10 Warren Harding

This is a post in My Presidential Rankings series, linked here: Presidential Rankings

Warren Harding is generally ranked near the bottom of presidential polls, but these rankings aren’t based on reality, but on a façade perpetrated by Harding’s political enemies. The real Harding was a very capable president that faced the issues of the day admirably.

Woodrow Wilson’s bequeathed to Harding a rapidly disintegrating economy. There was rampant inflation from 1917 to 1920, with a cumulative increase of 56%, followed by a deep recession and price deflation. Wholesale prices dropped 36.8%, the most severe drop since the American Revolution. Unemployment shot up to 12%, the Dow Jones Industrial Average dropped from 119.6 in November of 1919 to 63.9 in August of 1921, a 47% loss. How did Harding and his Secretary of Treasury, Andrew Mellon, respond to this recession? Through the following actions:

The Revenue Act of 1921 – cut taxes across the board, lowering the top rate from 73% to 58%, removed the excess profits tax, raised the personal exemption by $1000 and exemptions for dependents from $200 to $400. Excessive wartime taxes were strangling economic growth. These cuts have been demonized, but the top marginal rate before the war was only 7%.

Tariff Laws – Emergency Tariff of 1921 imposed temporary duties on agricultural goods due to price collapses and loss of European markets. The Fordney-McCumber Tariff of 1922 readjusted rates on a permanent basis.

Budget and Accounting Act of 1921 – Harding created the Bureau of the Budget, now called the Office of Management and Budget, that led to the first unified budget, which helped keep spending under control. Before this act each executive department would submit separate budgets to congress. Harding, along with bureau director Charles Dawes, cut spending from $6.4 billion in 1920 to $3.1 billion in 1923. 

What was the result? Rather than a decade long depression, like in the 1930s, there was a short sharp recession followed by unprecedented growth. That 12% unemployment in 1921 dropped below 3% by 1923.

The agricultural sector faced difficulty during the roaring twenties, but it was coming off of unprecedented prosperity in the 1910s. Once European farms were restored after the war, American farmers faced issues of overproduction. Historians compare the agricultural economy of the 1920s to that of the 1910s, but this is a dubious comparison, the 1910s were a “golden age” of farming. Harding helped farmers by encouraging The Capper-Volstead Act of 1922, sometimes called the “magna Carta” of cooperatives, which gave farm cooperatives exemptions from antitrust laws. Before this act the Clayton Antitrust Act and Sherman Antitrust Act had been used to break up farming cooperatives.

The Federal Highway Act of 1921, which foreshadowed the interstate highway program under Eisenhower, gave 50/50 matching funds to states to build a state highway system. In 1922 General John Pershing was commissioned to draw up a map of roads to show which roads were most important in the case of a war.

When congress passed a generous bonus bill for veterans of World War I Harding objected because it was passed without any mechanism to fund it. The Veterans Bureau was established in 1921 and veterans had already been paid for their service during the war. When Congress passed the Bonus Bill in 1922, Harding vetoed it, citing that we owed gratitude to those that served, but also stating:

“To add one-sixth of the total sum of our public debt for a distribution among less than 5,000,000 out of 110,000,000, whether inspired by grateful sentiment or political expediency, would undermine the confidence on which our credit is [built] and establish the precedent of distributing public funds whenever the proposal and numbers affected make it seem politically appealing to do so.”

Harding took a very unpopular stand, and even received heat from his own party, in doing what he felt was right. Few Presidents would have the courage to veto such a popular bill.

Even though the armistice ending fighting had happened twenty-eight months before Harding entered office, the United States was still technically at war with the Central Powers, as Wilson was unable to get any treaties ratified. Harding signed the Knox-Porter resolution in July of 1921 ending the United States involvement in WWI, and signed seperate treaties with Germany, Austria and Hungary by the end of the year.

In November of 1921 Harding convened the Washington naval conference. The three main reasons behind the conference was to end the naval arms race, relieve tensions in East Asia, and to prevent another war. Harding wisely involved members of the Senate from both parties in the negotiations to aid in the Treaties passage. Three major treaties came out of the conference:

  1. Five Power Treaty – limited tons of naval war ships to a set ratio of 5:5:3:1.75:1.75 between the US, Britain, Japan, France & Italy. It didn’t cover small classes of ships. This was the first arms control treaty ever negotiated.
  2. Four Power Treaty – the US, Britain, Japan and France agreed to consult with one another before taking action in the event of an East Asian crisis. This voided the Anglo-Japanese Treaty of 1902, which could have obligated Britain to come to Japan’s defense.
  3. Nine Power Treaty – Was between the US, Britain, Japan, France, Italy, Belgium, Netherlands, Portugal & China. It internationalized the Open Door Policy to China and promised that all parties of the treaty would respect China’s territorial integrity

Harding started healing ruptured relations with Latin America that were badly strained by Woodrow Wilson and Theodore Roosevelt. Franklin Roosevelt generally gets credit for the “Good Neighbor Policy” in Latin America, but it was initiated by Warren Harding and continued under Calvin Coolidge and Herbert Hoover. In April of 1921 Harding signed the Thomson-Urrutia Treaty, which granted Colombia $25 million and apologized for the United States’ meddling in Colombia’s internal affairs and fomenting Panamanian rebellion in 1903. Harding worked to improve relations with Mexico and towards official recognition of the Mexican government, which didn’t occur until four weeks after Harding’s death. Harding also withdrew troops from Cuba in 1921 as a first step to removing American military presence in Caribbean countries.

