to show for the price we pay, except our soaring living costs, our 21,000 new millionaires, our mutilated Constitution, our European entanglements, our permanently enlarged military and naval establishment, and a complete set of war laws ready to clap down upon the country, the moment it is decided that the thing shall be done again ?
What one fine promise did the noble democracies fulfill ? What one pernicious institution did they banish from the earth ? What one thing did they do for democracy ? Has America more or fewer friends abroad than it had in 1914 or 1916 ? Are we more united, as we were informed that we would be ? Is there less mutual fear and suspicion among us ? Are our personal liberties more or less secure than they were ? Is it easier for the masses to earn a living than before ? Are the social poles nearer together, or wider apart ? What one domestic evil has been corrected at home ?
A year after the German autocracy fell, our diplomats and our armed forces were meddling in a dozen foreign countries, breaking strikes here, denying the right of free assembly there, suppressing newspapers, acting as spies and informers for counter-revolutionists, overturning popular governments, seeking to return to power the very minions of autocracy whom we had proclaimed it our mission to overthrowat times, as at Archangel, driving citizens into the trenches to fight against their own peopleeverywhere making war upon every high principle for which we professed to fight.
At home, the Terror had been defended only as a war measure. But month after month passed, and no part of the repressive legislation had been repealed; the prisons remained crowded with objectors; the Postmaster-General continued to exercise his extraordinary powers. Although countless assurances had been given that Americans would get back their constitutional liberties, it became more and more evident that those who had set up the Terror intended to make it permanent.
The machinery created to make war on pro-Germanism was kept intact to make war on Bolshevism. As the German peril was played out, a new peril had to be invented. Bolshevism was any criticism of existing political or financial leadership, any dissatisfaction with existing tyranny, any effort of workmen towards higher wages, any movement among the masses for better conditions, any disposition towards reform, and especially any demand for a fulfillment of the war pledges. Bolshevism was painted as an even more horrible menace than Kaiserism, and in order to strike fear to the hearts of the people, Russian Bolshevism was lied about as recklessly as we had lied about Kaiserism.
So, unlawful arrests and imprisonments, and unlawful raids, did not come to an end. Espionage in the schools, colleges, and elsewhere, did not cease. We had our Federal, State, and local inquisitions into all forms of radicalism, and a flock of sedition laws for peace times. The Federal Secret Service was permanently enlarged. At the request of President Wilson, a peace-time Passport Law was enacted and, in conjunction with our allies, we established an international espionage system for the persecution of Bolshevists of every kind. The Attorney-General, while maneuvering for a Presidential nomination, proceeded periodically to discover and frustrate a series of bomb plots, just in time to save the country from the horrors of Bolshevism, and to use the peoples money to publish abroad his Don Quixote exploitsalthough he never succeeded in constructing a single plausible case, or bringing a single political bomb-thrower to justice. Never before in our history had the Federal government been so openly and militantly an ally of the employing class in industrial disputes. Never had it been so easy to procure the aid of the military to break a strike. The democracy which we enjoyed before the war was of purest ray serene, in comparison with the thing that faced us afterwards. The American people were given czarism and solemnly told it was Americanism.
To the official peace-time Terror was added an unofficial Terror, and the two worked in harmony. The same public leaders who had been most vociferous in the war for democracy now led the marching hosts in the war on Bolshevism. Patriotic organizations of every kind were kept intact to assist in the new war, and others were created for that purpose. The social, commercial, or religious organization that did not issue its diatribe against Bolshevism was not in good form. Men holding the highest positions in public life habitually gave voice to sentiments which could be interpreted only as an incitement to riot against any one dissenting from the blind, reactionary, brutal, and dangerous state of mind which the powerful were seeking to impose upon the nation under the name of patriotism.
As a direct consequence, in the year of its military triumph, America saw more civil strife, more domestic violence, more lawlessness, more intolerance of private opinion, more assaults upon common democracy, than in any other year within half a century. One-hundred-per-cent Americans went on a nation-wide, anti-Bolshevik shadow-hunt, conjuring up an enemy where there was nonebreaking up peaceful meetings, burning red literature, destroying property, sacking newspaper offices, maltreating defenseless and inoffensive persons. They ran no risk; for the Federal, State and local authorities gave them license and protection. The cowardice brewed in the fear propaganda of 1917 and 1918 was utilized in 1919, in the most dastardly series of attacks on civil liberties known in American history.
The excuse was that somebody wanted to overthrow the government by force. Since somebody wanted to overthrow the government by force, nobody must criticize the government or advocate change. Anybody who criticized the government must be put down by force. The government must put down the Constitution by force. An organization of ex-service men calling itself the American Legion assumed to set up a super-government in many communities, to censor public discussion, to break strikes, to abolish American liberties in the name of Americanism, and to exert a nation-wide influence in favor of black reaction. The only wonder is that these things did not of themselves produce a series of bomb plots having a more tangible basis than the imagination of the Attorney-General.
