When you think 1925, you probably think of the Roaring Twenties or the Jazz Age: flappers, the Charleston, gangsters, all kinds of material excess—basically this guy. Maybe you think of the Harlem Renaissance or Prohibition if you're a little more of a history buff.
What people don't talk about quite so much are the less jazzy topics, like politics, nativism, and the aftermath of World War I.
That's right, bust out your party balloons.
Calvin Coolidge was clearly responding to a number of issues roiling the United States when he wrote his Inaugural Address in 1925. WWI was still on the minds of Americans who wondered if another international skirmish was in their future or if the roaring economy would plunge into another postwar recession. Coolidge won his 1924 campaign with slogans like "Keep Cool with Coolidge" (who were the ad wizards who came up with that one?) and he seemed to be a stable, calm choice for a turbulent decade.
To be honest, the nation needed a little adult supervision.
World War I had ended in 1918. The U.S. didn't get involved militarily until April 1917, but it had been involved economically since the beginning. By 1915-1916, we provided supplies and food, not to mention huge loans, to the European powers duking it out.
The war had dragged on a lot longer than anyone originally expected, and Germany began unrestricted submarine warfare and started sinking American commercial ships. Plus they tried to turn Mexico against the U.S., promising it would help them get back all that territory they lost in the Mexican American War. B'bye to New Mexico, California, Utah, Nevada, Arizona, Texas, and western Colorado.
That was too much even for the neutrality-loving United States. Woodrow Wilson, who'd been elected president five months earlier with the slogan "He kept us out of war," stopped keeping us out of war. "The world must be made safe for democracy," he declared on April 2, 1917, and sent two million American soldiers overseas. 50,000 of whom never made it back. It's a long and horrible story; you can get it all here. Or even better, here. The U.S. emerged from the war as a major global player, with a new international leadership role and financial and military superiority over a Europe in shambles.
The war economy boomed as people were put to work producing raw materials and manufacturing ships, weapons, and warplanes. Agriculture and farm prices also skyrocketed as the U.S. exported supplies to feed Europe. Wages increased because of the labor shortage and women were drawn into the workforce to replace soldiers sent off to fight. African Americans flocked to the industrial north for the economic and social opportunities they hoped to find there.
But once the war was over, the transition to a peacetime economy was a rocky one.
Returning soldiers flooded the labor market; industries that geared up for war slashed production; broke Europeans weren't buying American goods. Europe started growing its own food again and no longer needed American farmers, who saw their prices plummet. By January 1920, the economy was in a severe recession that lasted for about 18 months. The stock market lost almost half its value; industrial production collapsed, unemployment increased to about 12%; wholesale prices fell almost 40%, corporate profits over 90% (source).
Even though the recession wasn't to last long, Americans' unhappiness with President Wilson's response to the downturn helped to send a Republican to the White House in November, 1920. Warren Harding's approach to the recession was to slash government spending and taxes on businesses and individuals, and let things work themselves out. The newly created Federal Reserve Bank shrugged and said, whatevs, don't look at us, these things happen sometimes, it's the price you pay for a free market economy.
For reasons that economists have been arguing about ever since, the economy was vigorously back on track in a year and a half, with full employment and peak levels of production by 1923. This is the economy that Calvin Coolidge inherited, and he followed the same policies that seemed to have solved the recession: hands off the economy. His beliefs about the prosperity resulting from tax cuts and small government were the centerpiece of his inaugural address.
After the war, Germany was saddled with very, very high reparations payments to France and the United Kingdom thanks to the Treaty of Versailles. The German economy was in shambles, and within a few years couldn't make their payments. By December 1923, it took one trillion (yes, with a "t") paper Deutschmarks to equal one gold mark (source), leading to some famous images of Germans lugging around bricks of cash to buy groceries—or simply playing with them. Cash was practically worthless, so France occupied the most industrial part of Germany (the Ruhr Valley) in an attempt to get their money back.
The U.S. spearheaded a commission of nonpolitical experts to figure out how to, in the immortal words of Tim Gunn, "make it work."
What came out of that commission, in April 1924, was the Dawes Plan, from the team led by Vice President Charles Dawes. The U.S. would loan money to Germany, who would use that money to pay back France and the U.K., who could then pay back the United States.
