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  • The Coolidge Presidency III

    Posted by Michael Kennedy on May 13th, 2011 (All posts by )

    La Follette ran for president in 1924, as feared by the Republicans, but on the Socialist ticket and got little support from mainstream voters. His issue was “control of government and industry by private monopoly.” Coolidge ran a low key campaign and, as he had done in Massachusetts, did not name his opponents. His speeches were not in campaign style but on general subjects like “What it means to be a Boy Scout,” and “The duties of citizenship” including, of course, the obligation to vote. He used radio addresses very effectively long before Roosevelt adopted the medium. Coolidge’s voice, unlike most politicians of the era, was well suited to radio but could not reach the back of large crowds. In a 1927 poll on radio personalities, Coolidge came in fourth, after three musicians.

    One of Coolidge’s radio talks had a profound impact on a nine-year-old boy who had put together the crystal set on which he heard the president. It was 1922 and Eugene Fluckey was nine years old. What he heard was “Press on. Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education alone will not; the world is full of educated derelicts. Persistence and determination alone are important.” The boy was so awestruck that he scribbled down the president’s words. He would later become the most decorated submarine captain of World War II and completed 12 war patrols without the loss of a single man in his crew. He was awarded the Medal of Honor and five Navy Crosses. He and his ship, the USS Barb, were known as “the galloping ghost.” Fluckey later told the story, “Silent Cal did not speak often but when he did people listened.”

    Some of Coolidge’s refusal to campaign was certainly his depression after the death of his son. Some was a recognition of his own abilities, or lack of them. In his Autobiography, he says, “When he went, the power and glory of the presidency went with him. I don’t know why such a price was exacted for occupying the White House.” Dawes took up the slack and enjoyed campaigning. His delivery was electric. One said of him, ” It was said that he was the only man in the world who, when he spoke, could keep both feet and both arms in the air at once.” His principal themes were LaFollette and the Democrats. For LaFollette, it was “red radicalism.” He spoke out forcefully against the Klan in August but was warned that it could hurt the ticket and he left that topic alone thereafter. Davis, the Democrat, in spite of being warned, attacked the Klan forcefully but nobody was paying much attention. Oddly enough, he would be the opposing counsel in 1954 for Brown vs Board of Education opposing school integration.

    Many years later, Davis described the campaign. Trapped between LaFollette on the left and Coolidge on the right, he had no strategy. He said, “I did my best to make Coolidge say something. I was running out of anything to talk about. What I wanted was for Coolidge to say something. I didn’t care what it was, just so I had someone to debate with. He never opened his mouth.” Coolidge finally did respond in his own way. “I don’t recall any candidate for president ever injured himself much by not talking.” The Republicans spoke of peace and prosperity under Coolidge, contrasting that with the war and depression they had inherited from Wilson in 1921. Sound familiar ? Campaign slogans included the familiar “Keep cool with Coolidge,” but another was “Coolidge or chaos.”

    In the election, Coolidge received 54% of the vote, Davis 28% and LaFollette 16.5 %. It was a smashing victory in the number of votes although Harding had gotten 60% of the vote in 1920. The new Congress was not as strongly Republican with the Senate split between 50 Republicans, 40 Democrats, 5 La Follette progressives and one Farmer-Labor party Senator. The House was more Republican but few in either house owed their election to Coolidge and he would have a hard time getting their support. The Klan was a loser, failing to defeat a number of anti-Klan candidates including “Ma” Ferguson, wife of the former governor of Texas and an anti-Klan candidate.

    William Allen White, no friend of Coolidge but a fair observer, wrote of him 1938, ” No Republican ever came to the White House, except possibly Theodore Roosevelt, who was elected on his own right with fewer strings on him. Calvin Coolidge had remade the Republican Party in his own image. He was an organization man but the organization of the party owed more to him than he owed to it. He was a natural ally of organized capital, those vast amalgamations of wealth which controlled the banks and so had suzerainty over major commodity industries of the land. But there again Calvin Coolidge was free. He had befriended the bankers and their industrial lieges. They had done little for him. No scandal surrounded the campaign fund of 1924. It was an inexpensive Republican campaign. The president for the most part stayed in the White House and paid his own way when he went out to make the few speeches which graced the campaign.” Fair enough.

