1. The Politics of Boom and Bust

2. The Republican “Old Guard” Returns Americans love Warren G Harding But, weak, inept and only a mediocre mind. Ohio Gang Strong members of Cabinet –Charles Evans Sect of State –Andrew Mellon Sect of Treasury –Hoover Sect of Commerce Awful Cabinet members –Albert Fall sect of interior –Harry Daugherty- Attorney General Hi, I suffer from Grantism

3. GOP Reaction at the Throttle Progressivism is dead Harding extends Laissez Faire, government should actually help guide big businesses into making profits

4. Methods of promoting business Put many like-minded people into administration and the courts. In Harding’s three years as President, he appoints four S. Ct. judges. –Taft as Chief Justice In 1920s the Supreme Court supported business. Kills –minimum wage law. –federal Child Labor law Adkins v. Children’s Hospital overturned a law that gave women special protections in the work place. Progressive legislation regulating business was ignored and un-enforced.

5. Government Post WWI Government control on the econ is dismantled Esch-Cummins Transportation Act of 1920- private consolidation of RR and pledged the ICC to guarantee their profitability. Merchant Marine Act of 1920- shipping board to dispose wartime fleet at bargain prices

6. Government Post WWI Labor, good relations during the war, now faces set backs A violent steel strike crushed by an injunction in 1919 –Membership in unions declined by nearly 30 percent between 1920 and 1930. –Strikes were ruthlessly crushed

7. Veterans Veterans were one of the few groups to achieve lasting gains through the war. 1921 Veterans Bureau American Legion.. Adjusted Compensation Act –Bonus bill in 1922. Harding vetoes. –1924, Congress repasses the bill.. –Coolidge vetoes, but Congress over-rides.

8. Benefits without Burdens Harding favors isolationism, since rejected treaty of Versailles, congress declares war is over in 1921 Irreconcilables hating on the L of N – US can only send unofficial observers

9. Benefits without Burdens Mid-East: GB and America were competing for oil-drilling rights of oil-rich Arab nations Disarmament big issue Big business support it- want to make profits, not support naval building Washington “Disarmament” Conference in 1921-22. Two main issues: Naval disarmament and the situation in the Far East. Becomes the Five-Power naval Treaty of 1922: –US England and Japan agree to ratio of 5:5:3 –Brits and Americans agreed not to fortify their Far East possessions, including the Philippines. Japan has no such restrictions. –Anglo-Japanese alliance replaced by the Four-Power Treaty. Brit, Japan, France and US agree to preserve the status quo in Pacific. –China boosted by Nine-Power Treaty of 1922 which guarantees a full open-door policy in China.

10. Kellogg-Briand Pact (1928) Also known as Pact of Paris Idealistic Americans urged nations to foreswear war as an instrument of national policy. Signed by 62 nations pledging not to use war as an instrument of national policy. Americans believed that this would prevent war.

11. Hiking the Tariff Higher Isolationism reflected in economic policy. Business wanted to keep American markets for American business. Fordney-McCumber Tariff Law. 1922 Hiked tariff from 27 percent to 35%. President given the power to raise or lower tariffs by 50%. Mostly used to adjust rates higher. (32 up, 5 down) Tariffs hurt European countries trying to recover from the war and pay war debts. Leads to international tariff war and to feeling of economic oppression in countries such as Germany.

12. The Stench of Scandals Charles R Forbes and associates take roughly 200 million dollars dealing with Veterans Bureau Teapot Dome Scandal Att. General Daugherty- illegal sale of pardons and liquor permits

13. Tecumseh's curse takes another Victim Harding dies in August, 1923, before the full scope of these scandals has come to light. His administration is the most scandal- ridden since Grant. Coolidge President.

14. Silent Cal Coolidge Coolidge embodies Yankee Puritanism Supporter of big business “Cautious Cal” His five years are relatively uneventful and isn’t forced to grapple with any serious crisis. Helps save republican image, as the Harding scandals emerge

16. Frustrated Farmers Peace brings an end to govt. guaranteed high prices and massive purchases by other nations Technology (McCormick’s Reaper) creates more surpluses and less farm hand jobs Capper-Volstead Act- exempts farmer’s co-ops from anti-trust persecution McNary-Haugen Bill- government would buy up surpluses and sell them abroad- govt would make up losses by a special tax on farmers –Coolidge twice vetoes this measure

17. Election of 1924 Reps- “Keep cool and Keep Coolidge” Demos- many splits, Wets vs Drys, urbans vs farmers, fundamentalists vs modernists- select John Davis Progressives – Robert La Follette – supported by AFL, socialists party, and debt burdened farmers

18. Problems in Foreign Policy (Debt) US still isolationists except in Caribbean and Central America Biggest foreign policy issue in second Coolidge term was foreign debt owed US. America had gone from a debtor nation before the war to a creditor nation after the war. The dollar was beginning to supplant the Pound Sterling. America had loaned 10 Bill. to Allies during and after the War, and American investors had loaned an equal amount to Europe in the 1920s. US wants this money back, but Allies are having a hard time repaying.

