Coolidge is primarily about events that occurred roughly 100 years ago, but the political debates often seem as though they could be in tomorrow morning’s news. We often like to think of ourselves as “progressive” but the long view looks more like mental stagnation.
In 1912, textile workers in Lawrence, Massachusetts went on strike (Wikipedia), making many of the same points as today’s advocates of a higher minimum wage. Opposition was also pretty similar…
President Taft … tiring of the progressive onslaught, … spoke out. Law could not make growth, he said. “Votes are not bread, constitutional amendments are not work, referendums do not pay rent or furnish houses, recalls do not furnish clothing, initiatives do not supply employment or relieve inequalities of condition or of opportunity.”
The federal government had expanded dramatically during a recent war (World War I in the book; compare to Iraq and Afghanistan in our time) and borrowed heavily. During the 1920s, “Hiram Johnson, a progressive Republican senator from California, was calling for the abolition of “250,000 useless jobs created at Washington during the war.” Having spent heavily during the war itself, politicians argued about how much to spend on veterans:
The next day, not pausing, [President] Harding vetoed the [veteran’s] bonus bill with an unyielding statement. The Bursum bill, he noted, established a precedent of paying veterans, regardless of need, each month. “The commissioner of pensions estimates its additional cost to the Treasury to be about $108 million annually,” Harding noted, an outlay that took the country in the wrong direction at a time when each dollar saved was hard won. More important, “I venture the prediction that with such a precedent established the ultimate pension outlay in the half century before us will exceed 50 billions of dollars.” The country could not help any one group without helping the other groups. …
In total, over twenty years, the bill would cost $2.28 billion, as Coolidge noted in a veto statement on May 15. There were millions of veterans across the country; once they were paid, they might have to be paid again. Even a bonus bill was not free of administrative costs, he warned. In the bill, Coolidge said, we “wipe out at once all the progress five hard years have accomplished in reducing the national debt. “We have no money to bestow upon a class of people that is not taken from the whole people,” he continued; the individual was going to lose out to the group. …
Coolidge could continue to use pocket vetoes at the end of sessions, killing bills by failing to sign them in the recess. Pocket vetoes were difficult to undo; they could not be overridden. Congress had to start anew with a new law in the next session. He used the pocket veto to kill a bill that introduced new pensions for widows of Civil War soldiers. Like so much pension legislation, it affected a tiny group, but established a principle that could be broadened to provide a benefit for millions. Coolidge, like Harding, found himself playing Scrooge.
But what Coolidge noticed was how much time went to military or diplomatic meetings necessary because of World War I. The effects of earlier wars and incursions, dating all the way back to the Spanish-American War, claimed many hours. … The cost of past wars was also evident in the pages of accounts over which he and Lord labored. They would have reached their $3 billion goal [for the total federal budget], passed it even, long ago, if not for wars. Outlays that fiscal year for veterans’ care and other payments to vets were about equivalent to all the payments made for civilian government together, and larger than any other single kind of payment by the federal government. If you totaled the veteran payments with the military costs and the amount paid in interest on debt mostly generated by wars, you could see that about three-fourths of the federal costs had to do with war in one way or another.
The Post Office delivered the mail, but people argued about whether or not their employees were paid too much:
“The postal service rendered the public is good,” [President Coolidge] acknowledged. He warned, however, that the precedent of an increase for the post office staff was itself troubling: “an organized effort by a great body of public employees to secure an indiscriminate increase in compensation should have the most searching scrutiny.”
“The post office ought to be self-supporting,” [private citizen Coolidge] wrote on August 4, 1930.
The elaborate procedures of the Senate attracted scrutiny:
[Coolidge’s vice president] Dawes could not resist the opportunity to deliver a 1,300-word rant against the Senate, three times as long as the 434 words Coolidge had delivered four years before. Senators were selfish, he suggested, in their decision to sustain the practice of the filibuster. Senate rules, written by senators, placed “power in the hands of individuals to an extent, at times, subversive of the fundamental principles of free representative government.” Because the Senate had not changed its ways, “the rights of the Nation and of the American people have been overlooked.”
