Examkin

Question

Difficulty: MediumProgressive Era Reforms and Influences

Source: Woodrow Wilson, First Inaugural Address, 1913

"We have itemized the things that ought to be altered: A tariff which cuts us off from our proper part in the commerce of the world, violates the just principles of taxation, and makes the government a facile instrument in the hand of private interests; a banking and currency system... which we must reconstitute in order to make it elastic to meet the demands of business...; an industrial system which, take it on all its sides, holds capital in leading strings, restricts the liberties and limits the opportunities of labor... We have done many things, but we have not cleaned the house. It is our duty to make these changes."

Which of the following federal policies enacted during Woodrow Wilson's presidency best represents an attempt to address the problems with the banking and currency system described in the excerpt?

  1. A
    The adoption of the subtreasury system to provide government-managed warehouses and low-interest loans to agricultural producers
  2. B
    The creation of the Federal Deposit Insurance Corporation to provide federal guarantees for individual savings accounts
  3. The establishment of the Federal Reserve System to regulate the money supply and oversee banking operationsAnswer
  4. D
    The reliance on private investment syndicates to stabilize the national economy during financial panics

Answer

The establishment of the Federal Reserve System to regulate the money supply and oversee banking operations
The establishment of the Federal Reserve System in 1913 directly addressed Wilson's call for an elastic currency and federal oversight of banking. By creating twelve regional Federal Reserve Banks overseen by a public Federal Reserve Board, the federal government gained the power to regulate the money supply, adjust interest rates, and stabilize the banking system without relying on private syndicates.

Step-by-Step Solution

1
Identify the primary problem regarding the banking system mentioned in the stimulus (specifically, the need to reconstitute the banking and currency system to make it 'elastic').
Recognize that Woodrow Wilson calls for federal intervention to reform the currency and banking structure.
This establishes the context of the legislative goal of Wilson's 'New Freedom' platform.
2
Distinguish between Gilded Age Populist proposals, Progressive Era federal reforms under Wilson, and New Deal reforms under Franklin D. Roosevelt.
Identify the Federal Reserve Act of 1913 as the signature banking reform of the Wilson administration.
The Federal Reserve System was specifically created to manage the money supply, provide an elastic currency, and oversee commercial banks.

Key Concept

Progressive Era banking reform under the Woodrow Wilson administration, specifically the creation of the Federal Reserve System.
Rate this question

Topics

Progressive Era Reforms and Influences

More questions from this topic