Chapter 33Chapter 33

The Politics of Boom and Bust

1920-1932

The Politics of Boom and Bust

1920-1932

Old Guard ReturnsOld Guard Returns

• Warren G. Harding steps into office.• “Ohio Gang” cronies who took advantage of

Harding in office. Couldn’t say no. Not a bad guy just not qualified.

• Place people around him to help lead. Hoover, Charles Evans Hughes, and Andrew Mellon.

• Harry Daugherty attorney general, and Albert Fall secretary of the interior. 2 of the worst.

• Warren G. Harding steps into office.• “Ohio Gang” cronies who took advantage of

Harding in office. Couldn’t say no. Not a bad guy just not qualified.

• Place people around him to help lead. Hoover, Charles Evans Hughes, and Andrew Mellon.

• Harry Daugherty attorney general, and Albert Fall secretary of the interior. 2 of the worst.

GOP Reaction at the ThrottleGOP Reaction at the Throttle

• McKinly-style order of laissez-faire government. Keep hands off business and also guide it along the path of profit.

• Harding appointed 4 of the nine justices to the Supreme Court in just 3 years of office.

• Chief Justice Taft was more liberal than some of his associates. Performed ably.

• Supreme court axed progressive legislation.

• McKinly-style order of laissez-faire government. Keep hands off business and also guide it along the path of profit.

• Harding appointed 4 of the nine justices to the Supreme Court in just 3 years of office.

• Chief Justice Taft was more liberal than some of his associates. Performed ably.

• Supreme court axed progressive legislation.

Adkins v. Children’s HospitalAdkins v. Children’s Hospital

• Adkins v. Children’s hospital reversed Muller v. Oregon. (Woman protection in the workplace) Ruling was that woman now had the right to vote, therefore the legal equals of men and no longer protected from special legislation.

• Do women deserve special legal and social treatment or equal in eyes of law and undeserving of special protection

• Adkins v. Children’s hospital reversed Muller v. Oregon. (Woman protection in the workplace) Ruling was that woman now had the right to vote, therefore the legal equals of men and no longer protected from special legislation.

• Do women deserve special legal and social treatment or equal in eyes of law and undeserving of special protection

• Corporations expanded and Anti trust laws often ignored.

• Industrialists set up trade corporations.

• Hoover, engineering efficiency led him to condemn waste from cut throat competition.

• Commitment to voluntary cooperation led him to urge business to regulate themselves.

• Corporations expanded and Anti trust laws often ignored.

• Industrialists set up trade corporations.

• Hoover, engineering efficiency led him to condemn waste from cut throat competition.

• Commitment to voluntary cooperation led him to urge business to regulate themselves.

Aftermath of WarAftermath of War

• Wartime government controls quickly abolished.

• Railroads to private management 1920. Esch-Cummins Transportation Act ecouraged private consolidation of Rails

• Merchant Marine act authorized Shipping Board to sell ships at bargain prices.

• Wartime government controls quickly abolished.

• Railroads to private management 1920. Esch-Cummins Transportation Act ecouraged private consolidation of Rails

• Merchant Marine act authorized Shipping Board to sell ships at bargain prices.

• Labor no more war time needs or friendly government suffers badly.

• Unions decreased by nearly 30% in 1930. • Veterans Bureau was created for War Vets to

operate hospitals and provide vocational rehabilitation for disabled vets.

• American Legion founded in Paris 1919, founded by Colonel Theodore Roosevelt Jr. Known for aggressive lobbying for benefits. Wanted adjusted compensation for that lost while at war.

• Labor no more war time needs or friendly government suffers badly.

• Unions decreased by nearly 30% in 1930. • Veterans Bureau was created for War Vets to

operate hospitals and provide vocational rehabilitation for disabled vets.

• American Legion founded in Paris 1919, founded by Colonel Theodore Roosevelt Jr. Known for aggressive lobbying for benefits. Wanted adjusted compensation for that lost while at war.

America seeks Benefits without BurdensAmerica seeks Benefits without Burdens• America still technically at War 3 years after the

armistice.• July 1921 simple joint resolution that declared the

war officially over.• Continued to regard League of Nations as unclean.

Sent unofficial observers to Geneva to watch.• Needed to pay attention to Middle East vast oil

fields. “Black Gold” helped win the war.• Secretary Hughes eventually secures American oil

companies the right to share.

