Woodrow Wilson_ A Biography

Chapter 3

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TAKEN AT THE FLOOD.

As a legislative leader in the White House, Woodrow Wilson repeated his performance as a college president and state governor. Once again, he got off to a fast start and pushed for major changes at once. Once again, he racked up big successes at the outset. In fact, he would succeed in pushing his programs through Congress throughout his first term as president. Taken together, his feats in enacting the New Freedom would rank him among the greatest legislative presidents in the twentieth century, perhaps in all of American history. His only rivals would be Franklin Roosevelt with the New Deal in the 1930s and Lyndon Johnson with the Great Society in the 1960s. In some ways, he wrought even more impressive feats than those men would. Unlike the second Roosevelt, he was not dealing with a desperate national emergency; unlike the second Johnson, he did not enjoy long experience, intimate knowledge, and mastery of the ways of Congress.

No one could have accomplished as much as Wilson did without help and luck. Congressional Democrats were willing to follow him, although their conflicting ideas and interests sometimes made them difficult to pull together. His party"s leaders in the respective chambers, Congressman Underwood of Alabama and Senator John W. Kern of Indiana, proved able and cooperative. Speaker Champ Clark remained a bit sulky and pa.s.sive, but he was no obstructionist. Bryan drew on his years of ideological primacy and his network of connections among Democrats to provide an important bridge to Capitol Hill. Brandeis continued to supply strategic policy advice at critical junctures. The larger political environment likewise smiled on Wilson. With the exception of Mexico, foreign problems would not greatly distract him from domestic matters. More important, the dominance of progressive issues in the 1912 campaign ensured that much of Wilson"s program had gained, to use a favorite word of his, taken from Edmund Burke, "expediency"-these were ideas whose time had come. Thanks to overwhelming reform sentiment and the defeat and departure of old guard Republicans, Wilson would face less of the conservative obstructionism that had hobbled and stymied Roosevelt"s and Taft"s initiatives.

Ever since he won the election, he had been planning to break the custom, started by Jefferson, whereby the president did not appear in person before Congress. On April 6, 1913, the White House announced that President Wilson would deliver his first speech since the inauguration before a joint session of Congress. The news brought protests from strict Jeffersonians in his own party, who called the move "federalistic." Wilson laughed at the comparison and told Daniels that "the only federalistic thing about it was delivering the message in person." When he stood at the rostrum of the House chamber in the Capitol on April 8, he began, "I am very glad indeed to have this opportunity to address the two Houses directly and to verify for myself the impression that the President of the United States is a person, not a mere department of the government hailing Congress from some isolated island of jealous power, sending messages, not speaking naturally and with his own voice-that he is a human being trying to co-operate with other human beings in a common service."1 Wilson protested a bit too much when he disclaimed "federalistic" motives. As a long-standing critic of the separation of powers, he meant to make more than a symbolic break with that aspect of Jefferson"s legacy. He was doing something that the country"s most renowned admirer of Hamilton and greatest denigrator of Jefferson had not dared to do. His daughter Nell recalled her mother saying on the ride back to the White House from the Capitol, "That"s the sort of thing Roosevelt would have loved to do if he had thought of it." Her father laughed and answered, "Yes, I think I put one over on Teddy."2 Wilson meant to out-Roosevelt Roosevelt by working closely with Congress and taking command over legislation. Wilson meant to out-Roosevelt Roosevelt by working closely with Congress and taking command over legislation.

The question of how to exercise legislative leadership appeared to present him with a fateful choice between progressivism and partisanship. Postmaster General Burleson later recounted that the president talked to him shortly after the inauguration about lower-level federal appointments and party relations: "Now, Burleson, I want to say to you that my administration is going to be a progressive administration. I am not going to advise with reactionary or standpat Senators or Representatives in making these appointments." Burleson, who said he felt "depressed" and "paralyzed" upon hearing that, advised playing along with the Democrats in Congress on "little offices" and other small matters, and he stuck to his guns for two hours. Wilson finally said, "All right, Burleson, I will think about the matter." A week later, the president began to relent, and he soon left minor patronage to Burleson"s discretion. A year later, after he had racked up some of his legislative triumphs, Burleson recalled him conceding, "What you told me about the old standpatters is true. They at least will stand by the party and the administration. I can rely on them better than I can on some of my own crowd."3 This face-off between dreamy idealist and the hard-bitten politico makes a nice story, and some elements of it ring true. Wilson did dislike his party"s conservatives, and he had flaunted his progressivism repeatedly since the election. But it is wrong to think that a man who had lauded party government for more than thirty years would need to be tutored about the leaders in Congress. The presence of Bryan and Burleson in the cabinet testified to Wilson"s undiminished regard for party affairs. Burleson acknowledged this when he told Ray Stannard Baker that "he felt he had been appointed in some degree as an intermediary between Wilson and Congress." At all events, the two men came to work so well together on party matters that the president and other cabinet members took to calling Burleson "the Cardinal."4 The president"s newfound coziness with the postmaster general and party barons on Capitol Hill did not mean that he had abandoned his intentions to make the Democrats more progressive. Wilson believed he could have it both ways. He resumed his rhetorical campaign to set out his ideological direction. In one speech, he maintained that anyone who claims special privileges "forfeits the t.i.tle of Americanism," and in another he gloried in paying attention to "the cool large s.p.a.ces of the United States" rather than the sound and fury of Washington. Wilson did not use the term, but he was mounting Roosevelt"s bully pulpit. Yet he knew it would take more than preaching to make good on his progressive promises. Before the inauguration, he had conferred with committee chairmen and party leaders in both houses of Congress, and he met with them frequently during his first months in the White House. By all accounts, he came across in those meetings as friendly but firm. On their part, his congressional visitors often felt, an English observer noted, "conscious of an intellectual inferiority, of a narrower point of view, of limitations in their knowledge, of less elevated purposes and motives."5 The following year, the English caricaturist Max Beerbohm captured this contrast in a drawing t.i.tled "Professor Wilson Visiting Congress," which shows a slender, bespectacled Wilson in academic garb lecturing to a bunch of large, paunchy, mainly walrus-mustached men. Political cartoonists in American newspapers likewise often depicted the president in a cap and gown or as a schoolmaster with congressmen and senators as squirming schoolboys. The following year, the English caricaturist Max Beerbohm captured this contrast in a drawing t.i.tled "Professor Wilson Visiting Congress," which shows a slender, bespectacled Wilson in academic garb lecturing to a bunch of large, paunchy, mainly walrus-mustached men. Political cartoonists in American newspapers likewise often depicted the president in a cap and gown or as a schoolmaster with congressmen and senators as squirming schoolboys.

