Louis Brandeis - Supporting President Wilson

Supporting President Wilson

Brandeis's positions on regulating large corporations and monopolies carried over into the presidential campaign of 1912. Democratic candidate Woodrow Wilson made it "the central issue," and, according to Wilson historian Arthur Link, "part of a larger debate over the future of the economic system and the role of the national government in American life." Whereas the Progressive Party candidate, Theodore Roosevelt felt that trusts were inevitable and should be regulated, Wilson and his party aimed to "destroy the trusts" by ending special privileges, such as protective tariffs and unfair business practices that made them possible.

On that basis, Brandeis, though "nominally a Republican," supported Wilson and urged his friends and associates to join him. The two men met for the first time at a private conference in New Jersey that August and spent three hours discussing economic issues. Mason notes that Brandeis came away from the meeting a "confirmed admirer of Wilson, whom he described in letters to his friends as possessed of a remarkable mind and likely to make 'an ideal president.'" Wilson thereafter began using the term "regulated competition," the concept that Brandeis had developed, and made it the essence of his program. In September, Wilson asked Brandeis to "set forth explicitly the actual measures by which competition can be effectively regulated."

After his victory in the November election, Wilson wrote to Brandeis, "You were yourself a great part of the victory." Wilson considered nominating Brandeis first for Attorney General and later for Secretary of Commerce, but backed down after a loud outcry from corporate executives that he had once opposed in court battles. He concluded that Brandeis was too controversial a figure to appoint to his cabinet.

Nevertheless, during Wilson's first year as president, Brandeis "played a key role in shaping the Federal Reserve Act," according to banking historian Albert Link. He adds that "Brandeis's arguments were decisive in breaking the deadlock on the banking issue." Wilson endorsed the banking proposals of Brandeis and Secretary of State William Jennings Bryan, who, Piott points out, felt that "the banking system needed to be democratized and its currency issued and controlled by the government," and convinced Congress to enact the Federal Reserve Act in December 1913.

In 1913, Brandeis wrote a series of articles for Harper's Weekly that suggested ways of curbing the power of large banks and money trusts. Then in 1914 he published a book entitled Other People's Money and How the Bankers Use It. He also urged the Wilson administration to develop proposals for new antitrust legislation to give the Department of Justice the power to enforce antitrust laws. McCraw writes that he was "one of the architects" of the Federal Trade Commission and served as Wilson's chief economic adviser from 1912 until 1916. "Above all else," he adds, "Brandeis exemplified the anti-bigness ethic without which there would have been no Sherman Act, no antitrust movement, and no Federal Trade Commission."