Woodrow Wilson campaigned for the presidency in 1912 as a progressive democrat. Wilson argued that changing economic conditions demanded new and aggressive government policies–he called his political program “the New Freedom”– to preserve traditional American liberties. I have long had an image in my mind of what constitutes liberty. Suppose that I were building a great piece of powerful machinery, and suppose that I should so awkwardly and unskillfully assemble the parts of it that every time one part tried to move it would be interfered with by the others, and the whole thing would buckle up and be checked. Liberty for the several parts would consist in the best possible assembling and adjustment of them all, would it not? If you want the great piston of the engine to run with absolute freedom, give it absolutely perfect alignment and adjustment with the other parts of the machine, so that it is free, not because it is let alone or isolated, but because it has been associated most skillfully and carefully with the other parts of the great structure. What is liberty? You say of the locomotive that it runs free. What do you mean? You mean that its parts are so assembled and adjusted that friction is reduced to a minimum, and that it has perfect adjustment. We say of a boat skimming the water with light foot, “How free she runs,” when we mean, how perfectly she is adjusted to the force of the wind, how perfectly she obeys the great breath out of the heavens that fills her sails. Throw her head up into the wind and see how she will halt and stagger, how every sheet will shiver and her whole frame be shaken, how instantly she is “in irons,” in the expressive phrase of the sea. She is free only when you have let her fall off again and have recovered once more her nice adjustment to the forces she must obey and cannot defy. Human freedom consists in perfect adjustments of human interests and human activities and human energies. Now, the adjustments necessary between individuals, between individuals and the complex institutions amidst which they live, and between those institutions and the government, are infinitely more intricate to-day than ever before. No doubt this is a tiresome and roundabout way of saying the thing, yet perhaps it is worthwhile to get somewhat clearly in our mind what makes all the trouble to-day. Life has become complex; there are many more elements, more parts, to it than ever before. And, therefore, it is harder to keep everything adjusted,—and harder to find out where the trouble lies when the machine gets out of order. You know that one of the interesting things that Mr. Jefferson said in those early days of simplicity which marked the beginnings of our government was that the best government consisted in as little governing as possible. And there is still a sense in which that is true. It is still intolerable for the government to interfere with our individual activities except where it is necessary to interfere with them in order to free them. But I feel confident that if Jefferson were living in our day he would see what we see: that the individual is caught in a great confused nexus of all sorts of complicated circumstances, and that to let him alone is to leave him helpless as against the obstacles with which he has to contend; and that, therefore, law in our day must come to the assistance of the individual. It must come to his assistance to see that he gets fair play; that is all, but that is much. Without the watchful interference, the resolute interference, of the government, there can be no fair play between individuals and such powerful institutions as the trusts. Freedom to-day is something more than being let alone. The program of a government of freedom must in these days be positive, not negative merely. [Source: Woodrow Wilson, The New Freedom (New York, New York: Doubleday, Page & Company, 1913).] Project Gutenberg Link.
Learning Objectives
When Wilson took office in March 1913, he immediately met with Congress to outline his New Freedom agenda for how progressive interests could be best preserved. His plan was simple: regulate the banks and big businesses, and lower tariff rates to increase international trade, increasing competition in the interest of consumers. Wilson took the unusual step of calling a special session of Congress in April 1913 to tackle the tariff question, which resulted in the Revenue Act of 1913, also known as the Underwood Tariff Act. This legislation lowered tariff rates across the board by approximately 15 percent and completely eliminated tariffs on several imports, including steel, iron ore, woolen products, and farm tools. To offset the potential loss of federal revenue, this new law reinstituted the federal income tax, which followed the ratification of the Sixteenth Amendment. This first income tax required married couples who earned $4000 or more, and single people who earned $3000 or more, to pay a 1-percent, graduated income tax, with the tax rate getting progressively higher for those who earned more. Late in 1913, Wilson signed the Federal Reserve Act to regulate the banking industry and establish a federal banking system. Designed to remove power over interest rates from the hands of private bankers, the new system created twelve privately owned regional reserve banks regulated by a presidentially appointed Federal Reserve Board. The Board, known informally as the Fed, regulated the interest rate at which reserve banks loaned or distributed money to other banks around the country. Thus, when economic times were challenging, such as during a recession, the Fed could lower this “discount rate” and encourage more borrowing, which put more currency in circulation for people to spend or invest. Conversely, the Fed could curb inflationary trends with interest hikes that discouraged borrowing. This system is still the basis for the country’s modern banking model.