19. Problems in Foreign Policy (Debt) Europe’s argument –Allies had sacrificed millions of lives while sat on the sidelines. Allies can’t get repaid for lost lives and manpower. –US tariffs making it very hard to earn the money necessary to repay the debt. –Money Allies had borrowed had been spent in US, helping to refuel the US economy.

20. Unraveling the Debt Knot Britain and France want to use German reparations to pay off debt- but Germany has HUGE inflation problems Dawes Plan of 1924- rescheduled German reparation payments, and allowed American private loans to Germany

21. Election of 1928 Reps- Herbert Hoover- prosperity and prohibition Demos- Al Smith- gov. of NY- Huge Wet and Roman Catholic HH- orphan, big believer in Rugged Individualism, endorsed labor unions, federal regulation of RR Dry southern demos vote for hh- Hoovercrats

22. Herbert Hoover Economy was roaring, but Farmers and non-union wage earners were not getting their share of the prosperity:. Hoover did not believe in direct aid. Wanted private sector response. Agricultural Marketing Act. Sets up Federal Farm Board- money to be lent to farm organizations seeking to buy, sell, and store ag. Surpluses

23. Herbert Hoover Leads to the Hawley-Smoot Tariff of 1930. Biggest tariff in US peacetime history. –Raised tariff from 38.5 to nearly 60%. –Foreign nations outraged. –Seemed to be a declaration of economic warfare. –Helped push the world toward depression. played into the hands of rising Nazism in Germany.

24. The Great Crash Economy was near the bursting point. –Prices on the stock market were vastly over-valued. –Many had bought on the margin Black Tuesday. October 29, 1929 In two months, investors lost 40 Bill, in paper value. More than total cost of WWI.

25. The Great Depression Opening bell of the worst and longest depression in US and World history. By the end of 1930, more than 4 Million unemployed. By 1932, 12 Mill. Wages and hours slashed. People weren’t buying, so factories weren’t producing, so there were no jobs. “We’re firing not hiring” Many lost their life’s savings in the Market. Was a huge hit to the America Psyche.

26. Causes of the Great Depression Over-production of both farm and factory. Too little being paid in wages. Over-expansion of credit through installment buying helped over-stimulate production and over-extend the buying power of consumers. Technology pushed people out of jobs. Economic anemia overseas caused by the debt burden (and Hawley-Smoot). Dried up purchasing from Europe. Terrible drought in the Mississippi Valley caused a number of farm foreclosures, putting farmers out of business. Lack of deposit insurance Soup lines and anti-Hoover Terms

28. Rugged Times For Rugged Individualists HH’s problem- humanitarian but rugged individualist- govt hand outs would destroy American Character Trickle down theory- assists banks, RR, rural credit corps Critics aren’t happy- can use govt. money to feed hungry Belgium's but not Americans Was effective in preventing even further collapse

29. Hoover battles the Great Depression Hoover eventually recommends that Congress vote 2.25 Bill. for useful public works. (Hooverdam) 1932—Reconstruction Finance Corporation (RFC)- indirect relief to insurance co. banks, ag. Orgs, RR, and state and local govts.

30. Hoover battles the Great Depression Norris-La Guardia Anti- Injunction Act.- outlaws yellow dog contracts, federal courts can’t use injunctions Compared to his predecessors Hoover did a great deal. Republican Congress was often very hostile to Hoover’s plans.

31. Bonus Army WWI vets march on Washington to get their Bonuses, set up Hooverville outside DC Bonus Expeditionary Force. Congress, riots ensue and two are killed. Hoover orders the army to force the marchers to leave. Gen. Douglas MacArthur. Battle of Anacostia Flats. Brings down more abuse on Hoover.

32. Japan Attacks China Japan, violates L of N, attacks Manchuria US sympathetic to China, but economically tied to Japan US won’t cooperate with L of N in terms of economic sanctions on Japan Stimson Doctrine- US would not recognize territories taken by force L of N lacks courage to stand up to Japan

33. HH and Good Neighbor Policy Depression makes US less aggressive in Latin America 1934- US withdrawals from Haiti 1933- US leaves Nicaragua