Wilson in Office: The Revival of Progressivism
Once in office, Wilson pushed a more aggressive progressive
agenda than either of his two predecessors. He lowered tariffs and
championed corporate regulation and banking reform, among other
Wilson’s first legislative action was to lower the tariff.
In 1913, he sponsored the Underwood Tariff, which cut
tariffs substantially. It was the nation’s first reduction in tariffs
since before the civil war. Also in 1913, Wilson helped launch an
investigation into the possibly corrupt relations between pro-tariff
lobbyists and certain senators.
The Federal Reserve System
Wilson and his supporters sought to create a centralized
bank system under public control, which would be able to stabilize
the economy in times of panic. After months of bargaining, Congress
passed the Federal Reserve Act in 1913. This act established
a network of regional Federal Reserve banks under partially private
and partially public control. The Federal Reserve Board was created
to oversee the entire network and national fiscal policy. Initially
weak, the “Fed” would become a powerful force in American economics.
Wilson’s most notable legislative achievement
was the 1913 passage of the Federal Reserve Act, establishing the
system of Federal Reserve banks still in use today.
Wilson pushed two important regulatory measures through
Congress in 1914. First, the Federal Trade Commission Act created
a five-member agency to investigate suspected violations of interstate
trade regulations and to issue “cease and desist” orders should
it find corporations guilty of unfair practices. Secondly, the Clayton
Antitrust Act improved upon the vague Sherman Antitrust
Act by enumerating a series of illegal business practices.
The Wilson administration initiated antitrust suits against almost
one hundred corporations.
Labor and Farm Reform
Wilson strongly supported worker’s rights. Under his administration,
Congress passed a series of labor laws designed to ban child labor,
shorten workdays, and, in the Workmen’s Compensation Act, provide
injury protection to federal employees. Wilson also supported reforms
benefiting farmers, such as low-interest loan programs.
“New Freedom” in Foreign Policy
Wilson rejected the big stick and dollar diplomacy approaches
to foreign policy in favor of “new freedom,” an idealistic
foreign policy aimed at morality in international affairs. He pledged
never to seek territorial expansion by conquest, and instead focused
on advancing capitalism and democracy throughout the world. To signal
his rejection of the old methods, Wilson withdrew American partnership
from a loan consortium in China in 1913. Between 1913 and 1917,
he tried with varying success to help foster democracy and stability
In 1914, war erupted across Europe. Soon after the war’s
outbreak, Wilson issued a statement of neutrality designed to keep
the U.S. out of the conflict. In 1916, Wilson was reelected in large
part on the slogan, “He kept us out of war.”