Republican Resurgence and Decline - Document Overview
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In the aftermath of World War I and the collapse of Woodrow Wilson's health and his presidency, the Republican party regained control of the White House and the Congress. President Warren G. Harding promised the nation a "return to normalcy." This meant abandoning the efforts of Wilson and Theodore Roosevelt to promote political reform and economic regulation. Instead, the Republicans would revive the pro-business orientation that had served the party so well during the Gilded Age. Harding's successors, Calvin Coolidge and Herbert Hoover, shared this philosophy. Coolidge, who assumed office in 1923 upon the death of Harding, proclaimed that the "business of America is business."
To foster the growth of business, the Republicans emphasized reduced government spending, lower taxes, and higher tariffs. Secretary of the Treasury Andrew Mellon, a wealthy Pittsburgh banker and industrialist, slashed personal income and estate tax rates and sharply reduced federal government spending. Coolidge once remarked that if the federal government disappeared, few would notice and even fewer would regret it. At the same time, Secretary of Commerce Herbert Hoover worked closely with business leaders to create benefits for workers so as to reduce the appeal of trade unions. He also established new government initiatives to help mediate disputes between labor and management and thereby avert strikes and boycotts.
The Democrats, meanwhile, fragmented along sectional lines that reflected the cultural civil wars of the decade. The rural faction, rooted in the South and West, sustained a commitment to cultural populism. This meant support for Prohibition, fundamentalism, the Klan, and government support for farmers. The urban faction of the party, centered in the growing cities of the East and Midwest, depended for its support on immigrant groups that were largely Catholic or Jewish. They tended to oppose Prohibition and recoil from the Protestant orthodoxy of their rural counterparts.
The split within the Democratic party turned into a chasm at the 1924 national convention in New York. Efforts to unify the divided party proved fruitless. Urban delegates dismissed the "rubes and hicks" from "the sticks" while populist spokesmen charged that metropolitan Democrats were "rooted in corruption, directed by greed and dominated by selfishness." A northern effort to pass a resolution condemning the Ku Klux Klan aroused bitter opposition from the southern delegates, and failed by one vote.
Progressives in both parties felt alienated by the conservative spirit of the times. In the 1924 election they rallied their support behind the third-party candidacy of Robert La Follette of Wisconsin, who headed a revived Progressive party. La Follette and the Progressives adopted a pro-labor and pro-farm platform that echoed the Populists: it called for federal ownership of railroads and utilities, higher taxes on the wealthy, the end of child labor, and conservation of natural resources. La Follette received the endorsement of the Socialist party and the American Federation of Labor, and he drew nearly 5 million votes, mostly from disaffected Democrats. Nevertheless, he still finished a distant third behind Coolidge and Davis.
Four years later Herbert Hoover rode the wave of economic prosperity into the White House. In his acceptance speech he predicted the "final triumph over poverty," and in his inaugural address he declared that he "had no fears for the future of our country. It is bright with hope." Hoover embodied the principles of rugged individualism and equal opportunity embedded in the American experience. Although a staunch supporter of corporate interests and ardent defender of Prohibition, he was a more progressive thinker than either Harding or Coolidge. Hoover believed that capitalism had advanced beyond the initial stage of cut-throat competition and was entering a period of rational cooperation in marketing, wage policies, and product standardization. He also argued that it was in the best interests of corporate America for businesses to engage in voluntary acts of welfare capitalism, extending benefits to workers in order to eliminate the need for trade unions and to blunt the appeal of socialism.
Hoover was by far the best qualified and most able of all the Republican presidents during the twenties, but he assumed office in 1929, the year in which the Great Bull Market collapsed and the nation began to spiral downward into the worst economic depression in its history. To be sure, Hoover did not cause the Great Depression, but he failed to recognize ominous warning signals.
The Great Depression deepened quickly after October 1929 and spread across the country. In 1930 alone almost 1,300 banks closed their doors. During 1931 another 2,300 collapsed. Unemployment rose from 3 percent in 1929 to 25 percent in 1933, meaning that almost 13 million people found themselves jobless.
