feared that its effect upon the expansion of legitimate business would be hampering. But the country had not recovered from its rather dazed condition when, only two weeks later, the Supreme Court handed down a decision requiring the dissolution of the American Tobacco Company, suit against which had been begun in the circuit court for the southern district of New York in July of 1907. The higher court swept away the interpretation of facts made by the circuit court, as well as the interpretation of law, and held the combination unlawful not only because of the dominion and control over the tobacco trade which actually exists" but because "the conclusion of wrongful purposes and illegal combination is overwhelmingly established by the undisputed facts of the evidence."

In June of 1911, the circuit court granted to the government contention a decree of dissolution against the DuPont Powder Company and, in October of the same year, decrees against the Southern Grocers Association and the Standard Sanitary Manufacturing Company, the latter commonly known as the "Bathtub Trust." It was in October also that suit was filed in the United States court at Trenton, New Jersey, against the United States Steel Corporation and eighteen individuals, seeking the dissolution not only of the corporation itself but of its constituent companies as well. This prosecution is perhaps the most important and far

reaching yet started under the Sherman Law, not so much on account of the enormous capitalization of the Trust as its acknowledged freedom from some of the worst features that had characterized other corporations. Two suits, civil and criminal, were also begun against the Beef Trust, one result of which was that, in the summer of 1912, the corporation was obliged to publish its plan for dissolution. In the latter year the Attorney-General asked the Supreme Court to dissolve the merger of the Union Pacific and Southern railroads, and took decisive measures against the Harvester Trust.

One of the most important events of the second year of Mr. Taft's administration was the satisfactory culmination of the century-long and sometimes bellicose disputes between the United States and Great Britain regarding the North American fisheries. These disputes had resolved themselves into seven questions involving the interpretation of the Anglo-American Treaty of 1818 and were referred to the Hague Tribunal for final settlement. It was a triumph for the cause of international arbitration that these vexing and sometimes threatening complications could be adjudicated so smoothly and that the result should be accepted with such entire acquiescence by the parties concerned. The decision was rendered on September 7, 1910, and became irrevocable on September 12. During the five-day period allowed by law for protest, no protest whatever, or even comment, was offici

ally offered by either the British or United States governments.

There were five arbitrators on the board of award, the United States being represented by the Hon. George Gray, of Delaware, of the United States Circuit Court of Appeals; the leading counsel for the United States was Senator Elihu Root.* Of the seven questions, the first and fifth were decided contrary to the claims of the United States, the others in her favor. The first question involved the point whether any "reasonable regulations made by Great Britain, Canada and Newfoundland in the form of

municipal laws, ordinances or rules

must be submitted to the consent of

the United States." Its decision in the negative appears to impartial observers a reasonable one, as any other view would have been, seemingly, an unwarrantable cession of sovereignty on the part of those countries. The fifth question involved the "headland doctrine." The British had contended that "the three marine miles within which the United States agreed not to fish should be measured from an imaginary line drawn across the

The other members of the tribunal were; President of the Tribunal, Dr. Heinrich Lammasch, of Austria, professor in the University of Vienna and member of the upper house of the Austrian Parliament; His Excellency, A. F. de Savornin Lohman, former Minister of State of the Netherlands; Canada's special representative, Sir Charles Fitzpatrick, Chief Justice of the Dominion Supreme Court; and Dr. Luis Maria Drago, formerly Minister of Foreign Affairs in the Argentine Republic, probably the most eminent jurist of South America.

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mouth of the bay, no matter how wide, from headland to headland," while America argued that the line should follow the coast's sinuosities. One of

the judges, Dr. Drago, dissented from the majority opinion on this question which was some consolation to American pride.

The other five points, on which the United States won, established that hereafter the British cannot compel our fishermen to report to custom houses; they cannot impose on these fishermen light, harbor or other dues when entering bays or harbors for shelter or other necessities; we may employ men who are not inhabitants of the United States on our fishing vessels, and these vessels have the right to purchase supplies and to enjoy other commercial privileges. The award provided also- and this was not the least of the benefits it wrought — that other disputed fishing regulations be submitted to a commission, the composition of which is stipulated, and recommended that a similar permanent commission be created for the settlement of future disputes.

