In Search Of Normalcy

by Michael Liss

Puck cover illustration, titled “Money Talks.” September 12, 1906. Library of Congress.

Senator Warren Harding had a big appetite: for food, for whisky, for cigars and cards and hanging around with his cronies. For spittoons and smoke-filed rooms. For another man’s wife when he had one of his own—Carrie Fulton Phillips, with whom he carried on (sorry) for about 15 years. Their passion ended badly when, in late 1919, he felt an urge for higher office, and she felt an urge for a little monetary compensation.

The best evidence we have is that both urges were satisfied. Carrie was consoled by a bit of largess. Harding stopped writing coded-but-torrid letters and focused more on a stay at 1600 Pennsylvania Avenue. This was as it had to be. It was an era in which the prurient was taboo—but it was also an era where few spoke on the record about it. Harding wouldn’t be the only aspiring candidate with a spotty record on fidelity. In general, boys will be boys, so long as what they do in private is kept private.

Urges aside, Harding “looked like a President”—handsome, good chin. He spoke like a President: mostly vacuously but with a roll that imparted a sense of some deeper wisdom. He was from Ohio, then, as now, a key state. He had influential friends, like Harry Micajah Daugherty, a powerbroker in the Ohio GOP, who saw him as the perfect compromise candidate—the man others would turn to after a bit of Convention turmoil. So, why not Harding for President?

That was Daugherty’s plan, and he executed it perfectly. In 1920, Republicans had a great many men who saw themselves as “papabile.” They even had several who had the standing for the job, but when the GOP assembled in hot, steamy Chicago in June, none of those men, qualified or not, could get enough traction to get a majority of the 984 Delegates. Harding was fifth after the first round, didn’t break 100 until the seventh ballot, and only made it to 135 on the eighth. Then, reputedly, the wired-in wise men of the Party—the Daugherty-types—went into a room and, after the prodigious consumption of tobacco products and alcohol, coupled with lively and creative horse-trading, made a decision. Harding went from distant third to clear first on the ninth ballot and closed it out on the tenth. Popular Massachusetts Governor Calvin Coolidge was quickly selected as Veep.

The smart money in the house knew that they had likely just selected a President. A few weeks later, the Democrats assembled in San Francisco, where it took them twice the number of ballots to select sacrificial victims Ohio Governor James Cox and the 38-year-old Assistant Secretary of the Navy, pre-polio Franklin Delano Roosevelt. The Cox-FDR ticket had no real chance. The Democratic Party was deeply unpopular for any number of reasons: WW-1 and its sour end, a divisive argument over the post-war order, the League of Nations, growing concerns about radicalism at home, Sacco and Vanzetti, strikes (including a police strike in Boston that left the city open to vandalism and looting), and a stroke-diminished, angry Woodrow Wilson who had lost whatever political skill he once possessed.

Harding campaigned on a simple but effective slogan: a “Return to Normalcy”—the good old days before all that, before Wilson and War and all the upheaval of TR’s experimentation and Progressivism. That kind of America was a place where a man could make his mark with hard work and grit and do so without the government coming in and messing it up. Time to clean the stables.

The imagery and the moment had a potent impact. In November, the Harding-Coolidge ticket won decisively. Their success echoed down-ballot: The GOP took 303 House seats to 131 for the Democrats and won a 59-37 margin in the Senate.

Harding had the prize. He had a lock on Congress, and he had what might be thought of as a genuine mandate. What would he do with it? At the outset, he also had a considerable amount of luck. Europe was devastated, with wholesale destruction of people and property. There was a vacuum to be filled. America could be an economic powerhouse, so the thinking went, provided that government stuck to its knitting, dealing with things like social order, and got out of the way of business.

This was exactly the change voters were looking for, and Harding was the embodiment of it. He was definitely not a Wilson-style intellectual who analyzed from a higher-than-mere-mortal level. It turned out that his common touch was evidence of a common mind, but, with a honeymoon period, he could settle in, pick (or have picked for him) a Cabinet, and find others who knew more than he to make the engine run.

He made three exceptional choices. State went to the former and future Supreme Court Justice Charles Evan Hughes. Treasury Secretary would be the industrialist and banker (and one of the wealthiest men in America) Andrew Mellon. Commerce would go to Herbert Hoover, who had done remarkable work in Europe during and after the war and was thought of as a future President.