Charges soon arose in the press that he was dictating to Congress. Wilson resented such allegations. "I do not know how to wield a big stick," he protested, "but I do know how to put my mind at the service of others for the accomplishment of a common purpose. They are using me; I am not driving them." The gentleman again protested too much, but he did engage in genuine consultation with congressional leaders. As a result of those consultations and his own inclinations, Wilson decided to push the tariff as the lead item on the agenda, but he staked out his position in general terms and remained flexible. In that initial speech before Congress, he addressed the tariff but kept his remarks brief, referring only to the goal of altering the present system and stating that remedies might "at some points seem heroic."6 Choosing to lead off with tariff revision brought several advantages. The Democrats were largely united in wanting to lower rates, and the tariff promised to be the easiest measure on Wilson"s agenda to enact. Likewise, tariff making was a long-practiced legislative art, so that the men on Capitol Hill could presumably handle the item much on their own, with little pressure and interference from the White House. Moreover, although the tariff contained a host of intricate schedules, it did not present the legal, technical, and philosophical challenges inherent in the other major items on the president"s agenda: banking reform and anti-trust legislation. Finally, the tariff presented this Democratic president and his majorities in Congress with an unparalleled opportunity to prove their strength and effectiveness.

Twice before in the last two decades, presidents and congresses of both parties had tried and failed to lower the tariff. Grover Cleveland and the Democrats had fumbled in 1894 with the Wilson-Gorman tariff, and in 1909, Taft and the Republicans had similarly failed, with the Payne-Aldrich tariff. Both of those efforts had followed the same pattern: the House, where, const.i.tutionally, revenue bills had to originate, pa.s.sed a version that lowered rates. Then protectionist senators, aided by a swarm of lobbyists, pa.s.sed a version loaded down with amendments that wiped out or, in the case of the Payne-Aldrich tariff, even reversed most of the downward revisions. The Senate version largely prevailed, and the president ultimately caved in, either allowing the bill to become law without his signature, as Cleveland did, or pretending that it was satisfactory, as with Taft. If President Wilson could break this pattern, he would win a big personal victory and establish his and his party"s governing credentials.

At first, history seemed to be repeating itself in 1913. In the House, Underwood served as both majority leader and chairman of the Ways and Means Committee, and he speedily produced a bill that reduced the average tariff rate by 10 percent and removed protection altogether from a large number of products. In addition, the bill contained a provision to levy income taxes: 1 percent on income over $4,000 (substantial earnings at the time) and in steps to a maximum of 4 percent over $100,000. On May 8, just one month after Wilson"s appearance before Congress, the House pa.s.sed the Underwood bill without amendment, by a vote of 281 to 139. Just five Democrats, four of them from sugar-dominated Louisiana districts, broke ranks; four Progressives, two Republicans, and one independent supported the bill.

Then repet.i.tion of history seemed to show its sour side. The Senate presented Wilson and other tariff reformers with a veritable minefield. There, the Democrats held only a small majority-six seats-and Louisiana"s two Democratic senators were almost certain to oppose any downward revision. Several Democrats who represented western states with mineral, beet sugar, and wool interests also seemed likely to defect. Ominously, too, the chairman of the Finance Committee was Furnifold Simmons of North Carolina, a conservative who had earlier helped Republicans gut tariff-revision bills. As matters transpired, the chairman bore out Cardinal Burleson"s prediction that old-line Democrats would stand by the party: Simmons stuck to a pledge to follow the president"s leadership. Still, like any good historian, Wilson could see what might happen, and he acted quickly to avert looming dangers. Even before the Underwood bill pa.s.sed, he started meeting with and writing to individual Democratic senators, particularly westerners, turning on his charm and power of persuasion. Despite those efforts, one of the westerners, Thomas J. Walsh of Montana, announced that he might have to vote against parts of the bill. Meanwhile, as in earlier tariff fights, lobbyists were pulling out all the stops in their efforts to influence senators. Trying to attract public attention, Wilson told the press that the people were "voiceless in these matters, while great bodies of astute men seek to create an artificial opinion and to overcome the interests of the public for their private profit. ... Only public opinion can check and destroy it."7 That statement was vintage Wilson. He was once more appealing directly to const.i.tuents, and as before, the appeal at first appeared to backfire. Usually supportive newspapers such as The New York Times The New York Times and Democratic senators objected to the allegations. Republican senators thought they saw an opportunity to make mischief by demanding an investigation. Wilson called their bluff by urging Democrats to support the investigation, which the Senate quickly approved, along with a requirement that senators disclose any of their own interests that might be affected by changes in the tariff. During the first week of June, the Judiciary Committee witnessed a parade of senators revealing stock- and land-holdings and confessing to previous efforts to protect those interests. Then the committee delved into the lobbyists themselves and discovered that during the past twenty years, sugar interests had spent $5 million to influence legislation and had contributed to the Democratic campaign in 1912. Wilson seemed vindicated. "The country is indebted to President Wilson for exploding the bomb that blew the lid off the congressional lobby," declared the Senate"s arch-progressive, Robert La Follette. "Congress sneered. The interests cried demagogue. The public believed. The case is proved." and Democratic senators objected to the allegations. Republican senators thought they saw an opportunity to make mischief by demanding an investigation. Wilson called their bluff by urging Democrats to support the investigation, which the Senate quickly approved, along with a requirement that senators disclose any of their own interests that might be affected by changes in the tariff. During the first week of June, the Judiciary Committee witnessed a parade of senators revealing stock- and land-holdings and confessing to previous efforts to protect those interests. Then the committee delved into the lobbyists themselves and discovered that during the past twenty years, sugar interests had spent $5 million to influence legislation and had contributed to the Democratic campaign in 1912. Wilson seemed vindicated. "The country is indebted to President Wilson for exploding the bomb that blew the lid off the congressional lobby," declared the Senate"s arch-progressive, Robert La Follette. "Congress sneered. The interests cried demagogue. The public believed. The case is proved."8 Denouncing the lobbyists played much the same role for Wilson"s presidency as the fight with Sugar Jim Smith had played for his governorship. Denouncing the lobbyists played much the same role for Wilson"s presidency as the fight with Sugar Jim Smith had played for his governorship.

