warren g. harding
election of 1920
Economic issues, labor strikes and general unrest, and racial tensions led to a general sense of disillusionment in the United States following World War I. Ohio governor, James M. Cox, ran with Secretary of the Navy, Franklin D. Roosevelt, on a platform of Progressive ideals. President Wilson encouraged the Democrats to create a referendum on the Treaty of Versailles and League of Nations. The Republican candidate, Warren G. Harding, ran on a campaign arguing that the United States should “return to normalcy,” or the America before the Great War and "drastic" Progressive changes. Harding won by a landslide.
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Warren's presidency & The return to normalcy
In 1920, Harding won the presidential election by a landslide. Rather than pursue reform, as the Progressives had done, Harding and his successor, Calvin Coolidge, favored more conservative policies that aided the growth of business and a return to laissez-faire economics.
Harding soon nominated wealthy banker Andrew Mellon as Secretary of the Treasury. Mellon supported legislation that supported big business. He disliked the new graduated income tax (16th Amendment) and instead supported low taxes on individuals and corporations. Mellon also “trimmed the fat” from the federal budget, going from a war-time high of $18 billion to $3 billion under his administration.
Harding signed a protective tariff that raised tariff rates by 25%. The tax on imports made it easier for American manufacturers to sell their products at home, but in retaliation, European nations hiked their tariffs. This made it more difficult to sell American products overseas, especially surplus crops. American farmers in particular suffered from their prices dropping, especially after demand also fell after the end of WWI. This international tariff war weakened the world economy and would be one of the contributing factors to the Great Depression.
Harding soon nominated wealthy banker Andrew Mellon as Secretary of the Treasury. Mellon supported legislation that supported big business. He disliked the new graduated income tax (16th Amendment) and instead supported low taxes on individuals and corporations. Mellon also “trimmed the fat” from the federal budget, going from a war-time high of $18 billion to $3 billion under his administration.
Harding signed a protective tariff that raised tariff rates by 25%. The tax on imports made it easier for American manufacturers to sell their products at home, but in retaliation, European nations hiked their tariffs. This made it more difficult to sell American products overseas, especially surplus crops. American farmers in particular suffered from their prices dropping, especially after demand also fell after the end of WWI. This international tariff war weakened the world economy and would be one of the contributing factors to the Great Depression.
The ohio Gang
Harding was especially kind and likeable, but not particularly intelligent or able to make decisions. Rather than deal with the complexities of the presidency, he often trusted others to make decisions for him. Many of those men making the decisions were his close friends. They were known as the “Ohio Gang” and they weren’t always an honest bunch. They were mostly greedy, small-minded men who saw government as a chance to get rich at the expense of the citizens they were supposed to represent.
Charles Forbes, head of the Veterans’ Bureau, practiced graft (corruption) on an immense scale and wasted hundreds of millions of dollars of taxpayer money. For example, his office bought $70,000 worth of floor cleaner, enough to last 100 years, at more than 24 times the fair price. Soon, Harding's presidency became known for its scandals, much like those of the Grant and Nixon administrations.
Charles Forbes, head of the Veterans’ Bureau, practiced graft (corruption) on an immense scale and wasted hundreds of millions of dollars of taxpayer money. For example, his office bought $70,000 worth of floor cleaner, enough to last 100 years, at more than 24 times the fair price. Soon, Harding's presidency became known for its scandals, much like those of the Grant and Nixon administrations.
the teapot dome scandal
The worst scandal of Harding’s administration involved Secretary of the Interior, Albert Fall. In 1921, Fall arranged to transfer oil reserves in Elk Hills, California and Teapot Dome, Wyoming from the Navy Department to the Interior Department (and planned to make a profit off of the transfer). The oil reserves were intended for the Navy’s use in time of emergency. Harding signed the transfer.
Once Fall had control of the oil, he ignored the needs of the Navy. He leased the oil-reserve properties to private oilmen in return for “loans” (which were actually bribes). Rumors of the deal led to a Senate investigation, and by 1924 the entire sordid affair was revealed to the public. The oil reserves were eventually returned to the government, but Fall was sentenced to a year in prison. Harding died shortly after the affair from a heart attack, but his presidency would be remembered for scandal.
Once Fall had control of the oil, he ignored the needs of the Navy. He leased the oil-reserve properties to private oilmen in return for “loans” (which were actually bribes). Rumors of the deal led to a Senate investigation, and by 1924 the entire sordid affair was revealed to the public. The oil reserves were eventually returned to the government, but Fall was sentenced to a year in prison. Harding died shortly after the affair from a heart attack, but his presidency would be remembered for scandal.