Robert Sobel
taught history at Hofstra University for more than forty years. He is
author of more than two dozen books on American economic and business
history, including Herbert Hoover and the Onset of the Great
Depression and Coolidge: An American Enigma.
Part 1. Coolidge and
the New Deal Historians
Consider
the following quotation, spliced from two of Calvin Coolidge's public
addresses. It is to be found in Arthur Schlesinger Jr.'s The Age of
Roosevelt: Crisis of the Old Order: "His speeches offered his
social philosophy in dry pellets of aphorism. 'The chief business of
the American people,' he said, 'is business.' But to Coolidge,
business was more than business; it was a religion; and to it he
committed all the passion of his arid nature. 'The man who builds a
factory,' he wrote, 'builds a temple ... The man who works there
worships there.'"
That
certainly sounds as though Coolidge was comparing business favorably
to religion. The second speech was to the Amherst Alumni Association
in 1916, when Coolidge was one month into his first term as Lieutenant
Governor of Massachusetts. Here is the full paragraph:
I
agree that the measure of success is not merchandise but character.
But I do criticize those sentiments, held in too many respectable
quarters, that our economic system is fundamentally wrong, that
commerce is only selfishness, and that our citizens, holding the
hope of all that America means, are living in industrial slavery. I
appeal to Amherst men to reiterate and sustain the Amherst doctrine,
that the man who builds a factory builds a temple, that the man who
works there worships there, and to each is due, not scorn or blame,
but reverence and praise.
So
it turns out that in this instance, Coolidge is talking of the dignity
of labor, not at all drawing a comparison between the workplace and
the church.
As
for "the chief business of the American people is business,"
one might understand why, if taken alone, such an utterance might be
interpreted as meaning that Coolidge believed America a land of pure
and unalloyed materialism. In January, 1925, Coolidge delivered this
speech, entitled: "The Press Under a Free Government,"
before the American Society of Newspaper Editors. There was nothing
unusual about this; Coolidge delivered scores of such addresses before
special interest groups. This one was better reasoned than any but a
handful of his talks, and marked by several felicitous phrases. 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 [emphasis added]. 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.
What
the President appeared to be saying was that the press would do well
to pay some attention to the many ways in which business is conducted
in America, since most Americans care deeply about such matters, which
are "moving impulses of life." Even so, one might understand
why, if taken alone, such a paragraph might be interpreted as meaning
that Coolidge believed America was and should be a land of pure and
unalloyed materialism. A skeptical person might also have concluded
that he approved of this stance.
The
New York Times reporter who provided the lead for the story
thought otherwise. The next day's newspaper headlined the speech this
way: "Coolidge declares Press Must Foster America's
Idealism," with one subhead being: "In Address to Editors,
He Warns Them Against the Evils of Propaganda," and another,
"Financially Strong Journalism, He Says, is Not Likely to Betray
the Nation." In the second paragraph of his story on the speech,
the 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
America...."
The
newspaperman covering the speech arrived at the conclusion expressed
in the headline based on what Coolidge said immediately after
that so-often paraphrased statement. The President went on to assert
that individuals who fear the press will betray the American people
are mistaken. "American newspapers have seemed to me to be
particularly representative of this practical idealism of our
people." "The business side of journalism is
important." to be sure, but "it is not the main element
which appeals to the American people."
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 had confidence
such matters would not sway reporters and editors.
What
Coolidge expressed that day was a thought he explored often in 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 scepter 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 worshipped." 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 his views toward business.
Now
try this one, from William Leuchtenburg's The Perils of Prosperity:
"Coolidge had the small-town man's awe of the successful big-city
businessman. As Governor he had looked up to Senator Murray Crane, the
Massachusetts paper tycoon; as President he looked up to Andrew
Mellon, head of the aluminum monopoly. In the State House he had been
shepherded by Frank Stearns, the Boston department store executive
later known as Lord Lingerie. When he entered the White House,
Coolidge installed William Butler, a Massachusetts textile
manufacturer, as head of the Republican Party; at the 1924 convention,
Henry Cabot Lodge sat unnoticed and unconsulted."
