Robert K. Murray's Politics of Normalcy

Robert K. Murray. The Politics of Normalcy. New York: WW Norton, 1973. 162 pages. $18.95

Robert K. Murray is a good writer and this is a useful account of the Warren G. Harding administration. The subtitle refers to the "Harding-Coolidge Era" but the book is about the Harding administration with a brief final chapter about Coolidge. Coolidge is more vividly remembered than Harding because after Harding died in office minor scandals, the most famous of which was the Teapot Dome Scandal, were revealed and these tarnished Harding's image.

Murray suggests that Coolidge carried forward Harding's "normalcy" philosophy and so Harding was the more influentional of the two presidents. Arguably, Harding's "normalcy" philosophy has been carried forward through George Bush.

The scandals did not touch Harding; they were the product of two or three unfortunate appointments he had made. Ironically, Harding's cabinet appointments were among the better ones in history. They included Charles Evans Hughes (state), Herbert Hoover (commerce), Andrew W. Mellon (treasury) and Henry Wallace (agriculture; the father of President Roosevelt's Vice-President, Henry A. Wallace). However, there were several exceptions, namely, Harry M. Daugherty, an Ohio crony of Harding's who was later accused of corruption and resigned during the Coolidge administration (1924), although nothing was really proven about Daugherty. Another unfortunate appointment was Interior Secretary Albert Fall, who was responsible for the Teapot Dome scandal, which involved Harry Sinclair's Mammoth Oil bribing Fall for oil leases. Another was Charles R. Forbes, director of the Veterans' Bureau who had sold government supplies illegally and whom Harding had asked to resign as a result.

My key interest in reading this book was to try to grasp why Americans had supported Theodore Roosevelt, a left-wing Progressive Republican in 1904, then supported William Howard Taft, a conservative Progressive Republican in 1908, then supported Woodrow Wilson, a middle of the road Progressive Republican in 1912 and 1916, then reverted to what most people call conservatives--Harding in 1920, Coolidge in 1924 and Hoover in 1928.

Murray does not give an answer to this because the political vocabulary he uses is already steeped in post-World War II liberalism, but a bit of interpretation is all that is needed. Hoover was a Progressive and the question that needs to be interpreted is how two conservatives, Harding and Coolidge, got sandwiched between 30 years' worth of Republican and Democratic Progressives (Wilson being the one Democrat). The answer is that Harding and Coolidge were not conservative in the sense that the word is used to refer to the late 19th century Mugwumps or Barry Goldwater. The Mugwumps had much more in common with Goldwater than Goldwater did with Harding or Coolidge. Rather, Harding and Coolidge were rural Americans who retained some of the homespun feeling for individualism without having much concern with the ideas of laissez faire economics or individual liberty. It is evident from Murray's rich description of the 67th Congress that progressivism had long been established. Harding's goals as president revealed the same thing. His goals included increasing agricultural tariffs, improving the federal farm loan system, increasing farmers' representation on federal boards (p. 32), promotion of "business-government cooperation" (with Hoover turning the Department of Commerce into "a beehive of probusiness activity"), and shipbuilding subsidies (p. 64). The tariff that Congress passed in 1922, the Fordney-McCumber tariff, in Murray's words:

"was of dubious value...The tariff debates had rarely involved principle; there were no great clashes as in the past between high and low tariff advocates. It was simply a struggle between vested-interest-groups for economic advantage. As the New York Commercial described it: 'The tariff now represents the composite selfishness of the country.'"

With respect to subsidies to ship builders, on February 18, 1922 Harding proposed (p. 68):

"that a fund was to be created to aid private shippers in building new ships as well as in buying the existing wartime government fleet. Subsidies would be paid to private shippers on a sliding scale, depending on vessel speed and gross tonnage. Shippers were to be allowed a 10 percent annual profit, but any excess would be divided between the owners and the government until the amount of the subsidy was repaid. The estimated cost of the program was $30 million per year. In presenting this plan to Congress, Harding pointedly admonished:

'We have voiced our concern for the good fortunes of agriculture, and it is right that we should. We have long proclaimed our interest in manufacturing...But we have ignored our merchant marine. The World War revealed our weakness, our unpreparedness for defense in war, our unreadiness for self-reliance in peace...'"