One of the chief causes of the midadministration revolt, so likely to occur against the party in power, had its inception in the tariff, that ancient trouble-maker for more than one President. While the business world had a sincere purpose to regard the new schedules as a fixed fact for at least some years to come and so adjust itself to changed conditions, the country as a whole, including many leaders in

"

the Republican party, felt, and suppressed no qualms in saying, that the party had not redeemed the promises made in the platform of 1908. The iniquitous Schedule K"- the woolen section-which, with the cotton schedule, was supposed to keep up high prices on clothing-were both subjected to a galling fire; while as for the "rubber robbery," Senator Bristow, a leading Insurgent, laid the responsibility for its extortionate rates directly at the door of Senator Aldrich himself. The opponents of the tariff charged that the 1909 tariff, from which so much had been expected, was simply a new and aggravated example of log-rolling and inter-bargaining of special interests. Newspapers and magazines reiterated the question whether that could be considered a "reasonable " profit to American industries which increased the duties on cotton, for instance, by amounts ranging from 40 to 85 per cent. And Senator Dolliver, another Insurgent, related how the Diamond Rubber Company of Ohio had in ten years declared stock dividends in creasing its capital from $50,000 to $10,000,000. Indeed this same Senator declared, shortly before the fall elections, that "the public has asked and asked again, in vain, for some one to point out a single reduction on any article ready to enter into consumption which has a commercial significance of any sort." This phase touched the public at a tender spot, for it seemed to indicate one source,

at least, of undeniable increases in the rates of many important articles of general consumption. The President, however, asserted that the general average duty was less nder the PayneAldrich Act than under those preceding, as it embraced "decreases on 654 items, involving a consumption value of $5,000,000,000." There being this radical difference of opinion, all parties agreed to lave the tariff question in statu quo until the electorate had expressed its opinion by the ballot. Certain it was that the new customs duties produced a revenue of $15,000,000 over that of 1909, and the new corporation tax produced $25,000,000 more, the latter item being a clear gain. Proclamations were issued and the entire machinery of the" maximum and minimum " rate clause put in operation, so that the entire import trade of the country was brought to the basis of the minimum rates.

The tariff board, it may be remembered, was created for the primary purpose of assisting to adjust the "maximum and minimum " rates, but the President, who had from the first been alive to the advantages of an expert tariff commission for wide researches on which to base future tariff legislation, asked and obtained from Congress an appropriation of $250,000 to continue the board for another year. The scope of its field was not officially enlarged, but there seemed to be an understanding that a general quest for information should be carried on which should further the " ad

Democratic Senators to take the places of as many Republicans, and 15 Democratic governors were elected, 7 of them to succeed governors of the opposing party.

The elections of 1910, nevertheless, widened the cleavage not so much between the two great parties as between the reactionary and progressive elements in the Republican party. In the Democratic party a similar but far less apparent division of opinion existed, which was destined to have its influence in shaping a course on the tariff in channels quite divergent from the party's traditional attitude. The views of President Taft toward the new movement were also somewhat modified, at least to the extent of publicly announcing a restoration of the patronage perquisites which he had formerly felt compelled to withdraw from those who gave indica tions of deserting the "Old Guard."

The Progressives continued to gain strength throughout the year following the Congressional elections, winning many adherents, especially in the Middle and Far West; while there were not wanting signs that, more slowly to be sure, but none the less irresistibly, the revolt against former procedures in framing public policies and against the control which special privilege and interests were claimed. to be exercising over legislation, was extending to the more conservative East. Concrete evidence of this numerical gain, as well as of the ever widening scope of the new movement

of protest, was furnished early in the year by the formation of a National Progressive Republican League for "the promotion of popular government and progressive legislation through five specific reforms. These were: Popular election of United States Senators; direct primaries for all elective offices; Presidential primaries for choosing delegates to National conventions; amendments to State constitutions providing for the initiative, referendum and recall; and an effective corrupt practices act. Nearly all the "Progressive" Senators, now far outnumbering the original seven, and many well known leaders in the Republican party, were included in the membership. They were loyal party men who, nevertheless, demanding that party pledges should be fulfilled, regarded a failure to do so sufficient reason for protest; while, as for the advanced ground which they took on new policies, their hope at this stage was to bring the party into alignment. This turning point was President Taft's second great opportunity. How he met it in his third year remains to be seen.

The general criticism of the PayneAldrich bill was now being directed against specific schedules, even the President admitting that some features of the wool schedule were "indefensible "; and, as an extra session of Congress had been called to deal with Canadian reciprocity, the Democrats seized the opportunity to strike at the root of reciprocity, the tariff.