Whatever respite or solace Calvin Coolidge may temporarily have conferred upon the nation, Americans during the 1920s could not keep the world from turning. The system of limited government and economic deregulation that he had cultivated was elegantly false and perilously flawed, carrying within it the seeds of its own dissolution.

I.
For an administration and a party wracked by multiple scandals, Calvin Coolidge turned out to be a gift from heaven. Elevated to national prominence by his relentless opposition to the Boston police strike of September 1919, Coolidge unexpectedly became a viable candidate for the vice-presidency, overcoming the doubts of Republican stalwarts who thought him too conservative to balance the ticket. Six months earlier he had been a political nonentity. But after he decimated the policemen’s union in Boston and declined to reinstate those officers who had walked off the job, Coolidge won the esteem of party regulars, such as Charles W. Fairbanks, the former Senator from Indiana and the vice president during Theodore Roosevelt’s administration. Fairbanks wrote to L.K. Tolbert of the Chicago Union League Club that “the ticket you suggest, ‘Harding and Coolidge,’ would sweep the country like a whirlwind, and re-establish an American government in Washington.”[1] Resolute in his devotion to law and order, Coolidge was the first in what has now become a long series of American politicians to improve their prospects by cracking down on political upheaval and curtailing social protest.

Coolidge’s approach to government had always rested on a few basic principles. His foremost conviction was in the decency and vigor of the American social, political, and economic order. Those who assailed it were mistaken or delusional, either fools or radicals. Private property and private enterprise were, for Coolidge, the foundation of the American way of life. Property owners must be free to use their property as they saw fit, with minimal interference from government. The market itself should operate without encumbrance, distributing its rewards to those worthy of receiving them. Finally, Coolidge embraced American exceptionalism. By virtue of their enlightened institutions and their unique moral sensibilities Americans were the greatest people on earth and the United States the greatest nation in history.

Coolidge’s brand of conservatism was not expediently political. At odds with his time, Coolidge was, as the journalist William Allen White characterized him, a “Puritan in Babylon.”[2] He rejected the excesses of the 1920s, and instead espoused tradition, rectitude, and piety. He did not drink, smoke, gamble, or philander. Since he was more politically astute than his predecessor and more ideologically committed to the defense of limited government and the free market, Coolidge posed a more formidable danger to the legacy of Progressivism. The government, he intoned, created no wealth. If left unfettered, it would only consume the wealth that industrious hands had made. Government, in Coolidge’s view, had thus to remain small, honest, and frugal. “The power over the purse,” he said in his Third Annual Message to Congress, delivered on December 8, 1925, “is the power over liberty.” As president, he sought to avoid costly wars, to encourage the expansion of foreign trade, and to remove burdensome regulations that hampered economic innovation, growth, and development. For the good of the country, businessmen must be allowed to profit from their labors. The market itself, Coolidge reassured Americans, would in time rectify any inequities to which corporate power had given rise. But, he concluded, “if abuses exist, it was not the concern of the federal government to attempt their reform.”[3]

True to his word, Coolidge remained sympathetic to business, and did little to challenge the privileges that corporations enjoyed, even as he denied their durability and significance. During his presidency the Justice Department initiated more than seventy anti-trust lawsuits. But the government lost on appeal the three most important cases against Standard Oil of Indiana, cement manufactures, and maple flooring companies, and entered into consent decrees in a third of the others before they ever went to trial. The courts even reduced the most severe penalty that the Justice Department imposed, a fine of $2,000 levied against an official of the National Cash Register Company who had been convicted of price fixing, to $50, which sum the government did not even bother to collect. When Attorney General Harlan Fiske Stone, the former dean of the Columbia Law School and a man of unquestioned integrity, moved to break up the Alcoa Aluminum Company, Coolidge nominated him to the Supreme Court. Stone’s successor, John G. Sargent, never brought the proposed suit against Aloca, a company that Andrew Mellon, the Secretary of the Treasury, administered.

Determined to reduce federal expenditures, Coolidge either weakened regulatory agencies by placing them under the authority of directors who failed to enforce the laws against unfair business practices or else eviscerated their budgets. Secretary of the Treasury Mellon and budget director Herbert M. Lord shared the president’s fiscal conservatism. In practical terms, their insistence on balanced budgets meant fewer inspections of food and drugs and more restrained efforts to safeguard public lands. Save for expenditures on the presidential yacht, Mayflower, Coolidge even ordered cuts to the budgets of the War and Navy Departments. There were fewer towels in White House lavatories and reporters had to buy their own pencils to take notes at press conferences. But these cutbacks worked. Revenues surpassed expenses every year during Coolidge’s tenure. The government, for example, ran a surplus of $677 million in 1925, to which it added another $607 million in 1927.