Crane
was the GOP boss in western Pennsylvania, different from others in
that he was scrupulously clean. Coolidge inherited Mellon from
Harding, and of course held him in respect, as did many Americans at a
time when he was called "the greatest Secretary of the Treasury
since Alexander Hamilton." To identify Mellon as head of the
aluminum monopoly, meaning Alcoa, is somewhat disingenuous. Mellon's
place in business history derives more from his leadership of the
Mellon Bank, and in addition to Alcoa, the bank controlled Gulf Oil
and other major corporations, which goes to indicate the writer's
unfamiliarity with the man and his period.
Anyone
who knows about Coolidge's relationship with Stearns knows that there
was never any question as to its propriety: Stearns admired Coolidge,
worked for him assiduously, and asked nothing in return. After
Coolidge's death, he disappeared from public life. One must wonder why
that business about "Lord Lingerie' was thrown in. Butler was
Crane's lieutenant, and it was only natural for him after Crane's
death to assume some place in the Coolidge government as well as
Lodge's place in the Senate upon Lodge's death. Why should Coolidge
consult Lodge? Coolidge was in the Crane camp, and Lodge was a rival.
Is the author suggesting that just because they both came from
Massachusetts there had to be an affinity?
One
final quotation, from John Blum, one of the authors of a best-selling
college text, The National Experience
Coolidge
was devoted to the dominant values of his time, to business,
materialism, elitism, and their corollaries. If only the rich were
worthy, it followed that government should beware the counsels of
the majority. Since poverty was the wage of sin, government should
not tax the virtuous rich in order to assist the unworthy poor. And
since the rich best understood their own interests, government
should not interfere with the businesses they ran, though it should
help promote them at home and abroad.
This
is offered without a scintilla of evidence. I don't know how Blum came
to some of these conclusions. Not tax the rich to assist the unworthy
poor? In 1920, 15.4 percent of total personal income taxes were paid
by those who earned less than $5,000. By 1929, it was down to 0.4
percent. In the same period the percentage of total taxes paid by
those who earned more than $100,000 went from 29.9 percent to 65.2
percent. In his 1929 budget address, Coolidge noted that in 1928, 54
percent of federal receipts had been derived from income taxes, up
from the 42 percent of 1923. Earlier he had asserted that tax cuts
would boost income tax collections as a result of their stimulative
effect on the economy--an argument later used by John F. Kennedy.
Finally,
what is to be made of Blum's statement that Coolidge believed
"government should not interfere with the businesses they ran,
though it should help promote them at home and abroad." As
Governor of Massachusetts, Coolidge supported wages and hours
legislation, opposed child labor, imposed economic controls during
World War I, favored safety measures in factories, and even worker
representation on corporate boards.
Did
he support these measures while president? No, because in the 1920s,
such matters were considered the responsibilities of state and local
governments. As for promoting business interests at home and abroad,
or course Coolidge did. So did all American presidents. The founding
fathers were quite explicit in their objective to leverage political
freedom through economic liberalism "'The spirit for Trade which
pervades these States is not to be restrained," George Washington
wrote to James Warren in 1784. Jefferson, the supposed believer in an
unadorned agrarian America, actually thought of farmer-businessmen,
not the simple yeomen. Europe was short of grain and starting to
import large amounts of cotton, which suggested the eventual emergence
of what today would be called "agribusiness." Toward this
end Jefferson advocated building canals and land freeholding and wrote
to Washington, "Since all the world was becoming commercial,
America too must get as much as possible of this modern source of
wealth and power."
And
so on through the presidencies. Lincoln gave financial and other
support to railroads. Herbert Hoover set up the Reconstruction Finance
Corporation to assist businesses and banks during the Great
Depression, and Franklin D. Roosevelt, in the NRA, at the beginning of
his first administration, suspended the antitrust laws and urged
businesses to come together to set prices, maintain wages, and divide
markets.
One
might argue that there have been periods when big business was seen as
predatory and very much in need of control. One of these would be the
Progressive Era. Did government reject the notion of aiding business
in that period? The Department of Commerce and Labor, established in
1903 by Theodore Roosevelt and then in 1913 as the separate Commerce
Department by Woodrow Wilson, was supposed to assist American
businesses in their overseas ventures. Roosevelt and Wilson are not
ordinarily perceived as supporters of American business interests
abroad. President Clinton's Secretary of Commerce, Ron Brown, was
renowned for his ability to get foreign contracts for American
businesses, and while in China in 1998, Clinton arranged for Chinese
orders of $2.5 billion for the likes of Boeing, General Electric, and
IBM. Would Blum consider such behavior improper?