So far, so good, although these were not guys you could have a beer with. Here’s where Harding began to fail. What to do when you have a whole White House to play with, but are not exactly sure you like the work? Bring in some playmates—in Harding’s case, the hard-drinking, cigar-chomping, poker-playing group known as the Ohio Gang.

The Ohio Gang consisted of pols and connected/rich buddies from Harding’s less exalted days. In the mix were the absurdly rich oil men Edward Doheny and Harry F. Sinclair, the soon-to-be Attorney General (and former Harding Convention Whisperer) Harry M. Daugherty, New Mexico Senator Albert B. Fall (Secretary of the Interior), and former Congressman Edwin Denby (Secretary of the Navy).

Harding may have been a little fuzzy about what to do with his Presidency. These men were not. Access, connections, and actual power coupled with absent consciences and zero Harding oversight gave their new roles a special appeal. So much to take, so few in positions of power to tell them no.

Take they did, in ways small and big, most notoriously in the Teapot Dome Scandal. If you are keeping score at home, it’s one of America’s finest efforts at sheer greed and mendacity. Whole books have been written about it, but here’s a small taste:

First, a quick primer: What’s a “Teapot Dome”? In order to ensure that the Navy would always have enough oil in time of war, then-President Taft had set aside federal lands that held huge petroleum reserves. Three of the sites, Teapot Dome Oil Field in Wyoming, and the Elk Hills and Buena Vista Oil Fields in California, were especially appealing to the conspirators. There was only one problem—Taft had vested control over the fields in the Navy Secretary, which made perfect sense, since the oil was a Naval strategic reserve. Harding’s new Secretary of the Navy, Denby, was an Ohio Gang member, but a bit tentative. Far more focused was Fall, the new Interior Secretary. He lobbied insistently for control to be passed to him. Fall was not a guy who had ever taken no for an answer, and he had urgent personal needs (large debts among them) that required satisfaction. Why not with public assets?

Fall made the case to Harding that “Interior” should mean what it said, and since the Naval Reserves were physically “interior,” control over them should be in his Department. In late 1921, likely to get Fall off his back, Harding issued an Executive Order to shift control of the sites from the Navy Secretary to the Interior Secretary. There’s some evidence that Denby resisted, but, by 1922, Fall had convinced Denby to yield. Fall now controlled the oil, and, putting on his best patriotic cap, decided that leasing those lands at below market rates to connected oil companies (including both Doheny’s and Sinclair’s) would be not only the strategically correct call, but would help the Fall family fortunes, which at that moment needed the help.

What followed were cross-country train trips with private cars, where people met to “discuss things,” non-descript bags with “bag men” to deliver them, and altogether a great deal of cloak and dagger. Albert Fall had a reputation for being a hard-nosed bargainer, but, when it came to selling things that didn’t belong to him, “sweetheart” was a better description.

Uber-favorable non-competitive bidding licenses for Elk Hills and Buena Vista went to Doheny. Sinclair got Teapot Dome. Cash, “Liberty Bonds,” no-interest “loans,” and other sweeteners headed to Fall’s enormous ranch in New Mexico. The “return on equity” for the oil barons could be described as “considerable.” Hundreds of millions of barrels of publicly owned oil were transferred for a relative handful of beans.

In the end, it was too big a story to hide, and The Wall Street Journal broke it in an April 1922 article. Fall denounced the accusations and the oil men professed to have negotiated in good faith and relied on Fall’s apparent authority. The licenses were valid—and even signed by Navy Secretary Denby.

The problem, in truth, was the immensity of the give-away—and the number of people who wanted in. One was Colonel James G. Darden, who claimed he already owned some of the Teapot field. By mid-summer 1922, he had already begun drilling operations. Darden was no crank. How he got the rights is unclear, but, among his other bona fides, he was also a financial backer of Warren Harding.

In any rational world, people would have gone into yet another smoke-filled room to work things out, but Fall had a hair-trigger temper and, it’s suggested, a memory of the good old days on the frontier, where he’d employ a little muscle to take care of a situation. Fall went to Harding and literally asked him to send in the Marines.

By this point, Harding was beyond exhaustion. He might have been President, but Fall was a scary guy, and he needed to buy some time, so he asked Darden to come to the White House for a chat. Couldn’t Darden just close up shop and forget all about Teapot Dome? To be polite, Darden wasn’t enthusiastic about yielding, and said he was ready to go to court. No deal, Mr. President.

