ing programme, with two battleships, two battle cruisers, three scout cruisers, 15 destroyers, five fleet submarines, and 25 coast submarines for the fiscal year 1917 (A. Y. B., 1915, p. 324). The House Committee on Naval Affairs not only abandoned the principle of a continuing programme, but refused to accept the recommendations for 1917. It provided for the construction of five battle cruisers, four scout cruisers, three fleet submarines, 17 coast submarines, and 10 de

dent, in time of war or the imminence | forward by the President. These proof war, to assume control of transpor-posals contemplated a five-year buildtation systems and to utilize them for military purposes. It established a Council of National Defense composed of six members of the Cabinet and designed to coördinate the industrial resources and transportation facilities of the country in the interests of national security, the Council to be assisted by an advisory commission of experts serving without pay. It also revised the Articles of War, which, remaining unchanged for a century, had become archaic. During conference Mr. Hay secured the adop-stroyers, this decision being reached tion of an amendment to these revised Articles, which exempted officers and men on the retired list from the military criminal code. Notwithstanding urgent representations made by the Secretary of War, the conferees refused to reconsider their action, and on Aug. 18 President Wilson vetoed the bill, on the ground that: So long as Congress sees fit to make the retired personnel a part of the Army of the United States, the constitutionality of the proposed exemption of such personnel from all responsibility under the Articles of War is a matter of serious doubt, leaving the President, as it does. without any means sanctioned by statute of exercising over the personnel thus exempted the power of command vested in him by the Constitution.

He was also convinced "of its baneful effect upon the discipline of the Army." Mr. Hay at once reintroduced the bill, eliminating not only the clause which the President had condemned, but also the whole section relative to the Articles of War which the President had expressly approved. It passed the House on Aug. 22; but three days later, conforming with the action of the Senate, the House reinserted the Articles of War without the objectionable clause, and the President signed the Act on Aug. 29. (See also XII, The Army.)

The

by a party vote of 13 to 8, with the Republican minority squarely committed to a more ambitious plan. The bill, as reported to the House on May 24, carried appropriations aggregating $241,449,151, and Secretary of the Navy Daniels, whose recommendations had been slighted, curiously enough expressed his approval. Chairman Padgett (Tenn.), in explaining the bill, said that while the Navy must continue to place its chief reliance in battleships, the immediate and pressing necessity was to provide it with swift battle cruisers. Republicans on May 30 supported amendments which called for two battleships, six battle cruisers, six scout cruisers, 28 destroyers, and 50 submarines. The battleship amendment was defeated 130 to 114; the battlecruiser amendment by 109 to 83; but with the assistance of some 20 Democrats the submarine amendment was adopted by 114 to 104. Three days later the Republicans nearly succeeded in having the bill sent back to committee and remodelled according to their views. The close vote (189 to 183) indicated a significant shift of opinion; 25 Democrats, mostly from New York, New Jersey, and Massachusetts, voted with the minor

The Naval Appropriation Act.-Theity. sentiment in favor of national preparedness, which found expression in the army bills, was evidenced still more notably in the case of the Navy. The credit for this belongs mainly to the Senate. Although the House finally sanctioned a building programme which went beyond the most sanguine expectations, it refused at first to sanction the proposals put

Another subject of controversy was the proposed Government plant for the manufacture of armor plate. A separate bill authorizing the construction of such a plant at a cost of $11,000,000 had been passed by the Senate on March 21 and favorably reported to the House on April 5. Private manufacturers made every effort to defeat the bill; one company even

The bill remained in conference until Aug. 11. As no agreement had been reached on the building programme, that matter now came directly before the House. The Presi dent and Secretary Daniels, having come out squarely for the Senate bill, labored with the Democratic leaders. On Aug. 15, by a vote of 283 to 51, the House gave way. The minority included 35 Democrats, 15 Republicans, and one Socialist, the Democratic floor leader (Mr. Kitchin) being among the number. He condemned the President for shifting ground and complained that "the United States becomes to-day the most militaristic naval nation on earth." Agreement on the building programme was the vital point. Other questions raised no serious difficulty. On Aug. 18 both houses accepted the bill, the appropriations having been fixed at $313,300,555, and the President signed it on Aug. 29. (For details see XII, The Navy.)

