American Experiment

by James Macgregor Burns

  Above all Mellon symbolized the unity between corporate power and the Grand Old Party. No chasm separated his Republicanism from his business conservatism. However much he disdained truck with ordinary politicos, touching their hands only with the tips of his fingers, organizational Republicanism was part of his life. Leaders of the Pennsylvania Cameron-Quay machine had often dropped in to see his father; later, Mellon consorted with Boies Penrose, Philander Knox, and other heads of one of the most conservative state parties in the country. Corporate control of the Republican party had long been a staple of muckraking journalists and progressive orators. They drew a picture of politicians as pawns of the corporations. But big business did not have to exert conservative influence on most Republican regulars; that influence was already in them, inculcated by heritage, family, education, occupation, class status, social environment, and party ideology.

  So Harding really meant it when he said, “This is essentially a business country. We hear a vast deal about ‘big business,’ but the big business of America is nothing but the aggregate of the small businesses. That is why we need business sense in charge of American administration, and why the majority of America has for more than half a century been a Republican majority.” He denounced the “hampering restrictions and bullying methods” used against business. Coolidge not only issued his famous pronunciamento: “The business of America is business,” but, flinty Vermonter though he was, waxed euphoric: the man “who builds a factory,” he said, “builds a temple, the man who works there worships there, and to each is due not scorn and blame, but reverence and praise.” Herbert Hoover said in 1928: “Given a chance to go forward with the policies of the last eight years we shall soon with the help of God be in sight of the day when poverty will be banished from this nation.” Every “expansion of government in business,” he said, “poisons the very roots of liberalism—that is, political equality, free speech, free assembly, free press, and equality of opportunity.”

  In the election of 1928 the voters granted Hoover’s wish to continue the essential program of the previous eight years—to proceed with the Republicans’ venture in a businesslike and business-loving regime. The Grand Old Party could claim all credit for the continuing success of the grand old experiment in rugged individualism, laissez-faire, materialism, social stability, corporate influence, and business power.

  Thus for a solid decade conservative belief dominated the public affairs of the nation. Not since the triumphant Republicanism of the turn of the century had a party majority so firmly established its power and leadership in Congress and the presidency, but the stakes were much higher now because of the expanded role of the federal government. Refurbishing its electoral majorities throughout the decade, the leadership of the Grand Old Party carried through its policies and programs not only in Washington but in a host of state capitals outside the South. It was government by compact majority.

  It was precisely this kind of majority that the Founding Fathers had feared in drafting the new constitution in 1787. As good republicans they believed in majority rule—rule by a majority of the fraction of the people who could vote at the time, that is—but as men wanting order and stability, they proposed to curb majorities, especially majorities composed of turbulent mobs and unruly populaces. Thus James Madison recognized the old and “fundamental principle of Republican government—that the majority who rule are the safest Guardians both of public good and private rights.” But—“If a majority be united by a common interest, the rights of the minority will be insecure.” By dividing up powers among different sets of leaders, by making these leaders elected by and responsible to diverse and conflicting constituencies, and by staggering elections over a period of time, the Framers sought to tame the unruly beast of majority power.

  The Founders recognized, nonetheless, that popular majorities ultimately would take control of the new federal government if such majorities could remain large and united enough to win a series of presidential and legislative elections. Here was where they played their trump constitutional card. By establishing presidential selection and Senate confirmation of federal judges, they tied the judiciary into the republican system; but by giving judges lifetime tenure, along with some power of judicial review, they created a judicial leadership that institutionally would be “behind the times”—that is, responding to the presidential and legislative majorities of a decade or even a generation back. This meant a virtual guarantee of continuity and stability: the judiciary would represent a kind of consensus among shifting factions, parties, and ideologies.

  Somehow this logical arrangement did not seem to be working in the early twentieth century. It might have been expected that when Harding came to the White House in March of 1921, the Supreme Court in particular would strike a balance between the conservative presidencies of McKinley and Taft and the progressive presidencies of Roosevelt and Wilson. But history played one of its tricks. Taft had the pleasure of making as many Supreme Court appointments in his four years in the White House as Wilson and TR did in their combined fifteen years. This was. not wholly by chance; retiring justices had long since learned the art of waiting out Presidents.

  So the Republicans returning to power in 1921 happily found like-minded brethren on the bench. Their luck continued when, two months after he took office, Harding could bestow the highest gift in a President’s hands—the chief justiceship. It was not only luck: Chief Justice White had held out until the GOP returned, repeatedly telling Taft, as the former President said later, that “he was holding the office for me and that he would give it back to a Republican administration.” It was Taft’s crowning moment, too, for this was above all else the post he craved, while serving in practically every other. There was a slight problem, since Harding had promised a place on the Court to his campaign brain-truster George Sutherland, but this was straightened out—Sutherland was told to wait for the next vacancy—and by summer 1921, William Howard Taft, as spry and genial as ever and less plump, was seated at the center of the High Court.

