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CHAPTER 9: DISCONTENT AND REFORMOUTLINE OF U.S. HISTORYtradition by which no president hadheld office for more than two terms.Instead, he supported William HowardTaft, who had served under himas governor of the Philippines andsecretary of war. Taft, pledging tocontinue Roosevelt’s programs, defeatedBryan, who was running forthe third and last time.The new president continued theprosecution of trusts with less discriminationthan Roosevelt, furtherstrengthened the Interstate CommerceCommission, established apostal savings bank and a parcelpost system, expanded the civil service,and sponsored the enactmentof two amendments to the Constitution,both adopted in 1913.The 16th Amendment, ratifiedjust before Taft left office, authorizeda federal income tax; the 17thAmendment, approved a few monthslater, mandated the direct electionof senators by the people, insteadof state legislatures. Yet balancedagainst these progressive measureswas Taft’s acceptance of a new tariffwith higher protective schedules; hisopposition to the entry of the stateof Arizona into the Union becauseof its liberal constitution; and hisgrowing reliance on the conservativewing of his party.By 1910 Taft’s party was bitterlydivided. Democrats gained controlof Congress in the midterm elections.Two years later, WoodrowWilson, the Democratic, progressivegovernor of the state of NewJersey, campaigned against Taft, theRepublican candidate — and alsoagainst Roosevelt who ran as thecandidate of a new Progressive Party.Wilson, in a spirited campaign, defeatedboth rivals.During his first term, Wilson securedone of the most notable legislativeprograms in American history.The first task was tariff revision.“The tariff duties must be altered,”Wilson said. “We must abolish everythingthat bears any semblanceof privilege.” The Underwood Tariff,signed on October 3, 1913, providedsubstantial rate reductions on importedraw materials and foodstuffs,cotton and woolen goods, iron andsteel; it removed the duties frommore than a hundred other items.Although the act retained manyprotective features, it was a genuineattempt to lower the cost of living.To compensate for lost revenues, itestablished a modest income tax.The second item on the Democraticprogram was a long overdue,thorough reorganization of the ramshacklebanking and currency system.“Control,” said Wilson, “mustbe public, not private, must be vestedin the government itself, so that thebanks may be the instruments, notthe masters, of business and of individualenterprise and initiative.”The Federal Reserve Act of December23, 1913, was Wilson’s mostenduring legislative accomplishment.Conservatives had favoredestablishment of one powerful centralbank. The new act, in line withthe Democratic Party’s Jeffersoniansentiments, divided the country into12 districts, with a Federal ReserveBank in each, all supervised by anational Federal Reserve Board withlimited authority to set interest rates.The act assured greater flexibility inthe money supply and made provisionfor issuing federal-reserve notesto meet business demands. Greatercentralization of the system wouldcome in the 1930s.The next important task wastrust regulation and investigationof corporate abuses. Congressauthorized a Federal Trade Commissionto issue orders prohibiting“unfair methods of competition”by business concerns in interstatetrade. The Clayton Antitrust Actforbade many corporate practicesthat had thus far escaped specificcondemnation: interlocking directorates,price discrimination amongpurchasers, use of the injunction inlabor disputes, and ownership byone corporation of stock in similarenterprises.Farmers and other workers werenot forgotten. The Smith-Lever Actof 1914 established an “extensionsystem” of county agents to assistfarming throughout the country.Subsequent acts made credit availableto farmers at low rates of interest.The Seamen’s Act of 1915improved living and working conditionson board ships. The FederalWorkingman’s Compensation Actin 1916 authorized allowances tocivil service employees for disabilitiesincurred at work and establisheda model for private enterprise. TheAdamson Act of the same year establishedan eight-hour day for railroadlabor.This record of achievement wonWilson a firm place in Americanhistory as one of the nation’s foremostprogressive reformers. However,his domestic reputation wouldsoon be overshadowed by his recordas a wartime president who led hiscountry to victory but could nothold the support of his people forthe peace that followed. 9198199