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Woodrow Wilson As I Know Him
Chapter XXII - Reforming The Currency
by Tumulty, Joseph P.

I have bitterly resented at times the imputation and charge that Woodrow Wilson is so egotistical, self-willed, and so wedded to his own ideas that he not only does not invite suggestion from the outside but that he resents it and refuses to be guided by it.

I feel that my daily intimacy with him for eleven years gives me the right to speak frankly in the matter. Of course, like every great man, he is firmly set in his opinions. He holds and cleaves to them with a passionate devotion and tenacity but only after the fullest consideration of all the facts and information upon which he bases a final conviction. Time and again I have seen him gallantly retreat under the fire of a better argument in a matter that he had been previously disposed to favour.

And what of his attitude toward those who came to the Executive offices to argue with him on some vital matter in which he had formed what appeared to be an unalterable judgment? Never did he assume the unfriendly or unyielding attitude of the doctrinaire or the man of a single idea. I recall a case in point. He was discussing the revenue situation with Representative Claude Kitchin of North Carolina, at a time when it was the subject of bitter controversy in the ranks of the Democratic party. The President and Mr. Kitchin held radically divergent views on this matter; the President sought to lead the party in one direction and Mr. Kitchin openly pursued an opposite course. I was present at this conference. No warm friendship existed between these two men; but there was never any evidence of hostility in the President's attitude toward Mr. Kitchin. He listened politely and with patience to every argument that Mr. Kitchin vigorously put forward to sustain his contention in the matter, and took without wincing the sledgehammer blows often dealt by Mr. Kitchin. The President replied to Mr. Kitchin's arguments in an open, frank manner and invited him to the fullest possible discussion of the matter.

I recall the conclusion of this interview, when it seemed that, having driven the President from point to point, Mr. Kitchin was the victor. There was no disappointment or chagrin evident in the President's manner as he faced Mr. Kitchin to accept his defeat. He met it in true sportsmanlike fashion. At the conclusion of Mr. Kitchin's argument the President literally threw up his hands and said, quietly, without showing a trace of disappointment: "I surrender, Mr. Kitchin. You have beaten me. I shall inform my friends on the Hill that I was mistaken and shall instruct them, of course, to follow you in this matter."

I could crowd this chapter with similar incidents, but it would be a work of supererogation.

Never before was Mr. Wilson's open-minded desire to apply in practice the principle of common counsel better illustrated than in his handling of the important work in connection with the establishment of the Federal Reserve Act, the keystone of the great arch of the Democratic Administration. It was the first item in his programme to set business free in America and to establish it upon a firm and permanent basis. He aptly said to me, when he first discussed the basic reason for the legislation, he wished not only to set business free in America, but he desired also to take away from certain financial interests in the country the power they had unjustly exercised of "hazing" the Democratic party at every Presidential election.

Shortly after the Presidential election in 1912, while he was burdened with the responsibilities of the Executive office at Trenton, New Jersey, he began, in collaboration with that fine, able, resourceful Virginian, Representative Carter Glass, then chairman of the Banking and Currency Committee of the House, the preparation of the Federal Reserve Banking and Currency Act. For hours at the Executive office in Trenton the Virginia Congressman conferred with the Governor of New Jersey over the preliminary drafts of this most vital piece of legislation. For days the work of preparation was carried on, so that when Mr. Wilson arrived in Washington to take up the duties of the Presidency, the Banking and Currency Bill was in shape and ready for immediate introduction in the Senate and House.

Looking back over the struggle that ensued from the time this measure was introduced into the Senate and House, I often wonder if the people "back home," especially the various business interests of the country, who have been saved from financial disaster by this admirable and wholesome piece of legislation, ever realized the painstaking labour and industry, night and day, which Woodrow Wilson, in addition to his other multitudinous duties, put upon this task. Could they but understand the character of the opposition he faced even in his own party ranks, and how in the midst of one of Washington's most trying summers, without vacation or recreation of any kind, he grappled with this problem in the face of stubborn opposition, they would, perhaps, be willing to pay tribute to the earnestness and sincerity of this man who finally placed upon the statute books one of the greatest constructive pieces of legislation of half a century. Having given his heart to this important task, whose enactment into law was a boon to business and established for the first time in America a "Democracy of Credit," as he was pleased to call it, he relentlessly pursued his object until senators and representatives yielded to his insistent request for the enactment of this law, not under the stress of the party whip, but through arguments which he passionately presented to those who sought his counsel in this matter.

