It took six months of hard work to get this adopted, but it was a marvelous achievement to get it adopted at all. For a large faction of the Democratic Party, including its most influential leader, still represented the old hostility to the "money power," which regarded the overthrow of the United States Bank as the great triumph of the American Democracy. The Glass-Owen bill differed from Senator Aldrich's scheme largely in the direction of decentralization and giving more control to the Government and less to the banks, but, even so, it was a suspicious document to those numerous Democrats whose economic ideas were obtained from the Greenback and Populist Parties of former years. And it was not satisfactory to the majority of the articulate bankers of the country, who wanted a central bank instead of the regional division of the reserve functions, and who thought that the banks should have a good deal to say about appointments to the Federal Reserve Board.
As late as the beginning of December there were still three separate bills before Congress, but the party organization under the President-Premier held together, and on December 23 the Glass-Owen Bill, with some modifications acquired en route, was signed by the President. The pressure on the White House during that struggle was perhaps the hardest which President Wilson encountered during his entire eight years. Many an honest Democrat thought the fundamental principles of the party were being betrayed, and many a Senator or Representative who regarded the reserve banks with profound alarm felt, nevertheless, that if the iniquitous things were going to be established there ought to be one in his home town. When Paul M. Warburg, a Wall Street banker, was appointed as one of the members of the Federal Reserve Board, there were more protests from politicians who professed to believe that the nation was being delivered over to the money power, while the complaints of bankers who thought that the banks were being given over to politicians had not yet died down. But when the act once went into operation criticism almost disappeared; and in the course of a few months the unprecedented financial strain attendant on the outbreak of the European war made it plain to almost anybody that without this timely reform of the banking system 1914 would have seen a disaster far worse than that of 1907.
The work of "striking the shackles off business" was continued in 1914 by the introduction of bills to carry out the President's recommendations for prohibiting interlocking directorates, clarifying the anti-trust laws, establishing an Interstate Trade Commission, and supervising the issue of railroad securities. The chief results of this discussion were the creation of the Trade Commission, a body of which much more was expected at the time than it has accomplished, and the passage of the Clayton Anti-Trust Act, which exempted farmers' combinations and labor unions from the anti-trust laws, and wrote into the statutes the declaration that labor is not a commodity. The La Follette Seamen's Bill, drawn by Andrew Furuseth of the Seamen's Union, was introduced in 1913 and not enacted until much later. Its friends declared that it would at least establish decent living conditions for sailors, and its opponents, including nearly all the shipping interests, asserted that, so long as foreign ship owners were not under similar restrictions, the bill would ruin the American Merchant Marine. Of the actual workings of this law there has really been no fair test, as conditions which arose during the war unsettled the entire shipping situation.
The domestic program of the first year and a half of the Wilson Administration comprised, then a long-needed and immeasurably valuable reform of the banking and currency system, a revised tariff, which was at least a technical victory for Democratic principles, and a number of minor measures which seem less important in retrospect than they did at the time. The program neither completely unshackled business nor opened the door to a new era of coöperation and human brotherhood, but it was a large and on the whole decidedly creditable accomplishment, and it was above all the work of President Wilson, who had led the fight that carried the Administration measures through Congress, quite as any Prime Minister might have done. He had not done it without exposing himself to severe criticism. Ex-Senator Winthrop Murray Crane, for example, declared that he had "virtually obliterated Congress." But he had got most of what he wanted, and by the end of his first year in office Mr. Bryan was no longer the most powerful individual in the Democratic Party.
Foreign Policies, 1913-1914
In The North American Review for March, 1913, edited by Colonel George Harvey, the original Wilson man, who had mentioned Wilson as a Presidential possibility back in 1904, when such a suggestion was regarded as only a playful eccentricity, who had begun to work hard for him in 1911, and who had finally been asked by Wilson himself to give up his activity because the connection of one of Harvey's magazines with J. P. Morgan & Co. was hurting Wilson in the West—there appeared an article entitled "Jefferson—Wilson: A Record and a Forecast." It consisted of eight pages of quotations from Wilson's "History of the American People," dealing with the beginning of Jefferson's Administration. The reader's attention was arrested by the startling parallel between the division in the Federalist Party and the quarrel between Hamilton and Adams that facilitated Jefferson's election, and the situation which led to Wilson's victory in November, 1912. Wilson, writing a dozen years before the fight between Taft and Roosevelt, had unconsciously drawn a parallel closer perhaps than the facts warranted; and the reader who had been attracted by this similarity read on into Wilson's characterization of Jefferson an introduction to the achievements of his Administration with a growing hope—if he happened to be a Wilson man—that after as before election Wilson's record would duplicate Jefferson's.
Colonel Harvey was as good a prophet in 1913 as in 1904. Wilson's achievement in domestic affairs in the first year of his Administration was not likely to suffer much by comparison with Jefferson's. But it could not have crossed anybody's mind in March, 1913, that complications of international politics such as had almost ruined the country under Jefferson would in the latter part of Wilson's first term expose him to as much criticism as Jefferson, and for the same reasons.
America was still new as a world power, but was beginning to feel more at home. In Taft's Administration, with Philander C. Knox as Secretary of State, there had been for the first time the beginnings of what might fairly be called a consistent foreign policy. True, it was not a very lofty policy, nor was it by any means generally approved in America. It was called by its friends "dollar diplomacy," meaning the promotion of American commercial interests by diplomatic agencies. It had been exemplified principally in Central America, where its operations had not always commanded admiration, and in China, where Knox had made a well-intentioned but not very skillful effort to prevent the absorption of Manchuria by Russia and Japan.