However, the agricultural interests fought this proposal. As preposterous as the shipbuilding proposal sounds to me, the farm lobby's opposition sounds even more preposterous. The agricultural resistance led Harding to change his philosophy of government from a belief that the president should be hands off, to a belief that the president should lead Congress toward legislation (p. 70).

It is evident that nothing in Harding's legislative or administrative agenda were conservative in an activist sense. Rather, his notion of "normalcy" was to accept the social system that the left-wing and conservative Progressives had implemented and simply "stand pat". He had no conception that assertion of markets and reassertion of individual freedom might be preferable to the Hepburn Act or the Federal Reserve Bank. He was conservative in this sense: he wished to conserve the progressives' programs, adding just a wee bit more progressivism, but not too much. What he meant by "normalcy" was just a wee bit more government spending.

In pages 3-6 Murray makes clear that there were serious economic problems facing the nation in 1920. Wilson had failed to liquidate military supplies resulting in inefficiency and waste (p. 3). Roberts indicates that prices increased 104.5% between 1914 and 1920, a compounded annual inflation rate of more than 10%. (Note that the Federal Reserve Bank was founded in 1913.) On top of the inflation, the end of the war threw many Americans into unemployment. In February 1919 an estimated 3 million Americans were unemployed. Then, the cost of living fell by about 10% in March 1921, just when Harding was inaugurated (March 4). By May 1921 farm prices had fallen by two thirds and land values fell (p. 5). The unemployment rate was 20 percent. Interestingly, Roberts is describing an inflation/recession somewhat like the one that preceded the election of Ronald Reagan in 1980. In the late 1970s the inflation and increasing unemployment occurred together, but the situation wasn't that different. But Harding did not offer to remedy the inflation/unemployment cycle by correcting Fed policies. Rather, his normalcy policy was primarily political: to end the discussion of the League of Nations and to subsidize farmers with a tariff (p. 11), tighter immigration policy, a bigger navy, subsidies to the shipbuilders and an anti-lynching law. He also favored rationalization of government, a long-time progressive theme. Most of all, Harding advocated normalcy (quoted on p. 15):

"By 'normalcy' I don't mean the old order, but a regular, steady order of things. I mean normal procedure, the natural way, without excess."

Harding defined the Republican stance for much of the twentieth century. Republicans have called for normalcy, accepting the "progressive" reforms that the Democrats concoct and then responding to by saying that they are too much. The Republicans then call for "normalcy" and win another term in office. But is it normalcy to have a Federal Reserve Bank that prints $29 billion to subsidize an incompetent and corrupt investment bank like Bear Stearns? Is it normal for the US government to spend a trillion dollars a year? What is normal about that? Perhaps in Harding's day the normalcy theme rang true, but the Democrats' schemes, the Department of Education, inflation, the Fed, political correctness, the incompetent, "progressive" education system, the failed social security system, the failed policies of "urban renewal" that destroyed American cities and subsidized real estate developers are not normal. Is accepting such programs normalcy?

Republican Antecedent to Regulatory Attacks on Commodity Speculation

The notion that regulators or public deliberation can better anticipate the valuation of commodities than can speculators is wrong for several reasons. First, there is no reason to believe that the public at large, professional economists, politicians or appointed officials are better equipped to value an asset like commodities than are private traders. The information required to do so is specific to time and place and requires the judgment and expertise appropriate to an individual with specific knowledge about commodity markets. This can only be obtained through professional experience.

Second, commodity speculators take considerable risk in investing in commodities and therefore are motivated to make the most accurate predication of future price. In contrast, politicians, appointees and the general public are unaware of the risk associated with a given price prediction. If the commodity speculator is wrong he loses his investment. If the politician is wrong, someone else goes hungry. That is, regulation of commodity prices potentially creates shortages. Such shortages can cause starvation and other forms of deprivation. The economists, experts, politicians and public advocates who clamor for regulation are not the ones who will suffer. Theirs is a special sort of greed and viciousness.