Coolidge was reluctant to use the surplus, even to assist the victims of the Mississippi flood of 1927, fearing that by doing so he would obligate the national government to afford relief in all future calamities.[4] Precedent was in his favor. Forty years earlier, Democratic President Grover Cleveland had vetoed a bill to aid Texans suffering from drought, and Theodore Roosevelt had demanded that local banks underwrite the cost of combating the yellow fever epidemic in New Orleans. Coolidge had no wish to break with this tradition and unduly to expand the responsibilities of government.

On April 17, 1927, the day after flood waters inundated Mississippi, Coolidge did summon a meeting of his cabinet at which he appointed the Secretary of Commerce, Herbert Hoover, to direct the rescue and relief efforts. As he always did, Hoover threw himself into the task wholeheartedly, but the funds at his disposal proved woefully inadequate. Charity and philanthropy could not generate all the money that Hoover needed. Despite widespread criticism (typical was an editorial in the Paducah, Kentucky News-Democrat that speculated whether Coolidge had either “the coldest heart in America or the dullest imagination, and we are about ready to believe he has both”), Coolidge refused to convene a special session of Congress to enact an emergency appropriations bill.

Only late in 1927, when Representative Frank Reid of Illinois, the Republican chairman of the House Flood Control Committee, conducted public hearings, did Coolidge yield. In his Annual Message of 1927, he acquiesced in federal flood-control measures, but still required local governments and property owners to pay most of the costs. Predictably, deadlock ensued. In time, Coolidge offered a partial concession on local contributions. To preclude the national government from having to assume a large and permanent role in confronting national disasters, Coolidge specified that only the areas flooded in 1927 could depend more on federal than on state and local aid. After Congress also rejected this overture, Coolidge became intransigent, refusing to make additional concessions. He told an aide that he considered the relief legislation “the most radical and dangerous bill that has had the countenance of the Congress since I have been president.”[5]

He objected to reporters that Congress had “lost sight of” its original purpose to help those trying to recover from the devastation. Instead, he complained, the proposed legislation had “become a scramble to take care of the railroads and the banks and the individuals who may have invested in levee bonds, and the great lumber concerns that own many thousands of acres in that locality, with wonderful prospects for the contractors.”[6] Displaying both his regional New England prejudice and his political sagacity, Coolidge also wondered aloud whether, given the corruption rampant in southern politics, any of the relief money would reach those whom it was intended to assist.

With the House and Senate struggling to reconcile different versions of the relief bill, Coolidge finally intervened to broker a settlement. The compromise recapitulated the terms set forth in his Annual Message that the national government would assume financial liability only for the areas flooded in 1927. But Coolidge agreed to allocate more money than he had wanted to lessen contributions from the most impoverished regions that the flood had devastated. The relief bill also established a federal board to supervise the repair or replacement of the levies that held back the Mississippi River and its tributaries. Declaring the measure “the best that can be obtained from Congress,” Coolidge grudgingly accepted it, tacitly assenting to the precedent it embodied: that the national government must bestow at least some aid in the aftermath of natural disasters and other crises, if for no other purpose than to alleviate human suffering.[7] But Coolidge revealed his displeasure at what had become for him an unpalatable necessity. He refused to host a ceremony in the White House, instead signing the bill in private on May 15, 1927, just after he had eaten his lunch.

II.

In the meantime, Coolidge named men such as William E. Humphrey to lead federal agencies that they despised. A former congressman from Washington State and an attorney for the lumber industry, Humphrey took over the Federal Trade Commission, having previously denounced it as “an instrument of oppression and disturbance and injury instead of help to business. No other government agency ever had a practice so tyrannical and so repugnant to every sense of justice.”[8] Given this attitude, it should come as no surprise that Humphrey diminished the number and narrowed the scope of investigations that the FTC conducted. The agency kept complaints secret until they were adjudicated, endorsed the private settlement of disputes, and permitted businessmen to regulate their own conduct.

Trimming the costs of government gave impetus to Secretary Mellon’s campaign to decrease taxes. Resistance from the Democrats notwithstanding, Congress approved tax cuts in 1924, 1926, and 1928. In his Annual Message for 1924, Coolidge proclaimed that:

The country is now feeling the direct stimulus which came from the passage of the last revenue bill, 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 amount 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. Moreover the effect of the present method of this taxation is to increase the cost of interest on productive enterprise and to increase the burden of rent. It is altogether likely that such reduction would so encourage and stimulate investment that it would firmly establish our country in the economic leadership of the world.[9]

Mellon asserted that he had undertaken to reform the tax code to aid the poorest Americans, exempting those whose annual net incomes fell below $5,000 from paying any income tax at all. The truth is rather more complicated. Various exemptions, which Mellon himself introduced, gave a boon to those whose incomes exceeded $100,000. The Revenue Act of 1926, for instance, lowered the taxable income of persons earning $1 million a year from more than $600,000 to $200,000. During the six years between 1924 and 1929, some of the wealthiest Americans paid no income tax at all. Mellon personally benefitted. George Norris, the Progressive Republican Senator from Nebraska, objected that “Mr. Mellon himself gets a larger personal reduction than the aggregate of practically all the taxpayers in the state of Nebraska.”[10] In addition, between 1921 and 1929, until Speaker of the House John Nance Garner at last exposed his conduct, Mellon distributed clandestine refunds, credits, and abatements totaling $3.5 billion to various corporations and to individuals supportive of the Republican Party.

