Miller Center

American President

A Reference Resource

Domestic Affairs

As President, Warren G. Harding often seemed overwhelmed by the burdens of his administration. He frequently confided to his friends that the job was beyond him. But he worked at his duties intensely and tried to keep his campaign promise of naming the best men in the nation to his cabinet. Some of them were clearly men of talent and energy.

Men of Competence and Corruption

His secretary of state, Charles Evans Hughes, the former presidential candidate, was one of the ablest of his choices. Andrew Mellon, the fabulously wealthy Pittsburgh financier, proved to be a powerful and effective though rigidly partisan secretary of the treasury. And the brilliant engineer Herbert Hoover, who had earned an international reputation for his work in feeding the starving millions of Western Europe after World War I, transformed the Department of Commerce into an efficient and effective support agency for U.S. business at home and abroad. All three cabinet members would stay on in the Coolidge administration. (Hoover would become the thirty-first President of the United States.)

Along with these distinguished men, Harding also surrounded himself with an unpleasant group of dishonest cheats known as "the Ohio gang." Many of them were later charged with defrauding the government, and a few of them went to jail. Harding clearly knew of their limitations, but he liked to play poker with them, drink whiskey, smoke, tell jokes, play golf, and keep late hours. Alice Roosevelt Longworth (the daughter of twenty-sixth President Theodore Roosevelt) once described the scene that she encountered at one of Harding's card games: "the air heavy with tobacco smoke, trays with bottles containing every imaginable brand of whiskey, cards and poker chips ready at hand—a general atmosphere of waistcoat unbuttoned, feet on the desk, and spittoons alongside." (He once gambled away the entire White House china set in a card game.)

His close friend and political manager, Harry Daugherty, whom he named attorney general, was one of the worst—and one of the slickest. He survived impeachment attempts by Congress and two indictments for defrauding the government in the disposal of alien property confiscated by his office from German nationals. Another schemer, Albert Fall, secretary of the interior, secretly allowed private oil companies to tap the Teapot Dome oil reserve in Wyoming and the Elk Hills oil reserve in California in return for least $300,000 paid to him in bribes. Fall was eventually sent to prison for his crimes. Charles Forbes, director of the Veterans Bureau, diverted alcohol and drugs from Veterans hospitals to bootleggers and narcotics dealers and took payoffs from contractors building the hospitals. He went to jail for two years.

It is noteworthy to remember that Harding was a man who could not say "no" to his friends. In fact, his father once told him that it was good that he had not been born "a gal," or else he would have been "in the family way all the time." Apparently, the President was not unaware of his problem. He enjoyed being liked, and he tried to make up for his weakness by supporting a few reform measures.

Reforms to Regain the Presidency

Harding did accept some government reforms to improve its efficiency. After failing to pass during the Wilson presidency, Harding signed a revised version of the Budget and Accounting Act of 1921, which allowed the President to present a unified budget for the first time (rather than have each cabinet secretary submit a budget to Congress), and which also created the General Accounting Office to audit government expenditures. He also supported bills assisting farm cooperatives and the liberalization of farm credit. Perhaps most importantly, unlike his predecessor Wilson, Harding was generally tolerant on civil liberties, honestly criticizing the unfair treatment of African Americans. He once lectured a segregated crowd of thirty thousand people at the University of Alabama on the virtues of racial equality and the evils of segregation.

Harding backed away from granting a general amnesty to the hundreds of Americans jailed for nonviolent antiwar protests during the Wilson years, but he did instruct the Justice Department to review each arrest on a case-by-case basis. Among those pardoned was Eugene V. Debs, the Socialist leader and five-time presidential candidate, who was serving a ten-year sentence at the federal penitentiary in Atlanta. Debs had won over ninety thousand votes from his prison cell in the 1920 election. As a condition for the pardon, Harding insisted that Debs come to the White House after being released from jail so the two men could meet.

Immigration Quotas and Pro-Business Stance

This generous and humane approach to healing domestic war wounds contrasted with Harding's support for the Johnson Immigrant Quota Act of 1921, which stipulated that the annual immigration of a given nationality could not exceed 3 percent of the number of immigrants from that nation residing in the U.S. in 1910. This quota made it more difficult for immigrants from southern and eastern Europe, whose numbers had been smaller in 1910, to enter the country. It would be the first in a series of anti-immigrant steps in the 1920s that greatly favored northern Europeans and immigrants from the Western Hemisphere over Italians, Russians, and eastern and central Europeans. Republicans passed these laws in part because immigrants from southern and eastern Europe were more likely to enroll in the Democratic Party.

On most issues related to the economy and foreign trade, Harding was decidedly conservative—determined, actually, to make the federal government serve U.S. business interests. He supported efforts by Secretary Mellon, one of the wealthiest men in the nation, to push through substantial tax cuts for the rich and for corporations. By 1926, a person earning $1 million annually paid less than a third of the income tax he had paid in 1920. And Harding's stand-pat attitude helped bestow confidence among U.S. business interests during the sharp deflation in 1920, which lasted for about one year. During that downswing of the economy, wages dropped drastically, and over twenty thousand business failures occurred. Delivering on his campaign promise, Harding supported, moreover, the Fordney-McCumber Tariff Act that reversed the downward movement in rates initiated by Wilson. The higher rates resulting from this piece of legislation were favored by industrialists who supported the Republican Party. Equally important in setting a pro-business tone were Harding's actions to encourage the Federal Trade Commission, the Justice Department, and the Interstate Commerce Commission to cooperate with corporations rather than to regulate them or to instigate antimonopoly actions against them.