Statistics hardly convey the human costs of the depression. Prolonged unemployment led people to lose their homes and farms. By the thousands, the displaced and dispossessed began to roam the streets and byways, looking for work, begging for money, and sleeping on benches or the ground. Suicides increased by 30 percent between 1929 and 1932, and marriage and birth rates plummeted.
Those already living on the margin of society were especially hard hit: African Americans, Mexican-Americans, and recent immigrants. Yet for all of the depression's devastating effects, most Americans refused to succumb to fatalism. They persevered, displaying a gritty tenacity that was both inspiring and ennobling. They refused to let hard times break their spirits or corrupt their dignity. As Ma Joad declares in John Steinbeck's The Grapes of Wrath (1936), "They ain't gonna wipe us out. Why, we're the peoplewe go on."
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Keep the Consumer Dissatisfied, Charles F. Kettering (1929)
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Not long ago one of the great bankers of the country said to me:
"The trouble with you fellows is that you are all the time changing automobiles and depreciating old cars, and you are doing it at a time when people have three or four payments to make on the cars they already have.
Yesterday I got an engraved invitation from one of your companies to see a new model. Out of curiosity I went. I darn near bought one. I didn't because you people wouldn't allow me enough money for my old car."
A few weeks later I was again talking with this banker. He appeared to be greatly disgruntled.
"I bought the new model," he barked. "But it was rotten shame that I had to accept so much depreciation on my old car. You are the fellow who is to blame. You, with all your changes and refinements, made me dissatisfied with the old model."
He paused, then added, mournfully, "And that old car ran like new."
I told him I thought it was worth what he paidthat is, the difference between the old and the new modeto have his mind changed.
He didn't argue over that but he did say something to the general effect that "the only reason for research is to keep your customers reasonably dissatisfied with what they already have."
I might observe, here and now, that he was right.
A few weeks back I was sitting with a group of executives. All were admiring a new model.
"It is absolutely the best automobile that can be made," enthused one. I objected to that statement.
"Let's take this automobile which, you say, is the 'best that can be made' and put it into a glass showcase," I said. "Let's put it in thereseal it so no person can possibly touch it. Just before we seal it in the case, let us mark the price in big letters inside the case."
"Let us do that and come back here a year from today. After looking at it and appraising it, we will mark a price on the outside of the glass. It will be a price something less than what we think the car is worth today. Probably $200 less. Then, let's come back once every year for ten years, look through the glass, and mark a new price. At the end of ten years we won't be able to put down enough ciphers to indicate what we think of the car. That is, of course, eliminating its value as junk.
"In those ten years, no one could possibly have touched the car. There could be no lessened value through handling. The paint would be just as good as new; the crank case just as good; the real axle just as good; and the motor just as good as ever.
What then, has happened to the car?
"People's minds will have been changed; improvements will come in other cars; new styles will have come. What you have here today, a car that you call 'the best that can be made,' will then be useless. So it isn't the best that can be made. It may be the best you can have made and, if that is what you meant, I have no quarrel with what you said. . . ."
Change, to a research engineer, is improvement. People, though don't seem to think of it in that manner. When a change is suggested they hold back and say, "What we have is all rightit does the work." Doing the work is important but doing it better is more important. The human family in industry is always looking for a park bench where it can sit down and rest. But the only park benches I know of are right in front of an undertaker's establishment.
There are no places where anyone can sit and rest in an industrial situation. It is a question of change, change, change, all the timeand it is always going to be that way. It must always be that way for the world only goes along one road, the road to progress. Nations and industries that have become satisfied with themselves and their ways of doing things, don't last. While they are sitting back and admiring themselves other nations and other concerns have forgotten the looking-glasses and have been moving ahead . . . .
The younger generationand by that I mean the generation that is always comingknows what it wants and it will get what it wants. This is what makes for change. It brings about improvements in old things and developments in new things.
