I. BIOGRAPHY

Wilson was born in Virginia in 1856. He grew up in Georgia and the Carolinas during the Civil War and Reconstruction. Wilson was by birth a Southerner. His father was a Presbyterian minister. Wilson graduated from Princeton in 1879. He did graduate work at John Hopkins University in Baltimore, and then taught history and political science at Bryn Mawr College. In 1890 he began teaching at Princeton, and in 1902 was elected president of Princeton. In 1910 he became governor of New Jersey. As governor he pushed through a workman's compensation law for New Jersey.

In the election of 1912 Wilson won the Democratic nomination. He embraced some progressive reforms, such as regulation of big business and better conditions for labor. Democrats traditionally favored an anti-trust policy of breaking up the monopolies and promoting competition between small businesses. In contrast Roosevelt felt that large corporations were a fact of modern life and were here to stay. Big business could not be wished away. You could not turn the clock back. Instead, the power of big business must be counterbalanced by the power of big government and in time, big labor or big unions.

The Republicans divided, and Wilson won the election of 1912. Not only that, the Democratic majority in the House of Representatives increased and they had a majority of 290-145. In the Senate the Democrats had a majority of 51 to 45.

Under Wilson the interests of agriculture and the South and West got a more favorable hearing in Washington. Federal Progressivism reached its peak under Wilson and the Democrats.

II. THE LEGISLATIVE ACCOMPLISHMENT

1. THE UNDERWOOD-SIMMONS TARIFF

Southerners had complained about the tariff since at least 1828. Since 1861 the Republicans had maintained high protective tariffs. In 1913, as one of his very first acts, Wilson asked Congress to lower tariffs. He called Congress into special session for the purpose, and personally addressed a joint session of the Congress. The Underwood-Simmons Tariff of 1913 lowered duties on 958 items (raised them on 86 items, and left them the same on 307 items. The tariff was lowered on cotton and woolen goods, iron and steel. On the free list of 300 items, with no duties at all, were placed sugar, wool, iron ore, steel rails, cement, coal, wood, and wood pulp and agricultural implements. The two sugar senators from Louisiana were the only Democrats in the Senate to vote against the bill. (Tindall and Shi, p. 967). Overall, the average duty fell from 37% to 29%.

2. SIXTEENTH AMENDMENT (INCOME TAX)

As part of the Ocala Platform of 1890 the Populists had called for an income tax, indeed a graduated income tax. There had been an income tax asd a temporary emergency war measure during the Civil War, and it was repealed in 1872. . And between 1874 and 1894 some 68 bills to restore the income tax were introduced into Congress. All were sidetracked or buried in committee. In 1893 representatives from the South and the West pushed hard for an income tax, and that year it passed the House 182-48, with 122 members, mostly Republicans, not voting. In 1894 the Senate passed it 40-24. But it was challenged in the courts, and in 1895 the Supreme Court declared it unconstitutional. The Court said that the way Congress was doing it was improper. It said that taxes on personal property such as capital assets and interest from bonds, were direct taxes. Under the constitution, as originally written, direct taxes must be apportioned over the states based on population.

The progressives came to feel that the rich were not paying their fair share, and were getting away with murder. In July 1909 Congress passed the 16th Amendment. Two-thirds of both houses approved. Since the constitution as originally written did not allow for an income tax, unless apportioned over the states, the constitution had to be changed to add this. The Sixteenth Amendment said:

"Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."

By 1913 three-fourths of the states had approved this amendment.

Pursuant to this new power, Cordell Hull of Tennessee attached a rider to the Underwood-Simmons tariff bill. It provided for a tax of 1% on incomes over $3,000 ($4,000 for married couples), and a surtax of from 1% on incomes of about $20,000 up to 6% on incomes of above $500,000. Two thirds of both houses of Congress had approved the income tax, and three-fourths of the states. This was added to the constitution because it was what the great majority of the people at the time said they wanted. It was in response to popular demand. The rich would have to pay their fair share. (Tindall and Shi, p. 967).

3. SEVENTEENTH AMENMDMENT (DIRECT ELECTION OF SENATORS)

Another demand of the Ocala Platform had been direct election of Senators by the people. The progressives felt that government was too beholden to big business, and needed to be made more responsive to the people. In 1912 two thirds of both houses of Congress approved the Seventeenth Amendment, whereby US Senators would be elected directly by the people. Within a year, by 1913, this had been ratified by three-fourths of the states. Again, the Constitution was changed in response to massive popular pressure.

4. FEDERAL RESERVE ACT OF 1913

In 1913 also, at the instigation of the Democrats, Congress passed the Federal Reserve Act. It created the federal reserve system. The country was divided into 12 districts. All national banks were required to subscribe 6% of their capital to the reserve fund. There would be a new type of currency, called Federal Reserve notes, backed up by a 40% gold reserve. And from this time forward the government would issue the currency by minting money or printing notes. This helped to make the money supply more elastic, and the reserves wee spread out across the country instead of being concentrated in New York. (For more detail see Tindall and Shi, p.967-968).

