Thursday, April 23, 2015

Early Soviet Threats

Although the label ‘Cold War’ is often thought to apply to the years from 1946 to 1989, a similar mood prevailed in earlier decades. Shortly after the 1917 Russian Revolution, the Soviet Union worked influence the United States.

The Industrial Workers of the World (IWW), a communist front which presented itself as a labor union, orchestrated a general strike in Seattle, Washington, terrorizing the city and holding the ordinary citizens hostage. When the strike ended, many IWW leaders fled to the Soviet Union.

In the years prior to WWII, the Soviet Union made use of enlisted agents, who engaged in espionage by extracting classified information about national security and sending it to Moscow, or by influencing policymakers in their decision-making. The Soviets also used unwitting dupes, usually naive idealists, who might not have been aware of the extent to which they were being manipulated to act in the interests of the international communist conspiracy.

Evidence has emerged that the Soviet Union had large numbers of both employed spies and unsuspecting pawns in the 1930s in the United States. Samples from a long list of names include Philip Keeney, Mary Jane Keeney, Haldore Hanson, Dorothy Kenyon, and one of the most famous spies: Alger Hiss.

Although this era lies more than half a century in the past, historians are still reconstructing the plan of the vast Soviet espionage network which existed inside the United States. The task is huge, and as more evidence comes to light, the work grows. Historians Stan Evans and Herbert Romerstein write:

Of note in this respect, covert by nature and kept that way for decades, was the nonstop backstage warfare that was waged between the opposing forces even as peace in theory prevailed among the nations. Only by degrees have we come to understand the extent of this clandestine combat, and a great deal more is still waiting to be discovered. Even so, with the revelations of recent years we have enough data in hand to sketch the outlines of an astounding tale and fill in specifics about some matters long uncertain or contested.

Successive estimates at the scale of Soviet intelligence activity have proven to be too small. Each disclosure of new data reveals the efforts to undermine the United States government to have been larger than previously thought.

Historians will be processing this information for decades to come, and new troves of documents are probably yet to be discovered.

Wednesday, April 22, 2015

Coolidge and Taxes

President Calvin Coolidge and Secretary of the Treasury Andrew Mellon agreed that taxes were a burden to ordinary citizens, and that taxes should be reduced. Mellon held his post already under President Harding, so when Coolidge took office, Mellon was solidly in place.

Mellon had already worked with Harding to get one round of tax cuts through Congress. Coolidge and Mellon would introduce additional tax reductions for congressional consideration in 1924, 1926, and 1928.

Already by 1924, Mellon and Harding had largely removed income taxes from the ordinary working class. In that year, Mellon and Coolidge would work on reducing the tax burden on the middle class. Historian Amity Shlaes writes:

Now, on taxes, Coolidge and Mellon pushed forward. The men told themselves they had the angles covered. The Treasury was readying a plan to publicize the tax problem: a National Tax Reduction Week, scheduled for early April. Mellon, cheered to have the support of such an ally, even planned to market his ideas. Mellon’s deputy, David Finley, was pulling together statements by Mellon and the administration into a little book that Macmillan would publish. The regular worker did not pay the income tax, but, Mellon believed, the regular worker would benefit from the tax rate cut. Therefore he titled his book Taxation: The People’s Business. The book was remarkable in its clarity, and for what it did not contain: the word “tariff” appeared only once, and revenues from customs were described as “abnormally high.”

While Mellon saw tax cuts as an encouragement for economic growth, Coolidge saw them as a matter of justice. If it was possible to relieve the working and middle classes, and reduce their tax burden, then justice required that it be done. If high marginal rates caused the upper classes to find loopholes in the tax code, then lower marginal rates would free that money to flow through the economy and stimulate growth.

Coolidge’s sense of justice about these matters was not primarily a legalistic morality driven by a need to follow rules, or make sure that others followed them. Instead, his sense of virtue was forward-looking, and was about taking action to improve one’s community.

Economics was, for Coolidge, an outgrowth of his spiritual worldview. He steered between a legalistic religion of rules and a worldly worship of governmental power, avoiding either extreme. Historian David Greenberg writes:

Less a censorious Puritan than a pious man of sentimental faith, Coolidge shunned the era’s new secularism as well as its resurgent fundamentalism; he saw religion as a source of virtue, not of division, oppression, or intellectual limitation.