During this time I gladly accepted the President's invitation to spend the summer with him at the White House, where I occupied the bedroom that had been used as Mr. Lincoln's Cabinet Room, and where Mr. Lincoln had signed his famous Emancipation Proclamation. My presence, during that summer, as a member of the President's family, gave me a good opportunity to see him in action in his conferences in regard to the Federal Reserve Act. Never was greater patience, forbearance, or fortitude, shown by a chief executive under such trying circumstances. Day after day, when it seemed as if real progress was being made, unexpected opposition would develop and make it necessary to rebuild our shattered lines, until finally the bill was out of the House and on its way to the Senate.

Its arrival in the Senate was but the beginning of what appeared an almost interminable struggle. The President's stalwart adviser in the Treasury, Mr. McAdoo, was always at hand to rally and give encouragement to our forces, many of whom at times were in despair over the prospects of the bill. The leaders of the opposition on the committee were Senator Root on the Republican side and Senators O'Gorman and Reed on the Democratic.

It seemed at times as if they had succeeded in blocking an agreement on the Conference Report. At last word was brought to the President by Representative Glass that the opposition of these gentlemen might succeed in killing the bill. The President up to this time, although fighting against great odds, showed no impatience or petulancy, but the message brought by Mr. Glass was the last straw. Looking at Mr. Glass, with a show of fire and in a voice that indicated the impatience he felt, the President said: "Glass, have you got the votes in the committee to override these gentlemen [meaning O'Gorman and Reed]?" Glass replied that he had. "Then," said the President, "outvote them, damn them, outvote them!"

Mr. McAdoo came to the White House a few days later to make a report about the situation in the Senate, with reference to the Federal Reserve Act. His report was most discouraging as to the final passage of the bill. He said that his information from the Hill was that the leaders of the opposition in the Senate were bent upon a filibuster and that the probabilities were that the Senate would finally adjourn without any action being taken on the Federal Reserve Act.

This conversation took place on the White House portico, which overlooks the beautiful Potomac and the hills of Virginia. It was one of the hottest days in June, a day which left all of us who were about the President low in spirit. Only those who know the depressing character of Washington's midsummer heat can understand the full significance of this statement. The President on this occasion was seated in an old-fashioned rocker, attired in a comfortable, cool-looking Palm Beach suit. Mr. McAdoo reported the situation in detail and said that, in his opinion, it was hopeless to try to do more with the bill: that an impasse had been reached between the Senate and the House. The President quickly interrupted Mr. McAdoo, saying, with a smile: "Mac, when the boys at Princeton came to me and told me they were going to lose a football game, they always lost. We must not lose this game; too much is involved. Please say to the gentlemen on the Hill who urge a postponement of this matter that Washington weather, especially in these days, fully agrees with me and that unless final action is taken on this measure at this session I will immediately call Congress in extraordinary session to act upon this matter." This challenge, brought to the Hill by Mr. McAdoo, quickly did the job and the bill was soon on its way to the White House.

Mr. Wilson conducted the conferences in this matter with friends and foes alike with a quiet mastery and good temper diametrically contrary to the reports sedulously circulated for political purposes, that he was autocratic and refused to cooperate with the members of the Senate and House in an effort to pass legislation in which the whole country was interested.

