1. T HE B USINESS OF THE G OVERNMENT 20.2

2. O BJECTIVES Analyze how the policies of Presidents Harding and Coolidge favored business growth. Discuss the most significant scandals during Harding’s presidency Explain the role that the United States played in the world during the 1920.

3. K EY P ARTS The Harding Administration Coolidge Prosperity America’s Role in the World

4. I NTRODUCTION Read section 20.2 Answer critical thinking questions 4-5.

5. T HE B USINESS OF G OVERNMENT In 1920 Warren G. Harding was elected President on a pledge of a “Return to Normalcy” Harding and his successor Calvin Coolidge favored a more conservative policies that aided the growth of business. Harding named Andrew Mellon as Secretary of the Treasury, a wealthy bank owner.

6. C ONT. Mellon’s idea was to support legislation that advanced business interests. He dislike the ne income tax that had been put into place by the previous president. Mellon lowered the income tax and trimmed the fat of the country’s budget. This allowed the treasury to actually show a surplus.

7. C ONT.. Harding also raised tariff’s on imported goods to help out local business. European nations did the same thing in retaliation to make it harder for Americans to sell their goods. Harding and Mellon worked to reduce government regulation on businesses.

8. C ONT … President Harding was very well liked and friendly to everyone, however; he was not overly smart. He didn’t know the complexity of all the facets of his job so he trusted his advisors and people to make the best decision based on their expertise. This was fine to a point but it led to corruption and personal gain by the ones making the decisions.

9. C ONT …. The teapot dome scandal was the worst during this time. Secretary of the Interior Albert Fall, in 1921 arranged to transfer oil reserves in Elk Hills, California and Teapot Dome, from the Navy. This oil was supposed to be used for the Navy in Emergency situations and he gave it private oilmen in return for loans.

10. C ONT ….. The situation was investigated and Fall was sent to jail for one year for the scandal and the oil was returned. This worried Harding because he began to see the corruption around him. Harding then went on a tour in Alaska and then ended up dying from a heart attack on August 2.

11. C OOLIDGE P ROSPERITY Calvin Coolidge took over as President and had a completely different from the out-going Harding. Calvin was know as silent Cal. He was quiet, honest, and frugal, a man who measured his words carefully. He made it known that the government was not a place to make quick money.

12. C ONT. Coolidge was a big fan of productive business leaders. He said that “the man who builds a factory, builds a temple” Calvin continued to follow Mellon by reducing the national debt and trimming the federal budget and lowering taxes on businesses. There were problems on the horizon, farmers were losing more and more money and land with the lowering of prices for their goods.

13. A MERICA ’ S R OLE IN THE W ORLD Under both Harding and Coolidge America continued to play an increasingly important role in world business and trade. After WWI all countries were trying to avoid war at all cost again due to the economic devastation of the war. World leaders held the Washington Naval Disarmament Conference to hammer out a settlement on several problems in international waters.

14. C ONT. Later the Kellogg-Briand Pact of 1928 tried to pass a treaty to outlaw war, 62 nations ratified the pact however in reality the pact was not able to be enforced. Another major issue was the war debts from WWI and in 1924 the Dawes Plan arranged U.S. Loans to Germany so they can make payments to Britain and France to payback their debts.