TAFT AND WILSON
Roosevelt’s popularity was at its peak as the campaign of 1908 neared, but he was unwilling to break the
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tradition by which no president had held office for more than two terms . Instead, he supported William How- ard Taft, who had served under him as governor of the Philippines and secretary of war . Taft, pledging to continue Roosevelt’s programs, de- feated Bryan, who was running for the third and last time .
The new president continued the prosecution of trusts with less dis- crimination than Roosevelt, further strengthened the Interstate Com- merce Commission, established a postal savings bank and a parcel post system, expanded the civil service, and sponsored the enactment of two amendments to the Constitution, both adopted in 1913 .
The 16th Amendment, rati- fied just before Taft left office, au- thorized a federal income tax; the 17th Amendment, approved a few months later, mandated the direct election of senators by the people, instead of state legislatures . Yet bal- anced against these progressive mea- sures was Taft’s acceptance of a new tariff with higher protective sched- ules; his opposition to the entry of the state of Arizona into the Union because of its liberal constitution; and his growing reliance on the con- servative wing of his party .
By 1910 Taft’s party was bitterly divided . Democrats gained control of Congress in the midterm elec- tions . Two years later, Woodrow Wilson, the Democratic, progressive governor of the state of New Jersey, campaigned against Taft, the Repub- lican candidate — and also against
Roosevelt who ran as the candidate of a new Progressive Party . Wilson, in a spirited campaign, defeated both rivals .
During his first term, Wilson secured one of the most notable leg- islative programs in American histo- ry . The first task was tariff revision . “The tariff duties must be altered,” Wilson said . “We must abolish ev- erything that bears any semblance of privilege .” The Underwood Tariff, signed on October 3, 1913, provided substantial rate reductions on im- ported raw materials and foodstuffs, cotton and woolen goods, iron and steel; it removed the duties from more than a hundred other items . Although the act retained many pro- tective features, it was a genuine at- tempt to lower the cost of living . To compensate for lost revenues, it es- tablished a modest income tax .
The second item on the Demo- cratic program was a long overdue, thorough reorganization of the ram- shackle banking and currency sys- tem . “Control,” said Wilson, “must be public, not private, must be vested in the government itself, so that the banks may be the instruments, not the masters, of business and of indi- vidual enterprise and initiative .”
The Federal Reserve Act of De- cember 23, 1913, was Wilson’s most enduring legislative accomplish- ment . Conservatives had favored establishment of one powerful cen- tral bank . The new act, in line with the Democratic Party’s Jeffersonian sentiments, divided the country into 12 districts, with a Federal Reserve