However reprehensible Mellon’s action was, promoting the interests of the wealthy was hardly the monopoly of Republicans. Among the more preposterous schemes, but one that turned out to have serious implications, was the bid of Pierre S. du Pont, the president of E.I. du Pont de Nemours & Company, to seize control of the Democratic Party. Like Mellon, du Pont found it unacceptable that the rich had to pay taxes at all. Instead, with the welfare of the American economy at stake, du Pont argued that working- and middle-class Americans, not the wealthy productive class or the corporations over which they presided, ought to bear the heaviest tax burden.

Together with John J. Raskob, an executive at both du Pont and at General Motors, du Pont set out to co-opt the Democratic Party and commit it to the repeal of prohibition. He and Raskob then proposed to tax beer. They estimated that the beer tax would produce annual revenues amounting at least to $1.3 billion, thereby permitting a 50 percent reduction in corporate taxes and the personal income tax. Workingmen could again drink, but they would have to pay more for the pleasure. To du Pont, Raskob, and their associates, this arrangement seemed a fair and equitable bargain.

To transform the conspiracy from fantasy to reality, du Pont and Raskob recruited Al Smith, the governor of New York and the Democratic nominee for president in 1928, as their unwitting ally. Once Smith had secured the Democratic nomination, he made Raskob, who had been a lifelong Republican, the chairman of the Democratic National Committee. Although Herbert Hoover defeated Smith in the election of 1928, Raskob maintained control of the Democratic Party for the next four years and helped to engineer the repeal of the eighteenth amendment in 1933. Coolidge may have been a fiscal conservative who insisted on balanced budgets, but so, too, were many Democrats. The main difference between the two parties was that the Republicans sought to tax working Americans through the mechanism of a national sales tax (another of Mellon’s innovations) while the Democrats worked to the same purpose by taxing the consumption of beer.[11]

Mellon also fashioned and implemented a coherent, if volatile, monetary policy for the United States, which entailed low interest rates at home and a restoration of the international gold standard. Low interest rates meant ample credit, which, Mellon reasoned, would accelerate capital investment and economic growth. Reinstatement of the gold standard would inspire confidence among those with money to lend, while offering a hedge against inflation and promising a fixed rate of conversion for national currencies.

Yet, the financial utopia that Mellon envisioned contained hidden perils. Despite low interest rates, Europeans continued to send money to the United States to evade the uncertain political and economic conditions that plagued the continent. As gold and currency flowed out of Europe, Mellon found that the international gold standard could be preserved only with an infusion of cash from American banks. The United States, of course, had to accept a considerable share of the blame for the economic disarray into which Europe had fallen. Although the United States exacted no reparations from Germany, according to the World War Foreign Debt Commission, the Allied nations (Great Britain, France, and Italy) owed the United States a combined $22 billion in outstanding debts. Coolidge made it clear that these loans must be repaid in full. “I am opposed to the cancellation of these debts,” he informed Congress, “and believe it for the best welfare of the world that they should be liquidated and paid as fast as possible.” He had no desire to be vindictive, to treat the former Allies of the United States as they had treated Germany. But reasonable expectations and decent conduct did not obviate financial commitments. “I do not favor oppressive measures, but unless money that is borrowed is repaid,” he warned, “credit can not [sic] be secured in time of necessity, and there exists besides a moral obligation which our country can not [sic] ignore and no other country can evade. Terms and conditions may have to conform to differences in the financial abilities of the countries concerned, but the principle that each country should meet its obligation admits of no differences and is of universal application.”[12] When Norman Davis and Thomas Lamont, two Wall Street investment bankers, suggested that the United States forgive the European debt as a gesture of mutual friendship and in the interest of worldwide economic stability, Coolidge declined their recommendation.

Coolidge’s obstinacy about the debt in part explains the unwillingness of the Allies to modify the reparation payments they demanded from Germany. Article 231 of the Treaty of Versailles, the so-called War Guilt Clause, required Germany to pay $33 billion plus interest. Coolidge was adamant that Allied debt be considered separately from German reparations, especially since the United States had not ratified the treaty, when, in fact, the debt and the reparations were inextricably linked. In addition, Coolidge’s preference for high tariffs limited the revenue that European nations could earn from trade with the United States, making it impossible for them to pay down their debts without inflicting higher taxes on their own citizens, and thereby further hindering the consumer economy at home.