When before was the American republic so steeped in sin that it dared not look itself in the face ? While many sincere though thoughtless persons were drawn into this scheme of violence, there is no question whence the impulse for it emanated, nor what its motive. Its basic motive, undoubtedly, was to impose permanent restrictions upon expression, and so conceal the war swindles, to hold the public mind in subjection and prepare it again to accept military service on behalf of Wall Streets foreign ambitions, in the name of patriotism and the national honor.
The conservative reaction of 1919, like the democratic brain-storm of 1917, was artificially stimulatedby the same interests and for similar ends.
But, in spite of the peace-time Terror, the war swindle became more and more discernible to the naked eye. Abroad, it was impossible entirely to conceal the dangerous friction among our various allies, or the source of that frictionthe hungry desire of righteous governments to administer new territories for the benefit of the inhabitants. It was impossible to keep from us some knowledge of their sanctimonious atrocities, particularly the butcheries of England in India, Egypt, and Ireland; of Japan in Korea, as well as of our proteges, Rumania, Poland, Greece, and Finland, either within or without their own borders. It was also impossible to suppress the fresh evidence, brought to light from time to time by the Bolsheviki and others, of Allied plotting for vast territorial grabs in a general European war, years before Serbian officers murdered an Austrian prince. It was impossible to hide from us the fact that Britons were beginning to mention America as the next world perilaccording us the same position in the British scheme of things that Germany had held during the past generation, that Russia held for nearly a century, that France held before Russia, that Spain held before France. It was impossible to hide the fact that, even greater than the discrepancy between the Fourteen Points and the various peace treaties, was the discrepancy between the best promises written into these documents and the performances that we proceeded to stage.
Weak nations were liberated, only to be used as pawns in the same old game. Mandatories were conquered with blood and iron, only to be fenced off for economic exploitation. Offensive and defensive alliances continued to be made. Diplomacy was never more secret nor sinister. Aggression was the order of the day. The new governments which we set up turned out to be, in notable instances, less restrained in autocracy and in egoistic madness than the great empires of which they had formerly been a part. The folly of championing with the sword the irredentism of any nation became increasingly evident. All of us proceeded to prepare to make use in the next war of all weapons, however frightful, developed by Germans as well as by our allies and ourselves. Never did the British imperialistic machine work at such high pressure, and the same may be said of the imperialistic machines of France, Japan, and even of ourselves.
In a twelvemonth we had sowed more seeds of new wars than Germany had sowed in all her history. The League of Nations was laughed to scorn by the Supreme Council, which dwindled to two premiers, who happened to hold the strings of the greatest military establishments in Europe. The old international law was made a mockery, and in its place was set up the authority of two politicans. The democratic and glorious France, which we had idealized during the fighting, was revealed as being in the grip of the most aggressive militarism of modern times.
Not the least damning are the words of the utter democrat himself, in his efforts to explain to the Senate and the country the settlement which he brought back from the European mire. Although the purpose of these explanations was to assure the nation that the Versailles Treaty realized the Presidents peace pledges, and to reassure it of the validity of the entire body of the war propaganda, and although, in the effort to carry out this purpose, the Presidents explanations became a mass of misstatements as to what was contained in the treaty, yet within these explanations themselves appear a series of admissions and contradictions which are themselves a confession of the monumental imposture.
While assuring his audiences that his settlement provided for general disarmament and would end war, he was urging upon Congress a bill to create a standing army of 576,000 mena standing army only 300,000 smaller than that of Germany at the beginning of the war.
While assuring his audiences that when the treaty is accepted men in khaki will not have to cross the seas again, he was awaiting a politically favorable moment in which to ask Congress to approve an American mandatory in Turkey, which would require a new army to be sent immediately to Europe.
While solemnly declaring America incapable of violating the political independence of any other nation, he was announcing that American troops would remain indefinitely in Russia.
While informing the public that the essential object of the treaty is to establish the independence of, and protect, the weak peoples of the world, he was threatening Mexico with a radical change of policy, which could have meant nothing less than another invasion of that country.
While informing us that only the free peoples of the world can join the League of Nations, he was confessing that a certain charter member (France) was under the control of its general staff at the Conference, that they were dominated by the military machine that they had created, nominally for their own defense, but really, whether they willed it or not, for the provocation of war.
While protesting that the members of his league were drawn together by a common passion for the political independence and the territorial integrity of weak nations, he was admitting that at least one of the most important of the number had to be permitted to transgress the political independence and territorial integrity of a defenseless neighbor, as a bribe to induce it to enter his league.
In one speech we find him proclaiming that, There can be cited no instance where these governments [the governments of England, France, Japan, etc.] have been dishonorable; yet within the week we find him describing their aggressions upon China, and characterizing them as a very serious impairment of the territorial integrity and a very serious interference with the political independence of that great political kingdom.
In one speech we find him asserting that the representatives of France and England had promised him to return to China the exceptional rights which they had extorted from that countrygiving pledges similar to the alleged pledge of Japan to return Shantung; three days later we find him saying that no such promise had been made. In one breath we find him acknowledging that his treaty would subject Germany to a punitive indemnity; in the next breath we find him denying it. On one day we find him suggesting that the German commercial classes wanted war for commercial reasons; on the following day we find him asserting that the German commercial classes wanted to avoid war for commercial reasons. To one audience he portrayed our proposed after-war union with our allies, as a moral union; to another audience he portrayed it as eminently a financial union. On one day he averred that he consented to participate upon the Reparations Commission only to assist our dear allies; on another day he acknowledged that his purpose was to serve what he termed the industrial interests of the United States. At times he proclaimed in the most positive terms that his peace pledges had been completely realized at Paris; at other times he confessed that they had not been realized, and offered excuses of various kind.
