Wall Street was Booming Just Months Before the Great Depression

Vintage photograph shows Calvin Coolidge in Plymouth, Vt., shortly after learning of President Warren G. Harding’s death.

By Jim O’Neal

After the 1928 election, President-elect Herbert Hoover met with incumbent Calvin Coolidge to make a special request. There were four months to go until inauguration and Hoover planned to use six weeks of that time to tour Latin America. He asked the president to place a battleship at his disposal since he wanted to include Mrs. Hoover, who spoke fluent Spanish.

Initially, Coolidge suggested a cruiser “since it does not cost so much,” but finally relented and gave Hoover the battleship USS Maryland one way and then the USS Utah to come home from Montevideo, Uruguay. This was classic Calvin Coolidge, always looking for creative ways to avoid federal spending.

Then Coolidge dispatched his final annual message to Congress on Dec. 4. The document revealed the optimism felt by Coolidge and the nation as a whole: “No Congress of the United States, on surveying the State of the Union, has met with a more promising 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 his budget address, read to Congress the following day, Coolidge said estimated revenues for 1929 were $3.831 billion with expenditures of $3.794 billion. Since the surplus was smaller than hoped for, he would not ask for yet another tax cut.

Calvin Coolidge – who assumed the presidency when Warren Harding died in 1923 – had a simplistic fiscal philosophy: hold the line on spending and if possible reduce it, while at the same time cutting taxes. He believed this would result in greater personal freedom and a more moral population. In 1923, federal expenditures were $3.1 billion and fell to $3.0 billion by 1928. Despite tax cuts, revenues were the same at $3.9 billion and the national debt fell from $22.3 billion to $17.6 billion. The number of federal employees in Washington fell from 70,000 to 65,000.

By 1929, automobiles jammed the roads, spurring a major construction boom. The Ford Model A was enthusiastically greeted in 1927, but the talk of the industry was Walter Chrysler, who came from nowhere to build the third-largest company in the industry. Auto sales zoomed and the Federal Oil Conservation Board announced the country was in danger of running out of petroleum.

The front-page news of early 1929 was Britain’s ailing King George V, whose sons were rushing home to his bedside. But the business pages focused on RCA’s purchase of the Victor Talking Machine Company, following the acquisition of Keith-Albee-Orpheum, which was renamed RKO. The stock of RCA was now selling at a P/E of 26 and there was talk of a 5-for-1 stock split.

Wall Street was booming and dividends were at an all-time high. The Federal Reserve was complaining about the banks using their money to fuel speculation, but the only response was from the small Dallas Reserve, which raised their discount rate to 5 percent (yawn). A few months later, Wall Street crashed and the entire country spiraled down into the Great Depression, which would last the next 10-plus years.

Welcome to Washington, D.C., President Hoover. It’s all yours!

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

President Coolidge’s Inaction Opened White House Door for Herbert Hoover

A photograph of President Herbert Hoover and his Cabinet, signed, circa 1929, sold for $2,151 at an April 2012 Heritage auction.

By Jim O’Neal

The first president born west of the Mississippi River was Herbert Clark Hoover in 1874. He was born in West Branch, Iowa, about 30 miles from the mighty river. He had a remarkable life, although there is little evidence of true joy other than the rewards from devoting all of his energy to work and public service … always striving for achievement.

It’s curious that he ended up the Cabinet of President Calvin Coolidge. “Silent Cal” was another taciturn man, “weaned on a pickle” and a work ethic that resulted in five-hour workdays, supplemented by naps in the White House. He did not like many people, especially Hoover, his Secretary of Commerce, complaining, “That man gave me unsolicited advice for six years, all of it bad.” Coolidge jeeringly called Hoover “Wonder Boy,” since Hoover’s reputation for saving lives in World War I had earned him an international title as “The Great Humanitarian.”

It was the Roaring Twenties and times were rosy.

By 1927, America was the most comfortable place in the world. Surrounded by sleek new appliances – radios, refrigerators, telephones, electric fans – that were all within reach of the common man. Eighty-two percent of all things produced were made in America, 80 percent of movies and 85 percent of all cars. America had 50 percent of the world’s gold and the stock market increased by one-third in one year.

