Meanwhile the President had completed the arrangements necessary for giving effect to the Currency Act (A.R., 1913, p. 459). In April the twelve cities in which the district banks were to be were determined as follows: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas (Texas), and San Francisco. The selection of Dallas instead of New Orleans or Galveston, and of Cleveland instead of Cincinnati, caused some comment, but it was explained that considerations of the wealth and commercial importance of a city might have to be overridden by that of the direction of trade. The Presidency of the Board was declined by Mr. Olney (Attorney-General in the Cleveland Administration of 1893-97), probably in view of his age; and ultimately (June 15) the nominations were sent to the Senate as follows: Charles S. Hamlin, Boston, first Assistant-Secretary to the Treasury, two years; Paul M. Warburg, of Kuhn, Loeb & Co., an important banking firm, four years; Thos. D. Jones, Chicago, six; W. Harding, Birmingham, Ala., eight, and A. C. Miller, San Francisco, ten years. Mr. Warburg and Mr. Jones, however, were objected to by the Senate, on the ground that they were too closely connected with "big business," Mr. Warburg being a financier and Mr. Jones a director of the International Harvester Company, against which proceedings were pending under the anti-Trust Law; and Mr. Warburg resented being cross-questioned by the Senate Committee. They requested the President to withdraw their nominations, though Mr. Warburg afterwards gave way and was confirmed; so that by the end of July the Board had not yet got to work.
The war took America by surprise as it did Europe, and almost produced a tremendous financial crisis. Practically all markets were closed, and shipping and exchange, for a short time, were utterly disorganised. On July 31 the Stock Exchange did not open, the news received during the night indicating that an immense amount of stock would be offered not only from American but from European holders, and that consequently a drain of gold would be set up from the United States.[29] Cargoes accumulated at the ports, inasmuch as the banks would not negotiate bills of lading on uninsured freight, and insurance was paralysed. Five hundred million dollars of emergency currency was at once printed, for use under the Aldrich-Vreeland Act of 1908, which permitted sudden expansion in emergencies (A.R., 1908, p. 446), and the Secretary of the Treasury promised the assistance of his Department to the utmost extent of its powers. A Bill was hastily passed by the Senate, authorising the Secretary of the Navy to establish naval lines to carry mails, passengers and freight to South America and Europe, a course, however, which proved unnecessary owing to the activity of the British Fleet in recovering command of the sea.
But the Mauretania and Cedric had to put into Halifax; the German liner Kronprinzessin Cecilie, with a large consignment of gold on board for London, was stopped on her way by wireless orders, and crept back without lights to Bar Harbour, Maine, where she remained for some months through fear of capture; eventually she made her way through coastal waters to Boston. The plight of Americans in Europe was serious (p. [187]). Even more completely than British tourists, they were held up by the worthlessness, for the moment, of all drafts and means of credit, and were stranded, not only on the Continent, but in Great Britain. The Administration, the Embassies, the Consulates, and private and voluntary effort, worked hard to get them home; the American cruiser Tennessee brought $250,000 in gold to facilitate the process (Aug. 20); and special trains (Aug. 26 and 29) took 3,000 from Geneva to Paris; these were required to stay in specified hotels, and to leave Havre for New York on appointed dates. An American Committee in London did admirable work in advising and repatriating others, and special trains were also run from Germany to Rotterdam and from Austria to Genoa, whence special steamers were despatched to New York.
At the outset of the war President Wilson tendered his services for mediation at once or at any future time to all the European Powers involved; but the offer was premature and brought no definite response. Strict neutrality was observed, though a few German liners, anticipating the declaration of war, put to sea with stores and coal for the converted liner-cruisers; the coast was patrolled by destroyers, and care was taken that wireless stations should not be used for communicating with the German Fleet. From the first, except among German-Americans and a few Irish extremists, American sympathy was with the Allies, and in spite of the persistent but extremely maladroit propaganda carried on by the German Ambassador, Count Bernstorff, Professor Münsterberg of Harvard, Dr. Dernburg, the former German Colonial Secretary, who was well acquainted with American business circles, and some German financiers, it became more and more positively anti-German, especially after the news of the atrocities in Belgium and the destruction of Louvain. The Belgian Mission (p. [371]) was received by the President, and the statements of its members made a profound impression and set up a great movement to relieve Belgian distress. The German Emperor telegraphed early in September to President Wilson, protesting against the use imputed to the Allies of dum-dum bullets, a use of which President Poincaré telegraphed a denial. But President Wilson declined to commit himself in his replies, whether to the Belgians or to the Emperor, and this reserve was strongly condemned in view of the German atrocities. An active agitation for peace was initiated by Mr. Hearst, which culminated in a meeting (Sept. 20) in New York addressed by the Vice-president, the Speaker of the Lower House of Congress, and the President of the Steel Corporation, but it was, of course, without result. Later a shipload of Christmas gifts for soldiers' children in the belligerent countries was sent to Great Britain by the United States naval auxiliary vessel Jason. An immense amount of Red Cross work was also done, and relief sent to sufferers in practically all the countries most affected by the war. By Presidential proclamation, October 4, was appointed as a day of prayer for the peace of Europe.
