Lesson 4: President Wilson's Progressivism

Lesson Focus

Building on his success as a progressive governor, President Woodrow Wilson entered office determined to achieve major social reform. This lesson explores how he championed significant federal legislation on tariffs, banking, and business regulation.

People to Know

Woodrow Wilson

Learning Objectives

• Explain why Wilson gained congressional support for his programs.
• List the key accomplishments of Wilson's domestic agenda, including new laws on tariffs and business trusts.

The 1912 election showed that Americans demanded progressive legislation. Although a minority president, Woodrow Wilson faced no strong opposition within the Democratic party and gained the support of influential figures like Bryan.
He used his inaugural address and personal appearances before Congress to rally national support for reform.
This created powerful momentum for his “New Freedom” agenda, allowing him to push major reforms through a cooperative Congress, starting with the tariff.

President Wilson argued that high tariffs protected monopolies and hindered economic efficiency. He wanted lower rates to force businesses to compete and to open new markets for American goods.
He personally addressed Congress and mobilized public opinion against lobbyists, leading to the passage of the Underwood Tariff Act.
This act, the first major tariff reduction since 1857, lowered duties on many goods. Pay special attention: It also created a federal income tax, legalized by the Sixteenth Amendment, which became the government's main source of revenue.

A financial panic in 1907 revealed that the U.S. banking system was unstable, with an inflexible currency and no central control. The National Monetary Commission confirmed these flaws, creating demand for a solution.
Wilson pushed Congress to pass the Federal Reserve Act in December 1913, creating 12 regional Federal Reserve Banks overseen by a public Federal Reserve Board.
This system introduced a flexible currency called Federal Reserve notes and used the rediscount rate to manage the money supply, shifting financial power from Wall Street to Washington, D.C.

The old Sherman Antitrust Act was not effective at stopping monopolies. Wilson sought stronger laws to prevent unfair business practices that destroyed competition.
In 1914, Congress passed the Federal Trade Commission Act, creating the Federal Trade Commission, and the Clayton Antitrust Act.
The Clayton Antitrust Act outlawed specific abuses like ruinous price-cutting and interlocking directorates. Note that while it aimed to protect labor unions, its impact was limited by court interpretations of its vague wording.

Building on his early successes, Wilson expanded his progressive agenda to address the needs of workers and farmers. He believed the federal government should act to improve their conditions.
His administration passed laws like the Keating-Owen Child Labor Act, which limited child labor, and the Adamson Act, which established an eight-hour workday for railroad workers.
These acts, along with the Federal Farm Loan Banks and Federal Highways Act, marked a significant use of federal power to aid ordinary Americans.

Despite his progressive agenda, President Wilson held strong beliefs in racial segregation, and his reforms did not extend to African Americans.
His administration segregated federal workplaces in Washington, D.C., separating facilities and assigning jobs based on race, reversing decades of integration.
This policy alienated black leaders like W.E.B. Du Bois, who had supported Wilson, and exposed the significant racial blindness within the broader progressive movement of the era.