Define: Payne Aldrich Tariff Children’s Bureau
Mann-Elkins Act
Bull Moose
Underwood Tariff income tax - 16 th Amendment
Federal Reserve Act
Clayton Antitrust Act
Identify: William Howard Taft
Federal Trade Commission
Woodrow Wilson
William Howard Taft in 1909 succeeded Teddy Roosevelt as
President. He was a progressive but he lacked Roosevelt’s dynamic personality. Taft’s approach to politics was slow and sometimes brought him into conflict with other progressives.
Payne-Aldrich Tariff: Progressives agreed with Taft who believed that high tariffs limited competition, hurt consumers, and protected trusts. He called Congress into a special session to lower tariffs. But the Congress had many legislators who wanted to protect high tariffs to protect American goods. The result was a weak Payne-Aldrich Tariff . This act barely cut tariffs and actually raised them on some goods. When Taft accepted this piece of legislation, progressives felt betrayed.
Ballinger-Pinchot Affair caused Taft’s standing among
Republican progressives to take a nosedive. In 1909 a controversy destroyed his popularity with reformers for good. Taft appointed
Richard Ballinger , a conservative corporate lawyer, to Secretary of the Interior. Ballinger tried to make nearly a million acres of public forests and mineral reserves available for private development.
This outraged progressives
Gifford Pinchot, head of the US Forest Service, charged
Ballinger with plotting to turn over public lands in Alaska to a private group for personal profit. The US Attorney General investigated the charges but found nothing. Pinchot leaked his accusations to the press and Taft fired him. Later a congressional committee probed the controversy and declared
Ballinger innocent. Nevertheless, Taft suffered. The Democrats gained control of the Congress in the 1910 and Taft lost his power.
Taft Reforms: Taft suffered from bad publicity but, in the end, he had 90 antitrust cases brought before the courts in four years as compared to Roosevelt who brought 44 cases in seven years. In
1911, two cases under TR won: the break-up of: Standard Oil
Trust and of the American Tobacco Company.
Taft established the
Children’s Bureau
, a federal agency to investigate and publicize problems with child labor. Taft supported the Mann-Elkins Act of 1910, which increased the regulations under the Interstate Commerce Commission.
The election of 1912 saw a split in the Republican Party.
Roosevelt decided run for president under the Bull Moose , or
Progressive, Party. Taft ran as the Republican candidate. The split stopped Taft’s reelection, so Democrat, Woodrow Wilson was elected president. Wilson plunged into a term of reform. Wilson believed monopolies were evil and needed to be destroyed. One of his first targets for reform was the tariff.
Underwood Tariff was Wilson’s tariff reduction bill. He declared that high tariffs, “built up privileges and exemptions from competition.” He said pressure from foreign competition would improve American manufactured goods & lower prices.
In 1913 Congress passed the Underwood Tariff which reduced the average tariff on imported goods to about 30% of the value of goods. A benefit of the act was the provision for an income tax , a direct tax on the earnings of individuals and corporations. Later passage of the 16 th Amendment in 1913 made it legal for the federal government to tax incomes.
Reforming Banks: In 1907 a banking crisis in the US closed many banks and wiped out the savings of many Americans. To restore public confidence in the banking system, Wilson supported a Federal Reserve System . Banks would have to keep a portion of their deposits in a regional reserve bank to provide a financial cushion against losses.
The Federal Reserve Act of 1913 organized the federal banking system as follows:
1.
8 to 12 regional Federal Reserve Banks throughout the country were created. These were the central banks for districts. Money and cash reserves were stored there.
2.
Federal Reserve Banks were governed by a Federal Reserve
Board appointed by the president. It set the interest rates it charged other banks, thereby controlling: interest rates of the nation and money in circulation.
3.
Each Federal Reserve Bank let member banks borrow money to prevent bank failures
4.
The system created a new national currency known as
Federal Reserve Notes . Now the Federal Reserve could expand or take away money in circulation.
Overall the system was given the power to fight inflation by raising interest rates and to stimulate the economy during a recession by lowering interest rates.
Federal Trade Commission FTC was created in 1914 to monitor
American businesses. It had the power to investigate companies and issue ‘cease and desist’ orders against companies engaging in unfair trade practices. Businesses could take the FTC to court if it disagreed with its rulings. Wilson wanted to work with businesses to limit activities that unfairly limited competition. He appointed business leaders to the FTC to ensure fairness on both sides of the issue.
Progressives saw this as a sabotage for their goals to crush big business. Congress responded with the Clayton Antitrust Act, which banned binding agreements. Before retailers who bought from one company had to stop selling a competitor’s product. It banned price discrimination when businesses charged different customers different prices an manufacturers could no longer give discounts to chain stores.
The act also declared that unions were not unlawful combinations in restraint of trade. It made striking, peaceful picketing, and boycotts legal.
By the early 1900s, the Progressives took pride in the many changes. They redefined the role of government in business and politics. They helped to improve life and working conditions in the city. In August 1914, World War I broke out. America focused on other concerns. As the country entered the war in 1917,
Americans turned from reform to making the world safe for democracy.
In the end, Progressives did not help tenant and migrant farmers. They did not help the non-unionized workers. They failed to address African American reform issues.
It would take another 50 years before the Civil Rights Movement, would force the federal government to legislate to help black people in
America.
1. Explain how Taft lost his popularity with progressives.
2. What positive progressive acts did Taft complete?
3. How did Wilson’s tariff law differ from Taft’s?
4. What progressives acts did Wilson complete?
5. Who did the progressives leave out?
1