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   436. The Peace Movement; Admission of New Mexico and Arizona. Early in the census year (1910) Mr. Edwin Ginn of Boston gave a large sum of money to establish and carry on the Map: Panama Canal ZoneWorld Peace Foundation to promote the friendship of nations. Later on, Andrew Carnegie gave $10,000,000 to form a similar Peace Fund, and a society was organized in New York for the purpose of hastening "the abolition of international war."
   Several other well-known societies in our country began working for the same object. One of the most active of them was connected with the World Peace Foundation. It endeavored to enlist the teachers and the school children of America in the great work of cultivating a desire for the amicable settlement of national disputes.
   On the other hand, the United States, and, in fact, the leading powers of the globe generally, seemed to believe that it was best to keep a "big stick" ready for emergencies. For this reason they encouraged the manufacture of every kind of improved firearms; so, too, they continued to build battle ships, torpedo boats, "submarines," and "destroyers." Not satisfied with doing all this, they constructed war balloons and aëroplanes (§ 373), in order that men might fight in the air, just as they fought not only on land and sea but even under the sea. Still, though the governments of the world were not willing to bind themselves to renounce the help of sword, shot, and shell in time of trouble, they were none the less making efforts to avoid using these death-dealing implements with the frequency they formerly did.
   On the whole, the workers for peace thought the outlook was in many ways hopeful. The Japanese ambassador at Washington declared that he firmly believed that the time was coming when the great contests between nations would be fought out not by armies but by a few eminent statesmen. When they met he hoped it would




be in the "Palace of Peace" at The Hague (§ 424), and that they would carry no weapons more formidable than fountain pens.
   Meanwhile we have added two new stars to our national flag, that glorious banner which, while it stands for twenty years of victorious war,1 and of war nearly always waged in behalf of liberty and of human rights, stands also for more than one hundred years of honorable and prosperous peace. The two new stars represent the admission of New Mexico and Arizona (1912) to our great family of states, which now numbers forty-eight in all. These states embrace the whole continental area of the Republic, from ocean to ocean, except the immense territory of Alaska (§ 368), -- that territory so rich in natural resources and so full of promise for the future (see Maps facing pp. 358, 380).
   437. Presidential Election (1912); Parcel Post; Sixteenth Amendment. Three leading candidates competed for the highest office in the gift of the American people. The Republicans renominated William H. Taft; the Progressives (a new party made up largely of men who had withdrawn from the regular Republican and Democratic parties) nominated ex-President Roosevelt; while the Democrats nominated Governor Woodrow Wilson of New Jersey. The political campaign ended in the election of Woodrow Wilson to the presidency by a very large majority of the electoral vote.
   Near the close of President Taft's administration the Parcel Post was established (1913). It soon proved itself of the greatest practical advantage to people all over the country. Shortly afterward the Sixteenth Amendment (§ 437) was added to the Constitution of the United States (Appendix, p. xxiii). It was a most important measure, for it gave Congress "power to lay and collect taxes on incomes" in a way that it had never possessed before. We shall see (§ 439) that Congress did not let the new power lie idle long; and after we entered the Great War (§ 445), this tax yielded more money than a first-class gold mine.

   1 The twenty years comprise the American Revolution (§ 190), the war with Tripoli (§ 214), the War of 1812 (§ 226), the war with Mexico (§ 290), the Civil War (§ 320), -- a victory for the welfare of North and South alike, -- and the war with Spain (§ 414). Now we must add our part (1917-1918) in the Great War, which convulsed the world as no conflict ever did before.




   438. Summary. The chief events of President Taft's administration were (1) the discovery of the North Pole; (2) the passage of a new tariff, which reduced duties to some extent; (3) the census of 1910, showing the growth of the nation in numbers and wealth and the great increase in our means of rapid transportation by electric cars and automobiles; (4) the movement for the promotion of peace and of the friendship of nations; (5) the admission of New Mexico and Arizona; (6) the presidential election; (7) establishment of the Parcel Post; (8) the Sixteenth Amendment to the Constitution of the United States.


