Hostname: page-component-586b7cd67f-t7fkt Total loading time: 0 Render date: 2024-11-25T11:23:01.400Z Has data issue: false hasContentIssue false
  • English
  • Français

Financial Asset Ownership and Political Partisanship: Liberty Bonds and Republican Electoral Success in the 1920s

Published online by Cambridge University Press:  23 June 2020

Eric Hilt  and
Wendy Rahn
Eric Hilt
Affiliation:
Professor, Economics, Wellesley College, 106 Central St., Wellesley, MA02481. E-mail: [email protected].
Wendy Rahn
Affiliation:
Professor, Political Science, University of Minnesota, 215 Johnston Hall, 101 Pleasant St. SE, Minneapolis, MN55455. E-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

We analyze the effects of ownership of liberty bonds on election outcomes in the 1920s. We find that counties with higher liberty bond ownership rates turned against the Democratic Party in the presidential elections of 1920 and 1924. This was a reaction to the depreciation of the bonds prior to the 1920 election (when the Democrats held the presidency) and the appreciation of the bonds in the early 1920s (under a Republican president), as the Federal Reserve raised and then subsequently lowered interest rates. Our analysis suggests that the liberty bond campaigns had unintended political consequences.

Type
Article
Information
The Journal of Economic History , Volume 80 , Issue 3 , September 2020 , pp. 746 - 781
Copyright
© The Economic History Association 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Achen, Christopher H., and Bartels, Larry. “Blind Retrospection: Electoral Responses to Drought, Flu and Shark Attacks.” Working Paper, Princeton University, Princeton NJ, 2004.Google Scholar
Achen, Christopher H., and Bartels, Larry. Democracy for Realists: Why Elections Do Not Produce Responsive Government. Princeton Studies in Political Behavior. Princeton, NJ: Princeton University Press, 2016.CrossRefGoogle Scholar
Bagby, Wesley M.The Road to Normalcy: The Presidential Campaign and Election of 1920. Baltimore, MD: Johns Hopkins University Press, 1962.Google Scholar
Bootsma, Martin C.J., and Ferguson, Neil M.. “The Effect of Public Health Measures on the 1918 Influenza Pandemic in U.S. Cities.” Proceedings of the National Academy of Sciences 104, no. 18 (2007): 7588–93.CrossRefGoogle ScholarPubMed
Burner, David. The Politics of Provincialism: The Democratic Party in Transition, 1918–1932. New York: Knopf, 1968.Google Scholar
Byerly, Carol R.Fever of War: The Influenza Epidemic in the U.S. Army during World War I. New York: New York University Press, 2005.Google Scholar
Byerly, Carol R. “The U.S. Military and the Influenza Pandemic of 1918–1919.” Public Healthy Reports 125, Suppl. 3 (2010): 82–91.Google ScholarPubMed
Clay, Karen, Lewis, Joshua, and Severnini, Edson. “Pollution, Infectious Disease, and Mortality: Evidence from the 1918 Spanish Influenza Pandemic.” Journal of Economic History 78, no. 4 (2018): 1179–209.CrossRefGoogle Scholar
Clubb, Jerome M., Flanigan, William H., and Zingale, Nancy H.. “Electoral Data for Counties in the United States: Presidential and Congressional Races, 1840–1972.” ICPSR08611-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2006-11-13.Google Scholar
Cotton Nesler, Natalie C., and Davis, Gerald F.. “Stock Ownership, Political Beliefs, and Party Identification from the ‘Ownership Society’ to the Financial Meltdown.” Accounting Economics and Law 2, no. 2 (2012).Google Scholar
Crosby, Alfred W.America’s Forgotten Pandemic: The Influenza of 1918. 2nd ed. Cambridge and New York: Cambridge University Press, 2003.CrossRefGoogle Scholar
