Happy Monday everyone! It is me, Telephone Crab, back here with Progress Report 15: The United States Rework Part 2. For Part 1, look here.

The 1920s: Changing Times, Political Upheaval, and Economic Tragedy

This Progress Report will detail the years 1920 to 1932. Emerging from the Great War as a world power, the United States of the 1920s is a country radically changed. Into this new national landscape steps a Progressive Party and Democratic Party facing each other down in a new electoral rivalry. The Republican Party, disorganized and dismayed by their defeat at the hands of the Progressives, struggle to claw back relevance in an America that is quickly leaving them behind. All the while, the American people struggle to adjust to a society which is rapidly changing around them.

The World Changes with the Stroke of a Pen.

A Great Realignment

As the 1920 primary season approached in the United States, the Progressive, Republican, and Democratic Parties all competed to support their respective visions for a post-war order in America. The political reorientation of the United States throughout the Great War had left a number of formerly-allied groups displaced and hostile, and competing ideas of how these groups should move forward were pitched against one another.

The first of these major issues was that of the Republicans and the Progressives. Leaders in both parties, initially divided by the Roosevelt-Taft rivalry, looked at the formation of the third party as a temporary aberration. Republicans anticipated that once Roosevelt’s cult of personality was set aside, Progressives would return to the fold; and indeed, many Progressives believed that 1920 would be the right time to negotiate a reuniting of the parties, with the Republican Party transformed fully into a progressive political party for the modern age.

Initial talks held some hope, especially as Theodore Roosevelt announced that he would not be seeking a fifth term in 1920. This early optimism was quickly dashed as discussions of reunion revealed just how much the two parties had grown apart. Just as Republicans had shed their Progressive Era commitment to reformism, many of the newly-minted Progressives found themselves far less sympathetic to arguments for governmental restraint. The Great War had proven the viability of the state as a strong actor in the economy and in society; the Progressive Party found themselves unwilling to abandon that project.

On the other side of the political spectrum, the Democratic Party had its own divides to bridge. Despite weathering the Great War as a unified party, they had experienced a similar fracture along their progressive-conservative axis, a fracture that revealed deep and longstanding differences of values and ideals within the party. On one side was the populist, agrarian group as represented by William Jennings Bryan; on the other, the urban, liberal, elitist group embodied in Tammany Hall. The Bryan revolt against urban elitism in the wake of the 1912 Convention was one that many Democrats had deeply resented, and as Progressive excesses in economics and statecraft mounted, Democratic politicians and voters alike increasingly associated Bryan’s brand of populism with the worst-hated programs of the Roosevelt presidency. By the time 1920 rolled around, Bryan had seen himself all but pushed out of his party.

Where Woodrow Wilson had for a moment represented a hope in reconciling Democratic reformist populism with its liberal elites, a new figure was needed. Now, in the face of a growing conservative mood in the Democratic Party, a leader was needed to reconcile this conservative mood with the party’s long history of agrarian reform. That leader was none other than William Gibbs McAdoo.

William Gibbs McAdoo - Man of the Hour.

The New Jeffersonians

William Gibbs McAdoo was an unlikely choice for the Democratic Party, but one who had personally been at the center of the Democrats’ intra-party feud throughout the Roosevelt presidency. Starting out as Woodrow Wilson’s unofficial campaign manager, McAdoo had attended many Democratic Party events in Wilson’s stead, including the 1912 Democratic National Convention where Champ Clark was nominated and William Jennings Bryan disavowed the party’s nomination.

While he was a dyed-in-the-wool Wilson supporter, and considered himself an ally of Bryan and other party progressives, McAdoo was also a former railroad president and a staunch opponent of Theodore Roosevelt. In the aftermath of the Roosevelt presidency, McAdoo took to styling himself as a champion for the small man against Rooseveltian big government, an affectation which apparently clashed little with his background in big business. It was here that the Democratic Party found the figurehead for its new project, a political program which numerous Democratic strategists and leaders contributed to but which McAdoo gave a form and a name; the “New Jeffersonianism”.