But suddenly, there were rain clouds in the sky and for months, it rained steadily across the country. Southern Illinois received two feet of rain in three months and places in Arkansas got over three feet. People had never seen anything like it.

Rain-swollen rivers overran their banks; the San Jacinto in California; the Klamath and Willamette rivers in Oregon; the Snake, Payette and Boise in Idaho; the Neosho in Kansas; Ouachita in Arkansas; the Tennessee and Cumberland in the South; and the Connecticut River in New England.

Then on Good Friday, April 15, 1927, a mighty storm system pounded the middle third of the nation with an unprecedented rain of intensity and duration. From Western Montana to West Virginia and from Canada to the Gulf of Mexico, rain fell as one might envision what Noah experienced.

Nearly all of this water raced into swollen creeks and rivers and headed straight to the great central artery of the continent – the Mississippi River. The Mississippi and its tributaries drain 40 percent of America, almost 10 million square miles across 31 states. Never in recorded history had the entirety of it been this strained. People standing on the banks watched the carnage floating by. Houses, trees, dead cows, barn roofs. At St. Louis, the volume of passing water was an astonishing two million cubic feet per second.

On April 16, the first levee gave way and 1,300 feet of earthen bank ruptured and a volume of water equal to Niagara Falls passed through the chasm. By May 1, the flood stretched 500 miles from Illinois to New Orleans. The statistics of the Great Flood were staggering. Sixteen million acres flooded … 204,000 buildings lost … 637,000 people homeless, along with 50,000 cattle, 25,000 horses, 145,000 pigs and 1.3 million chickens.

The Mississippi Flood of 1927 was the most epic natural disaster in American history. The Mississippi was at flood stage for 153 consecutive days.

President Coolidge sent Wonder Boy to clean up the mess, rolled over and went back to sleep. It would help Herbert Hoover win the 1928 presidential election, never suspecting that in 1929 the merry-go-round of good times would stop when the stock market crashed, followed by the Great Depression, which would last for 10 long years until we started gearing up for war.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Her Fearless Tongue Made Alice Roosevelt the Most Popular of Presidential Children

Albert Beck Wenzell (1864-1917) painted this gouache on paper, titled Theodore Roosevelt and His Daughter Alice. It went to auction in May 2006.

By Jim O’Neal

To describe Alice Roosevelt Longworth (1884-1980) as a handful would be a gross understatement. She was the only child of Teddy Roosevelt and Alice Hathaway Lee. Her mother died two days after her birth of Bright’s disease – a catch-all term for kidney diseases. Eleven hours before her death, TR’s mother, Martha “Mittie” Roosevelt, had died of typhoid fever. It was a traumatic time in the Roosevelt home and it would haunt Teddy for the rest of his life.

Young Alice never founded a school or hospital, never ran for public office, and was terrified of public speaking, but she became unquestionably the best known and most popular of presidential children.

She was 17 when William McKinley was assassinated in 1901, which vaulted her vice-president father into the White House. When she learned of the news, she reportedly let out a war whoop and danced on the front lawn. Years later in an interview with reporter Sally Quinn (third wife of Ben Bradlee, executive editor of The Washington Post), Alice described her feelings as “utter rapture.” This kind of candor made her almost irresistible to the American public, and the press dubbed her “Princess Alice.”

One infatuated biographer described her as the “first female American celebrity of the 20th century.” Her cousin Joseph Alsop – the famous syndicated columnist whose robust opinions appeared in national newspapers for five decades – referred to her as “Washington’s other memorial.” Her celebrity started early, as people all over the country were talking about her antics, her clothes and her fearless tongue, which all delighted the average citizen.

On Inauguration Day in 1905, she was so exuberantly waving to her friends in the crowd that her father chided her by saying, “Alice, this is MY inauguration!” She was a flirt who smoked cigarettes in public and when her father declared that no daughter of his would smoke under his roof, she devilishly climbed to the roof of the White House to smoke on top of his roof. A perplexed TR told renowned author Owen Wister (“The Virginian”): “I can either run the country or attend to Alice, but I cannot possibly do both!”

