Wilson’s New Freedom

ASU HST 200 (Historical Themes) The Progressive Movement 1890-1920 Wilson’s New Freedom Wilson met with Congress as soon as he entered office in March 1913 to present his New Freedom program, which sought to protect progressive interests. His strategy was straightforward: limit tariff rates to promote international commerce and boost competition for the benefit of consumers; regulate banks and large corporations. In order to address the tariff issue, Wilson took the unprecedented step of summoning a special session of Congress in April 1913. This action produced the Revenue Act of 1913, also referred to as the Underwood Tariff Act. This act removed duties on a number of imports, including agricultural implements, steel, iron ore, and wool goods, and reduced tariff rates generally by around 15%. This new statute, which came into effect after the Sixteenth Amendment was ratified, reinstated the federal income tax in order to make up for the possible loss of government revenue. In the first income tax, married couples making $4000 or more a year and single individuals making $3000 or more were obliged to pay a one-percent income tax. The tax rate increased gradually as income levels increased. Wilson signed the Federal Reserve Act at the end of 1913 in order to create a federal banking system and control the banking sector (Figure 21.22). The new system, which included twelve privately held regional reserve banks governed by a Federal Reserve Board nominated by the president, was intended to take control of interest rates away from private bankers. The Board, often referred to as the Fed, set the interest rate at which reserve banks might lend money to one another or distribute funds to other banks across the nation. In order to increase the amount of money in circulation for consumers to spend or invest, the Fed would decrease this "discount rate" and promote more borrowing during hard economic times, such as a recession. In contrast, the Fed may reduce inflationary tendencies by raising interest rates to make borrowing less appealing. The nation's current banking paradigm is still based on this structure. Wilson's New Freedom program came to a close in early 1914 when the Clayton Antitrust Act was passed. By extending the original Sherman Antitrust Act's authority, this bill made it possible to look into and break up further monopolies. The new law also targeted "interlocking directorates," which were rival businesses that continued to collaborate in an oligopolistic or trade-restrictive manner. After completing his New Freedom program, Wilson focused on international relations since war was engulfing Europe rapidly. The Progressive Movement, which took place between 1890 and 1920, was a significant period in American history that was defined by extensive political and social change. After assuming office in March 1913, President Woodrow Wilson quickly launched his New Freedom campaign with the goal of defending progressive values. His strategy was straightforward: he planned to impose rules on banks and big businesses in addition to lowering tariff rates to promote competition and international commerce, which would benefit consumers. Wilson called a special session of Congress in April 1913 to handle the tariff problem without delay. This audacious action led to the enactment of the Revenue Act of 1913, sometimes known as the Underwood Tariff Act, which drastically reduced taxes on a wide range of imports, including wool products, steel, iron ore, and agricultural tools. Tariff rates were lowered by around 15% overall. The federal income tax was reestablished by this bill, subject to the Sixteenth Amendment's ratification. A onepercent income tax was mandatory for married couples making $4000 or more yearly, and for single people earning $3000 or more. The rate increased as income levels increased. Wilson signed the government Reserve Act into law in late 1913, establishing a government banking system with the goal of controlling the banking industry, in addition to taking on tariff reform. Twelve privately owned regional reserve banks were part of this novel arrangement, which was supervised by a president-appointed Federal Reserve Board. Regaining authority over interest rates from private bankers was its main goal. The Board, sometimes referred to as the Fed, had the authority to determine the national interest rate for funds distribution and interbank lending. The Fed may reduce the "discount rate" to promote borrowing during economic downturns, such as recessions, so boosting the flow of money for investment or consumer spending. On the other hand, the Fed may increase interest rates to discourage borrowing in order to reduce inflationary pressures. Wilson led the establishment of this banking structure, which now serves as the foundation for the country's financial system. Wilson's New Freedom agenda culminated in early 1914 with the enactment of the Clayton Antitrust Act, which increased the jurisdiction of the Sherman Antitrust Act. Authorities were better equipped to look into and break up monopolies thanks to this act. It also went after "interlocking directorates," which are situations in which competing businesses banded together in a way that hindered access to markets or competition. After completing his domestic reform program, Wilson focused on foreign issues as Europe quickly descended into war.