Although motivated by his concept of personal virtue, Coolidge was still a man who’d worked his way through electoral cycles. He understood that tax cuts would help him at the polls.

President Harding was slightly more than halfway through his four-year term when he died, nudging Coolidge into office. Coolidge knew that the voters would be wondering about who he was. A tax cut was a way to send a clear signal about his political identity.

With the election in November 1924, the spring of that year was a good time to send that signal. Historian Robert Ferrell writes:

Personal income tax rates were highly political propositions, both in recommendation and in passage through Congress, and it is noteworthy that Coolidge proposed the Mellon tax cut of 1924 in March of that year, in time for the Republican convention and the subsequent election. It immediately placed the president in the public eye.

Economic policy would define the Coolidge administration in the popular imagination.

He took significant actions regarding race relations: Coolidge snubbed the KKK, which had enjoyed presidential favor during the Wilson administration; Coolidge promoted anti-lynching laws; he was the first incumbent president to deliver a commencement address at a historically Black college when he spoke at Howard University.

He also laid the foundation for a decade of peace. Coolidge worked with Charles Dawes; the result was the Dawes Plan, which restructured the payment of war reparations in 1924. Coolidge selected Dawes as vice president later that year. Coolidge appointed Frank Kellogg to be Secretary of State; the result was the Kellogg-Briand Pact, a treaty designed to offer diplomatic negotiations in an attempt to resolve international conflicts before they turned into open warfare. Although the war had ended only a few years before, Coolidge saw that tensions between various nations were already rising and that another war could easily erupt.

Despite his impact on both race relations and world peace, it was Coolidge’s economic policy that most affected the daily life of the ordinary citizen, that formed the popular image of him in the collective consciousness, and that is most remembered.

Tuesday, April 21, 2015

Coolidge: a Symbol of the Twenties

President Calvin Coolidge not only worked to implement his political agenda of personal political liberty and economic freedom, but he became a popular symbol for his era, even among his detractors.

The 1920s saw the emergence of technologies like film and radio into the mainstream consciousness. These, in turn, ushered in new styles like jazz and Art Deco.

Coolidge had little or nothing to do with these trends in popular culture, and in fact retained the aura of the earlier generation from which he came. Yet he embraced the technology as a way to explain his agenda to the voters. Citizens were already accustomed to seeing photographs of their presidents, but Coolidge was the first president whose voice and moving image became familiar to the public.

While Coolidge’s predecessor, Harding, had been a commanding orator, speaking to crowds of thousands, Coolidge became regular on the radio. Historian Amity Shlaes writes:

The radio, the new medium, had proved Coolidge’s friend. On the radio you didn’t need to have a strong voice but a clear one. And Coolidge’s was clear - it had wire in it, as someone would say later.

While he was, by nature and by reputation, taciturn, he gave 520 press conferences during his presidency, more than any other president, before or after. There is a paradox in the fact that the president who was so reticent that he earned the nickname ‘Silent Cal’ was also the president who frequently exploited the medium of radio and the occasions of press conferences.

Because of his comfort with, and skilled use of, the media, Coolidge became an image in the popular consciousness. Historian David Greenberg writes:

President from 1923, when he acceded to the office upon the sudden death of Warren Harding, until 1929, when he retired after forswearing a second full term, Coolidge was enormously popular throughout his tenure - an icon of his era every bit as much as Charles Lindbergh, Babe Ruth, or Charlie Chaplin.

Becoming icon entails the risk of become a caricature, which includes a loss of substance. The image and popularity of Coolidge belie the complexity and rigor of his economic thought.

Meticulously, Coolidge combed through the federal budget, searching for any chance to unburden the taxpayers. His thoroughness was targeted at finding ways to cut spending, cut taxes, balance the federal budget, reduce the deficit, and reduce the debt.

Keeping the federal budget roughly the same from year to year, while the economy grew significantly, was a way to reduce the burden on the ordinary taxpayer. Andrew Mellon was already Secretary of the Treasury before Coolidge took office. Historian Robert Ferrell writes:

The main contours of the budget, the object of cooperation between Mellon and Coolidge, are not difficult to relate. In the 1920s, the size of the budget remained virtually the same, after it decreased from the wartime era. In fiscal year 1921 (July 1920 through June 1921), federal expenditures were $5.1 billion; in fiscal year 1922, $3.3 billion. They stayed there during the Coolidge presidency, amounting in 1923 to $3.294 billion and in 1929 to $3.298 billion. Sources of revenue changed a great deal from prewar years. In 1913, one-third of the federal budget was from excise taxes on liquor, two-thirds from the tobacco tax and the tariff. In 1930, with no liquor tax, one-third came from tobacco and the tariff, one-third from personal income tax, and one-third from corporate income tax. The income tax, permitted by the Sixteenth Amendment, had gone into effect during the war.