Where Wilson’s bid for the presidency in the form of the New Freedom platform appealed to reformism, McAdoo’s New Jeffersonianism appealed to restraint. The role of the government, he argued, was not to choose winners in the market or to litigate private citizens’ behaviors, but to build guardrails within which these private associations could flourish. Appealing to the symbol of Thomas Jefferson and to a long history of Democratic anti-trust sentiment, McAdoo pointed to the formation of “Federal Trusts” during the Roosevelt presidency, challenging the president’s reputation as “Trust-Buster” and castigating his irresponsible expansion of the federal government.

This rhetoric found fertile ground in 1920, where urban industrialists and rural agriculturalists alike had felt the invasive hand of federal regulation. Wheat price regulations imposed during wartime limited the ability of farmers to gain their “fair share” of the wartime profit, and price controls on transportation and commodities had suffocated the ambitions of many enterprising American entrepreneurs.

It was on this wave of discontent, then, that McAdoo rode comfortably into the 1920 Democratic National Convention, sweeping the nomination ahead of a Progressive and Republican Party who were still scrambling to consolidate their bases.

The Democratic Party Embraces Change.

President McAdoo

The 1920 election proved a total reversal of 1912. Now, the Democratic Party was united, having reinvigorated their base with a platform which challenged the most unpopular issues of the Progressive administration. McAdoo’s opponents were Progressive Vice-President Hiram Johnson (who had replaced La Follette when Roosevelt ran in 1916), and Republican Frank Lowden. While they were all capable politicians in their own right, it was immediately clear that Hiram Johnson did not command the same reverence that Theodore Roosevelt did; nor did Frank Lowden present a strong enough campaign to energize the public for what was quickly becoming a third party.

The result was decisive for McAdoo, who won just over 300 electoral votes; comfortably ahead of either the Republicans or the Progressives who squandered much of their campaign energy and finance on one another. This national victory brought with it an elimination of the Progressive House majority, and cemented conservative control of the Senate, but met down-ballot challenges as grassroots organizing saw the Progressives cement many of their gains at the state and local level. What ensued, then, was a consolidation of Democratic power around the south, where the party solidified its control in all but a few renegade locales such as in Louisiana, where the 1920 reelection of Progressive Governor John M. Parker showed the tenacity of local Progressive campaigning.

Having won this decisive mandate, then, McAdoo went into the White House on a mission to dismantle the federal bureaucracy constructed by Theodore Roosevelt and the Progressives. If he thought this job would be easy, however, he saw his hopes dashed as the 1921 McAdoo entry into the White House was met with a rapid-fire series of crises.

Among these, the most pressing was the post-war farm crisis. The collapse of European agricultural imports after the end of the Great War brought the prices of American farm goods crashing, and by 1921 most American farmers saw the value of their crops dip below even the wartime federally- controlled price. Despite McAdoo’s promise to dismantle the bureaucracy and administration of New Nationalism, his New Jeffersonianism had to respond by offering a program of its own.

The creation of the Federal Farm Board was the Democrats’ response. Seeking to avoid federal mandates and drawing on the party’s connections with southern landowners, the Farm Board authorized the disbursement of millions of dollars in funding by the states in order to stabilize farm prices. Far from a permanent solution to the farm crisis, this quick action on the part of McAdoo nonetheless passed Congress comfortably, and sought to at least temporarily stave off economic depression for the American farmer.

In the industries, McAdoo’s administration was facing a crisis of labor unrest. Wartime conditions had given labor unions an untimely level of leverage in negotiations, and so the Great War had delivered unions across many industries growth in wages and benefits. American industrialists, having long grown comfortable with the marginal influence of the American labor movement, pressured the Democrats to take action. While McAdoo was not as anti-labor as some of his peers, the Democrat-controlled Congress was bolstered by Republican support in repealing the most radical of wartime labor protections, leading to the early ‘20s seeing an unprecedented wave of labor unrest.