Fall was unrelenting, and so Harding eventually relented (or not, it’s not entirely clear). In what had to be one of silliest uses of the Marines ever, on August 1, 1922, a very small contingent of Marines (five, not a typo), escorted by some men from the Department of the Interior and a reporter for The Denver Post, confronted a very small number of Darden’s roughnecks at one drill-hole at Teapot Dome. The Marines took no quarter and thoroughly rousted Darden’s team—in a very polite way. No blood was shed, and there’s no record of combat medals being awarded. The Marines, the foreman, and supervisor apparently sat down together for lunch.

Fall’s victory celebration was short-lived. The Denver Post man was to be the skunk at the picnic. Almost 30 years earlier, The Post had been purchased by a couple of men peculiarly suited for the moment at hand. Harry Heye Tammen and Frederick Gilmer Bonfils had been monetizing news (usually of the embarrassing variety) ever since. They were masters of the racy article, the hyperbolic editorial, the strategic “catch and kill.” Teapot Dome was an incredible opportunity. Bonfils struck a deal with a John Leo Stack, who had approached him with the complaint that Fall and Sinclair had cheated Stack out of a claim that he, too, had in Teapot Dome. The men agreed to work together to do a little extracting from Harry Sinclair.

The pitch to Sinclair was simple. Bonfils would cease negative reporting and editorializing, and Sinclair would compensate them. The final price was $250,000 cash and the rights to 320 acres in Teapot Dome with a guaranteed value of $750,000. Sinclair was as shrewd and tough a man as any, but there’s at least a suggestion that Harding himself played a role in convincing him to pay for silence.

Eventually, there was just too much out there for people not to notice, and for Congress not to do at least a little something for the cameras. Hearings began in January 1924. The conspirators were actually quite good at keeping secrets, but it was revealed that Fall had received a $100,000 interest-free “loan” from oil man Doheny, and the loan was delivered by Doheny’s son Ned in stacks of $20’s—in an actual bag. For comfort, Ned was accompanied by his friend Hugh Plunkett. There was more. Sinclair had sent a large herd of livestock to Fall’s ranch (merely as a friendly gesture, of course). His company had then delivered nearly $300,000 in cash and Liberty bonds to Fall’s son in law.

Where was Warren Harding during the hearings? He was dead. Returning from a long-planned trip to Alaska and the West Coast, he reported to his physician pain in his upper abdomen. Upon reaching San Francisco, it was clear he was ill, and he was confined to his hotel room. At first, he seemed to rally a bit, but, on August 2, 1923, while being read a flattering article about himself by his wife, he collapsed, convulsed, and died a few minutes later. He was just 57.

What did Harding know and when did he know it? While on a short cruise with Herbert Hoover in June 1923, he had asked what Hoover would do if he were President and became aware of a scandal. Hoover’s response was to disclose it. Harding didn’t. To the editor William Allen White, he apparently said, “I have no trouble with my enemies. I can take care of my enemies all right. But my damn friends, my god-damned friends, White, they’re the ones who keep me walking the floor nights!”

In a way, Harding’s death did what he wouldn’t do in life. Fall had already left, stepping down from Interior in January 1923 to enjoy his “enhanced” ranch. It would take until 1929 for him to be fined and sentenced to a year in jail. The rest of the Ohio Gang thinned out. Coolidge wasn’t a carouser and sent most of them packing. Oil man Doheny was charged with bribery, but eventually acquitted because both he and Fall testified that the $100,000 was a loan. Much later, however, he suffered a larger personal loss. His son Ned was shot dead in 1929 in a murder suicide; the shooter was Hugh Plunkett, who had apparently been consumed with anxiety over the chances his role in delivering the bribe would come to light. Harry Sinclair was tough to the end. He refused to answer some of the Senate investigators’ questions, saying their jurisdiction did not extend to private citizens. The Supreme Court eventually disagreed, and Sinclair later served 6 months for contempt of Congress and jury tampering. Upon his release from prison, he resumed his role as President of Sinclair Oil and Gas. Harry Daugherty, the political string-puller whom Harding picked for Attorney General, ran interference for Fall and the other conspirators as long as he could, even going so far as to send federal agents to Montana to investigate Senator Thomas Walsh, who had led the hearings. After Harding’s death, for some inexplicable reason, Coolidge kept Daugherty on as AG. Finally, Hoover and Hughes prevailed upon Coolidge to demand his resignation, which was received on March 28, 1924, nearly eight months after Harding’s death.