Duca, John V., and Saving, Jason L.. “Stock Ownership and Congressional Elections: The Political Economy of the Mutual Fund Revolution.” Economic Inquiry 46, no. 3 (2008): 454–79.CrossRefGoogle Scholar
Federal Reserve. Banking and Monetary Statistics, 1914–41. Washington, DC: Board of Governors of the Federal Reserve System, 1943.Google Scholar
Feigenbaum, James. “Intergenerational Mobility during the Great Depression.” Working Paper, Boston University, Boston MA, 2016.Google Scholar
Friedman, Milton, and Schwartz, Anna J.. A Monetary History of the United States, 1867–1960. Princeton, NJ: Princeton University Press, 1963.Google Scholar
Greenough, Walter Sidney.The War Purse of Indiana; The Five Liberty Loans and War Savings and Thrift Campaigns in Indiana during the World War. Indianapolis, IN: Indiana Historical Commission, 1922.Google Scholar
Haines, Michael R., and Inter-university Consortium for Political and Social Research. “Historical, Demographic, Economic, and Social Data: The United States, 1790–2002.” ICPSR02896-v3. Ann Arbor: Inter-university Consortium for Political and Social Research [distributor], 2010-05-21.Google Scholar
Hausman, Joshua K., Rhode, Paul W., and Wieland, Johannes F.. “Recovery from the Great Depression: The Farm Channel in Spring 1933.” American Economic Review 109, no. 2 (2019): 427–72.CrossRefGoogle Scholar
Healy, Andrew J., Persson, Mikael, and Snowberg, Erik. “Digging into the Pocketbook: Evidence on Economic Voting from Income Registry Data Matched to a Voter Survey.” American Political Science Review 111, no. 4 (2017): 771–85.CrossRefGoogle Scholar
Hibbs, Douglas A. Jr. “Bread and Peace Voting in U.S. Presidential Elections.” Public Choice 104 no. 1 (2000): 149–80.CrossRefGoogle Scholar
Hilt, Eric, and Rahn, Wendy M.. “Turning Citizens into Investors: Promoting Savings with Liberty Bonds During World War I.” RSF: The Russell Sage Journal of the Social Sciences 2, no. 6 (2016): 86–108.CrossRefGoogle Scholar
Hilt, Eric, and Rahn, Wendy M.. “Replication: Financial Asset Ownership and Political Partisanship: Liberty Bonds and Republican Electoral Success in the 1920s.” Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2020-04-24. https://doi.org/10.3886/E119103V1.CrossRefGoogle Scholar
Jaremski, Matt, and Wheelock, David. “Banking on the Boom, Tripped by the Bust: Banks and the World War I Agricultural Price Shock.” Journal of Money, Credit and Banking, forthcoming (2019).Google Scholar
Jha, Saumitra. “Financial Asset Holdings and Political Attitudes: Evidence from Revolutionary England.” Quarterly Journal of Economics 130, no. 3 (2015): 1485–545.CrossRefGoogle Scholar
Jha, Saumitra, and Shayo, Moses. “Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes.” Working Paper, Stanford University, Stanford, CA, 2017.CrossRefGoogle Scholar
Kang, Sung Won, and Rockoff, Hugh. “Capitalizing Patriotism: The Liberty Bonds of World War I.” Financial History Review 22, no. 1 (2015): 45–78.CrossRefGoogle Scholar
Key, V.O.The Responsible Electorate: Rationality in Presidential Voting, 1936–1960. Cambridge, MA: Harvard University Press, 1966.CrossRefGoogle Scholar
Kramer, G.H. “Short-Term Fluctuations in U.S. Voting Behavior.” American Political Science Review 71 (1971): 131–43.CrossRefGoogle Scholar
Leip, David. Dave Leip’s Atlas of U.S. Presidential Elections. http://www.uselectionatlas.org, 2018.Google Scholar
Lewis-Beck, Michael Steven, and Nadeau, Richard. “Economic Voting Theory: Testing New Dimensions.” Electoral Studies 30, no. 2 (2011): 288–94.CrossRefGoogle Scholar
