On Federalism

Coolidge does not seem to have fully perceived the harm done by his youthful support for the Seventeenth Amendment, which stripped the influence of the states on the national government and removed the insulation of the Senate from the same popular impulses pressuring the House. In fact, how costly have been the consequences (in both obstructing good legislation and passing the bad) of so drastic a transformation to this unique body? The two houses of Congress were not intended by the Framers to serve the same purpose. The distinct differences between House and Senate were thrown away too hastily by those who did not thoroughly consider the costs of changing the constitutional design.

Despite his earlier support of the Senate’s alteration, Coolidge is unique among modern presidents for consistently holding a high regard for the Constitutional balance of federalism, defining a sufficient sphere of authority for the States, limiting the scope of national governance and preserving the responsibility of local decision-makers over their own affairs. By so doing, the balance of orderly liberty is kept. For Coolidge, this was more than pandering for votes. It was a necessary mechanism to ensure government remained limited especially in times of emergency. It was not to be bartered away but existed for just such occasions when the temptation was greatest to seize the reins from state or local authorities. The danger to people’s liberties was too great, even were he to exercise such powers cautiously. Coolidge knew that with the best of intentions, government would not remain limited for long even when the storm passed.

But for Coolidge, the threat of national overreach was not the only potential problem, the prospect that the States would abuse their authority was also very real. Remembering his experiences with State politics in Boston, Coolidge knew legislatures and municipalities could pass equally as reckless regulations against an individual’s freedoms. The restrictions imposed by Mayor Bloomberg of New York City and by Governor Hickenlooper of Colorado on “gun control” are but two examples of such abuses.

It was on the 150th anniversary of the Virginia Resolutions for Independence, that President Coolidge came to the College of William and Mary on May 15, 1926, summing up the value of that federalist balance with these words,

“While we ought to glory in the Union and remember that it is the source from which the States derive their chief title to fame, we must also recognize that the national administration is not and can not be adjusted to the needs of local government. It is too far away to be informed of local needs, too inaccessible to be responsive to local conditions. The States should not be induced by coercion or by favor to surrender the management of their own affairs. The Federal Government ought to resist the tendency to be loaded up with duties which the States should perform. It does not follow that because something ought to be done the National Government ought to do it. But, on the other hand, when the great body of public opinion of the Nation requires action the States ought to understand that unless they are responsive to such sentiment the national authority will be compelled to intervene. The doctrine of State rights is not a privilege to continue in wrong-doing but a privilege to be free from interference in well-doing. This Nation is bent on progress. It has determined on the policy of meting out justice between man and man. It has decided to extend the blessing of an enlightened humanity. Unless the States meet these requirements, the National Government reluctantly will be crowded into the position of enlarging its own authority at their expense. I want to see the policy adopted by the States of discharging their public functions so faithfully that instead of an extension on the part of the Federal Government there can be a contraction.”

The following year would test this principle to its limits as floods would devastate first the Mississippi River Basin in April and then New England, including Coolidge’s beloved state of Vermont, in November. The damage came not only in the property destroyed but the lives lost. The most intense pressure fell on Coolidge to visit the areas, spearhead the effort to aid and rebuild and otherwise take decisive action. He deliberately held back. He dispatched Secretary Hoover to collaborate with state and local officials, not always successfully or deferentially. Those who do not understand our Constitutional system condemn Coolidge as “cold” and “unfeeling,” for his decision. They overlook the strength it took to withstand the urge to involve himself, especially when it concerned his home state. Principles mattered more. There would be no recovering the balance lost to local decision-making once he, the President, used powers he could not rightly claim. It was the burden of free people to exercise responsibilities over their lives and property, even when nature interjected. National Government was not there to spare folks from life’s consequences, however unpleasant the price.

The fight to grant flood relief would not subside quickly and while Coolidge kept much of the spending down, the drive to appropriate money, especially with an even larger surplus expected in 1928, was too much for both House and Senate to resist. Interestingly, the argument that convinced Coolidge to finally relent on a smaller relief bill was the fact that States and local governments were already paying into the sum being levied (Barry, ‘Rising Tide,’ p. 406). Federalism was working. The States and local authorities were taking responsibility for their own expenses. Had the Senate remained less constrained by public passions, as the Framers intended, it is not improbable that even the drastically reduced $296 million (which would become closer to $1 billion, in reality) flood relief measure could have been struck down before reaching the President’s desk.

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      The waters roaring through Springfield, Vermont in 1927

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              Forty foot deep floods along the waterfront of Cape Girardeau, Missouri, spring of 1927

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                     When the levees broke and the Mississippi flooded, it is estimated some 300,000

                     people were displaced in as many as ten states. Coolidge would not see their

                     freedoms eroded further with government’s good intentions supplanting local

                     oversight.

“Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical form” — President Coolidge, March 4, 1925

“Does cutting taxes really shrink government?”

“Does cutting taxes really shrink government?”