Democrats advocated for high tax rates, up to about 70 percent, while Republicans argued that revenues would be higher with lower rates:
“It has been our experience that a reduction in taxation does not mean an equivalent loss in revenue.” As he had in Taxation: The People’s Business, here [Andrew] Mellon tried to put his case simply: “If income taxes are so excessive that a man of ability finds he must work more than three days a week for the Government and has but three days a week for himself he will become discouraged and decide that the result is not worth his effort.” …
But the new revenues undermined the argument that Mellon’s laws benefited the rich. For a good share of the new revenue was coming from higher earners. By lowering rates on the wealthy, the Treasury had actually collected more from them. A greater portion of the income tax came from top earners than had at the beginning of the decade. In 1927, those earning over $50,000—a tremendous sum—would pay about 80 percent of the income taxes, whereas in 1920 those top earners had paid about half. “The income tax in this country,” as Mellon wrote triumphantly to one of the Treasury’s correspondents, “has become a class rather than a national tax.”
“There is another tax reduction that usually brings up the revenue, and that is one in relation to capital increases. That is, persons buy land or they buy securities and hold them. When the tax is very high they don’t sell on account of feeling that if they sell they have got to give so much to the Government that they had better hold it,” he added. Dilating on his beloved topic, the president went on, “And when taxes were reduced on that item of income it resulted in a considerable increase.”
Democrats advocated for frequent attempts to optimize tax rates and policies. Republicans tried to keep things stable:
“In fixing rates, whether they be normal taxes or surtaxes or death taxes,” said [Treasury Secretary Andrew] Mellon, “the controlling factor should be the effectiveness of the rates in producing revenue, not only for the year in which they are levied but over a long period of years.” Tax changes should be infrequent and permanent when possible.
[in 1931] There was another problem: the Democrats would pursue action for action’s sake, continuing where Hoover had started. “The Democrats will probably set aside the Hoover measures and try some of their own. That only means more experimenting with legislation.” Harding’s great inaugural address about the damage of experimentation seemed gone from memory. Though Coolidge could not know the details, Roosevelt was preparing an inaugural address that called for the opposite: “bold persistent experimentation.”
When arguing against tax reductions it was highly effective to point out that those with high incomes would be the primary beneficiaries:
the opponents of the legislation began to quantify the share of the tax break that the wealthy would claim. This, they were discovering, was an easy way to frame an opponent. General, across-the-board cuts of any progressive structure always favored the rich, since they had been paying more under progressivity to begin with. …
George Norris pointed out, “Mr. Mellon himself gets a larger personal reduction than the aggregate of practically all the taxpayers in the state of Nebraska.” So he did. But Mellon paid more tax than the citizens of that state as well.
During Coolidge’s years as president, the federal budget was in surplus. Coolidge wanted to cut tax rates while Congress wanted to expand the government and spend money, especially on bridges, dams, and roads:
The loudest and most authoritative demand for costly programs came from infrastructure engineers, led by Herbert Hoover.
The U.S. could not refrain from foreign military adventures: “The United States kept a contingent force in Nicaragua more or less constantly; Coolidge wanted to end that conflict …”
Governments sought to end the possibility of war with words, paper, and ink, culminating in the Kellogg-Briand Pact of 1928, signed by all of the nations that would shortly fight each other in World War II.
A distaste for direct American military involvement led to arms sales instead. Will Rogers pointed out the hypocrisy: “Here we are the Nation that is always hollering for dissarmament, and Peace, and just because we are not smart enough to settle our differences by diplomacy (because we have none) why we are going to make it possible for somebody else to exterminate the faction that we don’t like. Suppose they don’t like Coolidge down there, and they would allow arms to be shipped into this Country to arm a revolution against our Government that is in Power. Boy, what a howl we would put up! But it’s us doing it down their way now, so that’s all right. Here is the humatarian nation of the world fixing so more people can get shot.”