After those hearings, Senate debate on the tariff turned into a slow grind. The Finance Committee reduced rates further, and the Democratic caucus held firm in support of the measure, with only the two Louisianians in dissent. Republicans attacked on two fronts. Conservatives, joined by some insurgents, trotted out their party"s well-worn justifications of protection, such as its supposed benefits for jobs and wages. They recognized that they did not have the votes to stop the tariff revision, but the maneuvering was delaying consideration of banking-reform legislation, which was making its way through the House. Meanwhile, insurgent Republicans attacked the income tax provision for not going far enough. In late August, La Follette persuaded four Democrats to demand that their caucus adopt his amendment to raise rates to 10 percent on the highest income. The Finance Committee countered with a compromise that raised the rate on income of more than $100,000 to 7 percent. Simmons appealed to Bryan and Wilson for help, and the president, who was on a short visit to his family"s summer quarters in New Hampshire, wrote back to support the committee"s proposals as "reasonable and well considered. I should think that they would commend themselves to the caucus."9 Wilson"s letter, together with Bryan"s arm-twisting, sufficed to unite the Democrats behind the committee compromise. Wilson"s letter, together with Bryan"s arm-twisting, sufficed to unite the Democrats behind the committee compromise.

Final pa.s.sage came fairly soon. Republicans made a last-ditch effort to save the duties on wool, and insurgents tried to tack on an inheritance tax. On September 9, the Senate pa.s.sed the Simmons bill by a vote of 44 to 37. Among the Democrats, only the Louisiana senators voted no; one Republican insurgent, La Follette, voted yes, as did the lone Progressive senator, Miles Poindexter of Washington. A conference committee ironed out differences between the versions, mainly keeping the lower rates in the Simmons bill, and both chambers pa.s.sed the final version on an almost straight party-line vote. On October 3, the president staged a ceremony at the White House to sign the Underwood-Simmons tariff. He used two gold pens, which he presented to the respective chairmen, and he lauded their work and expressed grat.i.tude for having played a part himself, quoting Shakespeare: "If it be a sin to covet honor, then I am the most offending soul alive."10 Only one thing kept the ceremony from being perfect: Ellen and the Wilson daughters were not there. They were still vacationing in New Hampshire, and on October 3, Ellen made a brief trip to New York to shop for Jessie"s wedding, which was to take place at the White House in November. When Ellen read newspaper reports of the ceremony, she exulted, "[N]ow at last everybody in the civilized world knows that you are a great man[,] a great leader of men."11 Her husband had won a great victory, succeeding where his predecessors had failed and doing so as a party leader. The theorist of party government had become the pract.i.tioner of party government. Hardly any Republicans voted for the tariff despite the inclusion of the income tax. Insurgents had a ready excuse in their claim that the tax did not go far enough; some of their lack of support also stemmed from their being ignored by the president. Conversely, it was a sign of future trouble that the insurgents made little effort to reach across party lines, as they had done in the past. Another sign of trouble was that the easiest item on Wilson"s legislative agenda had taken so much time and effort to pa.s.s. At the time, however, all signs looked good. Tariff reform gave the new president a big boost toward his goal of seeing the rest of his reform program enacted. Her husband had won a great victory, succeeding where his predecessors had failed and doing so as a party leader. The theorist of party government had become the pract.i.tioner of party government. Hardly any Republicans voted for the tariff despite the inclusion of the income tax. Insurgents had a ready excuse in their claim that the tax did not go far enough; some of their lack of support also stemmed from their being ignored by the president. Conversely, it was a sign of future trouble that the insurgents made little effort to reach across party lines, as they had done in the past. Another sign of trouble was that the easiest item on Wilson"s legislative agenda had taken so much time and effort to pa.s.s. At the time, however, all signs looked good. Tariff reform gave the new president a big boost toward his goal of seeing the rest of his reform program enacted.

The item that was now second on Wilson"s agenda, banking reform, presented different and tougher challenges. A near consensus favored doing something to strengthen the country"s financial structure, but that consensus presented the biggest challenge. If just about everybody agreed that something needed to be achieved, few agreed on exactly what that something should be. Broadly speaking, the divergent approaches to the problem attracted support from different const.i.tuencies and their political representatives.

The first approach, supported by big investment firms on Wall Street and in other metropolitan centers of the Northeast and Midwest, favored a privately controlled central bank that would hold government deposits and act as a reserve for smaller banks. Such central banks operated in Britain, France, and Germany; one had functioned in the United States before Andrew Jackson smashed it in the "Bank War" of the 1830s. In recent years, J. P. Morgan had acted informally as a central banker, particularly during financial panics in 1893 and 1907. Conservative Republicans supported this approach to reform and had taken a step in this direction in 1908 by pa.s.sing the Aldrich-Vreeland Act, which provided for moves toward a single private reserve bank with fifteen branches. That move had angered Democrats and progressive Republicans.

Apart from rejecting a private central bank, those opponents of the Aldrich-Vreeland Act agreed on little else. Bankers and larger business interests in the South and West had long resented domination by Wall Street and other big financial centers. They, too, wanted privately controlled reserves, but they favored a second approach-namely, a system of regional banks. More conservative southern Democrats supported this approach, and Congressman Gla.s.s had begun to discuss ideas along those lines with Wilson soon after the election. His Banking Committee had recently drawn up a bill that embodied a decentralized version of the Aldrich-Vreeland system.

Farmers and smaller business interests in the South and West supported a third approach, which also favored a regional system, but they did not want access to credit controlled by local bankers and big operators. Other southern and western Democrats, mainly Bryan and his followers, took their party"s Jacksonian anti-bank heritage seriously, and they favored government-controlled regional reserve banks. Some insurgent Republicans also supported this approach. Finally, urban intellectuals and reform-inclined lawyers and economists believed that only a national approach could slay the "money trust" and constructively address the country"s credit and financial needs. More sophisticated Republican insurgents, such as La Follette, and some of Roosevelt"s Progressives were calling for a single government inst.i.tution to provide reserves and oversee banking. In short, two conflicting principles-private versus public control and decentralization versus centralization-created a veritable Gordian knot that a successful program of banking reform would have to cut.

Wilson not only had to put together a congressional majority, but he also had to wrestle with th.o.r.n.y technical problems in seeking to reform a diverse, complex array of inst.i.tutions spread throughout a vast nation. In June, he described the difficulty to Mary Hulbert this way: "It is not like the tariff, about which opinion has been forming long years through. There are almost as many judgments as there are men. To form a single plan and a single intention about it seems at times a task so various and so elusive that it is hard to keep one"s heart from failing."12 By the time he wrote those words, Wilson had been struggling for weeks to reconcile Gla.s.s"s plan for decentralized private banks with Bryan"s demand for public control. By the time he wrote those words, Wilson had been struggling for weeks to reconcile Gla.s.s"s plan for decentralized private banks with Bryan"s demand for public control.