Lewis-Beck, Michael S., Nadeau, Richard, and Foucault, Martial. “The Compleat Economic Voter: New Theory and British Evidence.” British Journal of Political Science 43, no. 2 (2013): 241–61.CrossRefGoogle Scholar
McAdoo, William. G. Crowded Years: The Reminiscences of William G. McAdoo. Boston, MA: Houghton Mifflin Company, 1931.Google Scholar
Meltzer, Alan. A History of the Federal Reserve, Vol. I: 1913–51. Chicago: University of Chicago Press, 2003.Google Scholar
Murray, Robert K.The 103rd Ballot: The Legendary 1924 Democratic Convention That Forever Changed Politics. New York: HarperCollins, 1976.Google Scholar
Olney, Laurence M.The War Bond Story. Washington, DC: U.S. Savings Bonds Division, 1971.Google Scholar
Olney, Martha L., 1995. Saving and Dissaving of 12,817 American Households, 1917–1919. Amherst, MA: Martha L. Olney, University of Massachusetts [producer], 1993. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor].Google Scholar
Ott, Julia C.When Wall Street Met Main Street: The Quest for an Investors’ Democracy. Cambridge, MA: Harvard University Press, 2011.CrossRefGoogle Scholar
Porter, Kirk H.National Party Platforms. New York: MacMillan, 1924.Google Scholar
Rahn, Wendy M., and Dancy, Logan. “Interim Report to Russell Sage Foundation. Citizen Investors Grant, #83-07-11.” Unpublished Manuscript, University of Minnesota, Minneapolis, MN, 2009.Google Scholar
St. Clair, Labert. The Story of the Liberty Loans. Washington, DC: James William Bryan Press, 1919.Google Scholar
Samuel, Lawrence R.Pledging Allegiance: American Identity and the Bond Drive of World War II. Washington, DC: Smithsonian Institution Press, 1997.Google Scholar
Schreiner, Mark, and Sherraden, Michael. Can the Poor Save? Savings and Asset Building in Individual Development Accounts. New Brunswick, NJ: Transaction Publishers, 2006.Google Scholar
Skocpol, Theda, Munson, Ziad, Karch, Andrew, and Camp, Bayliss. “Patriotic Partnerships: Why Great Wars Nourished American Civic Voluntarism.” In Shaped by War and Trade: International Influences on American Political Development, edited by Katznelson, Ira, 134–80. Princeton, NJ: Princeton University Press, 2002.CrossRefGoogle Scholar
Sutch, Richard. “Financing the Great War. A Class Tax for the Wealthy, Liberty Bonds for All.” BEHL Working Paper No. 2015–09, Berkeley, CA, 2015.Google Scholar
Tabellini, Marco. “Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration.” MIT Working Paper, Cambridge, MA, 2017.CrossRefGoogle Scholar
Tooze, Adam. The Deluge: The Great War, America and the Remaking of the Global Order, 1916–1931. New York: Penguin, 2014.Google Scholar
U.S. Bureau of the Census. Mortality Statistics 1918. Washington, DC: GPO, 1920.Google Scholar
U.S. Congress. House of Representatives. Committee on the Rules. Investigation of Depreciation in Value of Liberty Bonds. Hearings before the Committee on the Rules. 66th Congr., 2nd sess., 15 May 1920.Google Scholar
U.S. Treasury. Annual Report of the Secretary of the Treasury on the State of the Finances, for the Fiscal Year ended June 30 1917. Washington, DC: GPO, 1918.Google Scholar
U.S. Treasury. Annual Report of the Secretary of the Treasury on the State of the Finances, for the Fiscal Year ended June 30 1918. Washington, DC: GPO, 1919.Google Scholar
U.S. Treasury. Annual Report of the Secretary of the Treasury on the State of the Finances, for the Fiscal Year ended June 30 1920. Washington, DC: GPO, 1921.Google Scholar
U.S. War Department. Annual report, 1919. Washington, DC: GPO, 1920.Google Scholar
Supplementary material: File

Hilt and Rahn supplementary material

Online Appendix

Download Hilt and Rahn supplementary material(File)
File 7.2 MB