You can't stop people from being born. You can't stop the thing we call progress. You can't stop the thing we call change. But you can get in tune with it. Change is never wasteit is improvement, all down the line. Because I have no further need for my automobile doesn't mean that that automobile is destroyed. It goes to someone who has need for it and, to get it, he disposes of something that is unnecessary to his happiness. And so on to the end where the thing that is actually thrown away is of no further use to anyone. By this method living standards, all around, are raised.
We hear people complaining because of new models in automobiles. If it were not for these new models these same people would be paying more for what they have. Recognition of the fact that progress is inevitable forces us to recognize that we must have improvements in motor cars.
We, as manufacturers, must offer those improvements after they have been found to be capable improvements. The public buys and disposes of what it has. The fact that it is able to dispose of what it has enables us, as producers, to put a lower price tag on the new model. The law of economy in mass production enters here. We are permitted to turn out cars in volume because there is a market for them.
If automobile owners could not dispose of their cars to a lower buying strata they would have to wear out their cars with a consequent tremendous cutting in the yearly demand for automobiles, a certain increase in production costs, and the natural passing along of these costs to the buyer.
If everyone were satisfied, no one would buy the new thing because no one would want it. The ore wouldn't be mined; timber wouldn't be cut. Almost immediately hard times would be upon us.
You must accept this reasonable dissatisfaction with what you have and buy the new thing, or accept hard times. You can have your choice.
[From Charles F. Kettering, "Keep the Consumer Dissatisfied,"
Nation's Business, 17, no. 1 (January 1929), 3031, 79.]
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The LaFollette Platform of 1924
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The Big Business emphasis of Coolidge and mainstream Republicans prompted Wisconsin Senator Robert La Follette to revive the Progressive party that Theodore Roosevelt had organized in 1912. The sixty-nine-year-old reformer gained the endorsement of the AFL and the faltering Socialist party, but his base of support came from distressed farmers. The party platform reflected its agricultural focus. In the election itself, La Follette polled almost 5 million votes, the largest total for any third-party candidate to that point.
The great issue before the American people today is the control of government and industry by private monopoly.
For a generation the people have struggled patiently, in the face of repeated betrayals by successive administrations, to free themselves from this intolerable power which has been undermining representative government.
Through control of government, monopoly has steadily extended its absolute dominion to every basic industry. In violation of law, monopoly has crushed competition, stifled private initiative and independent enterprise, and without fear of punishment now exacts extortionate profits upon every necessity of life consumed by the public. The equality of opportunity proclaimed by the Declaration of Independence and asserted and defended by Jefferson and Lincoln as the heritage of every American citizen has been displaced by special privilege for the few, wrested from the government of the many.
Fundamental Rights in Danger
That tyrannical power which the American people denied to a king, they will no longer endure from the monopoly system. The people know they cannot yield to any group the control of the economic life of the nation and preserve their political liberties. They know monopoly has its representatives in the halls of Congress, on the Federal bench, and in the executive departments; that these servile agents barter away the nation's natural resources, nullify acts of Congress by judicial veto and administrative favor, invade the people's rights by unlawful arrests and unconstitutional searches and seizures, direct our foreign policy in the interests of predatory wealth, and make wars and conscript the sons of the common people to fight them.
The usurpation in recent years by the federal courts of the power to nullify laws duly enacted by the legislative branch of the government is a plain violation of the Constitution. . . .
Distress of American Farmers
The present condition of American agriculture constitutes an emergency of the gravest character. The Department of Commerce report shows that during 1923 there was a steady and marked increase in dividends paid by the great industrial corporations. The same is true of the steam and electric railways and practically all other large corporations. On the other hand, the Secretary of Agriculture reports that in the fifteen principal wheat growing states more than 108,000 farmers since 1920 have lost their farms through foreclosure or bankruptcy; that more than 122,000 have surrendered their property without legal proceedings, and that nearly 375,000 have retained possession of their property only through the leniency of their creditors, making a total of more than 600,000 or 26 percent of all farmers who have virtually been bankrupted since 1920 in these fifteen states alone.