The triumph of Coolidge’s economic policy not only eased the tax burden on citizens at all income levels, from the lowest to the highest, but also boosted employment levels and wages at all levels. The prosperity which Coolidge brought permeated all sectors and regions.

He also paid off a significant fraction of the national debt, a rarity in economic history.

Beyond economics, Coolidge made progress in extending personal liberty. He sharply denied the KKK’s attempt to gain more influence in national politics, departing from the pattern of the Wilson administration’s fondness for the Klan.

Coolidge encouraged Congress to pass anti-lynching laws, and became the first incumbent president to deliver a commencement address at a historically Black college when he spoke at Howard University in 1924. He was consistently popular with African-American voters.

In foreign policy, Coolidge worked to keep Europe stable. Despite, or because of, the treaties which ended the war, tensions between nations continued to simmer. Coolidge wanted to prevent another war.

Coolidge encouraged Charles Dawes to implement a plan to make the payment schedule for war reparations more realistic. The Dawes Plan went into effect in 1924, and Dawes later became Coolidge’s vice president.

Coolidge’s Secretary of State, Frank Kellogg, negotiated the Kellogg-Briand Pact, which sought to organize negotiated and diplomatic opportunities to address conflicts before they escalated into war. The pact was finalized in 1928.

Saturday, April 11, 2015

Adolf Berle: Assistant Secretary of State

A child prodigy who entered Harvard at age 13, Adolf Berle was also the youngest person to ever graduate, in 1916, from Harvard Law School at the age of 21.

(He’d stopped between his bachelor’s degree and law school to get a master’s degree. Otherwise, he’d have been even younger when he got his law degree!)

In the late 1930s and early 1940s, Adolf Berle served as Assistant Secretary of State for President Franklin Roosevelt. In this capacity, he received information from Whittaker Chambers, who up until 1938 had been working for the Soviet Union, gathering information about the United States and sending it to Moscow.

Chambers told Berle about two brothers, Alger and Donald Hiss, who were also Soviet agents, and who were endangering the security of the United States by sending classified information to the various Soviet intelligence agencies, and by influencing policy decisions within the Roosevelt administration.

Concerned about a security problem, Berle attempted to alert other members of FDR’s administration. Ann Coulter reports the results:

Berle also told Dean Acheson, then Roosevelt's undersecretary of the Treasury, what Chambers had said about the Hiss brothers. As Berle described the meeting, Acheson "said he had known the family and these two boys since childhood and could vouch for them absolutely." When Acheson later became assistant secretary of state, he immediately requested Donald Hiss as his assistant. Berle again stepped in to remind Acheson that Chambers had identified Donald Hiss as a Soviet agent.

When Acheson appointed Hiss to a position with access to classified information, he executed a casual and pro forma investigation of Donald Hiss.

He asked Hiss if he was a Communist, Hiss denied it, and Acheson sum­marily announced that "the matter was closed."

Apparently, Berle felt torn between his loyalty to the Roosevelt administration and his horror about its “non­chalance about Soviet agents on their staffs was scandalous.” While privately warning other members of the administration about these national security threats, he publicly defended the administration.

In public, Berle would downplay the Roosevelt administrations’s

promotion of two traitors with an inane straw-man argument: "The idea that these two Hiss boys … were going to take over the United States govern­ment did not strike me as any immediate danger."

Yet, despite his respect for FDR, it was clear to Berle that the president’s attention to detail was impaired by his declining health, and that some of the president’s appointees were either not troubled by, or refused to entertain the possibility of, the fact that there were Soviet operatives at high levels within the State Department.

As even Berle admitted, "We were all trying not to tell anything that ought not be told, and there were pretty consistent leaks whenever anything went through [Alger Hiss's] office."

Decades later, it would proven by the Soviet Union’s own records that the Hiss brothers were on Moscow’s payroll.

The deaths and horrors caused by the Soviet Union’s domination of Poland and other eastern European nations are directly attributable to Alger Hiss’s influence on FDR. Hiss gave advice to the president about how to negotiate with Stalin.