The ability of markets to assess value is unparalleled. Shortages induce increases in price. If speculators irrationally bid up prices, then public demand for the commodity will marginally decline. Depending on the responsiveness or elasticity of the commodity price, a small decline in demand potentially can have a large effect on price. It is not unusual for speculators to lose large fortunes in the commodity field. This would be associated with a price correction.

The power of markets to reassess erroneous price determinations was unknown in the days of the Progressives. Today's social democrats are likewise economically illiterate. It is not surprising that many Republicans, schooled in the Progressive tradition, are, like social democrats, eager to greedily cause shortages that harm the poor.

When Warren G. Harding won the presidency in 1921 he was the first non-progressive president in almost twenty years, since William McKinley. The public had been frustrated by an inflation that occurred following World War I and, as well, by Woodrow Wilson's obsession with the League of Nations. Progressivism was primarily a Republican, not a Democratic, movement. Not all Republicans were Progressives, but a large share of the Republican Party, perhaps half, bolted in 1912 to vote for Theodore Roosevelt, the Progressive Party candidate, enabling Wilson to win. Wilson was a progressive but of a different stripe from Roosevelt. He emphasized individualism, he opposed the minimum wage, he had long been an advocate of the gold standard, and he retained a belief in the producerist philosophy that had informed 19th century Republicans.

Harding was not idelogical and has generally been viewed with skepticism by left wing historians as well as by the Progressives of his day. However, by 1920, after nearly two decades of Progressivism, the assumptions that politicians made were very much in the Progressive tradition. Neither Harding nor Coolidge, who succeeded Harding after his death, had any interest in repealing Progressive legislation such as the Hepburn Act, which established federal price controls on railroads, or the Federal Reserve Bank. Instead, Harding argued for "normalcy". In his riveting book The Politics of Normalcy*, Robert K. Murray describes the 67th Congress, which was Republican, as was Harding, as involving a contest between several special interests for regulatory privilege. The idea of laissez faire had already been forgotten. In its place, farm interests were clamoring for tariffs and farm supports and business interests were clamoring for tax reductions. In addition, there were regional conflicts over regulatory advantage.

One of the laws that the agricultural lobby pushed through early in the Republican Congress (irritating the business lobby, which thought they would get their special interest legislation passed first) was the passage of the Capper-Tincher bill**. The Capper-Tincher bill was passed as the Future Trading Act that:

"...more carefully regulated the grain exchanges by placing a prohibitive tax on speculative transactions involving puts and calls, bids and offers."

Although the politics of the 1920s are thought of as a reassertion of conservatism, it is important to understand that by 1921 Harding no longer thought in terms of the limited government philosophy of the late nineteenth century Mugwumps, Jackson or Jefferson. Rather, Harding's normalcy simply referred to an end to the inflation, radical emphasis on the League of Nations and war-related imbalances that occurred during the Wilson administration. It was no rejection of Progressivism.

Today, we again hear clamor for regulation of freedom of exchange in the name of economic illiteracy. Not surprisingly, the clamor comes from both parties.

*Robert K. Murray, The Politics of Normalcy: Government Theory and Practice in the Harding-Coolidge Era. New York: WW Nortn, 1973.

**Ibid., page 50

John W. Dean's Warren G. Harding

John W. Dean. Warren G. Harding. New York: Henry Holt and Co., 2004. 202 pages.

The reason that John W. Dean was interested enough in Warren G. Harding to write a biography becomes obvious at the end of the book. Just as Dean was involved in the Watergate scandal, Harding is (Dean argues unfairly) remembered for the "teapot dome scandal" that reached the public eye immediately following his death 2 1/2 years into his administration. Harding's death led to the appointment of Vice President Calvin Coolidge to the presidency in August 1923.

