EDUCATORS ’ PERSPECTIVE
1930 , for a loss of over $ 21,000 . The Great Depression took J . P . Morgan ’ s “ depression-proof stock ” tip and turned it into a loser .
Since he didn ’ t own a house , Coolidge sometimes used his stock holdings as collateral for loans from the local bank in Northampton . For instance , 50 shares of US Steel common stock were used as collateral for a 1918 loan of $ 1,825 with an annual interest rate of 6 %. The loan was fully repaid by the end of 1928 .
According to Coolidge biographer Donald McCoy , Coolidge ’ s finances improved considerably during his time in Washington , DC :
His income rose and he saved large amounts of it . His bank interest and stock dividends increased steadily from $ 1,194 in 1921 to $ 10,483 in 1928 , which would indicate cash investments of between $ 20,000 and $ 30,000 in 1921 and between $ 200,000 and $ 250,000 in 1928 . Most of his capital was earned from his vice presidential and presidential salaries with the remainder coming from … speeches , writings and lands .
Sobel estimates that Coolidge left the presidency with about $ 400,000 in assets and had no need to work after leaving the White House . Nevertheless , Coolidge began a lucrative writing career in his post-presidential years , earning hundreds of thousands of dollars . According to Sobel , Coolidge ’ s syndicated newspaper column “ Calvin Coolidge Says ”— which ran from July 1 , 1930 to June 29 , 1931 — earned Coolidge $ 203,045 . “ In contrast ,” writes Sobel , “ his presidential salary had been only $ 75,000 , plus $ 25,000 for travel , and use of the White House and the presidential yacht , Mayflower .”
While Calvin Coolidge will never crack the top 10 list of the nation ’ s best Presidents , he managed the nation ’ s finances effectively and reduced the national debt that had ballooned during the first World War . In his personal life , Coolidge developed good financial habits early . These habits allowed him to save money even when his income was low and enabled him to manage his wealth as it grew .
Though many consider him to be one of the most peculiar Presidents in history , they would be hard pressed to find a better example of an effective manager of personal finances .
Brian Grinder is a professor at Eastern Washington University and a member of Financial History ’ s editorial board . Dr . Dan Cooper is the president of Active Learning Technologies .
Sources
Coolidge , Calvin . The Autobiography of Calvin Coolidge : Authorized , Expanded , and Annotated Edition ( A . Shlaes & M . Denhart , Eds .). Intercollegiate Studies Institute . 2021
Coolidge , Calvin . “ Calvin Coolidge Says ” Columns ( 7 / 1 / 1930 – 6 / 29 / 1931 ). https :// coolidgefoundation . org / calvin-coolidge-says /
Document 392 , Folder 20 , Coolidge Family Papers , 1802-1932 , Financial Papers , ca . 1915 – 1932 . Vermont Historical Society , Barre , Vermont .
Erb , Kelly Phillips . “ What ’ s A Blind Trust , Anyway , And Why Won ’ t It Work For President-Elect Trump ?” Forbes . January 12 , 2017 .
Fishback , Price V ., Jonathan Rose and Kenneth Snowden . Well Worth Saving : How the New Deal Safeguarded Home Ownership ( National Bureau of Economic Research Series on Long-Term Factors in Economic Development ). The University of Chicago Press . 2013 .
Hecht , Marie B . Beyond the Presidency : The Residues of Power . Macmillan . 1976 .
Johnson , Charles C . Why Coolidge Matters : Leadership Lessons from America ’ s most Underrated President . Encounter Books . 2013 .
McCoy , Donald R . Calvin Coolidge : the Quiet President . Macmillan . 1967 .
Lowenstein , Roger . “ Who Needs the Mortgage-Interest Deduction ?” The New York Times Magazine . March 5 , 2006 .
Pak , Susie J . “ Reputation and Social Ties : J . P . Morgan & Co . and Private Investment Banking .” The Business History Review , 87 ( 4 ), 703 – 728 . 2013 .
Shlaes , Amity . Coolidge . Harper . 2013 .
Sobel , Robert . Coolidge : An American Enigma . Regnery Publishing . 1998 .
White , William Allen . A Puritan in Babylon : The Story of Calvin Coolidge . The Macmillan Company . 1938 .
Notes
1 . In a New York Times article entitled “ Who Needs the Mortgage-Interest Deduction ?” Roger Lowenstein writes , “ The first modern federal income tax was created in 1894 . Interest — all forms of interest — was deductible ; the Supreme Court , however , quickly ruled that the tax was unconstitutional . In 1913 , the Constitution was amended and a new income tax was enacted . Once again , interest was deductible .” Lowenstein also notes that “ the tax excluded the first $ 3,000 ( or for married couples , $ 4,000 ) of income ; less than one percent of the population earned more than that .”
2 . Amity Schlaes writes , “ Coolidge had always prepared for [ bank crashes ] by banking at multiple institutions . At the time of his father ’ s death [ March 18 , 1926 ], John , Coolidge , and Coolidge ’ s son John had maintained deposits , all of a hundred or a few thousand each , in more than 20 local banks , from the Springfield Savings Bank of Springfield , Vermont , to the Nonotuck Savings Bank in Northampton or the Amherst Savings Bank .”
3 . US Presidents are not prohibited from trading stocks while in office . Lyndon Johnson was the first President to use a blind trust while he was in office in order to avoid perceived conflicts of interest , and most Presidents since Johnson have followed suit .
4 . Morrow and Coolidge were classmates at Amherst College from 1891 to 1895 . Morrow went on to become a partner at J . P . Morgan in 1914 . The close relationship between Morrow and Coolidge gave Coolidge an in with the firm and led to his inclusion on a list of J . P . Morgan customers who were given special discounts on shares of stock . When the list was revealed in the 1930s , Coolidge was unapologetic about his inclusion on it .
www . MoAF . org | Summer 2023 | FINANCIAL HISTORY 11