• America still technically at War 3 years after the armistice.

• July 1921 simple joint resolution that declared the war officially over.

• Continued to regard League of Nations as unclean. Sent unofficial observers to Geneva to watch.

• Needed to pay attention to Middle East vast oil fields. “Black Gold” helped win the war.

• Secretary Hughes eventually secures American oil companies the right to share.

Disarmament Conference 1921-22Disarmament Conference 1921-22• Concern from the British and Japanese over the

amount of American Ships on the waters.• Invitations to all major powers but the Russians.• Hughes10 year holiday on creating battleships

and dismantling of some ships.• Ratio 5:5:3 British, American, Japanese ship• 5 Power Naval Treaty 1922 ship ratio and

Japanese compensation to save face.

• Concern from the British and Japanese over the amount of American Ships on the waters.

• Invitations to all major powers but the Russians.• Hughes10 year holiday on creating battleships

and dismantling of some ships.• Ratio 5:5:3 British, American, Japanese ship• 5 Power Naval Treaty 1922 ship ratio and

Japanese compensation to save face.

Continued…Continued…

• 4 Power Treaty bound to the status quo of the pacific between French, English, Japanese, and U.S.

• 9 Power Treaty- agreement to keep China Wide open the Open Door policy.

• Fanfare of disarmament. • No Restrictions on small warships, cruisers,

destroyers, and subs. U.S. lagged behind.• American mindset that war could be avoided at all

costs if only people would agree. Pact of Paris.

• 4 Power Treaty bound to the status quo of the pacific between French, English, Japanese, and U.S.

• 9 Power Treaty- agreement to keep China Wide open the Open Door policy.

• Fanfare of disarmament. • No Restrictions on small warships, cruisers,

destroyers, and subs. U.S. lagged behind.• American mindset that war could be avoided at all

costs if only people would agree. Pact of Paris.

Higher TariffsHigher Tariffs

• Shortsighted prospects of a prosperous home market racked up Tariffs. Fordney-McCumber Tariff avg. 38.5%

• Flexibility introduced. Tariff commission and president could increase or reduce.

• Harding and Coolidge more often raised.• Chain Reaction in Europe raising Tariffs.• Europe feels squeeze, needs to sell products in

America to get out of war debt, America needs to give them a chance to make a profit,

• Shortsighted prospects of a prosperous home market racked up Tariffs. Fordney-McCumber Tariff avg. 38.5%

• Flexibility introduced. Tariff commission and president could increase or reduce.

• Harding and Coolidge more often raised.• Chain Reaction in Europe raising Tariffs.• Europe feels squeeze, needs to sell products in

America to get out of war debt, America needs to give them a chance to make a profit,

Stench of ScandalStench of Scandal

• Teapot Dome Scandal-Naval Oil Reserves @ Teapot Dome, WY and Elk Hills CA.

• Sec. Interior, Albert Fall got the land from the Sec. of Navy, signed by Harding indiscreetly, and leased the land to Sinclair and Doheny for a Bribe of $100,000.

• Details came out in March 1923. Fall found guilty of taking a bribe 1 year in jail. 2 oilmen were indicted but were acquitted.

• Pollute prestige of government, rich get away with it.

• Teapot Dome Scandal-Naval Oil Reserves @ Teapot Dome, WY and Elk Hills CA.

• Sec. Interior, Albert Fall got the land from the Sec. of Navy, signed by Harding indiscreetly, and leased the land to Sinclair and Doheny for a Bribe of $100,000.

• Details came out in March 1923. Fall found guilty of taking a bribe 1 year in jail. 2 oilmen were indicted but were acquitted.

• Pollute prestige of government, rich get away with it.

Continued…Continued…

• Attorney general Daugherty with illegal sales of pardons and liquor permits.

• Harding sparred full revelation of the scandals when he died on his way back from a speech tour in San Francisco of pneumonia.

• Attorney general Daugherty with illegal sales of pardons and liquor permits.

• Harding sparred full revelation of the scandals when he died on his way back from a speech tour in San Francisco of pneumonia.

Coolidge takes OfficeCoolidge takes Office

• “Silent Cal”- New Englander, frugal, honesty, virtue, industry, morality.

• Thrifty nature and support of big business.

