Coolidge’s initial impressions of his two cabinet members had only strengthened. The supposedly cold Coolidge heartily approved of Mellon’s tax policy, saying that “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 every one will have a better chance to be successful.” Mellon, with Coolidge’s support, reduced the national debt from $24 billion to $16 billion. He did away with the excess-profits tax—it was wrong to say that profits were excessive anyhow, when they created the work. Negotiating past the progressive George Norris, he put through the Revenue Act of 1926, a dramatic series of rate cuts, repealing gift taxes, slashing estate taxes, and taking one-third of those who had paid in the preceding year entirely off the tax rolls. Norris commented of one of the drafts of the act, “Mr. Mellon himself gets a larger personal reduction than the aggregate of practically all the taxpayers in the state of Nebraska”—Norris’s state. Still, Mellon also paid more taxes than the people of such states.
Mellon’s goal had been to get the top tax rate down to 25 percent, a full 50 percent below where it had stood at Frick’s death, and he achieved this. Mellon had also lowered the base or “normal” rate at the bottom of the schedule. Growth was up, but so, more importantly, was the average real wage, solid evidence that a tax cut for the rich was also good for Henry Ford’s worker. The after-inflation earnings of employees grew 16 percent from 1923 to 1929. Revenues continued to flow in just as the treasury secretary had so pointedly predicted. Mellon was managing to balance the budget and to reduce the staff of tax officials at the Bureau of Internal Revenue. The policy was so well regarded that even Democrats, the party of the income tax, argued for lower taxes. John Nance Garner, a representative from Texas and a leader in the House, had a plan for a corporate tax lower than Mellon’s, at least in some brackets. Between Coolidge and Mellon there was also a personal bond. Later it would be said of them that they conversed entirely in pauses.
Matters were different when it came to Hoover. Coolidge understood the political success of the beneficent hand, but he did not believe in it. Man himself, he would write toward the end of the 1920s, was after all “but an instrument in the hands of God.” More and more Coolidge was thinking of God—in 1924, his son Calvin got a blister on his toe playing tennis on the South Lawn of the White House, and in those prepenicillin days, the blister brought on an infection that killed him. This tragedy made Coolidge brittle, impatient, and irritable, and one of the people who irritated him was the persistent Hoover, so different from Mellon. Where the president eschewed technology, Hoover was always playing with it. Coolidge also hated Hoover’s tendency to react to news with grand, intrusive plans. Could not Hoover see where some of his rescues had led? At one point later on, the minimalist president Calvin Coolidge concluded quite simply that “that man has offered me unsolicited advice for six years, all of it bad.” He had a nickname for Hoover: “Wonder Boy.”
Beyond grief lay Coolidge’s accurate perception that in the 1920s Mellon’s and his own policies were yielding the good that the menhad predicted. Today we estimate that the highest level of unemployment under President Coolidge had been 5 percent in the year he was elected. From there it dropped to 3.2 percent in 1925 and then into the twos and ones. Citizens could afford all the new products. There was nothing bubbly about the potential for productivity gains. By the end of 1925 Ford’s peak production was 8,500 a day, up substantially from the 6,000 from a few years before. Overall in the years from 1923 to 1929 car production would double. Another emblem of the new
Mellon’s goal had been to get the top tax rate down to 25 percent, a full 50 percent below where it had stood at Frick’s death, and he achieved this. Mellon had also lowered the base or “normal” rate at the bottom of the schedule. Growth was up, but so, more importantly, was the average real wage, solid evidence that a tax cut for the rich was also good for Henry Ford’s worker. The after-inflation earnings of employees grew 16 percent from 1923 to 1929. Revenues continued to flow in just as the treasury secretary had so pointedly predicted. Mellon was managing to balance the budget and to reduce the staff of tax officials at the Bureau of Internal Revenue. The policy was so well regarded that even Democrats, the party of the income tax, argued for lower taxes. John Nance Garner, a representative from Texas and a leader in the House, had a plan for a corporate tax lower than Mellon’s, at least in some brackets. Between Coolidge and Mellon there was also a personal bond. Later it would be said of them that they conversed entirely in pauses.
Matters were different when it came to Hoover. Coolidge understood the political success of the beneficent hand, but he did not believe in it. Man himself, he would write toward the end of the 1920s, was after all “but an instrument in the hands of God.” More and more Coolidge was thinking of God—in 1924, his son Calvin got a blister on his toe playing tennis on the South Lawn of the White House, and in those prepenicillin days, the blister brought on an infection that killed him. This tragedy made Coolidge brittle, impatient, and irritable, and one of the people who irritated him was the persistent Hoover, so different from Mellon. Where the president eschewed technology, Hoover was always playing with it. Coolidge also hated Hoover’s tendency to react to news with grand, intrusive plans. Could not Hoover see where some of his rescues had led? At one point later on, the minimalist president Calvin Coolidge concluded quite simply that “that man has offered me unsolicited advice for six years, all of it bad.” He had a nickname for Hoover: “Wonder Boy.”
Beyond grief lay Coolidge’s accurate perception that in the 1920s Mellon’s and his own policies were yielding the good that the menhad predicted. Today we estimate that the highest level of unemployment under President Coolidge had been 5 percent in the year he was elected. From there it dropped to 3.2 percent in 1925 and then into the twos and ones. Citizens could afford all the new products. There was nothing bubbly about the potential for productivity gains. By the end of 1925 Ford’s peak production was 8,500 a day, up substantially from the 6,000 from a few years before. Overall in the years from 1923 to 1929 car production would double. Another emblem of the new
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