chapter 23
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The Politics of Boom and Bust. Chapter 23. Essential Questions. What was the legacy left by the Harding and Coolidge administrations? What were the economic factors that contributed to the stock market crash and the Great Depression? - PowerPoint PPT PresentationTRANSCRIPT
The Politics of Boom and Bust
Chapter 23
Essential Questions
What was the legacy left by the Harding and Coolidge administrations? What were the economic factors that contributed to the stock market crash and the Great Depression? What policies are associated with Hoover in reguards to the economy and foreign affaris?
Vocabulary
1. Ohio Gang2. Adkins vs. Children's hospital3. Kellogg-Brand Pact4. Teapot Dome Scandal5. "Silent Cal" Coolidge6. Reparations7. Herbert Hoover8. Prohibition9. Agricultural Market Act
10. Hawley-Smoot Tariff11. Black Tuesday12. Threadbare Thirties13. Good Neighbor Policy14. Veteren's Bureau15. Norris-La Guardia Anti-Injunction Act
The Republican “Old Guard” returns
• Warren G. Harding (Republican) won the election of 1921
• Harding = strong on the outside, and weak on the inside o Surrounded by corrupt
associates (“Ohio Gang”)o Couldn’t say no to his
friends
• “Best Minds” o Charles Evan Hughes became
secretary of state o Pittsburgh aluminum king, Andrew
W. Mellon, became secretary of treasury
o Herbert Hoover became secretary of commerce
• The Worst o Senator Albert B. Fall of New Mexico
became secretary of interioro Harry M. Daugherty became attorney
general (part of “Ohio Gang”)
GOP Reaction at the Throttle• Harding = "front" for enterprising industrialists• McKinley-style old order
o Hoped to improve on Laissez-Faire• Put courts and administrative bureaus in safekeeping
o Harding appointed 4 judges (including Taft)• Supreme Court stopped progressive legislation
o killed child-labor law, and many other labor gainso restricted government intervention.
• Adkins vs. Children's Hospital: reversed Muller vs. Oregon decisiono Women were legal equals of men
• Corporations no longer persecuted o Industrialsts set up trade associationso Encouraged by secretary Hoover (businesses should fend
for themselves)
The Aftermath of War
• Wartime economy swiftly dismantled• War Industries Board disappeared, and
so did progressive government regulation
• Railroads went back to private managemento gov't aslo tried to stay out of
shipping• Labor movements hurt• Veterens got benifits
o Congress created Veterens Bureauo American Legion lobbied for
veterens' benifitso Adjustment Compensation Act
passed (Insurance policy)
America Seeks Benefits Without Burdens
• U.S. rejected Treaty of Versailles: Still at war with Austria, Germany and Hungaryo July 1921: Congress passed joint resolution declaring war
ended• America directed attention to oil in the Middle East• Harding supported Disarmement
o "Disarmament" conference in 1921-1922o All major naval powers (except Bolshevik Russia)o Agenda = Naval disarmament and the Middle East
• Four-Power Treaty replaced Anglo-Japanese Alliance• Nine-Power Treaty agreed to nail open China's Open Door
• Americans pushed for the "outlawry of war"o Quarreling nations would pledge to forswear war as an
international policyo Sec. of State Kellogg signed Kellogg-Briand Pact (Pact of
Paris) with French foreign minister• Defensive wars were still permitted
o Virtually useless
Hiking the Tariff Higher
• Businesspeople wanted to protect American market from cheap goods flooding in from recovering Europeo 1922: Fordney-McCumber Tariff Lawo Duties on farm products increasedo Said to equalize cost of American and foreign production
• President authorized to reduce or increase duties up to 50%• Harding and Coolidge supported tariff increases
o together, they authorized 32 increases• Tariffs prolonged the chaos in recovering post-war European
nations• High tariffs hurt not only American-made goods, but European
products as well
The Stench of Scandal• Series of Scandals during Harding Era
– 1923: Colonel Charles R. Forbes resigned as head of the Veterans
Bureau after getting caught stealing about $200 mil from the government in connection with building veterens' hospitals.
– Teapot Dome scandal 1921: Sec. of Interior Albert B. Fall induced SecNav to transfer naval oil reserves at Teapot Dome and Elk Hills to interior dept. Fall then leased the land to Harry Sinclare and Edward Doheny for a generous bribe.