In Germany, the economic situation rapidly deteriorated by the early 1920s. The German government had financed the war effort by taking out a series of short-term loans, which, in addition to the reparations, had now to be repaid. The steady depletion of German gold reserves and an adverse balance of trade, worsened by the need to import raw materials and food after the war, further depreciated the currency. The Allies had aggravated the problem by ordering Germany to surrender its merchant fleet, most of its gold supply, and considerable quantities of raw materials, making it nearly impossible for the Germans to effect an independent economic recovery.

The government of the Weimar Republic responded to the crisis by printing more money, with the inevitable consequences. Inflation soared to unmanageable levels. In 1914, the value of the German mark had been 4.2 to one American dollar; in 1919 it was 8.9 marks to the dollar. By the spring of 1921, one American dollar equaled 65 marks. Two years later, in August 1923, one dollar was the equivalent of 4.6 million marks, and by September one dollar was worth 9 million marks. Although estimates vary, by November, 1923, one dollar could be exchanged for 4 billion marks, although some sources calculate that the exchange rate was 4.2 trillion marks to the dollar. By any measure, the currency was worthless. The value of savings, pensions, and investments, which represented years of toil and thrift, had disappeared in an instant.

With the economy in ruins, the German government defaulted on reparation payments. In January 1923, even before the worst inflation occurred, Raymond Poincaré, the Premier of France, deployed French and Belgian troops to occupy the Ruhr, the main industrial region in Germany. The government urged already resentful workers not to cooperate with the occupying force. In response, they staged a general strike and carried out acts of sabotage. To support them, the government printed even more money, which only exacerbated conditions.

When Gustav Stresemann, the most able statesman in the Weimar government, became chancellor in August 1923, he determined to do all he could to revive the German economy. Although Stresemann’s ministry lasted only until November, his policies went a long way toward restoring economic stability and confidence. He first confirmed to the French that he expected shortly to resume making the reparation payments. He then issued a new currency backed by a mortgage on the one commodity that had kept its value: real estate. At the same time, he cut government expenditures by firing civil servants and by reducing the salaries of those who remained, while he increased government revenue by raising taxes. Although unpopular, Stresemann’s policies worked. Inflation began to recede.

Still hesitant to involve the United States in European affairs, Coolidge had no choice but to act. Armed with halting encouragement from the Secretary of State Charles Evans Hughes, two American financiers, Charles Dawes and Owen D. Young, undertook in 1924 to reorganize the system of international finance. Negotiations with Allied leaders resulted in changes to the Treaty of Versailles, lowering the amount that Germany owed to $26 million and authorizing a payment schedule of fifty-nine years. Dawes and Young also obtained new loans, most of them coming from American banks, to bolster the resurgent Germany economy.

The low interest rates that Mellon’s policies had engendered made possible this elegant performance of financial diplomacy. But these same low interest rates, which made borrowing so attractive, also created an unhealthy dependence of European nations on the American economy. American banks readily lent money to Germany. The Germans used the loans to make reparation payments to France and Great Britain. In their turn, the French and the British used the German funds to repay their war debts to the United States. During the late 1920s, the international monetary system was a house of cards waiting to collapse should American banks ever contract or withdraw access to credit.[13]

III.

Coolidge conducted American foreign policy at minimal expense. To curb military spending, he hoped to protect American interests around the world by tendering economic incentives or by enforcing economic sanctions. At Geneva during the summer of 1927, the administration sought to repeat the success of the Washington Naval Conference of 1921-1922, by restricting naval armaments and thereby forestalling a costly program to match the number of British and Japanese cruisers and submarines. Impolite, obtuse, and unprepared, Coolidge’s Secretary of State Frank B. Kellogg, who had replaced Charles Evans Hughes in 1925, ruined any chance of reaching an accord with the British by leveling gratuitous insults and issuing foolish ultimatums. The French and the Italians, meanwhile, did not even bother to send delegations.

Coolidge experienced somewhat better fortunes in his relations with the countries of the Western Hemisphere. Further to constrain military expenses, Coolidge sped up the removal of troops from the Caribbean and Latin America, which Harding had begun. He recalled American troops from Haiti and the Dominican Republic after finalizing treaties that granted American businessmen and investors almost complete jurisdiction over the finances of both countries. The administration also organized, armed, and trained local militias to operate as American surrogates, poised to suppress insurgent movements and to preserve law and order.

Nicaragua proved more difficult to subdue. After having brought the U.S. Marines home in 1925, Coolidge, much to his dismay, was obliged to send them back in 1926 to quell a vicious civil war. Coolidge also dispatched the veteran diplomat and former secretary of war Henry L. Stimson to discuss a peace agreement. Threatening to use the Marines to end unrest by force of arms if necessary, Stimson managed to persuade the warring factions of José Moncado and Adolfo Díaz to cease fighting and hold elections. They agreed, but one of Moncado’s lieutenants, Augusto César Sandino, repudiated the treaty, and, between 1928 and 1932, conducted an effective guerilla campaign against his Nicaraguan rivals and the American Marines, which resulted in the deaths of 42 Marines and at least 3,000 Nicaraguans, while stoking considerable anti-American sentiment.[14]

Delegates to the Conference of Western Hemisphere Republics, which met in Havana during 1928, nurtured this growing hostility, condemning the intervention of the United States into the politics of Latin America. The irony was not lost on Coolidge. Yet, the uncertain accomplishments of Coolidge’s foreign policy had done nothing to dissuade citizens from re-electing him four years earlier. His tax cuts, balanced budgets, low interest rates, and nominal regulation of the economy, along with a low-cost, if uneven, foreign policy, enhanced his popularity. By staging a tumultuous national convention in New York City, broadcast live on the radio, the Democrats had also done their part to ensure Coolidge’s re-election.

