Events
1913Sixteenth and Seventeenth Amendments are ratifiedCongress passes Federal Reserve Act and Underwood
Tariff
1914Panama Canal is completedCongress passes Clayton Anti-Trust Act, establishes
Federal Trade CommissionUnited States occupies Vera Cruz, Mexico
1915Congress passes La Follette Seaman’s ActUnited States invades Haiti
1916Congress passes Workingmen’s Compensation Act, Federal
Farm Loan Act, Warehouse Act, Adamson Act, and Jones ActPancho Villa attacks New MexicoUnited States invades Dominican Republic
1917United States buys Virgin Islands
Key People
Woodrow Wilson -
28th
U.S. president; outlined New Freedom domestic policies to lower protective
tariff and tame big business
Venustiano Carranza - General who took power in Mexico after
1914 coup
ousted revolutionary leader Victoriano Huerta
Pancho Villa - Mexican
rebel who tried to provoke war between the United States and Mexico
in order to oust Venustiano Carranza from power
John J. Pershing - General sent by Wilson to pursue Villa’s band of
Mexican rebels into Mexico in
1916
The New Freedom
Even though Woodrow Wilson won the vast majority
of electoral votes in the election of 1912,
he received only 41 percent of the popular
vote, ostensibly leaving him with little mandate. Despite this handicap,
Wilson managed to accomplish every one of his major domestic goals
on his progressive New Freedom agenda. In just four years,
Wilson reduced the tariff, passed more anti-trust legislation, and
reformed the banking system.
Wilson began in 1913 by
pushing Congress to pass the Underwood Tariff, which
drastically reduced duties on foreign goods from an average rate
of 40 percent to an average rate of 25 percent.
Congress compensated for the loss of revenue by creating a national
income tax under the Sixteenth Amendment, another major progressive
achievement of 1913.
Banking Reform
Next, Wilson took on the banking industry, which despite
industrialization and the population boom had remained essentially unchanged
since the Civil War. In 1913,
Wilson and Congress passed the Federal Reserve Act to
create a decentralized national bank comprising twelve regional
branches. Collectively, all the private banks in each region owned
and operated that respective region’s branch. However, the new Federal
Reserve Board had the final say in decisions affecting all
branches, including setting interest rates and issuing currency.
This new banking system helped stabilize national finances and credit
and helped the financial system survive two world wars and the Great
Depression.
Other Progressive Legislation
Wilson also continued to crack down on trusts, most notably
by convincing Congress to pass the Clayton Anti-Trust Act in 1914. Unlike
the Sherman Anti-Trust Act, the Clayton Anti-Trust Act actually
gave lawmakers the power to punish monopolistic corporations. Furthermore,
it legalized labor unions and their right to strike peacefully.
Congress passed a wide variety of other progressive legislation during
Wilson’s first term. The La Follette Seaman’s Act of 1915,
for example, protected sailors’ rights and wages on merchant ships, while
the Federal Farm Loan Act and the Warehouse Act of 1916 gave farmers
access to easy credit. That same year, Congress also passed the Workingmen’s
Compensation Act to help support temporarily disabled federal
employees and the Adamson Act to establish an eight-hour
workday for all employees on interstate railroads. With the ratification
of the Seventeenth Amendment in 1913,
Americans won the right to elect U.S. senators directly.
Wilson’s Foreign Policy
In foreign affairs, Wilson flatly rejected Roosevelt’s
Big Stick Diplomacy and Taft’s Dollar Diplomacy in favor of a more
moralistic approach to international relations. He immediately withdrew
federal support for American investors abroad and pressured Congress to
give increased (but not complete) control of the Panama Canal to Panama.
In 1916, he signed
the Jones Act, which made the Philippines an official
U.S. territory and promised Filipinos independence once they established
a stable government. Wilson did, however, send troops to Haiti,
the Dominican Republic, and Cuba and purchased the U.S. Virgin Islands
from Denmark in 1917.
