Calvin Coolidge And Andrew Mellons’ Economic Policies

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Posted: Nov 22, 2021 1:34 PM
Calvin Coolidge And Andrew Mellons’ Economic Policies

Source: National Archives via AP

Calvin Coolidge continued the support of Mellon’s economic policies, after he assumed the office of the President. He understood economic policies in the context of individual liberty guaranteed under the Declaration of Independence and the Constitution—and scorned the likes of social justice. In his Inaugural Address on March 4, 1925 Coolidge said:

Fortunately, of all the great nations this country is best in a position to adopt that simple remedy.  We do not any longer need wartime revenues.  The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny.  Under this republic the rewards of industry belong to those who earn them.  The only constitutional tax is the tax which ministers to public necessity.  The property of the country belongs to the people of the country.  Their title is absolute.  They do not support any privileged class; they do not need to maintain great military forces; they ought not to be burdened with a great array of public employees.  They are not required to make any contribution to Government expenditures except that which they voluntarily assess upon themselves through the action of their own representatives.   Whenever taxes become burdensome a remedy can be applied by the people; but if they do not act for themselves, no one can be very successful in acting for them.

The time is arriving when we can have further tax reduction, when, unless we wish to hamper the people in their right to earn a living, we must have tax reform.  The method of raising revenue ought not to impede the transaction of business; it ought to encourage it.  I am opposed to extremely high rates, because they produce little or no revenue, because they are bad for the country, and, finally, because they are wrong.  We cannot finance the country, we cannot improve social conditions, through any system of injustice, even if we attempt to inflict it upon the rich.  Those who suffer the most harm will be the poor.  This country believes in prosperity. It is absurd to suppose that it is envious of those who are already prosperous.  The wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which everyone will have a better chance to be successful.  The verdict of the country has been given on this question.   That verdict stands.  We shall do well to heed it.

These questions involve moral issues. We need not concern ourselves much about the rights of property if we will faithfully observe the rights of persons.  Under our institutions their rights are supreme. It is not property but the right to hold property, both great and small, which our Constitution guarantees.  All owners of property are charged with a service.  These rights and duties have been revealed, through the conscience of society, to have a divine sanction.  The very stability of our society rests upon production and conservation.  For individuals or for governments to waste and squander their resources is to deny these rights and disregard these obligations.  The result of economic dissipation to a nation is always moral decay.[1]

America seeks no earthly empire built on blood and force.  No ambition, no temptation, lures her to thought of foreign dominions.  The legions which she sends forth are armed, not with the sword, but with the cross.  The higher state to which she seeks the allegiance of all mankind is not of human, but of divine origin.  She cherishes no purpose save to merit the favor of Almighty God.[2]

President Coolidge wrote that he “knew that when taxes were laid someone had to work to earn the money to pay them. “ Then, acknowledging how the government was poorly handling its economy also noted, “I saw that the public debt was a burden on all the people in the community.”[3]

[1] John Gabriel Hunt (Ed.), 1997, “Calvin Coolidge: Inaugural Address, March 4, 1925,” The Inaugural Addresses of the Presidents: From George Washington to George W. Bush, (New York, NY: Gramercy Books), pp. 357-358.

[2] John Gabriel Hunt (Ed.), 1997, “Calvin Coolidge: Inaugural Address, March 4, 1925,” The Inaugural Addresses of the Presidents: From George Washington to George W. Bush, (New York, NY: Gramercy Books), p. 360.

[3] Calvin Coolidge, 2004 (originally published in 1929), The Autobiography of Calvin Coolidge,” (Honolulu, HI: University Press of the Pacific), p. 26.