Delegates from the West and South favored the nomination of William Gibbs McAdoo, the former secretary of the treasury and the son-in-law of Woodrow Wilson. They advocated prohibition and also affirmed the ethnic and racial bigotry of the Ku Klux Klan.[15] Their opponents from the urban north and east, especially those who were immigrants and Roman Catholics, resented prohibition and spurned the racism and xenophobia of their counterparts. They championed the governor of New York, Al Smith. The vicious debates among Democrats revealed the profound, ethnic, cultural, and religious divisions that tormented both the party and the country. Voting began on June 30 and did not end until July 9 when, on the 103rd ballot, the Democrats endorsed a compromise ticket, nominating John W. Davis of West Virginia for president with Charles W. Bryan, the governor of Nebraska and the brother of William Jennings Bryan, as his running mate.

Davis had served as Wilson’s solicitor general between 1913 and 1918 and as the ambassador to Great Britain after the First World War, from 1918 to 1921. As solicitor general he had successfully argued in Guinn v. United States (1915) for the unconstitutionality of the Oklahoma “grandfather clause,” which exempted residents whose ancestors had been eligible to vote in 1866 from having to pass a literacy test, a law that effectively disenfranchised blacks. Davis’s vindication of black voting rights, and the antipathy he felt toward the Klan, made him unpopular among conservative southern Democrats.[16] Worse for the party, at the time of his nomination, Davis was a senior partner in a Wall Street Law firm that represented J.P. Morgan and Company as its principal client, rendering him an unpersuasive critic of wealth and privilege. His celebration of private enterprise and individual initiative throughout the campaign made his economic policies virtually indistinguishable from those of Coolidge.

The genuine alternative to both Coolidge and Davis was Senator Robert La Follette of Wisconsin, who, as the candidate of the Progressive Party, sounded the lone voice of dissent in the election of 1924. La Follette vowed to dismantle the tyrannical power of “the private monopoly system,” which exercised “absolute control” over the government, the economy, and the lives of the American people.[17] He and his running mate, Senator Burton Wheeler of Montana, sanctioned the right of workers to bargain collectively, proposed a constitutional amendment to restrain the power of the federal judiciary, forbade conscription, and decreed that a popular referendum must take place before the Senate could declare war. They lamented the influence of corporations on the American economy and the intervention of the military in overseas conflicts.

Coolidge won in a rout. He received 15,723,789 popular votes (54 percent) and 382 electoral votes, carrying thirty-five states. Davis got 8,386,242 popular votes. His 28.8 percent constitutes the smallest percentage of the popular vote that any Democratic presidential nominee has ever attained.[18] He collected 136 electoral votes and carried just twelve states, all of them, with the partial exception of Oklahoma, in the Democratic South. Americans resolutely discarded the Progressive agenda in 1924, even though the Progressive Party ran ahead of the Democrats in eleven states. La Follette attracted only 4,831,706 popular votes, or 16.6 percent, and obtained a mere 13 electoral votes, carrying only his home state of Wisconsin.

After winning such a spectacular victory and retaining his popularity with most Americans, Coolidge’s decision not to seek re-election four years later was as bewildering as it was unexpected. Distributed to reporters on August 2, 1927, four years to the day on which he had become president, Coolidge’s announcement provoked ample conjecture and debate. What were his real motives, journalists and politicians wondered? Was he serious about withdrawing his candidacy, or was he cleverly testing the extent of his support among voters and party regulars? But Coolidge was adamant. Having celebrated his fifty-fifth birthday a month earlier, on the Fourth of July, he was beginning to worry about his age and his health, and he did not wish to subject his wife to the hardships and anxieties that another four years in the White House would bring.