After her 1902 society debut, the press constantly speculated on her romantic links with most of Washington’s eligible bachelors. She finally married Congressman Nicholas Longworth (future Speaker of the House) in one of the most famous weddings in American history, with front-page coverage across the country. Longworth was a notorious philanderer. William “Fishbait” Miller, doorkeeper of the House, described him as the “greatest womanizer in the history of Capitol Hill.”

Their marriage was an open sham and Alice was rumored to have had a child with William Borah, who became a senator after Idaho became a state in 1890. He was a perennial contender for president and was responsible for killing President Wilson’s attempt to approve the Treaty of Versailles.

Alice delighted in skewering prominent politicians. Calvin Coolidge “was weaned on a pickle.” Speaking of Herbert Hoover, she said “the Hoover vacuum is more exciting, but of course it is electric.” New York Governor Thomas Dewey, with his slick black hair, reminded Alice of the little groom on the top of a wedding cake. When FDR ran for a third term, she declared, “I’d rather vote for Hitler!”

Her acidic commentary on the rich and famous delighted and amused the public for four generations. Alice Roosevelt died of pneumonia on Feb. 20, 1980. At age 96, she had outlived the children of every other president.

She was a handful.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Coolidge Focused on Creating Conditions Under Which Everyone Could Succeed

This rare “KEEP COOL-IDGE” campaign button, 1924, sold for $2,250 in February 2015.

By Jim O’Neal

The Republican Party’s 1924 presidential convention in Cleveland was the first to be broadcast on radio. Incumbent President Calvin Coolidge was a cinch to win the nomination as the nation was at peace, the country prosperous and the integrity of the executive branch restored after the Warren G. Harding scandals. “Keep Cool With Coolidge” captured the mood of the country and Democrats were so divided it took 103 ballots before they picked John Davis of West Virginia (“The Disaster in Madison Square Garden”).

The only real surprise was the selection of the Republican vice president candidate. Coolidge favored Senator William Borah of Idaho, who declined. On the second ballot, they nominated Governor Frank Lowden of Illinois, but he stunned everyone by refusing just as delegates were making the vote unanimous. Finally, Charles Dawes was nominated and he accepted. He would win the Nobel Peace Prize in 1925 for his work on World War I reparations and is the only vice president to be credited with a No. 1 pop song (“It’s All in the Game,” 1958, performed by Tommy Edwards).

President Coolidge’s inaugural address in March 1925 was a ringing endorsement of his policies: encourage business and reduce taxes. “Economic legislation is not to destroy those who have already secured success, but to create conditions under which everyone will have a better chance to be successful.”

On Aug. 2, 1927, Coolidge surprised the nation with a terse announcement of his intent to retire. “I do not choose to run for president in 1928.” He explained his reelection would extend his presidency to 10 years … longer than anyone before … and too long in his opinion.

Some observers have speculated that he turned down reelection due to health concerns. Mrs. Coolidge claimed he told her that the next four years may have required greater federal spending … something he was too frugal philosophically to support. Others believe Coolidge retired because he sensed the coming economic crash and got out before his reputation for fostering prosperity was tarnished.

“You hear a lot of jokes about ‘Silent Cal Coolidge.’ The joke is on the people who make the jokes. Look at his record. He cut taxes four times and we probably had the greatest growth and prosperity we’ve ever known. I have taken heed of that because if he did that by doing nothing, maybe that’s the answer.” – President Ronald Reagan

Amen.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

President Harding’s Funeral Train Transfixed the World

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President Harding was popular with Americans, but the Harding Scandals later tainted his legacy.

By Jim O’Neal

The news of President Warren G. Harding’s death astonished the American people. Telephone and telegraph lines stayed busy between San Francisco and Washington. A special railroad car, “The Superb,” was outfitted as a hearse. Twenty-four hours after the president died, the train left San Francisco, pulling the lighted car with its flag-draped coffin, honor guard and banks of flowers.