– 1924: Attorney General Daugherty accused of the illegal sale of pardons and liquor permits
• Harding was merciful to the accused• Harding died of pneumonia and thrombosis while touring the
country to give speeches
"Silent Cal" Coolidge
• VP Coolidge took office after Harding's deatho True to stern
Republican ideals\o Horrible speaker and
leader• Coolidge morally
fumigated the Harding Administration
Frustrated Farmers
• During the war, farmers prospered; war brought and end to government guaranteed high prices and massive purchases
• Machines caused farmers to have an overabundance cropso Surpluses lead to lower prices
• "Farm bloc" (agricultural states in congress) pushed for relief for farmerso Capper-Volstead Act: farmer corporations saved from antitrust
prosecution• Despite many attemps, farm prices stayed down
A Three-Way Race for the White House in 1924• Republicans nominated Coolidge• Democrats were so divided that they had trouble choosing a
canidateo eventually settled on conservative John Davis
• Senator Robert La Follette came forward to represent progressivistso Supported by AF of L and Socialist partyo Main support came from poor farmers
• Coolidge won the electiono everyone was too focused on prosparity to vote for a reform
canidate
Foreign-Policy Flounderings
• Isolation continued • Only exception to isolation: armed interventionism in the
Caribbean and Central Americao Troops remained in Haiti, and sent back to Nicaraguao Oil companies wanted military expedition in Mexico (Coolidge
defused the situation)• International debts: America went from debtor to creditor during
WWIo The Allies owed America $10 billion; Europeans strongly
argued against their debts
Unraveling the Debt Knot
• America insisted on getting paid back, and that made the Allies come down even harder on Germanyo increased reparations = increased
chance of anarchy in Germany• Statesman called for war debts and
reparartions be scaled down, but America refused
• Dawes Plan of 1924: rescheduled German reparations paymentso U.S. bankers loaned money to
Germany• U.S. was never fully paid (except by
Finland)
The Triumph of Herbert Hoover, 1928
• Coolidge didn't run in 1928 election; Herbert Hoover was his chosen successoro Platform included prosperity and prohibition
• Democrats nominated Alfred E. Smitho Alcoholic when most people supported prohibition
• Radio figured prominantly in this election for the first timeo Helped Hoover more than Smith
• Below-the-belt tactics were employedo Religous bigotry (Smith =
Catholic)o Klu Klux Klan and the rest of
the south hated Smith• Hoover was the ideal canidate, and
won by a landslide
President Hoover's First Moves
• Wage earners and farmers not enjoying the prosperityo Agricultural Marketing Act: designed to help farmers help
themselves. Set up a Fedeal Farm Board to give money to farm organizations
o Grain Stabilization and Cotton Stabilization Corporations to buy surpluses
• Hoover used Congress and attempted to help farmers o Hawley-Smoot Tariff of 1930 started out to help farmers, but
ended up being the highest protective tariff in the nation's peacetime history
o Tariff made foreigners mad too, and caused depression in American and overseas
The Great Crash Ends the Golden Twenties
• When Hoover took office, the "long boom" seemed endless• Everyone was prospering (except for the farmers)
• Catastrophic crash came in October 1929o In part due to British raising interest rates
• "Black Tuesday" October 29, 1929o 16,410,030 shares of stock were soldo suicides increased drastically
• Stock-market collapse caused business depressiono 4 million Americans were joblesso Over 5,000 banks collapsed
Hooked on the Horn of Plenty• Main cause of the Great
Depression was overproduction of both farm and factoryo The nation's ability to
produce goods had outrun it's ability to consume and pay for them
o Overexpansion of credit stimulated production
o Europe's economy also collapsed
• "Threadbare Thirties"• Terrible drought hit the
Mississippi in 1930
Rugged Times for Rugged Individuals• The Depression destroyed Hoover's
popularity• Hoover was unable to relieve the
Depressiono Against government handouts (would
destroy nationalism)• Hoover finally broke down and began to
provide government aid to the poor and unemployedo Gave money to the top of the economic
pyramid, and hoped it would trickle down to the unemployed
• For the first time, indvidualism prooved unsuccessfulo Hoover's efforts prevented an even
worse depression
Hoover Battles the Great Depression
• Hoover finally recommended that Congress vote immense sums for public works projects in line with his "trickle-down" philosophyo Hoover Dam on Colorado Rivero Fought any shemes that he
reguarded "socialistic"• Reconstruction Finance Corporation
became a government lending banko benifited Americans, but came
too late for maximum usefulness
• After debate, Congress passed Norris-La Guardia Anti-Injunction Act in 1932
• Outlawed antiunion contracts and forbade the federal courts to issue injunctions to restrain strikes, boycotts and peaceful picketing
• Hoover's efforts not supported by Republicans in Congress
o Combined with Democrats to harass Hoover
Routing the Bonus Army in Washington
• Veterens wanted paid for their service prematurelyo Moved on Congress for the immediate payment of their entire
bonuso Camped out in Washington hoping to intimidate Congress
• Were kicked out of Washington by the army after causing riotso Carried out by General Douglass MacArthur with tear gas and
bayonetso This action made Hoover disliked even more
Japanese Militarists Attack China• In September 1931 the Japanese imperialists
attacked Manchuriao Overran and converted the province, and
shut it's open dooro Violated League of Naitons, and various
other treaties• League was handicapped by the
nonmembership of the United Stateso Stimson doctrine: U.S. refused to
recognize any territories gained by force (Didn't slow down Japan at all)
• Japanese bombed Shanghai in 1932o Americans launched informal booycotts
on Japanese goods• The League had the power and resources to
stop Japan, but lacked the courage...WW2 was born
Hoover Pioneers the Good Neighbor Policy
• The Depression made Americans less agressive toward Latin Americao Economic imperialism
became less popular• 1932: Hoover negotiated an
new treaty with Haitio Provided the complete
withdrawal of American platoons by 1934
• Americans left Nicaragua after almost 20 years
• Foundations of the "Good Neighbor Policy"
Review
A. William Howard Taft 1. Passed as an insurence policy for B. Hoover Dam veterens 2. Constructed to help relieve the Great depression ("trickel down" philosophy)C. Japanese invading Manchuria 3. A leading cause of WW2D. Adjustment Compenstation Act 4. Appointed a supreme court justice E. Harding administration by Harding 5. Remembered for it's scandals
Answers
A - 4B - 2C - 3D - 1E - 5