• Seemed to help ease the shock of scandal with honesty. Virtue brought people back in and moral sensibility was dulled by prosperity.

• “Silent Cal”- New Englander, frugal, honesty, virtue, industry, morality.

• Thrifty nature and support of big business.

• Seemed to help ease the shock of scandal with honesty. Virtue brought people back in and moral sensibility was dulled by prosperity.

Farmers FrustrationFarmers Frustration

• WWI farmers find success with open markets. End of War is end of prosperity abroad. More competition.

• Prosperity encourage new tractors and land to be tilled.

• Lower prices with a surplus. Depression in agricultural business of 1920’s.

• Government relief programs, exempting marketing cooperatives from anti-trust.

• McNary-Haugen Bill-keep agriculture prices high with government bought surplus to sell abroad.

• WWI farmers find success with open markets. End of War is end of prosperity abroad. More competition.

• Prosperity encourage new tractors and land to be tilled.

• Lower prices with a surplus. Depression in agricultural business of 1920’s.

• Government relief programs, exempting marketing cooperatives from anti-trust.

• McNary-Haugen Bill-keep agriculture prices high with government bought surplus to sell abroad.

ContinuedContinued

• Government loses made up with a special tax.

• Twice Congress passed it and both times Coolidge vetoed it.

• How do Farmers react?

• Government loses made up with a special tax.

• Twice Congress passed it and both times Coolidge vetoed it.

• How do Farmers react?

1924 Election1924 Election

• Coolidge for Republicans.• Squabbling Democrats nominate John Davis

on the 102 ballot. (Weak) Too many factions separate the party.

• 3rd party Senator La Follette’s of Wisconsin. Progressive party nomination with no local nominations.

• Platform: ownership of Railroads, relief for farmers, against monopoly and antilabor injunctions, constitutional amendment to limit Supreme court power to invalidate laws of congress.

• Coolidge for Republicans.• Squabbling Democrats nominate John Davis

on the 102 ballot. (Weak) Too many factions separate the party.

• 3rd party Senator La Follette’s of Wisconsin. Progressive party nomination with no local nominations.

• Platform: ownership of Railroads, relief for farmers, against monopoly and antilabor injunctions, constitutional amendment to limit Supreme court power to invalidate laws of congress.

Foreign PolicyForeign Policy

• Isolation continued to reign.• Exception was Caribbean and Central America.

Troops in Haiti until 1934. • Troops in Nicaragua until 1933.• International debt was the biggest issue.• By 1922 were a creditor nation of 16 billion.• Key issue 10 Billion US Treasury loaned to the

Allies. Time to pay back.• Allies argued the cost of lives they suffer while

American withheld until the end.

• Isolation continued to reign.• Exception was Caribbean and Central America.

Troops in Haiti until 1934. • Troops in Nicaragua until 1933.• International debt was the biggest issue.• By 1922 were a creditor nation of 16 billion.• Key issue 10 Billion US Treasury loaned to the

Allies. Time to pay back.• Allies argued the cost of lives they suffer while

American withheld until the end.

• Allies call U.S. to write them off as War Costs like they wrote of their lives lost.

• Protest that they profit from the war boom buying their materials.

• American insistence on being paid back hardened the Allies stance for Germany to pay reparations of 32 billion dollars.

• Germany responded with permitting its currency to inflate astronomically. Oct. 1923 bread cost 480 million marks (120 million pre inflation)

• Allies call U.S. to write them off as War Costs like they wrote of their lives lost.

• Protest that they profit from the war boom buying their materials.

• American insistence on being paid back hardened the Allies stance for Germany to pay reparations of 32 billion dollars.

• Germany responded with permitting its currency to inflate astronomically. Oct. 1923 bread cost 480 million marks (120 million pre inflation)

Continued…Continued…

• U.S refused to back down on the debts claiming no connection between debt and reparations.

• Dawes Plan of 1924: Rescheduled reparation payments, opened private loans to Germany.

• Monetary merry go round. When the well dried up with the crash all debtors defaulted except Finland.

• America never was paid back and ill will brewed on both sides.

• U.S refused to back down on the debts claiming no connection between debt and reparations.

• Dawes Plan of 1924: Rescheduled reparation payments, opened private loans to Germany.

• Monetary merry go round. When the well dried up with the crash all debtors defaulted except Finland.

• America never was paid back and ill will brewed on both sides.