Confident that he was leaving behind a stable government and a flourishing economy, Coolidge, like most respected economists, saw nothing ominous in the surge of bank failures, farm foreclosures, slowing auto sales, and declining construction that had taken place throughout 1927. He had calmed the tumult that followed Harding’s death and the scandals that tarnished the administration. There was no national emergency that wanted attention. He had entrusted the free market to its own devices and it had delivered prosperity, apparently ushering in a New Era of unending affluence. He had kept the peace in the Western Hemisphere and in Western Europe. Having done his utmost to contract the size and expense of government, he had no unfinished agenda to complete. Few Americans would have dissented from the image of the United States and the world that Coolidge presented in his final message to Congress of December 4, 1928:

No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment, harmonious relations between management and wage earner, freedom from industrial strife, and the highest record of years of prosperity. In the foreign field there is peace, the good will which comes from mutual understanding, and the knowledge that the problems which a short time ago appeared so ominous are yielding to the touch of manifest friendship. The great wealth created by our enterprise and industry, and saved by our economy, has had the widest distribution among our own people, and has gone out in a steady stream to serve the charity and the business of the world. The requirements of existence have passed beyond the standard of necessity into the region of luxury. Enlarging production is consumed by an increasing demand at home and an expanding commerce abroad. The country can regard the present with satisfaction and anticipate the future with optimism.[19]

Recognizing his imminent departure from public life, Coolidge had seen to it that all was right with the world.

IV.

Several days earlier, Coolidge had told his secretary, Everett Sanders, that if he were re-elected, “I should serve almost ten years in the presidency, which is too long for a president in this country.” He then handed Sanders the note that he intended for members of the press. With admirable brevity, he had written: “I do not choose to run for president in 1928.”[20] Sanders understood that he could not deter Coolidge, and so he did not try. Coolidge had done his part to keep the country and the world from succumbing to the forces of darkness, and now it was time for him to go.

There is some evidence that the death of Coolidge’s sixteen-year-old son, Calvin Jr., who died suddenly from an infection in August 1924, had robbed Coolidge of what zest he had for public life. He no longer relished the presidency, if he ever had. It had become for him more of an affliction than an honor. He preferred to retire. Coolidge also seems to have been genuinely concerned about the length of time he would have spent in office were he to win a second full term in 1928. The presidents of republics should never be permitted to accumulate too much power.

Still, critics ridiculed his apparent lethargy and indifference. Coolidge had “a genius for inactivity,” confessed Walter Lippmann in 1926. “No one has ever worked harder at inactivity, with such force of character, with such unremitting attention to detail, with such conscientious devotion to the task. Inactivity is a political philosophy and a party program with Mr. Coolidge, and nobody ought to mistake his unflinching adherence to it for a soft and easy desire to let things slide.”[21] But the qualities that Lippmann disparaged in the president were precisely those that many Americans admired about him, as Lippmann himself acknowledged.

Coolidge was the twentieth-century prophet of limited government. He sought to prevent, or at least to impede, government activity and involvement, applying, to Lippmann’s regret, “a wet blanket to an enthusiast” and “diverting attention from government” by employing “dullness and boredom as political devices…. To every yawp Mr. Coolidge can match a yawn.”[22] To his credit, Coolidge was not seduced by the power that accompanies political engagement. He shunned it. Coolidge shared Americans’ distaste for commotion and disturbance. He took seriously the mandate voters had conferred upon him to do as little as possible, certainly not to embark on any troublesome and expensive adventures either at home or abroad. His brand of politics reflected the ideals of satisfied men living in a contented society. Such men were resolved to uphold the status quo from which so many rewards had accumulated. Coolidge’s presidency was the quiet after the tempest of Progressive reform and war world.

But whatever peace of mind Coolidge purchased for the American people came dear. If, as Lippmann alleged, he really had diverted awareness from government in all matters of public importance, then his tactics best advanced the interests of the business and financial elite, which preferred not only to escape government supervision but also public notice. Businessmen and financiers were afterwards free to collect the recompense of an unregulated economy, low interest rates, and enormous tax cuts without scrutiny, interference, or protest. If, on the one hand, Coolidge was the consummate statesman of the Republic who eschewed power, he was, one the other, a menace to democracy in his efforts to install a docile citizenry inattentive to the responsibilities of political life. The irony is as palpable as it is distressing.

Writing in the early 1830s, Alexis de Tocqueville foresaw that despotism, however benign its character, would prevail in democratic societies when the citizens renounced the obligations of self-government. They would inadvertently come to venerate two incompatible masters: the desire to be protected and led and the desire to be free and independent. Finding it impossible to desert one and love the other, they tried to satisfy both. It was a hopeless enterprise. Such a degraded people could rally themselves from time to time to select their masters, Tocqueville conceded, while they gradually lost “the faculty of thinking, feeling, and acting for themselves.” Under such circumstances, government

does not break men’s will, but softens, bends, and guides it; it seldom enjoins, but often inhibits, action; it does not destroy anything, but prevents much from being born; it is not at all tyrannical, but it hinders, restrains, enervates, stifles, and stultifies so much that in the end each nation is no more than a flock of timid and hardworking animals with the government as its shepherd.[23]

The antithesis of the flamboyant ethos of the 1920s, Coolidge’s values recommended him to the American people. The very model of old-fashioned American rectitude, he was virtuous in his austere devotion to frugality, hard work, and self-denial. He let the American people relax and indulge in the pleasures, fads, and dreams that were endless sources of amusement and distraction. Absorbed in their trivial and meaningless pursuits, Americans were diverted from engaging the serious business of life, except for making money, which itself soon turned into a kind of game that no one could win.

