Wall Street History
Harding, Fall, and Teapot Dome; Part I
"I cannot hope to be one of the great presidents, but perhaps I
may be one of the best loved."
--Warren G. Harding
As it turned out, Harding led one of the most corruption-riddled
and discredited administrations in America''s history. In a recent
survey, historians rated Harding #38 out of 41 presidents,
trailed only by Franklin Pierce, Andrew Johnson, and James
Buchanan. And as historian Robert Murray writes, Harding''s
name, "rather than evoking praise and admiration, has conjured up
scenes of smoke-filled rooms, evil machinations, and raucous poker
While history shows that Harding was not personally involved in
the many scandals that plagued his stewardship, nonetheless, he
was guilty of incredibly poor judgment. And one of the great
scandals in our nation''s history, "Teapot Dome," occurred under
his watch. We will spend the next few weeks exploring this in
Harding was born on November 2, 1865, in the town of what is
now called Blooming Grove, Ohio. He worked in the newspaper
business as editor of the Marion (Ohio) Star, then caught the
politics bug and served Ohio, both as state senator and Lieutenant
Governor, before a term in the U.S. Senate (1915-1921).
The presidential election of 1920 proved to be no contest. The
nation was tired of the tumultuous era of Woodrow Wilson and
Harding correctly gauged the sentiments of the people.
"America''s present need is not heroics but healing, not nostrums
but normalcy," he said.
The Republican Harding slaughtered his Democratic opponent
James Cox by a 60.4% to 34.3% margin. However, when it
came time for Harding to pick his cabinet, he chose unwisely.
But to further set the stage for our discussion of Teapot Dome,
let''s take a look at the decade in which it transpired.
The 1920s were a period of incredible prosperity for most of
America. The nation''s gross national product surged 47%
between 1921 and 1929, while per capita income rose from $522
to $716, a gain of 37%.
The boom was fueled by the growth in the auto industry. Back
in 1920 there were some 8 million cars in America. By 1929, the
country produced 5.6 million in that year alone. The surging
sector helped innumerable other areas of our economy, including
oil, highway construction, repairs, glass, steel and rubber.
It was also a period where government spent less, tax rates were
reduced and large federal surpluses were used to help pay off the
national debt, which fell by more than a third from its post-
World War I high. Treasury Secretary Andrew Mellon, one of
Harding''s good cabinet selections and a man who served under
three presidents at treasury from 1921-32, had a lot to do with the
good times. His fiscal policies provided an atmosphere of
stability that was welcomed on Wall Street. Said Mellon, "The
government is just a business, and can and should be run on
Of course, the 1920s were also a period of incredible excesses,
both in government and on Wall Street. And one can draw some
interesting parallels between the boom in the economy and the
inauguration of President Warren G. Harding.
When Harding took the oath of office on March 4, 1921, the
Dow Jones Industrial Average stood at 75.11. That was basically
its low for the decade. [The Dow peaked at 381 on September 3,
1929 and closed out the ''20s at a level of 248.]
This is a good break point before we get into the story of Albert
Fall, Harding''s Secretary of the Interior and the central figure of
Teapot Dome. And if you glance down at the sources, next week
you''ll discover why an encyclopedia of western outlaws is
among those used to put together this series.
Sources: [For the whole series]
Robert Sobel, "The Great Bull Market"
Robert Sobel, "Coolidge: An American Enigma"
J.M. Roberts, "Twentieth Century"
John Steele Gordon, "The Great Game"
George Brown Tindall and David Shi, "America: A Narrative
Harold Evans, "The American Century"
Jay Robert Nash, "Encyclopedia of Western Lawmen &
Paul Johnson, "A History of the American People"
Morison, Commager, Leuchtenburg, "The Growth of the