Flight of the Eagle: The Grand Strategies That Brought America From Colonial Dependence to World Leadership (58 page)

BOOK: Flight of the Eagle: The Grand Strategies That Brought America From Colonial Dependence to World Leadership

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In December 1913, after six months of debate, and fierce opposition from the commercial banking system, the Congress approved the Federal Reserve Act, the first comprehensive reform of American banking since the Civil War, and reestablishment of a central bank after Jackson’s abolition of the charter of the Bank of the United States in 1836. Twelve district banks were set up in regional centers around the country as depositories for nationally chartered banks that were required to join the system, and for whichever state banks chose to join. The Federal Reserve Board set the discount rate (the rate at which money was loaned to the banking system), which controlled credit in the country. The district banks rediscounted the paper of local banks, which subscribed to the capital of the district banks and participated with the Federal Reserve in choosing directors of the district banks. The district reserve banks issued commercial paper that was counted as part of the money supply, against deposits by adhering banks and backed by a 40 percent reserve of gold. It was a comprehensive and very successful organization of the banking system, which put the United States, with Great Britain and the Bank of England, at the forefront of sensible monetary policymaking and credit administration. Most of the balance of Wilson’s reform program was contained in the Federal Trade Commission Act and Clayton Anti-Trust Act of September and October 1914. The Federal Trade Commission was a bipartisan body empowered to enforce and monitor anti-trust rules, and the Clayton statute substantially expanded, clarified, and made more enforceable the Sherman Anti-Trust Act of 1890.

In foreign relations, Bryan opened his tenure in the State Department, in keeping with his unworldly, evangelical idealism, with the pursuit of treaties with the nations of the world assuring that all disputes would be referred for settlement to a permanent investigative commission, which would report within a year, during which there would be an obligatory (but completely unenforceable) “cooling off” period. Twenty-one such treaties were ratified, almost all of them with Latin American and Caribbean satellite states of the U.S.

Much more complicated, and instructively more intractable, were the problems of Mexico, which erupted into the lap of the United States following the overthrow of the 34-year dictatorship of President Porfirio Díaz in 1911, and Díaz’s departure from Mexico. Diaz was another amiable scoundrel, only marginally more pure of motive, if significantly less absurd a mountebank, than General Antonio L. de Santa Anna, subduer of the Alamo and unsuccessful opponent of Sam Houston and of Winfield Scott. Diaz achieved great material progress for Mexico and coined the famous lamentation that Mexico was “so far from God and so close to the United States,”
⁹⁶but he ignored social reform and was inappropriately close to the big landowners and foreign investors. Santa Anna, Benito Juárez, the authentic and relatively disinterested patriot who overthrew the French in Mexico and executed the “Emperor” Maximilian, and Diaz were the three leading figures of Mexican public life from independence to 1911, principal political figures in the country from, respectively, 1833 to 1855, 1858 to 1872, and 1877 to 1911. Diaz was a successful leader in many ways, but after 34 years his regime was ripe to fall.

The opposition to Diaz was led by Francisco Madero, a moderate reformer and classic Kerensky type (Kerensky was the initial leader of the Russian revolution in 1917), who unleashed forces he could not control. Madero was overthrown and executed by the reactionary front for foreign and large domestic investors, led by Victoriano Huerta, in 1913. Wilson refused to recognize Huerta, whom he rightly saw as very unrepresentative of Mexican popular opinion, and preferred the less tainted Venustiano Carranza.

There was the usual sort of absurd incident that long bedeviled American relations with its “sister republics,” as successive American presidents hopefully referred to them, when an American shore party at Tampico, on April 9, 1914, seeking only some supplies, strayed into an excluded area and was arrested. They were promptly released, but the U.S. squadron commander, Admiral Henry T Mayo, in the sort of conduct that has irritated relations with Latin America for nearly two centuries, demanded a formal apology, punishment of the officer responsible, and a 21-gun salute to the American flag flying above Tampico. Huerta refused; Wilson allowed himself to be persuaded that he had to support Mayo in order not to advantage Huerta, and the apology was provided, but not the salute. Wilson secured the authority of Congress on April 22, 1914, to use force to redress grievances, and Bryan had just advised that a German ship carrying munitions was approaching Vera Cruz, in contravention of the blockade Wilson had taken it upon himself to impose. American ships and Marines bombarded and occupied Vera Cruz, and Huerta broke off relations, Wilson having managed to unify Mexican opinion against the United States. Wilson did accept the mediation offer of Argentina, Brazil, and Chile, and at a meeting in Niagara Falls, Ontario (Canada), in May and June, the mediating countries proposed the retirement of Huerta, his replacement by a reform government, and no indemnity to the U.S. Huerta refused and had himself elected president; neither the mediating powers nor the U.S. accepted this, and Huerta resigned a few days later.

A month later, General Álvaro Obregón led a Constitutionalist army (the Carranza party) into Mexico City, and Carranza was recognized as president by the United States and other countries. Carranza’s supposedly loyal lieutenant in the north, Francisco “Pancho” Villa, revolted, as did the leading warlord in the south, Emiliano Zapata. Carranza and Villa traded control of Mexico City as chaos prevailed in much of Mexico from 1915 to 1917. In his freebooting activities, Villa ignored the Mexican-U.S. border, other than as a refuge when Carranza and Obregón’s loyalists succeeded in chasing him right out of the country. On January 10, 1916, Villa murdered 18 American mining engineers whom Carranza had invited to help reopen mines, and Villa’s forces killed 17 Americans in a raid against Columbus, New Mexico, in March.

