Republicans and a “Return to Normalcy”
In the early 1920s, weary from fighting a world war and
disillusioned by the failure of Wilson’s plans to create a new world
order, Americans sought stability. Popular support for Republicans
grew, since Republicans promised a “return to normalcy.” Republicans ceased
to promise progressive reforms and instead aimed to settle into
traditional patterns of government. In 1920, after eight years under
a progressive Democrat, Americans elected a conservative Republican
as president, the first of the decade’s three Republican presidents.
Big business and advocates of isolationism reaped the benefits of
Warren G. Harding won the election of 1920
by a landslide on the promise of a “return to normalcy”—which, for
Republicans in the 1920s, meant a return to big business. In addition
to its pro-business stance, Harding’s administration was known primarily
for its corruption, exposed fully after Harding’s death in office
in 1923. Many officials were forced from office, and some narrowly
escaped prison time. The most prominent scandal, the Teapot
Dome scandal, involved Secretary of the Interior Albert B.
Fall secretly leasing government oil reserves to two businessmen
and accepting about $400,000 in return.
Harding’s vice president, Calvin Coolidge,
became president upon Harding’s death in 1923 and was then elected
himself in 1924. In contrast to his predecessor, Coolidge ran a relatively
scandal-free White House. Staunchly pro-business, Coolidge opposed
government regulation of, or interference with, the economy.
Herbert Hoover, the third Republican president
of the decade, rode the tide of economic prosperity to victory in
1928. He took a slightly different stance toward big business than had
his predecessors. Hoover thought that capitalism produced social
obligations but believed in voluntarism rather than government coercion
as the method of fulfilling these obligations. Hoover urged and
persuaded industry reform, but refused to institutionalize reform
in law. This reliance on voluntarism would hurt him as prosperity
began to fade.
The Republican presidents of the 1920s—Harding, Coolidge,
and Hoover—reversed the Progressive Era trend of regulating big
business and lowering tariffs. Instead, Republican policies generally
gave corporations free rein, raised protective tariffs, and cut
taxes for the rich. Big business and wealthy businessmen especially
benefited from the following policies:
- The Supreme Court overturned a number of
measures designed to regulate the activities of big business. The
Court declared boycotts by labor unconstitutional and authorized
the use of antitrust laws against unions.
- The Fordney-McCumber Tariff of 1922 and the Smoot-Hawley
Tariff of 1930 were two of six major tariffs passed that
hiked importation rates to all-time highs. These tariffs protected
American companies from international competition.
- Andrew Mellon, treasury secretary from 1921 to 1932, persuaded
Congress to lower income tax rates for the wealthy.
The Republican presidents of the 1920s
reversed the Progressive Era trend of corporate regulation. Progressive
trust-busting gave way to an era of big business.