We have only to recall the previous attempts made by former administrations to legislate upon the currency question, especially the efforts of the Harrison and Cleveland administrations, to understand and appreciate the difficulties that lay in the path of Woodrow Wilson in his efforts to free the credit of the country from selfish control and to push this vital legislation to enactment. Previous attempts had always resulted in failure and sometimes in disaster to the administrations in control at the time. The only evidences of these frequent but abortive efforts to pass currency legislation were large and bulky volumes containing the hearings of the expensive Monetary Commission that had been set up by Senator Aldrich of Rhode Island. As an historian and man of affairs, Woodrow Wilson realized the difficulties and obstacles that lay in his path in attempting to reform the currency, but he was not in the least daunted by the magnitude of the task which confronted him. He moved cautiously forward and pressed for early action at the first session of the Congress following his inauguration. He realized that with the passage of the tariff legislation, which always acts as a business depressant, it was necessary at the same time to have the stimulus the Currency Bill would afford when enacted into law. The split of '96 in the Democratic ranks over the money question was an additional reason for cautious and well-considered action if the Federal Reserve Bill was to become a reality.

The presence of Mr. Bryan in the Cabinet and his well-known views on this question were strong reasons for watchful and careful prevision. It was obvious to Mr. Wilson from the outset that insurmountable difficulties lay in his path, but he brushed them aside as if they were inconsequential.

In the Committee on Banking and Currency, in both the Senate and House, were many ardent and devoted friends of Mr. Bryan, who thought that his radical views on the money question could be used as a rallying point for opposition to the President's plan for currency reform. But those who counted on Mr. Bryan's antagonism were doomed to disappointment and failure, for while it is true that Mr. Bryan found serious objections to certain parts of the bill, when these were eliminated he moved forward with the President in the most generous fashion and remained with him until the Federal Reserve Act was made part of the law of the land.

It was in a conference with members of the Banking and Currency Committee that I first saw the President in action with the gentlemen of the Senate and House. He had invited the Democratic members of the Banking and Currency Committee to confer with him in the Cabinet Room in the White House offices. From my desk in an anteroom I heard all the discussions of the bill. There was full, open discussion of the bill in all its phases at this conference in which were collected the conservatives of the East, the radicalists of the West, and those who came to be known as the "corn tassel" representatives of the South, all holding widely divergent views and representing every shade of opinion, some of it sharply antagonistic to the President's views. Some of the members were openly hostile to the President, even in a personal way, particularly one representative from the South, and some of the questions addressed to the President were ungracious to the verge of open insult. It was an exasperating experience, but Mr. Wilson stood the test with patience, betraying no resentment to impertinent questions, replying to every query with Chesterfieldian grace and affability, parrying every blow with courtesy and gentleness, gallantly ignoring the unfriendly tone and manifest unfairness of some of the questions, keeping himself strictly to the merits of the discussion, subordinating his personal feelings to the important public business under consideration, until all his interrogators were convinced of his sincerity and fair-mindedness and some were ashamed of their own ungracious bearing.

It was clear to me as I watched this great man in action on this trying occasion that in the cause he was defending he saw, with a vision unimpaired and a judgment unclouded by prejudice or prepossessions, far beyond the little room in which he was conferring. He saw the varied and pressing needs of a great nation labouring now under a currency system that held its resources as if in a strait-jacket. He saw in the old monetary system which had prevailed in the country for many years a prolific breeder of panic and financial distress. He saw the farmer of the West and South a plaything of Eastern financial interests. And thus, under the leadership of Woodrow Wilson was begun the first skirmish in the great battle to free the credit of the country from selfish control, a movement which led to the establishment of a financial system that ended for all time the danger or possibility of financial panic.

There was an interesting incident in connection with the handling of the currency legislation that brought about what threatened to be the first rift in the President's Cabinet. It concerned Mr. Bryan's attitude of opposition to certain features of the bill as drafted by the Banking and Currency Committee of the House. My connection with this particular affair arose in this way: In the early stages of the discussion of the Federal Reserve Act, and while Mr. Glass's committee was considering the matter, a messenger from the White House informed me that the President wished to confer with me in his study. As I walked into the room, I saw at once from his general attitude and expression that something serious was afoot and that he was very much distressed. Turning around in his chair he said: "It begins to look as if W. J. B. [he thus referred to Mr. Bryan] and I have come to the parting of the ways on the Currency Bill. He is opposed to the bank-note feature of the bill as drawn. We had a long discussion about the matter after Cabinet meeting to-day. In thoroughly kindly way Mr. Bryan informed me that he was opposed to that feature of the bill. Of course, you know, W. J. B. and I have never been in agreement on the money question. It is only fair, however, to say that in our discussion Mr. Bryan conducted himself in the most generous way, and I was deeply touched by his personal attitude of friendliness toward me. He even went so far as to say that in order that I might not be embarrassed in the handling of the bill, he was willing to resign and leave the country and make no public criticism of the measure. In the meantime, Mr. Bryan has promised to say nothing to any one about the matter until he has a further discussion with me."