   439. Wilson's Administration (Twenty-ninth President, Two Terms, 1913-1921); Gettysburg; Seventeenth Amendment; New Tariff. Early in July (1913) a memorable meeting took place on the battlefield of Gettysburg (§ 343). There President Wilson spoke to more than fifty thousand veterans representing both armies of the Civil War. These men who, fifty years before, fought each other on that historic ground, now met as friends and brothers. The "blue" and the "gray" stood for a united country. They clasped each other's hands; they ate together; they sang "America" together; they joined in decorating the thousands of soldiers' graves in that great national cemetery. It was an occasion full of meaning -- one that never can be forgotten in our history.
   Meanwhile another amendment -- the Seventeenth (§ 439) -- had become a part of the Constitution of our country. It declared that in future United States senators must be elected directly "by the people" instead of by the State legislatures (Appendix, p. xxiii).
   In the following autumn (1913) Congress passed a new tariff law (§ 434), which made many changes. Under it wool, meat, lumber, flour, and coal were admitted free of duty.2 Furthermore, the duties on woolen goods, and on a great variety of articles

   1 Woodrow Wilson was born in Staunton, Virginia, 1856; graduated at Princeton University, New Jersey; became professor of jurisprudence and political economy, and then president of the University; wrote an American History; in 1910 was elected governor of New Jersey.
   2 Sugar was to come in free after May 1, 1916; but the tax was continued.




manufactured abroad, were much reduced. Finally, the new tariff -- known as the Underwood Tariff -- levied on all persons in the United States (with some exceptions) an Income Tax (§ 437) on whatever income they receive above $3000.1
   440. New Banks; Panama Canal; Mexico. Having completed the tariff, Congress next Woodrow Wilsontook up the great question of how to improve the banking system of the country. The National Banks which the government organized during the Civil War (§ 324) had been of immense service for many years; but the time finally came when it seemed necessary to make certain changes in them. The panic of 1907 (§ 430) had a good deal to do with these proposed changes. At that period money became so scarce that it was difficult for those who did business with the banks to borrow what was required for carrying on trade or even to get enough to pay workmen's wages.
   In order to prevent such cases of "tight money" in future, Congress passed a new banking law (1913). Under that law the United States was divided into twelve districts, and a central bank called a "Federal Reserve Bank" was established in each district. These twelve new banks get their name from the fact that they hold "reserves," or supplies of money furnished by the government. Every National Bank has the right to borrow some of that money for the use of its depositors and customers in case of need,2 but that right depends on this condition: those who want to borrow must give good security for the loan.

    1 After we entered the Great War this tax was enormously increased.
   2 Every National Bank in each district must become a "member" of the "Federal Reserve Bank" of that district by purchasing a certain amount of stock in the Reserve Bank and paying for it in gold.




Seal of the Panama Canal Zone   The new banks began to do business. in November, 1914. Meantime Colonel George W. Goethals,1 the chief engineer of the Panama Canal and the Governor of the Canal Zone, opened the great water way to commerce. On August 15, 1914, a large ocean steamship, fully loaded, led the way, and passed through from ocean to ocean. You will see that the official seal which the governor uses tells the whole story of the gigantic undertaking -- the most remarkable of its kind that the world has ever completed.
   Attention has already been called to the fact that the canal will provide new and shorter routes of trade to many countries2 (see



Map facing p. 380). Moreover, it will give our battle ships speedy access to all important ports on both sides of the entire American

    I Goethals (go'thals).
   2 Serious earth-slides at times blocked the canal, but now that they appear to be finally overcome we can expect that our Atlantic coast will be brought into permanent communication with all our western ports and with our islands in the Pacific; also with the western ports of Mexico and South America, and with Japan, China, the East Indies, Australia, and New Zealand.




continent. This may prove a decided help to us in our efforts to restore Read's Flight Across the Atlanticpeace to the unfortunate Republic of Mexico, where civil war has been raging for a number of years over the question of who shall be its President.1
   441. The Great European War; Proclamation of Neutrality. While these events were happening, a great war -- the greatest perhaps that was ever fought in the history of the world -- set Europe aflame. It was the first war in which two American inventions, the submarine (§ 220) and the aëroplane, that "eye in the sky" which sees all things (§ 373), were employed with terrible effect.2 The contest began early in August, 1914; on one side Germany and Austria marshaled their forces; on the other, Russia, France, and England rose against them. President Wilson promptly issued a proclamation of neutrality on the part of the United States. He also declared that we should be glad to act in the interest of European peace whenever the nations at war might ask our assistance. Later, he appointed a day of prayer for peace. Meanwhile

   1 In April, 1914, General Huerta of Mexico arrested some of our sailors, who landed at Tampico to buy gasoline. Their boat carried the Stars and Stripes. We demanded an apology, but Huerta refused to make it. We then blockaded Tampico and seized the port of Vera Cruz in order to prevent Huerta from getting war supplies by sea. In taking the port we had 19 men killed. In 1916 Mexican outlaws entered New Mexico, burned part of Columbus, and killed a number of citizens. Our troops pursued the outlaws, but they managed to escape, and the Mexican civil war continued.
   2 The machine gun, the caterpillar tractor, or "tank," and barbed wire (for defenses and entanglements) were also American inventions which were used in the Great War.

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