“The spectacle of the funeral train traversing the entire breadth of the United States,” observed The Washington Post, “is not to be forgotten.”

News of Harding’s death arrived at the White House by telephone. Irwin “Ike” Hoover, the White House Chief Usher, had been trying to keep a diary, but he never seemed to make a record of important things. “President dies” was all he recorded that day. In fact, his book was merely a series of blank pages for all the early days of August 1923. Hoover’s job was to run the White House, not record history. He quickly set to work hanging crepe over the mirrors of the East Room. Then the shades were drawn and the house was closed to the public.

Later, the book 42 Years in the White House chronicled Hoover’s service, which started in 1891 (when he installed the first electrical wiring in the White House) and continued through nine presidents, starting with Benjamin Harrison and ending with Herbert Hoover. He died in 1933 and President Franklin D. Roosevelt offered the White House for his funeral. Oh, the tales that probably didn’t get recorded.

Harding’s funeral train pulled into Union Station on Aug. 7. It had held the world transfixed during its five-day trip across the nation. An honor guard transported the coffin from the train with great ceremony and Harding’s body was placed in the East Room. The funeral was held in the Capitol with his Cabinet, Congress and a large group of invited dignitaries.

Florence Harding had a quiet dinner with Calvin Coolidge and his family, and would remain in the White House for five busy days. She had a fire built in the fireplace in the Treaty Room and then methodically started burning the presidential papers she determined should not survive. Then she had all the remaining papers packed into boxes and removed to a nearby friend’s house. Then she resumed the burning more slowly in small fires on the lawn.

President Harding’s secretary, George Christian, stood by helplessly during this process, until he found some papers undisturbed in the Oval Office and hid them in the pantry on the first floor. They remained there, apparently forgotten, until after Mrs. Harding’s death. Then they were given to the Library of Congress. No other papers of President Harding are known to have survived the purge of his records.

Later, the “Harding Scandals” would offer one possible reason for this unusual situation.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Truman’s Time in Office Was Tumultuous, but He Still Ranks Among Best

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Virtually every prediction indicated that Harry S. Truman would be defeated by Thomas E. Dewey in the 1948 election. A copy of the famous “Dewey Defeats Truman” photograph, inscribed by Truman, sold for $10,157.50 at an April 2013 Heritage auction.

By Jim O’Neal

Harry S. Truman moved back into the newly rebuilt White House in March 1952 and he had already decided not to seek reelection.

Since Truman had only served one full term as an elected president (having filled a partial term after Franklin D. Roosevelt died in office), he was eligible to run for president a second time. This was the same dilemma that had confronted two of his predecessors: Teddy Roosevelt and Calvin Coolidge, both of whom had decided not to run a second time. Truman was well aware of their personal deliberations; the first Roosevelt had lived to regret not running, while Coolidge had never looked back.

In 1951, after four years of debate, Congress ratified the 22nd Amendment of the Constitution, which limited an elected president to two terms. This was a reaction to FDR’s long tenure, and it specifically exempted Truman. But, he had made up his mind.

He addressed the Democratic Party’s historic Jefferson-Jackson dinner at the D.C. National Guard Armory. “I shall not be a candidate for reelection. I have served my country long and I think efficiently and honestly. I shall not accept a re-nomination.” He added in an ironic tone not typical of him, “I do not think that it is my duty to spend another four years in the White House.”

Although he was a tough-skinned politician, he resented the negative public opinion that had risen around him. His time in office, eight years less about two months, had been tumultuous, filled with achievements that had not been easy. His call for liberal change had been rooted philosophically in the New Deal, but in the wake of World War I and increased prosperity, his call fell on deaf ears.

The American public was turning elsewhere, particularly after he vetoed an ardent Republican crusade to turn coastal tidelands mineral rights over to the states, and it was viewed as a lame-duck president lashing out. It was actually one of the few vetoes that stuck (12 of his vetoes were overridden by Congress) and it created an energy that would result in a Republican victory in the upcoming election.

At about the same time, the Treasury Department announced that the federal deficit would be double than the previous year and in the last months of his presidency, his popularity and spirits were low. He was ready to go home.

