During his first year as president, Wilson authorized the widespread imposition of segregation inside the federal bureaucracy. His first term was largely devoted to pursuing passage of his progressive New Freedom domestic agenda. His first major priority was the Revenue Act of 1913, which lowered tariffs and began the modern income tax. Wilson also negotiated the passage of the Federal Reserve Act, which created the Federal Reserve System. Two major laws, the Federal Trade Commission Act and the Clayton Antitrust Act, were enacted to promote business competition and combat extreme corporate power.
At the outbreak of World War I in 1914, the U.S. declared neutrality as Wilson tried to negotiate a peace between the Allied and Central Powers. He narrowly won re-election in the 1916 United States presidential election, boasting how he kept the nation out of wars in Europe and Mexico. In April 1917, Wilson asked Congress for a declaration of war against Germany in response to its policy of unrestricted submarine warfare that sank American merchant ships. Wilson nominally presided over war-time mobilization and left military matters to the generals. 