WILSON’S BACKGROUND
Wilson spent his youth in the South during the Civil
War and Reconstruction. The son, grandson, and nephew of Presbyterian minis-
ters, he received a strict upbringing. Before entering the political arena, Wilson
spent time as a lawyer and president of Princeton University. In 1910, Wilson
became the governor of New Jersey. As governor, he supported progressive legis-
lation programs such as a direct primary, worker’s compensation, and the regula-
tion of public utilities and railroads.
As America’s newly elected president, Wilson moved to enact his program,
the “New Freedom,” and planned his attack on what he called the triple wall of
privilege: the trusts, tariffs, and high finance.
TWO KEY ANTITRUST MEASURES
“Without the watchful . . . resolute inter-
ference of the government,” Wilson said, “there can be no fair play between indi-
viduals and such powerful institutions as the trusts. Freedom today is something
more than being let alone.” During Wilson’s administration, Congress enacted
two key antitrust measures. The first, the Clayton Antitrust Act of 1914,
sought to strengthen the Sherman Antitrust Act of 1890. The Clayton Act pro-
hibited corporations from acquiring the stock of another if doing so would create
a monopoly; if a company violated the law, its officers could be prosecuted.
The Clayton Act also specified that labor unions and farm organizations not
only had a right to exist but also would no longer be subject to antitrust laws.
Therefore, strikes, peaceful picketing, boycotts, and the collection of strike bene-
fits became legal. In addition, injunctions against strikers were prohibited unless
the strikers threatened damage that could not be remedied. Samuel Gompers,
president of the American Federation of Labor (AFL), saw great value to workers
in the Clayton Act. He called it a Magna Carta for labor, referring to the English
document, signed in 1215, in which the English king recognized that he was
bound by the law and that the law granted rights to
his subjects.
The second major antitrust measure, the Federal Trade
Commission Act of 1914, set up the Federal Trade
Commission (FTC). This “watchdog” agency was given
the power to investigate possible violations of regulatory
statutes, to require periodic reports from corporations, and
to put an end to a number of unfair business practices.
Under Wilson, the FTC administered almost 400 cease-and-
desist orders to companies engaged in illegal activity.
A NEW TAX SYSTEM
In an effort to curb the power of big
business, Wilson worked to lower tariff rates, knowing that
supporters of big business hadn’t allowed such a reduction
under Taft.
Wilson lobbied hard in 1913 for the Underwood Act,
which would substantially reduce tariff rates for the first
time since the Civil War. He summoned Congress to a spe-
cial session to plead his case, and established a precedent of
delivering the State of the Union message in person.
Businesses lobbied too, looking to block tariff reductions.
When manufacturing lobbyists—people hired by manufac-
turers to present their case to government officials—
descended on the capital to urge senators to vote no, pas-
sage seemed unlikely. Wilson denounced the lobbyists and
urged voters to monitor their senators’ votes. Because of the
new president’s use of the bully pulpit, the Senate voted to
cut tariff rates even more deeply than the House had done.
The Progressive Era 539
DEREGULATION
In recent years the railroad, air-
line, and telecommunications
industries have all been deregu-
lated, or permitted to compete
without government control. It is
hoped that this will improve their
efficiency and lower prices.
During the Progressive Era,
reformers viewed regulation as a
necessary role of government to
ensure safety and fairness for
consumers as well as industrial
competitors. Opponents of regu-
lation, however, believed that gov-
ernment regulation caused ineffi-
ciency and high prices.
Modern critics of deregulation
argue that deregulated businesses
may skimp on safety. They may
also neglect hard-to-serve popula-
tions, such as elderly, poor, or
disabled people, while competing
for more profitable customers.
A
A. Answer
Wilson placed
greater govern-
ment regula-
tions on busi-
nesses.
Vocabulary
injunction: a cour t
order prohibiting a
party from a
specific course of
action
MAIN IDEA
MAIN IDEA
A
Summarizing
What was the
impact of the two
antitrust
measures?