1 Harding and Coolidge

Candidates: Warren G. Harding represented the Republican party, advocating a campaign centered on isolationism and a return to normalcy following the upheaval of World War I.
Election Outcome: Harding's platform resonated with voters, leading to a significant Republican victory in the election of 1920, which marked a shift in political power back to conservative governance.

Primary Objective: Harding aimed to reinstate laissez-faire economics, promoting minimal government interference in economic matters to encourage growth.
Corruption Issues: His administration was marred by scandal, primarily due to his appointment of several corrupt associates, which ultimately led to a series of political scandals that undermined public trust in his leadership.

Continued Reforms: While Harding sought a return to laissez-faire policy, some Progressive reforms remained intact, such as the Clayton Antitrust Act, which aimed to prevent anti-competitive practices, and the Federal Trade Commission, focused on consumer protection.
Laissez-faire Belief: Harding maintained that a strong relationship between government and big business would stimulate economic growth and restore prosperity.

Pro-Business Agenda: The Harding administration actively worked to reduce the effectiveness of regulatory frameworks established during the Progressive Era, undermining the intended protections for consumer rights and fair competition.
Regulatory Changes: Key changes included filling regulatory agencies like the ICC (Interstate Commerce Commission) and FTC (Federal Trade Commission) with pro-business advocates, diminishing their regulatory capabilities.
Esch-Cummins Transportation Act: This act facilitated the consolidation of railroad companies, encouraging monopolistic practices that subordinated smaller competitors and eroded consumer choice.

Fordney-McCumber Tariff of 1922: This significant tariff legislation raised rates by 11.5% compared to previous reductions, granting the President unilateral authority to adjust tariffs by as much as 50% without congressional input. This expansion of presidential power over tariffs was controversial and contentious.
32 Tariff Expansions: Over six years, the government enacted 32 expansions of tariff protections, which had profound implications for international trade, benefiting American manufacturers but alienating foreign trade partners.

Retaliatory Measures: While beneficial for American businesses in the short term, increased tariffs prompted retaliatory actions from other nations, leading to a slowdown in global commerce and straining international relations.

Major Corruption Case: The Teapot Dome Scandal exemplified the level of corruption within Harding's administration, where individuals in key positions abused their power for personal gain.
Key Figures: Harding appointed Albert B. Fall as Secretary of the Interior, who orchestrated manipulation of federal oil reserves meant for national security to benefit private business interests, in exchange for a bribe of $400,000 from Sinclair Oil Company.
Public Outrage: The scandal sparked public outrage for several reasons, including the improper exploitation of strategic oil reserves and the leniency towards Fall, who received a light sentence while others involved faced acquittal, triggering persistent speculation about Harding's own awareness of the scandal's details.

Broader Context of Corruption: Harding's presidency was characterized by numerous additional scandals beyond the Teapot Dome, illustrating systemic corruption and poor governance that plagued his administration.

Transition and Public Perception: Following Harding's death, Calvin Coolidge assumed the presidency and was generally perceived as a corrective figure, restoring integrity to the White House while maintaining a strong pro-business stance.
Economic Philosophy: Coolidge encapsulated his economic policy with the phrase, "the business of America is business," indicating a commitment to supporting corporate interests at the cost of regulatory oversight.

Influence of Andrew Mellon: As Secretary of Treasury, Mellon’s policies favored wealthy individuals and corporations. He championed reductions in taxes for the upper class, based on the belief that their wealth would trickle down to the broader economy by promoting investment and job creation.
Tax Burden Shift: Mellon's policies effectively shifted the tax burden onto the middle class, ensuring disproportionate benefits for the wealthy and contributing to economic inequality.

Republican Dominance: Coolidge's candidacy in 1924 was buoyed by a strong Republican alignment with business interests, easily securing the Republican nomination.
Democratic Internal Struggles: Democrats faced significant division over social issues, leading to the nomination of John W. Davis, who held more moderate views favoring business.
Third-party Challenge: Progressive Robert La Follette ran as a third-party candidate, promoting a platform that appealed to those disenchanted with both major parties.

Economic Prosperity: The prevailing economic prosperity of the 1920s played a crucial role in Coolidge's re-election, as voters favored stability and continued growth.
Political Landscape: The electoral landscape of 1924 showcased a decisive Republican victory, overshadowing the fragmented Democratic and Progressive campaigns.

International Financial Relations: Coolidge faced significant challenges regarding debts owed by Britain and France, resulting from the $10 billion in loans during World War I. Both nations relied on Germany's reparations to settle their debts, creating a precarious financial situation.
Economic Instability in Germany: Following the war, Germany's Weimar Republic was severely affected by hyperinflation, a consequence of excessive money printing that destabilized its economy and hindered its ability to repay debts.

International Economic Stabilization: The Dawes Plan represented a pivotal international agreement aimed at stabilizing Germany’s economy by facilitating American loans to support recovery.
Reforms and Oversight: It involved reorganizing Germany's central banking system under US and British oversight, with loans directed towards ensuring the stability of German businesses, thereby enabling reparations payments.

Short-term Success: The Dawes Plan achieved initial success by stabilizing the German economy and allowing for the resumption of reparations payments to Allied nations.
Long-term Risks: However, it also inadvertently tied the European economy closely to the American economy, creating vulnerabilities that would manifest dramatically following the 1929 American economic crash, leading to widespread global financial instability.