History has been kind to Truman. Every year, his standing on the Best Presidents list seems to improve. He was a small man in stature who assumed a big job at a crucial time and did his very best. Who could expect more?

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

For President Johnson, Goal was Reached with ‘Great Society’ Legislation

lyndon-b-johnson-great-society-bill-signing-pens-from-1965
A complete set of 50 pens President Johnson used to sign “Great Society” legislation in 1965 sold for $18,750 at a November 2015 Heritage auction.

By Jim O’Neal

Whether Lyndon B. Johnson intended to run a second time for the presidency (after his 1964 election) is uncertain. Many of his predecessors had made it clear that one elected term was enough.

Theodore Roosevelt made a campaign promise not to run again for president and regretted it so much that he later ran anyway (in 1912). Rutherford B. Hayes never intended to run more than once (and was happy he hadn’t), and neither did Harry Truman or Calvin Coolidge. Except for TR, these men were no longer popular by the end of their first elected term, and it most likely would have been a waste of time.

So it was with LBJ. On March 31, 1968, he took the nation by surprise when he announced abruptly in a televised address from his office, “I shall not seek, and I will not accept, the nomination of my party for another term as your president.”

Johnson had even spoken of resigning, but if anything deterred him, it was the fear of losing his “Great Society” programs in Congress. Even the media-fueled support for Robert Kennedy was threatening, because Johnson never trusted him and was leery of his lack of power with Congress to be sure the programs got enacted. Johnson cared more about his agenda than the presidency.

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President Johnson signs legislation.

Then, shortly after his retirement speech, came the assassinations of Dr. Martin Luther King Jr. (April) and Kennedy (June), which stirred even more violence in the streets. The military was on stand-by and ready to pour into Washington if rioting was too much for the police. For the man in the White House, the outside world was a horror show and the idea of returning to his ranch grew more appealing. A long-time colleague from the old days, Congressman Jack Brooks, said the president did not seek reelection because he “kind of wanted to get back home,” adding for those who might not understand, “It’s not so bad out on the ranch, you know.”

Some presidents depart the White House invigorated, but most leave exhausted. For LBJ, the office had drained his vigor and confidence. He also believed that history would never give him credit for achieving the most powerful social agenda since Roosevelt’s New Deal. It was Johnson’s political skill that made it happen, not JFK, but Johnson believed that somehow the applause would inevitably go to his more popular predecessor. Sadly, he was right, but in recent years, a more balanced narrative has evolved.

Republicans nominated Richard Nixon in August 1968 and the Democrats chose VP Hubert Humphrey. LBJ did not attend the convention to share Humphrey’s triumph since he didn’t want to add any Vietnam War baggage to the ticket. During the campaign, the war flared on and LBJ was still impassioned to end it. On Oct. 31, just days before the election, he even announced a halt to the bombing, but it was too late.

On Jan. 14, 1969, President Johnson delivered his final State of the Union to Congress. It was strong, pragmatic and well-received by his old Senate colleagues – and in a venue where he was very comfortable.

Then it was time to pack up and head back to Texas.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

With Discovery of Gold, President Polk Opened Massive Migration West

half-plate-daguerreotype-of-california-gold-rush-mining-scene-ca-1850s
This half plate daguerreotype of a California gold rush mining scene, circa 1850, sold for $28,680 at a June 2008 Heritage auction.

By Jim O’Neal

Reports of gold in California came to the president as early as June 1848. Part of the talk was idle speculation; part was based on tales of settlers and soldiers plus myths of Spanish treasure troves. A succession of adventurers, spies and famous Western characters like Kit Carson had slipped quietly up the stairs into President James Polk’s office to tell of the vast domain far to the west.

The lost mines of El Dorado had long fascinated nearly everyone.

The first official report on “gold diggings” came to Polk in August 1848. Navy Lieutenant Edward Fitzgerald Beale showed the president some actual gold nuggets. Authoritative and “eyewitness” accounts of California gold started popping up in various newspapers. In a message to Congress on Dec. 5, 1848, Polk outlined the possible scope of the precious metal mines and the extraordinary potential that had been corroborated by authentic reports.