Wall Street earnings soared during the final years of the Coolidge administration in what pundits labeled the “Coolidge Market.” But structural weaknesses lingered just beneath the surface of the economy. As early as 1926 the housing market had begun to slow. The sale of durable goods weakened in 1927, and construction ebbed in 1928. Meanwhile, Coolidge’s economic reforms had enriched those who were already wealthy. The cuts to both the personal and corporate income tax that he and Mellon orchestrated had, as by design, conferred on individuals and corporations alike substantially more money to invest. As corporate profits rose, buying common stock became an even more attractive option. The value of stock continued to appreciate and a lengthy bull market emerged and grew.

The low interest rates that Coolidge had brought about facilitated the practice of margin trading, the most enticing yet diabolical way to purchase stock. An investor who wished to trade on the margin borrowed money from a broker to buy securities, using the securities themselves as collateral. As stock prices rose and kept rising, the allure of brokers’ loans and margin trading became irresistible. After 1926, and persisting until a few weeks before the collapse of the New York Stock Exchange in October 1929, money poured into the stock market. Investment soon gave way to speculation motivated by the desire to get rich quick. Instead of paying modest returns and reinvesting profits, corporations increased both dividends and capital gains. By early 1928, investors entered the market frenzy based solely on expectations of short-term profits rather than of long-term stability. Although only ten percent of Americans owned stock, margin trading had enabled the middle class to join the furor of buying and selling. They bound their economic future, and that of the nation, to the upward trajectory of stock indices. Few contemplated the outcome should stock prices fall as suddenly and as fast as they had risen.

Americans could ignore or tolerate the vast inequality of income that haunted American society as long as prosperity endured. But the majority of Americans gained nothing from the upsurge in corporate profits that occurred during the Coolidge presidency. At the time Coolidge left office in March of 1929, the Brookings Institute reported that more than fifty percent of American families lived at or below the level of subsistence. They could not participate in the bounty of the New Era or take advantage of the Coolidge Prosperity. They were powerless to contribute to the welfare of the American economy, or even to improve their own modest standard of living.

On the advice of such renowned economists as William Z. Ripley of Harvard University, Coolidge did nothing to quell the speculative mania or to rebalance the inequitable distribution of income. The wisest counsel that he received instructed him that there was nothing he or the government could do. The revolutionary transformation in manufacturing, commerce, and finance that had taken place since the turn of the century had at last tamed the volatility of the capitalist system, so much so that prosperity need never end. “There is no cause for worry,” Secretary of the Treasury Mellon confirmed. “The high tide of prosperity will continue.”[24] Government should do no more than get out of the way and prepare the American people to enter the glorious new millennium.

Most Democrats either participated in the national euphoria or else feared that their political fortunes would suffer irrevocable damage were they to vilify figure as popular as Coolidge. The stock market seemed to justify the reverence for Coolidge and the faith in his policies, until just as abruptly it destroyed that trust. Whatever respite or solace Coolidge may temporarily have conferred upon the nation, Americans during the 1920s could not keep the world from turning. The system of limited government and economic deregulation that he had cultivated was elegantly false and perilously flawed, carrying within it the seeds of its own dissolution.

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Notes:

[1] Quoted in Francis Russell, The Shadow of Blooming Grove: Warren G. Harding and His Times (New York, 1968), 343.

[2] William Allen White, A Puritan in Babylon: The Story of Calvin Coolidge (New York, 1938); see also R. L. Duffus, “The Character of Coolidge: William Allen Whites’s Portrait of ‘A Puritan in Babylon,’” New York Times (November 20, 1938), 87. John Lukacs offers a rather different impression of Coolidge that positions him more fully in his times. Rather than seeing Coolidge as a “taciturn Yankee,” a “Last Puritan” who had “certain private convictions,” Lukacs portrays him as an “unsure man” who was anxious to cultivate his public image, even to the point of manipulation and dishonesty. See A New Republic: A History of the United States in the Twentieth Century (New Haven, CT., 2004), 268-69.

[3] Calvin Coolidge, Third Annual Message (December 8, 1925) Miller Center, University of Virginia.

