Wilson’s New Freedom

1 332 CHAPTER9 Terms & NamesTerms & NamesMAIN IDEAMAIN IDEAW ilson s NewFreedom Carrie ChapmanCatt Clayton AntitrustAct Federal TradeCommission (FTC) Federal ReserveSystem NineteenthAmendmentWoodrow Wilson establisheda strong reform agenda as aprogressive leader. The passage of the NineteenthAmendment during Wilson sadministration granted womenthe right to IT MATTERS NOWWHY IT MATTERS NOWOn March 4, 1913, the day of Woodrow Wilson s inauguration, 5,000woman suffragists marched through hostile crowds in Washington, Paul and Lucy Burns, the parade s organizers, were members of theNational American Woman Suffrage Association (NAWSA). As police failedto restrain the rowdy gathering and congressmen demanded an investi-gation, Paul and Burns could see the momentum building for suffrage. By the time Wilson began his campaign for a second term in 1916, theNAWSA s president, Carrie Chapman Catt, saw victory on the expressed her optimism in a letter to her friend Maud Wood PERSONALVOICECARRIE CHAPMAN CATT I do feel keenly that the turn of the road has come.

2 I really believethat we might pull off a campaign which would mean the vote within the next six years if we could secure a Board of officers who would have sufficientmomentum, confidence and working power in them.. Come! My dear Mrs. Park, gird on your armor once more. letter to Maud Wood ParkCatt called an emergency suffrage convention in September 1916, and invit-ed President Wilson, who cautiously supported suffrage. He told the convention, There has been a force behind you that will .. be triumphant and for which youcan afford.. to wait. They did have to wait, but within four years, the passageof the suffrage amendment became the capstone of the progressive Wins Financial ReformsLike Theodore Roosevelt, Woodrow Wilson claimed progressive ideals, but he hada different idea for the federal government. He believed in attacking large con-centrations of power to give greater Freedom to average citizens. The prejudices ofhis Southern background, however, prevented him from using federal power tofight off attacks directed at the civil rights of African Americans.

3 One American's StoryCarrie Chapman Catt WILSON S BACKGROUNDW ilson spent his youth in the South during the CivilWar and Reconstruction. The son, grandson, and nephew of Presbyterian minis-ters, he received a strict upbringing. Before entering politics, Wilson worked as a lawyer, a history professor, and later as president of Princeton University. In1910, Wilson became the governor of New Jersey. As governor, he supported pro-gressive legislation programs such as a direct primary, worker s compensation,and the regulation of public utilities and railroads. As America s newly elected president, Wilson moved to enact his program,the New Freedom , and planned his attack on what he called the triple wall ofprivilege: the trusts, tariffs, and high KEY ANTITRUST MEASURES Without the watchful .. resolute inter-ference of the government, Wilson said, there can be no fair play between indi-viduals and such powerful institutions as the trusts.

4 Freedom today is somethingmore than being let alone. During Wilson s administration, Congress enactedtwo key antitrust measures. The first, the Clayton Antitrust Actof 1914,sought to strengthen the Sherman Antitrust Act of 1890. The Clayton Act pro-hibited corporations from acquiring the stock of another if doing so would createa monopoly; if a company violated the law, its officers could be prosecuted. The Clayton Act also specified that labor unions and farm organizations notonly had a right to exist but also would no longer be subject to antitrust , strikes, peaceful picketing, boycotts, and the collection of strike bene-fits became legal. In addition, injunctions against strikers were prohibited unlessthe strikers threatened damage that could not be remedied. Samuel Gompers,president of the American Federation of Labor (AFL), saw great value to workersin the Clayton Act. He called it a Magna Carta for labor, referring to the Englishdocument, signed in 1215, in which the English king recognized that he wasbound by the law and that the law granted rights to his second major antitrust measure, the Federal TradeCommission Act of 1914, set up the Federal TradeCommission (FTC).

5 This watchdog agency was giventhe power to investigate possible violations of regulatorystatutes, to require periodic reports from corporations, andto put an end to a number of unfair business Wilson, the FTC administered almost 400 cease-and-desist orders to companies engaged in illegal NEW TAX SYSTEMIn an effort to curb the power of bigbusiness, Wilson worked to lower tariff rates, knowing thatsupporters of big business hadn t allowed such a reductionunder Taft. Wilson lobbied hard in 1913 for the Underwood Act,which would substantially reduce tariff rates for the firsttime since the Civil War. He summoned Congress to a spe-cial session to plead his case, and established a precedent ofdelivering the State of the Union message in lobbied too, looking to block tariff manufacturing lobbyists people hired by manufac-turers to present their case to government officials descended on the capital to urge senators to vote no, pas-sage seemed unlikely.

