e out in Europe.
The conditions which had prevailed through half a century of tariff
making had ceased to exist. They have not yet returned. A subsidiary
feature of the Underwood-Simmons Act, however, was to attain enormous
importance in the course of the Wilson Administrations. To supply the
deficiency in revenue which the lowered duties might be expected to
produce there was added an income tax law, which had recently been
permitted by constitutional amendment. Even the light duties of the
first year, with their $3,000 exemption, were denounced by
conservatives as a rich man's tax; but within four years more the
exemption was to be lowered to $1,000, and the peak of the tax raised
to tenfold its original height.

So long as the Wilson Administration was reducing the tariff, it was
carrying out the traditional policy of the Democratic Party; but the
next task which the President laid before Congress was much more
delicate and much more important. As the event showed, the result was
to be of infinitely greater benefit to the nation. Reform of the
currency had long been an evident necessity, and the panic of 1907 had
recently called attention to the dangers of the system based on
emergency measures of the Civil War period. Mr. Wilson himself had said
much of the necessity of freeing business from unnatural restrictions,
among which the makeshift currency system was included. During the
previous Administration Senator Aldrich's plan for a centralized
reserve bank had been widely discussed, and innumerable modifications
had been suggested. Democratic leaders were already working on plans
for currency reform when the new Administration came in, and on June 26
a bill was introduced in the House by Carter Glass and in the Senate by
Robert L. Owen.

It took six months of hard work to get this adopted, but it was a
marvelous achievement to get it adopted at all. For a large faction of
the Democratic Party, including its most influential leader, still
represented the old hostility to the "money power," which regarded the
overthrow of the United States Bank as the great triumph of the
American Democracy. The Glass-Owen bill differed from Senator Aldrich's
scheme largely in the direction of decentralization and giving more
control to the Government and less to the banks, but, even so, it was a
suspicious document to those numerous Democrats whose economic ideas
were obtained from the Greenback and Populist Parties of former year