While the majority in Congress struggled with the anti-Trust programme, the Republican Opposition was provided by the disappointing financial results of the new tariff with fresh material for attacking the Administration. The value of imports of manufactured articles from October 1, 1913, to April 1, 1914, as compared with the corresponding period of 1912-13 had increased from $215,000,000 to $228,000,000; exports of such articles had fallen to $541,000,000 against $582,000,000; materials for manufacture imported had fallen from $517,000,000 to $409,000,000; Customs receipts had fallen from $165,000,000 to $140,000,000. The deficit for the year had already reached $37,000,000, and a few weeks later the new income tax proved to be likely to yield only $30,000,000 for the first ten months of its operation, as against estimates before its introduction by its projectors and the Treasury respectively of $80,000,000 and $54,000,000.
The position of the Administration was not bettered by the course of events in Mexico. The Constitutionalists, whose success it favoured as the more legitimate claimants of authority, committed excesses at Saltillo, Tampico and elsewhere; and the alleged murder after torture of Private Parks, who had strayed into the Huertist lines at Vera Cruz, stimulated the cry for drastic intervention. The Constitutionalists' refusal to accept an armistice or to submit to the findings of the Niagara Conference, together with the growing differences among their leaders, gave little hope of a permanent pacification; and ultimately, at the end of June, the conference broke up, leaving the Huertists and Constitutionalists to arrange for another conference composed of their representatives, which should deal with the establishment, composition, and programme of a provisional Government.
However, the Administration obtained some success elsewhere. The Panama Tolls Bill was debated in the Senate at considerable length; but some waverers were conciliated by an amendment moved by Senator Simmons (North Carolina), providing that the repeal should not impair American rights under the Hay-Pauncefote treaty, and on June 11 the Bill passed by 50 to 35—the majority consisting of 37 Democrats and 13 Republicans, the minority of 23 Republicans, 11 Democrats, and a Progressive. Among the rejected amendments was one referring the Hay-Pauncefote treaty to the Hague Court for interpretation. The Bill was accepted by the House as amended, and signed by the President on June 15. The honour of America was thus vindicated in the view of Europe; and the way was cleared for the completion of the programme of anti-Trust legislation and for the adjustment of relations with Colombia and other Spanish-American States.
Another success for the Administration was the authorisation by Congress of the sale to Greece of the battleships Idaho and Mississippi, launched in 1905, and considerably inferior, of course, both to the newer battleships of the United States and to the Dreadnought just purchased by Turkey from Brazil. They were, however, of 14,465 tons each, could steam nearly seventeen knots, and carried twelve-inch guns. They were to be sold at cost price ($11,726,000) to pay for a Dreadnought; and the sale was partly intended to enable Greece to be a match for Turkey, and so to avert a Greco-Turkish war. The sale was sanctioned by Congress owing mainly to President Wilson's influence.
Meanwhile the anti-Trust legislation had been partly postponed and considerably modified by the Senate—notably by an amendment designed to exempt labour unions and agricultural and mutual aid associations from being treated as combinations in restraint of trade under the Sherman Law; and business did not improve. It was true that the railroad world was encouraged by the decision of the United States Supreme Court (June 8) that a State must not impose, even within its own borders, rates which conflicted with the fair operation of those fixed by the Inter-State Commission for similar services in traffic crossing the State border; but the general depression was ascribed to the uncertainty of legislation, and the President's repeatedly expressed view that the depression was "merely psychological" was not generally shared. A fresh shock was given to the hopes of revival by the largest failure on record in the dry goods trade (June 27), that of H. B. Claflin & Co., an immense wholesale house, with liabilities of $35,000,000, though the assets awaiting liquidation were estimated at $44,000,000. The failure, however, was mainly caused by financing retail customers and inability to raise money on the debts due to it, and a reorganisation scheme was arranged later.
The situation in politics and business gave Mr. Roosevelt an excellent opportunity for attack. On his arrival from Spain (June 25) he denounced the President's Colombian and Mexican policy; and a few days later (June 30) he spoke at Pittsburg in favour of the candidature for the Senate of Mr. Gifford Pinchot, who was standing against Senator Penrose, Republican. After attacking the Democrats for tariff reduction, and for their "wretched" foreign policy, he denounced the Republican managers for splitting the party, and promised that the Progressives would have a scientific Tariff Commission, and would recognise that big business was not necessarily purely pernicious. The tone of his speech was less Radical than in former years, and seemed to hint at a possible fusion of the Progressives with a reformed Republican party.
The passing of the Panama Tolls Act had cleared the way for the settlement of other foreign questions. Mr. Bryan was anxious to obtain the ratification of his "Peace Commission" Treaties, supplementing the existing Arbitration Treaties by providing for the submission of disputes between the countries who were parties to them to a permanent International Commission (which was allowed a year within which to report) before going to arbitration before the Hague Court. This Commission would be composed of five members, two appointed by the respective Governments from their subjects, two from another country, the fifth from another neutral country by agreement between them. The Commission's Report would not be final, as in that case the prerogatives of the Senate would have been infringed. The British treaty was to be delayed for submission to the Dominion Governments, but a number of similar treaties with the minor Powers on both sides of the Atlantic were submitted to the Foreign Relations Committee of the Senate.
But there were more troublesome questions ahead. The Mexican tangle was somewhat simplified a little later by the retirement of General Huerta (July 23, post, p. 485), but the Colombian Treaty, which gave Colombia $25,000,000 as compensation for her loss of Panama in 1903, and contained words which looked like an apology for the action of the United States Government on that occasion, was regarded by many politicians on both sides as both costly and humiliating; while the Nicaragua Treaty provided for the loan to that State (in return for the right of constructing a canal by the San Juan route and of using certain islands as a naval base) of $3,000,000 for certain urgent items of expenditure and the establishment of a sort of financial Protectorate. This was regarded as doubtful policy, and as likely to benefit certain financiers more than either of the Powers concerned, while the Diaz Government in Nicaragua was believed to be merely the creature of the United States. There was trouble, moreover, in Santo Domingo, for which the United States had a certain responsibility through having lent it financial administrators, and in Hayti, where German creditors were pressing the Government, and revolution was impending; and marines were sent in the middle of July to Cuba, for use if necessary in either Republic.
The anti-Trust legislation, however, was not passed yet, and, while business men feared its effects, the need of further regulation, especially in the matter of interlocking directorships and stock and bond issues, was exhibited by the report of the Interstate Commerce Commission on the affairs of the New York, Newhaven, and Hartford Railroad, once among the best managed systems in America, now, by agreement with the Government, in voluntary liquidation. The inquiry had been undertaken at the direction of the Senate, and the evidence, especially that of Mr. Mellen, the President, had been sensational. Substantially the Directors were found to have used illicit and corrupt means, including bribery, extortionate commissions, and excessive payment for properties purchased, to obtain a complete monopoly of traffic in New England. They had increased the Company's liabilities between 1903 and 1912 from $93,000,000 to $410,000,000, and had lost from $60,000,000 to $90,000,000 of the stockholders' money. The directorate contained representatives of the New York Central and Pennsylvania Railroads, of the United States Steel Corporation, the Standard Oil and Pullman Companies, and the stockholders seemed to have less representation than any other interest.