Coolidge (48 page)

But much broader bonus legislation passed in the House and Senate around the same time. Coolidge wrote his veto, leaving only the spaces for the numbers blank. The day after writing Mr. Allis, Coolidge met with Lord and Mellon, who made a strong case against the legislation; all in all the law would cost $6 billion, double what they aimed to spend a year. Coolidge vetoed the House version of the second bill on May 15 and the Senate version two days later. The new law would cost $146 million in fiscal year 1925—not the whole of the amount of the surplus, but a good share of it. In total, over twenty years, the bill would cost $2.28 billion, as Coolidge noted in a veto statement on May 15. There were millions of veterans across the country; once they were paid, they might have to be paid again. Even a bonus bill was not free of administrative costs, he warned. In the bill, Coolidge said, we “wipe out at once all the progress five hard years have accomplished in reducing the national debt.

“We have no money to bestow upon a class of people that is not taken from the whole people,” he continued; the individual was going to lose out to the group. This was the point he had been trying to make when he spoke of emulating Lincoln’s party platform. The bonus bill, he and Mellon suspected, would kill off the prospect of tax reduction. The same day as Coolidge issued a veto of this second bonus bill, May 15, the House voted 306–58 and the Senate 69–9 to pass an immigration bill that contained the Japanese exclusion measure.

Upon receiving this information, the president took to his apartments with a cold, turning away visitors. Even Longworth and Madden of Illinois, who came over to the White House to discuss the bonus with Coolidge, had to content themselves with visiting Mr. Slemp. Later in the day, his veto of the costly pension bill was indeed overridden by the House. By May 19, the day the Senate followed with its override of the pension bill, Coolidge was not better. Allies he had expected to vote with him had not. Lodge had voted to override as well, in support of the bonus. The
Boston Herald
, stunned at the humiliation to Coolidge, decided to conduct a public poll in Boston, asking for voters to choose among two statements about the new soldiers’ pension: “We believe Coolidge is right” and “We believe Lodge is right.”

The congestion in his chest worsened. The doctors at Walter Reed Hospital encouraged him to try a new treatment. The scientists at the Chemical Warfare Service had noticed that workers who spent days with chlorine suffered from few colds. They now recommended gassing patients to reduce their colds. Secretary of War Weeks had already tried chlorine gas for his cold and found it beneficial. For forty-five minutes, Coolidge inhaled in an airtight chamber; afterward, he declared himself better. In taking the cure, he strengthened a fad: 146 members of the House of Representatives and 23 senators also tried it. On Coolidge’s next trip, he brought Grace, who submitted to the treatment with him out of solidarity; both Coolidges afterward announced that their plan in the future was to “get out in the open oftener.” But Coolidge did not feel like going out. Just as he recovered, Mellon’s book arrived, proudly published in maroon and gold binding with gold leather. But the plan in the book would not be realized this year. If Congress overrode an immigration veto, he would suffer twice an indignity that Harding had never suffered.

The opposition was quick to crow, not only at the victory but also in mockery of Coolidge’s tactic of cutting first. “If the Republicans had possessed courage they would have created a deficit and then we would not have a bonus,” the Democrat Carter Glass told a ladies’ luncheon in Philadelphia on May 27. The surplus “was just an invitation to the Treasury raiders.” In Coolidge’s place, he told the ladies, crying crocodile tears, “I would resign.” The Republicans’ error had been in cutting so much that they had a surplus.

The bad news kept proliferating. Coolidge had to decide whether to sign the immigration bill. He wanted to restrain immigration but was not as great a fan of quotas as Dillingham had been; Coolidge no longer spoke in the racialist tones of the unfortunate articles he had written as vice president. His position now was that he did not like to judge people by their race or creed. Longworth was finally delivering up the compromise he had worked on for the tax bill. The top rate was still high; the Congress had voted to focus its cuts closer to the bottom of the tax schedule. Therefore the law might not encourage the commerce and growth Mellon envisioned. The bill that came to the administration also contained several measures crafted to infuriate the wealthy. One was an increase in the estate tax, a jab at Mellon, who had long fumed about the damage state estate taxes had done to the estate of his late friend Henry Frick. Finally, it contained a section that represented the progressives’ revenge against Mellon and Coolidge: citizens’ and companies’ tax returns would be open to the public. “As soon as practicable,” the law read, citizens’ names and their tax bills should be “made available to public inspection.” No one was quite clear whether the publicity requirement applied to returns for 1923 or 1924, or whether the Supreme Court would uphold this breach of privacy or not. But most legal experts seemed clear that the “Peeping Tom Law,” as it was instantly dubbed, meant that the names of taxpayers and their payments would be posted at district offices of the Bureau of Internal Revenue, if not the post offices. Adding insult to injury, the tax legislation cost more than they had planned; Coolidge and Lord would have to redouble their efforts to compensate for the loss.

