A Republican from Ohio, President Harding was an influential self-made newspaper publisher. His conservatism, affable manner, and "make no enemies" campaign strategy made Harding the compromise choice at the 1920 Republican National Convention. During his presidential campaign, in the aftermath of World War I, he promised a return of the nation to "normalcy. " This "America First" campaign encouraged industrialization and a strong economy independent of foreign influence.
Harding departed from the progressive movement that had dominated Congress since President Theodore Roosevelt. In the 1920 election, he and his running mate, Calvin Coolidge , defeated Democrat James M. Cox in the largest presidential popular vote landslide in American history (60.36% to 34.19%).
Harding is known for his financial policies, fiscal responsibility, and his endorsement of African American civil rights. Harding's creation of the Budget Bureau was a major economic accomplishment that reformed and streamlined wasteful federal spending. The nation's unemployment rate dropped by half during Harding's administration. However, Harding is also remembered for rewarding friends and political contributors, referred to as the Ohio Gang, with financially powerful positions. Scandals and corruption, including the notorious Teapot Dome Scandal, pervaded his administration; one of his own cabinet and several of his appointees were eventually tried, convicted, and sent to prison for bribery or defrauding the federal government.
In August 1923, President Harding died in office and was succeeded by Vice President Calvin Coolidge. Coolidge restored public confidence in the White House after the scandals of his predecessor's administration and left office with considerable popularity. Praising the achievement of widespread prosperity in 1928, he said: "The requirements of existence have passed beyond the standard of necessity into the region of luxury. " Coolidge echoed many of Harding's Republican themes, including immigration restriction and the need for the government to arbitrate the coal strikes then ongoing in Pennsylvania; later that year Coolidge signed the Immigration Act of 1924.
Coolidge's taxation policy was that of his Secretary of the Treasury, Andrew Mellon. Taxes should be lower, and fewer people should have to pay them. Congress agreed, and the taxes were reduced in Coolidge's term. In addition to these tax cuts, Coolidge proposed reductions in federal expenditures and retiring some of the federal debt. In 1924, Congress passed the Revenue Act of 1924, which reduced income tax rates and eliminated all income taxation for some two million people. They reduced taxes again by passing the Revenue Acts of 1926 and 1928, all the while continuing to keep spending down so as to reduce the overall federal debt.
Coolidge left the administration's industrial policy in the hands of his activist Secretary of Commerce, Herbert Hoover, who energetically used government auspices to promote business efficiency and develop airlines and radio. With the exception of favoring increased tariffs, Coolidge disdained regulation, and carried on this belief by appointing commissioners to the Federal Trade Commission and the Interstate Commerce Commission who did little to restrict the activities of businesses under their jurisdiction. Some have criticized Coolidge as an adherent of the laissez-faire ideology, which they claim led to the Great Depression. Coolidge's reputation underwent a renaissance during the Ronald Reagan Administration, but the ultimate assessment of his presidency is still divided between those who approve of his reduction of the size of government programs and those who believe the federal government should be more involved in regulating and controlling the economy.
Perhaps the most contentious issue of Coolidge's presidency was concerning relief for farmers. Coolidge initially supported a measure that would have created a federal board to lend money to farm co-operatives in times of surplus but the bill did not pass. In February 1927, Congress took up the McNary-Haugen Bill again, this time narrowly passing it. Coolidge vetoed it. In his veto message, he expressed the belief that the bill would do nothing to help farmers, benefiting only exporters and expanding the federal bureaucracy.
Coolidge's best-known initiative was the Kellogg–Briand Pact of 1928,which committed signatories including the United States, the United Kingdom, France, Germany, Italy, and Japan to "renounce war, as an instrument of national policy in their relations with one another. " The treaty did not achieve its intended result, but did provide the founding principle for international law after World War II. Coolidge continued the previous administration's policy not to recognize the Soviet Union.
The Republicans retained the White House in 1928 in the person of Coolidge's Secretary of Commerce, Herbert Hoover. Coolidge had been reluctant to choose Hoover as his successor; on one occasion he remarked that "for six years that man has given me unsolicited advice—all of it bad." Even so, Coolidge had no desire to split the party by publicly opposing the popular commerce secretary's nomination.