[4] Since the fall of 1926, unusually heavy and frequent rains had pelted the Midwest and upper South. On April 16, 1927 the unfolding disaster assumed new proportions when a 1,200-foot stretch of a levee collapsed in southern Illinois. Five days later, the torrent broke through another levee down river at Mounds Landing, Mississippi. The flood waters swept away hundreds of blacks working to fortify the river banks. In the days ahead, the disaster killed hundreds, displaced hundreds of thousands more, and caused damages totaling hundreds of millions of dollars. See John Barton Payne, The Mississippi Valley Flood Disaster of 1927: Official Report of the Relief Operations (Washington, D.C., 1929). The Mississippi Flood has received ample and excellent scholarly attention. See Pete Daniel, Deep’n as it Come: The 1927 Mississippi River Flood (New York, 1977); John M. Barry, Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America (New York, 1997); Susan Parrish, The Flood Year 1927: A Cultural History (Princeton, NJ, 2017). A more specialized study that should not be missed is Richard M. Mizelle Jr., Backwater Blues: The Mississippi Flood of 1927 in the African American Imagination (Minneapolis, 2014). Fans of the Delta Blues should listen to Charlie Patton’s harrowing firsthand account of the flood in “High Water Everywhere, Parts I & II,” Snapper Music/Catfish Records, SBluesCD505X, 2001.

[5] Quoted in David Greenberg, Calvin Coolidge (New York, 2006), 135. See also William E. Leuchtenburg, The American President: From Teddy Roosevelt to Bill Clinton (New York, 2015), 131.

[6] Quoted in Greenberg, 135.

[7] Ibid.

[8] William E. Humphrey, “A Friend of Honest Business,” Nation’s Business XVI (June 5, 1928), 31. See also C. Cullum Davis, “The Transformation of the Federal Trade Commission,” Mississippi Valley Historical Review 49/3 (December, 1962), 437-55 and Daniel A. Crane, “Debunking Humphrey’s Executor,” George Washington Law Review 83/6 (November, 2015), 1835-75.

[9] Calvin Coolidge, Second Annual Message (December 3, 1924), Miller Center, University of Virginia.

[10] Quoted in Robert S. McElvaine, The Great Depression, America, 1919-1941, Twenty-Fifth Anniversary Edition (New York, 2009), 23.

[11] Perhaps my view will not be widely shared, yet I cannot help but regard this episode as, in important respects, an ironic and vicious reversal of G.K. Chesterton’s novel, The Flying Inn, published in 1914. Although Chesterton more fully explored the general crisis of Western civilization, for readers unfamiliar with novel, the representatives of big government and big business attempt to exploit and oppress the English lower classes by depriving them of the right to take a drink rather than by taxing their thirst.

[12] Coolidge, Second Annual Message (December 3, 1924).

[13] See William Ashworth, A Short History of the International Economy Since 1850 (New York, 1962).

[14] Only when Juan Bautista Sacasa was elected president in 1932 did the Marines at last leave Nicaragua. With his nephew, Anastasio Somoza, and supported by the Guardia Nacional, which the Marines had trained, Sacasa established one of the most brutal dictatorships in the Western Hemisphere. After a peace conference held on February 21, 1934, Sacasa assassinated Sandino and his brother, Socrates. See Neil Macaulay, The Sandino Affair (Chicago, 1967).

[15] Following a bitter floor fight in which delegates shouted down William Jennings Bryan, the Democrats did manage to include a plank in the party platform denouncing the Klan. See David Burner, The Politics of Provincialism: The Democratic Party in Transition, 1918-1932 and Lawrence W. Levine, Defender of the Faith: William Jennings Bryan, the Last Decade, 1915-1925 (New York, 1965).

[16] Davis’s legal and political views were complex and seemingly inconsistent, if not contradictory. Although he supported black voting rights, he opposed anti-lynching legislation. In 1952, he unsuccessfully defended the doctrine of separate-but-equal in Briggs v. Elliott, one of the five companion cases to Brown v. Board of Education. See William Henry Harbaugh, Lawyer’s Lawyer: The Life of John W. Davis (New York, 1973) and Sydnor Thompson, “John W. Davis and His Role in Public School Segregation Cases—A Personal Memoir,” Washington & Lee Law Review 52/5 (January 1, 1996), 1679-97.

[17] Robert M. La Follette, “Government by Private Monopoly,” in International Brotherhood of Blacksmiths’ Drop Forgers and Helpers Monthly Journal 25/1 (January, 1923), 25 and Machinists’ Monthly Journal 35/9 (September, 1923), 421.

[18] By comparison, although he won only 17 electoral votes to Nixon’s 520 in the presidential election of 1972, George McGovern still garnered 37.5 percent of the popular vote.

[19] Calvin Coolidge, Sixth Annual Message (December 4, 1928), Miller Center, University of Virginia.

[20] Quoted in Greenberg, 137.

[21] Walter Lippmann, “Calvin Coolidge: Puritan De Luxe,” in Men of Destiny (New Brunswick, NJ, 2003; originally published in 1927), 10-17. The quoted passage appears on p. 13.

[22] Ibid., 13-14.

[23] Alexis de Tocqueville, Democracy in America, ed. by J. P. Mayer, trans. by George Lawrence (New York, 1988), 694, 692.

[24] Quoted in John Kenneth Galbraith, The Great Crash 1929 (Boston, 2009; originally published in 1954), 15.

The featured image is a photograph of Calvin Coolidge (1919) and is in the public domain, courtesy of Wikimedia Commons. It has been brightened for clarity.

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