    On December 3, 1924, Coolidge had the clerk read his State of the Union speech to the outgoing Congress. This had previously been traditional but he had made the speech himself the year before. He asked for further development of internal waterways and the sale of the Muscle Shoals complex. He favored more disarmament and cutbacks in military spending. He condemned lynching and urged full civil rights for black Americans. His principle concern was taxes. “The country is now feeling the direct stimulus of the last revenue bill (which cut taxes), and under the assurance of a reasonable system of taxation there is every prospect of an era of prosperity of unprecedented proportions. But it would be idle to expect any such results unless business can continue free from excess profits taxation and be accorded a system of surtaxes at rates which have for their object not the punishment of success or the discouragement of business, but the production of the greatest amounts of revenue from large incomes. I am convinced that the larger incomes of the country would actually yield more revenue to the government if the basis of taxation were scientifically revised downward.”

    No more significant statement has ever been made in a State of the Union address, in my opinion. He returned to the theme in his inauguration address, which was broadcast to the country. “I want the people of America to be able to work less for the government and more for themselves. I want them to have the rewards of their own industry. That is the chief meaning of freedom. Until we can re-establish a condition under which the earnings of people can be kept by the people, we are bound to suffer a very distinct curtailment of our liberty.” Once again, Coolidge has a message for all of us today as we enter a period ominously similar to that after 1929, and especially after 1932.

    Here is where the slanders of Coolidge began. In his 1927 State of the Union address, he pointed out that, “Exemptions have been increased until 115,000,000 people make out but 2,500,000 individual taxable returns. Treasury Secretary Mellon pointed out in 1924 that only 2.5 % of the cuts in his original program would have gone to taxpayers with incomes of more than $100,000, while 70% went to those with incomes below $10,000. In 1927, 56% of Americans had incomes between $3,000 and $25,000, which meant middle class. Two bedroom apartments in New York City rented for $30 per month. Seventy percent of income taxes came from those with incomes above $50,000. Americans with incomes below $3,000 paid less than 1 % of income tax. My mother worked as a legal secretary in this era and her employer paid her income tax as a fringe benefit, the amount was so low.

    Coolidge was not a supply sider in the sense that he thought increased revenue from low tax rates would pay for more spending. He said, “While I am exceedingly interested in having tax reduction, as I say, it can only be brought about as a result of economy, and therefore it seems to me that the Chamber of Commerce and all others that are interested in tax reduction ought to be first bending their energies to see that no unwise expenditures are authorized by the government, and that every possible effort is put forth to keep our expenditures down, and to pay off our debt, so that we can have tax reduction.”

    Coolidge was concerned with minimizing government activities. In his view, government was unproductive. Only private enterprise could create wealth. The government induced prosperity of World War I was artificial and unsustainable. It was purchased with increased debt which would have to be repaid. To a business audience he said, “One of the rights which the freeman has always guarded with most jealous care is that of enjoying the rewards of his own industry. Realizing the power to tax is the power to destroy; and that the power to take a certain amount of property or of income is only another way of saying that for a certain proportion of his time a citizen must work for the government, the authority to impose a tax upon the people must be carefully guarded…, it condemns the citizen to servitude.” Still, he was not a complete advocate of Laissez Faire, or libertarianism as we would call it today. He told another business audience, “It would be difficult, if not impossible, to estimate the contribution government makes to business. It is notorious that where government is bad, business is bad. The mere fundamental precepts of the administration of justice, the providing of order and security, are priceless. The prime element of the value of all property is the knowledge that its peaceful enjoyment will be publicly defended.”