Bryan had a friend and powerful ally in the chairman of the Senate Banking and Currency Committee, Robert Owen of Oklahoma, who resented having been left out of the talks before the inauguration and adamantly opposed the Gla.s.s bill. Secretary of the Treasury McAdoo had stepped in with a plan that, like Aldrich-Vreeland, called for a central bank with fifteen branches but would be part of his department and administered by a board of political appointees. Gla.s.s had counterattacked by enlisting support for his bill from prominent New York bankers. Meanwhile, House was pa.s.sing along criticisms of public control by some of those same financiers, with murmurs of his own agreement with them. Buckling under this onslaught, McAdoo had withdrawn his plan and said he favored the Gla.s.s bill. On June 17, Wilson brought the congressman, the senator, and the secretary together for a meeting at the White House. In a long, heated discussion, Gla.s.s and Owen stuck to their guns, but McAdoo shifted again, this time back to public control, or, as he told House, "the right measure ... which puts the Government in the saddle." Faced with an impa.s.se and the secretary"s shifting stands, Wilson ended the meeting without a decision and said he would think the matter over.13 Again he leaned on his most valued adviser on economic issues-Brandeis. The president had asked the Boston attorney to come to the White House on June 11 and thrash out the issues with him. As he had done earlier, Brandeis afterward wrote a memorandum that summarized their discussion and reiterated his advice. He urged balancing speed with "full and free discussion" and a.s.surance that "limiting the power of the money trust" would make money available to businesses throughout the country. He also warned, "The conflict between the policies of the Administration and the desires of the financiers and of big business, is an irreconcilable one. Concessions to big business interests must in the end prove futile." As earlier, Brandeis appears to have been pushing Wilson down a path he already wanted to take. The president insisted to reporters that he had not decided on specifics but added, "About the main lines, I have had a considerable opinion."14 Although he did not say so, the opinion was that bankers should not be on the central board of the new system. Although he did not say so, the opinion was that bankers should not be on the central board of the new system.

On June 18, Wilson summoned Gla.s.s, Owen, and McAdoo back to the White House and told them that he wanted the board to be an exclusively governmental agency, with money issued by the regional banks to be backed as a government obligation. Two days later, he met with the Democrats on the House Banking Committee and made it clear to them that he was committed to pa.s.sing a banking bill that contained those provisions. On June 23, he underlined his commitment to publicly controlled banking reform by going to the Capitol to deliver his second address to a joint session of Congress. Following the model of his tariff speech, Wilson kept his message brief and general and again struck notes that appealed to different sides in the debate. "We are about to set them [businessmen] free," he proclaimed but hastened to add, "It is not enough to strike the shackles from business." Government had a strong role to play in preventing "the concentration anywhere in a few hands of the monetary resources of the country," and it must control the new reserve system.15 Banking interests and conservative newspapers mounted furious attacks, with the New York Sun Sun complaining that the proposal "is covered all over with the slime of Bryanism." Wilson made a gesture toward the financial community by meeting with representatives of the American Bankers" a.s.sociation at the White House on June 25, joined by Gla.s.s, Owen, and McAdoo. When the bankers pushed for official representation on the new system"s central board, Wilson asked them, "Which of you gentlemen thinks that railroads should select members of the Interstate Commerce Commission?" He did make one concession-the establishment of an advisory council chosen by the regional banks. The next day, Gla.s.s and Owen introduced the revised plan, called the Federal Reserve, in their respective chambers. complaining that the proposal "is covered all over with the slime of Bryanism." Wilson made a gesture toward the financial community by meeting with representatives of the American Bankers" a.s.sociation at the White House on June 25, joined by Gla.s.s, Owen, and McAdoo. When the bankers pushed for official representation on the new system"s central board, Wilson asked them, "Which of you gentlemen thinks that railroads should select members of the Interstate Commerce Commission?" He did make one concession-the establishment of an advisory council chosen by the regional banks. The next day, Gla.s.s and Owen introduced the revised plan, called the Federal Reserve, in their respective chambers.16 The next attack came from the opposite flank. In the House, a band of southern and western agrarian Democrats bridled at what they saw as a sellout to the "money trust." They correctly grasped that the one element of private control in the plan-the role of bankers in the regional reserve banks-meant giving those bankers the power to create currency and manipulate credit. These agrarians called instead for further investigation of the "money trust" and extension of credit to farmers by allowing them to borrow against their crops. That scheme, known as rural credits, harked back to an idea of the Populists in the 1890s. Late in July, agrarians on the House Banking Committee offered amendments to the Federal Reserve bill that would expand the board to include representatives of agriculture and "industrial labor" and make $700 million available for loans to farmers. Wilson, who privately sympathized with the idea of rural credits, met with some of the agrarians and appeased them with promises to strengthen the next item on his legislative agenda: anti-trust legislation. This attack from the left did not bother him unduly, and he thought the trouble would disappear when the bill cleared the committees in which the troublemakers were ensconced. Then, he told Ellen, "I believe we shall have comparatively plain sailing."17 That prediction proved premature. After more meetings and some cajoling by the president, the Banking Committee rejected the agrarians" amendments and approved the bill on August 5. The Democratic caucus followed suit three weeks later, but only after concessions from the White House on agricultural lending and a threatened agrarian revolt. It took intervention by Bryan to quell that revolt. In a public letter on August 22, he reiterated the president"s promise of strong anti-trust legislation and implored his friends in the House to stand by the president. In the meantime, bankers redoubled their opposition. The American Bankers" a.s.sociation met in late August and endorsed a set of counterproposals that amounted to a rejection of public control and reaffirmation of Aldrich-Vreeland. Their stand seemed to bear out Brandeis"s judgment that their differences with the Wilson administration were "irreconcilable." Floor debate began in the House after Labor Day, and on September 18 representatives pa.s.sed the Federal Reserve bill by the overwhelming margin of 285 to 85. Only three Democrats-southern agrarians-defected, while twenty-three Republicans, mostly insurgents, and ten Progressives voted in favor. It was a great victory for Wilson, but it had taken a long, hot summer of wrangling, coddling, arm-twisting, lobbying, and threatening to get this far.18 And it was only half the battle. Ahead loomed the Senate. Wilson tried again to put an optimistic face on the situation. He told Ellen that there would be "no insuperable difficulty in handling the situation, so far as I can see." The president"s distance vision was defective. His party had a much smaller majority in the Senate, and three first-term Democrats on the Banking Committee were joining Republicans in dragging out hearings on the Federal Reserve plan. Each of them-Gilbert Hitchc.o.c.k of Nebraska, James O"Gorman of New York, and James Reed of Missouri-had his own political and personal reasons for making trouble, and their openly flouted obstructionism strained Wilson"s prized self-control. At the end of September, he told Mary Hulbert of his concern that a "man of my temperament and my limitations ... may lose his patience and suffer the weakness of exasperation. It is against these that I have constantly to guard myself."19 Guard himself he did-barely. He made noises about denouncing the banking lobby, as he had done earlier with the tariff lobby, and he reportedly asked the Senate Democratic caucus to discipline Hitchc.o.c.k, O"Gorman, and Reed. Eventually, however, he took a softer approach. On October 16, he invited the three recalcitrant senators to the White House and turned on his charm and persuasiveness. The overture seemed to work: newspapers reported that the senators had a pleasant meeting and remained open to changes in the banking bill. The president affirmed the newfound good feelings on October 20 in a public letter to Underwood: "I have met and had conferences with members of Senate Committee on Banking and Currency, both Democrats and Republicans. As a result of those conferences, I feel confident that a report on the bill may be expected not later than the first week in November. ... The pa.s.sage of the bill is a.s.sured."20 What happened next must have put Wilson in mind of the woes of Job. On October 23-at the request of the three dissident Democrats and one Republican on the Banking Committee-Frank A. Vanderlip, president of the National City Bank of New York, appeared before the committee to present a last-ditch alternative to the Federal Reserve plan: the "Vanderlip plan" would set up a Federal Reserve bank with twelve branches, all under the control of the government. The plan immediately attracted support from some progressives, who warmed to the government-control feature, and conservatives, who still wanted a central bank. Wilson bristled at the move. Vanderlip claimed to be working along the same lines as Wilson and requested a meeting so that he and two of his colleagues could explain the plan. The president shot back, "I am at a loss to understand how you have come to think of the plan which you presented to the Senate Committee on Banking and Currency yesterday as "being along the lines of my own thought." It is so far from being along the lines of my thought in this matter that it would be quite useless for me to discuss it with you." Wilson also summoned Senate Democratic leaders to a meeting at the White House, at which he warned them that he would not accept any plan dictated by bankers.21 He and his loyalists hung tough. After more haggling, the Banking Committee reported on two measures. One was the House-approved Federal Reserve bill, supported by Democrats, including O"Gorman and Reed; the other was a modified version of the Vanderlip plan, backed by the Republicans and Hitchc.o.c.k. Floor debate in the Senate opened on December 2 and featured mainly conservative Republican attacks on the Federal Reserve as disguised "Bryanism." Their arguments evidently made an impact, because the Democratic caucus bowed to Republican preferences by increasing the level of gold reserves in the new system. That was the only modification adopted. On December 19, the Senate narrowly beat back the modified Vanderlip plan, 44 to 41; only Hitchc.o.c.k joined the Republicans in voting for this alternative. The Senate then pa.s.sed the Federal Reserve bill by a vote of 54 to 34. Every Democrat, including Hitchc.o.c.k, supported it, as did six Republicans and the lone Progressive. A conference committee quickly ironed out differences, and the two houses approved the final version on December 22 and 23.22 Just hours after the final vote, the president staged another White House ceremony. This time, Ellen would be present, along with other family members, cabinet officers, congressional Democrats, and reporters. All watched as Wilson signed the Federal Reserve Act into law and presented gold pens-to Gla.s.s, Owen, and McAdoo. He praised the two legislators, along with their committee members, and he thanked the Republicans who supported the bill. "All great measures under our system are of necessity party measures," he noted, "... but this cannot be called a partisan measure." Nor would this measure benefit one cla.s.s at the expense of any other but was simply finishing "a work which I think will be of lasting benefit to the business of the country."23 Wilson toned down the note of triumph because a sigh of relief was more fitting. Creating the Federal Reserve had been a longer, harder-fought, more complicated struggle than lowering the tariff. Downplaying partisanship was gracious, although Wilson had again worked almost exclusively with Democrats. Eschewing cla.s.s politics was wise, and it served his larger ideological purposes of setting a new tone for his party. Yet he could have been pardoned if he had chosen to crow. This was the greatest legislative triumph of Wilson"s presidency, and it showed his style of leadership at its best. He picked the destination and stayed on course. He avoided details and showed flexibility and patience.