6 Wilson denounced the lobbyists andurged voters to monitor their senators votes. Because of thenew president s use of the bully pulpit, the Senate voted tocut tariff rates even more deeply than the House had done. The Progressive Era333 NOWNOWTHENTHENDEREGULATIONIn recent years the railroad, air-line, and telecommunicationsindustries have all been deregu-lated, or permitted to competewithout government control. It ishoped that this will improve theirefficiency and lower prices. During the Progressive Era,reformers viewed regulation as anecessar y role of government toensure safety and fairness forconsumers as well as industrialcompetitors. Opponents of regu-lation, however, believed that gov-ernment regulation caused ineffi-ciency and high critics of deregulationargue that deregulated businessesmay skimp on safety. They mayalso neglect hard-to-ser ve popula-tions, such as elderly, poor, ordisabled people, while competingfor more profitable :a courtorder prohibiting aparty from aspecific course ofactionMAIN IDEAMAIN IDEAAS ummarizingWhat was theimpact of the twoantitrustmeasures?

7 FEDERAL INCOME TAXWith lowertariff rates, the federal government hadto replace the revenue that tariffs hadpreviously supplied. Ratified in 1913,the Sixteenth Amendment legalized afederal income tax, which provided rev-enue by taxing individual earnings andcorporate this graduated tax, largerincomes were taxed at higher rates thansmaller incomes. The tax began with amodest tax on family incomes over$4,000, and ranged from 1 percent to amaximum of 6 percent on incomes over$500,000. Initially, few congressmenrealized the potential of the income tax,but by 1917, the government was receiv-ing more money on the income tax thanit had ever gained from tariffs. Today,income taxes on corporations and indi-viduals represent the federal govern-ment s main source of RESERVE SYSTEMNext, Wilson turned his attention to financialreform. The nation needed a way to strengthen the ways in which banks wererun, as well as a way to quickly adjust the amount of money in circulation.

8 Bothcredit availability and money supply had to keep pace with the s solution was to establish a decentralized private banking systemunder federal control. The Federal Reserve Act of 1913 divided the nation into 12districts and established a regional central bank in each district. These banker sbanks then served the other banks within the federal reserve banks could issue new paper currency in emergency situ-ations, and member banks could use the new currency to make loans to their cus-tomers. Federal reserve banks could transfer funds to member banks in trouble,saving the banks from closing and protecting customers savings. By 1923, rough-ly 70 percent of the nation s banking resources were part of theFederal ReserveSystem. One of Wilson s most enduring achievements, this system still serves asthe basis of the nation s banking Win SuffrageWhile Wilson pushed hard for reform of trusts, tariffs, and banking, determinedwomen intensified their push for the vote.

9 The educated, native-born, middle-class women who had been active in progressive movements had grown increas-ingly impatient about not being allowed to vote. As of 1910, women had federalvoting rights only in Wyoming, Utah, Colorado, Washington, and suffragists pushed on, however. They finally saw success comewithin reach as a result of three developments: the increased activism of localgroups, the use of bold new strategies to build enthusiasm for the movement, andthe rebirth of the national movement under Carrie Chapman SUFFRAGE BATTLESThe suffrage movement was given new strengthby growing numbers of college-educated women. Two Massachusetts organiza-tions, the Boston Equal Suffrage Association for Good Government and theCollege Equal Suffrage League, used door-to-door campaigns to reach potential334 CHAPTER9 BackgroundSeetaxationonpage R46 in from Individual Federal Income Tax,1915 1995 TotalSources: Historical Statistics of the United States; Statistical Abstract of the United States,1987, 1995, 1999 Dollars (in billions)6005004003002001000191519351955 19751995 SKILLBUILDERI nterpreting what year did income tax revenues first begin torise sharply?

10 How much revenue did the income tax bring in1995?MAIN IDEAMAIN IDEABE valuatingWhy weretariff reform andthe FederalReser ve Systemimportant?supporters. Founded by Radcliffe graduate Maud Wood Park,the Boston group spread the message of suffrage to poorand working-class women. Members also took trolley tourswhere, at each stop, crowds would gather to watch theunusual sight of a woman speaking in wealthy young women who visited Europe aspart of their education became involved in the suffragemovement in Britain. Led by Emmeline Pankhurst, Britishsuffragists used increasingly bold tactics, such as hecklinggovernment officials, to advance their cause. Inspired bytheir activism, American women returned to the UnitedStates armed with similar approaches in their own cam-paigns for AND THE NATIONAL MOVEMENTS usan s successor as president of NAWSA was CarrieChapman Catt, who served from 1900 to 1904 and resumedthe presidency in 1915.