Two days later, a courier from California arrived at the War Department with a mysterious package and more dramatic evidence of western riches. As soon as Secretary of War William Marcy unwrapped the parcel, he took it directly to President Polk. It contained a tea caddy crammed full of gold nuggets and dust that weighed over 230 ounces.

They quickly decided to send the largest “lump” to Philadelphia to be minted into coins and put the rest on display in the War Office. Visitors of every class stood in long lines just to see it and it became the dominant subject everywhere. On Dec. 12, Polk predicted the coming 12 months would witness “a large population … attracted to California by its mineral wealth.”

In his History of California, historian Hubert Bancroft wrote of Polk’s prophecy. “The interest in California became all-absorbing, creating a restlessness which finally poured a human tide into San Francisco Bay, and sent hundreds of caravans over the plains and mountains.”

However, the Polks moved out of the White House on Saturday, March 3, 1849, to 10 rooms prepared for them at the Willard Hotel. He had promised to only serve one term and his time in the WH had taken an enormous toll on his health. He had the shortest retirement of any president and died of cholera 103 days after leaving office. Along with George Washington, Andrew Johnson, Chester Arthur, Calvin Coolidge and LBJ, he was one of six presidents to die while their direct successor was in office.

He totally missed the Gold Rush and the massive migration west he was responsible for.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

President Harding Entered Office on a High Note … then Came the Scandals

warren-g-harding-and-james-m-cox-absolutely-stunning-matched-pair-of-large-1920-rarities
This matched pair of Warren G. Harding and James M. Cox 1920 campaign buttons sold for $6,875 at a November 2013 Heritage auction.

By Jim O’Neal

The Republicans returned to power in the election of 1920 with the victory of Warren G. Harding of Ohio. Isolated even further in the confines of the White House, Woodrow Wilson and family waited out the year and the first two months of 1921. The outgoing president’s condition had stopped improving. He was feeble and mostly occupied with his books and papers, though he now lacked the mental acuity that was key to his greatness.

Late in his term, Wilson was awarded the Nobel Peace Prize and his spirits rose. Remorse yielded to genuine gratification, an indulgence he rarely allowed himself even in the good times. However, Edith Wilson found little diversion from this almost oppressive situation. The world was slowly passing the Wilsons by without a second glance.

The 1920 campaign had been dull and lackluster, with Harding remaining in Ohio on his front porch, greeting thousands of well-wishers and speaking to them informally. The Democrats had tried to make the League of Nations a campaign issue, but Harding’s position was too obscure since he was really only interested in preserving the Senate’s constitutional rights regarding foreign treaties. When voters got to the polls, politicians discovered the campaigns had not mattered. The people were so tired of government restrictions and hardships imposed by the war that they sought a complete change in administrations and a return to “America First.”

Harding and running mate Calvin Coolidge drubbed James Cox and Franklin D. Roosevelt in both the popular vote and electoral college (404 to 127).

Between the election and inauguration, Harding chose his cabinet, carefully balancing the membership with close political friends and leaders in the Republican Party. It was a blue-chip group that included Charles Evans Hughes (former governor of New York, Supreme Court Justice and presidential candidate in 1916) as Secretary of State; Secretary of Commerce Herbert Hoover; and millionaire Pittsburg banker Andrew Mellon as Secretary of Treasury. But there were also a few friends, like Albert Fall (Interior) and Harry Daugherty (Attorney General), who would become infamous for corruption.

Friends of Harding and Daugherty flocked from Ohio to Washington for jobs. Headquarters for the “Ohio Gang” was the “Little Green House” on K Street, where government favors and appointments were bought and sold. Evidence of Harding’s knowledge is sketchy; his friends just assumed he would agree in order to please them. But late in 1922, Harding learned of irregularities at the Veterans’ Bureau, where huge amounts of surplus materials were sold far below market value and in turn new supplies were purchased far above fair value, all without competitive bidding.