Warren G. Harding was certainly a supporter of progressivism. However, he split with Theodore Roosevelt because Roosevelt was disloyal to the Republican Party by running against Taft on the Progressive Party or Bull Moose Party (so-called because Roosevelt had said that he was "fit as a bull moose"). The conservatives and progressives within the Republican Party were at odds, but Harding was hardly a conservative. According to Dean:

"In late 1911 and early 1912 Harding and the Star* had railed at the progressive movement within the Republican Party, which Harding believed was based on personalities, not principles. Harding was not opposed to progressive ideas, such as voter initiatives, recall of elected officials, referendums on ballot issues, corporate trust busting and resource conservation. But he found the progressives' 'unreasonable antipathy to Taft' baseless, and TR's talk about fighting against special interests for the common man 'claptrap'...To Harding Roosevelt was a traitor..."


When Harding ran for Senator from Ohio in 1914 Taft endorsed him, but he was not ideologically committed to either the conservative or progressive ideology. Dean writes (p. 36) "the audience could hear what they wanted". As a junior US Senator Harding was asked to be keynote speaker at the 1916 Republican Presidential convention because "Republicans wanted to heal the division between the progressive and conservative factions of the party, and Harding held the respect of both elements, in spite of his earlier disapproval and chastisement of the progressives who had bolted to the Bull Moose Party in 1912."

The one area where Harding significantly differed from the Democrats was that he favored protectionism while the Democrats opposed it. Harding (p. 32) opposed free trade and believed that Woodrow Wilson's low tariff policy would result in a depression. The two chief differences between Harding and Wilson were that Harding was more statist in that he favored protectionism and that he was less supportive of the League of Nations than was Wilson. In a speech before the Senate (p. 49) which Dean argues was preliminary to his presidential campaign, Harding argued that he could not sign the League of Nations treaty unless an article were added relieving the US from defending other countries without the approval of Congress as required by the Constitution. Harding said to the Senate (p. 49):


"A Senator may be as jealous of his constitutional duty as the President is jealous of an international concoction, especially if we cling to the substance as wll as the form of representative democracy."

The New York media (p. 67) opposed Harding's candidacy because the Times, the Post, the World, the New Republic and the Nation perceived him as a second rate conservative. But Harding was not a Mugwump (he was too young) and was not at all influenced by the laissez faire ideas of the late 19th century, to include Sumner's and Godkin's. Nevertheless, the Nation wrote that Harding was an (quoted on p. 67):

"amiable, faithful, obedient errand boy for the Old Guard politicians and the business interests they serve...In truth he is a dummy, an animated automaton, a marionette that moves when the strings are pulled."

Thus, the pattern of the left wing progressives calling the right wing progressives "old guard" is established by the Harding candidacy (it was more likely a product of the Taft-Roosevelt fight). But Harding did NOT reflect the laissez faire views of Sumner and was less linked to east coast business interests than was Roosevelt. Thus, by 1920 the left had established a pattern of slandering right-wing progressives. But true advocates of small government were already virtually non-existent except as a fringe of the Republican Party.

Harding's campaign hired Albert D. Lasker of the Lord and Thomas advertising and public relations firm in Chicago. It may have been the first to introduce advertising and PR techniques that are commonly used today.

Harding was not a particularly ideological candidate. William McAdoo described a typical Harding campaign speech as (quoted on p. 73):

"an army of pompous phrases moving over the landscape in search of an idea. Sometimes these meandering words actually capture a straggling thought and bear it, triumphantly, a prisoner in their midst, until it died of servitude and over work."

Dean observes (p. 77) that Harding's victory over Democratic candidate Jim Cox in 1920 may have been as much a rejection of Wilson as a vote for Harding. As well (p. 77):

"Harding biographer Andrew Sinclair attributes the victory to Harding's ability to give voice to the dream of the rural past by the promise of returning to normal times..."

There was no ideology or rejection of Progressivism. Just a mood change.