Three weeks before the passage of the Revenue Act of 1928, the President was analyzing the results of his administration’s formula: cut taxes, enforce constructive economy and retire debt with surplus. The President was not pleased, however. The reason was not in making the case for cuts and shrinking expenditures. The reason was not in retiring the national debt, which would be reduced $5.4 billion over the course of five and a half years, a feat not replicated since. Had the rate of reduction been constant, the debt would have been eliminated in just over fifteen years. The reason was in the incessant temptation by those around him to spend the “surplus revenue.”

The administration’s plan had worked beyond everyone’s expectations. It had worked so well that Congress was eager to start spending all that extra money. The President wanted it returned in cuts and put toward the debt. It was becoming increasingly clear that tax cuts were going to be tougher and tougher to sell as surpluses grew larger and larger. Ironically, thanks to Coolidge being “too successful,” spending would be even harder to restrain in the future than it was in the present.

The fiscal year would yield a surplus of $398,000,000, well beyond even the President’s initial figures. But as Coolidge lists all the projects Congress wanted, it not only made future tax reductions impossible but would have overturned them with increases to cover government profligacy: the flood bill, $500 million, the farm bill, $400 million, the Boulder Dam bill, $125 million, the pension bill, $15 million, the salary bill, $18 million, the Muscle Shoals bill, $75 million, the Post Office pay bill, $20 million, a reduction of post payments costing another $38 million, the corn borer, $7 million, and $6 million for “vocational training,” just to name a few. Meanwhile, the President observed, tax reduction between $203 and $289 million remained before Congress as he spoke. “If all these bills went through and became law I should think it would not only endanger tax reduction at the present time, but would make necessary the laying of additional taxes.” This was an impermissible step backward, not forward. As the President reminded reporters early the following month, “the surplus was secured, of course, by very careful management of expenditures…” not by spending it all away. 

The size of the surplus and the urge to spend it, however strong, did not make indulging the desire any more responsible with the people’s money than in lean years. Government, not unlike children, has to learn self-control. The existence of “more somewhere” does not free government to find it and spend it with impunity.

“We must have no carelessness in our dealings with public property or the expenditure of public money. Such a condition is characteristic either of an undeveloped people, or of a decadent civilization…We must have an administration which is marked, not by the inexperience of youth, or the futility of age, but by the character and ability of maturity. We have had the self-control to put into effect the Budget system, to live under it and in accordance with it. It is an accomplishment in the art of self-government of the very highest importance. It means that the American Government is not a spendthrift, and that it is not lacking in the force or disposition to organize and administer its finances in a scientific way. To maintain this condition puts us constantly on trial. It requires us to demonstrate whether we are weaklings, or whether we have strength of character” — President Coolidge, June 30, 1924.

Amity Shlaes’ thought-provoking piece recalls that even good policies can carry unintended side effects that have the potential to destroy the gains made. Tax cuts are but one part of the whole. President Coolidge knew this firsthand and if trends back toward expansive government are to be checked, it will demand from us, informed and engaged citizens, the same unwavering self-restraint and courage he demonstrated. The times also require statesmen, mature men and women, who take the whole task seriously of restoring limited government, not merely one element of tax policy. Tax cutting without the people’s determination for making government shrink can be cast aside when expediency calls it time to spend. Such was the bitter pill of the Reagan years. When what is easy is allowed to prevail over what is right, self-government suffers and liberty loses.

On Good Business

Mr. Coolidge recognized the essence of good business was in strengthening ties of service and collaboration with others. He never saw the validity of an adversarial system, such as Bentham and the socialist economists espoused. Profit was important, of course, but not the supreme purpose of good business relations. He understood that business was about more than “crushing the competition.” It was about building bridges, not burning them. That is why he demanded a meeting with an apprehensive editor one afternoon. The editor had not published the entire number of articles agreed upon and written by the former President. Still, Mr. Coolidge had been paid for the entire set. The editor, bracing for confrontation, was shocked to find the former president wanted to meet in order to return the balance of the money due for the articles not published. To Coolidge, if they were not “good enough” to warrant publication, it would not be right to take money for them. In this way, good business is preserved.

The former President, writing another article on June 17, 1931, observed the necessity for “good business” to continue, especially as folks struggled to keep commerce going,

“It is a very sound business principle to let the other fellow make a profit. That was the essence of the slogan we heard a few years ago about passing prosperity around. The same thought is involved in paying good wages and fair prices. Cutting prices calls for cutting wages in the end.

“This is often the basis of the complaint against large concerns. When they control a large percentage of production they control the prices of the raw and unfinished materials used in that trade. They become almost the sole market for them. Under this condition there is a strong tendency in the name of efficiency and good management to squeeze out the small concerns furnishing these materials. But it is not usually good business.

“We are all so much a part of a common system of life that the business world is not healthy unless we all have a chance. A profit made by squeezing some one else out of a livelihood will almost surely turn up later as a loss. The great asset in trade is good will. The best producer of good will is the profit which others make” (emphasis added).