supplant the dictatorship of private banking institutions by a reorganization that should provide funds available to meet extraordinary demands and a currency that would expand and contract automatically. Early in 1914 the President called upon Congress to continue its labours of reform by the regula- tion of the trusts. After long debate and warm opposition, his appeal was answered by the passing of the Federal Trade Com- mission Act and the Clayton Anti-trust Act. The latter, be- sides perfecting anti-trust legislation in several ways, met the demands of labour by declaring that labour was not a commod- ity, by prohibiting injunctions in labour disputes unless neces- sary to prevent irreparable injury, and by proclaiming that strikes and boycotts were not violations of Federal law. It further exempted labour associations from the anti-trust laws.
Mr. Wilson's policy of domestic social reform had thus been developed with surprising legislative success during the first year of his administration. His foreign policy was not so clear- cut and aroused little enthusiasm. It was characterized by an evident desire to concede the rights of other nations to the limit and to avoid any stressing of the power of the United States for the material advantage of its citizens. Definite steps were taken to prepare the Filipinos for self-government. Pressure was brought to bear upon the California state Government to mitigate the severity of its anti-Japanese legislation. The " dollar diplomacy " of the preceding administration was repudiated and American bankers effectively discouraged from participating in the international Chinese loans. As a result of the President's personal demand, Congress repealed the law exempting American coastwise shipping from Panama Canal tolls. Mr. Wilson, however, failed to secure the Senate's rati- fication of a treaty with Colombia, which contained a virtual apology on the part of the United States and an offer to pay $25,000,000 as reparation for the alleged grievances of Colombia in connexion with the establishment of Panama as an independ- ent country. In the Caribbean, Mr. Wilson's policy differed in principle rather than practice from that of his predecessors; in Nicaragua and Haiti the customs were taken over by U.S. officials. By a treaty signed Sept. 16 1915, a virtual protecto- rate of Haiti was assumed ; in Santo Domingo the precautionary visits of American cruisers were followed in the summer of 1916 by the landing of marines, and in Nov. of that year by the proc- lamation of a military government under American auspices.
Mr. Wilson's Mexican policy aroused heated criticism. Fol- lowing the accession of Gen. Huerta to power and the Presi- dent's failure to arrange a settlement providing for his elimina- tion as dictator, Mr. Wilson resigned himself to what he called a policy of " watchful waiting." Conditions in Mexico were anarchical, and intervention was strongly urged by both Ameri- can and European commercial interests. To formal interven- tion the President was definitely opposed, but in April 1914 he was compelled to authorize the occupation of Vera Cruz in retaliation for affronts to American blue-jackets. The proffered mediation of Argentina, Brazil and Chile he gladly accepted, but the resulting protocol of Niagara Falls (June 24 1914) did not provide a basis for peace. Although Huerta fled from Mexico in July, the country continued to be torn by rival factions. American troops were withdrawn from Vera Cruz in Nov. 1914, but it was not until Oct. 1915 that the Govern- ment of Carranza was recognized by Mr. Wilson, in company with eight South and Central American Governments. Further complications ensued. The raid into American territory of Gen. Villa, March 9 1916, led Mr. Wilson to authorize a puni- tive expedition, which soon aroused the protests of Carranza. In May and June the President mobilized the National Guard and sent a force of about 100,000 to patrol the Mexican border. The crisis was tided over by a joint Mexican-American com- mission sitting at New London, Conn., which brought no definite settlement, but at least postponed hasty action on either side. In Jan. 1917, the last American troops were withdrawn from Mexican soil. The President's policy had not led to stable conditions in Mexico, and the sole advantage secured seemed to be the emphasis laid by the U.S. Government on the principle
that it would not take advantage of the misfortunes of a weak neighbour for its own selfish profit.
Foreign affairs after July 1914 were naturally dominated by the World War. President Wilson insisted upon a policy of strict neutrality. This he emphasized not merely by formal proclamation on Aug. 4, but by an address to the American people of Aug. 18, in which he adjured them, in view of the mixture of nationalities in the United States, to be impartial in thought as well as action. His offer of mediation, made on Aug. 5, remained without response, and further attempts at mediation in early autumn proved fruitless. His determina- tion to remain absolutely aloof from European quarrels was underlined in several addresses, in which he insisted that the United States was in no way concerned, and was further empha- sized by his opposition to any change in its military policy. America's vital interest in the struggle, however, soon became | plain and resulted in diplomatic controversies with the belli- gerents. Great Britain's attempt to control indirect importa- I tion of goods into Germany, by an enlargement of contraband i schedules and an extension of the doctrine of " continuous i voyage " to conditional contraband, was vigorously opposed by President Wilson, who authorized Mr. Bryan, his Secretary of State, to protest in strong terms. A lengthy interchange of notes folio wed, which led to no settlement (see INTERNATIONAL LAW). The diplomatic controversy with Germany proved more serious. The proclamation of a " war zone " about the British Isles, in which German submarines threatened to destroy enemy merchant vessels with consequent danger to the lives and property of neutrals, was met by a note of Feb. 10 1915, which warned Germany that she would be held to " strict accountability " for the lawless acts of submarine commanders. Mr. Wilson further attempted to find a compromise, based upon a relaxation of the British food blockade and an abandonment of the German submarine campaign. The effort failed and was followed by a series of submarine attacks, which culminated in the sinking of the " Lusitania," May 7 1915, with the loss of over 100 American lives. The President, while he disappointed opinion in the eastern states by a speech in which he reaffirmed his pacific determination, stating that a man might be " too proud to fight," at once set out to win from Germany a dis- avowal and a promise that merchant ships should not be tor- pedoed without warning and the saving of the lives of passen- gers. A lengthy exchange of notes ensued; the pacific Mr. Bryan, Secretary of State, regarding the President's language as too strong, resigned; on the other hand Mr. Wilson's patience with the evasions of the German Government and the continued sinkings by submarines led to bitter attacks upon the Presi- dent's policy of conciliation, which was stigmatized as anaemic or even cowardly. Mr. Wilson succeeded, however, in securing from Germany a promise not to sink liners without warning (Sept. i rgi5), and continued his efforts to induce Germany to abandon the submarine campaign completely. He was hampered by an attempted revolt of Congressional leaders, who blurred the issue with Germany by introducing resolutions designed to prevent Americans from travelling upon belligerent ships. The President, through his personal influence, secured the defeat of these resolutions in Feb. 1916, insisting that he would not con- sent " to any abridgment of the rights of American citizens in j any respect." Shortly afterwards the issue with Germany was brought to a head by the sinking of the " Sussex," March 24 1916. Mr. Wilson waited three weeks before sending a formal. note of protest to Germany (April 19 1916) but couched it in ! the form of an ultimatum, stating that unless Germany should immediately declare and effect an abandonment of its present j methods of submarine warfare, the United States would be com- pelled to sever diplomatic relations. The German answer, | while attempting to make acceptance conditional upon Great Britain's relaxation of the blockade, was in effect a promise not to sink merchant ships without warning and without saving; human lives. The submarine issue now seemed less critical.
The diplomatic victory thus apparently secured by Mr. Wilson was utilized in his behalf during the electoral campaign