offering to supply the Government at | La Follette (Wis.), and Mr. Norris a price based upon the cost of pro- (Neb.). The bill finally passed the duction and determined by impartial Senate on July 21 by a vote of 71 arbitrators. On May 31 the armor- to 8. The minority included two plate bill was incorporated in the na- Democrats (Thomas of Colorado and val bill; and when the Republican Vardaman of Mississippi), the three leaders, wishing to leave the way Republicans named above, and three open to an understanding between the other Republicans (Curtis of Kansas, Government and private manufactur- Gronna of North Dakota, and Works ers, sought to have the provision of California). struck out, they found the Democrats practically unanimous in its favor and their own followers divided. Forty-eight Republicans voted for the plant. Another amendment provided that certain navy yards should be equipped for the building of capital ships and that the Government should build any or all of the ships now authorized in case the terms offered by private contractors proved unsatisfactory. With these and other items added the appropriations reached $269,970,000. On June 2 the House passed the bill by a vote of 358 to 4. The House bill, considered by the Senate Committee, was radically changed on June 22. With the members of both parties acting in agreement, it assumed the character of a new bill based upon the Administration's proposals. Indeed it provided for the first year three more capital ships than the President had recommended. Before reporting the bill to the Senate on June 30, the Committee made a still more radical change. The five-year programme, involving 157 new units and an expenditure of $588,180,000, was converted into a three-year programme. For the first year the bill authorized four battleships, four battle cruisers, four scout cruisers, 20 destroyers, and 30 submarines; it carried a grand total of $315,826,843, or more than twice the amount voted for 1916. Yet no formidable resistance was offered in the Senate. Three Republicans who afterwards voted for the bill (Cummins and Kenyon of Iowa and Townsend of Michigan) made various attempts to reduce the number of capital ships, as did two Democrats (Thomas and Shafroth of Colorado); but their motions commanded only insignificant support. The chief opposition came from a small group of radical or progressive Republicans, the most active of whom were Mr. Clapp (Minn.), Mr.

Minor Defense Measures.-The Fortifications Appropriation Act provided $25,748,050, this sum representing an increase of more than $6,000,000 over 1916. An act of Feb. 15 enlarged the cadet corps at the Naval Academy; each member of Congress and territorial delegate is now permitted to name three cadets instead of two. An act of May 4 enlarged the cadet corps at the Military Academy, assigning two to each Congressional district, two to each territory, four to the District of Columbia, two to Porto Rico, four to each state at large, 80 to the United States at large, and 180 to the enlisted men of the National Guard.

The General Revenue Act.-Contemplating a deficit of $252,701,000 for the fiscal year 1917, the President recommended in his message the extension of the War Revenue Act of 1914, the retention of the sugar duty

pound which would bating unfair competition on the part scum in hay 1. 1916, the of foreign producers in American aerial taxes, and markets. This latter so-called antithe income tax dumping clause imposed penalties in 7. By an act of cases where imported commodities evenue Act was should be sold at a price substantithe amì jî 1916. A bill ally less than their price in the maryoon of the Under-kets of the world with the cost of imby which sugar portation and sale added, the object tood the of duty after of the low price being to prevent the russed the House on establishment of a new American ins me of 346 to 14. The dustry or to injure any existing inCllowing a decision of the dustry or to restrain trade. It also nus amended the bill imposed double duties on articles imsas merely to postpone ported under a restrictive agreement 1206 tưa ai the Underwood pro- binding any one to purchase, use, or vas pernod of four years. Ul- deal in them exclusively. Novskye, by a vote of 59 to

Bungal the House bill, which Yeager, seed on April 27. Jos Servcue bill was favorod from the Ways and La Comm Tree of the House on Republicans, Gardner and Longworth (Ohio), votLaseratie majority; two (lowa) and Sloan we opposing the favorable expressed intention of accepton final passage. ChairAn estimated the total apwww.ves for 1917 at $1,579,000,** Nou $125,000,000 of this amount, been required to meet the A situation, should be financed land issue. To meet an anticicit of $266,922,000 it was to levy new taxes yielding mately $197,000,000 and to $3,922,000 from the General ne of the Treasury. The revenue provided for changes in the intax, the existing exemption limgretained, but the normal or Ny rate increased from one to two nt, and the surtax reclassified rates running from one per cent. comes between $20,000 and $40,V to 10 per cent. on incomes over xx000; an inheritance tax with es varying from one per cent. on ates of $50,000 or less to five per et, on estates of more than $450,; a munition manufacturer's tax five to eight per cent. on gross rewipts: certain miscellaneous taxes; rotective duties for a limited period the importation of dyestuffs (see \XIV, Industrial Chemistry); a TarCommission; and means of com

