Among the foreign policy victories were the Dawes Plan and the Kellogg–Briand Pact. Both were aimed at calming troubled international relationships. Coolidge saw that WWI, which had just ended, had not exhausted the serious tensions in global relationships. Coolidge’s foreign policy initiatives were designed to ease tensions and avoid another world war.
In the early 1920s, people on both sides of the Atlantic, and around the world, were thinking about recovering from the war, and getting life back to normal. But Coolidge and other farsighted leaders could see that the motives for armed conflict had not exhausted themselves on the battlefields of WWI, and that international relations needed to be carefully managed to avoid another outbreak of massive violence.
When Coolidge took office in August 1923, the diplomatic and economic situation in Europe was teetering on the brink of collapse, and collapse might mean the outbreak, or resumption, of hostilities. Coolidge looked to Charles Dawes to find a way to stabilize the situation.
The overly-punitive reparations demanded by the French and British at the Versailles discussions in 1918/1919 needed to be moderated. If Germany declared bankruptcy and defaulted on its payments of these reparations, the situation would grow dire. In fact, Germany did so default.
The United States would lend, under the terms of the Dawes Plan, eight hundred million (800,000,000) gold marks to Germany to help it meet its obligations. Thereafter, the plan regulated the amount of payments per year to keep the financial burden on Germany manageable.
The Dawes Plan avoided a crisis and stabilized Europe, both economically and diplomatically. The Plan was accepted by the European nations in August 1924, and Coolidge rewarded Dawes by making him vice president.
Building on the gains of the Dawes Plan, Coolidge’s Secretary of State, Frank Kellogg, worked to build an international agreement. In early 1927, the French had proposed a similar but more limited idea, which had a lukewarm reception. Kellogg’s idea was bolder and went further. It created a framework for negotiations to avoid military conflict. Historian Amity Shlaes writes:
The treaty itself had crystallized in Kellogg’s mind as the administration had tried to decide what to make of Briand’s irritating bilateral plan. Briand had proposed that plant in the newspapers in April 1927, and for months after, Kellogg had made a show of ignoring him. But perhaps, Kellogg had begun to think, one could use Briand’s document as a basis for a treaty among the great powers, a “universal undertaking not to resort to war.” That “might make a more signal contribution to world peace by joining in an effort to obtain the adherence of all the principal powers of the world to a declaration renouncing war as an instrument of policy.” Such a declaration, he wrote in one State Department paper, “could not but be an impressive example.” With the word “example,” Kellogg knew, he might lure not only Briand but also Coolidge.
The Kellogg-Briand Pact was formally approved in August 1928. Although some observers criticized the treaty as ineffective because it lacked an enforcement mechanism, the next decade lacked major military conflicts.
Aside from the Spanish Civil War and Japan’s aggression in China, it seems that the Kellogg-Briand Pact delayed the next World War for ten years, but strict causality in this case is impossible to prove.
While managing these achievements in foreign policy, Coolidge was achieving equally great, or even greater, things in domestic policy.
The Coolidge presidency achieved amazing feat: reduction in national debt, reduction in taxes, reduction in government spending, and practical elimination of the deficit. By certain statistical metrics, Coolidge can be quantified as one of the most economically successful presidents. Citizens in all income categories enjoyed increased standards of living. All regions of the country and all industrial and business sectors experienced growth.
His enthusiasm for the free market was coupled with his sense of civic responsibility. Goodwill in the private sector, fueled by a sense of charity and duty, could accomplish as much and more than public sector programs. Historian David Greenberg writes:
Coolidge famously summarized this philosophy in his January 1925 declaration to the American Society of Newspaper Editors: “The chief business of America is business.” Although sometimes caricatured as a sign of Coolidge’s obeisance to corporations, the statement actually contained a more subtle though still pro-business message. No apologist for raw laissez-faire, Coolidge believed that public-spiritedness was needed to counter the corrupting temptations of the profit motive. He was reminding the editors that they had to remain high-minded if they commercially driven newspaper business was to benefit the public. “The chief ideal of the American people,” he explained, “is idealism.” And Coolidge’s economic outlook was indeed idealistic.
Meticulous in detail, personally supervising the use of office supplies in the White House, Coolidge was debt-averse in the extreme. This passion for avoiding financial obligations was part theoretical economics, and part family culture from his boyhood.
Attacking the debt and paying it down was Coolidge’s highest policy priority, domestic or foreign. Historian Robert Ferrell writes:
Coolidge liked the idea of living within one’s means. Perhaps ever since his father in 1880 refused to advance him a penny until the election of Garfield, he had thought about debt. As soon as he finished reading law in Northampton, he balanced income with outgo. After marriage in 1905 the Coolidge family always came up with a surplus. As president he watched over the national debt, bringing it down from $22.3 billion in 1923 to $16.9 billion in 1929, a major achievement of economy. Coolidge considered the national debt to be the same as a private debt. In his day, there was none of the intricate calculation that would later grace - or disgrace, depending on the observer and his or her political party - government account keeping, whereby the government debt became subject to management and became a positive good, a vital necessity for the nation’s economic well-being. No one ventured that a rising gross national product would shrink the debt in a relative sense, or that what shrinkage did not occur relatively could occur through inflation. To Coolidge, the debt was an unadulterated debit, an evil, something to be rid of. Retiring the debt was “predominant necessity of the country.” Retiring the debt was “the very largest internal improvement … possible to conceive.”
The significance of Coolidge’s achievements can be seen when one searches for another United States president who simultaneously reduced debt, deficit, spending and taxes, while growing the economy for all income brackets, regions and industrial sectors.