How did banking work before the passage of the Federal Reserve Act? Designed to prevent banking disasters, the Federal Reserve Act was a signature policy of Woodrow Wilson’s “New Freedom”. You can view the transcript for “Before The Federal Reserve Banking System” here (opens in new window). Figure 1. With the creation of the Federal Reserve Board, President Wilson set the stage for the modern banking system (a). This restructuring of the American financial system, which included the authorization of a federal income tax, was supported in large part by an influential Republican senator from Rhode Island, Nelson Aldrich (b), co-author of the Payne-Aldrich Act of 1909.
The history of the Federal Reserve Act is explored in The Washington Post, reflecting back on the act one hundred years later. In early 1914, Wilson completed his New Freedom agenda with the passage of the Clayton Antitrust Act. This law expanded the power of the original Sherman Antitrust Act in order to allow the investigation and dismantling of more monopolies. It also specifically regulated mergers and price discrimination and protected labor’s access to collective bargaining and related strategies of picketing, boycotting, and protesting. Congress further created the Federal Trade Commission to enforce the Clayton Act, ensuring at least some measure of implementation. The new act also took on the “interlocking directorates”—competing companies that still operated together in a form of oligopoly or conspiracy to restrain trade. His New Freedom agenda complete, Wilson turned his attention to foreign affairs, as war was quickly encompassing Europe. As the 1916 election approached, Wilson’s focus on foreign affairs, as well as the natural effect of his small government agenda, left the 60 percent of the American public who had not voted for him the first time disinclined to change their minds and keep him in office. Realizing this, Wilson began a flurry of new Progressive reforms that impressed the voting public and ultimately proved to be the last wave of the Progressive Era. Some of the important measures that Wilson undertook to pass included the Federal Farm Act, which provided oversight of low-interest loans to millions of farmers in need of debt relief; the Keating-Owen Child Labor Act, which, although later deemed unconstitutional by the U.S. Supreme Court, prohibited the interstate distribution of products by child workers under the age of fourteen; and the Adamson Act, which put in place the first federally mandated eight-hour workday for railroad workers. Wilson also gained significant support from Jewish voters with his 1916 appointment of the first Jewish U.S. Supreme Court justice, Louis D. Brandeis. Popular among social justice Progressives, Brandeis went on to become one of the most renowned justices on the court for his defense of freedom of speech and right to privacy issues. Finally, Wilson gained the support of many working-class voters with his defense of labor and union rights during a violent coal strike in Ludlow, Colorado, as well as his actions to forestall a potential railroad strike with the passage of the aforementioned Adamson Act.
Louis D. Brandeis was the first Jew on the US Supreme Court and was a champion of inquiry, learning, and serving others. He is the namesake of Brandeis University, located in Massachusetts. The university’s web page about Justice Brandeis includes links to other informational sites that discuss his life, experience on the court, and legacy. Wilson’s actions in 1916 proved enough, but barely. In a close presidential election, he secured a second term by defeating former New York governor Charles Evans Hughes by a scant twenty-three electoral votes, and less than 600,000 popular votes. Influential states like Minnesota and New Hampshire were decided by less than four hundred votes. Despite the fact that he ran for reelection with the slogan, “He Kept Us Out of the War,” Wilson could not avoid the reach of World War I much longer. For Wilson and the American public, the Progressive Era was rapidly winding down. Although a few Progressive achievements were still to come in the areas of women’s suffrage and prohibition, the country would soon be gripped by the war that Wilson had tried to avoid during his first term in office. When he took the oath for his second term, on March 4, 1917, Wilson was barely five weeks away from leading the United States in declaring war on Germany, a move that would put an end to the Progressive Era.
Watch this video to review the work done by the Progressive Era presidents—Theodore Roosevelt, William Taft, and Woodrow Wilson. During their years in office, they helped to break up monopolies, lower tariffs, create national parks, develop social programs, and get women the right to vote, but their presidencies were also characterized by imperialism, nativism, division, and the entry into WWI. You can view the transcript for “Progressive Presidents: Crash Course US History #29” here (opens in new window). Review Questions
New Freedom: Woodrow Wilson’s campaign platform for the 1912 election that called for regulating banks and big businesses, lowering tariffs to increase international trade, and increasing competition in the interest of consumers. |
What was one element of woodrow wilsons new freedom agenda?
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