The President then frankly discussed with me the effect of the possible resignation of Mr. Bryan. The President suggested that I drop in on Mr. Bryan very soon and if possible casually invite a discussion of the Federal Reserve Act, telling Mr. Bryan of his [the President's] interests in it, and how much he appreciated Mr. Bryan's personal attitude toward him.

I realized the seriousness and delicacy of the situation I was asked to handle, and, being on the friendliest terms with Mr. Bryan, I telephoned him and invited myself to his home--the old Logan Mansion, a beautiful place in the northwest part of Washington. I found Mr. Bryan alone when I arrived. We went at once to his library and, in a boyish way, he showed me a picture which the President had autographed for him only a few days previous. As we stood before this picture Mr. Bryan gave expression to his sincere admiration and affection for the President. He related, with deep feeling, how much Mr. Bryan had enjoyed his contact and official companionship with him and how he had come to have a very deep affection for him. As we turned away from the picture, he grew serious and began the discussion of the very thing the President and I had conferred on only a few hours before. He freely discussed his differences with the President over the Federal Reserve Act, and asked me the direct question: "Who from Wall Street has been discussing this bill with the President? I am afraid that some of the President's friends have been emphasizing too much the view of Wall Street in their conferences with the President on this bill." I frankly told Mr. Bryan that this imputation did a great injustice to the fine men with whom the President conferred on the matter of banking reform and that I was certain that the President's only intimate advisers in this matter were Mr. McAdoo, Senator Owen of Oklahoma, and Mr. Glass of Virginia, and that I personally knew that in their discussions the President never argued the point of view of the Eastern financial interests. Mr. Bryan was reassured by my statement and proceeded to lay before me his objections to the character of the currency issue provided for in the bill. He then took from the library shelves a volume containing all the Democratic National platforms and read excerpts from them bearing upon the question of currency reform. He soon convinced me that there was great merit in his contention. Before leaving him, I told him of my interview with the President and how deeply distressed he [the President] was that Mr. Bryan was not disposed to support him in the matter of the Federal Reserve Act. It was evident that Mr. Bryan felt a keen sympathy for the President and that he was honestly trying to find a way out of his difficulties that would enable him to give the President his whole-hearted support. He showed real emotion when I disclosed to him the personal feelings of the President toward him, and I feel sure I left him in a more agreeable frame of mind. I told him that I would talk with the President, Mr. McAdoo, and Mr. Glass and report to him on the following day.

I returned to the President's study and reported to him in detail the results of my conference with Mr. Bryan. I called his attention to Mr. Bryan's criticism of the bill and then ventured the opinion that Mr. Bryan, according to the traditional policy of the Democratic party, was right in his attitude and that I felt that he [Mr. Wilson] was wrong. For a moment the President showed a little impatience with this statement and asked me to point out to him where the party in the National platforms had ever taken the view Mr. Bryan indicated in his discussion with me. I then showed him the book Mr. Bryan had given me, containing the Democratic platforms, and he read very carefully plank after plank on the currency. He finally closed the book, placed it on his desk, and said: "I am convinced there is a great deal in what Mr. Bryan says." We then discussed ways of adjusting the matter. I finally suggested that the President allow me to talk with Mr. Glass and place before him Mr. Bryan's position and that he have Mr. Glass confer with Secretary McAdoo and Senator Owen. This was arranged. I had no way of ascertaining just what took place at this conference, but after the Cabinet meeting on the following Tuesday Mr. Bryan walked around to where the President was sitting, and said to him: "Mr. President, we have settled our differences and you may rely upon me to remain with you to the end of the fight." The President thanked him cordially, and thus the first break in the Cabinet line was averted.


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