1. Mr. Porter APUSH POWERPOINT CHAPTER 32
Politics of Boom and Bust
International and Domestic

2. KEYS TO THE CHAPTER
Three Republican Presidents (HCH)
Isolationism
Japanese Expansionist Policies
High Tariffs
International Debt
Over Production on the Farms
Black Tuesday (10/29/1929)
Labor Movement Gains Strength

3. President Harding Pro-Business but plagued by scandals
Courts become business oriented
Adkins v. Children’s Hospital (1923)
Reversed Muller v. Oregon (1908) that said that women deserved special treatment
Held that women had vote, and therefore no longer needed special legislation
Struck down minimum-wage law for women

4. Consolidation in business
Agreements made to reduce competition
Secretary of Commerce Hoover encouraged cooperation / cut throat competition wasteful
Esch-Cummins Transportation Act of 1920
Encouraged private consolidation of railroads
1924 – Bonus Baby’s
Money that veterans would have gotten had they stayed in factory jobs (instead of fighting) to be paid as “bonus” in 20 years

5. 1921/1922 – D.C. Naval Conference All major powers but Russia invited
Ration of 5:5:3 (US, Britain, Japan) on naval battleships and aircraft carriers
British and Americans promised to not fortify possessions in Pacific, including Philippines
Japanese not subject to these restrictions
Four-Power Treaty
US, Britain, France, Japan promised to not seek increased holdings or naval strength in Pacific
Open Door policy in China now international law

6. Kellogg-Briand Pact (Pact of Paris)
Coolidge’s secretary of state (Kellogg) signed pact with France to “renounce war”
Pledge by nations to forsake war (62 sign)
Weaknesses of the Kellogg-Briand Pact
Defensive wars permitted
Nations could make up excuse of self-defense
No enforcement provisions
Lulled Americans into false sense of security

7. Effects of the high tariff policies:
Europeans needed to sell manufactured goods in US to
Achieve economic recovery
Pay down war debt to US
Purchase manufactured goods from US
High Tariffs slowed international trade & caused Europe to retaliate & increase theirs
Business in America suffer in future because can’t sell goods competitively overseas
Cost of goods to consumers would rise

8. Increased distrust of government and courts
Teapot Dome Scandal
1921 – Albert B. Fall (secy of interior) got Secy of the Navy Denby to transfer naval oil reserves at Teapot Dome, Wyoming and Calif. to control of Interior Department
Fall leased these lands to oil developers Sinclair and Doheny and received bribes from both
Case dragged on until 1929
Fall got year in jail; Sinclair & Doheny acquited
Increased distrust of government and courts

9. Teapot dome investigation (An overwhelming, advancing force that many believe would crush everything in its path. In the long run it didn’t)

10. Harding’s attempt to escape the scandals
1923 – cross-country speaking tour to Alaska
August 2, 1923 died of pneumonia and thrombosis (blood clot in a blood vessel)
Harding’s legacy
Worst news of corruption came out after death
Too weak to be a good president
“Silent Cal” Coolidge takes over and his philosophy says gov’t should support business, not right social wrongs

11. “Silent Cal” ----------- Favors Business and wants to reduce government

13. Problems for farmers in 1920s: overproduction and declining prices
High prices drastically declined & productivity up (over supply reduces prices forcing more production)
Congress tries to help but President uses veto power
Brings increase in progressive movement by farmers again

14. A Three-Way Race for President 1924
Results
Coolidge won with 54% of the popular vote
La Follette (progressive) only won Wisconsin, but polled well in Midwest & mountain states
Davis (Democrat) got South and cities with large immigrant populations

15. Coolidge continues isolationism policies except in Latin America where we still keep troops:
Dominican Republic until 1924
Haiti, 1914 – 1934
Nicaragua, off-and-on 1909, 1926 – 1933
Mexican nationalization of oil reserves
US businessmen want armed intervention but Coolidge relies on diplomacy
International debt brings the most issues

16. International debt problem $10B loaned by US to Allies during WWI
US wants to be paid back
Allies thought US should write it off
They had suffered the casualties
Their $ had financed boom in US economy
US’s tariffs made it impossible to sell goods
US insistence on repayment led to cycle of financial problems in Europe
France & Britain demand reparations from G. of $32 billion
Berlin inflated its currency to repay debts