While asserting that the League of Nations makes every agreement of every kind invalid, he was confessing that one of its primary objects was to validate and enforce a peace based upon the multifarious agreements written into the secret treaties.
In admitting that in making peace he was guided by the secret treaties, he defended the action on the ground that the war was fought partly to vindicate the sacredness of treaties; pretending that his obligation to observe these secret robber bargains was greater than his obligation to insist upon the conditions of a permanent and democratic and just peace, which he had promised his own people and the world, and which the makers of the secret treaties had solemnly agreed to abide by.
Although, in his Memorial Day address at Paris (1919) he asserted : Private counsels of statesmen cannot now and cannot hereafter determine the destinies of nations; and although, at Oakland, California (Sept. 18, 1919) he declared : From this time forth, all the world is going to know what all the agreements between nations are. It is going to know, not their general character merely, but their exact language and contents; yet in the intervening period he refused the Senate information upon which his Paris decisions were based; mentioned the intimacies of the Peace Conference, and the indiscretion of talking about them, even to the treaty-ratifying body; declared it a mistake to redebate here [with the Senate Foreign Relations Committee] the fundamental questions that we debated at Paris; refused data on the ground that it was agreed at Paris that they should be confidential; acknowledged possession of international secrets which he declined to share even with the Senate; confessed to the view that his Paris secrets should never become public property (Conference with Senate Foreign Relations Committee, at White House, Aug. 19, 1919); brought out more and more clearly the facts that the treaty itself was but a skeleton of secret understandings known only to five old men who whispered together at Paris; that he was attempting to bind America to courses of action which would be revealed to the country only after they had become accomplished facts; that he had entered into far-reaching engagements with foreign governments to use the money and the blood of the American people in secret enterprises over which neither the American people nor their representatives in Congress would ever exercise choice or dominion; that his projected League of Nations was not intended to be under the control of peoples or of national legislatures, but that it was to be an instrument of executives, as secret, irresponsible, and autocratic as the Peace Conference itself.
He asserted that he knew nothing of the secret treaties until after he arrived at Paris, although they had been published in Europe and in America, debated in the Parliaments of our allies and acknowledged by Allied statesmen. He asserted that he did not know, until we went to war, that Germany was not the only country that maintained a secret service, although he himself maintained a secret service of precisely the same sort as Germanys. He asserted that Japan had promised to return the sovereignty of Shantung, without qualification, although Japanese statesmen had already announced that there would be qualifications. Japan has kept her engagements, he declared, although he could not be ignorant of the history of the strangling of Korea.
In declaring the unwisdom of defining the Monroe Doctrine in the covenant of the League because I do not know how soon we may wish to extend it, he confessed himself capable of the trickery which extending the Monroe Doctrine would involve.
In conceding that America was not directly attacked, he acknowledged as fraudulent the proposition upon which he had asked Congress to declare war, that the recent course of the Imperial German Government is nothing less than war against the government and people of the United States.
In admitting that America was not immediately in danger, he branded as a hoax the entire scare propaganda, for which he himself had struck the keynote. In confessing that This was a commercial and industrial war, not a political war, he discarded in a word the theory of a German world peril, upon which his own high professions of a war against autocracy were based.
In suggesting that he waited on the American people a long time before he asked Congress to declare war, he pleaded guilty to practicing deception upon the American people during the critical weeks of February and March, 1917.
In reiterating what he told us at the beginning of the war, that the German people did not choose war and did not want war, he condemned the punishment-for-wrong-done theory, upon which his settlement was based, and which elsewhere he sought to justify. In urging ratification on financial and commercial grounds, he confessed to charlatanry in all his pretenses of an unselfish war.
Mr. Walsh, do you think that any considerable number of people, when they read my declarations, thought that these settlements were to be made at some particular place, automatically, immediately ? (President Wilson to Frank P. Walsh, Paris, June 11, 1919, as reported to the Senate Foreign Relations Committee by Messrs. Walsh and Dunne.)
What is this but an admission that the promises upon which 100,000 American youths gave up their lives were never intended to be carried out ?
So, Wilsons own explanations of his settlement, as given to the Senate and in his treaty tour, become the final word against Wilson himself, against Wilsons war propaganda, against Wilsons treaties, against Wilsons war.
The wisest and best men honestly fail to reach their highest aims, honestly make mistakes, honestly change their minds, honestly reverse themselves. But the inconsistencies of Woodrow Wilson cannot be explained on any theory that includes an assumption of honesty. Apologists for the individual may still argue that Wilson was forced to reverse himself, forced to break his promises, forced against his will to ask for a declaration of war, forced to consent to an imperialistic peace, forced by the invisible government. Were there no other answer it would be enough to point to the fact that Wilson always had the alternative of resigning his office. The theory, indeed, reveals a woeful misunderstanding of the operations of the so-called invisible government. The great force of the latter is exerted before election, not afterwards. Had Wilson idealism been anything but verbal, he would not have been nominated and elected. The great myth of the world war was Wilson idealism. Our noble President was simply a one hundred per cent. American politician. The secret of Wilson is hypocrisy.