Wilson also did something no president had ever done before: he kept Congress on the job without a break. Before then, senators and representatives had rarely spent more than half the year in the capital. Even during the Civil War, Lincoln had not kept them at work continuously. Moreover, in those days before air-conditioning, Washington"s hot, humid summers made long sessions an ordeal on Capitol Hill. Wilson stayed in town, too, except for brief trips to visit his family, and shared in the discomfort. In fact, he would keep the senators and representatives on the job for another nine months, until the fall of 1914. This Congress would stay at work longer than any other in American history.24 Small wonder the political cartoonists often drew Wilson as a schoolmaster keeping his charges chained to their desks. Small wonder the political cartoonists often drew Wilson as a schoolmaster keeping his charges chained to their desks.

The Federal Reserve Act brought off the feat of having something in it for everybody. Three of the four contending approaches found fulfillment under the new system. Public control prevailed, though not totally, while centralization and decentralization each found a place. The Federal Reserve would be a government agency with a chairman and board of governors appointed by the president. This was not, however, the awesome inst.i.tution that later became "the Fed," with chairmen who mixed the roles of Delphic oracle and economics czar. That development would begin in another twenty years, as a result of reforms under the New Deal. Ironically, those reforms would make the Federal Reserve look more like the Vanderlip plan. Greater power in the original system resided, as most observers recognized at the time, in the regional banks. These, too, were government agencies, with boards appointed by the president, but the board members would be mostly bankers, and their a.s.sets would be the deposits of member banks. As Gla.s.s recognized, his approach lost little substance in the give-and-take of June 1913. Even the apparent losers in this fight-advocates of a privately controlled central bank-came out well: financial necessity dictated that one of the regional banks be located in New York, on Wall Street.25 Choosing the locations of the regional banks brought some ironic twists. The Federal Reserve Act divided the country into twelve districts, whose boundaries demarcated distinct economic regions. Locations were picked to ensure that anyone in a district could travel to its bank by overnight train. For the states and cities chosen, the banks were rich political plums, better than federal courthouses, almost as good as big customhouses. Some cities were inescapable choices, such as New York, although that particular choice rewarded the obstreperous Senator O"Gorman. One selection may have been at least partly political: the bank for the district covering the northern part of the Great Plains, which could have been located in either Omaha or Kansas City. Unfortunately for Omaha, that city was Senator Hitchc.o.c.k"s hometown. Instead, the bank went to Kansas City, which was Senator Reed"s adopted hometown, thereby making Missouri the only state to have two Federal Reserve banks (the other one being in St. Louis). Ironically, Hitchc.o.c.k would later metamorphose into an administration supporter, whereas Reed, after gripping the president"s coattails when he ran for reelection in 1916, would become one of Wilson"s bitterest enemies. Even the greatest political triumph can have surprising sequels.

