Wilson, Woodrow (Administration)

HISTORIES OF WOODROW Wilson's presidency (1913–21) often focus on Wilson's internationalism, and particularly his role in bringing the United States into World War I. However, during the first of his two terms in office, Wilson undertook significant domestic action that served the interests of the poor.

In 1910, while serving as president of Princeton University, Wilson was elected governor of New Jersey. He ran as a strong Progressive, surprising state Democratic Party leaders who had nominated him based on his reputation as a moderate. During his brief tenure as governor, Wilson succeeded in creating a state Public Utilities Commission, establishing a statewide accident insurance program, and enacting massive electoral reform, including the introduction of party primary elections in New Jersey.

In 1912, Wilson was elected president of the United States with 42 percent of the popular vote in a four-way race. (He received 82 percent of the electoral vote.) In the campaign, Wilson's New Freedom platform espoused states' rights and individualism, but also called for federal action on specific issues, including tariff reduction, child labor, monetary policy, and the elimination of special corporate privileges. With Wil-son's fellow Democrats in control of Congress, Wilson was able to advance much of his agenda into law.

First, shortly after taking office in 1913, Wilson signed into law the Underwood-Simmons Tariff Act. In order to curb the cost of living for American consumers, this legislation reduced or eliminated numerous import tariffs that had earlier been erected to protect U.S. business interests against foreign competition. In addition to lowering average tariff rates from 40 percent to 26 percent, the act eliminated all import tariffs on wool, consumer goods, iron, steel, and steel products. Lost tariff revenues were replaced by a modest federal income tax.

Also in 1913, the enactment of the Federal Reserve Act resolved a heated controversy over who would control the issuance and supply of U.S. currency: private financial institutions or the U.S. government. Under the compromise legislation, public control over currency supply and interest rates would be exercised by the Board of Governors of the Federal Reserve System, a newly created federal agency.

This board, in turn, would regulate and supervise 12 privately operated regional Federal Reserve Banks that would move currency and coin into and out of circulation, and process millions of checks each day. Wilson stated that this bifurcated system would ensure “that the banks may be the instruments, not the masters, of business and of individual enterprise and initiative,” as related by Arthur S. Link.

In 1914, Congress moved to strengthen existing antitrust laws in order to combat the power of monopolies and curtail anticompetitive business practices. To those ends, the Clayton Antitrust Act prohibited anti-competitive corporate mergers, acquisitions, and tying arrangements. The act also prohibited corporations that were supposed to be competing against one another from sharing interlocking directorates. Although the Clayton Act generally prohibited collusive economic behavior, standard tools of organized labor such as secondary boycotts, strikes, and peaceful picketing remained lawful. In a separate but related statute, Congress in 1914 also created the Federal Trade Commission, which was charged with enforcing the Clayton Act and several other competition statutes.

...