Coolidge

by Robert Sobel

  However, Coolidge was not a “supply sider” as Arthur Laffer and his disciples were to be in the 1980s. He meant for the tax cuts to be paid for mainly by reductions in government spending. “While I am exceedingly interested in having tax reduction,” he said at his October 11, 1927, press conference, “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 of all 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 pay off our debt, so that we can have tax reduction.”

  More important to Coolidge than alleviating the plight of the wealthy was the minimization of government activities. In his view, government was largely unproductive; true progress and prosperity were generated by the private sector, which included farmers as well as businessmen, laborers as well as managers. Government-induced prosperity, such as during World War I, was artificial and unsustainable, a chimera purchased at the cost of increased debt—which would have to be repaid. In his 1924 acceptance speech, Coolidge said, “I am not disturbed about the effect on a few thousand people with large incomes because they have to pay high surtaxes. What concerns me is the indirect effect on the rest of the people. Let us always remember the poor.”

  While this juxtaposition may have jarred some, to those who knew Coolidge’s basic philosophy and accepted it the meaning was clear and obvious. The money not taken from the wealthy would be invested in the economy, to provide products, services, and a higher standard of living. Put another way: only a few of those who worked for government created wealth, while those who worked in factories and offices made the country more prosperous by producing goods and services and purchasing them with their decent wages. “We require a national defense, but it must be limited. We need public improvements, but they must be gradual,” he told a business audience in 1924. “We have to make some capital investments, but they must be certain to give fair returns. Every dollar expended must be made in the light of all our natural resources, and all our national needs.” He went on: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.

  Yet Coolidge was not an absolutist about government spending. Above all, government existed to assure peace and law, without which economic activity would be crippled. In short, those who assert Coolidge was a believer in classical laissez faire are wrong. As he stated:It would be difficult, if not impossible, to estimate the contribution which government makes to business. It is notorious that where the 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.

  In between the State of the Union message and the Inaugural Address the president delivered a speech in which he uttered the words to which detractors habitually refer when they discuss Calvin Coolidge: “the chief business of the American people is business.” On January 17, 1925, Coolidge spoke before the American Society of Newspaper Editors, the talk entitled “The Press Under a Free Government.” Although Coolidge delivered scores of such addresses before special interest groups, this one was better reasoned than most of his talks. In the middle of the speech, the president said: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 opinion 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 moving impulses of our life [emphasis added].

  The next day’s New York Times headlined the speech: “Coolidge Declares Press Must Foster America’s Idealism.” Subheads added: “In Address to Editors, He Warns Them Against the Evils of Propaganda,” and, “Financially Strong Journalism, He Says, is Not Likely to Betray the Nation.” In the second paragraph the Times reporter wrote, “President Coolidge declared that the cause of liberty was dependent upon the freedom of the press, saying that under a system of free government it was highly important that the people could be correctly enlightened.”

  There was no mention in the newspaper story about “the chief business of the American people….”

  Indeed, Coolidge’s speech actually praised idealism and criticized materialism:It is only those who do not understand our people, who believe our national life is entirely absorbed by material motives. 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. I cannot repeat too often that America is a nation of idealists. That is the only motive to which they ever give any strong and lasting reaction. No newspaper can be a success which fails to appeal to that element of our national life. It is in this direction that the public press can lend its strongest support to our government. I could not truly criticize the vast importance of the counting room, but my ultimate faith I would place in the high idealism of the editorial room of American newspapers.

  So in the end Coolidge appears to be saying that, while he knows newspapers are businesses and want to show profits, he has confidence such matters will not sway reporters and editors.

  Coolidge often struck a similar note in other of his speeches. On July 5 of the following year, speaking in Philadelphia at the celebration of the 150th anniversary of the Declaration of Independence, he said:We live in an age of science and of abounding accumulation of material things. These did not create our Declaration. Our Declaration created them. The things of the spirit come first. Unless we cling to that, all our material prosperity, overwhelming though it may appear, will turn to a barren sceptre in our grasp.

  On June 11, 1928, in a speech dealing with the budget, Coolidge put it this way: “Prosperity is only an instrument to be used, not a deity to be worshiped.”

  Still, the phrase, “the chief business of America is business,” (most of the time the word “chief” is dropped, making it sound even more pro-business) remains the one scholars, textbook writers, and journalists fall back on to characterize the man and the age.