One last major issue remained on Wilson"s legislative agenda-an ant.i.trust solution. By 1913, this issue had acquired even more "expediency" than banking reform. The previous year, all three major presidential contenders had argued that something had to be done about the huge concentrations of economic power in private hands, but careful a.n.a.lysis revealed sharp disagreements about what approach to take. Roosevelt"s diagnosis of the problem as "conduct, not size" and the solution of government oversight and regulation had attracted scant support, even among his Progressive followers, but it did plant the seed of a regulatory, rather than a legal, approach. Taft and Wilson had favored a legal approach, but not the same one. Taft had maintained that vigorous enforcement of the existing anti-trust law, the Sherman Act, would do the job, an approach that had attracted little support even among Republicans; many conservatives disliked the anti-trust law, and insurgents were so alienated that they gave him little credit for effective action despite his success in dissolving such monopolies as Standard Oil and American Tobacco. Wilson had reaped the greatest political profit by attacking the Sherman Act as inadequate, thereby appealing to widespread convictions that the anti-trust laws needed to be strengthened. Now that he was president, he needed to come up with such a law and, presumably, a better approach to the trust problem.26 At first, Wilson seemed hesitant about how to proceed. He vetoed an effort by Attorney General McReynolds to use the new income tax as a tool to punish the "tobacco trust" and other firms convicted under the Sherman Act. Yet he backed moves by McReynolds against American Telephone and Telegraph, United States Steel, and the New Haven Railroad, a Morgan holding. The president did not speak out on the anti-trust issue until the end of 1913, but his praise of tariff revision for unleashing enterprise and of banking reform for attacking the "money trust," as well as his promises to congressional Democrats of a strong anti-trust law, showed that his ardor for the New Freedom had not cooled. Wilson"s hesitancy seems to have sprung from the process of learning his way, from his not wanting to overload the legislative agenda, and from his feeling distracted by other matters, particularly Mexico. After Congress pa.s.sed the banking bill, he predicted "many another struggle until the middle of next summer" over the anti-trust problem. In November, when the Federal Reserve bill appeared to be breaking free in the Senate, Wilson turned to this question. After conferring with congressional leaders, he affirmed in his first State of the Union address, on December 2, "I think that all thoughtful observers will agree that the immediate service we owe the business communities of the country is to prevent private monopoly more effectually than it has yet been prevented."27 He called for new legislation to supplement and clarify the Sherman Act but said the subject was so complicated that it required a separate address to Congress. He called for new legislation to supplement and clarify the Sherman Act but said the subject was so complicated that it required a separate address to Congress.

With the trust problem, as with banking reform, Wilson faced a variety of proposed solutions and a plethora of conflicting advice. In the Senate, La Follette offered a bill, drafted with Brandeis"s help, that called for broad revisions in the anti-trust law; other bills in both houses called for prison terms for persons convicted of violating the Sherman Act, strict control of railroad stock, and regulation of financial markets. At the same time, Secretary of Commerce William Redfield was urging the president to soft-pedal the anti-trust issue and rea.s.sure a nervous business community, and Colonel House was dropping similar hints. Wilson confronted the situation in typical fashion. He thought the issue over by himself during the two-week vacation that he and Ellen took in the Gulf Coast city of Pa.s.s Christian, Mississippi, after Christmas. This time, he did not confer with Brandeis directly, but he was receiving advance copies of the lawyer"s series of articles on "Breaking the Money Trust," which were appearing in Harper"s Weekly Harper"s Weekly. When he returned to the White House, on January 13, 1914, Wilson was ready to move.

While he was away, he had written the speech he had promised to Congress. He read a draft to the cabinet as soon as he got back to Washington and met with members of the Commerce Committees of the two houses to discuss legislative plans. On January 20, he went before a joint session to speak about the anti-trust issue. His opening was pure Burke: "Legislation is a business of interpretation, not of origination; and it is now plain what the opinion is to which we must give effect in this matter. It is not recent or hasty opinion. It springs out of the experience of a whole generation." Into this vision of "expediency," he mixed rea.s.surance toward business. "The antagonism between business and government is over," he announced, but he also favored a long-sought goal of Bryanite Democrats and insurgent Republicans, the prohibition of interlocking directorates. He likewise backed another of their schemes: empowering the Interstate Commerce Commission to oversee railroad finances, and he endorsed an idea previously favored mainly by Progressives: an interstate trade commission. He hedged by saying that such a commission would be used "only as an indispensable instrument of information and publicity," but he also affirmed, "Other questions remain, which will need very thoughtful and practical treatment."28 That last bit of ambiguity gave him the flexibility he wanted, and he would need all he could muster. For one thing, he would be grappling not just with other people"s divergent ideas but also with his own. He would also face even more challenging legislative hurdles with this issue than he had with the previous two New Freedom measures. Those measures had needed only to go through single committees in each chamber-Ways and Means in the House and Finance in the Senate for the tariff and the income tax, Banking in both the House and the Senate for the Federal Reserve-and congressional Democratic leaders had shrewdly folded the income tax into the tariff bill. None of those advantages obtained with anti-trust measures. Proposals for a new law to supplement the Sherman Act would go before the Judiciary Committee in each chamber, whereas trade commission bills would go before the respective Commerce Committees. Finally, other issues and interests were intruding on the picture. In particular, some Democrats and insurgent Republicans wanted to take Wilson up on the issue of strengthening the Interstate Commerce Commission"s oversight of railroads, while labor unions were clambering for Congress to lift restrictions that courts had placed on them under the Sherman Act.29 At first, Wilson again deferred to the men on Capitol Hill. The House Judiciary Committee, chaired by Henry D. Clayton of Alabama, drew up a bill that made officers and directors of companies subject to criminal prosecution for violating anti-trust laws, but the main thrust of the bill lay in its definition of unfair trade practices, such as predatory pricing, the acquisition of stock to reduce compet.i.tion, and the creation of interlocking directorates among large firms doing business with one another. The press immediately dubbed the committee"s measure, which was introduced on the House floor on April 14, the Clayton bill. Its legalistic approach enjoyed broad support among Bryanite Democrats and insurgent Republicans. The previous twenty years of prosecutions under the Sherman Anti-Trust Act had elicited disappointment, frustration, and fury among their agrarian and small-business const.i.tuencies. Much of the problem, as they saw it, stemmed from the brevity and vagueness of the law, which practically invited the courts to define what prohibited "combinations in restraint of trade" really were. The Supreme Court had handed down a string of decisions that gave great lat.i.tude to businesses, and in its Standard Oil Standard Oil ruling in 1911 the Court had promulgated a "rule of reason" that made explicit what had been plainly implicit-namely, that the justices arrogated to themselves near-total discretion in applying the ant.i.trust law. It was understandable, therefore, that Democrats and insurgents demanded that such judicial discretion be curbed with new, sharply defined anti-trust laws. ruling in 1911 the Court had promulgated a "rule of reason" that made explicit what had been plainly implicit-namely, that the justices arrogated to themselves near-total discretion in applying the ant.i.trust law. It was understandable, therefore, that Democrats and insurgents demanded that such judicial discretion be curbed with new, sharply defined anti-trust laws.

