Wilson’s New Freedom Chapter 17 Section 5

I Progressive Reform under Wilson A. Wilson’s New Freedom Became Dem. Gov. and then left party affiliation to institute reform legislation – Ex= direct primary/workmen’s comp Implemented “new Freedom” through the “triple wall of privilege” – Trusts – Tariffs – High finance

B. Clayton Antitrust Act Clayton Anti Trust Act – Aimed to strengthen Sherman Antitrust by making business practices that created monopolies illegal – Prosecuted officers for breaking law – Conservative cts. Could not prosecute trade unions Federal Antitrust Act – Set up a “watchdog” agency called the Federal Trade Commission (FTC) – Investigated pos. violations (ex=inaccurate label) – Could issue “cease & desist order” for illegal practices

C. New Tax System Believed high tariffs created monopolies by reducing comp. Secured the Underwood Tariff= reduces tariff rates for 1 st time since civil war Denounce lobbyists & urged citizens to watch their senators votes EFFECTIVLY USED THE BULLY PULPIT

D. Federal Income Tax Lower Tariffs led gov’t to look for another source of revenue 16 th Amendment legalized fed. Income tax – Income tax=tax on profits and earnings Graduated tax= higer wage higher tax, lower wage lower tax Brought more revenue than tariffs Main source of fed revenue until this day

E. Federal Reserve System Neede dto make credit available outside of NY and Boston And adjust amount of $ in circulation FEDERAL RESERVE ACT SOLVED BOTH PROBLEMS

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