By the close of 1919, it had become more or less respectable to confess disillusionment as to Wilson, and especially as to Wilsons peace. We may have become disillusioned regarding Wilson, but how about ourselves ? Why were we so long in finding out that Wilson and perfection are not synonymous terms ?
What happened from 1917 on would have been impossible had not the leaders of the people generally been of much the same character as Wilson, and willing to serve the same ends by similar means. Had the convictions of the majority of Senators and Representatives gone any deeper than regard for their own immediate political fortunes, they would not have yielded the day on so many important points, upon which in the beginning they were opposed to the President. Although the President was more willing to plunge the country into war, readier to go against the peace spirit of the country, and bolder in duplicity and contempt for the laws of the land, the members of the national law-making body did, in the endwith a few honorable exceptionsswallow the Wilson programme, tolerate the Wilson usurpations, and connive at the Wilson duplicities. Every Wilson war lie was echoed with becoming sanctity by Wilsons leading political opponents.
Senatorial opposition to the Wilson settlement, insofar as it saved the country from financial, political, and military deals to which the President attempted to commit us, and insofar as it operated to explode the myth of Allied and Presidential perfection, was a real service. The service, however, was an incident of party politics. For it was almost universally conceded that, had the Presidents head not been turned by adulation, had he continued to employ ordinary political sagacity; once the Republican party had won the election of 1918, instead of piling up slights and insults, had he permitted it to go through the motions of participating in the drafting of the treaties, had he been willing to share the honor, his work would have been promptly ratified, without the dotting of an i or the crossing of a t.
Notwithstanding the iniquity, one cannot refrain from a passing regret that the Senate did not at once ratify the Wilson treaties, thus yielding the final item of his war programme, just as it had yielded every other item of importance from the beginning. For there will always remain some simple persons to contend that Senatorial perversity was the one thing that prevented the whole of the beautiful edifice of world peace and democracy, promised by Wilson, from being realized then and there.
Such persons really have little to complain of. Smarting under a thousand indignities, and with an eye upon the 1920 election, the Republicans blocked ratification, pledged themselves to withdraw from European entanglements, promised immediate peace, won the election on such pledgesonly to project the country again into the European mess as deeply as they dared.
The League of Nations under that name must forever remain anathema, but under other forms we join in the imperialistic schemes for which the League was set up. The Armenian mandate and the French-British-American special alliance are shelved; from that much the Republican party saved usfor the time being, at least. Otherwise, it did not right a single wrong, or, in any important particular, attempt to change the course of the country. The Wilson policy towards reparations, mandatories, territorial disputes, the China Consortium, Shantung, Russia, alien property, railroads, shipping, dye tariffs, the army and navy, passports, foreign trade, anti-dumping, Haiti, Nicaragua, Cuba, Mexico, oil, Federal espionage, our European debtors, we take up where Wilson left off, and carry forward from there. Even in his speeches, Wilsons successor can do little else than feebly echo Wilson. The result of the great and solemn referendum was that the public, while believing it was repudiating the Wilson policies, was only putting them into other hands quite as willing to carry them out. The election of 1920 was a fraud of the same character as that of 1916, though of lesser magnitude.
By the middle of 1920, it was no longer Bolshevism to criticize the Wilson peace; it was still Bolshevism to question the validity of the Wilson war. So the saviors of our country, in the Republican group in the Senate, continued to glorify the Wilson war while condemning the Wilson peace, and many of the rest of us, sheep-like, followed their example. But had the major premises of the war propaganda been validthe perfection of Wilson and the purity of our alliesthe settlement could not have been other than a pure and perfect one. It is impossible now to offer any criticism of the Wilson settlement, or of Wilson, or of any of the post-war conditions, without tearing down some essential part of the theory upon which the war was put through. But the invalidity of that theory was as demonstrable before the war as afterwards. There was no occasion for the experiment that we made. No one who joined in the Stand-Behind-the-President ! cry, or participated in the purity-versus-depravity nonsense, has a right to cast a stone at Wilson. He got what he bargained for. The Liberal patriots who raised their hands in holy horror at the peace-time Terror got what they bargained for. The now-that-were-in patriots got what they bargained for. The Labor patriots of the American Federation of Labor got what they bargained for. The anti-union drive of the Garys and the government, like the lawless war on Bolshevism, was an almost certain aftermath of a war for the enrichment of the Garys, although that war would hardly have been possible without the voluntary cooperation of the Gomperses.
Certain liberal editors have sought to excuse our war lies on the ground that they were necessary for victory. But had Americas cause been just, there would have been no need to bolster it up with lies. Even had this argument been valid once, it would long ago have lost its force. Nevertheless, the movement to keep alive the memory of our dead in Europe also became a movement to keep alive the war lies, and forever hide the war swindles. Let us face the truth.
