Woodrow Wilson

The Visionary President

What handicaps did President Wilson have when he entered the office in 1913?

He was a minority President chosen by only 42 percent of the vote.No experience in national politics.He knew few Democratic leaders.Democrats not expected to work well together due to local interests.Democrats were so long out of power that they lacked experience running the government at the Federal level.

What advantages did Wilson have entering office?

1912 Election sent a clear message that people in the United States wanted change.No prominent Democratic leaders opposed Wilson.Had the support of Democratic leaders especially William Jennings Bryan, the most powerful Democrat in Congress.

What did Wilson see as the purpose of his election to office?

To do away with the evils that, along with many blessings, industrialism had brought.Some of the evils were: inexcusable waste of natural resources, the human cost of unrestrained individualism, and the use of government for private and selfish purposes.

Wilson’s speech before Congress the first in 100 years.

Tariffs had,” built up a set of privileges and exemptions from competition behind which it was easy to organize monopoly until …nothing is obliged to stand the tests of efficiency and economy.”

– Woodrow Wilson

What reasons did Wilson give for promoting the lowering of the tariffs?

Lower rates would help businesses by putting them under constant necessity to be efficient, economical and enterprising.Opening America’s markets would open foreign markets to American goods.

Where did the real fight over the tariff occur?The Senate where the Democrats held only a six vote majority.Lobbyists swarmed capitol hill pressuring Senators to alter the bill.

How did Wilson get the Underwood Tariff Bill to pass the Senate?

He appealed to the people denouncing the insidious lobbyists and asked an aroused public to put an end to this unbearable situation.He held personal conferences with Democratic senators.He wrote letters to those threatening to oppose him.

What was the significance of the Underwood Tariff Act?

First substantial drop in import duties since 1857.It attempted to fix duties at a level where the costs of production in the United States and abroad would be equalized thus lowering the duty on over 1,000 articles.It removed protection entirely on products that were already competing successfully with foreign products.

What happened to banks in 1907?There were runs on many banks due to the failure of financial markets on Wall Street.Many banks closed and stopped lending money throughout the crisis.In 1908 the Federal government set up a commission to investigate the Panic and propose changes to the banking system.

What four aspects of the banking system were flawed according to the Aldrich Commission?

American banks lacked stability in a crisis. They did not keep enough money in reserve to cover sudden withdrawals, and not enough cooperation among banks.America’s currency was inflexible. The amount of money in circulation was tied to the amount of gold and silver in the treasury, plus bonds held by the national banks.The present system provided no means to increase or decrease the supply of money.

What four aspects of the banking system were flawed according to the Aldrich Commission?

Third there was no central control of banking practices. Too much capital was concentrated in New York City and on Wall Street. Meanwhile other parts of the country, especially isolated rural districts often suffered from a lack of adequate banking facilities and credit.

What two approaches to solving the banking crisis were considered?

Conservative: A great central bank, privately controlled like the first and second Banks of the United States.Progressive: Strict Federal control of banking and credit.

Wilson creates the Federal Reserve12 Federal Reserve Banks situated around the country.All national banks required to join.Other banks to join voluntarily.Federal Reserve dealt only with member banks.Provided support for banks in times of difficulty such as runs.Provided for local investment allowing money to move freely from one part of the country to another.

How did the Federal Reserve provide a compromise between private and public control?The Federal Reserve Banks were privately owned.A majority of the directors were were elected by member banks.Overall control remained in the hands of the Federal Reserve board whose 7 members were appointed by the President.The Senate confirms the nominations to a 14 year term in office.Financial center of the U.S. moves to Washington D.C.

What was the purpose of the Federal Trade Commission?

Investigate and regulate business practices.Had the power to:

Order companies to cease and desist from unfair conduct.Charged with enforcing antitrust laws and preventing unlawful suppression of competition.

What practices did the Clayton Antitrust Act forbid?

Price cutting:Whereby a company deliberately sold goods at a loss to drive weaker competitors out of business.

Tying of contracts:A purchaser of goods from a particular company had to agree not to trade with its competitors.

Incorporate Investment:Whereby a company bought part ownership in rival concern.

Clayton Antitrust Act ContinuedInterlocking directorates

Between banks and large corporations whereby the same people acted as directors in many different companies.

Favorable union language:“nothing in the antitrust laws shall be construed to forbid the existence and operation of labor organizations.

How had the Sherman Antitrust Act been used against Unions?

Forbid Conspiracies:Danbury Hatter’s Case (1903 –1915) Trade Union was required to pay triple damages to a business whose product had been boycotted.

Clayton Antitrust ContinuedFavorable union language:

Forbade federal courts from issuing injunctions against peaceful strikes, picketing, boycotts or union meetings.

Protection circumvented:Limited to unions pursuing their legitimate purposes. It was courts who defined the legitimate. Injunctions could still be issued to prevent irreparable

damage to property or to a property right.