The head of the agency, Charles R. Forbes – one of Harding’s poker buddies – was allowed to resign, but the attorney for the Bureau committed suicide. This was soon followed by the death of another close Harding friend, Jess Smith, who shared an apartment with Daugherty and was a member of the “Ohio Gang.” Sensing trouble, Harding had asked him to leave Washington, however Smith shot himself to death. But the biggest surprise surfaced after Harding died of a heart attack in San Francisco in August 1923.

Secretary of Interior Fall had allowed two large federal oil fields in Elk Hills, Calif., and Teapot Dome, Wyo., to be opened to private oil companies. He was convicted of bribery ($400,000) and sent to prison. Attorney General Daugherty was brought to trial in 1924 for conspiracy in much of this, but refused to testify to avoid “incriminating the dead president” and it hung the jury.

How much Harding actually knew about the corruption among his friends will never be known. After his death, Mrs. Harding burned all his papers and correspondence, diligently recovering and destroying even personal letters in the possession of other people. Since she had also refused to have Harding’s corpse autopsied in San Francisco, there have always been rumors he was actually poisoned.

Ah, Washington, D.C. – such a small city, but with so many untold mysteries.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Transfer of Power Between Hoover, Roosevelt Tense but Peaceful

herbert-hoover-classic-ok-america-button
This “OK America!” button from Herbert Hoover’s 1932 re-election campaign sold for $2,500 at a September 2015 Heritage auction.

By Jim O’Neal

Herbert Hoover aspired to the presidency of the United States strictly for the opportunity to serve the public. When elected in 1928, he was universally recognized as the greatest living humanitarian. He helped organize the return of thousands of Americans stranded in Europe before the outbreak of World War I (taking no salary) and also directed the program for relief to millions of Belgians and French (after Germany invaded Belgium) as head of President Wilson’s Food Administration.

For several years after the war, he continued to serve without salary as Secretary of Commerce for presidents Warren Harding and Calvin Coolidge until he resigned to run for president in 1928. He won by a large margin and in his inauguration speech on March 4, 1929, he described the future of the country as being “bright with hope.”

Three and a half years later, Republican prosperity had vanished, beginning with the stock-market crash seven months after Hoover took office. Protesting veterans of the Bonus Army were camped out in sight of the Capitol and milling around the White House to display their frustration and bitterness.

Hoover was on a tour of the Midwest the day the stock market crashed. For seven rainy days, he plodded from town to town on his train, proclaiming prosperity to anyone willing to listen. He arrived home on Oct. 4, 1929, and at a press conference the next morning, he assured newsmen the country’s businesses stood on a solid foundation.

Days later, on Oct. 19, Black Tuesday, the stock market fell sharply, but the president earnestly believed this was only a tough patch, like the Panic of 1907. Like most people, he seems to have had little idea of how bad the worst would be. The plan he presented to Congress in December was totally unorthodox by calling on the federal government to save the day through a series of programs that included education reform, housing for the underprivileged, jobs in long-term construction, lower taxes and a balanced budget … while making government more effective and efficient.

To add to the gloom of 1929, the Executive Office burned to its walls on Christmas Eve as carolers serenaded. The destruction of the Executive Office was a better symbol for the Hoover presidency than the White House, since virtually all the programs failed and the country started a downward spiral that would continue until we had to gear up for the next world war.

In the summer of 1932, Franklin Delano Roosevelt was nominated by the Democratic National Committee in Chicago. On Aug. 11, Hoover formally accepted the Republican nomination that had been offered several months earlier. But he chose to bury himself in work for the balance of August and all of September. By then, the Democrats were in full stride and FDR became the president-elect.

However, the transfer of office from Republican to Democrat was chilly. At best, the feeling between the two men was of mutual contempt. The Hoovers declined to host the traditional March 3 dinner for the incoming president, and the Roosevelts had no intention of attending. Hoover was frustrated that FDR did not accept any of his advice and Roosevelt had grown weary of listening. (This would lead to changing the inauguration of March 4 to January 20, since it was too long to have a lame duck badgering the new guy.)

A small awkward tea ceremony was finally negotiated and that was that. A quiet, peaceful transfer of the most powerful political office in the world.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].