Political Thought Of Woodrow Wilson example essay topic

Woodrow Wilson, as the 28th President of the United States, enacted some of the most sweeping economic overhauls the American government has ever seen. The "Professor President", by compromising and cutting deals, was able to bring to life his vision of reform in the business world. The Underwood-Simmons bill, the Federal Reserve Act, the Federal Trade Commission Act and the Clayton Anti-Trust Act were all brought about by Wilson as tools to further his goal of taking away power from the large corporations and banks and giving it to the small businesses and entrepreneurs. First, Wilson enacted the Underwood-Simmons bill in 1913.

This Act lowered the trade tariffs for the first time since before the Civil War, and initiated the first progressive income tax for citizens of the United States. By doing this, Wilson lowered the tariffs, opening the doors for foreign goods to be brought in at cheaper prices. Wilson lowered the tariffs on the belief that "we long ago passed beyond the modest notion of protecting the industries of the country and moved boldly forward to the idea that they were entitled to direct patronage of the government". In essence, he was saying that the original justifications for the tariff were no longer applicable and were only causing harm by giving unfair advantage to corporations. "For a long time - a time so long that the men now active in public policy hardly remember the conditions that preceded it - we have sought in our tariff schedules to give each group of manufacturers or producers what they themselves thought that they needed in order to maintain a practically exclusive market as against the rest of the world. Consciously or unconsciously, we have built up a set of privileges and exemptions from competition behind which it was easy by any, even the crudest, forms of combination to organize monopoly; until at last nothing is normal, nothing is obliged to stand the tests of efficiency and economy, in our world of big business, but everything thrives by concerted arrangement.

Only new principles of action will save us from a final hard crystallization of monopoly and a complete loss of the influences that quicken enterprise and keep independent energy alive". In addition to the lowering of tariffs, the Underwood-Simmons bill established the first progressive income tax to be charged to all United States' citizens. Wilson realized that by lowering the tariffs, this would take money away from the government. In order to offset the loss in revenue, he put into place the income tax, which the nation had been pushing for but until the passing of an amendment that year, had been ruled unconstitutional. Wilson wanted to relieve the nation of the burden of tariffs, but still realized the importance of government revenue. In addition to government finance, the progressive income tax helped shift the burden off the poor and onto those more able to foot the bill of taxation.

The fact that Wilson was able to pass such a tax says something about his relative innocence in respect to affiliation with corporate interest groups. Coming into politics from the world of academia, he had not formed connections with special interests that most career politicians had and thus was able to relate more to the constituents he had left only a few years before his Presidential campaign. In the same year that the Underwood-Simmons bill had passed, his first year as President, Wilson was also able to get the Federal Reserve Act through Congress. The Federal Reserve was Wilson's vision of the consolidation of money and credit. Credit, up until then, had been centralized in New York by its major banks. "The great monopoly, in this country is the money monopoly.

Credit... is dangerously concentrated in this country". The banks had developed close bonds with the nation's industries, an intermingling of board members and directors had fused them together so that the interests of the banks were those of the major industries. Financing of potential competitors was nearly impossible which gave the already established an unfair advantage in the market. "The control of credit also has become dangerously centralized.

It is the mere truth to say that the financial resources of the country are not at the command of those who do not submit to the direction and domination of small groups of capitalists who wish to keep the economic development of the country under their own eye and guidance". Wilson wanted to take the power away from the banks in New York and make money more available to people outside of Wall Street by spreading it throughout the country in independent reserves that were controlled by the federal government and not bankers. "We must have a currency, not as rigid as now, but readily, elastically responsive to sound credit, the expanding and contracting credits of everyday transactions, the normal ebb and flow of personal and corporate dealings. Our banking laws must mobilize reserves; not permit the concentration anywhere in a few hands of the monetary resources of the country or their use for speculative purposes in such volume as to hinder or impede or stand in the way of other more legitimate, more fruitful uses.

And the control of the system of banking and of issue which our new laws are to set up must be public, not private, must be vested in the Government itself, so that the banks may be the instrument, not the masters, of business and of the individual enterprise and initiative... ". With control over the interest rates and the amount of currency in circulation, the Federal Reserve was a check on the bankers. By controlling the money, Wilson's Reserve Board would make credit more accessible to the smaller businesses and entrepreneurs, thereby eliminating another barrier to entrance that the monopolies and trusts had relied on for the protection of their market share. Wilson's next aim at economic reform was another shot at monopolies and trusts. He saw through Congress the passage of the Federal Trade Commission Act of 1914.

This would be the policing arm of Wilson's reforms. The new Commission would be an independent, bipartisan organization that would monitor commerce and act against monopolistic practices. The opinion of the country would instantly approve of such a commission. It would not wish to see it empowered to make terms with monopoly or in any sort to assume control of business., as if Government made itself responsible. It demands such a commission only as an indispensable instrument of information and publicity, as a clearing house for the facts by which both the public mind and the managers of the great business undertakings should be guided, and as an instrumentality for doing justice to business where the processes of the courts or the natural forces of correction outside the courts are inadequate to adjust the remedy to the wrong in a way that will meet all the equities and circumstances of the case".

