It is true that early in the last century the various State Governments of America did enter into financial partnership with the promoters of canals; and later, when steam railways were introduced, States and cities and towns and counties alike were appealed to for assistance in building railways. Nor was the appeal unheeded, for in the forties and fifties an epidemic, very similar to the present fever for municipal trading in England swept over the country, and ended in bankruptcy and ruin, not only of cities and towns, but of important States. Bonds issued by State and local authorities for the promotion of railways went in default. These and kindred experiences taught them the useful lesson that there was a limit to State and municipal credit. The taxpayers of those times, who saw their property practically confiscated to pay for enterprises which should have been left to individual endeavour or private speculators, invented a device known as "the Debt-limit Clause," and this clause, in some form or other, had been inserted in nearly every State Constitution drawn and adopted since those days of financial disaster and destruction of State and local credit. Partly owing to debt limitation and partly because private enterprise had been allowed a freer headway in such undertakings as the supply of gas, electric lighting, tramways, and telephones, there is to-day in America no city owning and operating its own tramways and street railways, probably less than half a dozen manufacturing gas, a very few engaged in supplying electric light, and not one in the telephone business.

CHAPTER VI

THE NEW DIPLOMACY

WE pass now from America's territorial expansion and domestic law-making to consider her new foreign relations.

1

America has somewhat blindly and naïvely entered the international arena. Her advantages are her wealth and rude strength; her disadvantages are those inseparable from democracy, from the peculiar formation of her Government, from ignorance of usage, want of political continuity, and from a too-exalted conception of her own position and destiny. Thus hampered, it is inevitable she must make in this new business more enemies than friends. It is the chief purpose and the truest province of diplomacy to make friends. Friends mean good-will, good-will means markets, markets prosperity, prosperity domestic peace and more intellectual and spiritual expansion. Let us now see if American policy is calculated to encompass these great ends.

Diplomacy-respect for another nation's rightsregard for legality; comity, the jus gentium-is all so new to Americans that it is small wonder they stumble.

1 Signor Bonamico has said that America will necessarily become an aggressive military power, and anticipates its eventual solidarity with the Dual Alliance.

"What have we to do with foreigners and treaties?" once asked the eminent Senator Matthews.1

Washington's Farewell Address is commonly summarized as "advice to steer clear of European entanglements." Consequently, without reading that document, a large body of Americans conceive that it recommends national isolation and advises against alliances of any sort with any European nation. But, as a matter of fact, Washington merely considered as entangling any European alliance which should make America the vassal of any other; any alliance in which his country should be an unequal partner and dependant. He contemplated temporary alliances on a footing of equality, but counselled against permanent ones, because the relative strength of nations is not a fixed equality, but constantly fluctuates. "It is," said he, "our true policy to steer clear of permanent alliances with any portion of the foreign world . . . we may safely trust to temporary alliances for extraordinary emergencies."

Again," he says, "It must be unwise for us to implicate ourselves, by artificial ties, in the ordinary vicissitudes of her (Europe's) politics, or the ordinary combinations and collisions of her friendships and enmities," clearly implying that time might bring ties

1 To show what a quantité negligeable America was in international matters before the war, we need only refer to the experience of their Minister to China so recently as 1894.

"So far did the idea that we ought to take no part in foreign questions extend," says Mr. Denby, "that some of my colleagues at Pekin, when I undertook to make peace for China and Japan, deprecated any intervention whatever of the United States in the affairs of the Far East." He proceeds, "We hold our heads higher now. We are coming to our own. stretching out our hands for what nature meant should be ours. taking our proper rank among the nations of the world; we are after markets -the greatest markets now existing in the world,” etc., etc.

We are

We are

that were not artificial, but natural and politic. He even believed also that America might wisely become a member of a European coalition, and this doctrine of his is accentuated by the recent discovery of certain omitted words in the original draft of the famous address. Speaking of neutrality, he says that one of the results would be that "beligerent nations, under the impossibility of making acquisitions upon us will not lightly hazard the giving us provocation." In the first draft the sentence continues" to throw our weight into the opposite scale," which, although subsequently erased, shows what was in Washington's mind, viz. that armed intervention in Europe was a future possibility for his nation.

Furthermore, writing to La Fayette, he says that "these United States shall one day have a weight in the scale of Empire." He also describes himself as a member of an infant empire."

(6

The dramatic collapse of Spain under American blows startled the Continental nations of Europe, who for at least three centuries had regarded the Spanish Court with a respect hardly justified by its real modern weakness. The apparition of the new power was likened to the descent of a brigade from the planet Mars -"a force singularly potent, absolutely new and not quite accountable, had suddenly put itself in evidence.'

In Asia we have for some years witnessed the spectacle of the European powers striving to obtain concessions which would end in territorial acquisition, with the avowed intention of closing the ports of such acquired territories to the world's commerce in favour of its own, by the imposition of exorbitant customs

duties. But it is not to the interest of two countries, Britain and America, to conform to such policy. They are enabled by their resources, the industry and the inventiveness of their peoples, and their facilities for reaching foreign markets, to compete on equal terms. Both possess a large and increasing population, and large and increasing surplus production, dependent on foreign markets for an outlet.

It is clear that the interests of these countries demand that no combination of Powers be permitted to close the ports of Asia to their commerce.

But although it was equally to America's interest, she long stood by inert, lending no aid to Britain in her efforts to avert the impending danger. She was fettered by her historic policy of isolation, a policy enunciated by most of her leading statesmen from Washington to Cleveland. In spite of the interests she had at stake, she remained silent, while France acquired Madagascar and abrogated American treaty rights by imposing discriminating duties in favour of French products. No word came from President or Foreign Secretary or Senate when the Chinese territory was occupied by Russia, Germany, and France, threatening dismemberment of the ancient Empire.

Yet Russia and Germany, by means of their protective policy, were shutting America off the northern coast of Asia from territories which might readily become large markets.

The general partition of China would mean placing American goods at a disadvantage. On the other hand, what is the good of the "open door" to Germans who are seeking protection for their manufactures. The