Davies played an important role in ensuring that the western states and Wisconsin gave Woodrow Wilson their vote at the 1912 Democratic National Convention. Wilson made Davies head of his entire western campaign. As a reward for being critical in winning Wilson the election, Wilson named Davies head of the Bureau of Corporations. Davies was instrumental in the formation of the Bureau's successor organization, the Federal Trade Commission, and served as its first chairman from 1915 to 1916. At the President's request when Senator Paul O. Husting of Wisconsin suddenly died in 1917, Davies retired from the FTC in order to run for the open seat in a special election. He lost to Republican Irvine Lenroot in a pivotal election which denied Democrats control of the U.S. Senate. President Wilson appointed Davies to serve as an economic advisor to the United States during the Paris Peace Conference following World War I.