“The President Should Veto the Tax Bill,” prodded the
Sun
of Baltimore. There was simply “too small a reduction of surtaxes.” The result would be evident when Coolidge reckoned up his own taxes. Did the 1924 act perhaps even represent an increase for someone who earned, as he did, about $75,000 a year? Under the very loosest interpretation of the diminution clause in the Constitution, no increase was allowed while a president or a judge was in office. Garrard Winston, an undersecretary at Treasury, ran the numbers for him. Under the 1921 law, a man with a net income of $75,000 would pay $13,372 in federal tax; under the new law he would pay $13,145, scarcely a difference. In addition, the new legislation decreased the amount one could deduct in capital losses, so that some people would pay more tax. The great unleashing of capital Mellon had sketched would not come.

The Wall Street Journal
made matters difficult for the president by making this an issue of pride. Coolidge had to veto or be humiliated. This Senate was not making law; it was “hazing the president” through his Treasury secretary, it alleged. And there was more humiliation in other bills before him, such as the immigration law.

On May 26, he sat down at a little desk on the White House lawn, bit his lip, and signed the immigration law, appending his own special criticism of the Japanese exclusion component. For years, the gentleman’s agreement under which Japan herself had monitored and restricted emigration had allowed the Japanese to save face when it came to immigration, to pretend at least that migration policy was a decision of the Japanese sovereign. Tokyo was withdrawing its ambassador from Washington; the U.S. ambassador to Japan, Cyrus Woods, was likewise retreating, though he claimed his resignation was in part due to the illness of his mother-in-law, who had been injured in the recent earthquake. Coolidge warned that the historic relationship with Japan was now disturbed, and unnecessarily so; instead of avoiding “new ground for misapprehension,” Congress had created it.

The same day he signed the immigration law, Coolidge escaped the White House and took a long walk through Washington, betting that citizens would not recognize him. He wanted to try to shake off his cold through exercise. Secret Service men trailing, he crossed through business and commercial districts and even window-shopped, thinking about prices and what he had accomplished. It took a few hours for the papers to catch up with the story.

The greatest shame, he considered, was the tax bill. On Saturday, May 31, he met with both Mellon and Lord. Was the tax cut worth what it might cost the budget? Earlier they had defined “scientific taxation” as tax law that promoted growth by cutting at the top. If the bill was not sufficiently scientific—and by Mellon’s terms it wasn’t—wouldn’t the bill cause the government to forgo revenue? Then government debts in turn could not be paid off. Interest rates would go up. Growth would be more sluggish. The people might get used to larger government. All these possibilities in turn made it likely the administration would never get the budget down to that $3 billion goal. General Lord, whose images ran to the classical, would later talk of feeling like the mythical Greek figure Tantalus, who was immobilized beneath a bunch of tempting grapes; though the grapes hung close, he was never able to reach them. The $3 billion mark was that tempting bunch of grapes for this administration. Each time Lord thought he could get there, something like the bonus bill happened and the government had to spend more, not less.

What’s more, when it came to timing, Coolidge and Mellon were trapped. Coolidge had made a point of rejecting special sessions of Congress, on the simple principle that they provided opportunity for more legislation. Activists tended to like such sessions for the same reason; indeed, La Follette of Wisconsin was seeking one now. To repair the bill, however, would require such a session. Even if he did not sign this tax bill, the bonus bill would set them all back. The details of the outlays that the bonus would require were just beginning to come out; $132 million was needed for the first year. Major General Robert Davis of the War Department was estimating that 2,517 clerks would have to be hired to deliver the bonuses to the veterans. A “deficiency bill,” a new law, would have to be passed to pay for the costs of the veterans’ bonus. That would reduce the surplus for which he, Lord, and Mellon had worked so hard. Mellon was alleging that signature of this tax bill would send them into deficit. Everything was now moving in the wrong direction.