Still, the Clayton bill drew a lot of fire. Business groups predictably denounced it as dangerous and hostile, and they pointed to the severe recession that had started at the end of 1913 as proof that measures adopted and proposed by Wilson and the Democrats were ruining the economy. Such charges left Wilson unmoved, and he refused to rein in reform efforts and send Congress home. Attacks also came from anti-trusters who wanted to see more practices prohibited and stiffer penalties imposed, and from Democrats who pushed for an expanded role for the Interstate Commerce Commission in the financing of railroads and the regulation of stock exchanges. In this atmosphere, and with prodding from Wilson, the House Democratic caucus voted on May 12 to bind members to the Clayton bill. After perfunctory debate, the House pa.s.sed the bill on June 5, by a vote of 275 to 54. Every Democrat but one supported it, joined by forty-one Republicans and fifteen Progressives.30 By the time the House pa.s.sed the Clayton bill, the focus of attention and the argument had shifted. Most of the floor debate concerned not trade practices but labor unions. Starting with the 1894 conviction of Eugene Debs and his American Railway Union for "combination in restraint of trade," which was upheld by the Supreme Court, unions had suffered under a succession of decisions that imposed restrictions on their activities. Exemption from anti-trust laws had been the top legislative goal of the American Federation of Labor for more than a decade, and many Democrats were anxious to grant the AFL its wish. Bryan had courted union support ever since his first run for president in 1896. By his third run, in 1908, his appeal had grown so strong that Samuel Gompers, the resolutely nonpartisan head of the AFL, could not stop his organization from endorsing the Democratic nominee. Wilson had likewise wooed labor in 1912 and had won a big share of the union vote. In response, Gompers and other labor leaders put pressure on him and congressional Democrats to grant them their coveted immunity under the anti-trust laws.

Since the beginning of 1914, the AFL had engaged in such intense lobbying that some House Democrats were afraid the bill might not pa.s.s without labor"s approval. Wilson, however, did not satisfy labor"s demands immediately or fully. He personally sympathized with workers, and in 1913 he had privately deplored employers" brutal actions against striking miners in West Virginia and Colorado. He also supported laws to protect merchant seamen and had intervened with senators to urge that they move legislation on that matter. Then, when the Clayton bill went to the House floor in April 1914, he confronted the unions" demands for an ant.i.trust exemption. The president met with members of the Judiciary Committee on April 13 and agreed to conciliate labor, but it was unclear what he would do. He reportedly agreed to provisions requiring jury trials in criminal contempt cases and narrowing the scope of court injunctions in labor disputes, together with language stating that labor unions and farm organizations did not const.i.tute conspiracies in restraint of trade. He also decided to oppose further concessions, evidently because he took umbrage at the AFL"s heavy-handed tactics and doubted the legal wisdom and const.i.tutionality of full exemption.31 Wilson"s halfway house between anti-trust prosecutions of unions and full exemption shaped the final provisions of what became the Clayton Anti-Trust Act. Union and farm-organization leaders renewed their lobbying efforts, but to little avail. The only noteworthy change made in the Senate came when a Republican insurgent, Albert c.u.mmins of Iowa, got a sentence added to the section affirming the legality of farm and labor organizations, which read, "The labor of a human being is not an article of commerce." In all, organized labor got no more in the final bill than such verbal rea.s.surance and the jury-trial and injunction-limiting provisions. Nevertheless, Samuel Gompers put a bright face on the outcome. In July, he saluted the Clayton bill as labor"s "Magna Carta," and in October he effusively thanked Wilson for sending him one of the pens used in signing the Clayton Act, "the labor provisions of which are indeed a magnificent piece of legislation, according to the working people of our country the rational, const.i.tutional and inherent rights of which they have too long been denied."32 Gompers was engaging in flummery to make the best of half a loaf, but the moment had great significance. These provisions of the Clayton Anti-Trust Act marked a milestone in the continuing courtship of organized labor and the Democratic Party. Gompers was engaging in flummery to make the best of half a loaf, but the moment had great significance. These provisions of the Clayton Anti-Trust Act marked a milestone in the continuing courtship of organized labor and the Democratic Party.

In contrast to its earlier conduct in dealing with the tariff revision and the Federal Reserve, the Senate now did not linger long over the ant.i.trust measure. Conservatives on the Judiciary Committee struck out the criminal penalties in the Clayton bill and watered down other sections with qualifying language. On the floor, a group of southern and western "radicals," led by the irascible James Reed, tried to restore those penalties and add draconian provisions outlawing holding companies and limiting the size of businesses. They did not succeed. On September 2, the Senate pa.s.sed the Judiciary Committee"s version by a vote of 46 to 16. A conference committee labored for three weeks to reconcile the two chambers" bills and generally adopted the Senate version. On October 5, the Senate pa.s.sed the final bill by a vote of 35 to 24. The House concurred three days later by a vote of 244 to 54. By then, the anti-trust bill had become a legislative orphan. It came to be known as the Clayton Act even though its namesake had left Congress to become a federal judge before the House pa.s.sed the bill. Wilson did not involve himself in the Senate"s debate and action, and this time he invited no one to the White House and held no public ceremony when he signed the anti-trust bill into law on October 15, 1914.33 The president had reasons-tragic reasons-for not involving himself in those last debates and votes. They ranged from the global-the outbreak of the world war in Europe in August 1914-to the personal-the death of Ellen at the same time. But even before those devastating events, other matters had diverted him from the anti-trust measure. By the time the House pa.s.sed the Clayton bill in June, the focus of attention had shifted to a trade commission bill. In his speech to Congress in January, Wilson had left the door open to two kinds of agencies. One would be a purely investigatory body, such as the Interstate Commerce Commission had been before gaining rate-making powers under Roosevelt. The other would be something like the more recent ICC, a regulatory agency empowered to initiate actions, make rules, and enforce orders. The investigatory body appealed to more conservative Democrats and to Attorney General McReynolds, who did not want another agency infringing on his department"s anti-trust prosecutions.