Wilson, himself being a lawyer, knew that the time and effort needed to supervise the activities of the business world for fraud and illegal behavior would be too time consuming and beyond the scope of the Department of Justices specialties. In order to be sure that these events were monitored and the public properly safeguarded a new body was needed. The Federal Trade Commission would be more effective as a tool to investigate unfair competitive practices and safeguard the small businesses and entrepreneurs that Wilson sought to protect. The last of Wilson's four most widespread economic reforms to help the little people and control big business was the Clayton Antitrust Act. The signing of the bill in 1914 marked the capstone on two of the most ambitious years this country has ever seen a President embark upon. The three main components of the act were the provisions detailing what were illegal corporate activities, the outlawing of interlocking corporate directorates, and the provision endowing the right to strike, boycott or picket to unions.

By passing the first component of the legislation Wilson hoped to help define acts that the Federal Trade Commission should proceed upon and eliminate any ambiguity that the courts could use to weaken its bite. Wilson wanted to undermine the monopolies in every way he could. In the following excerpt from one of his campaign speeches Wilson describes the mindset of the monopolies and trusts:" Now did you ever look into the way a trust was made? It is very unnatural, in one sense, in the same sense in which human greed is fundamentally natural.

If I haven't efficiency enough to beat my rivals, if I can't get money enough to beat my rivals, then the thing I am inclined to do is to get together with my rivals and say: 'Here, don't let's cut each others throats; let's combine and determine prices for ourselves and determine the output, and thereby determine the prices, and so dominate and control the market". The contempt in his tone was directed at those who would conspire to create alliances to manipulate the market in their favor and unjustly reap the benefits of price fixing and other schemes that influence the natural supply and demand curves. The size of the corporations that were involved in these activities was not issue in Wilson's reform, though the companies involved tended to be large, it was their means of achieving that state and maintaining it that Wilson targeted". I admit that anything that is built up by the legitimate processes of business, by working capital, by economy, by efficiency, by growth, is natural; and I am not afraid of it, no matter how big it gets, because it can stay big only by doing its work more thoroughly than anybody else". The second component of the Clayton bill dealing with interlocking directorates had been one of Wilson's main focuses in the Federal Reserve Act. Wilson saw the commingling of banks and industry and by enacting the Federal Reserve system, profoundly diminished their power to suppress competition.

The Clayton bill took the matter one step further and made the commingling of directors in related corporations illegal. By cutting the common threads between two companies in the same industry with this provision, an outlawing open communication between the companies on pricing and output, the two companies would be forced to compete against each other, thereby raising each companies need for efficiency and competitive pricing. The lower pricing of goods would help Americans throughout the country to be able to provide for themselves, their families and small businesses. As a further step to help the people earn a living the Clayton Act gave trade unions the right to strike, boycott, and picket. Utilizing these approaches gave the unions the power to barter with employers about wages and working conditions, furthering their members's tankard of living. President Wilson spent his first two years in office working with both Houses of Congress to ensure that the reforms he thought were needed made it through and that relief was given to the Americans who were paying inflated costs for the goods that they bought.

Wilson fought corporate America's lobbyists to remove the economic protections that had harbored big business and allowed it to become oppressive. The Underwood-Simmons Tariff lowered the tariffs on foreign goods bringing outside competition into American markets that had never before seen it. American companies, now having to compete, were forced to become more efficient and competitively price their goods. The Federal Reserve Act took the control of the money supply out of the hands of New York bankers and into those of the United States'.

Reserve Boards throughout the country would distribute the money into the market and control the interest rates in order to make it easier for Americans and small businesses to acquire and utilize. Weakening the bankers meant weakening the private monopolies and trusts that were in bed with them to suppress competition and maintain control over the markets and prices of goods. The Federal Trade Commission was established to ensure that the business world was abiding by the restrictions set against it and to promote fair-play. Enforcement of the new standards was vital to their effect on the economy.

An independent commission with federal authority to investigate business transactions and prosecute misconduct, Wilson idealized, would deter corporate officers and directorates from engaging in foul play and if not, penalize them. The Clayton Antitrust Act established written legislature defining certain acts that were inhibitive of competition and illegal, outlawed the commingling of executives of similar companies and gave unions the right to stand up to employers. All three acts aimed at taking away undue power from corporations and raising the standard of living for the people of America. Wilson came into office only a few years removed from life outside of politics, but only two years after inauguration he was able to do more for this country than some Presidents had done in four. A champion of the people, Woodrow Wilson did all that he could to level the playing field in American business by following legislature all the way through both Houses of Congress and making key compromises to make sure bills were passed and that they "abolish everything that bears even the semblance of privilege or of any kind of artificial advantage".

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