Despite all the verve of the American social scene in the 1920s, the Presidential leadership of the decade was quite unremarkable. Warren Harding won his bid for the White House in 1920 with the campaign slogan "Return to Normalcy." Republicans believed Americans had grown weary of the turmoil caused by World War I and promised tranquility. Harding found himself mired in scandals unknown in America since the Grant Administration. Although Harding himself was above the graft, his friends were more than willing to dip into the public treasury. Fraud and bribery plagued the Veterans Bureau and the Justice Department. The Teapot Dome Scandal exposed Secretary of the Interior Albert FallÏã½¶³ÉÈËÊÓÆµapp for accepting bribes for allowing private oil companies to lease public lands. Harding fell ill in 1923 and died shortly thereafter.
Calvin Coolidge brought no significant change to Harding's laissez faire, pro-business style. Progressives bemoaned the end of activist Presidents protecting the public good, prompting Fighting Bob LaFollette to launch an unsuccessful run for the Presidency under the Progressive Party banner in 1924. The only successul progressive reforms occurred on the state and local levels. Politics became interesting in the election year of 1928. The Democrats nominated Al Smith, the first Catholic ever to earn the nomination of a major party. Smith raised eyebrows with an open opposition to the Prohibition amendment. As a result, the South broke with a long tradition of supporting Democrats and helped Herbert Hoover to continue Republican domination of the Presidency.
On the international scene, two themes dominated American diplomacy. The first was to take steps to avoid the mistakes that led to World War I. To this end, President Harding convened the Washington Naval Arms Conference in 1921. The United States, Great Britain, and Japan agreed to a ten-year freeze on the construction of battleships and to maintain a capital ship ratio of 5:5:3. They also agreed to uphold the Open Door Policy and to respect each other's holdings in the Pacific. In 1928, the United States and France led an initiative called the Kellogg-Briand Pact, in which 62 nations agreed to outlaw war. These two measures showed the degree to which Americans hoped to forestall another disastrous war. The second priority dealt with outstanding international debt. While practicing political isolation, the United States was completely entangled with Europe economically. The Allies owed the United States an enormous sum of money from World War I. Lacking the resources to reimburse America, the Allies relied on German reparations. The German economy was so debased by the Treaty of Versailles provisions that they relied on loans from American banks for support. In essence, American banks were funding the repayment of the foreign debt. As Germany slipped further and further into depression, the United States intervened again. The Dawes Plan allowed Germany to extend their payments on more generous terms. In the end, when the Great Depression struck, only Finland was able to make good on its debt to the United States.