Theodore Roosevelt and Woodrow Wilson's progressive reforms against corporate monopolies

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QUESTION 2: In rebutting the words of the historian in Question 1, an equally perceptive scholar argued, "The most damning force in America, 1900-1940, was the rise of business. Corporations produced little but hardship and despair, and gave us nothing. Indeed, this period was marked by the rise of large corporations, but it was the growth of the large corporation instead that doomed American society and destroyed democracy."

In the years prior to Theodore Roosevelt's presidency, two of the greatest social/political problems facing America were based on the continuing warfare between the poor and wealthy classes and the expansion of "Manifest Destiny" in foreign lands. Domestically, the country was burdened by a financial panic in the 1890's which complicated the lives of the urban poor and made the wealthy even more prosperous. In the cities, people demanded democratic change in many areas, such as the twelve hour work day, the dangerous conditions in American factories, the exploitation of immigrant laborers, corporate resistance to the formation of labor unions, political corruption in the leaders of the great cities, child labor, inadequate wages and most importantly the on-going concentration of wealth by such "Robber Barons" as J.P. Morgan and the Vanderbilts. As President of the United States between 1901 and 1909, Theodore Roosevelt applied his progressive beliefs towards the monopolies held by many American corporations which he felt adversely affected the divisions between the rich and the poor. As America's "Trust Buster," Roosevelt attacked big business and demanded a cessation to their monopolistic activities. At the same time, Roosevelt supported the American labor force by initiating child protection laws, aimed at preventing children from working in factories, and introduced workman's compensation in order to protect company employees from utter poverty if they were injured on the job. Roosevelt also proposed the 2 Pure Food and Drug Act in order to protect consumers from unsafe "patent medicines" and contaminated meat. In spite of all this, the huge corporations which emerged from the beginning years of the twentieth century continued their unfair practices and increased in scope and power throughout America. By the time Woodrow Wilson had become President of the United States in 1912, American corporations continued to expand and many Americans became fearful that corporations, due to their vast financial holdings, would absorb smaller companies, thus creating more monopolies and limiting fair competition. The Clayton Anti-Trust Act of 1914, designed to limit or prevent corporate monopolies, was only part of the entire package which also included Wilson's "New Freedom" program in 1913 and the Federal Reserve Act which created the Federal Reserve banks. Wilson also issued his "cease and desist" orders aimed at preventing unfair competition. In addition, the principles of Frederick Winslow Taylor, based on his system of Scientific Management, greatly affected corporate America by attempting to raise the standards of business practice; however, his methods actually detracted from the overall success of the American worker and aided the corporations by showing how they could further exploit their employees. With the onset of World War I in 1914 and America's involvement in 1917, American corporations expanded even more, due to the demand for materials and commodities necessary to fight the war, such as scrap metal for tanks and guns. Wilson's campaign slogan for re-election as President in 1916 ("He kept us out of war") failed miserably when America was forced into war with Germany. This also aided the corporations, for Wilson declared that "the world must be made safe for democracy," a 3 statement which virtually guaranteed that American capitalism, supported by the huge corporations, would endure well into the twentieth century. With the demise of the Wilson Administration and the opening years of the Coolidge Presidency, America experienced tremendous growth in what has been called the "roaring twenties." Yet during this time, not all Americans were given an equal share in the prosperity. In 1929, the richest Americans controlled the vast majority of savings, while the remainder had no savings at all. A prime example of this disparity was the automobile mogul Henry Ford, who earned $14 million as compared to the average income of $7500 a year. As usual, the major reason for this disparity was due to the increased manufacturing output of the big corporations which saw immense gains in their profit margins while those of the common working man increased nominally. One other factor was the Revenue Act of 1926 which favored big business and the wealthy by reducing the federal income tax and inheritance taxes. But the major event, beginning in 1929, which financially catapulted American corporations and the wealthy was the Great Depression, the worst economic catastrophe in U.S. history that affected every American citizen. Although many factors contributed to the Depression, the main cause centered around the unequal distribution of wealth and the speculations in the stock market.