The president took a final weekend on the
Mayflower
to consider it all. With him came a copy of the as yet unsigned tax bill, comments by General Lord and Secretary Mellon, and planks of the Republican platform. Not only was the tax bill unsatisfying; Coolidge’s demand that the platform be 2,000 words, like Lincoln’s, was also going unheeded. The 1924 GOP platform, at 5,200 words, was not much shorter than the 1920 platform, and several times the length of Lincoln’s platform. The president walked the deck for several hours and had the Sunday
New York Times
delivered to him by naval airplane at 10:30 on Sunday. From the
Mayflower
, no word came, but reporters heard that Coolidge had dictated something.

When Coolidge considered the tax bill, though, he saw that disappointment obscured some strong advantages. The tax bill did cut tax rates for many taxpayers. Middle earners saw their base rates come down. Higher earners paid less income tax in total. That was, to Coolidge, a good thing. It was always good for the government to take less. Most important of all was the future: If he went along with this bill and withstood the humiliation, he and Mellon might get another shot at tax legislation. In Mellon he had found the partner that Harding could not be: the partner with whom he could finish a job.

There was something familiar about the feeling of spring in Washington to him. Over the years, the Senate had beaten him down, indeed, humiliated him in ways it had never humiliated Harding. Yet the country did not see the failure of the tax law: it saw his industry, that Coolidge had tried. It appreciated the budget sessions. Senator Lodge had gone against him yet again in the override of the pension bill, but the
Boston Herald
poll had yielded an astounding result: by a ratio of 250 to 1, Boston voters had endorsed Coolidge on the bonus. Boston understood how much the spending of the war had disrupted, and they appreciated his effort. They appreciated normalcy.

The big powers like Hearst and Ford liked the Mellon Plan, but Coolidge’s popularity went beyond taxes. It was the devotion to service that struck people. His ideas and the culture were in harmony. Columbia University’s Pulitzer Prizes were awarded during the veto debacles in May. One prize had gone to an autobiography that was largely about the possibilities America offered to immigrants if they assimilated,
From Immigrant to Inventor
by Michael Pupin. Assimilation was also Coolidge’s emphasis. Another Pulitzer had gone to Robert Frost, the instructor at Coolidge’s own Amherst, for
New Hampshire
, a collection of poems about the virtues of New England. The book included “Stopping by Woods on a Snowy Evening
.
” Though Coolidge was not friendly with Frost and preferred the poetry of precursors such as John Greenleaf Whittier, “Stopping by Woods” and other poems by Coolidge’s fellow New Englander kept touching the themes that Coolidge himself probed: honoring commitments, even at the tired end of a day. Yet another prize went to the editorial “Who Made Coolidge?” All his life, Coolidge had found favor by delivering more than others expected; now, in a more profound way that went beyond his law-and-order popularity after the strike, the American people gave him their favor. Coolidge had not won the tax battle, but he had won the battle for more time, even another term as president. The tax idea, if not the execution, had gone farther than it had under Harding, and many important forces appreciated that. The great newspaper magnate William Randolph Hearst let Clarence Barron know that he was especially impressed by the tax plan. Ford approved. Barron’s support at
The Wall Street Journal
meant something, too.

On June 2, Coolidge made his great wager: if he stayed around, and ran again, he could yet prevail on taxes. He signed the stopgap tax bill for now, but accompanied it with a strong letter, a declaration of war. The bill, the letter acknowledged, would bring significant relief to voters, especially the 25 percent credit the bill gave taxpayers on the payment for the prior year’s tax return. This was a relief, especially because the economy could not forever grow straight up as it had that year. But such credits, Coolidge warned, did not represent true tax reform; they were only temporary measures. It was perverse to raise estate taxes to 40 percent as the law did, to sustain the income tax with a top rate in the 40s and to sustain the tax-exempt status of municipal bonds. Money would continue to flow into tax-favored state projects but not to inventors or entrepreneurs. The publication of tax returns constituted a violation of privacy, sacrificing “without reasons the rights of the taxpayer.” Much of the bill was so destructive, he said, as to jeopardize the future of the country. Coolidge channeled Mellon’s memos in his statement, in places adding bits of his own: “A correction of its defects may be left to the next session of the Congress. I trust a bill less political and more economic may be passed at that time. To that end I shall bend all my energies.”