Election of 1928Election of 1928• Coolidge won’t run again and successor for

nomination is Hoover.• Not in with the Political Bosses, bright mind, but

never elected to any other office.• Story of American success pulled up from the

boot straps.• Orphan boy worked way through Stanford, to

become a successful mining engineer and businessman.

• Faith in American Individualism, free enterprise, small government.

• Coolidge won’t run again and successor for nomination is Hoover.

• Not in with the Political Bosses, bright mind, but never elected to any other office.

• Story of American success pulled up from the boot straps.

• Orphan boy worked way through Stanford, to become a successful mining engineer and businessman.

• Faith in American Individualism, free enterprise, small government.

• Al Smith from New York Democrat nominee.

• Democratic party still in shambles and broken. No unified candidate.

• Smith, wet promoter, too urban, catholic, many dry, Fundamentalist Democrats couldn’t accept the nomination.

• Al Smith from New York Democrat nominee.

• Democratic party still in shambles and broken. No unified candidate.

• Smith, wet promoter, too urban, catholic, many dry, Fundamentalist Democrats couldn’t accept the nomination.

• Radio figured prominently with advantage to Hoover over his twanged opponent.

• The South didn’t fully support Smith and Hoover triumphed in a landslide.

• Large Republican majority was returned to the House.

• Hoover carried 5 states of the former Confederacy.

• Radio figured prominently with advantage to Hoover over his twanged opponent.

• The South didn’t fully support Smith and Hoover triumphed in a landslide.

• Large Republican majority was returned to the House.

• Hoover carried 5 states of the former Confederacy.

Hoover’s 1st moves as PresidentHoover’s 1st moves as President

• Aid Farmers by allowing them to set up producer cooperatives to store surplus, but too much product was being brought in.

• Go to the Tariff, Hawley-Smoot of 1930. Originally to help farmers by time through the House and Lobbyists became the biggest tariff at 60%.

• Economic warfare on the outside world, plunging the world into deeper depressions.

• Aid Farmers by allowing them to set up producer cooperatives to store surplus, but too much product was being brought in.

• Go to the Tariff, Hawley-Smoot of 1930. Originally to help farmers by time through the House and Lobbyists became the biggest tariff at 60%.

• Economic warfare on the outside world, plunging the world into deeper depressions.

Crash ends the Golden 20’sCrash ends the Golden 20’s• Oct. 29, 1929 it all comes down. Foreign and

domestic investors wary of the situation begin to dump their stocks, 16,410,030 stocks were sold.

• 2 months after the crash 40 Billion lost more than total cost of WWI to U.S.

• End of 1930 4 million lost their jobs and in two years it tripled.

• 5 thousand banks collapsed along with life savings.

• Families feel the stress of not being able to provide.

• Oct. 29, 1929 it all comes down. Foreign and domestic investors wary of the situation begin to dump their stocks, 16,410,030 stocks were sold.

• 2 months after the crash 40 Billion lost more than total cost of WWI to U.S.

• End of 1930 4 million lost their jobs and in two years it tripled.

• 5 thousand banks collapsed along with life savings.

• Families feel the stress of not being able to provide.

CausesCauses

• Nations ability to produces surpassed ability to consume or pay for.

• Wealth into the hands of a few and not enough put in wages of workers to revitalize purchasing power.

• Overexpansion of credit. Dive in beyond.• Dry up of international trade.• Tensions with Europe of reparations, debt, and

defaults on loans.• Drought through the Mississippi Valley in 1930.

• Nations ability to produces surpassed ability to consume or pay for.

• Wealth into the hands of a few and not enough put in wages of workers to revitalize purchasing power.

• Overexpansion of credit. Dive in beyond.• Dry up of international trade.• Tensions with Europe of reparations, debt, and

defaults on loans.• Drought through the Mississippi Valley in 1930.

• Depression a national calamity by 1930.• Despair sets in. People want to work but

can’t find jobs.• Baffled people. People lived in shanty

towns known as Hoovervilles.• Hoover’s reputation as a wonder worker

and efficient engineer crashed along with the economy.

• Depression a national calamity by 1930.• Despair sets in. People want to work but

can’t find jobs.• Baffled people. People lived in shanty

towns known as Hoovervilles.• Hoover’s reputation as a wonder worker

and efficient engineer crashed along with the economy.

continuedcontinued

• Hoover was deeply concerned as a humanitarian but his belief in “rugged individualism kept him from government handouts.

