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Wall Street History
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05/24/2002
The Spanish-American War, Part II
It’s the fall of 1898 and the Spanish-American War is over. Now
it’s peace treaty time and among the issues that the United States
faced was what to do with the Philippines. This was a defining
moment in the development of both America’s foreign as well as
trade policies and President McKinley gave U.S. representatives
to the Peace Commission that assembled on October 1st in Paris
the following instructions.
“The presence and success of our arms at Manila imposes upon
us obligations which we cannot disregard. The march of events
rules and overrules human action We cannot be unmindful that,
without any desire or design on our part, the war has brought us
new duties and responsibilities which we must meet and
discharge as becomes a great nation Incidental to our tenure in
the Philippines is the commercial opportunity to which American
statesmanship cannot be indifferent.” [Morison, Commager,
Leuchtenburg]
The debate raged between the expansionists and the anti-
imperialists as the Treaty of Paris, signed December 10, 1898,
forced Spain to renounce its claim to Cuba, while ceding Guam
and Puerto Rico to the U.S. In turn, the U.S. paid Spain $20
million for title to the Philippines. [Spain had been humiliated,
with the U.S. having such an easy time of it that America
basically said, “Take this, we feel sorry for you.”]
McKinley was still greatly troubled, particularly with regards to
the Philippines, and later explained his dilemma to a religious
group.
“And one night late it came to me this way (1) that we could
not give (the Philippines) back to Spain – that would be cowardly
and dishonorable; (2) that we could not turn them over to France
or Germany – our commercial rivals in the Orient – that would
be bad business and discreditable; (3) that we could not leave
them to themselves – they were unfit for self-government – and
they would soon have anarchy and misrule over there worse than
Spain’s was; and (4) that there was nothing left for us to do but
to take them all, and to educate the Filipinos, and uplift and
civilize and Christianize them, and by God’s grace do the very
best we could by them, as our fellowmen for whom Christ also
died. And then I went to bed, and went to sleep and slept
soundly.” [Tindall and Shi]
In the words of historians George Brown Tindall and David Shi,
McKinley had spelled out the reasons behind imperialism: “(1)
national honor, (2) commerce, (3) racial superiority, and (4)
altruism.”
Of course now the Treaty of Paris still had to be ratified by the
U.S. Senate and leading businessmen such as Andrew Carnegie
thought acquiring the Philippines would actually threaten the
peace and security necessary for foreign trade. Labor leader
Samuel Gompers was afraid that the U.S. would be flooded by a
cheap workforce that would then drive down American wages.
[Sound familiar?]
Of course other businessmen saw the Philippines as being the
gateway to the rest of Asia, particularly China and its huge
potential markets for oil (to light lamps), as well as textiles.
But the debate still boiled down to, in the words of historian
Michael Beschloss, “whether a nation that had gained its own
independence through revolution against a colonial power should
now become a colonial power itself.”
McKinley said, “If, following the clear precepts of duty, territory
falls to us, and the welfare of an alien people requires our
guidance and protection, who will shrink from the responsibility,
grave though it may be?”
Finally, on February 6, 1899, the treaty passed the Senate, 57-27,
just one more than the two-thirds required for passage.
Democrat William Jennings Bryan, a frontrunner to battle the
Republican McKinley in 1900, actually helped passage, stupidly,
as he convinced some in his own party that approving the treaty
would hasten the Philippines’ independence. [By supporting
passage, he was inadvertently giving ammunition to his
opponents in the Democratic Party and it helped cost him the
election.]
But, while the U.S. planned to turn the Philippines back over to
the people, eventually, rebel leader Emilio Aguinaldo, who had
accompanied American forces in the capture of Manila the
previous August, sought independence immediately, and, rather
than Spain, suddenly it was the U.S. that was in the way of this
goal. Aguinaldo thus commenced a bloody guerrilla war (shades
of today?), establishing the “Visaya Republic” in the province of
Luzon, while making a bid for foreign recognition.
U.S. newspapers, particularly those controlled by William
Randolph Hearst, clamored “Keep the Philippines,” while the
navy warned of the consequences should Germany or Japan fill
the void. Said one admiral, the Philippines would “convert the
Pacific Ocean into an American lake.”
The guerrilla war, however, proved bloody, with both sides
guilty of atrocities, which only helped rile up the anti-
imperialists. Mark Twain suggested that “(Old Glory should
now have) the white stripes painted black and the stars replaced
by the skull and cross bones.”
In the end, Aguinaldo’s insurrection lasted 3 years, with 1,000
U.S. soldiers killed in action (while scores more died as a result
of disease). Aguinaldo was captured in March 1901 and the
guerrilla movement finally crushed in 1902. William Howard
Taft had earlier been appointed commissioner of the Philippines
and did such a creditable job that it helped lead to his election as
President in 1908.
Of course this is all supposed to be about “Wall Street History,”
but at least you can see how the Spanish-American War, among
other things, played a role in the spread of U.S. influence on the
world trade scene. Oh, and by the way, the chief reason why the
Dow Jones fell 8.7% on December 18, 1899 (the 5th largest
percentage decline in history), was, indeed, due to reports of
American casualties in the Philippines. But I reserve the right to
bring up other explanations for the decline down the road.
Sources:
George Brown Tindall and David E. Shi, “America: A Narrative
History”
Samuel Eliot Morison, Henry Steele Commager and William E.
Leuchtenburg, “The Growth of the American Republic”
Henry Graff / editor, Paul Glad, “The Presidents”
Michael Beschloss / editor, Donald Young, “American Heritage:
The Presidents”
Paul S. Boyer / editor, “The Oxford Companion to United States
History”
*Wall Street History will return June 7.
Brian Trumbore
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