  That Court had for some years been a center of controversy. During the heyday of progressivism, liberals and radicals complained that the reactionary bench was upholding corporate property rights and thwarting state and federal regulation of the economy. In 1908, three years after Lochner v. New York, the court in Adair v. U.S. invalidated the Erdman Act, which had outlawed the notorious “yellow-dog” contract that made union non-membership a condition of employment. The Court held that the act impaired both the employer’s and the worker’s freedom of contract, and that the commerce power of Congress did not extend to the act, for labor relations had no “real or substantial relation” with commerce. A few years later, the Court struck down a state law against yellow-dog contracts. During the progressive era, the Court upheld a couple of Oregon laws limiting hours of work, as well as other regulatory legislation. But then came Hammer v. Dagenhart (1918), invalidating a child labor act that had been the direct product of efforts by Florence Kelley and other progressive activists. Congress, the Court held in a five-to-four verdict, lacked power to exclude goods from interstate commerce unless they were themselves intrinsically harmful. No matter, as Oliver Wendell Holmes said in dissent, that the goods were the “product of ruined lives.”

  Would the new Chief Justice—genial, moderate, kind Will Taft—make a difference? An early answer came in the second child labor case in 1922. Thwarted by Hammer v. Dagenhart, Congress had passed a new act against child labor, this time using its taxing power. Taft not only voted with the Court to invalidate; he wrote the decision. Then came Adkins v. Children’s Hospital.

  Congress had passed a minimum-wage law for women in the District of Columbia, partly on the ground of a relationship between wages and the health and morals of women. The High Court was expected to sustain the act, on precedent of the Oregon cases, but the Court was now packed with more conservative justices. Writing for the Court, Justice Sutherland, who had finally been elevated late in 1922, based his de
cision voiding the law on the liberty-of-contract doctrine. Taft produced a moving dissent but could not sway his colleagues. Using as precedent the Lockner and Adair decisions, Sutherland held that in principle “there can be no difference between the case of selling labor and the case of selling goods.” As Max Lerner later pointed out, “by treating the labor contract like any commodity purchase-and-sale,” Sutherland had borne out the contention of Karl Marx that “under capitalism labor has become a mere commodity.” From Marx’s grave in Highgate cemetery in London might have come a thin peal of cynical laughter.

  For a time under Taft’s leadership the Court followed a wavering centrist course, issuing a number of antiunion labor decisions while upholding various state regulatory laws and federal programs. Later in the 1920s, its conservatism seemed to harden. In vain left-liberals denounced the “reactionary” course of the Court. For most Americans, the High Court was still above politics and above ideology, handing down decisions from some rarefied summit, interpreting a sacred document, simply “finding” the law, not making it. In fact, the Court could hardly have been more partisan and ideological. Taft used his personal and political skills in “massing the court,” as he strove to make it appear more united than it was. Sometimes, justices would reluctantly go along with the majority in order to lessen internal conflict. Taft even held Sunday afternoon caucuses in his home, described by his friendly biographer as “extra-curricular conferences” at which “plans were made to block the liberal machinations.”

  Taft and his Court occupied the best of political worlds. Benefiting from both the popular worship of the Constitution and the “cult of the robe,” the justices seemed above the battle at the same time that they in fact were deeply involved in politics. Ironically, in a system designed to thwart majorities, they held a majority that worked, that delivered. In a system that so often thwarted the wishes of masses of voters, they had the votes.

  The compact majority produced. As President, Congress, and Court worked smoothly together, despite occasional sputterings, a conservative party and government churned out conservative legislation and administrative and judicial decisions. Following a rash of railroad and coal strikes in the summer of 1922, Harding allowed Harry Daugherty, now his Attorney General, to gain a sweeping restraining order from a federal judge against the rail strikers. The failed strikes left railroad labor furious with the Administration, and divided to boot, as tens of thousands of shopmen were required to sign agreements with vindictive managements, forcing them into company unions.

  Toward farmers the Harding Administration took a more generous line. The Packers and Stockyards Act of 1921 forbade discriminatory practices in livestock, poultry, and dairy transactions, especially the manipulation of prices, and next year the Capper-Volstead Act exempted farmers and their organizations from the reach of the antitrust laws. But what most farmers most keenly wanted was control of farm surpluses and stabilization of prices. When a 1923 credit act easing loans for crop financing proved inadequate, farm organizations rallied behind the McNary-Haugen bill, an elaborate scheme to buy the annual surplus of certain crops during times of high output and keep it off the domestic market. Defeated time and again in House or Senate, the bill finally passed Congress in 1927, only to be vetoed by Coolidge.

  The Grand Old Party seemed powerful enough to resist the demands of poorer members of its grand old coalition of farmers and workers. It was equally casual toward a third and historic bastion of Republicanism—black Americans. Harding had been treading a wary course between those Republicans who wanted the GOP to recognize burgeoning black power in Northern cities, and others who sought to curb the Republican “black-and-tan” organizations in the South in order to create a “lily-white” party that could appeal to Southern whites. But Harding wanted the Negro to have the right to vote. “Let the black man vote when he is fit to vote,” he told a Birmingham audience; “prohibit the white man voting when he is unfit to vote.” And he wanted the black man to have the right to life. He proposed a federal anti-lynching law, only to see it filibustered to death by Southern Democrats in the Senate. Under Lodge’s leadership the Republican caucus decided to give up efforts to overcome the filibuster, handing black leaders the excuse blacks would hear again and again—the anti-lynching bill had to yield to “more important” business in the Senate.