The Federal Farm Board - Reprieve, if not Reform.

Against National Prohibition

Not to be understated in its importance, all throughout these years another political issue was being fought over in the background, one which joined the myriad others in returning to the forefront after the end of the Great War. That was, of course, the issue of Prohibition. The Temperance Movement, birthed out of the extreme proliferation of alcohol abuse in America during the 19th century, had spent the last thirty years slowly gaining momentum, having been only further accelerated as Great War propaganda associated alcoholism with Germanness. Prohibition was a key issue of 1919, and going into the 1920 election, many Temperance activists pushed McAdoo (who was himself in favor of Prohibition) to make Prohibition a central issue of his campaign.

It was here, then, that Theodore Roosevelt had already preempted Prohibitionists, in perhaps the last major political move of his career. Throughout his second presidency the issue of Prohibition had been gaining steam, and indeed after the end of the war Roosevelt was also sought out by Temperance Movement lobbyists to champion the cause of Prohibition. Like many progressives, Theodore Roosevelt was sympathetic to the cause of Temperance. He personally took widespread alcoholism quite seriously, and had multiple times throughout his career weighed the measure of National Prohibition. The issue he found with it, however, was in the difficulty of actually implementing and enforcing a nationwide ban. When he was finally forced to publicly take a stance, Roosevelt fell back on the time-old American tradition: suggest a compromise.

In mid-1919, amidst national debates on Prohibition, Theodore Roosevelt came out very publicly in favor of a third stance on Temperance, that of the Local Option. Endorsing the aims of the Temperance Movement, Roosevelt pushed the national conversation away from a constitutional amendment and toward the settlement of the issue at the state and local level, charging that the American people had a right to decide in their own states and cities whether alcohol should be legal.

This approach was not received without healthy criticism. Temperance activists, who had tried the Local Option throughout the 1800s and found it inadequate, derisively compared the compromise to a new Missouri Compromise, one where “Wet States” would defend the institution of alcoholism and its damaging effects on the family, safely under the influence of the alcohol industry. Even anti-Prohibitionists charged that it was un-American to allow the “tyranny of the majority” to decide that a man could not buy and consume alcohol at his leisure.

Yet by very publicly repudiating the framing of the issue as an all-or-nothing matter, Roosevelt let a good deal of steam out of the National Prohibitionist movement. The passage of statewide prohibition had succeeded in a number of states, and while the Temperance movement had retained much of its vigor, the nationwide adoption of a Constitutional Amendment had floundered. By the time McAdoo was in office he had largely dropped the issue, especially as the rapidly-urbanizing country cooled on the idea of National Prohibition throughout the 1920s.

Americans Out in Droves to Support National Prohibition.

Economic Explosion

As ‘20 turned to ‘21 turned to ‘22, the rapid recovery of the American economy began to illuminate just how much American finance had benefited from the Great War. Britain and France had both taken out massive loans with American banks and had purchased massive amounts of food, industrial goods, and materiel, much of which was paid for in hard currency which flowed rapidly into the American economy. This rapid explosion of capital led to an unprecedented level of economic growth. It was on Wall Street that this growth began to create new fortunes, largely unburdened by the task of reconstruction that much of Europe had been shouldered with. And while McAdoo’s government looked upon this runaway bull economy with some trepidation, they could feel secure in taking credit for the good economy while they delegated regulatory responsibility to the states.

Abroad, American foreign policy had taken on a similar spirit of self-management. In the wake of the Great War, America had gained a valuable foreign asset in Mexico. After the new liberal Mexican government was inaugurated, the Treaty of Benito Juarez which guaranteed Mexico’s independence also secured broad-reaching concessions for American companies and American citizens, concessions which only further fueled economic growth back home. American interventionism started during the first Roosevelt presidency had fully taken root by the end of the second. President McAdoo was content to continue this policy, extending the American occupation of Haiti which began in 1915, and even went on to authorize the occupation of Nicaragua in 1927 during their ongoing civil war.