The truth is that there was not a particle of democracy about our war, either in the way it was achieved, in the way it was conducted, in the distribution of its burdens, in the fighting organization itself, in its real motives, in the manner of making peace, or in its fruits, either at home or abroad; that we quarreled with Germany, went to war, and negotiated peace, purely in the interest and at the direction of high finance, and at all stages to the prejudice of the general welfare; that no American died for his country in Europe in 1917, 1918, or 1919, since there was no occasion for any American to die for his country, either in Europe or elsewhere.
A great truth is that we have liedwe have indulged in an orgy of lying. We have not been honest even with our own allies. No American could honestly ask for freedom for Ireland on any ground of principle, and put the soft pedal on Haiti. No one could consistently criticize the Shantung award and keep still about Nicaragua. America has nothing to be afraid of except its own conscience, and has not had for a long time. The truth is that we have given the world a spectacle of white-livered hysteria that will require years of self-respecting conduct to live down.
For the mere money cost of our war, every person who works for a living in America, every bread-winner, every propertyless family, could have been provided with a modern and comfortable home, free of liability. Instead, we have what are called Liberty Bonds. We were informed that they were a good investment, but that was not enough; they were forced upon us. We paid our good money for them. We were then taxed to pay for them again. Our government then proceeded to confiscate a large share of their value, by printing paper money in greatly increased quantities. At the end of the war we could sell our bonds for something less than half the goods the same money would have bought before. But whether we sell our bonds or whether we keep them, we shall continue paying for themover and over again; in taxes and in swollen prices. By the simple trick of inflation, the government confiscates a part of the wages of every workman; and by its financial operations turns the money over to the multimillionaire owners of our essential industries.
Instead of gaining, we have everywhere lost. Our Liberty Bonds turn out to be a gold brick from every point of view.
The case against the war is also the case against existing leaders of the people in every walk of life, against big business patriotism, against Wall Street democracy, against the press as it is, against a trust-in-the-President form of government, against a social system that could permit the great American swindle of 1916-1919.
There remains a single chance for America to derive a benefit from the war just past. It is to perceive the lesson and act upon it. It is for common folks to recognize the real character of past events, and so take measures to prevent a recurrence with probably more costly results.
1 In all, more than 71,000 of our soldiers and sailors have been discharged as mentally disabled, and more than 38,000 as tubercular.American Legion Weekly, January, 1921. In a letter to Senator Ashurst, during the same month, Surgeon-General Cummings estimated that the sick and insane men, whose afflictions can be charged to service in the war, were increasing at the rate of 1000 per month. According to a report of the National Disabled Soldiers League, at the beginning of 1921, the number of disabled soldiers was 641,900.
2 What matters the error or the incapacity of a single man compared with the incapacity and the error of the entire nation which glorified him ? I borrow these words from Martin Luis Guzman, who applied them not to Woodrow Wilson and the American people, but to Porfirio Diaz and Mexico, in a little book, The Complaint of Mexico.
3 Under the name of a Conference for the Limitation of Armaments, we stage at Washington a parley of governments reminiscent of the conferences of the powers of Europe so frequently held in the years before the outbreak of the world war. While Chinas finish is being duly arranged, we are positively assured that, as a result of the conference, armaments will be reduced all around. At the same time the still small voice of a cabinet member is informing us : Plans now initiated for preparation far national defense contemplate a more complete state of Preparedness than at any previous period in the peace-time history of our country. (Annual report of the Secretary of War, Dec., 1921.)
THE programme that would preserve the peace of America, promote its prosperity, and serve democracy at home and abroad, would have to include an honest application of principles by which President Wilson professed to be guided in sending American armies to European battlefields.
For international application, the cardinal principles are self-determination and equality of sovereignty. Before there could be any question of fighting to compel the observance of these fundamentals by others, we would first have to observe them ourselves, as well as to heal, as far as may be, the scars that we have cut in trampling upon them in the past. In other words, we would have to purge ourselves with a course of repudiation, withdrawal, and reparation.
1. Repudiation. Formal repudiation of every American and other policy in foreign affairs that conflicts with the principles of self-determination and equality of sovereignty.
Repudiation of the policy of employing diplomatic coercion or armed intervention on behalf of business investments in any country, whether under the name of protecting American lives and property, preserving order, or any other guise.
Repudiation of dollar diplomacy in any form. Repudiation of the Platt Amendment, asserting a right to intervention in Cuba.
Repeal of the legislation empowering the President to proclaim an arms embargo, as a means to assisting or hindering one side or another in an internal dispute in Latin America, or countries elsewhere.
Repudiation of the Lansing-Ishii Agreement, recognizing special interests of Japan in China for considerations kept secret.
Repudiation of the imperialistic peace treaties, and all special alliances with imperialistic governments.
Renunciation of the Nicaraguan Canal Convention, the Haitian and Santo Domingan conventions, and every other international agreement procured under duress from our neighbors.
