Part 3 (1/2)

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 pus.h.i.+ng 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 leaders.h.i.+p appeared to present him with a fateful choice between progressivism and partisans.h.i.+p. 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 Was.h.i.+ngton. 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 leaders.h.i.+p. 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 governors.h.i.+p. Denouncing the lobbyists played much the same role for Wilson's presidency as the fight with Sugar Jim Smith had played for his governors.h.i.+p.

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 Hamps.h.i.+re, 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 Was.h.i.+ngton. 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 Hamps.h.i.+re, 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.