There’s an interesting coda to this story, even a surprising one. Republicans paid a political price in the 1922 Midterms, but it was a short-term one. They painted the investigations as partisan, and it clearly worked. The 1924 hearings didn’t make a dent in Coolidge’s popularity—he won decisively. Four years later, Hoover, riding on his own personal popularity and Coolidge’s record, crushed Al Smith.

Why didn’t voters care about the corruption? In some respects, because the “Normalcy” agenda began to take hold. Ron Chernow, in The House of Morgan, notes that “[d]uring the Republican dominated 1920s, bankers probably attained the peak of their influence in American history.” I’d be inclined to amplify that to add that businesses in general had virtually unbridled leave to do as they pleased.

They were aided immeasurably in this by the efforts of Treasury Secretary Mellon and Commerce Secretary Hoover. Hoover built Commerce into an organization single-mindedly dedicated to advancing business. Mellon, along with carrying out a very conservative agenda, was also given the extraordinary authority to refund taxes previously paid. He did so, returning over $3 billion dollars to the worthy (and occasionally connected).

It worked. Throughout the Harding and then Coolidge years, the monied interests, given preferential treatment, acting without meaningful regulatory restraints, stepped up, invested, and people generally prospered. The gains were not shared by everyone, and certainly not proportionately, but they benefited more people than just those at the very top. Electricity became more generally available, and newfangled equipment like radios, toasters, washing and sewing machines, and refrigerators improved quality of life. The Roaring Twenties were real for many. Things were better. Republicans were popular at the ballot box because they delivered.

All dreams must come to an end, and the idea of limitless growth without consequence met its sell-by date in declining economic numbers through the summer of 1929 and then the Crash. People could see there was a price to unfettered laissez-faire—the lack of meaningful guardrails. Speculation increased, risk increased, and prudent business practices like solid capitalization were on the wane. Finally, the structure sank under its own weight.

Photograph titled “Depression,” by Mark Benedict Barry, c1934. Library of Congress.

Hoover was an extraordinarily talented man, but his reaction was anything but empathetic. He had reached the stage in life where he was convinced that everyone could attain success, and a little privation might spur a man to it. Mellon was even more astringent. He wanted to “purge the rottenness out of the system,” and that was best accomplished by the government doing nothing at all. The markets would do the purging—businesses may fail, people may suffer deprivation, but, in the end “[p]eople will work harder, live a more moral life.”

Hoover, and his Party, paid, just as Democrats had paid 12 years earlier. The promise of Harding’s “Normalcy” had curdled, to be replaced by the bread line.

Let’s jump nearly a century forward. President Trump has been returned to office, and he’s selected over a dozen billionaires to take positions of authority in his Administration. What’s more, he’s managed to co-opt without formal position a few others for whom a billion is what they find in the sofa cushions. At his Inauguration were not only his “First Pal” Elon Musk, but also Amazon’s Jeff Bezos, Apple CEO Tim Cook, Google Chief Sundar Pichai, and Meta’s Mark Zuckerberg (representing a combined $10 trillion in market capitalization). Add to those four OpenAI’s Sam Altman and TikTok’s Shou Chew (perhaps a combined $300 billion in private market values), and you have quite a group of supportive supplicants.

What will Trump’s economic policies look like? Certainly pro-business. What about the people he empowers? Are they Falls? Mellons? Daughertys or Sinclairs? We can’t even begin to predict. Will they work for you or for themselves? We will have to see, but to expect anything but an agenda that includes substantial cuts to programs from which many common folks benefit, and which many wealthy people disdain, is Pollyannaish. Better times will have to come from economic growth that “trickles down.” Two years from now, and again in 2028, the public will judge whether that “New Normalcy” has worked.

I can’t fret over economic policies, no matter how much they could potentially impact my life. I have to trust democracy to self-correct. Here’s the people I do worry about: Bezos, Cook, Zuckerberg, Pichai. Altman, and Chew. These people, and Musk, and others, have a dominant say in what we read, what we see, what groups we sort ourselves into, and what “truths” are presented to us. These people, and Musk, collect data on us, and, by extension, on our friends and family. These people, and Musk, commoditize us and monetize us. They sell us to others. What I do not want them to do is to sell us to our government.