The Tariff Commission, which did not find a place in the President's message, was advocated in a letter which he addressed to Mr. Kitchin on Jan. 24. He there outlined the proper functions of such a Commission, these embracing generally the operation of the customs tariff laws "in economic effect and administrative method." To some Democrats this letter seemed to imply a lack of faith in the Underwood Tariff; they accused the President of abandoning party principles. He answered his critics in a second letter. "I have changed my mind," he said, "because all the circumstances of the world have changed. . . . I have had in this change of mind no thought whatever of a change in mind toward the so-called protection question." The Commission would have nothing to do with theories or policy, but would deal only with the actual facts of industry and commerce.

As Mr. Kitchin had no sympathy with this proposal, the introduction of a Tariff Commission bill was entrusted to Mr. Rainey (Ill.). This bill provided for a commission of six members, no more than three of the same political party, to be appointed by the President and Senate for 12 years, one retiring every two years, and to be paid salaries of $10,000. After languishing for several months in the Ways and Means Committee, it came before the House as a part of the General Revenue bill. On July 10, after four days of debate, that comprehensive measure was passed without any fundamental change by a vote of 239 to 139, the majority including 39 Republicans and one Inde

pendent. Among minor amendments | exemption (the caucus had refused to

was one which reduced the salaries of the commissioners to $7,500 and another which substituted for the permanent annual appropriation of $300,000 a single appropriation for the first year.

The House bill, after being revised by the Democratic members of the Senate Finance Committee, was subjected to further modification by the Democratic caucus and finally reported to the Senate on Aug. 16. The new features of the bill included: a surtax of 11 to 13 per cent. on incomes over $1,000,000; an increased inheritance tax of six to 10 per cent. on estates between $1,000,000 and $5,000,000; an increase of the munitions tax to 10 per cent. and its application at half that rate to materials used in producing munitions; a corporation stock license tax of 50 cents for each $1,000 of capital, surplus, and undivided profits above $99,000; the postponement of the tax on dyestuffs until after the war; and a clause empowering the President to place an embargo on the admission of articles | from foreign countries when similar articles produced in the United States are not permitted to enter those countries. This clause was apparently directed against the action of the Entente Allies in excluding certain articles designated as luxuries during the period of the war.

sanction such a change when proposed by the Democratic members of the Finance Committee) also failed; the vote was 31 to 19, the minority including five Democrats. The only important changes made by the Senate were in the nature of retaliatory measures directed against the Entente Allies (see also III, International Relations). The first of these provided that where a foreign belligerent, during the existence of a war in which the United States was not engaged, discriminated against any American products, the President should have power to prevent the importation of similar articles into the United States. A second clause empowered the President to refuse clearance papers to any belligerent merchantman refusing to carry American goods unless and only because of lack of cargo space, and imposed heavy penalties for any attempt to sail without such papers. A third clause empowered the President to refuse the use of the mails and of telephone, telegraph, wireless, cable, and express facilities to the citizens of any belligerent countries which should interfere with American mails or withdraw commercial privileges. A fourth clause prohibited the importation through any foreign country, except when bound for an American port, of any fish taken in the North Pacific or its tributaries. The bill passed the Senate on Sept. 6, after a continuous session of 14 hours. The vote was 42 to 16. The Democrats, supporting it solidly, were joined by five Republicans-Clapp (Minn.), Cummins and Kenyon (Iowa), La Follette (Wis.), and Norris (Neb.).