Renunciation of the Monroe Doctrine, our time-honored excuse for a denial of full sovereignty to Latin American states. In practice we have not fully enforced observance of the Monroe Doctrine upon others. Much less have we observed it ourselves. We permitted England to take and keep Belize. With the existing colonies or dependencies of any European power we have not interfered and shall not interfere. But in 1898, we stripped Spain of all her colonies in this part of the world, and in 1916 we coerced Denmark into selling us the Virgin Islands. Our policy with regard to Europe ... is not to interfere in the internal concerns of any of its powers. Yet we projected America into the middle of European affairs in 1917.
In abandoning the Monroe Doctrine, we would abandon a policy that long ago outlived whatever usefulness it ever had as a protector of the weak, or as a means for our own defense; which long ago became a scrap of paper in our hands, and whose only present use is as a cloak for aggression.
2. Withdrawal. Immediate and unconditional withdrawal of all American military and naval forces from all countries not a part of the United States.
Withdrawal from Nicaragua, Haiti, Santo Domingo, and Cuba.
Immediate withdrawal from all protectorates, official and unofficial. Withdrawal of American collectors from all foreign customhouses. Withdrawal of all support of Latin American dictators whom we have set up, or who owe their tenure to our favor. Abandonment of all measures inimical to popular movements in neighboring countries requiring revolution for their success.
Withdrawal of all military forces from Europe and Asia. Immediate and complete independence to Filipinos, Porto Ricans, and Virgin Islanders.
3. Reparation. Full reparation to all countries, such as Nicaragua and Honduras, whom we have assisted into bankruptcy by compelling them to acknowledge exorbitant claims of our bankers, having no just foundation.
Restoration of Guantanamo to Cuba, and the Corn Islands and other territory taken from Nicaragua. Restoration of full sovereignty to Cuba, Nicaragua, Haiti, Santo Domingo, and Honduras.
Adequate reparation to Haiti, Santo Domingo, and Nicaragua for injuries done to their citizens in our wars of conquest.
Restoration of all indemnities to our late enemies, including merchant ships appropriated in American harbors, and property confiscated on land.
Satisfactory reparation and apologies to all neutral nations against whom we committed injuries in violation of international law during the late war.
Having freed the subject peoples under our heel, having washed our hands of the blood of our weaker brethren, having righted every international wrong that we have committed, so far as that is possible; having taken the fear from the hearts of our nearest neighbors, we may consider ourselves competent thenand only thento offer proposals to other nations, looking toward the maintenance of the peace of the world, and the safety of democracy.
Governments which really cared nothing for democracy, or international justice, or peace, might not take kindly to our proposals; they would know that they were sincere. All governments care for peace of a sort; all wish to avoid great wars if they can have their way without them. But no government devoted to the interests of a minority which fattens upon the profits of aggression wishes to see established the bases of permanent world peace. They do not wish to be deprived of the right to make public war for private profit.
But every government not devoted to imperialism, or under the thumb of an imperialistic government, or in immediate terror of reprisals from imperialistic governments, would be interested in our proposals and willing to join a genuine peace league. They would have everything to gain and nothing to lose.
Such a league would have a larger charter membership than the spurious league which President Wilson brought back from Versailles. At the same time it would not at once be a league of all nations. For the noble democracies, our late comrades at arms, would be conspicuous by their absenceunless our magnificent example should lead to the downfall of imperialism everywhere.
It is impossible to exaggerate the probable effect throughout the world of such an example. The downfall of Russian imperialism caused all imperialistic governments to tremble in their shoes. Either the restoration of Russian imperialism or the partition of that country among imperialistic governments was everywhere deemed essential to the safety of imperialistic civilization. Yet the lesson of Americas renunciation would be infinitely clearer and more inspiring. Russian imperialism crumbled under the stress of war, under circumstances in which the issue was clouded, at a time when the new regime was subject to misinterpretation, hostile prejudice, and attack, from which we in America would be comparatively free.
We have talked much and we have not delivered the goods. The world will never again credit our high pretensions, until they are proven by deeds. It is easy to believe that one magnificent act of renunciation would nerve a suffering world to deliver the death-blow to the cause of its travail.
And if it did not, what then ? Would it mean danger or disaster for ourselves ? Would we stand in peril of our noble allies, the only remaining governments in the world either interested in aggression or in a position to perpetrate aggressions ?
These governments will have their hands overfull for yearsand probably as long as they lastin enforcing the conditions of settlement upon their late enemies, in carrying out other schemes nearer home, and in keeping their own people in subjection at the same time. The withdrawal of our support would vastly limit their capabilities for aggression. If, with our support, a supreme effort to subjugate Russia was impracticable, as Entente statesmen admittedRussia, impoverished by war, weakened by revolution and counter-revolution, disorganized, blockaded, geographically within easy reach, her ports in their possession and their armies upon her soilhow much more impracticable would it be for these governments to attempt to send any force across the Atlantic in an effort to dictate in our affairs !
Our imperialistic allies will continue to perpetrate aggressions in Europe, Asia, and Africa, in proportion to the practicability of the undertakings. They are the world peril, they and their system, a far greater peril to the world than the Kaiser ever succeeded in becomingonly because they are stronger than he and his Junkers ever were or had a chance to be.
