America's Economic Life Changes Under President Woodrow Wilson

THE MAKING OF A NATION -- a program in Special English by the Voice of America.

A new leader stood before the American people on March fourth, nineteen-thirteen. He was Woodrow Wilson -- the twenty-eighth president of the United States.

I'm Harry Monroe. Today, Kay Gallant and I begin the story of Wilson's administration.

Woodrow Wilson had spent most of his life at Princeton University. First he was a professor. Then he was university president. Next, Wilson was elected governor of the state of New Jersey. His early success as governor made him a leading candidate for the Democratic presidential nomination in nineteen-twelve.

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Such proposals helped him win the Democratic nomination for president. Then he defeated President William Howard Taft and former president Theodore Roosevelt in the election. Woodrow Wilson, the former president of a university, had become the president of a nation.

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Many members of Congress opposed Wilson's plans. But the new president used the results of a Senate investigation to win the fight. The investigation showed that a number of senators owned companies that depended on high tariffs for their profits. The votes of these senators were influenced by their property holdings.

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President Wilson and the Democratic Party were pleased with the new tariff and income tax bills. But they were far from finished. Next they turned their efforts to reform of the banking industry.

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Wilson said the nation needed a money supply that could be increased or reduced, when necessary, to correct economic conditions. He said a method was needed to let banks help each other during economic emergencies. And he said laws were needed to prevent a few wealthy men from using the economic resources of the country for their own purposes.

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Under the plan, the nation would be divided into twelve areas. Each area would have its own federal reserve bank. These area banks would not do business with the public. They would serve only as "bankers' banks. " And they would issue a new form of money supported by the federal government. Most important, the leaders of the new system would be chosen by the government. . . not by private business.

Bankers, business leaders, and their representatives in Congress sharply criticized President Wilson's proposals. They said government control of the banking system was socialism, not capitalism.

It did not take long for bankers to discover that the new system was much better than the old one. Today, the Federal Reserve System is one of the most important institutions in the United States.

For Woodrow Wilson, the fight over the banking system was yet another political success. He had won major reforms in the nation's tariffs, taxes, and banking systems. Now he told Congress that new legislation was needed to control the power of monopolies and trusts. These were the giant companies and business alliances that controlled complete industries.

For example, no longer could a company set prices that would reduce competition or create a monopoly. No longer could corporations buy stocks of competing companies. No longer could they demand that a store refuse to sell competing products. The new bill also protected labor unions from being charged with anti-trust violations. It gave unions more power to organize and protect workers.

At President Wilson's request, Congress also prepared a law that set up a government agency called the Federal Trade Commission. The commission was given the job of investigating wrong-doing in business. It had the power to force companies to obey the new anti-trust laws and other rules.

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The reforms were not only a victory for Woodrow Wilson. They also changed the face of American business and economics for many years to come. The income tax, for example, grew to become the federal government's main source of money.

Woodrow Wilson had taught history in the days when he was a professor at Princeton University. He knew his actions as president could influence the country for a long time. But, as a historian, he also knew his own term in the White House could be changed by unexpected events. That is just what happened.

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You have been listening to THE MAKING OF A NATION -- a program in Special English by the Voice of America. Your narrators were Harry Monroe and Kay Gallant. Our program was written by Frank Beardsley. The Voice of America invites you to listen again next week at this same time, when we will continue the story of President Woodrow Wilson.