Wilson in Office: The Revival of Progressivism
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 policies.
Lowering Tariffs
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.
Business Regulation
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 Mexico.
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.”
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