  That important business was a ship subsidy bill, and the Republicans throughout the decade pushed through subsidies for a variety of business interests despite their vaunted belief in laissez-faire. But the most powerful Republican thrust came in the field of taxation. This was Treasury Secretary Mellon’s domain. The financier was quite direct and emphatic in his approach to taxation. The income tax and war demands had shifted the tax burden too heavily onto the upper-income classes, he believed, impairing their capacity to risk capital for the expansion of production. Soon after his appointment, Mellon appeared before the House Ways and Means Committee to urge repeal of the excess-profits tax and reduction of the maximum surtax rate from 65 percent to 32 percent.

  Harding fully backed his Secretary, though he was hardly of much help intellectually. “I can’t make a damn thing out of this tax problem,” he exploded to an aide. “I listen to one side and they seem right, and then—God!—I talk to the other side, and they seem just as right.” But Mellon did not need Presidents; he had himself. With the help of Penrose and other Old Guard members of Congress, he pushed through the first of his revenue bills by the end of 1921. Unappeased, he pressed for further reductions in personal income taxes on the rich and in inheritance taxes, gaining these in the revenue acts of 1926 and 1928 under Coolidge. Mellon backed up both Harding and Coolidge in vetoing veterans’ bonus bills, and he worked closely with Harding’s budget director, Charles Dawes, on government economy. By the time Mellon left Hoover’s Cabinet for the Court of St. James’s in early 1932, the Mellon-Harding-Coolidge-Hoover fiscal program had long been firmly in place.

  Only one thing seemed to threaten continued Republican ascendancy throughout the decade—scandal. Rumors of malfeasance on the part of an “Ohio gang,” climaxed by the suicide of an old friend of Harding and Daugherty, began circulating through Washington early in 1923. The President had been suffering from high blood pressure and other ills for some time, and his concern over the reports probably hastened his death, apparently from an embolism, during a long trip back from Alaska early in August that year. For months, indeed years, following Harding’s death, Washington was titillated by revelations of fraud and bribery in the Veterans Bureau, of secret leases of Teapot Dome oil reserves to oil men in exchange for their “loans” to Harding’s Interior Secretary, Albert B. Fall. Attorney General Daugherty, who was accused of conspiracy, refused to testify, charged that “Red labor” was plotting against him, and got off with a hung jury, some three years after Coolidge had sacked him.

  For all the publicity, the scandals had little effect on Republican presidential victories. In large part, this was due to Coolidge’s probity and his distance from the “Ohio gang.” Coolidge also possessed a gift that Harding lacked—luck. He had luck in small ways: the news of Harding’s death came to him while he happened to be in his rustic home town in Vermont, resulting in marvelous newspaper stories of his swearing-in by his father, a notary public, in the little parlor of the Coolidge household. If Harding had died a day later, the news would have come to Coolidge while he was stopping at the baronial New Hampshire estate of a rich Boston friend. He had luck in big ways too: the “Coolidge boom” roared all through the five and a half years of his presidency.

  Coolidge boom? This was just what Andrew Mellon had planned.

  Bankers and Battleships

  The Republican “compact majority” was far less united over foreign policy than domestic. Businessmen could agree on tax, labor, subsidy, and similar issues, but the business community fragmented in the face of world needs and demands. Ideologically they divided into isolationists, unilateralists, and internationalists; economica
lly they divided into importers and exporters, competing regional producing interests, investment bankers like the House of Morgan favoring financial and commercial cooperation with London, and industrialists like the Rockefellers pressing for aggressive American investment abroad. Politically they divided into factions in the GOP, in Congress, and in the presidency. The conservatism that dominated the decade’s thought seemed to falter at the water’s edge.

  The result was a foreign policy of zigzag, of “fits and starts, of hesitancy and of timid advance,” in L. Ethan Ellis’s words. At times, envoys to Washington could hardly find a foreign policy. Editors sardonically suggested that the American Secret Service or even Scotland Yard be dispatched to locate it.

  Harding’s Cabinet epitomized the Republican disunity. On the President’s right sat Secretary of State Charles Evans Hughes, ardent spokesman for the dwindling band of GOP internationalists. Across from him was the imperious Andrew Mellon, who had bankrolled the unilateralists’ campaign against Wilson’s League. Between them was Commerce Secretary Herbert Hoover, whose main goal now was to promote American exports while limiting imports. Alongside these men sat the knavish party regulars and domestic policy brokers, Albert Fall and Harry Daugherty. These regulars linked with the conservative congressional party centered in the Senate, where Lodge continued to press for a foreign policy expressive of American power, and where Borah and his fellow isolationists now opposed Lodge as tenaciously as they had fought Wilson.

  Washington seemed headed for a dull and squalid unilateralism as the Republicans dropped any pretense of fulfilling Harding’s vague promise of an “association of nations” in place of the spurned League. Then came a historic zigzag.