Almost unlimited prosperity for the great corporations and ruin and bankruptcy for agriculture is the direct and logical result of the policies and legislation which deflated the farmer while extending almost unlimited credit to the great corporations; which protected with exorbitant tariffs the industrial magnates, but depressed the prices of the farmers' products by financial juggling while greatly increasing the cost of what he must buy; which guaranteed excessive freight rates to the railroads and put a premium on wasteful management while saddling an unwarranted burden on to the backs of the American farmer; which permitted gambling in the products of the farm by grain speculators to the great detriment of the farmer and to the great profit of the grain gambler.
A Covenant with the People
Awakened by the dangers which menace their freedom and prosperity the American people still retain the right and courage to exercise their sovereign control over their government. In order to destroy the economic and political power of monopoly, which has come between the people and their government, we pledge ourselves to the following principles and policies:
The House Cleaning
1. We pledge a complete housecleaning in the Department of Justice, the Department of the Interior, and the other executive departments. We demand that the power of the Federal Government be used to crush private monopoly, not to foster it.
Natural Resources
2. We pledge recovery of the navy's oil reserves and all other parts of the public domain which have been fraudulently or illegally leased, or otherwise wrongfully transferred, to the control of private interests; vigorous prosecution of all public officials, private citizens and corporations that participated in these transactions, complete revision of the waterpower act, the general leasing act, and all other legislation relating to the public domain. We favor public ownership of the nation's water power and the creation and development of a national superwaterpower system, including Muscle Shoals, to supply at actual cost light and power for the people and nitrate for the farmers, and strict public control and permanent conservation of all the nation's resources, including coal, iron and other ores, oil and timber lands, in the interest of the people.
Railroads
3. We favor repeal of the Esch-Cummins railroad law and the fixing of railroad rates upon the basis of actual, prudent investment and cost of service. . . .
Tax Reduction
4. We favor reduction of Federal Taxes upon individual incomes and legitimate business, limiting tax exactions strictly to the requirements of the government administered with rigid economy, particularly by the curtailment of the eight hundred million dollars now annually expended for the army and navy in preparation for future wars; by the recovery of the hundreds of millions of dollars stolen from the Treasury through fraudulent war contracts and the corrupt leasing of the public resources; and by diligent action to collect the accumulated interest upon the eleven billion dollars owing us by foreign governments. We denounce the Mellon tax plan as a device to relieve multi-millionaires at the expense of other tax payers, and favor a taxation policy providing for immediate reductions upon moderate incomes, large increases in the inheritance tax rates upon large estates to prevent the indefinite accumulation by inheritance of great fortunes in a few hands; taxes upon excess profits to penalize profiteering, and complete publicity, under proper safeguards, of all Federal tax returns.
The Courts
5. We favor submitting to the people, for their considerate judgment, a constitutional amendment providing that Congress may by enacting a statute make it effective over a judicial veto. We favor such amendment to the constitution as may be necessary to provide for the election of all Federal Judges, without party designation, for fixed terms not exceeding ten years, by direct vote of the people.
The Farmers
6. We favor drastic reduction of the exorbitant duties on manufactures provided in the Fordney-McCumber tariff legislation, the prohibiting of gambling by speculators and profiteers in agricultural products; the reconstruction of the Federal Reserve and Federal Farm Loan Systems, so as to eliminate control by usurers, speculators and international financiers, and to make the credit of the nation available upon fair terms to all and without discrimination to business men, farmers, and homebuilders. We advocate the calling of a special session of Congress to pass legislation for the relief of American agriculture. We favor such further legislation as may be needful or helpful in promoting and protecting cooperative enterprises. We demand that the Interstate Commerce Commission proceed forthwith to reduce by an approximation to prewar levels the present freight rates on agricultural products, including live stock, and upon the materials required upon American farms for agricultural purposes.
Labor
7. We favor abolition of the use of injunctions in labor disputes and declare for complete protection of the right of farmers and industrial workers to organize, bargain collectively through representatives of their own choosing, and conduct without hindrance cooperative enterprises. We favor prompt ratification of the Child Labor amendment, and subsequent enactment of a Federal law to protect children in industry. . . .