    One of the most pernicious slanders of Coolidge began with a speech about this time. He is remembered for having said, allegedly, “The chief business of America is business.” On January 17, 1925, Coolidge gave a speech to the American Society of Newspaper Editors. In it was the following sequence. “There does not seem to be cause for alarm in the dual relationship of the press to the public, whereby it is on one side a purveyor of information and on the other side a purely business enterprise. Rather, it is probable that a press which maintains an intimate touch with the business currents of the nation, is likely to be more reliable than it would be if it were a stranger to these influences. After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing, and prospering in the world. I am strongly of the opinion that the great majority of people will always find these are the moving impulses of our life.

    In fact, the line about business was not the theme that was taken from the speech by those attending. He also said” We make no concealment of the fact that we want wealth, but there are many other things we want much more. We want Peace and Honor, and that Charity which is so strong an element of all civilization. The chief ideal of the American people is idealism.” These other lines have been ignored by the historians.

    Another step that he did not want to take concerned flood control and post-flood relief. An enormous Mississippi flood occurred in 1927. The river crested at 47 feet at Baton Rouge. That has never been surpassed (although a similar flood crest is moving down the Mississippi right now as I write this). Coolidge placed Hoover in charge of relief efforts but felt that most of the expense should be borne by states. Eventually, he supported a larger relief program of $180 million but, of course, it was not enough for those who complained. His opposition was not so much to relief for individuals but for business. He felt they should be responsible for their own decisions but this was lost to his critics. Eventually, Congress appropriated $1.4 billion and placed the Army Corps of Engineers in charge of flood control. We have reaped the consequences of these decisions as recently as the 2005 hurricane Katrina when Army COE projects failed. Moral hazard has also been a major problem as people build in flood prone areas. Coolidge would not be surprised.

    Coolidge was a morose figure these years, still mourning his son. He was attacked by the Progressives as a tool of business, by the farm bloc as hostile to farmers and by the intellectuals as the image of various muck raking novels of the period. He has been more fairly criticized as ineffectual in the area of civil rights for black Americans. He did support a black dentist named Charles Roberts who had been nominated for a GOP Congressional seat in New York. Dr Roberts had been opposed by GOP bosses and asked to withdraw. Coolidge reminded the country, “During the war, 500,000 colored men and boys were called up under the draft, not one of whom sought to evade it. They took their places where ever assigned in defense of the nation of which they are just as truly citizens as any others.”

    He appointed his Attorney General (and Amherst man) Harlan Stone to the Supreme Court. There was criticism but Stone was easily confirmed. He failed to prevent an act of vengeance by the 1925 Senate which would cause him much trouble in the future. Robert LaFollette was ill and unlikely to serve out his term. Others discriminated against were the progressives Smith Brookhart of Iowa, Lynn Frazer and Edwin Ladd of North Dakota. They were read out of the party on November 28. This resulted in them joining the Farm Bloc and harassing the administration for the next few years. It was totally unnecessary and ineffective and created new enemies for Coolidge although he had nothing to do with the action of the party. However, it is fair to criticize him for his inactivity in not attempting to prevent this foolish step.

    His vice-president Dawes got off on the wrong foot right after his swearing in as he lectured the Senate in vigorous fashion. Senator James Reed of MIssouri said, “It was the most acrobatic, gymnastic speech I have ever heard in the Senate.” It was also a serious mistake and one step on a path to becoming a political joke. Coolidge got into trouble with his nomination to replace Stone as Attorney General. The nominee was Charles Warren of Michigan who had been an attorney for the sugar trust, recently cited by the FTC for sugar sales that were illegal. The progressives saw an opportunity for revenge and allied with Democrats in opposition. No cabinet nominee had been defeated since 1868. Here Dawes made a serious mistake. He asked another Senator to take the chair during the debate so he could go back to his hotel room and take a nap. He had been told there would be no vote that day but five Senators withdrew their request to speak when they saw him leave. The Committee chair, Curtis, saw his support eroding and called for an immediate vote. The result was a tie. Dawes was warned and tried to get back to the Capitol to vote but was delayed and one Senator changed his vote to make it 41-39 against. The result was an embarrassment for Coolidge and Dawes.