A large number of voters worked for the government and could be relied upon to vote for government expansion and/or larger salaries for government workers:
Under a plan like La Follette’s, as Herbert Hoover said, officeholders would proliferate, whether bureaucrats or elected officials. Together all officeholders would number 6 million; now that women could vote, their wives would join them and the government vote would be 25 percent of the electorate, Hoover said.
When natural disaster (Mississippi River flood) struck people complained that the federal government did not do enough:
Rescue was work for the state governments. A number of governors and senators shared this view. Governor Austin Peay of Tennessee, a Democrat, took a position to the right of Coolidge on that: he turned down the Red Cross, too, because he “felt that the people should be expected to provide for themselves,” as a Red Cross official had noted. Praise for Coolidge’s position came from The New York Times: “Fortunately, there are still some things that can be done without the wisdom of Congress and the all-fathering Federal Government.”
Hoover slipped into the role as flood chief so naturally that it was as if the war had never ended, as if he were again rescuing Belgium. The commerce secretary popped up everywhere in the news: He talked railroads into transporting the displaced for free and carrying freight at a discount. He commandeered private outboard motors and built motorboats of plywood. He urged the people who were not yet flooded out, such as the population around the Bayou des Glaises levee, to evacuate early, then rescued by train the tens of thousands who had ignored his warning. …
Coolidge stayed in Washington [after a terribly damaging 1927 flood in Vermont]. Just as before, the federal rescue was to come through the supervision of the Red Cross. Coolidge himself would lead a fund-raising drive; a public relations campaign from the chief executive, just as in the case of the spring, seemed within bounds. … Then he summarized the administration’s position in a single sentence. “From anything I know about the section that was flooded in Vermont, there would be nothing that could be done there about flood control.”
Nobody could agree on whether government borrowing was good or bad:
Mellon wanted to keep or shorten the maturity of public debt; the Democrats wanted to increase the number of years the public debt was paid down to more than thirty. Mellon fought back. “Pay your debts while you can,” he admonished.
What was worse, the Chamber of Commerce was staking out a new position on deficits. “While no deficit is looked for should the rate reduction herein be made effective,” it announced in early November, “it is obvious that in view of the excellent credit standing of the government and the low interest rates at which it can borrow money there would be no great cause for alarm even though a deficit should, through unexpected developments, arise in any year.”
If now, in good times, high times, the government went into deficit, there would be no money left for the downturn that [Coolidge] suspected was coming.
Politicians from farm states advocate for the federal government to fix prices and subsidize farming. Coolidge disagreed:
Farmers sought more help, but [Coolidge] signaled that he would block farm legislation: “It is impossible to provide by law an assured success for those who engage in farming.” On the merchant marine and government entry into the ship business, he was equally frank: “Public operation is not a success.”
Presidents ended up disappointing the public after 4-6 years. Coolidge wrote that “It is difficult for men in high office to avoid the malady of self-delusion. They are always surrounded by worshipers. They are constantly, and for the most part sincerely, assured of their greatness. … The chances of having wise and faithful public service are increased by a change in the presidential office after a moderate length of time.”
There are a handful of debates that seem to have been mostly settled since Coolidge’s time. Social Security did not exist in the 1920s. Coolidge’s job upon retirement was joining the Board of New York Life: “Purchasing insurance, especially life insurance that paid pensions, annuities, would keep Americans independent: ‘It is a long step toward abolishing poverty.’ Here [private citizen Coolidge] was explaining the logic behind the New York Life directorship. Life insurance wasn’t merely safe; it was the alternative to speculation, a protection during recessions.” Today, of course, most voters and politicians agree that the government, rather than private insurance companies serving voluntary customers, should be responsible for basic pensions (though we can’t agree on how to pay for Social Security!).
But that is one of the few. What do readers think? It is a good or a bad sign that Congress and the Administration are going back over all of the same ground covered by their counterparts 100 years ago? Perhaps this means that we’re getting all of the big stuff right and the only issues remaining are fringe ones that don’t matter too much.
More: Read the book