tradition by which no president had Roosevelt who ran as the candidate
held office for more than two terms . of a new Progressive Party . Wilson,
Instead, he supported William How- in a spirited campaign, defeated both
ard Taft, who had served under him rivals .
as governor of the Philippines and
During his first term, Wilson
secretary of war . Taft, pledging to secured one of the most notable leg-
continue Roosevelt’s programs, de- islative programs in American histo-
feated Bryan, who was running for ry . The first task was tariff revision .
the third and last time .
“The tariff duties must be altered,”
The new president continued the Wilson said . “We must abolish ev-
prosecution of trusts with less dis- erything that bears any semblance
crimination than Roosevelt, further of privilege .” The Underwood Tariff,
strengthened the Interstate Com- signed on October 3, 1913, provided
merce Commission, established a substantial rate reductions on im-
postal savings bank and a parcel post ported raw materials and foodstuffs,
system, expanded the civil service, cotton and woolen goods, iron and
and sponsored the enactment of two steel; it removed the duties from
amendments to the Constitution, more than a hundred other items .
both adopted in 1913 .
Although the act retained many pro-
The 16th Amendment, rati- tective features, it was a genuine at-
fied just before Taft left office, au- tempt to lower the cost of living . To
thorized a federal income tax; the compensate for lost revenues, it es-
17th Amendment, approved a few tablished a modest income tax .
months later, mandated the direct
The second item on the Demo-
election of senators by the people, cratic program was a long overdue,
instead of state legislatures . Yet bal- thorough reorganization of the ram-
anced against these progressive mea- shackle banking and currency sys-
sures was Taft’s acceptance of a new tem . “Control,” said Wilson, “must
tariff with higher protective sched- be public, not private, must be vested
ules; his opposition to the entry of in the government itself, so that the
the state of Arizona into the Union banks may be the instruments, not
because of its liberal constitution; the masters, of business and of indi-
and his growing reliance on the con- vidual enterprise and initiative .”
servative wing of his party .
The Federal Reserve Act of De-
By 1910 Taft’s party was bitterly cember 23, 1913, was Wilson’s most
divided . Democrats gained control enduring legislative accomplish-
of Congress in the midterm elec- ment . Conservatives had favored
tions . Two years later, Woodrow establishment of one powerful cen-
Wilson, the Democratic, progressive tral bank . The new act, in line with
governor of the state of New Jersey, the Democratic Party’s Jeffersonian
campaigned against Taft, the Repub- sentiments, divided the country into
lican candidate — and also against 12 districts, with a Federal Reserve
198
OUTLINE OF U.S. HISTORY
Bank in each, all supervised by a na- of 1914 established an “extension
tional Federal Reserve Board with system” of county agents to assist
limited authority to set interest rates . farming throughout the country .
The act assured greater flexibility in Subsequent acts made credit avail-
the money supply and made provi- able to farmers at low rates of in-
sion for issuing federal-reserve notes terest . The Seamen’s Act of 1915
to meet business demands . Greater improved living and working con-
centralization of the system would ditions on board ships . The Fed-
come in the 1930s .
eral Workingman’s Compensation
The next important task was Act in 1916 authorized allowances
trust regulation and investigation of to civil service employees for dis-
corporate abuses . Congress autho- abilities incurred at work and estab-
rized a Federal Trade Commission lished a model for private enterprise .
to issue orders prohibiting “unfair The Adamson Act of the same year
methods of competition” by busi- established an eight-hour day for
ness concerns in interstate trade . railroad labor .
The Clayton Antitrust Act forbade
This record of achievement won
many corporate practices that had Wilson a firm place in American
thus far escaped specific condem- history as one of the nation’s fore-
nation: interlocking directorates, most progressive reformers . How-
price discrimination among pur- ever, his domestic reputation would
chasers, use of the injunction in soon be overshadowed by his record
labor disputes, and ownership by as a wartime president who led his
one corporation of stock in similar country to victory but could not
enterprises .
hold the support of his people for
Farmers and other workers were the peace that followed .
9
not forgotten . The Smith-Lever Act
199