5. EARLY GESTURES TO LABOR

A). In 1913, in the coal strike in Colorado, Wilson sent in the U.S. army to intercede between the strikers and the private army of guards hired by the company.

B). Wilson also appointed the first Secretary of Labor, who was William Wilson.

6. FEDERAL TRADE COMMISSION ACT OF 1914

In September 1914 the Democrats pushed through the Federal Trade Commission Act. It established the Federal Trade Commission, or FTC. Its role was to define "unfair business practices and act as a watchdog over business misconduct.

7. CLAYTON ANTI-TRUST ACT OF 1914

In October 1914 the Democrats pushed through the Clayton Anti-Trust Act. It specified in more detail what were and were not illegal business practices, and strengthened the anti-trust laws. As an example, the Clayton Act outlawed what it called price discrimination, or charging different customers different prices for the same goods. It also outlawed the practice of "tying agreements," where manufacturer A required a dealer to agree not to handle the merchandise of competing manufacturers as a condition of selling his merchandise (for example, if I am General Electric, you have to agree not to handle any Sony or Panasonic or Westinghouse products if you want me to let you handle my products). It also limited interlocking directorates, where the same individual sits on the board of directors of various firms (Tindall and Shi, p. 969) It also affirmed that workers had the right to form unions. This principle was now stated explicitly in federal law. But enforcement of the abstract right was another matter. (Tindall and Shi, p. 970).

Wilson's commitment to the anti-trust crusade was actually quite lukewarm, and vacillated a bit in response to whichever way the political winds were blowing. In fact he appointed rather conservative people to the FTC and the ICC.

8. SEGREGATION IN THE CIVIL SERVICE

In many ways Wilson's instincts were conservative. Five of the ten cabinet members were Southerners, and the Postmaster general, Albert Burleson, took the lead in introducing racial segregation into the federal civil service in Washington, D.C. Under Wilson the cafeterias and restrooms in federal government facilities were segregated.
 
 
 
 

III. A SECOND WAVE OF REFORM: 1916

In 1914 Wilson opposed proposed reforms on behalf of agriculture and child labor. However as the election of 1916 approached Wilson was concerned about re-election. This pushed him back toward reform. It was no accident that federal progressivism reached its high water mark, or zenith, in the election year of 1916.

1. JUSTICE BRANDEIS

In January 1916 he named Louis Brandeis to the Supreme Court. Brandeis became the first Jew to sit on the high court. This was designed to appeal to the most liberal progressives.

2. FARM LOAN ACT OF 1916

Early in 1916 Wilson suddenly reversed his opposition to the proposed Farm Loan Act. It passed in July 1916. It established a Farm Loan Bank that would provide long-term, low interest loans to farmers. However they would have to put up their farms as collateral for the loans.

3. WAREHOUSE ACT OF 1916

Also in 1916 the Democrats embraced a much diluted version of the Populist subtreasury scheme. Under the Warehouse Act of 1916, the government would license private warehouses. Farmers could store their crops in these warehouses and get a receipt that banks were supposed to accept as collateral for short-term loans. (Tindall and Shi, p. 972-973). Wilson had opposed both these measures in 1914. But in 1916 he saw that they would help him win the farm vote.

4. FEDERAL HIGHWAYS ACT OF 1916

The Federal Highways Act of 1916 provided for $75 million in matching grants over 5 years to state highway departments. This was for "post roads," (delivery of mail) and was justified as important for national defense. Rural areas in particular saw the need for improved roads. This act was renewed and expanded in 1921, and became the origin of the national highway system (Tindall and Shi, p. 973).

5. KERN-MC GILLICUDDY ACT

The Kern-McGillicuddy Act of August 1916 established workman's compensation for federal employees. (Tindall and Shi, p. 973).

6. ADAMSON ACT OF 1916

The Adamson Act of 1916 was brought about by a threatened strike by railroad workers demanding the 8 hour day. The Adamson Act mandated an 8-hour day for railroad workers employed by interstate railroads, beginning January 1, 1917, with time and a half for overtime. Basically, because the railroads at that time were seen as so crucial to the national welfare, they were brought under federal supervision under the power of the federal government to regulate interstate commerce. (Tindall and Shi, p. 973-974).

7. KEATING-OWNE FEDERAL CHILD LABOR ACT

In 1916 Congress also passed the Keating-Owen Federal Child Labor Act. Wilson had opposed this in 1913. The Act excluded from interstate commerce any goods manufactured by children under age 14. However it was challenged in the courts and in 1917 the Supreme Court ruled it unconstitutional. It said that the power of Congress to regulate interstate commerce did not include the conditions of labor. (Tindall and Shi, p. 973). By this time period most of the North and West had laws against child labor. Not until the New Deal of the 1930s would there be an effective federal law against child labor that put an end to it in the South.

Wilson also promised to keep the United States out of the war in Europe. World War I had begun in Europe in 1914. Wilson ran against Charles Evans Hughes. The election was close. Wilson carried the South and West. His victory in the electoral college was 277 to 254. His victory in the popular vote was 9 million to 8.5 million. Wilson carried California by 3,772 votes (Tindall and Shi, p. 990).