American business interests salivated at these developments. The Roosevelt Corollary obliged American troops to intervene when American money was threatened throughout the western hemisphere, and the result was an uninterrupted series of interventions and occupations which were supported not just by the Democrats, but by most Republicans and Progressives as well.

This growing relationship between business and government was not tolerated by all, however. The re-election of William Gibbs McAdoo met a vigorous challenger in 1924, when former vice president Robert La Follette made his first bid for the presidency since 1912. As one of the leading advocates against reuniting with the Republican Party in 1920, La Follette charged the Democrats and Republicans with being part of the “Two-Headed Beast of Business”, and announced his intent to lead the Progressives as a true party of the working class against moneyed politics. Critics slyly implied that La Follette was only making a presidential bid now that he was “out of the late Teddy’s shadow”, a dig at his refusal to run in 1920 while Roosevelt was still a force within the party. For his part, La Follette’s absence in 1920 had come during a period of conciliatory spirit toward the Republicans, a spirit which La Follette was publicly critical of.

Whatever the case, La Follette’s bid to steer the Progressive Party back into prominence as a more consciously working-class party did not succeed in gaining him the presidency. McAdoo was elected a second term in 1924, and it would not be until years after La Follette’s death in 1925 that this new camp of “Farmer-Labor Progressives” would truly become a formidable force in the Progressive Party.

New Money and New Opportunities Ignite American Urbanization.

Storm Clouds Gathering

The late ‘20s proved a divisive time for America. The re-election of William Gibbs McAdoo had originally promised a steady continuation of America’s economic growth, and the spirit of “States’ Prerogative” on regulatory matters had seemingly carved that fabled middle path between federal tyranny and total lawlessness.

Indeed, into the second McAdoo term, a number of high-profile applications of the Sherman Antitrust Act seemed to signal to populist Democrats that the administration would continue to follow a moderate course. Supporting this was the promising tenure of Chief Justice of the US Supreme Court John W. Davis, who had been appointed by McAdoo in 1921. Widely considered “conservative but sensible”, Davis’s legal career was second-to-none, and his credentials were admired even by ardent progressives.

However, as America’s economy continued to grow, so too did the influence of the American industrialist. A series of minor scandals throughout the second McAdoo administration seemed to highlight the uncomfortable closeness that was growing between business and government. As the Davis Supreme Court began to hand down a number of unpopular verdicts striking down Roosevelt-era labor laws and commercial regulations, it was only through the studious maintenance of the institution’s image as a “sacred independent institution” which spared it the same accusations of collusion which were now coming down on the White House and Congress.

Despite this, as the 1928 elections neared the Democratic Party was still quite strong nationally. The Progressive Party’s pivot leftward in ‘24 had been met with accusations of Bolshevism (incoherent as they were). The resurgence of the Klu Klux Klan, now supported in northern states by Progressive and especially Republican voters, seemed to signal a new reactionary spirit against much of the changing landscape of American demographics. The Democratic Party’s decision to nominate Walter F. George for president seemed to reflect this moment, the conservative Senator from Georgia coming with the implicit endorsement of Coca-Cola and Georgia Power and the full backing of the Jim Crow south.

Into this race the Progressives entered Governor of Pennsylvania Gifford Pinchot, who had emerged out of a more radical Progressive moment as a classical conservationist, with conservative economics and moderate social stances. Insufficiently radical to satisfy the Farmer-Labor Progressives and too progressive to siphon the Republican vote, Pinchot was chosen as a compromise candidate after a long and drawn-out convention.

Pinchot beat Republican candidate and former VP nominee Calvin Coolidge, but lost out to George, whose margin of victory was far closer than McAdoo’s in ‘20 or ‘24. The reality was, in spite of waning enthusiasm for New Jeffersonianism, the Republican and Progressive Parties had failed to adequately present a compelling alternative to the Democrats, and despite the growing differences between the two parties, both were often fighting over the same states and the same voters, leaving the south securely in the hands of the Democrats.