In his first address to Congress Harding asked for an anti-lynching bill. From 1882 to 1951 over 4700 people were lynched, the vast majority of which were African-Americans. It took until 1922 for the Dyer Anti-lynching Bill to pass the House of Representatives, which would have classified lynching as a federal felony. Harding came out in support of the act, and though it passed by a large majority in the house, it was filibustered and killed by Senate Democrats. Wilson had segregated the Federal government and fired most black workers. In response, Harding asked his cabinet members to find positions in their departments for African-Americans. Warren Harding was also the first to speak in favor of civil rights in the south, when he spoke in Birmingham Alabama at its semi-centennial celebration. Harding spoke to a segregated crowd, where African Americans were kept behind a chain link fence. When speaking of voting rights Harding stated:

“Whether you like it or not, our democracy is a lie unless you stand for that equality”. Harding spoke of equality in education, labor and voting concluding the speech by stating that Birmingham’s next fifty years could be more glorious if the people of the city had “the courage to be right.”

During the war Wilson jailed several political prisoners under the Espionage Act of 1917 and the Sedition Act of 1918. By June 30th of 1923 Harding had pardoned or commuted the sentences of  548 people convicted under these acts, and when Harding died there were only 31 people still incarcerated under them. Harding should be given great credit for reversing some of the most egregious violations of Constitutional liberties ever done by a President. Harding showed great courage in the face of continuous opposition in persevering in this task.

Historians tend to focus on corruption during Harding’s term, the levels of which have been greatly exaggerated. Harding never participated in, nor gained from any corruption. The two instances of proven corruption were of personal greed, in which appointees enriched themselves at the governments expense. Whereas any corruption is bad, this type of corruption doesn’t even compare to actions that undermine the Constitution or break the citizens basic rights. Generally I don’t discuss theft of government funds in my essays, I will in this instances, since they are so ingrained in people’s opinions of Harding.

The Teapot Dome scandal involved leases of oil reserves held by the federal government that had been awarded without competitive bidding, which was legal under the Mineral Leasing Act of 1920. When Wyoming oilman and future Democratic Governor Leslie Miller found out that Harry Sinclair had secured the rights to drill in Teapot Dome, he asked fellow Democrat, U.S. Senator John Kendrick, to look into the deal. Kendrick started an investigation of the oil leases, which eventually led to the fact that Albert Fall had received $100,000 from Edward Doheny, who obtained the rights to drill in the Elk Hills, and $200,000 from Harry Sinclair, who obtained the rights to drill in Teapot Dome. Fall asserted that the payments were loans, but he was convicted of taking bribes. Oddly, both Doheny and Sinclair were acquitted of paying bribes. It seems shaky at best that Fall could accept bribes from Sinclair and Doheny when they were not guilty of giving any bribes. Doheny foreclosed on Fall’s New Mexico ranch when Fall was unable to pay the loan, lending credence to Fall’s claim that the money was a loan. During Doheny’s trial he let it slip that he had several of Wilson’s cabinet members on his payroll, including William McAdoo (Treasury), Franklin Lane (Interior) and Thomas Gregory (Attorney General). When pressed, Doheny stated that he “paid them for their influence”. Doheny did build the enormous storage tanks at Pearl Harbor as part of the deal that were of inestimable value to the Navy during World War II. Fall has been painted as a “crony”, but Fall was the first cabinet appointee to be confirmed by acclamation in Senate history. If Fall fooled Harding, he fooled everyone else as well. Outside of Teapot Dome, Fall was a very capable cabinet member, reorganizing the interior department and increasing efficiency.

Charles Forbes, originally appointed by Wilson to build Pearl Harbor, was a decorated World War I veteran, promoted to be Director of the Veterans Bureau by Harding. Forbes was guilty of taking kickbacks in the building of hospitals and selling of surplus supplies from World War I at a loss. When Harding discovered Forbes’ theft, he slammed him against a wall in the White House and called him a “double-crossing bastard”. Harding forced Forbes to resign, taking care of the corruption when found it. While taking kickbacks is wrong, it’s pretty standard practice in the government today, they have just found a better way to hide the evidence. How else can one explain a $10 hammer costing the government over $400?

Harding’s Attorney General, Harry Daugherty, has been accused of crimes, but after two congressional investigations and two criminal trials, he was always acquitted. When Daugherty got an injunction to stop the great railroad strike of 1922, he drew the ire of union leaders who vowed to get him either impeached or fired. This vendetta against Daugherty’s is where the charges of corruption were manufactured.

Every President makes a few bad appointments and historians focus on the few bad ones Harding made, ignoring several excellent ones. Charles Evan Hughes (State), Andrew Mellon (Treasury), Herbert Hoover (Commerce), Henry Wallace (Agriculture) and James Davis (Labor) in the cabinet as well as four distinguished Justices to the Supreme Court: George Sutherland, Pierce Butler, and Edward Terry Sanford and William Howard Taft as Chief Justice.

Harding’s reputation was further tarnished by three books:

  1. The Presidents Daughter by Nan Britton, which told a salacious, and unproven account of an affair with the president.
  2. The Strange Death of President Harding by convicted con artist Gaston Means that spun an incredible tale that Harding was poisoned by his wife.
  3. Revelry, by Samuel Hopkins Adams, was a sensationalized fictitious version of the Harding administration.

Thinking Harding’s wife destroyed his presidential papers, historians used these books to create the false narrative of the Harding presidency. The time has come for the real Warren Harding to replace the false caricature created by his enemies.

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