The Sixteenth Grand Council of the Confederation of North America was elected to a five-year term in February 1918. The Sixteenth Grand Council had a People's Coalition majority and a Liberal Party minority, though Sobel does not give the number of seats each party had. The Coalitionist majority elected Calvin Wagner of Indiana to the office of Governor-General, though it is not known who the Coalitionists chose as Majority Leader or who the Liberals chose as Minority Leader.
The Sixteenth Grand Council was the sixth in a row to have a Coalitionist majority, and the seventh in a row in which the P.C. had either a majority or a plurality. During the Grand Council elections, Wagner had promised that another Coalitionist majority would mean "still greater prosperity and continued peace and tranquility." Thus, under Wagner and the P.C. the C.N.A.'s government carried on the policies established thirty years before by Ezra Gallivan: continued industrialization and urbanization at home, a continuation of the National Financial Administration's low-interest start-up loans for new businesses, and continued isolationism abroad.
However, although Wagner was able to deliver on his promise of prosperity, the peace and tranquility of the nation had already been dealt a serious blow under his predecessor, Governor-General Albert Merriman. On 4 January 1916, thousands of North American citizens belonging to the Friends of Black Mexico had attacked the Federal Prison in Mexico City, freeing 8,000 Mexican Negro slaves who were being tried for treason, known as the Chapultepec Incident. The incident had nearly precipitated war between the C.N.A. and the United States of Mexico. The Confederation Bureau of Investigation's harsh reprisals against the F.B.M. had caused a backlash that sparked a series of race riots and gave birth to the New Radicals, a group of organizations such as the Agrarian Alliance, Universities for Justice, and the Workers' Army who supported various radical reforms, all aimed at changing the basic nature of North American society, though in different and often contradictory ways.
When slavery was abolished in Mexico in May 1920, Howard Washburne, the leader of the F.B.M., converted the organization into the League for Brotherhood, which was dedicated to combating racism in the C.N.A. The members of the various New Radical groups quickly joined the L.B., and soon controlled it, relegating Washburne to obscurity. By the summer of 1922 growing opposition to the New Radicalism by conservatives led to serious outbreaks of social disorder as the two sides fought in the streets. The C.N.A. appeared to be on the brink of civil war, when in December the locomobile magnate Owen Galloway proposed his own remedy to the crisis: the Galloway Plan, which would subsidize the emigration of North Americans within and from the C.N.A., thus separating the two groups into their own enclaves.
The reaction to Galloway's proposal was overwhelmingly positive on both sides of the national divide. An unsuccessful attempt was made to draft Galloway for governor-general, and in the 1923 Grand Council elections both candidates sought to present themselves as more supportive of Galloway. Liberal challenger Henderson Dewey proved more adept than Wagner at convincing voters, even going so far as to mimic Galloway's wooden speaking style, and the first Liberal majority in 35 years was elected.
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