So long as these governments last, the world cannot be made safe for democracy, especially that part of the world practically within their reach. Yet I do not advocate that we attack this peril as we attacked the Kaiser. The struggle against autocracy and imperialism is essentially an internal one. The autocracy, militarism, and imperialism of a given country can best be dealt with by the democratic forces within that country. Imperialistic governments may, on occasion, overthrow imperialistic governments, as in the present era. But the sum of the worlds imperialism is not decreased thereby. Autocracy, militarism and imperialism thrive on external hostilities. So long as the democratic forces within imperialistic countries are not strong enough to deal with their own governments, the death-blow to imperialism cannot be delivered, and a part of the world will remain in danger.
I would not advocate an effort of America against this peril, even to the extent of attempting to save the next intended victims of European and Asiatic imperialism in Europe, Asia, or Africa. But in the western hemisphere something of the kind might wisely be done.
In the past, the independent states of the western hemisphere have owed their comparative immunity from European aggression more to distance and their own strength than to the protection of the Monroe Doctrine. They had been under European rule, and with their own strength had cast it off. The Monroe Doctrine pronounced against their reconquest, which was under consideration by the Holy Alliance. Nevertheless, the credit for saving them from new wars at that time cannot be claimed for the Monroe Doctrine. For the withdrawal of England from the Holy Alliance, which happened before the Monroe Doctrine appeared, was sufficient to cause the abandonment of the scheme as impracticable.
No one can say that, if the Monroe Doctrine had not been promulgated, the whole of the Americas, outside of the United States, would have came into the possession of European powers. Nor can it be said that, had they come into the possession of European powers, such possession would now constitute a peril to the independence, the territorial integrity, or the institutions of the United States. Is Canada a peril to this country ?
Although, in our national pride, we have greatly exaggerated the effect of the Monroe Doctrine upon the relations between Europe and the western hemisphere, it has not been wholly without influence. What would be the effect of its formal renunciation ? Would our late alliesone or more of themrush in and seize Mexico and other Latin American states ?
Mexico is the issue upon which the policy of imperialism may next be tested in the western hemisphere. British gentlemen, like American millionaires, have properties, claims, and ambitions, which they are anxious shall be made good by the strong arm of the United States government. Let us suppose that America should refuse to use either its arms or its diplomacy on behalf of British interestsshould unreservedly recognize the sovereignty of Mexico, as it has repeatedly promised to doshould concede the full right of Mexico to tax, or otherwise control, foreign property within her borders, in accordance with her own ideas of the public welfarewould Britain then proceed to enforce her rights in Mexico with British arms ? I grant that England or any other imperialistic government is capable, morally, of entering upon a war of conquest upon Mexico. Every imperialistic government everywhere stands ready to perpetrate a war of conquest anywhere, the moment that it appears practicable to do so. But would it be practicable for England to invade Mexico ? Certainly not nearly as practicable for England as for the United States. That is a reason why England is quite willing for America to attend to her interests there. Why not wait and see if England would consider it practicable to enter upon a war of conquest upon Mexico, before entering upon such an enterprise on her behalf ourselves ?
The Mexicans would rather have us do that, feeling that they would be safer without the protection of the Monroe Doctrine than with it. Latin Americans generally, would be most happy to have us withdraw from them the protection of our Monroe Doctrine, and only because they have reason to consider it more of a menace than a protection. They know the history of American aggressionand understand its significancebetter than do the American people themselves.
Should the United States formally renounce the Monroe Doctrine, and recognize, in its stead, what has sometimes been called the Carranza Doctrinewhich places foreigners on the same level with citizens, denying to the former the right to call upon their home governments to intervene on behalf of their business enterprisesthe action would be hailed with rejoicing throughout Latin America; the fear and hatred felt generally for Americans would disappear with the removal of its cause; and it is certain that the Carranza Doctrine would be adopted generally by Latin American countries. In which case it is probable that the eastern hemisphere would be forced, by circumstances already mentioned, to accept the dictum of the western hemisphere, and refrain from pressing any imperialistic claims in this part of the world.
But supposing that it should not ? The people of the United States would then have to determine how far they would go in standing with their near neighbors against European aggression.
There would be several courses open to us. First, we could give military assistance of a strictly defensive character, such as the original Monroe Doctrine contemplated, and such as was contemplated for all threatened states in Wilsons original scheme for a genuine League of Nations. If we must have a war over Mexico of some kind, why not fight to save Mexico from being grabbed by others, instead of grabbing Mexico ourselves ?
Second, if we did not think it wise to fight, we could stand aside, selling our neighbors the arms with which to protect themselvesour right as a neutral nationleaving the issue to be determined between them and their enemies.
A third possible course would be to use our good offices, and a small portion of our great wealth, if need be, to settle any immediate claims of a pressing nature that might seem to threaten the peace of the western hemisphere.
We paid out more money for our part in the European war than the combined investments of all Europeans in all the independent states of Latin America. One of our reasons for doing this, we said, was to save small states from the peril of aggression. We did not save small states from such peril. A far wiser policy, and a far less expensive oneat least, so far as the western hemisphere is concernedwould have been to guarantee, with the Treasury of the United States, the foreign debt of all our neighbors who happened to be in financial trouble, to adjust all European claims, and to put every state on its feet financially, even if we never received a penny of our money back.