  Those who believe that Coolidge was pro-business occasionally point to his actions during the great Mississippi flood of 1927. During this period Congress mounted major efforts for flood control, which Coolidge supported feebly. In the spring of 1927 there were severe rainstorms in the Mississippi Valley, inundating 4 million acres and causing property losses of more than $300 million. In Baton Rouge, Louisiana, the Mississippi crested at forty-seven feet, a record that has not been surpassed. Business activity ground to a halt. There were also floods in New England, though of lesser severity. As many as 1.5 million people were homeless, at a time when the population was 120 million.

  Hoover was placed in charge of relief efforts, and governors in New England and the Midwest called upon the federal government for assistance. For months Coolidge resisted, holding that the states were responsible for dealing with such matters. Then, in his December 1927 message to Congress, he did ask for flood control legislation, but with much of the burden borne by property owners, and more in the form of loan
s than in outright grants. As pressures for additional funding developed, however, Coolidge relented, and in February 1928 he supported a $180 million program with more of the money to come from the government. His congressional critics, especially those from affected areas, said this was inadequate, since damages amounted to close to $1.4 billion.

  Under the terms of a measure introduced by Democratic Congressman Marvin Jones of Texas, the federal government would not only assume responsibility for this flood control, but would also provide future assistance in calamities of this nature. Coolidge initially fought this measure, not only because it would cripple his financial program, but also on the principle that the government should not back programs assisting one segment of the population at the expense of others. The logic that ruled in McNary–Haugen applied here as well. During his April 10 press conference, he said:The flood control legislation is getting into a very unfortunate situation. I was afraid it would, when it became apparent that there was great reluctance on the part of Congress to have any local contribution. Of course, as soon as that policy is adopted, then it becomes a bestowal of favors on certain localities and naturally if one locality is to be favored, all the other localities in the United States think they ought to come in under the same plan and have their floods taken care of. The bill, of course, is an entire reversal of the policy that has been pursued up to the present time, which was that of helping the locality. This undertakes to have the United States go in and assume the entire burden….

  It leaves the United States government also to pay all the major costs of maintenance, which it has never done before. It almost seems to me as though the protection of the people and the property in the lower Mississippi that need protection has been somewhat lost sight of and it has become a scramble to take care of the railroads and the banks and the individuals that might have invested in levee bonds, and the great lumber concerns that own many thousands of acres in that locality, with wonderful prospects for contractors.

  Coolidge thus indicated that a prime reason he opposed the measure was that he wanted to withhold assistance not from individuals, but from business interests that would profit from such aid.

  Congress ignored Coolidge, and in April approved a $1.4 billion flood control measure, with all the money to come from the federal government. The final legislation, agreed upon in May, had a price tag of $500 million, and placed responsibility for future flood control in the hands of the Army Corps of Engineers. While often ignored or downplayed in discussions of the Coolidge administration, the flood control measure marked an important step in the expansion of government responsibilities and obligations, which Coolidge hadn’t wanted to take. It set into motion a major program of river and harbor improvements that continued into the Hoover and Roosevelt administrations.

  In other areas, the president supported merchant marine expansion, and, while criticizing naval expenditures, he increased those for the Army Air Corps. He also accepted public works projects. Secretary Hoover was an ardent believer in the expansion of hydro power in the West, in particular the development of the Colorado River basin, and as early as 1922 he set to work on an enterprise that would culminate in the construction of the Hoover Dam. Coolidge did not voice any objection to this plan and permitted Hoover, together with Interior Secretary Hubert Work, to go ahead.

  Coolidge was a triumphant if morose figure in this period. The progressives continued to view him as a tool of business, the farm bloc as the enemy of rural America, and the intellectuals as the personification of Babbitry. But those who belittled Coolidge did not explore the record itself, especially that of the Justice Department. Under Coolidge the government initiated more than seventy antitrust suits, more than under any of his predecessors, but admittedly most of them were minor. When National Cash Register was found guilty of price fixing, it was fined $2,000, but on appeal it was reduced to $50. Rumor had it that Coolidge advanced Attorney General Harlan Fiske Stone to the Supreme Court was because Stone was about to initiate an antitrust action opposed by the president, against Aluminum Corporation of America, a key Mellon holding. Some progressives, however, protested that as attorney general Stone had been less than energetic in prosecuting his predecessor, Daugherty, even though he fired William Burns, the chief of the Bureau of Investigation, who was suspected of having conspired with Daugherty to block the Teapot Dome matter. Stone was nonetheless confirmed by a large majority.