Wilson had tried to fob off the whole Mexican imbroglio, including these unhappy episodes, with a policy of “watchful waiting,” but these outrages blew the lid off that humbug and, as happens from time to time in American affairs, the Congress got well ahead of the president in aroused belligerency. Wilson mobilized 150,000 militia to guard the Mexican border, and authorized, with Carranza’s arm-twisted approval, a punitive raid into Mexico by General John J. Pershing at the head of 15,000 men. It was essentially a fiasco, aroused immense hostility in Mexico, and made a hero out of Villa, and Carranza rejected Wilson’s unctuous attempts at agreed withdrawal and joint guarantees of the border. Finally, in early 1917, as European war threatened to involve the United States, Wilson quietly withdrew American forces, and Pershing prepared to head a hundred times as large a force against a thousand times as formidable an enemy.

Former president Huerta died of cirrhosis of the liver in 1916, as he approached the U.S.-Mexican border from the American side, with a view to launching another coup. (His nickname was “the jackal.”) Carranza was elected president, and recognized, in 1917, and successfully arranged to have Zapata murdered in 1919. But Obregón turned against him and President Carranza was assassinated in 1920. Villa made peace with Obregón and retired to luxury, but was also assassinated in 1923. Obregón had a legitimate and very successful term as president from 1920 to 1924, and was succeeded by the talented and devious General Plutarco Calles in 1924. Consecutive terms were not permitted, but President Obregón was elected to succeed Calles in 1928, but was, in conformity with the now well-established tradition, assassinated before being reinaugurated the third of four presidents of Mexico to die violently, a record rarely challenged in any semi-serious jurisdiction since Roman times.

Calles remained the power in the country, and was known as
Maximato
until the election of General Lázaro Cárdenas in 1934. Calles founded the Partido Revolucionario Institucional, which ruled until 2000 in a virtual one-party state (and was democratically restored in 2012). He also conducted an anti-clerical campaign, known as the Cristero War, in which nearly 100,000 people were killed, including nearly 5,000 priests. Calles on the (anti-clerical) right and Zapata on the left, and Villa in the lore of outlawry, continue to be revered figures. These matters are recounted here because Mexican-American relations became an intermittently recurring matter of concern in Washington—little wonder, given the tumultuous devolution of events in Mexico and the illegal entry of perhaps 20 million Mexicans into the United States in the last half of the twentieth century.

10. WORLD WAR I

The Panama Canal opened officially on August 15, 1914. The Congress had passed a statute excluding U.S. flag ships from tolls, and the British objected that this was a violation of the Hay-Pauncefote Treaty, which promised equal treatment for all countries. Wilson agreed with the British and had the Panama Tolls Act repealed. It was presumably not entirely coincidental that the British thereafter approved everything the United States did in Mexico. By this time, the Great War had begun. Crown Prince Franz Ferdinand of Austria was assassinated by an anarchist, Gavrilo Princip, in Sarajevo, Bosnia, on June 28, 1914. Princip was acting for the Black Hand, a Serbian Pan-Slavic group, and the Serbian government was somewhat aware of the conspiracy, though it took no direct part in it. The German emperor gave Austria what he called “a blank check” to deal with Serbia as it wished. The Austrians investigated thoroughly but failed to find evidence of Serbian government complicity. The world was outraged and sympathetic to the Habsburgs. President Raymond Poincaré and Premier René Viviani of France visited St. Petersburg, July 20 to 23, and the French urged a strong hand to restrain Vienna. As soon as the French leaders had left the Russian capital, Austria served its ultimatum on Serbia, demanding suppression of hostile (to Vienna) organizations and publications, and dismissal of hostile officials, prosecution of accessories to the plot, sanitization of school curricula, and abject apologies. Serbia’s reply was apparently conciliatory but evasive, and declined the requirement of prosecutions.

Serbia was the leader of Pan-Slav opposition to Austro-Hungarian incursions into the South Slavic lands grudgingly and forcibly vacated by Turkey, and Russia aspired to be the champion of the Slavs against Vienna, as it had been against the Turks. The British foreign secretary, Sir Edward Grey, proposed a conference on Austro-Serb problems, which France and Russia accepted but Austria-Hungary declined as unsuitable to matters of the honor of their empire, and they were supported by Germany. Both Vienna and Berlin believed the czar was bluffing, and Austria-Hungary declared war on Serbia on July 28. There was perfervid maneuvering, as France urged a strong response on Russia, and Berlin promised not to enter France or Belgium if Britain remained neutral. The British government declined. Between July 29 and August 3 all the five main powers were raising the ante while offering conditional reductions of tension but inching toward general mobilization, including a Russian order of full mobilization, which was then reduced to mobilization against Austria-Hungary only. This still attracted a German ultimatum to cease preparations for war on the German frontier, which caused a Russian reescalation, and Germany declared war on Russia on the evening of August 1. Belgium declined to give Germany free passage on its territory and was invaded by Germany, and Germany declared war on France on August 3. Britain declared war on Germany on August 4 and Austria-Hungary declared war on Russia on August 6. Italy declined to join the war, though some weeks later Turkey joined the war on the side of the Central Powers.

Almost all the leaders of the five initial Great Power belligerents were erratic and reckless about what they were getting into, like children playing with dynamite, without a thought of the human and material damage they might be about to cause. The expectation was for a brief war. The United States had talented ambassadors in the major capitals, who reported events accurately, but the United States was not consulted and claimed no right to intervene diplomatically. Wilson declared U.S. neutrality and on August 19 asked his countrymen to be “impartial in thought as well as in action.” The British were more responsible and wary, but knew that they could not tolerate a German victory over France, Russia, and Belgium, and entered what their leaders feared would be an unprecedented hecatomb, with the capable foreign secretary, Grey, famously remarking: “The lights are going out all over Europe; we shall not see them lit again in our lifetime.”

CHAPTER EIGHT

The Crisis of Democracy

World War, Isolationism, and
Depression, 1914
–
1933