    The episode ended Dawes’ prospects as a presidential nominee in 1928 and there were signs at the Willard Hotel, “Dawes Slept Here.” Other cabinet changes intervened. Secretary of Agriculture Henry Wallace, father of FDR’s vice president 1940-44, died on October 25. Coolidge offered the place to Kansas Senator Arthur Capper, a member of the Farm Bloc who opposed McNary-Haugen. He turned it down but helped Coolidge get his next choice, William Jardine, another Kansas man confirmed. His secretary Slemp resigned and was replaced by Everette Sanders, less politically astute but Coolidge was not going to run again and had less need for Slemp’s advice. In March 1925, Secretary of State, Charles Evans Hughes resigned. He recommended Ambassador Frank Kellogg to replace himself and he was easily confirmed. He was thinking of retirement but Coolidge talked him out of it. He would co-auther the Kellogg-Briand Pact and receive the 1929 Nobel Peace Prize. The pact outlawed war just four years before Hitler came to power.

    Frank Kellogg.

    Coolidge’s 1925 State of the Union address was similar to the previous one and he asked for lower taxes and reduced spending. He mentioned Muscle Shoals again and the farm issues but he offered very little in the way of recommendations. He added, “in the fundamentals of government and business the results demonstrate that we are going in the right direction.” The economy was booming and the period resembled the Clinton years in many ways. New technology was driving the economy and the government needed to do little but keep out of the way. Radio and the automobile were the great technological innovations of the time. George Westinghouse had won the contest with Thomas Edison for the method of electrical transmission as AC with step down transformers was much more versatile. Sam Insull then pioneered the usage rate charge system for electricity lowering electric bills for most small customers of the public utility. Insull began with the Edison company but switched to AC when he realized that it was going to be the future of electric power. His company, Commonwealth Edison Company, switched to AC in spite of its name. He combined with Westinghouse to open Chicago’s first radio station KYW, in 1921. He also began to develop small electrical appliances for the home. This was part of the revolution of technology of the 1920s. He became overextended with all his interlocking companies and his finances collapsed after 1929. He was demonized by the Roosevelt administration and his great contributions were minimized.

    John Coolidge, the president’s father, died on March 18, 1926. His last letters to his father are rather gloomy and it is clear that he is not enjoying the presidency. “It is forty-one years since mother lay ill in the same room where you are now. Great changes have come to us, but I do not think we are any happier, and I am afraid not much better. Everyone tells me how cheerful you are. I can well understand that you may be. So many loved ones are waiting for you, so many loved ones are daily hoping you are comfortable and are anxious to know about you.”

    One good thing that happened in 1926 was another tax cut. The Revenue Act of 1926 had failed to pass the year before but was re-introduced to the new Congress. Once again the progressives put up a fierce fight to oppose it, not stopping at outright lies and poor statistics. George Norris said, “Mr Mellon himself gets a larger personal reduction than the aggregate of practically all the taxpayers in the state of Nebraska.” Mellon did not respond but could have pointed out that he personally paid more income tax than the residents of the entire state of Nebraska. The bill gave Coolidge what he had wanted. It repealed the gift tax, halved the estate tax and lowered rates all down the line. The rate on the first $7,500 of income was 1.5%. That included a large share of the middle class. There was also an exemption of $1,500 for a single taxpayer and $3,500 for families. One third of those who had paid taxes in 1925 would be off the rolls after this. The one aspect he opposed was an increase in the corporate tax rate. Except for the effects of inflation on the dollar, the debates are almost unchanged today.