To
cap things off, in a sidebar, Blum offered a quote from Walter
Lippmann's Men of Destiny, in which he carefully truncates the
journalist's statement about Coolidge to switch its meaning. On the
preceding page is a picture of a smiling Coolidge, waving his hat. The
caption reads: "Calvin Coolidge in smug delight." How Blum
(or his picture editor) came to this conclusion is not known.
What
do Schlesinger, Leuchtenburg, and Blum have in common? They are of the
same generation, born between 1917 and 1922. Each entertains fond
memories of the New Deal and the national unity that marked American
society during World War II. Their careers really began in the
post-World War II period. The memories of Roosevelt were fresh, they
were New Dealers in their youths, and devoted to the man and what he
represented-the New Deal struggle against the Great Depression and the
battle against fascism in World War II. That Roosevelt was a great
president is something impartial historians should recognize. To be a
great president one must live in times when greatness is demanded.
Washington had the burden of establishing the new nation, Lincoln had
to face the possible dissolution of the Union, and Roosevelt had the
Depression and the War. FDR restored confidence in a nation which had
been badly shaken. This is the view that animates what often is termed
"The New Deal School of History."
Moreover,
Roosevelt changed the very nature of the presidency and the relations
between the states and the federal government. After Roosevelt all
presidents wanted to be seen as "strong." Coolidge, the last
president of what might be considered the "republican" as
opposed to the "imperial' age, warned against those who wanted to
be strong presidents, since the stronger the president, the less
freedom the people would have.
Even
though there were some negative treatments of Coolidge in the 1930s
and 1940s, the true beginning may be dated to the publication in 1957
of Schlesinger's Crisis of the Old Order. Leuchtenburg's The
Perils of Prosperity was published the following year. Blum's
biography of Teddy Roosevelt had appeared in 1954, but he soon was
writing about FDR as well. By then memories of Coolidge had faded, and
those who had voted for him a quarter of a century earlier either had
been converted to the New Deal or died. By then, too, the Republican
responsibility for the Great Depression was annealed in the public
conscience. The fact is that in this period the New York Stock
Exchange was chartered in New York, and was deemed not involved in
interstate commerce. New York governors had investigated Wall Street
on several occasions and forced reforms, but no American president had
done so. Coolidge asserted he had no control over what happened on
Wall Street and that it was the obligation of the state's governors to
act if reforms or curbs were needed. There were no protests to these
statements, which were part of the wisdom of the time. New York's
governors said and did nothing. Who were they? Alfred E. Smith and
Franklin Delano Roosevelt.
Roosevelt
is not their only hero. Woodrow Wilson fills the bill nicely, and in
fact Blum is one of the leading historians of the Progressive Era, who
has written fulsomely of Wilson, as have the others. The
scholar-president had a flurry of legislation in his first term and
the Great Crusade of World War I in the second. He was a shattered
hero in the view of the New Deal School, whose dreams for peace and
justice were smashed, but fortunately were revived by the man who
served him as assistant secretary of the navy, FDR.
Given
this template, what is one to make of those who came between Wilson
and Roosevelt, who reversed Wilson's policies and preceded Roosevelt?
Clearly they have to be at best misguided tools of the "predatory
interests," namely big business, who caused the stock market
crash of 1929 and the Great Depression that followed. The fact is that
in the 1920 GOP primaries business funds went to the candidacies of
Frank Lowden and Leonard Wood, that Coolidge never received meaningful
financial support from businesses for any legislative or executive
favors offered, and that Hoover's associational philosophy and service
under Wilson made him quite different from Harding and Coolidge.
Indeed, the policies he advocated and put into place bore more
resemblance to the early New Deal than the Harding-Coolidge years.
The
negative images of Coolidge, as a tool of business, appeared in the
late 1930s but more important, after World War II. It was not in
biographies and most scholarly articles, but rather in textbooks and
works dealing with the New Deal. The books and articles on Coolidge
written in his lifetime were for the most part complementary, with
some exceptions, such as Oswald Garrison Villard's The Nation.
