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].

Vice President Agnew Believed They Were Out to Get Him

Spiro Agnew in his memoirs suggested Richard Nixon and Alexander Haig planned to assassinate him.

By Jim O’Neal

Spiro Theodore Agnew was elected vice president twice … in 1968 and 1972. However, he became the second vice president to resign in 1973. Although accused of several crimes along the way, he finally pleaded no contest to a single charge of not reporting $29,500 income in 1967.

Lesser known is that in 1995, his portrait bust was placed in the U.S. Capitol. An 1886 Senate resolution stipulated that all former VPs were entitled to a portrait bust in the building. Agnew proudly attended the formal ceremony.

He later claimed that both President Richard Nixon and his Chief of Staff, Alexander Haig, had threatened to assassinate him … “Either resign … or else.” (That would have really been a first!)

Grover Cleveland served two non-consecutive terms as president – No. 22 and No. 24.

He was the first Democrat elected after the Civil War, which he conveniently sidestepped by hiring a replacement to take his place in military service.

Some of his firsts include:

• Only president to admit fathering an illegitimate child.

• First and only president to marry in the White House.

• First president to have a child born in the WH.

During the Panic of 1893, he secretly had a cancerous jaw replaced with a rubber mandible. It was done on a yacht at sea to avoid spooking the markets. Perhaps the absence of any “leaks” was because he was a tough man who had (personally) hung two crooks when he was a sheriff in Buffalo.

Thomas Riley Marshall is still a relatively obscure vice president despite serving eight years (1913-21) with Woodrow Wilson, and in 1916 becoming the first VP reelected since John Calhoun (1828).

Many historians argue that he should have assumed the presidency when Wilson suffered his debilitating stroke, but a small group around Wilson (including his wife) were able to keep it a secret. Some Wilson signatures appear to be forged, however Marshall had little interest and confined his duties to calling each day to inquire about the president’s health.

Marshall is famously credited with saying, “What this country needs is a really good five-cent cigar!”

Three of our first five presidents died on July 4, as did Abraham Lincoln’s first VP, Hannibal Hamlin.

Calvin Coolidge Jr. was born on that historic date. After President Warren G. Harding died in San Francisco in 1923, Coolidge assumed the presidency and won re-election in 1924. His father swore him in in 1923 as he was a judge/notary.

“Silent Cal” was a real tax cutter, and by 1927, 98 percent of the population paid zero income tax. Plus, he balanced the budget every year and when he left office in 1929, the federal budget was lower than when he started.

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].

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

president-harding
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].

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].

Great Depression Overshadows Hoover’s Humanitarian Legacy

President Hoover’s 1932 Presidential Christmas Card was sent to close staff members. This card, and another for the First Lady, realized $1,673 at a December 2012 auction.

By Jim O’Neal

Images of the 1929 stock market crash, Hoovervilles (shanty towns built by the homeless), and the soup lines of the Great Depression are all associated with President Herbert Hoover. His administration (1929-33) coincided with all these events, although most of the underlying causes occurred prior to him assuming office.

A remarkably different perspective of his career emerges when one closely examines the years preceding his time in the White House.

In 1900, he and his wife Lou helped defend Tientsin, China, during the Boxer Rebellion, then Herbert started traveling the world displaying his engineering and business prowess. He found silver, lead and zinc in Burma, zinc in Australia, and both copper and oil in Russia. He also accumulated wealth and prestige as his company benefited from rescuing financially troubled mining companies. By 1913, his personal wealth soared to over $4 million.

When World War I broke out, Hoover was in London and shifted his primary focus to alleviating the inevitable suffering he knew would be next. First, he established the American Citizens Relief Committee and helped Americans escape the continent to London. Next, he headed a private charitable group, the Commission for Relief in Belgium. As always, he worked tirelessly, raising funds from the British, French and American governments to import wheat for Belgium millers to convert to flour for bread.

After the United States entered the war, President Wilson brought Hoover to Washington to head up the administration of U.S. food production. Then, he returned to Europe in 1918 to head post-war food relief to the allies. When he decided to include Germany as well, critics complained they should be punished instead. Hoover countered, “The United States is not at war with German infants!”

He did a lot more than stave off starvation. His rebuilding efforts included the wrecked European economies: heavily polluted rivers were cleansed, railroads repaired, and communication systems re-established. As Bolshevism festered in the rubble, the Hoover-led American efforts established capitalism to counter it.

In 1919, President Wilson appointed Hoover vice-chairman of the Second Industrial Conference in Washington. The group’s final report, primarily written by Hoover, called for progressive reforms: greater equity between profits and wages; a minimum wage law; equal pay for men and women; and a 48-hour workweek. Even today, these reforms sound familiar.

Hoover made a strong run for the 1920 Republican presidential nomination, but lost out to Warren G. Harding. He would not get his chance for another eight years … just when all the cracks were beginning to appear and the roof would come cascading down as he took office.

Bad luck, bad timing or both? Either way, Hoover was at the helm when the ship started to list and he carried the stigma of blame for the rest of his life. History can be a cruel master.

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].

Coolidge’s Quiet Demeanor Was No Hindrance to a Winning Campaign

This four-inch Calvin Coolidge “Deeds Not Words” political button alludes to his taciturn nature. It realized $3,346 at a November 2011 Heritage auction.

By Jim O’Neal

In 1924, incumbent President Calvin Coolidge (R) squared off against Democrat John W. Davis. As vice president, Coolidge assumed the presidency as a result of Warren G. Harding’s odd death in 1920 and voters were still trying to assess this quiet, taciturn man born on July 4 in Plymouth Notch, Vt. He favored U.S. participation in the World Court, but opposed any involvement in the League of Nations.

Although in opposing parties, Coolidge and Davis shared similar conservative views on the role of the federal government: lower taxes, less regulation and a small, focused agenda (some things never change … just the individuals espousing them).

In fact, their views were so similar that historians call this election “the high water mark of American conservatism.”

Naturally, this didn’t sit well with Liberal Progressives, so they formed a new Progressive Party (it only lasted for one election) and then ratified the nomination of Wisconsin Senator Robert M. La Follette for president.

Although La Follette represented this minor third party, he managed to snag 4.8 million votes and 13 electoral votes … probably just as well since he died several months after the election of heart disease (a common malady for men of this era).

The third party divided the Democratic Party rather badly and allowed President Coolidge to keep his job.

Coolidge’s vice president, Charles G. Dawes, had written the music in 1911 for a tune which eventually became a big hit in 1958 for Tommy Edwards. “It’s All in the Game” is the only number one hit co-written by a VP.

The election of 1924 was also the first presidential election in which all American Indians were recognized as citizens and allowed to vote.

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].