* * *
Peace on Earth
We denounce the mercenary system of foreign policy under recent administrations in the interests of financial imperialists, oil monopolies and international bankers, which has at times degraded our State Department from its high service as a strong and kindly intermediary of defenseless governments to a trading outpost for those interests and concessionseekers engaged in the exploitations of weaker nations, as contrary to the will of the American people, destructive of domestic development and provocative of war. We favor an active foreign policy to bring about a revision of the Versailles treaty in accordance with the terms of the armistice, and to promote firm treaty agreements with all nations to outlaw wars, abolish conscription, drastically reduce land, air and naval armaments, and guarantee public referendum on peace and war.
[From Donald Bruce Johnson and Kirk H. Porter, eds.,
National Party Platforms, 1840-1972 (Urbana: University of Illinois Press, 1973), pp. 252-55.]
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Herbert Hoover's "New York City Speech" (1928)
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Herbert Hoover positioned himself somewhere between the conservative orthodoxy of Coolidge and the progressive Republican tradition of Roosevelt and La Follette. Born in Iowa and raised in a Quaker family, he pursued a successful career as a mining engineer before being asked by Woodrow Wilson to head the Food Administration during World War I. He then served with distinction as secretary of commerce under Harding and Coolidge, expanding American markets abroad and nurturing the infant airline and radio industries. In the excerpt below, he described the American system of individualism and free enterprise.
. . . During one hundred and fifty years we have builded [sic]1 up a form of self-government and a social system which is peculiarly our own. It differs essentially from all others in the world. It is the American system. It is just as definite and positive a political and social system as has ever been developed on earth. It is founded upon a particular conception of self-government in which de-centralized local responsibility is the very base. Further than this, it is founded upon the conception that only through ordered liberty, freedom and equal opportunity to the individual will his initiative and enterprise spur on the march of progress. And in our insistence upon equality of opportunity has our system advanced beyond all the world.
During the war we necessarily turned to the government to solve every difficulty economic problem. The government having absorbed every energy of our people for war, there was no other solution. For the preservation of the State, the Federal Government became a centralized despotism which undertook unprecedented responsibilities, assumed autocratic powers, and took over the business of citizens. To a large degree we regimented our whole people temporarily into a socialistic state. However justified in time of war if continued in peace time it would destroy not only our American system but with it our progress and freedom as well.
When the war closed, the most vital of all issues both in our own country and throughout the world was whether Governments should continue their wartime ownership and operation of many instrumentalities of production and distribution. We were challenged with a peace-time choice between the American system of rugged individualism and a European philosophy of diametrically opposed doctrinesdoctrines of paternalism and state socialism. The acceptance of these ideas would have meant the destruction of self-government through centralization of government. It would have meant the undermining of the individual initiative and enterprise through which our people have grown to unparalleled greatness.
* * *
When the Republican party came into full power it went at once resolutely back to our fundamental conception of the State and the rights and responsibilities of the individual. Thereby it restored confidence and hope in the American people, it freed and stimulated enterprise, it restored the Government to its position as an umpire instead of a player in the economic game. For these reasons the American people have gone forward in progress while the rest of the world has halted, and some countries have even gone backwards. If anyone will study the causes of retarded recuperation in Europe, he will find much of it due to the stifling of private initiative on one hand, and overloading of the Government with business on the other.
There has been revived in this campaign, however, a series of proposals which, if adopted, would be a long step toward the abandonment of our American system and a surrender to the destructive operation of governmental conduct of commercial business. Because the country is faced with difficulty and doubt over certain national problemsthat is, prohibition, farm relief and electrical powerour opponents propose that we must thrust government a long way into the business which gave rise to these problems. In effect, they abandon the tenets of their own party and turn to State socialism as a solution for the difficulties presented by all three.
It is proposed that we shall change from prohibition to the State purchase and sale of liquor. If their agricultural relief program means anything, it means that the Government shall directly or indirectly buy and sell and fix prices of agricultural products. And we are to go into the hydro-electric-power business. In other words, we are confronted with a huge program of government in business.
There is, therefore, submitted to the American people a question of fundamental principle. That is: shall we depart from the principles of our American political and economic system, upon which we have advanced beyond all the rest of the world, in order to adopt methods based on principles destructive to its very foundations?
