How did Theodore Roosevelt and Woodrow Wilson differ in their respective approaches to the problem of regulating and controlling big business in the United States?
According to John Milton Cooper, Jr., author of Woodrow Wilson and Theodore Roosevelt, both Theodore Roosevelt and Woodrow Wilson wanted to use the power of the federal government to intervene in the market and curb the power of monopolies. However, their methods of intervening in the market to regulate business differed.
Roosevelt believed that corporations were "indispensable instruments of our modern civilization." He believed that the government should monitor and help direct corporate profits to benefit the less privileged members of society, including women, children, and farmers. However, Roosevelt did not believe the government should have a heavy hand in regulating business.
Wilson, on the other hand, wanted to use the power of the federal government to put some real teeth into the anti-trust regulations. He wanted to enforce laws against monopolies and restore a situation in which the market had greater degrees of competition. He felt that the monopolies limited the competition in the market and wanted to put a forceful end to this situation.
Woodrow Wilson and Theodore Roosevelt had different views on how to regulate big business. Theodore Roosevelt believed that the government and big businesses could exist and work together. Roosevelt believed the government must intervene and regulate businesses when business acted in ways that only benefitted its own interests while hurting the public’s interests. This was done with the Northern Securities Company. The creation of the company nearly caused an economic crisis. Roosevelt took the company to court and won as the company had to be broken up because it violated antitrust laws. This concept of treating everybody equally was known as the Square Deal.
Wilson, on the other hand, believed big businesses had to be tightly regulated by the government. He wanted to see monopolies eliminated. As part of his New Freedom program, the Clayton Antitrust Act was passed, and the Federal Trade Commission was created. Both of these actions gave the government more power in dealing with big businesses. Both Wilson and Roosevelt had ideas on how to deal with big businesses.
A major difference in their respective approaches has to do with how they attacked monopolies. Roosevelt is known for the fact that he did not try to attack all monopolies. He believed that there were both good monopolies and bad monopolies that were greedy and exploitative. Roosevelt tried to go after the bad ones while leaving the good ones alone. By contrast, Wilson did not try to differentiate between good and bad monopolies. Instead, he pushed for laws that specified certain types of actions (such as price discrimination or interlocking directorates for large corporations) were illegal in all cases. This was very different from Roosevelt's idea of taking the monopolies on a case-by-case basis.
Theodore Roosevelt supported "New Nationalism," a system where the government is a trustee for the people and controls and supervises the economy in the national interest. To achieve this purpose, he differentiated between "good" and "bad" monopolies, based on whether the monopoly was in the nation's interest or in a corporation's own interest. For example, he provided concessions to the meatpacking and steel industries while regulating the railroads.
Woodrow Wilson supported New Freedom and believed that big corporations could use money and influence to control the regulator (the government). He championed the removal of any artificial advantage to corporations, such as protective tariffs, so that market forces would provide equal competition and hence break any monopolies. As per Wilson's model of government regulations, all the monopolies were bad and had to be taken care of.