In March, the House Commerce Committee produced a measure called the Covington bill, after Representative James Covington of Maryland, which would create a trade commission authorized only to investigate conduct by businesses and recommend procedures to them for complying with existing laws. Meanwhile, the regulatory agency, though a.s.sociated with Roosevelt, was gaining support among people who deplored his approval of bigness in business, most notably Brandeis. A protege of Brandeis"s, George Rublee, drafted a measure for introduction by another Democrat on the Commerce Committee, Raymond Stevens of New Hampshire, which would add provisions to the committee bill, giving the commission enforcement powers.34 Wilson initially leaned toward the investigatory body, but in April he received a letter that may have helped to change his mind. It came from Norman Hapgood, a well-known progressive journalist who was friendly with both him and Brandeis, who commended Rublee as "one of the best minds for this kind of thinking." Hapgood told the president that "a half hour spent with Mr. Rublee would not seem to you wasted." Rublee would later fancy himself the father of what became the Federal Trade Commission because he believed that when they met, he converted Wilson to his concept of the regulatory agency. In fact, as with Brandeis"s influence at the outset of the 1912 campaign, this was a case of helping Wilson down a path he already meant to follow.35 Wilson had decided to back the regulatory agency before he met Rublee, and he had another reason for the switch, besides the attractiveness of the idea and the Brandeis connection: political calculation. On June 2, he told a Democratic senator, Henry Hollis of New Hampshire, that he and his colleagues could not hesitate and hold back because Progressives were going to attack them on anti-trust regulation, "as Mr. Roosevelt has kindly apprised us." Brandeis and his a.s.sociates seemed to him to have come up with "a better way of dealing" with regulation: "The rest of it seems to me rather plain sailing." The remark about Roosevelt referred to the ex-president"s opening salvos in the campaign for the congressional elections in November 1914. Wilson"s great rival was once more charging him and his party with making halfhearted, ineffective stabs at solving major problems, while the sharpest criticisms of the Covington bill in the House were coming from the leader of the tiny band of Progressives, Victor Murdock of Kansas. By backing the regulatory agency, Wilson could kill several birds with one well-aimed stone. In the upcoming campaign, he could blunt attacks by Roosevelt and the Progressives. In Congress, he could reach across party lines and gain support from Progressives and insurgent Republicans such as La Follette. In the longer run, he might induce Progressives and insurgents to support him in 1916.36 On June 10, Wilson called to the White House Hollis, Stevens, Brandeis, and Rublee, whom he was meeting for the first time. Rublee presented the main argument, and Brandeis backed him up. By the end of the meeting, Rublee recalled, "it was clear to all of us that the president had accepted the idea. He seemed much interested and quite worked up." Brandeis went immediately to the Capitol and talked with members of the Senate Commerce Committee, most of whom, Democrats and Republicans alike, favored a strong agency, and they quickly approved their version of the Stevens bill, now called the Federal Trade Commission bill, on June 13. Then the troubles started. When floor debate began in July, a motley collection of Republican conservatives and insurgents and Bryanite Democrats mounted a fierce attack, concentrating their fire on the section of the bill that empowered the commission to identify and move against unfair trade practices, and they tried to attach amendments that imposed narrow definitions of such practices and restricted action against them. The bill"s supporters wavered but stood their ground. Wilson wrote the chairman of the Commerce Committee to demand "elasticity without any real indefiniteness, so that we may adjust our regulation to actual conditions."37 Presidential firmness carried the day. On September 2, the Senate pa.s.sed the Federal Trade Commission bill, 46 to 16. All Democrats present voted in favor, as did seven insurgent Republicans and the sole Progressive. Presidential firmness carried the day. On September 2, the Senate pa.s.sed the Federal Trade Commission bill, 46 to 16. All Democrats present voted in favor, as did seven insurgent Republicans and the sole Progressive.

Wilson exerted similar pressure in the House to get the measure approved. On August 5-the day before Ellen died-he wrote to the chairman of the Commerce Committee to argue for retaining the enforcement section: "It seems to me a feasible and very wise means of accomplishing the things that it seems impossible in the complicated circ.u.mstances of business to accomplish by any attempted definition." It thereby admirably advanced "the effort to regulate compet.i.tion without making terms with monopoly." The president"s view prevailed, although the House pa.s.sed an amendment that broadened court review of commission rulings. The conference committee largely followed the House version. On September 8, the Senate pa.s.sed the conference bill, 43 to 5, with all Democrats present again in favor. Two days later, the House concurred in a voice vote. Wilson quietly signed the bill into law on September 26.38 Together, the Clayton Anti-Trust Act and the Federal Trade Commission Act comprised Wilson"s anti-trust program. By mid-October, the president could muster enough emotional resilience to say something publicly about those acts for use in the campaign for the congressional elections that was then under way. Thanks to the FTC, he maintained, unfair methods of compet.i.tion could not be used to build up monopolies. Thanks to the Clayton Act, interlocking directorates could not sustain monopolies. Democrats had remained true to their cardinal principle: "that we should have no dealings with monopoly, but reject it altogether, while our opponents were ready to adopt it into the realm of law and seek merely to regulate it and moderate it in its operation. It is our purpose to destroy monopoly and maintain compet.i.tion as the only efficient instrument of business liberty." Wilson likewise lauded the Clayton Act for doing justice to the worker: "His labor is no longer to be treated as if it were merely an inanimate object of commerce to be dealt with as an object of sale and barter."39 Fine words exalted legislation that fell short of its stated goals. The labor provisions helped unions less than either the president and his party or the AFL pretended. The insistence of the House on broader court review of FTC rulings would significantly weaken the agency"s powers, and a series of questionable early appointments would further hobble its effectiveness. The FTC would not emerge as a truly strong regulatory body with an anti-trust thrust until the 1930s. Then, under the next Democratic president, new legislation would strengthen its powers, and stronger commissioners would come on board.40 Those shortcomings in th

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