Economic Policy of President Woodrow Wilson

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 In essence, he was saying that the original justifications for the tariff were no longer applicable and were only causing harm by giving unfair advantage to corporations.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 ...

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