In 1936, when the New Dealers were blaming the GOP's leaders for
having caused the depression, the Republicans nominated Governor Alf
Landon of Kansas for the presidency. Landon was honest, decent, and
colorless. Hoping to draw upon memories of a better time, the
Republicans advertised Landon as "The Kansas Coolidge." Even
then, they knew that the American people harbored favorable memories
of Coolidge. It didn't work. Roosevelt won in a landslide.
However,
these negative views of Coolidge are not confined to the New Deal
historians, but rather pervade the discipline. One might wonder why
this is so. To appreciate it, a brief exploration of the training of
historians is needed. Professional historians rarely are generalists.
One makes a reputation in the field through specialization, writing
books and articles on a narrow band of subjects in which the
historian, if fortunate, intelligent, and capable, becomes known as an
authority. I am, for example, a business historian, but I can't stop
there. The area of business I concentrate on is financial history.
Narrow it further. The history of financial markets? All financial
markets? No, only American, and in the 20th century at that. Now ask
yourself, how worthwhile is my opinion on the New England colonies in
the 17th century? On the history of the Spanish missions? On the
Indian Wars? On American foreign policy toward Australia at the turn
of the century? You get the idea. I may know how to obtain
information, synthesize it, and at times may have some worthwhile
things to say on these subjects. But everything? Of course not.
So a colonial historian setting out to write a high school text will
quote Coolidge as having said something about business, without
bothering to go much further. After all, would you expect him to go
into the files to find out if Roosevelt actually said, "The only
thing we have to fear is fear itself'? Everyone knows that he did. No
wonder Coolidge receives the reputation of being a tool of big
business. These historians are usually not malicious or mendacious.
They simply do not know any better than to rely upon the experts--like
Schlesinger, Leuchtenburg, and Blum.
Part II. Coolidge's
Thoughts Regarding the Relationship between Government and Business
Speaking
to the New York Chamber of Commerce in November, 1925, Coolidge said:
New
York is an imperial city, but it is not a 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.
To
Coolidge, the wedding of government and business would lead to
socialism, communism, or fascism, and certainly alter the nature of
American life. Yet Coolidge saw no difficulties in government aid to
commercial aviation, grants for road building, or the protective
tariff, once known as "Mother of the Trusts." What he railed
against was direct aid to business rather than assistance to
infrastructure. It was a common enough thought at the time, shared by
moderate Democrats and Republicans alike. Herbert Hoover certainly
believed this. Writing in his Memoirs about Secretary of Agriculture
Henry C. Wallace, who supported the McNary-Haugen bill which would
have aided farmers directly, Hoover said, "My colleague, the
Secretary of Agriculture, was in truth a fascist, but did not know it,
when he proposed his price-and distribution-fixing legislation in that
bill."
Coolidge
initially opposed aid for those who suffered as a result of the
Mississippi flood of 1927. In those texts that deal with the flood
this attitude often was attributed to an indifference to suffering. It
might be instructive to go to the reasons he offered at the time.
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.
In
this way, Coolidge indicated that a prime reason he opposed the
measure was not that he wanted to withhold assistance from
individuals, but from business interests that would profit from such
aid.
Of
course, presidents and other politicians have been friendly to those
interests which supported them financially or in other ways. How may
one explain this? One view might be that the politicians were
"bought." Republicans oppose legislation to punish the
tobacco interests--which contribute heavily to Republican candidates.
President Clinton is opposed to limiting legal fees in class actions
and is strongly opposed to the voucher system in education, perhaps
reflecting the major financial support he received from legal and
public education lobbyists. But is this really the way this situation
came about? It might alternately be argued that today's Republicans
and Clinton were not bought, but rather received backing because
contributors liked their ideas. In other words, the tobacco, legal,
and public education people backed them because they felt their
professed policies served the interests of their constituencies. This
is a more likely possibility. It is also likely that businessmen
during the 1920s applauded Coolidge because they felt his approach was
good for them, and for the rest of the country as well. Too often
historians assume the former rather than the latter. For example, in
1904, trustbuster Theodore Roosevelt ran against Alton Parker, the
most conservative Democrat nominated since the Civil War. Business,
led by J.P. Morgan and E.H. Harriman, contributed heavily to the
Roosevelt campaign. Why? Because they feared Socialist Eugene V. Debs
and knew they could come to terms with a man like TR, who
distinguished between "good" and "bad" trusts.