It was a circle, a circle of loans, and it moves us all—wait, hang on, that's not right….
By the time Coolidge was president, the economic recovery of a lot of the world rested on the shoulders of the United States. No pressure though.
While Europe was attempting a reboot, the U.S., having recovered from the recession of 1920-21, was having a wild party despite Prohibition. (The Eighteenth Amendment had made the production, transporting, and sale—but not possession or drinking—of alcohol illegal in 1920). The popular image of the "Roaring Twenties," which generally features flappers in fringy dresses and pearls holding cocktails and dancing the Charleston in jazz clubs, was only part of the story.
And lots of people weren't too happy about those flappers.
If you look at Coolidge's inaugural speech, he spends a lot more time praising America's past and talking about religion and morality than he does talking about America's modern culture. Probably not a coincidence.
The '20s saw rapid changes in the economy, industry, and society, ranging from the rise of the automobile to shorter women's skirts. And one byproduct of the ban on booze was the bloody rise of organized crime to provide thirsty Americans with illegal booze. Lots of people saw the traditional, agrarian America they knew as disappearing into this modern industrialized society of questionable morals (source).
F. Scott Fitzgerald, the boy genius literary chronicler of the Jazz Age, summed up these contradictions in his novels: wealth and extravagance built on a foundation of moral decay and carelessness, the giant hangover from the party that was the 1920s.
But when Coolidge gave his inaugural talk, the economy was doing fabulously, which kept the party going. Massive tax cuts left more money in peoples' pockets, and they used it to invest in the stock market. However, a lot of investments were made "on margin" (meaning people borrowed money to invest), and put into get-rich-quick schemes or in companies that didn't actually make anything (source). Stock market values continued to climb, but nobody questioned that maybe things were getting a bit overheated—irrational exuberance, in the words of a later Fed chairman.
Signs of the crash to come were there, but nobody was really paying attention.
(If all this is sounding a little familiar, you're right on the money.)
At the time Coolidge made his Inaugural Address, it looked like the tax cuts were making everyone rich and happy.
The 1920s saw a rise in nativist attitudes throughout the U.S. Getting entangled in World War I didn't help Americans feel very welcoming towards people they perceived as foreigners. Immigration legislation in 1917 and 1922 led to strict quotas in immigration numbers, primarily from Eastern Europe (because too many Jews), southern Europe (too many Catholics) and Asia (too many, well, Asians). Religious and ethnic minorities fought rampant discrimination, and a revived Ku Klux Klan was at its peak enrollment and political power.
African Americans flocked to the northern cities during the war years, hopeful that employment opportunities due to wartime labor shortages would provide more economic security than agricultural life in the South, and would offer an escape from the oppressive segregation of Jim Crow laws. Despite misgivings about fighting for a country that denied them basic civil rights, 200,000 African Americans answered the call to service, believing that with their sacrifice for the nation, they couldn't be denied their rights when they returned.
How'd that work out? Hint: not well.
Warren Harding had left behind a legacy of scandal source, sexual and political, that Coolidge quickly reversed in his own presidency by being a paragon of morality and incorruptibility.
The 1924 election was a Coolidge landslide. Democrats had imploded at their convention and elected a compromise candidate who no one was really jazzed about (source). The Republicans had big business on their side, and the social reform spirit of the Progressive Era had faded.
When Coolidge was officially elected and inaugurated in 1925, the nation was prosperous and at peace. It had taken on an important economic and political role in the postwar world, but Coolidge and his party promised to keep the country out of other wars and international entanglements. Domestically, the economy was thriving; Coolidge further slashed taxes and government spending. When Coolidge left office, the federal budget was smaller than he found it.
Underneath, though, there were some cracks in that beautiful Art Deco foundation. That overheated stock market, growing wealth inequality, organized crime, and nativism marred the pretty picture.
A year after Coolidge left office, the stock market crashed, and a Great Depression crippled the economy for years. In an effort to correct the damage, his successors reversed Coolidge's laissez-faire, small-government economic policies, greatly expanding the role of the federal government in the lives of the American people. Whether that solved the Great Depression, or just extended it, is another loud argument turned up to eleven between Democrats and Republicans ever since—one of the great legacies of the Coolidge era.