An objection to this will be that some of these countries are in the hands of corrupt and inefficient governments, which would continue to contract European obligations and would soon be found again in financial difficulties. An answer is that, once an adjustment were made, coupled with the declaration that henceforth no debts were to be collected by governmental intervention, future risks would not be taken with the expectation of making them good by such means.
Another answer is that our present policy is largely responsible for the insolvency of Latin American governments, their inefficiency and corruption. In order to be in a position always to assert American supremacy for the sake of selfish interests, we have created the fiction that Latin Americans are unfit to look after their own affairs, and are incapable of self-government. At the same time we ourselves have forced Latin American states into bankruptcy. We have set up dictators who betrayed their own people. We have furnished Latin America with the foreign peril that everywhere plays into the hands of autocracy. We supported the counter-revolutions that have kept Mexico in turmoil. Our own citizens and our own government are responsible for the very danger to life and property that we are asked to end by intervention.
It is probable that Mexico, if left to herself, would ultimately pay all just claims of foreigners. But the demands of foreign capitalists, intent on getting away with Mexicos natural resources without adequate return to the country, ought not to be met. The great oil corporations would have the American people war upon the Mexican people in order to save the oil deposits from what they term confiscation by the Mexican government. What an unterrified Mexican government would do with the remaining oil resources it is impossible to say. We will suppose that it would confiscate them. Then let it confiscate them. The interests of the American people are not the interests of the oil corporations in this matter. They are, rather, the interests of the Mexican people. Perhaps some American would really suffer. But the Americans who are interested in the exploitation of Mexican oil are, for the most part, millionaires with great holdings elsewhere. Were they dispossessed in Mexico, without a dollar of compensation, they would not forego any luxury, nor would their families starve. There may be foreign rights in Mexico, but how about the rights of Mexicans ? Public undertakings on a large scale, serviceable to the Mexican nation, must wait until there are funds to prosecute them. Mexico has both the legal and the moral right to tax such funds from the rich holdings in her natural resources. The vested interests of a minority, whether native or foreign, cannot stand against the needs of the great majority.
America needs a new patriotisma patriotism that is able to see our neighbors viewpoint, as well as our own; that is willing to accord genuine equality of rights, regardless of relative might; that dares to look our own faults in the face, in order that they may be rectified.
But we cannot make democracy safe abroad, not even from ourselves, until we have first made democracy safe at home. It is not within the scope of this book to offer any detailed suggestions for making democracy safe at home. When the eyes of the American masses are opened to the real motives of their war and the fruits of their peace, they will then begin to see what they must do. Circumstances will have to determine how rapidly progress may be made, as well as what means may be most effectively employed to make it.
It may be suggested, however, that those Americans whose professions of love for their Constitution are genuine cannot do less than to press for its restoration, and the righting, so far as possible, of the domestic wrongs that have been accomplished by its profanation. They will at least insist that every imprisoned victim of any war law be set free, also all victims of army courts-martial. They will cast about for a means of defending their Constitution against the President and the Supreme Court. Since, in our foreign policy, we remain subject to a Stand-behind-the-President-trust-in-the-President systemto a scheme of things that holds us at the mercy of the secret whims, blunders, treacheries, and machinations of one manthey will seek to take from the President the power which, for that matter, the framers of the Constitution never intended that he should have, to make war practically at will; they will try to accomplish at home the thing that Woodrow Wilson declared to be a war aim of the United States : The destruction of every arbitrary power anywhere that can separately, secretly, and of its single choice, disturb the peace of the world.
Again, all Americans, whose professions of love for democracy are sincere, will at least clamor for the immediate and absolute abolition of secret diplomacy, and of conscription, for the obliteration of existing class distinctions in the armed forces, for the abolition of the present barbarous system of military justicereformed though it be. They will perhaps press for a prohibition of the use of the armed forces outside the territory or territorial waters, except after referendum. Certainly they will demand that the entire cost of the war be collected from the interests that profited by it and furnished the motive for it. They will even seek to make an end of government service to the big business minority, whether in foreign or domestic affairs.
The majority will have to gain actual control of the public business in every department thereof. But to hope to gain such control and keep it will be futile so long as a minority retains possession of the means of information, and uses it to deceive the others for its own selfish and secret purposes. A simple observance of the Constitution would preclude the imprisonment of persons for expressing their views upon public affairs, but real freedom of speech and of the press cannot be restored without fundamental economic changes.
So long as a handful of men in Wall Street control the credit and industrial processes of the country, they will continue to control the press, the government, and, by deception, the people. They will not only compel the public to work for them in peace, but to fight for them in war.
Democracy is not a reality in America. America is a financial oligarchy, in which the President is the willing, though pretendedly reluctant, servant of the great financial powers.
The events of the past half-dozen years have demonstrated not only the moral bankruptcy of the political and intellectual leaders that capitalism has given the world, but the inability of capitalism to save the world from periodic disaster. Imperialism is simply a phase of capitalism. Big business government must go, but big business government will not go until big business goes. Only the institution of a new social order, based upon economic equality, will save the world from more and more wars for business.