28 - Woodrow Wilson as reformer
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How Capitalists Rule/Pt.28
THE REPUBLOCRATS SERIES
Part 28:
WOODROW WILSON AS REFORMER
By Vince Copeland
WILSON'S BACKERS
In addition to the powerful forces at the very peaks of society that moved Woodrow Wilson into the presidency ahead of Theodore Roosevelt in 1912, there had to be behind both of them a galaxy of smaller stars who were openly in the act and tireless in their efforts.
Wilson had several other important backers besides George Harvey and William F. McCombs. Grover Cleveland, a trustee of Princeton and a classmate of Wilson's, was of great help, although he stayed mostly in the background. Henry Morgenthau, of banking and real estate, and Cleveland Dodge of Phelps, Dodge & Co. joined much more visibly in Wilson's campaign than the Harveys, Morgans, etc.
They were neither so skilled nor influential as Harvey, but were wealthier and much more interested in Wilson personally, whereas Harvey's main intention was to revamp and reform--or rather counter-reform--the Democratic Party itself.
Cleveland Dodge received favors from the Wilson administration for his support. To repeat what may not be necessary to repeat, while the very large political donors often invest in a sort of impartial democratic philanthropy for all capitalists, they seldom forget their own particular interests.
Henry Morgenthau was of a different type, however. He was appointed to important ambassadorial positions by Wilson but was apparently not involved in any shady business dealings that required government assistance.
He worked full-time in politics from 1912 onward and quickly became a leading Democrat, having quit the Republican Party in the wake of Theodore Roosevelt's gigantic split. He had retired from his very profitable New York real estate speculation activities to do just this, as a sort of "civic duty."
Morgenthau was so skilled in real estate that nearly all the directors of the National City Bank (today Citibank), including at least one Rockefeller and one Morgan, had at one time gotten a huge pool of speculative money together and commissioned him to invest it in real estate at his own discretion. Morgenthau's connections with these important bank officers constituted another channel for Wall Street influence on Wilson. (Henry Morgenthau, "All in a Lifetime," Doubleday, Page & Co., New York, 1921, pp. 39-100)
THE MAVERICK BANKER
Col. Edward M. House was the most famous and publicized millionaire in the Wilson team. House was a banker, but was somewhat anti-Wall Street in his outlook. On one occasion he advised Wilson to break with Harvey, the Morgan-Rockefeller mouthpiece. Wilson had already broken off with Harvey once before, but found the relationship vitally necessary for his campaign.
In a surprising twist, Wilson early in his first term not only repudiated some of the political "bosses" and right-wing forces who had nominated him--he also made an appointment that satisfied most of the country that he was in earnest about uniting and liberalizing the Democratic Party. This was his appointment of William Jennings Bryan to the position of Secretary of State. The appointment may have been due to House's influence.
Bryan resigned the position in 1915, however, because of his opposition to the United States getting involved in the First World War. He was replaced by Robert Lansing, a tireless emissary for J.P. Morgan.
When one remembers that Bryan's resignation was two and a half years before the actual U.S. entry into the war, the upper-crust reaction to it seems almost hysterical. The ordinarily sober New York Times editorialized about it as though Bryan were softheaded, much as an extreme right-wing organ today might take someone to task for being "soft on communism."
Under the headline "The Bryan Idea of War," the paper wrote:
"He proposes that the question of whether there shall be war or not shall be voted on by the nation, women included. [This was before women legally had the vote--VC] Lock Mr. Bryan in a cell incommunicado, deprive him of books and take away his writing materials and he would still be a happy man, for he could delve into his mind morning, noon and night and always bring up something that would astonish him."(New York Times, Oct. 19, 1915)
Of course, the majority of ordinary people opposed getting into the war, but the right wing--or "war party"--could always make the leading anti-war figures look like impractical dreamers or even flabby cowards.
Wilson himself played the anti-war game somewhat in the way Julius Caesar had played the democrat, refusing the crown--each time more weakly than the last.
At the very time the Morgans were moving into the secretaryship of state, Wilson was still posing as a liberal and actually sponsoring some liberal legislation. His liberal stance, at least for some of the pre-war years, raises an interesting question and to some extent answers it. That is, how much can the pressure of the electorate on the nominee affect the nominee's real political program?