  In the three most important antitrust cases—against Standard Oil of Indiana, the cement manufacturers, and the maple flooring interests—the government lost on appeal. Coolidge named William E. Humphrey, a lawyer for the lumber industry, to the Federal Trade Commission (FTC). During the Coolidge years, with individuals like Humphrey on board, the FTC did little.

  Coolidge’s critics also might have charged him with being ineffectual and timid and with ignoring important issues. The president spoke out on the abstract issue of the patriotism of black Americans and immigrants, but he refused to go beyond that. In an October 1924 speech on “Toleration and Liberalism,” Coolidge told an Omaha audience:Well-nigh all the races, religions, and nationalities of the world were represented in the armed forces of this nation, as they were in the body of the population. No man’s patriotism was impugned or service questioned because of his racial origin, his political opinion, or his religious convictions. Immigrants and the sons of immigrants from the central European countries fought side by side with those who descended from the countries which were our allies; with the sons of equatorial Africa; and with the Red men of our own aboriginal population; all of them equally proud of the name American.

  But he wouldn’t take the next step—confronting the bigots by discussing specifics, not philosophy. Nor would he denounce the Klan directly, as had the other major candidates. During the 1924 campaign, the Brooklyn Eagle, which backed the Democratic ticket, chided Coolidge on this point:With candidate Davis and candidate La Follette out flatly and squarely against the hooded night riders of the anti-negro and anti-Jew and anti-Catholic Ku Klux Klan, candidate Calvin Coolidge, Puritan of the Puritans, coming of the stock from which the old Know-Nothings were chiefly recruited, seems to imagine that without denouncing the Klan he can avoid loss of votes by saying nice things about the classes that are the victims of the Klan’s hostility.

  True, but as noted, he did not campaign in 1924 and said next to nothing about the other issues. He forcefully opposed suggestions that Charles Roberts, a black dentist from Harlem whom the GOP nominated for a House seat, be asked to step down. In his letter on the subject Coolidge said: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 wherever assigned in defense of the nation of which they are just as truly citizens as any others. The suggestion of denying any measure of their full political rights to such a great group of our population as the colored people is one which, however it might be received in some other quarters, could not possibly be permitted by one who feels a responsibility for living up to the traditions and maintaining the principles of the Republican Party.

  How far would he go with this belief? Attorney General John Sargent wrote:From time to time the president was much troubled by the insistent discrimination by white employees against the colored people employed by the department—such, for instance, as insistence that they would not work in the same room, at the same kind of work. On one occasion some outburst on the subject that had occurred was brought up by a cabinet office. After a general discussion the president said:

  “Well, I don’t know what you can do, or how you will solve the question, but to me it seems a terrible thing for persons of intelligence, of education, of real character—as we know many colored people are—to be deprived of a chance to work because they happen to be born with a different colored skin. I think you ought to find a way to give them an even chance.”

  This may not seem much by the standards of our time, and there is no record of Coolidge having taken a
ction to change the situation. But presidents from the beginning of the century to the end of World War II made disparaging statements or indicated insensitivity on race, and there is no evidence that Coolidge thought or said anything inconsistent with his belief in a colorblind society.

  His stance on the immigration law was quite similar. Although Coolidge opposed the law’s Japanese exclusion, he would not veto it. In effect, the charge that Coolidge was a tool of business cannot be convincingly demonstrated, but his timidity—his unwillingness to take political risks—can be seen time and again throughout his life.

  Likewise, his lack of boldness stands out in his refusal to capitalize on his personal victory in 1924 in respect to Congress that year. After the election, the congressional Republicans were in a muddle. The regular Republicans in 1925 were as intent as the regulars in 1913 had been to punish the progressive defectors, but with a difference: in 1913 the GOP did not have control of Congress, but in 1925 they did. In 1913, moreover, Roosevelt had formed a political party, but La Follette had refused to do so. The congressional regulars sought vengeance, which was merely symbolic, even though conciliatory gestures might have worked wonders.

  Their chief target was La Follette, who was quite ill and not likely to last out the year. La Follette, Smith Brookhart of Iowa, and Lynn Frazer and Edwin Ladd of North Dakota were read out of the party on November 28, and when Congress convened, stripped of their seniority on committees. It was symbolic because it didn’t change matters much in the Senate, but it was foolhardy because it assured that these four, together with Henrik Shipstead, the Farmer–Laborite from Minnesota, and the rest of the bipartisan farm bloc, would retaliate by harassing the administration.