In the main the conferees accepted the Senate's changes. But they elimi

During the course of the debates Mr. Underwood (Ala.) made persistent efforts to secure modifications in the bill. Declaring at the outset that he would not be bound by the decisions of the party caucus (it was technically termed a conference), he came into conflict with several Democratic leaders, particularly Mr. Stone (Mo.). "Of course," the latter remarked, "a demagogue cannot be dra-nated the third and fourth retaliagooned. The position taken by the tory measures just described; fixed Senator from Alabama makes the the munition manufacturer's tax at Democratic caucus worse than use- 121⁄2 per cent. of net profits, the same less." Mr. Underwood was especially rate applying to materials used in opposed to what he termed "Repub- producing munitions; and allowed the lican tariff legislation"; but as only $4,000 income-tax exemption to apsix Democrats joined him in his at- ply not only to married persons but tack upon the dyestuffs duty, it was to heads of families as well. Presiretained by a vote of 43 to 7; and the dent Wilson signed the bill on Sept. provision for a Tariff Commission 8. The detailed provisions of the bill was retained by a vote of 55 to 5. are described elsewhere (see XIV, His effort to reduce the income-tax Public Finance).

tween shippers or ports or between exporters of the United States and their foreign competitors. The requirement of a license for common carriers was omitted. In order to minimize political influence, the composition of the Board was altered so as to include five appointed members in addition to the Cabinet officers.

The Shipping Act.-The failure of then should be sold, leased, or charthe ship-purchase measure in 1915, tered to American citizens and the when Senator Clarke (Ark.) and six other property disposed of to the best other Democrats deserted the Admin- advantage; and that the privately istration (4. Y. B., 1915, p. 71), in- owned stock should be taken over by dicated that concessions would have the Board at a fair and reasonable to be made to secure its passage price. Another change confined the through the Sixty-fourth Congress. general rate-making powers of the President Wilson, in his message, Board to interstate commerce except foreshadowed changes "in some es- where common carriers in foreign sential particulars"; and it was commerce charged rates which aphoped that such changes would pla-peared to discriminate unjustly becate Senator Clarke and Mr. Kitchin. The revised bill, worked out by the Secretary of the Treasury and the Secretary of Commerce, was introduced in the House on Jan. 31. It erected a Shipping Board of five members, the Secretaries of the Navy and Commerce ex officio and three others appointed by the President and Senate for six years and paid $10,000 a year; it invested this Board with authority to regulate commerce on the high seas and the Great Lakes, an authority extending not only to the fixing of reasonable rates, but to the licensing of all vessels, irrespective of nationality, engaged in interstate and foreign commerce, to the approval of the sale of American vessels to foreign interests, to the control of competitive practices, and to the sanctioning of pools which would otherwise be illegal under the Sherman Act; and it empowered the Board to spend a maximum sum of $50,000,000 | in acquiring ships which should be leased or sold to private capitalists for the establishment of new services, or which, failing such arrangements, should be operated under a corporation controlled by the Government as majority stockholder. Thus Government operation was to be a last resort, not to be undertaken unless the Board found it impossible to interest private capital.

Committee hearings, which began on Feb. 10, elicited a good deal of criticism. Still described as an Administration measure, the bill was revised and reintroduced on April 10 and again revised and reintroduced on May 8. The most important change provided that the corporation formed by the Board should be dissolved five years after the close of the European War, its property then reverting to the Board; that the ships

The effect of these changes was to elicit from Mr. Kitchin a promise of active support and from Mr. Clarke an intimation that he might withdraw his opposition. But the Republicans maintained an attitude of resolute hostility, asserting (to quote the minority report from the committee) that the bill "would work immediate and lasting injury." While acquiescing in the creation of the Shipping Board, they deprecated the wide powers entrusted to it. Debate began on May 17 under a special rule which called for final action two days later. But the Republicans, resorting to obstructive tactics and attacking insistently the clauses which empow ered the Board to acquire ships and form a corporation to operate them, delayed the passage of the bill until the 20th. The final vote of 211 to 161 followed party lines, only nine Republicans supporting the bill and only two Democrats opposing it. The bill remained substantially unaltered.

In the Senate progress was exceedingly slow. It was not until July 8 that the Democratic caucus finished consideration of the bill and pledged the party to stand behind it. To disarm criticism the caucus made changes which prohibited the purchase of ships flying a belligerent flag, or already engaged in American trade, or 25 per cent. below their original efficiency; and to ensure the nonpartisan character of the Board the two Cabinet officers were eliminated.