    The Farm Bloc brought back another incarnation of McNary-Haugen in 1926, not discouraged by the fact that both authors had lost their seats in 1922. A modern critique of the bill. Coolidge, typically, had a droll comment. “At every cabinet meeting for a year or so back, Secretary Henry Wallace used to be grumbling about the price of corn and was always wanting the government to do something about it. Then corn took a rise. The government didn’t do it. I noticed that Wallace had shut up about the price of corn.” Coolidge supported a moderate substitute bill, the Curtis-Crisp Bill. This created a Federal Farm Board which would lend money to farm cooperatives to buy up perishables and raise prices in times of surplus. Neither bill passed but some steps were taken to encourage farm cooperatives.

    About this time, Walter Lippmann wrote, “The politicians in Washington do not like Mr Coolidge very much, for they thrive on issues,and he destroys their business. But the people like him, not only because they like the present prosperity, and because at the moment they like political do-nothingism, but because they trust and like the plainness and nearness of Calvin Coolidge himself. This is one of the most interesting conjectures of our age.” In the fall of 1926, the Republicans campaigned on his record of tax cuts and budget surpluses. Coolidge did little campaigning although he did go to Massachusetts to try to help his allies, Governor Fuller, in trouble because of the Sacco-Venzetti murder case and Butler, the GOP Chair who was running against a popular Democrat, David Walsh. Fuller kept his seat but Butler lost and Democrats claimed that Coolidge was repudiated, an unlikely conclusion. The Republicans lost 10 House seats and 7 Senate seats, leaving them in a numerical majority but the progressive wing was emboldened.

    His December 1926 State of the Union address called for radio regulation, a bill supported by Hoover, plus tax cuts and a banking act authored by Pepper and McFadden. It allowed branch banks in the same city as the head office. One theory of the Depression is that banks were not allowed branches and this made them most susceptible to local economic crises. Canadian banks have always been allowed branches.

    Both of these measures passed and he signed them with pleasure. His other major task was prevent passage of the McNary-Haugen bill. It had more supporters in this Congress, including Frank Lowden, a convert, and even Charles Dawes, the vice-president. A revised version of the bill passed the House easily and the Senate by a narrow margin. Coolidge promptly vetoed it. He included in his veto message a closely reason critique of the bill’s approach. For one thing, European agriculture had recovered from the war. He noted that the bill covered only five commodity crops and the farmers who grew other crops were discriminated against. He complained the chief beneficiaries were the exporters, the middlemen. He feared increasing surpluses as increased production was encouraged at the expense of the taxpayer who would have to buy the most expensive farm products in the world. The Congress could not over ride his veto and the bill returned again in 1928 to be vetoed again.

    Why was he adamant about the farm bills ? It went to the heart of his philosophy and similar issues plague us today. He believed that lower taxes and reduced government spending went to providing a freer and more independent society. He saw the farm bill as bringing a great change to the relationship between the government and the people. He believed that government should stay out of the economy and businessmen should stay away from the proper functions of government. A November 19, 1925 speech to the NY Chamber of Commerce illustrates his belief.

    New York is an imperial city, but it is not the seat of government. The empire over which it rules is not political, but commercial. The great cities of the ancient world were the seats of both government and industrial power. The Middle Ages furnished a few exceptions. The great capitals of former times were not only seats of government but they actually governed. In the modern world government is inclined to be merely a tenant of the city. Political life and industrial life flow side by side, but practically separated from each other. When we contemplate the enormous power, autocratic and uncontrolled, which would have been created by joining the authority of government with the influence of business, we can better appreciate the wisdom of the fathers in their wise dispensation which made Washington the political center of the country and left New York to develop into its business center. They wrought mightily for freedom.

    The final post is coming soon.

     

    One Response to “The Coolidge Presidency III”

    1. Whitehall Says:

      Just read about the Harding/Coolidge years in Paul Johnson’s “History of the American People” – great book and has similar good coverage of these years.

      Thanks for the additional details.