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The second item on the Democratic program was a reorganization of the banking and currency system. The nation had long suffered from inflexibility of credit and currency. Stopgap legislation had permitted the national banks to issue emergency currency, but a thorough overhauling of the banking system was long overdue. "Control," said Wilson, "must be public, not private, must be vested in the government itself, so that the banks may be the instruments, not the masters, of business and of individual enterprise and initiative." The Federal Reserve Act of December 23, 1913, filled these requirements. Upon the existing banks it imposed a new system of organization. The country was divided into twelve districts with a federal reserve bank in each. These were to serve as depositories for the cash reserves of those banks which joined the system. Their primary function was to act as a bank for banks. It was made possible, therefore, for the funds thus accumulated to be used to assist individual local banks in moments of temporary embarrassment. To accomplish the second object-greater flexibility of the money supply-provision was made for the issuance of federal reserve notes to meet business demands. Finally, the plan was to be supervised by a Federal Reserve Board.
The next important task was trust regulation. Experience suggested a system of control similar to that of the Interstate Commerce Commission over the railways. Thus, the power of investigating corporate abuses was given to a Federal Trade Commission authorized to issue orders prohibiting "unfair methods of competition" by business concerns in interstate trade. A second law, the Clayton Antitrust Act, forbade many corporate practices that had thus far escaped specific condemnation-interlocking directorates, price discrimination among purchasers, and the ownership by one corporation of the stock in similar enterprises.
Labor and the farmers were not forgotten. A Federal Farm Loan Act made credit available to farmers at low rates of interest. One provision of the Clayton Act specifically prohibited the use of the injunction in labor disputes. The Seamen's Act of 1915 provided for the improvement of living and working conditions of employees on ocean-going vessels and on lake and river craft. The Federal Workingman's Compensation Act in 1916 authorized allowances to civil service employees for disabilities incurred in the course of their work. The Adamson Act of the same year established an eight-hour day for railroad labor.
This record of reform reflected the temper of the people which found its voice through the leadership of President Wilson. A remarkable figure in the annals of the American presidency, he lacked the robust qualities indispensable to success in the rugged arena of competitive politics. Wilson was essentially a student and a philosopher of political institutions. His writings in the field of political science, in fact, were a notable contribution to the study of that subject in America. Wilson surveyed the world with singular mental detachment, with the eyes of a student accustomed to probe beneath the immediate flux of events and to seek for guiding principles. His hold on the people rested more on their confidence in his disinterested and penetrating intelligence than on a devotion to his personality, though he was deeply loved by his intimates. Wilson's place in history, however, has been measured not by his scholarship nor his devotion to social reform, but by the strange destiny which catapulted him into the role of wartime president and architect of the uneasy peace which followed World War 1. The great forces unleashed during Wilson's second term of office were likewise destined to effect fundamental changes on the American nation, confronted for the first time with the full responsibilities and hazards of a major world power.
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