After election, Harding appointed Henry C. Wallace secretary of agriculture (p.85):

"Harding knew he would have to take political flack for selecting Wallace, because his liberal leanings were offensive to the right wing of the party, but the president-elect understood that the party's progessives would support Wallace."

Dean adds (p. 86):

"Harding was impressed with young Hoover and wanted him in his cabinet, but Republican elders and conservatives objected...Harding experienced more internal party squabbling and opposition to Hoover than any of his choices. Notwithstanding old guard opposition that he was too liberal, too ambitious, too international in his views, not to mention too publicly popular, Harding offered Hoover the Deoartment of Commerce or the Department of the Interior."

Wilson did not leave the country in good shape (p. 94). In his inaugural address (p. 96) he stated that the U.S. would not join the League of Nations but would have an activist and interventionist foreign policy. He criticized businesses that profited from the war. He said (p. 96):

"Our most dangerous tendency is to expect too much of government and at the same time do for it too little."

That is hardly the view of an advocate of small government or laissez faire.

On April 12, 1921 Harding (p. 100):

"addressed a joint session of Congress concerning the policies, plans and matters he believed the Congress should undertake...Harding's normalcy was not a call to turn back the clock but rather...he was calling for onward, normal way...He called on Congress to cut government expenditures by creating a Bureau of teh Budget, he urged revising the federal tax laws including the abolition of the excess profits tax, and he requested that Congress enact emergency tariffs followed in six months with more comprehensive revisions...he called for a new immigration law; he raised the need to deal with emerging transportation problems (railroads, highways as well as the new civil and military aviation); he asked Congress to regulate the new technology of radio and transcontinental cable communications; and he called for establishing a merchant marine. No request surprised and confounded his conservative colleagues more than his recommendation that they create a department of public welfare that would be responsible for 'education, public health, sanitation, conditions of workers in industry, child welfare, proper amusement and recreation, the elimination of social vices.'"

On May 27, 1921 Harding signed an emergency tariff measure and in July 1921 the House passed a bill that increased tariffs across the board. In September 1922 Harding signed the Fordney McComber Act which reflected a hodgepodge of special interests. The result, though, was that other countries responded with high tariffs, hurting American agriculture (p. 105).

In 1921 Harding's Budget Accounting Act created the Bureau of the Budget and the General Accounting Office. Harding did favor tax cuts (P. 106). However, he also supported (p. 112) a host of government interventions concerning agriculture such as the Grain Futures Act which regulated speculation on commodities and the Packers and Stockyard Act insuring fair practices on the part of the meat packing industry.

Dean quotes Schapsmeier's and Schapsmeier's "Disharmony in the Harding Cabinet" on p. 113:

"[t]he amount of progressive-type legislation during [Harding's brief presidency] was not duplicated until the New Deal."

Harding also advocated an activist fiscal policy more than a decade before the election of Franklin D. Roosevelt. Dean writes (p. 115):

"[he prodded] state and local governments to commence public works projects that would provide employment. The president took similar action at the federal level, ordering all his cabinet secretaries to look for federal projects that could be started sooner rather than later...Harding's pump priming was contrary to hi philosophy of using federal funds to solve the unemployment problem..."

Harding also tried to unravel the racism that was prevalent during and characteristic of Woodrow Wilson's administration (p. 124). "Wilson had removed Republicans and blacks from appointed positions, replaced them with white Democrats and then locked them into the system by extending civil service protections.

In 1922 (p. 137) Harding:

"called for the end of child labor, by consitutional amendment if necessary. His message...pleaed Congress, the New York Times and even such progressive journals as the Literary Digest."

It is evident that Harding was hardly a conservative. Following on the heels of William H. Taft, he was probably slightly to Taft's left and to Theodore Roosevelt's right. He was a blend of conservatism and progressivism, hardly to the right of Woodrow Wilson. Following the left wing presidency of Roosevelt and the mildly conservative but progressive presidency of Taft, Harding was very much in the tradition of Republican progressivism and was certainly no advocate of laissez faire or free market ideas. He was a low-tax progressive.

*Harding's business was that he was owner and editor of the Marion Star.