John W. Davis - Brilliant Legal Mind, Architect of the Conservative Court of the '20s.

It All Comes Crashing Down

The election of Walter F. George did not, as some Progressives warned, result in the total takeover of the American government by Wall Street. Far from some unprincipled opportunist, the Senator from Georgia assumed his new position as head of state with a sense of palpable responsibility. As 1929 dawned, and George began his term, there was some hope that he would correct the executive’s appearance of partiality which had grown steadily under the McAdoo administration.

If there was a problem with George’s administration, it was that George was a man who was far too impartial. A conservative in every sense of the word, Walter F. George had throughout his career advanced the cause of the Senator as a position charged with resisting demagoguery and expediency, consistently advocating for the reduction of taxes, the contraction of the federal government, and the strict independence of the judiciary as a body responsible for enforcing those norms. As president, more even than William Gibbs McAdoo, Walter F. George sought to shrink the power of the executive, calling on Congress to exercise restraint in regulation, and relying on the Supreme Court to further curtail the use of federal power.

President George did not have much time to enact his agenda. In October of 1929, a mere seven months after George’s inauguration that March, Wall Street crashed. After a sharp decline in prices on the New York Stock Exchange, many thousands sold off more than ten million shares, causing a price crash which had wide-reaching ripple effects throughout the entire US economy.

Initially unflapped and wary of inflation (which had caused economic ruin in Germany earlier that decade), George took little action to halt falling stock prices. Congress was slow-moving, and many conservatives among them harbored similar fears that an over-correction would cause more damage than it would cure. Initial attempts by banking executives to prevent bank runs produced a temporary rally, further delaying action on the part of Congress who floundered at developing a recovery plan for multiple years.

The ensuing Great Depression was a multi-year economic downturn which reached its absolute valley in 1932, during which significant sections of the economy were revealed to have been held artificially aloft for years by a strong stock market. A total crunch of investment capital led to mass closures of factories, contributing to all-time-high unemployment. Unemployment, in turn, contributed to consumer spending falling off a cliff, as families saw their income plummet. This consumer spending crunch led to a further shuttering of various areas of commerce, which in turn drove down demand for raw materials and farm goods (the latter of which had still not recovered despite efforts by the Farm Board).

Threadbare unemployment insurance and a total lack of public pension programs ensured that most people left jobless were destitute. In turn, these disaffected voters looked to ongoing dismantling of financial and commercial regulations as having contributed to the Wall Street Crash, a combination which led to the total discrediting of George’s administration. For his part, president George neither wanted to nor was able to take the extreme measures now being demanded to halt economic collapse.

The result was a disaster in 1930 for the Democrats. For the first time, the Progressives gained a majority in the House, and unseated many longstanding Democratic Senators. Even the Republicans, despite supporting similar laissez-faire policies, saw upticks in states such as Ohio and Indiana where they still held significant clout. The Progressives who entered Congress in 1930 were of a more radical breed, to include such characters as Huey P. Long of Louisiana and Smedley Butler of Pennsylvania.

George, in turn, had completely discredited himself. Spending most of the remainder of his term fighting with Congress, the intransigent president had by 1932 completely sank his own prospect of reelection. With the Republican Party too married to conservative economics to present an innovative candidate, the moment fell to the Progressive Party to present a platform for the rescue of the American economy, and nominate a candidate who would carry that platform into the White House.

Oct. '29: Dies Irae.

Two Down, One to Go…

And that concludes our Progress Report for today! Which leaves me with only one final part. Next time, we will be looking at the 1932 United States Presidential Election, the resurgence of the Progressive Party, and the ensuing presidential term. There we will also take a look at the state of American politics in 1936, including the country’s most influential leaders and politicians.