Wilson’s New Freedom. Wilson took the oath of office in March 1913. His inaugural address reflected his strong, unbending sense of morality: “The nation.

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Presentation transcript:

Wilson’s New Freedom

Wilson took the oath of office in March His inaugural address reflected his strong, unbending sense of morality: “The nation has been deeply stirred, stirred by a solemn passion, stirred by knowledge of wrong, of ideals lost, of government too often…made an instrument of evil. The feelings with which we face the new age of right and opportunity sweep across our heart- strings like air out of God’s own presence.” Wilson asked honest, forward looking Americans to stand at his side. “God helping me,” he pledged, “I will not fail them.”

Progressive Reform under Wilson Wilson’s New Freedom The phrase came after the campaign, as the title of a book of his speeches, and as the slogan for his administration's policies. Implemented New Freedom through the “triple wall of privilege” – Trusts – Tariffs – High finance (and banks)

I. Tariff Reform Underwood Tariff of 1913 First lowering of tariffs since the Civil War Went against the protectionist lobby (who wanted to force everyone to “buy American” by making the prices of foreign products unreasonably high

II. Business Reform Wilson believed government's role was to create a level playing field. Then individual energy and business competition would give Americans lives both decent and free from big-brother intrusions. His solution for monopoly was antitrust prosecution and break-up.

A. Federal Trade Act (1914) -Set up FTC or Federal Trade Commission to investigate and halt unfair and illegal business practices. The FTC could put a halt to these illegal business practices by issuing what is known as a "cease and desist order.”

B. Clayton Antitrust Act (1914) -Declared certain businesses illegal (interlocking directorates, trusts, horizontal mergers) -Unions and the Grange (farmers) were not subject to antitrust laws. This made unions legal! -Strikes, boycotts, picketing and the collection of strike benefit funds ruled legal

III. Tax Reform Lower Tariffs led gov’t to look for another source of revenue 16 th Amendment legalized federal Income tax – Income tax = tax on profits and earnings Graduated tax - higher earners pay a higher tax, lower earners paw a lower tax Brought more revenue than tariffs Continues to be the main source of federal revenue

IV. Banking Reform Needed elastic currency, ability to control the amount of $ in circulation Creation of Federal Reserve System Federal Reserve Banks in 12 districts would print and coin money as well as set interest rates. In this way the "Fed," as it was called, could control the money supply and effect the value of currency. The more money in circulation the lower the value and inflation went up. The less money in circulation the greater the value and this would lower inflation.

Federal Reserve Act – Divided country into 12 regions/districts – Each had own fed. Bank – Fed bank issue paper money to other member banks to make loans to their customers – Fed bank could transfer money in emergency to save banks from closing and protect customer $$ Federal reserve system serves as basis of our system today