President Woodrow Wilson's Economic Policies
How He Made the Presidency So Powerful
Wilson oversaw America’s entrance into World War I. His “14 Points” laid the groundwork for the Treaty of Versailles. Wilson argued vehemently for the League of Nations to protect the world from another horrific war. Wilson believed in free trade and a nation’s right to self-governance. Wilson received a Nobel Prize for his efforts to promote peace.
Immediately upon taking office, Wilson signed the Federal Reserve Act to create America’s first central bank. The nation had just suffered from devastating booms and busts. Congress wanted the regional banks to control the Fed. But Wilson insisted on a central board to balance the bankers’ regional structure. Unfortunately, these complicated arrangements are why people are confused about who owns the Fed. It is an independent body made up of 12 regional Federal Reserve banks.
Wilson signed the Underwood-Simmons Act in 1913. It reduced tariffs on manufactured goods and raw materials and this lowered costs for consumers. To compensate for the loss in revenue, it also created a graduated federal income tax. Most workers at that time made too little to get hit with the tax, and the reduction in tariffs did not immediately reduce the cost of imports. World War I broke out the following year, reducing European production.
In 1919, Wilson vetoed the Volstead Act, which enforced the 18th Amendment prohibiting alcohol. A year later, he advocated for the 19th Amendment, giving women the right to vote in 1920.
Wilson’s Role in World War I
Germany sank the British ocean liner Lusitania in 1915. Wilson warned any further attacks would cause the United States to enter World War I.
In 1916, Wilson signed three acts to prepare the United States for war.
- He approved the Adamson Act to create an eight-hour workday for railroad workers. Wilson wanted to avoid a strike by the railroad unions while the country was gearing up for World War I. That set the standard for Ford Motor Company to do the same 10 years later.
- The Federal Farm Loan Act set up government loans to farmers to develop and expand their farms.
- He also signed the Keating-Owen Act. It banned articles produced by child labor from being sold in interstate commerce. The Supreme Court declared it unconstitutional two years later.
On April 2, 1917, Wilson addressed Congress where he famously said, “The world must be made safe for democracy. Its peace must be planted upon the tested foundations of political liberty. We have no selfish ends to serve. We desire not conquest, no dominion.”
The United States declared war on April 6, 1917, after Germany attacked U.S. merchant ships. In early 1918, the United States deployed 1 million troops to Europe. In November 1918, they severed a critical German railway supply track at Meuse-Argonne. That crippled the German offensive. Germany surrendered in 1918.
Woodrow Wilson’s 14 Points
Wilson presented the Fourteen Points in a speech to Congress on January 8, 1918. It called for the establishment of the League of Nations and independence for the smaller countries in the war. It didn't promote war reparations from Germany. But, the Republicans in the U.S. Congress defeated it.
In summary, Wilson’s 14 points were:
- Peace treaties must be negotiated and remain in public.
- Freedom of navigation upon the seas.
- Free trade.
- Reduce armaments except for what is necessary for defense only.
- Colonized people must have an equal voice as the governing country.
- Russia must be allowed to determine its own future.
- Belgium must be restored to freedom and self-rule.
- Alsace-Lorraine should be returned to France.
- Italy’s boundaries should be aligned with its nationalities.
- People formerly under the Austro-Hungary Empire should be allowed to self-rule.
- Romania, Serbia, and Montenegro should be restored to sovereignty. Serbia should have access to the sea.
- The Turkish portion of the Ottoman empire shall be free. Other countries under Turkish rule shall be allowed self-rule. The Dardanelles should be open to free trade.
- Poland should be free and be granted free access to the sea.
- A league of nations should be created.
Wilson used these 14 points to broker the Treaty of Versailles in 1919.
Wilson and the Debt
President Wilson was the second-largest contributor to the debt percentage-wise. He added $21 billion, which was a more than 700% increase over the $2.9 billion debt of his predecessor. That was because of World War I. During his presidency, the Second Liberty Bond Act gave Congress the right to adopt the national debt ceiling. See how much Wilson added to the national debt by comparing the U.S. debt by president.
President Wilson’s salary during his term was $75,000 a year. In 2019, this value translated to $1.9 million. It's much more than the $400,000 annual salary a president receives today.
Wilson’s Early Years
Woodrow Wilson was born in Virginia in 1856, the son of a Presbyterian minister. Wilson’s early years were affected by the horrors of war. His father used his church as a hospital for injured Confederate troops during the Civil War.
Wilson graduated from Princeton, then referred to as the College of New Jersey, in 1879. He received a law degree from the University of Virginia Law School, He then earned a doctorate at Johns Hopkins University in 1886. He is the only U.S. president to have a Ph.D.
He taught at Bryn Mawr, Wesleyan, and Princeton. He was president of Princeton from 1902 to 1910. He became nationally known for reforming education.
This national reputation led some conservative Democrats to ask him to run for Governor of New Jersey in 1910. In the campaign, he abandoned the conservative machine and switched to a progressive platform.
He was nominated for president at the 1912 Democratic Convention. He campaigned for the “New Freedom” program. It advocated individualism and states’ rights.
After Leaving Office
While in office on September 25, 1919, Wilson suffered a stroke that left him almost blind and partially paralyzed. His impairment was kept from the public and his wife Edith fulfilled many of his duties. Wilson’s stroke prevented him from accomplishing much after he left office. Although he was almost blind and remained partially paralyzed, Wilson fantasized about running for a third term in 1924 to seek a referendum from the American people on the League of Nations. He felt that, if he won, it would prove the American people supported a League of Nations.
In August 1923, he published a brief plea for a more enlightened foreign policy entitled “The Road Away from Revolution.” In November, he labored through a short Armistice Day address on a nationwide radio network, but he could not manage any real public role. He died quietly at his home on February 3, 1924. He is buried in the National Cathedral in Washington, D.C.
Other Presidents' Economic Policies
- Donald J. Trump (2017 - 2021)
- Barack Obama (2009 - 2017)
- George W. Bush (2001 - 2009)
- Bill Clinton (1993 - 2001)
- Ronald Reagan (1981 - 1989)
- Jimmy Carter (1977 – 1981)
- Richard M. Nixon (1969 - 1974)
- Lyndon B. Johnson (1963 - 1969)
- John F. Kennedy (1961 - 1963)
- Harry Truman (1945 - 1953)
- Franklin D. Roosevelt (1933 - 1945)
- Herbert Hoover (1929 - 1933)