* * *
I should like to state to you the effect that this projection of government in business would have upon our system of self-government and our economic system. That effect would reach to the daily life of every man and woman. It would impair the very basis of liberty and freedom not only for those left outside the fold of expanded bureaucracy but for those embraced within it. . . .
It is a false liberalism that interprets itself into the government operation of commercial business. Every step of bureaucratizing of the business of our country poisons the very roots of liberalismthat is, political equality, free speech, free assembly, free press, and equality of opportunity. It is the road not to more liberty, but to less liberty. Liberalism should be found not striving to spread bureaucracy but striving to set bounds to it. True liberalism seeks all legitimate freedom, first in the confident belief that without such freedom the pursuit of all other blessings and benefits is vain. That belief is the foundation of all American progress, political as well as economic.
Liberalism is a force truly of the spirit, a force proceeding from the deep realization that economic freedom cannot be sacrificed if political freedom is to be preserved. Even if Governmental conduct of business could give us more efficiency instead of less efficiency, the fundamental objection to it would remain unaltered an unabated. It would destroy political equality. It would increase rather than decrease abuse and corruption. It would stifle initiative and invention. It would undermine the development of leadership. It would cramp and cripple the mental and spiritual energies of our people. It would extinguish equality and opportunity. It would dry up the spirit of liberty and progress. For these reasons primarily it must be resisted. For a hundred and fifty years liberalism has found its true spirit in the American system, not in the European systems.
I do not wish to be misunderstood in this statement. I am defining a general policy. It does not mean that our Government is to part with one iota of its national resources without complete protection to the public interest. . . .
Nor do I wish to be misinterpreted as believing that the United States is free-for-all and devil-take-the-hind-most. The very essence of equality of opportunity and of American individualism is that there shall be no domination by any group or combination in this Republic, whether it be business or political. On the contrary, it demands economic justice as well as political and social justice. It is no system of laissez faire.
I feel deeply on this subject because during the war I had some practical experience with governmental operation and control. I have witnessed not only at home but abroad the many failures of Government in business. I have seen its tyrannies, its injustices, its destruction of self-government, its undermining of the very instincts which carry our people forward to progress. I have witnessed the lack of advance, the lowered standards of living, the depressed spirits of people working under such a system. My objection is based not upon theory or upon a failure to recognize wrong or abuse, but I know the adoption of such methods would strike at the very roots of American life and would destroy the very basis of American progress.
* * *
And what have been the results of our American system? Our country has become the land of opportunity to those born without inheritance, not merely because of the wealth of its resources and industry, but because of this freedom of initiative and enterprise. Russia has natural resources equal to ours. Her people are equally industrious, but she has not had the blessings of 150 years of our form of government and of our social system. . . .
The greatness of America has grown out of a political and social system and a method of control of economic forces distinctly its ownour American systemwhich has carried this great experiment in human welfare further than ever before in all history. We are nearer today to the ideal of the abolition of poverty and fear from the lives of men and women than ever before in any land. And I again repeat that the departure from our American system by injecting principles will jeopardize the very liberty and freedom of our people, will destroy equality of opportunity, not alone to ourselves but to our children. . . .
1. Editorial insertion.
[From Herbert Hoover, "New York City," in The New Day: Campaign Speeches of Herbert Hoover, 1928 (Palo Alto, CA: Stanford University Press, 1928), pp. 149-76.]
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Radio Broadcast, mid-1920s
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Cartoon showing the Teapot Dome scandal
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Warren Harding (left) and Calvin Coolidge
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The Wrights and the first flight of a power-driven airplane
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Charles Lindbergh in front of The Spirit of St. Louis
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Cartoon: The Cash Register Chorus
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Socialist women in jail
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Coolidge and journalists
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William Jennings Bryan The Ideal Republic, 1923
Calvin Coolidge speech on equal rights; from the Library of Congress
Finnegans Wake folk song; from the Library of Congress
A Garland of Old-Fashioned Roses folk song from 1930s; from the Library of Congress