DO THEY BEND WITH THE WIND?
We have seen that Theodore Roosevelt, the Republican, changed his political image drastically while in office. The Democrat Woodrow Wilson changed his image, although not by as much, to gain his office, and did sponsor some progressive legislation.
In later years, the reconstituted Democratic Party, by then more or less free from Bryanism, was to become the apostle of the New Deal, which was relatively quite radical.
In the 1930s, the dissatisfaction of the great masses was obviously the whip that beat the Democratic Party into more radical shape. On the other hand, the unanimous Supreme Court school desegregation decision in 1954 was handed down by the Republican Earl Warren. And its implementation was officiated over by the Republican President Dwight Eisenhower. Again, the stirrings of the Black people were evident and the desegregation move was probably calculated to eliminate any greater Black protest.
In the Reagan years, the Republican Party moved so far to the right that any such phenomenon would seem impossible to duplicate now. But the Democrats have also attempted to move to the right in recent years, feeling the majority of the voters would accept a more conservative program. However, this has produced new contradictions which may or may not be resolved by the Clinton administration.
Under capitalist democracy, the parties do have to reflect, at least to some degree, the feelings of a large section of voters. A great upsurge or "sea change" in the population will lead to certain adjustments in at least one or another ruling political party. And this is all independent of our main thesis: that Wall Street dominates the political parties and by that token, however flexibly, it rules the country.
THE LIBERAL (YES!) INCOME TAX AMENDMENT
It was during Wilson's reign that the 16th Amendment, providing for an income tax, was passed. So was the Prohibition amendment and one for women's suffrage. He had not been in favor of any of them but nevertheless basked in a certain liberal glow because of them. He was more responsible for the creation of the Federal Reserve banking system, which had been a demand of the Bryanites but turned out to be an instrument of the biggest New York banks acting as a "central bank" for the government.
The income tax at that time was directed mainly against higher incomes, and remained so until the Second World War. The first payroll deductions were taken from the working people only in 1942.
Wilson had at first been opposed to child-labor laws, farm subsidies (which really were meant for small farmers in those days), and the eight-hour day for railroad workers. But he finally caved in and supported all these measures. As one well-informed writer put it:
"Wilson planned to push through Congress a minimal program of unavoidable legislation touching on banking and big business. This, hopefully, would keep the progressives at bay until Wilson felt it politically safe to declare--as he would actually do in November 1914--that all remediable grievances had been remedied and the business of reform was at an end. Wilson's chief concern was that the enacted legislation look as though designed to demolish the money trust, that his anti-trust laws look like the comprehensive attack on monopoly that he and the Democrats had promised the voters in 1912." (Walter Karp, "The Politics of War")
While it may seem odd to us now, the creation of the Federal Reserve Board was also supposed to be a concession to popular feeling and a sort of discipline for bankers. Actually, it was really the establishment of a central national banking institution that gave the bankers, especially from New York, a new political as well as economic power.
"The conservative press of both parties would duly praise Wilson's Federal Reserve Act as a milestone of reform legislation, but reform leaders in Congress would assail it for what it was--a `big banker's bill,' in Senator La Follette's words, that actually legalized the money trust it was supposed to dismember." (Karp)
The people had somehow got the idea that government rule over the banks would straighten out the money system to the benefit of the whole people. Whatever partial truth there was in this proposition was more than negated by the bigger control the banks got over the economy, however. One writer expressed the situation at the time as follows:
"For several months [William G.] McAdoo and [Colonel] House had engaged in a tug of war over the selection of the Board. McAdoo argued that the appointees should be men in sympathy with the administration's broad policies, House advising that the President choose leading bankers and businessmen .... When the membership of the Board was announced, it evoked almost unanimous approval from bankers and business leaders. Progressives, on the other hand, were shocked and astonished. 'Why, it looks as if Mr. Vanderlip [president of the National City Bank] of New York has selected them!' one progressive Republican Senator exclaimed." (Arthur S. Link, "Woodrow Wilson and the Progressive Era," Harper and Row, New York, 1954, pp. 76-77)
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(Copyright Workers World Service: Permission to reprint granted if source is cited. For more info contact Workers World, 46 W. 21 St., New York, NY 10010; via e-mail: ww%nyxfer@igc.apc.org or workers@mcimail.com.)
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