As tax policy comes to the forefront, and especially the search for new “revenue sources,” it is worthwhile reflecting on President Coolidge’s thoughts on the Constitution’s limited power to tax, when he said on December 8, 1925,

“It is a fundamental principle of our country that the people are sovereign. While they recognize the undeniable authority of the state, they have established as its instrument a Government of limited powers. They hold inviolate in their own hands the jurisdiction over their own freedom and the ownership of their own property. Neither of these can be impaired except by due process of law. The wealth of our country is not public wealth, but private wealth. It does not belong to the Government, it belongs to the people. The Government has no justification in taking private property except for a public purpose. It is always necessary to keep these principles in mind in the laying of taxes and in the making of appropriations. No right exists to levy on a dollar, or to order the expenditure of a dollar, of the money of the people, except for a necessary public purpose duly authorized by the Constitution. The power over the purse is the power over liberty.“

Thomas Woods reminds us that while many may be convinced that history is now told objectively, that we are freed of the old narratives that force certain political conclusions in this enlightened, modern era, the neglect of the lessons from the 1920s illustrate how committed policymakers still are to a deliberate “overpass” constructed across the entire Harding-Coolidge Era. Woods points out that this is no where more on infamous display than in the silent treatment given to the Depression of 1921. While James Grant in his excellent book, The Forgotten Depression, published last November, has begun the fight back on behalf of the truthful record, Woods shows why this economic struggle remains all too forgotten — It resolved by purposefully refusing the stimulus spending approach of Government that time after time after time has become the unchallenged, knee-jerk reaction to every downturn in our day. Neither was it, as Wood asserts, laissez-faire governance. Government did act, implementing the Budget and Accounting system, empowering the Comptroller, substantially reducing spending, paying on the Nation’s debt and chopping down income taxes, what would become the first of four times that decade. Nevertheless, it proved that spending does not yield the return of prosperity, cutting waste and restraining expenditures works and that by allowing the marketplace to self-correct rather than rescue the inefficient and “indispensable,” the country quickly found peace and growth again without years of suffering. Had President Harding listened to his Commerce Secretary, Herbert Hoover, whose list of government-backed remedies rivaled his actual program in 1929, there might have been a far more memorable Depression of 1921. President Coolidge would later summarize his estimate of Hoover’s blundering policy “expertise,” when he said, “That man has given me unsolicited advice every day for six years, all of it bad.” It is to the credit of men who knew, like Harding and Coolidge did, that what worked was not government largesse but discipline, not Washington saving capitalism from itself, as if it needed saving, but resisting the urge to prop up ineffective uses of capital with more of people’s money. This took perspective and maturity but it also took courage, a kind of strength less understood now in a day where celebrity matters more than character.

Woods reviews a much overlooked chapter in the Harding-Coolidge record, a record of experiences and teachable events that are already vastly neglected. It is a chapter to which we would do well to read again before another slew of stimuli, urged with the desperate tone of government-pressured “salesmanship,” rushes us ever further away from the actual antidote demonstrated under both Harding and Coolidge.

Harding and Coolidge, June 1920

Walter McDougall, over at The Imaginative Conservative, has a thought-provoking piece on our traditional commitment to remain sovereign and independent, seeking peace with all while just as determinedly avoiding the permanent alliances against which Washington warned in his First Inaugural Address. Jefferson likewise intoned against the danger of “entangling alliances,” a principle guarded, however imperfectly, until the end of the nineteenth century from Jackson and Lincoln to Cleveland and Benjamin Harrison. Abandoned under McKinley with the rise of the Progressive Movement in this country, the commitment to working out our own problems rather than campaigning to fix those of everyone else, found an eloquent and principled advocate once more in Calvin Coolidge.

While his era has been mischaracterized as “isolationist,” Coolidge’s foreign policy articulated a fidelity to ending the global crusade that aspired to “save civilization” through projected militarism abroad introduced after 1897. Coolidge did not always succeed in navigating America free of the troubles inherited in Nicaragua, Mexico, the Philippines, China, Russia, and much of Europe, but he summoned the Nation back to earlier ideals which had preserved it a Republic, held it responsible in its sphere, and understood its source of strength rested on the moral and spiritual rather than the ambitions of military prowess. Coolidge continued the honorable continuity of peace and independence maintained by most of his predecessors in the face of an intensifying call to militarize. Coolidge knew that America’s great rise to world power carried a lofty responsibility but he also understood that this would only be squandered if it became a limitless warrant for our participation. He would not leave the country defenseless but neither would he be co-opted into placing the American people and its resources at the disposal of the world’s every quarrel, the security guard of the nations, expanding the scope of our interests beyond all rational meaning.

Coolidge appealed, “America stands ready to bear its share of the burdens of the world, but it cannot live the life of other people, it cannot remove from them the necessity of working out their own destiny. It recognizes their independence and the right to establish their own form of government, but America will join no nation in destroying what it believes ought to be preserved or in profaning what it believes ought to be held sacred” (speech delivered at Johns Hopkins University, Baltimore, Maryland, January 22, 1922, included in The Price of Freedom p.148).

He would go on to declare on another occasion, “Ultimately nations, like individuals, cannot depend upon each other but must depend upon themselves. Each one must work out its own salvation. We have every desire to help. But with all our resources we are powerless to save unless our efforts meet with a constructive response. The situation in our own country and all over the world is one that can be improved only by hard work and self-denial. It is necessary to reduce expenditures, increase savings, and liquidate debts. It is in this direction that their lies the greatest hope of domestic tranquility and international peace. Our own country ought to furnish the leading example in this effort. Our past adherence to this policy, our constant refusal to maintain a military establishment that could be thought to menace the security of others, our honourable dealings with other nations, whether great or small, has left us in the almost constant enjoyment of peace…While we desire always to cooperate and to help, we are equally determined to be independent and free. Right and truth and justice and humanitarian efforts will have the moral support of this country all over the world. But we do not wish to become involved in the political controversies of others” (Message at the opening of the Second Session of Congress, December 3, 1924, cited in The Mind of the President pp.22-23).

Coolidge, yet again, got it right.