The Income Tax Amendment.—The rift in party harmony was widened by another serious difference of opinion. During the debate on the tariff bill, there was a concerted movement to include in it an income tax provision—this in spite of the decision of the Supreme Court in 1895 declaring it unconstitutional. Conservative men were alarmed by the evident willingness of some members to flout a solemn decree of that eminent tribunal. At the same time they saw a powerful combination of Republicans and Democrats determined upon shifting some of the burden of taxation to large incomes. In the press of circumstances, a compromise was reached. The income tax bill was dropped for the present; but Congress passed the sixteenth amendment to the Constitution, authorizing taxes upon incomes from whatever source they might be derived, without reference to any apportionment among the states on the basis of population. The states ratified the amendment and early in 1913 it was proclaimed.
President Taft's Policies.—After the enactment of the tariff bill, Taft continued to push forward with his legislative program. He recommended, and Congress created, a special court of commerce with jurisdiction, among other things, over appeals from the interstate commerce commission, thus facilitating judicial review of the railway rates fixed and the orders issued by that body. This measure was quickly followed by an act establishing a system of postal savings banks in connection with the post office—a scheme which had long been opposed by private banks. Two years later, Congress defied the lobby of the express companies and supplemented the savings banks with a parcels post system, thus enabling the American postal service to catch up with that of other progressive nations. With a view to improving the business administration of the federal government, the President obtained from Congress a large appropriation for an economy and efficiency commission charged with the duty of inquiring into wasteful and obsolete methods and recommending improved devices and practices. The chief result of this investigation was a vigorous report in favor of a national budget system, which soon found public backing.
President Taft negotiated with England and France general treaties providing for the arbitration of disputes which were "justiciable" in character even though they might involve questions of "vital interest and national honor." They were coldly received in the Senate and so amended that Taft abandoned them altogether. A tariff reciprocity agreement with Canada, however, he forced through Congress in the face of strong opposition from his own party. After making a serious breach in Republican ranks, he was chagrined to see the whole scheme come to naught by the overthrow of the Liberals in the Canadian elections of 1911.
Prosecution of the Trusts.—The party schism was even enlarged by what appeared to be the successful prosecution of several great combinations. In two important cases, the Supreme Court ordered the dissolution of the Standard Oil Company and the American Tobacco Company on the ground that they violated the Sherman Anti-Trust law. In taking this step Chief Justice White was at some pains to state that the law did not apply to combinations which did not "unduly" restrain trade. His remark, construed to mean that the Court would not interfere with corporations as such, became the subject of a popular outcry against the President and the judges.
Progressive Insurgency and the Election of 1912
Growing Dissensions.—All in all, Taft's administration from the first day had been disturbed by party discord. High words had passed over the tariff bill and disgruntled members of Congress could not forget them. To differences over issues were added quarrels between youth and old age. In the House of Representatives there developed a group of young "insurgent" Republicans who resented the dominance of the Speaker, Joseph G. Cannon, and other members of the "old guard," as they named the men of long service and conservative minds. In 1910, the insurgents went so far as to join with the Democrats in a movement to break the Speaker's sway by ousting him from the rules committee and depriving him of the power to appoint its members. The storm was brewing. In the autumn of that year the Democrats won a clear majority in the House of Representatives and began an open battle with President Taft by demanding an immediate downward revision of the tariff.
The Rise of the Progressive Republicans.—Preparatory to the campaign of 1912, the dissenters within the Republican party added the prefix "Progressive" to their old title and began to organize a movement to prevent the renomination of Mr. Taft. As early as January 21, 1911, they formed a Progressive Republican League at the home of Senator La Follette of Wisconsin and launched an attack on the Taft measures and policies. In October they indorsed Mr. La Follette as "the logical Republican candidate" and appealed to the party for support. The controversy over the tariff had grown into a formidable revolt against the occupant of the White House.
Roosevelt in the Field.—After looking on for a while, ex-President Roosevelt took a hand in the fray. Soon after his return in 1910 from a hunting trip in Africa and a tour in Europe, he made a series of addresses in which he formulated a progressive program. In a speech in Kansas, he favored regulation of the trusts, a graduated income tax bearing heavily on great fortunes, tariff revision schedule by schedule, conservation of natural resources, labor legislation, the direct primary, and the recall of elective officials. In an address before the Ohio state constitutional convention in February, 1912, he indorsed the initiative and referendum and announced a doctrine known as the "recall of judicial decisions." This was a new and radical note in American politics. An ex-President of the United States proposed that the people at the polls should have the right to reverse the decision of a judge who set aside any act of a state legislature passed in the interests of social welfare. The Progressive Republicans, impressed by these addresses, turned from La Follette to Roosevelt and on February 24, induced him to come out openly as a candidate against Taft for the Republican nomination.
The Split in the Republican Party.—The country then witnessed the strange spectacle of two men who had once been close companions engaged in a bitter rivalry to secure a majority of the delegates to the Republican convention to be held at Chicago. When the convention assembled, about one-fourth of the seats were contested, the delegates for both candidates loudly proclaiming the regularity of their election. In deciding between the contestants the national committee, after the usual hearings, settled the disputes in such a way that Taft received a safe majority. After a week of negotiation, Roosevelt and his followers left the Republican party. Most of his supporters withdrew from the convention and the few who remained behind refused to answer the roll call. Undisturbed by this formidable bolt, the regular Republicans went on with their work. They renominated Mr. Taft and put forth a platform roundly condemning such Progressive doctrines as the recall of judges.
The Formation of the Progressive Party.—The action of the Republicans in seating the Taft delegates was vigorously denounced by Roosevelt. He declared that the convention had no claim to represent the voters of the Republican party; that any candidate named by it would be "the beneficiary of a successful fraud"; and that it would be deeply discreditable to any man to accept the convention's approval under such circumstances. The bitterness of his followers was extreme. On July 8, a call went forth for a "Progressive" convention to be held in Chicago on August 5. The assembly which duly met on that day was a unique political conference. Prominence was given to women delegates, and "politicians" were notably absent. Roosevelt himself, who was cheered as a conquering hero, made an impassioned speech setting forth his "confession of faith." He was nominated by acclamation; Governor Hiram Johnson of California was selected as his companion candidate for Vice President. The platform endorsed such political reforms as woman suffrage, direct primaries, the initiative, referendum, and recall, popular election of United States Senators, and the short ballot. It favored a program of social legislation, including the prohibition of child labor and minimum wages for women. It approved the regulation, rather than the dissolution, of the trusts. Like apostles in a new and lofty cause, the Progressives entered a vigorous campaign for the election of their distinguished leader.