On September 4 the President read a Message to Congress, advising additional taxation to the extent of $100,000,000, of which $20,000,000 would be spent on war insurance, ship purchase, and bringing home Americans in Europe. A loan of $100,000,000 was raised without difficulty by New York City in short-term notes to meet foreign obligations maturing in the near future.
Gradually the economic disturbance righted itself, with some assistance. The Government undertook to insure cargoes against war risks, appropriating by Act of Congress $1,000,000 for that purpose. The difficulty of sending gold abroad was met, partly by the shipment on the Tennessee to Paris (p. [463]), and more fully by depositing a large sum in gold at Ottawa on account of the Bank of England, so that bills could then be drawn against it as usual; and the enormous wheat crop, followed by immense supplies of munitions of war and stores to Great Britain and France (and even to Russia, via Seattle and Vladivostok), facilitated a readjustment of the situation. The product most depressed was cotton, in view of the shortage of factory labour caused in Europe by the war, though its export to Germany was not hindered before the new year, and a "Buy a Bale" movement was started to relieve the producers. The Ship Purchase Bill encountered unexpected difficulties, partly because the Seamen's Bill, also pending, would make the working of American ships more costly, still more because the Allies objected to the purchase by the United States of the interned German liners, the only shipping available, and the question was not settled at the end of the year.
Some temporary difficulty arose in October through the seizure by British cruisers of ships belonging to the Standard Oil Corporation. The Brindilla had been transferred since the war began from the German to the American flag, but Great Britain treated the transfer as invalid, and the vessel was taken into Halifax; the John D. Rockefeller (which had always been American), bound under the American flag for Copenhagen, was also stopped, but released, as Denmark had prohibited the export of oil to Germany. At the end of the year the United States Government made a temperate protest against the British detention of American ships and seizure of cargo on them (Dec. 30).
The war served Mr. Roosevelt as an example of the futility of such engagements as the arbitration treaties just signed by the Administration. His own plan for maintaining the peace of the world was an improved Hague Court, whose decisions the nations should pledge themselves to carry out by force.
The session of Congress closed on October 24. As there had been no break between the session of 1914 and the ordinary session preceding it, Congress had been sitting continuously (with very brief recesses) for the longest period on record. The record of work was remarkable. Following the Tariff and Currency Acts of 1913, there were the two Acts representing President Wilson's anti-Trust programme—the Trade Commission Act, creating a tribunal to arbitrate between commercial disputants, and the Clayton anti-Trust Bill, preventing interlocking directorates and otherwise controlling monopolies; the Panama Tolls Act, the Alaska Railroad Act, providing for the construction and working by the Government of 1,000 miles of railroad, telephones and telegraphs; an Act regulating dealings in cotton "futures," and the conclusion not only of twelve arbitration treaties (p. [460]) but of twenty-three Peace Commission treaties with Great Britain, Norway, the Netherlands, Portugal, Switzerland, Denmark, Italy, Salvador, Guatemala, Honduras, Nicaragua, Bolivia, Persia, Costa Rica, Venezuela, Chile, Argentina, Brazil, Peru, Paraguay, France, and Spain. Besides this there was the emergency war legislation, comprising the Emergency Currency Act (p. [462]); the insurance of war risks, to which $1,000,000 was devoted; the appropriation of $1,000,000 for special diplomatic and consular services and the transport home of American citizens whose return was hindered by the war; and the emergency war taxation, which was estimated to produce from $94,000,000 to $107,000,000 annually. This included taxes on beer ($1.75 a barrel), whisky (5 cents a gallon), American still wines, champagne (25 cents a quart), bankers ($1 per $1,000 of capital, surplus, and undivided profits), pawn-brokers, commercial brokers, commission merchants, proprietors of places of amusement, dealers in leaf tobacco, and cigar and cigarette manufacturers. There were also internal revenue (stamp) taxes on a few articles such as perfumery, on bonds, promissory notes, bills of lading, conveyances, telegrams, telephone messages, marine, fire, and casualty insurance, steamship tickets to foreign ports, and parlour-car berths and seats.