President Wilson’s First Term


The first half of Woodrow Wilson’s 8 years in office focused on Domestic policies such as the tariff, the money issue, and antitrust legislation.

World War I – then called simply “The Great War” – did not officially begin until more than a year into Woodrow Wilson’s first term in office. Even then, the nation maintained as much as possible a neutral stance (though Wilson earned criticism by some for his loyalty to Great Britain).

Because of this, Wilson’s first term was not dominated by the war. As long as he refused to involve America in the European affairs, he was able to focus solely on his domestic agenda, the most important aspects of it can be seen on three fronts: Finances, Tariffs, and Trusts. These are the three issues which, more than any others, had defined American politics ever since the end of the reconstruction period four decades earlier.


Woodrow Wilson earned a great deal of attention, both positive and negative, from both sides of the aisle with his support of the Republican-sponsored Federal Reserve Act of 1913, which is generally considered to be one of the most important pieces of legislation ever passed.

The reserve act was an attempt to resolve the financial question once and for all (which had for decades revolved around the debate between gold, silver and paper money), finally putting into place the first centralized financial system in America since the end of the Second Bank of the United States 80 years earlier.


In a measure which should have been appreciated by the Progressive wing of the Republican party, Wilson signed into law the Underwood Tariff in 1913, which dramatically lowered the tariff rates from 40% to 25%.

In order to make up for the lower revenue as a result, the act took advantage of the recently-ratified 16th amendment, authorizing the establishment of a national income tax. American families making more than a certain amount of money each year ($4,000 a year for couples, $3,000 for single persons) would for the first time be taxed based on how much money they made.

A version of this same system is the same which remains in place to this day.


Where Presidents Roosevelt and Taft had both adopted a policy of dealing with trusts by imposing restrictions on business, Wilson and the democrats went about the matter in a different way – Get rid of trusts altogether.

Signing into law the Clayton Antitrust Act of 1914, Wilson began America on a decidedly antitrust course – much more so than had been in place before. Individuals in corporations could now be held liable for unfair business practices, and the door was opened for further legislation in the future.


By the time the 1916 election came around, Wilson ran on the accurate slogan, “He kept us out of the war,” although this very fact earned him many detractors, including former President Roosevelt, who decried Wilson’s failure to build up America’s military strength, knowing that the nation would inevitably be drawn into the conflict.

Nevertheless, Wilson reelection against New York Governor Charles Evan Hughes in one of the closest elections in American history (Wilson won New Hampshire by only 53 votes, for example). He did win, however, but even before his second term began, he would have to go against his own campaign slogan.