17. German Inflation- Might as well burn it

18. Effects of the financial meltdown (in 1929)
The Dawes Plan of 1924 further complicated the international financial system
US bankers loaned $ to Germany
Germany paid reparations to France and Britain
Allies paid war debts to US
System would break down if US credit ended
This occurred with 1929 crash
Effects of the financial meltdown (in 1929)
European nations defaulted on their debts
US never got its money
Bitter feelings against US in Europe
A cause of isolationism in the US in the 1930s

19. Results of 1928 Election {Hoover vs. Smith}
“Hoover wins some democrats”
Southerner Democrats broke from Smith because of his Catholicism, “wettism”, foreignism, liberalism
Hoover wins a landslide with 58% of the vote
Not a typical politician
Never before elected to public office
Not used to criticism, compromise and asking for votes
Real power was in humanitarianism, organization, and honesty

20. Reversed worldwide trend for more reasonable tariffs
Hoover’s first moves are to try and help farmers and to seek increase in tariff
Effects of the Hawley-Smoot Tariff (60%)
Reversed worldwide trend for more reasonable tariffs
Huge trade gaps between US and foreigners
Plunged US and world deeper into (already begun) depression
Forced US to retreat further into isolationism

21. Effects of the Crash October 1929 - Great Crash ends roaring 1920s
Foreign and domestic investors began a sell-off
October 29, 1929 – “Black Tuesday”
Scramble to sell of over 16 million shares
December $40 billion in paper wealth erased
Effects of the Crash
Unemployed workers
1930 – 4 million
1932 – 12 million
Wages slashed
5,000 banks failed erasing savings
Homes and farms foreclosed on

22. Panicked Stock Traders outside the NYSE

23. A BANK RUN AFTER THE CRASH

24. Unemployment Line in the Depression

25. Causes of the Great Depression ----------- Sound familiar to issues today?

26. Consumer Borrowing in the 1920s It will rise even higher in the late 1990s and 2000s In 2007 America has a negative savings rate

27. Note skater is so happy he is not looking ahead

28. Weak farm economy Government policies
1/2 of all Americans still lived in rural areas
Farmers never shared in prosperity of 1920s
Suffered from overproduction, high debt, and low prices since end of World War I
Further hit with severe droughts during 1930s
Government policies
Lack of regulation over business
High tariffs hurt international trade
Low taxes put tax burden on middle class

29. Hoover does not believe in all out government aid: individuals should help themselves – Makes a compromise policy:
assist those at the top of the economic pyramid (such as banks and railroads)
Relief would trickle down to poor (same policy as R. Reagan)
Spending on relief revolutionary for the time, turned away from decades of laissez-faire beliefs sets up idea for New Deal under FDR

30. Popular feeling in 1932 election
Blame it on Hoover

31. Hoover Dam begins 1930 & finished 1936
Hoover finally recommends Congress appropriate massive sums for public works
Total of $2.25 billion spent
Hoover Dam begins 1930 & finished 1936
Created lake for irrigation, flood control, electric power
1932: Reconstruction Finance Corporation (RFC)
$1/2 billion government lending bank
loans to business but not to individuals

32. Forbade federal courts from issuing injunctions to prevent strikes
1932 – Norris-La Guardia Act
greatest law ever passed for labor
Outlawed “yellow-dog” contracts (agreement not to join a union as a condition of employment)
Forbade federal courts from issuing injunctions to prevent strikes

33. Bonus Expeditionary Force (BEF)
W W I soldiers want bonus now - Voted in 1924; payable in 1945
Bonus Expeditionary Force (BEF)
20K marched on Washington to demand entire bonus and set up public camps
Bonus bill fails in Congress
Several thousand refused to leave
Riots kill 2 people
Hoover orders General Douglas MacArthur to disperse the Bonus Army & he overdoes it

34. Police and Bonus Army Clash 1932

35. Invasion violates league of nations and shocks America

36. Japan as Breaker of Treaties After Manchuria

37. Japanese portrayed as the aggressor nation

38. US takes paper action against Japan:
Secretary of State Henry L. Stimson doctrine:
US would not recognize territorial acquisitions gained by force
Japan is not deterred
1932 – Japan bombs Shanghai, killing many
US remains isolationist – refusal during depression to intervene in China
Some say this is when war actually started