The New Freedom
The Progressive Program of President Woodrow Wilson
Jan 15, 2009 William L. Wunder
In August of 1912, Democratic Party nominee Woodrow Wilson met with progressive lawyer Louis Brandeis to discuss how to combat Progressive Party nominee Theodore Roosevelt and his New Nationalism. Brandeis offered a model of thought that Wilson readily agreed with that differed from New Nationalism at the start, but ended up resembling it.
The political and economic thoughts that Brandeis shared with Wilson harken back to old Democratic traditional beliefs and the days of Andrew Jackson- a distrust of wealthy or powerful entities, private and public. Brandeis believed that economic "bigness" was not natural, Roosevelt believed it was. Bigness originated from the machinations of bankers, thus strangling the freedom of others, according to Brandeis. Centralization weakened society, cutting off talent and ideas from the community to the center. The excessive power of big business and government was corruptive, offering more power to men than they can handle, transforming them into tyrants.
Federal Trade Commission
Where Roosevelt favored regulating those tyrants, Wilson and Brandeis wanted to eliminate them, "both of us (Wilson and Brandeis) have as an object the prevention of monopoly, monopoly is created by unregulated competition." The center of the New Freedom was regulated competition, without the growth of government. "I do not look forward with pleasure to the time when the juggernauts are licensed and driven by commissioners of the United States," Wilson said.
As President however, Wilson discovered that to acheive Jacksonian ends, he had to reject Jacksonian means. Wilson had to shift course from the Clayton Act of 1914, which was a confusing and tedious list of unfair business practices, to passing the supplemental Federal Trade Commission Act. The commission had regulatory powers, including mediating conflicts between public and private interests, as the New Nationalism envisioned. Gradually, big business and lawmakers drastically reduced its powers.
Underwood Tariff
Also going back to Jacksonian times and beyond, the persistant Democratic call for lower tariffs was adopted by Wilson. Large manufacturing interests since the antebellum period have demanded protection from cheap foreign goods through the federal government's tariff, the type of thing the New Freedom was specifically against.
Wilson went all out for a lower tariff. He broke precedent by appearing in person in Congress to make the case of tariff reductions. He used his patronage powers in the Senate to outmanuever the staunch protectionist bloc. The result was the passage of the 1913 Underwood Tariff bill, which reduced duties by an average of ten percent. To make up for the lost revenue, the income tax amendment was passed. But, yet again, Wilson went against his New Freedom precepts by creating the Tariff Commission to organize the country's trade policies.
Federal Reserve System
Even Jackson's Bank War found its way into the New Freedom. Jackson sought to dismantle the Bank of the United States because the eastern banking establishment had too much control over the nation's finances. He ended up removing the government's deposits from the B.U.S. and distributed it to state pet banks. Wilson also sought to decentralize the banking system from Wall Street, giving the small regional banks more freedom.
Again, the resulting legislation was at odds with the New Freedom. Although the Federal Reserve Act of 1913 did permit some decentalization by establishing twelve regional bank districts owned by member banks, a supervisory board in Washington D.C. controlled the nation's money, including forming the new currency- federal reserve notes. However, the board for the next twenty years cemented a relationship with Wall Street and saw no need for significant regulation.
Wilson came to realize that to tame big business, he needed a powerful government. The New Freedom was inadequate to meet his progressive goals and instead metamorphosed into Roosevelt's New Nationalism. The New Freedom was one of the last gasps of Jacksonian thinking.
Sources
Bailyn, Bernard et al eds, The Great Republic, D.C. Heath: Lexington, MA, 1985.
Chace, James, 1912, Simon and Schuster: New York, 2004.
Schlesinger, Arthur M, Jr., The Crisis of the Old Order, Bookspan, 2002.
Woodrow Wilson, official White House portrait
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