United States

The first item in Wilson’s program was tariff reform, a perennial Democratic objective since the Civil War; the president’s measure, the Underwood Tariff Act of 1913, reduced average rates from 40 percent to 25 percent, greatly enlarged the free list, and included a modest income tax. Next came adoption of the president’s measure for banking and monetary reform, the Federal Reserve Act of 1913, which created a federal reserve system to mobilize banking reserves and issue a flexible new currency—federal reserve notes—based on gold and commercial paper; uniting and supervising the entire system was a federal reserve board of presidential appointees.

The third, and Wilson thought the last, part of the New Freedom program was antitrust reform. In his first significant movement toward Roosevelt’s New Nationalism, Wilson reversed his position that merely strengthening the Sherman Antitrust Act would suffice to prevent monopoly. Instead, he took up and pushed through Congress the Progressive-sponsored Federal Trade Commission Act of 1914. It established an agency—the Federal Trade Commission (FTC)—with sweeping authority to prevent business practices that would lead to monopoly. Meanwhile, Wilson had abandoned his original measure, the Clayton Antitrust Act passed by Congress in 1914; its severe provisions against interlocking directorates and practices tending toward monopoly had been gravely weakened by the time the president signed it. The Clayton Act included a declaration that labour unions, as such, were not to be construed as conspiracies in restraint of trade in violation of the antitrust laws, but what organized labour wanted, and did not get, was immunity from prosecution for such measures as the sympathetic strike and the secondary boycott, which the courts had proscribed as violations of the Sherman Act.

In a public letter in November 1914, the president announced that his reform program was complete. But various groups were still demanding the advanced kind of social and economic legislation that Roosevelt had advocated in 1912; also, by early 1916 the Progressive Party had largely disintegrated, and Wilson knew that he could win reelection only with the support of a substantial minority of Roosevelt’s former followers. Consequently—and also because his own political thinking had been moving toward a more advanced Progressive position—Wilson struck out upon a new political course in 1916. He began by appointing Louis D. Brandeis, the leading critic of big business and finance, to the Supreme Court. Then in quick succession he obtained passage of a rural-credits measure to supply cheap long-term credit to farmers; anti-child-labour and federal workmen’s-compensation legislation; the Adamson Act, establishing the eight-hour day for interstate railroad workers; and measures for federal aid to education and highway construction. With such a program behind him, Wilson was able to rally a new coalition of Democrats, former Progressives, independents, social workers, and a large minority of Socialists, and he narrowly defeated his Republican opponent, Charles Evans Hughes, in the 1916 presidential election.

Brandeis, LouisLouis Brandeis.Library of Congress, Washington, D.C.

The rise to world power

Woodrow Wilson and the Mexican Revolution

Although Wilson’s consuming interest was in domestic politics, he had to deal primarily with foreign affairs while in the White House, and before the end of his presidency he had developed into a diplomatist of great skill as well as one of the commanding figures in world affairs. He was a “strong” president in the conduct of foreign policy, writing most of the important diplomatic correspondence of his government and making all important decisions himself. He usually worked well with his secretaries of state, Bryan and Robert Lansing, and often relied for advice upon his confidential counselor, Col. Edward M. House of Texas.

Wilson served his apprenticeship by having to deal at the outset of his administration with an uprising in Mexico, set off when a military usurper, Victoriano Huerta, murdered liberal president Francisco Madero and seized the executive power in February 1913. It was difficult for the United States to remain aloof because Americans had invested heavily in Mexico and 40,000 U.S. citizens resided there.

Mexican Pres. Victoriano Huerta (seated centre) with his cabinet, c. 1910–15. Bain Collection/Library of Congress, Washington, D.C. (LC-DIG-ggbain-14712)