• Industry, thrift, and self-reliance were virtues that made America great and handouts would weaken the national fiber.

• Depression worsens relief at local level breaks down. Hoover concedes that national help is needed.

• Hoover was deeply concerned as a humanitarian but his belief in “rugged individualism kept him from government handouts.

• Industry, thrift, and self-reliance were virtues that made America great and handouts would weaken the national fiber.

• Depression worsens relief at local level breaks down. Hoover concedes that national help is needed.

• Hoover compromises from hands off policy. • Assist Banks, Railroads, and rural credit

corporations hoping the money given to them would trickle down to the bottom of unmeployment.

• Partisan critics claiming helping those who caused the mess or will to assist agriculture organizations to feed pigs but not the people.

• Probably did help from making it worse, but critics didn’t see it helping immediately.

• Hoover compromises from hands off policy. • Assist Banks, Railroads, and rural credit

corporations hoping the money given to them would trickle down to the bottom of unmeployment.

• Partisan critics claiming helping those who caused the mess or will to assist agriculture organizations to feed pigs but not the people.

• Probably did help from making it worse, but critics didn’t see it helping immediately.

Hoover Battles the DepressionHoover Battles the Depression

• Did secure for Congress 2.25 billion dollars in public works projects.

• Hoover Dam started in 1930 and finished in 1936.

• Fought schemes regarded as socialism because of direct competition with private enterprise.

• Reconstruction Finance Corporation- Government lending bank to provide indirect relief but no loans to individuals. Giant corporations did benefit. (New Deal Flavor)

• Did secure for Congress 2.25 billion dollars in public works projects.

• Hoover Dam started in 1930 and finished in 1936.

• Fought schemes regarded as socialism because of direct competition with private enterprise.

• Reconstruction Finance Corporation- Government lending bank to provide indirect relief but no loans to individuals. Giant corporations did benefit. (New Deal Flavor)

• Indirect assistance to labor.• Norris-La Guardia Anti-Injunction Act in 1932.

Outlawed “yellow dog” contracts. (Anti Union), Forbade federal courts from issuing injunctions to restrain strikes, boycotts, and peaceful picketing

• Hostile congress, 1st two years republicans uncooperative, loss of party in 1930, some republicans combined with Democrats in opposition of Hoover.

• Indirect assistance to labor.• Norris-La Guardia Anti-Injunction Act in 1932.

Outlawed “yellow dog” contracts. (Anti Union), Forbade federal courts from issuing injunctions to restrain strikes, boycotts, and peaceful picketing

• Hostile congress, 1st two years republicans uncooperative, loss of party in 1930, some republicans combined with Democrats in opposition of Hoover.

Bonus Army in Washington.Bonus Army in Washington.

• Veterans of WWI were unemployed and seeking their bonus payments from the war.

• BEF mustered 20,000 to march on Washington and set up camp in filthy conditions to demand payment.

• Congress failed to pass it.• Hoover offered to pay expenses back home. • When most refused he had them forced out with

tear gas and bayonets. • Hoover is becoming the most unpopular man.

• Veterans of WWI were unemployed and seeking their bonus payments from the war.

• BEF mustered 20,000 to march on Washington and set up camp in filthy conditions to demand payment.

• Congress failed to pass it.• Hoover offered to pay expenses back home. • When most refused he had them forced out with

tear gas and bayonets. • Hoover is becoming the most unpopular man.

Japanese Militarists attack ChinaJapanese Militarists attack China• Japanese imperialists claimed provocation

attacked Manchuria and shut down the Open door Policy.

• American economic interests were more in Japan than China.

• No hard action taken just paper action.• Stimson doctrine- declared we would not

recognize any territorial acquisition by force. Preach and run policy

• Japanese imperialists claimed provocation attacked Manchuria and shut down the Open door Policy.

• American economic interests were more in Japan than China.

• No hard action taken just paper action.• Stimson doctrine- declared we would not

recognize any territorial acquisition by force. Preach and run policy

• League of Nations had the economic and naval power to halt Japan but not the courage to follow through. Couldn’t count on U.S. support

• League of Nations had the economic and naval power to halt Japan but not the courage to follow through. Couldn’t count on U.S. support