Free People, Free Markets. George Melloan
Truman was wrong if he was trying to suggest that the Journal was a party newspaper. With one unfortunate exception, it adhered to the Charles Dow injunction against endorsing political candidates. The exception came in 1928 with an editorial by Hamilton, ordered up by the dying C.W. Barron, that endorsed Republican Herbert Hoover. Barron apparently feared that the election of Democratic New York governor Al Smith would undo the economic achievements of his good friend Calvin Coolidge.
What Barron didn’t seem to realize—although it may have made no difference—was that although Hoover was a Republican, he was not cut from the same cloth as Coolidge or the earlier William Howard Taft. His penchant for market interventions was almost as intense as what would later be displayed by the New Deal Democrats. For example, he signed the excessive and ruinous Hawley-Smoot Tariff Act in 1930, which had a lot to do with deepening and prolonging the 1930 recession, turning into what we know now as the Great Depression. It scuttled many businesses and almost did in Dow Jones itself. The Journal never again endorsed a political candidate.
But the Journal’s free-market ideas usually have been more compatible with those of Republican candidates than Democrats over the years, or at least more compatible with what Republicans professed to believe, even if they were less dedicated in practice than in their rhetoric. The Dow policy of no endorsements has served the Journal’s opinion editors well because it has freed them to criticize Republicans, often more fiercely than Democrats, when they have strayed off the free-market path.
Republicans, with the exception of the election of Democrat Grover Cleveland to the presidency in 1884 and for a second term in 1893, had controlled the White House for 37 of the 45 years leading up to the election of Woodrow Wilson in 1913. Even Cleveland, a former New York governor admired for his probity and conservatism, was of a different ilk from the statists who would later become a powerful wing of the Democratic Party.
But there was one extremely important issue on which the Journal would differ sharply from the prevailing opinion in the conservative wing of the Republican Party: Prohibition. In the late teens of the early 20th century, there was a groundswell of anti-alcohol sentiment in the country—fanned among other odd things by a World War I animus against German Americans and their prominence in the brewing industry and their fondness for beer.
The Journal was against Prohibition, even though it got much of its support from conservative Republicans. But the Journal’s opinion counted for little against this avalanche of do-goodism. The 18th Amendment passed and was implemented on January 16, 1920, by the Volstead Act. New York mayor Fiorello La Guardia estimated that enforcing it in his city alone would require 250,000 additional cops and a like number of investigators to police the cops. As Clarence Barron had foreseen, the results were disastrous, with the act giving rise to bootlegging, the rise of criminal gangs and widespread lawlessness and corruption.
In a fiery editorial in 1921, the Journal castigated Republicans for their support for Prohibition, writing that the party had succumbed to Prohibitionist bigotry when it should be the party of freedom. “You cannot ameliorate a cesspool by sowing the surface with forget-me-nots and daisies,” the Journal editorial said.
At the beginning of the 1928 election campaigns, the Journal even saw fit to briefly suspend its Republican leanings and pass a left-handed compliment to Democratic candidate Al Smith for advocating repeal of the 18th Amendment. A Journal editorial, presumably written by Hamilton and referring to the governor’s annual message to the New York legislature, archly praised him for his attacks on Prohibition while at the same time criticizing him for his support for government ownership of electric utilities. Publicly owned versus privately owned electric power utilities was also a big issue in those days, and the Journal was, of course, a defender of private ownership against political involvement in the provision of a vital service.
But there were other momentous happenings as America entered the 1920s. A Journal editorial on September 17, 1920, shortly after the 19th Amendment to the Constitution forbade “sex-based discrimination in state and federal elections,” correctly predicted that the vote of women would swing the November presidential election to the Republicans. The Republicans had pushed the amendment through Congress in 1919 against Democratic opposition, so it was natural that suffragettes would favor Republicans when their right to vote was guaranteed nationally. Moreover, wrote the Journal, “the country is tired of Wilson, his uncompromising autocracy, his monopoly on all the political virtues, the inefficiency and extravagance of his administration.” The Journal was right. Senator Warren G. Harding won in a landslide over Democrat James M. Cox, with 404 electoral votes to Cox’s 127.
The president who Barron formed his closest attachment to was Calvin Coolidge, the Vermonter who ascended to the presidency on the death of Warren Harding in 1923. Barron had met Coolidge at a dinner party given by H.B. Endicott, a prominent New England industrialist who was father-in-law to one of Barron’s two stepdaughters, Martha Endicott. Coolidge was then governor of Massachusetts, where he would become famous for his firm suppression of the 1919 police strike in Boston, proclaiming in a reply to a message from American Federation of Labor president Samuel Gompers that “there is no right to strike against the public safety by anyone, anywhere, anytime.”
Coolidge and Barron had a long conversation at the dinner party and developed a liking for each other, even though their two personalities could hardly have been more opposite. Barron was an extroverted, garrulous newspaper tycoon, whereas Coolidge was a taciturn, flinty Vermonter serving as governor of a populous eastern state that had once been one of the most influential 13 colonies. What they had in common were keen intellects focused on public policy issues and a shared belief that allowing markets to do their work in resolving economic dislocations produces better results than government interventions. Barron thereafter promoted Coolidge’s political career. He rode on the delegate campaign train to the June 1920 Republican convention in Chicago where Warren Harding was nominated for president and Coolidge for vice president. He gave the Republican ticket praise in the Journal but held to the Charles Dow stricture against endorsing candidates.
After Coolidge became president in 1923 on the death of the scandal-tarred Harding, Barron continued as his friend and counselor. The new president proved to be particularly resistant to the pleadings of lobbyists, particularly the powerful farm lobby, for subsidies and import protections. The economy soared in the Roaring Twenties as automobile sales and housing starts burgeoned and American industry brought forth labor-saving household appliances like motorized washing machines and vacuum cleaners. Radio came into its own, and in 1927, the first “talking” motion picture, “The Jazz Singer” starring Al Jolson.
The Wall Street Journal prospered along with the new Barron’s weekly business newsmagazine introduced in 1921 at the suggestion of Hugh Bancroft, husband of Barron’s other stepdaughter, Jane Bancroft, and a proper Bostonian. Bancroft, a lawyer, had had an off-and-on relationship with Barron and Dow Jones over the years, but for all practical purposes was the company’s business manager at the time he proposed the magazine launch.
Barron displayed his admiration for Coolidge in a late 1924 interview with the Boston Traveler, saying that the fundamental factor in the outlook for 1925 was “the strength of the government in Washington.” He went on to tell the interviewer that there had been a great deal of “sloppiness” in government over the last 50 years, but for the first time in a generation “we now have a firm hand at the helm and a man who stands for plain speaking and fundamental principles in national security and defense.”
He said that since Coolidge had delivered his first State of the Union address to Congress early in 1924, the outlook for business had steadily improved. Barron was right again; the economy soared to new heights in the mid-1920s. Incidentally, his reference to sloppiness encompassed a half century that included the incumbency not only of Warren Harding, who was indeed sloppy, but also Teddy Roosevelt, whose genuine achievements, such as the Pure Food and Drug Act, had no doubt been forgotten by Barron in his resentment of the 1912 election debacle that put Wilson in the White House.
The Journal’s growth in circulation and prominence in the 1920s was in large part due to Barron’s fame and popularity. But some of