The
Literary Digest scanned the nation's newspapers on September 29,
1923, barely two months after Coolidge took office, trying to
determine whether there was any theme to the new administration.
Monroe
had his era of "good feeling;" Jackson, as one of our
editors recalls, his shibboleth of "local
self-government;" we associate "Union" with Lincoln,
the "square deal" and the "strenuous life" with
Roosevelt, the "New Freedom" and "making the world
safe for democracy" with Wilson; and, as Harding was
consecrated to the restoration of "normalcy," so the
correspondents tell us, President Coolidge is pledged to the
preservation of "stability."
The writer then proceeded to quote from stories around the country,
most of them in newspapers that were Republican and in which that
theme appeared. Coolidge was supposed to have told reporters that he
stood for "stability, confidence, and reassurance." He added
that his administration did not intend to "surrender to every
emotional movement seeking remedies for economic conditions by
legislation." The New York Times took this to mean that
Coolidge believed that "stability" would assure the business
community that it could make plans without worrying about sudden
shifts from Washington. The New York World thought for example,
that Coolidge would not alter tariff rates unless absolutely
necessary, and would not "rush to the front with proposals to
Congress that would tend to undermine stability." This, reflected
The Philadelphia Inquirer, "is the kind of assurance that
will be appreciated. The Philadelphia Public Ledger called the
policy of stability "good hard sense."
This
country has come to a considerable degree of "normalcy."
What it needs now is a stabilization of its favorable situation and
confidence that this will continue. Wages are very high and
unemployment is negligible. Labor is, indeed, very well off.
Business is good and industry is humming, The farm hysteria is
hardly as vocal now as it was thirty days ago. Outside the wheat
states, the farmer is going along very well. He had ample
credit--too much in fact, according to his best friends. The
all-around condition of the country is sound and warrants much
optimism. Far-reaching changes, such as are constantly sought by the
political devil doctors are the last thing this country needs.
The
judgment that the country had calmed down from the turbulent postwar
period and was growing economically was largely accurate. Many of the
heated debates of that time had either ended or were muted. Given his
temperament and inclination, Coolidge was a near-perfect person to
preside over a period of stability. So it was, and would be so long as
he remained in office.
Coolidge
dispatched his final annual message to Congress on 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 that comes from mutual understanding, and the
knowledge that the problems which a short time ago appeared so
ominous are yielding to the touch of mutual friendship.
Few
denied the essential truth of the statement, and certainly not
businessmen. Note that Coolidge was commenting on the state of the
union; he did riot claim he had been responsible for these happy
circumstances.
Coolidge
died in 1933, and the nation mourned. Toward the end of his life he
told several people he felt he no longer fit in with his times, and
perhaps this was so. He certainly would not fit in with the temper of
politics we have today, which is all the worse for us. In the months
that followed scores of prominent individuals chimed in with their
reactions to Coolidge's death and assessments of his accomplishments
as president. They ranged from the adulatory to the unpleasant, from
the eloquent to the clumsy. Al Smith offered one of the clearest and
fairest assessments of the man:
I
had a great liking and respect for him. Beneath a chilly, reserved
and dignified exterior, he was keen, kindly and entirely free from
conceit, pompousness, and political hokum. We are often told
politics in a republic produced only demagogues. Calvin Coolidge was
a most successful and popular politician, but he had nothing of the
demagogue in him.
Coolidge
was not a great president, thought Smith, but rather belonged
... in the class of
Presidents who were distinguished for character more than for heroic
achievements. His great task was to restore the dignity and prestige
of the Presidency when it had reached the lowest ebb in our history,
and to afford in a time of extravagance and waste, a shining public
example of the simple and honest virtues which came down to him from
his New England ancestors. These are no small achievements, and
history will not forget them.
Calvin
Coolidge was a salty, original character, an unmistakable home-grown,
native American product, and his was one of those typically American
careers, which begin on the sidewalks, or on the farm, and prove to
the youth of the nation that this is still the land of unbounded
opportunity.
