John Passos - Mr. Wilson's War

Western ideas were stirring in the Far East. In China a republic had been proclaimed. Wilson’s first conversations with his newly installed Secretary of State dealt with the terms of a loan the European powers were trying to force on the backward Chinese.

The Caribbean was uneasy. Trouble was popping everywhere. In Mexico a revolution was on the march. Rifles bristled out of every adobe hut. Two weeks before Wilson’s inauguration, Francisco Madero, whom American Democrats had hailed as a kindred spirit when he displaced the old Mixtec dictator, Porfirio Díaz, a few months before, was shot full of lead by a new strong man named Victoriano Huerta. The reform wave that had swept the United States was agitating the Mexicans, but south of the Rio Grande the revolt against the vested interests took the form of arson and murder.

“It would be the irony of fate,” Wilson told a Princeton friend when he heard the news, “if my administration had to deal chiefly with foreign affairs.”

In spite of storms brewing on every frontier Wilson’s first duty was to his campaign commitments. In a rare burst of legislative energy, Congress, under the President’s skillful prodding, passed two basic measures during the first nine months of his administration.

Tariff for revenue only had long been a Democratic motto. The Underwood Tariff Act, pushed through the two houses during the summer, accomplished the first thoroughgoing downward revision of import duties since 1846.

For years the reformers had dreamed of an income tax to syphon off the guilty profits of the rich. A small progressive income tax, made possible by a constitutional amendment ratified by the states a couple of years before, was included ostensibly to make up for the loss of revenue. The bill was ready for signature by October 3.

“I have had the accomplishment of something like this at heart ever since I was a boy” the President cried out exultantly to the assembled cabinet members, congressmen and reporters who packed into the executive office to see him affix his Woodrow Wilson with two gold pens, “and I know men standing around me who can say the same thing, who have been waiting to see the things done which it was necessary to do in order that there might be justice in the United States.”

At the same time a far more intricate and controversial measure was in the works.

Breaking up what Bryan and his followers called the money trust was a shibboleth of the southern and western uprising against Wall Street which had landed the new administration in Washington. The management of the currency of the United States, and consequently of credit and finance, was admittedly chaotic and outdated. Conservatives and progressives agreed that the state of affairs where some seven thousand banks could issue money under the vague direction of a Comptroller of the Currency was a breeder of panics. For some years Senator Aldrich, heading a committee that sought the guidance of the New York bankers, had been working for legislation which would centralize the banking system. Nobody denied the need. The question at issue was who would run the new system, the bankers or the representatives of the people.

The construction of the Federal Reserve Act out of a welter of conflicting interests and conflicting dogmas was one of the great successes of the congressional system.

It would never have come to pass if Woodrow Wilson had not managed to make himself the leader of the whole Democratic Party, instead of merely its progressive wing; and if he had not shown, during that first summer of his administration, an unexpected ability to learn by doing. Finance was not his special province, but he eagerly soaked up information from such men as the reforming Louis D. Brandeis, who was then considered a dangerous firebrand by the conservatives, and from banker friends McAdoo smuggled into the White House when Bryan wasn’t looking. It was the President himself who suggested the Federal Reserve Board, which made control in the public interest a workable proposition.

At first the bare notion of such a board horrified both sides. Bryan’s followers claimed it would create “an oligarchy of boundless wealth … to govern the financial destiny of the nation, operating under governmental protection.” Conservatives were equally revolted. The New York Sun described the President’s project as “the preposterous offspring of ignorance and unreason … The provision for a government agency and an official board to exercise absolute control over the most important of banking functions is covered all over with the slime of Bryanism.”

Virginia Representative Carter Glass, who, starting from a printshop in Lynchburg, became publisher and owner of his smalltown papers, and developed into the southern congressman best qualified to deal with fiscal matters, steered the bill through the House. Robert L. Owen, a stockman and banker from Oklahoma, who had been a careful student of European banking systems, steered it through the Senate. Secretary Bryan did yeoman service keeping his radicals in order once the President had convinced him the measure was the nearest thing to public control of banking that could be achieved at that time. Secretary McAdoo, meanwhile, whose promotion of the Hudson tubes had won the admiration of the business community, cajoled the conservatives.

Throughout the hot summer and the long fall the President managed to simulate an air of coolness and equanimity while he conducted the general strategy from the White House. In private he blew off steam:

“Why should public men, senators of the United States, have to be led and stimulated to do what all the country knows is their duty—” he wrote Mrs. Peck, finding it hard, as usual, to imagine that any man in his right mind could honestly disagree with him on any topic whatsoever. “Why should they see less clearly, apparently, than anyone else what the straight path of service is? To whom are they listening? Certainly not to the voice of the people, when they quibble and twist and hesitate … A man of my temperament, and my limitations will certainly wear himself out on it … the danger is that he may lose his patience and suffer the weakness of exasperation.”

When President Wilson did lose his patience “and suffer the weakness of exasperation” his wrath found an unexpected target. There existed in Washington a branch of an organization of veterans of the Philippine insurrections know as the Military Order of the Carabao. The Carabao’s annual celebrations were bibulous affairs with skits and spoofing of public officials in the spirit of the Gridiron dinners conducted by the press. They were accompanied by the singing of old warsongs like “There’s Many a Man Been Murdered in Luzon,” and “Damn Damn Damn the Filipinos.” No one had ever taken their jollifications seriously until one December morning while the tug of war over the Currency Bill which was to set up the Federal Reserve was still undecided on Capitol Hill, the Schoolmaster in Politics read a facetious account of the antics of the local corral of the Carabao in his morning paper.

He was not at all amused. He decided to give the military a lesson.

Wilson’s policy towards the Philippines was a cautious advance in the direction of selfgovernment and his pronouncements on the subject had been received with jubilation in Manila. The oldtime jingos of the regular army viewed independence for the little brown brethren with derision.

Though not a prohibitionist himself Wilson had appointed two prohibitionists to his cabinet. Bryan was refusing to allow wine to be served at his state dinners and Josephus Daniels would soon go so far as to cut off the Navy’s traditional grog.