• HardingGenialLack of strong convictionsPut strong men in important

officesGave lesser offices to the “Ohio

Gang”

Harding’s Wife and Girlfriend

• Secretary of Treasury, Andrew Mellon, dominated domestic policy under HardingLowered taxes – BUT opposed lower rates for lower classesRaised tariffs to protect US industries Returned to laissez-faire policiesReduced national debtBUT farm bloc opposed rich industrialists – farmers lost income

following WWI

• Charles Forbes – embezzled millions appropriated for veterans’ hospitals

• Attorney general Daugherty implicated in fraud

• Teapot Dome ScandalSecretary of Interior Albert FallLeased government oil reserves

to private oil companies

• Calvin CoolidgeElected after three-party split

election (LaFollette ran on Progressive ticket)

After elected cleaned houseKept on Secretary of Treasury

Mellon “Silent Cal”

• Both Harding and Coolidge deferred to the Senate on foreign affairs

• US overwhelmingly isolationist

• Economic interests forced US to seek American influence abroad

• Continued Open Door Policy in China – required increasing checks on Japanese expansionism

• The Washington ConferenceFive-Power Treaty

US-GB-Fr-Jp-It agreed to stop building battleships and reduce fleets to a fixed ratio

Four-Power Treaty US-GB-Fr-Jp agreed to respect each other’s interests in Pacific and

confer if any attack launchedNine-Power Treaty

All powers agreed to respect Chinese independence and maintain Open Door

• Treaties signified US interest in world affairs but treaties toothless• Ratio under treaty actually gave Japanese naval dominance in

Pacific• Treaty made Philippines indefensible and endangered Hawaii• Japan offended by National Origins Act 1924 that omitted Japan

from quota• Most Japanese military officers considered war with US inevitable

• Peace organizations flourished in 1920’s• Isolationism strengthened• Kellogg-Briand Pact 1928

French foreign minister Aristide Briand and US Secretary of State Frank Kellogg

Both saw treaty as meaningless but were pushed by peace movement

Diplomats from 15 countries signed treaty that renounced war as implement of policy

• Hoover first to treat Latin Americans as equals• Re-interpreted Roosevelt Corollary to Monroe Doctrine to mean

US to intervene only in self-defense• Marines in Haiti, Nicaragua, and Dominican Republic recalled in

1934• Platt amendment abrogated• Latin Americans still resentful of “rich Americans”

• 1931 Japanese occupied Manchuria made into puppet state Manchukuo

• Violation of Kellogg-Briand Pact and Nine-Powers Treaty• US and League of Nations asked by Chiang Kai-shek to intervene

– US refused – not a world policeman• 1932 Japan attacked Shanghai• Condemnation by League of Nations resulted in Japanese

withdrawal from League

• US lent Allies $10 billion for WWI – wanted money repaid• Allies demanded billions from Germany to pay for war• 1924 Dawes Plan scaled down German reparations• 1929 Young Plan further scaled down German reparations• When Great Depression struck both Germans and Allies defaulted

on payments

• Democrats nominated Governor Al Smith Catholic Wet Born in slums Tammany Hall product

• Republicans nominated Herbert Hoover Quaker Dry Modern approach to business and

labor• Economic prosperity and Hoover’s

wide appeal gave Hoover a landslide

• Economy of 1920’s had defects – lagging industries• Movement towards consolidation meant more business in fewer

hands• Large manufacturers afraid of upsetting the public about

monopolies, kept prices down

• Agriculture weakest sector – prices fell and costs rose along with European tariffs and quotas

• Government did little to help the farmer

• US economy built on sandLarge wealth gapMoney held by rich used in stock market speculation and rise in

“bull market”

• Stock prices increased – some brokers expressed alarm at overvalued stocks – few cared

• Stock speculation became national mania – pulling in thousands of small investors

• October 24 – a wave of selling sent prices spinning downward

• October 29 – 16 million shares sold – prices plummeted

• Stock market collapse did not start Depression• Great Depression was a global event caused by economic chaos

as result of WWI• In US too much wealth in too few hands – not enough consumers

to buy products• Wealth gap caused by easy credit extended by federal reserve

(friendly to rich)• Under-consumption caused factories to close and fire workers

causing demand to further shrink

• Automobile output fell from 4.5 million in 1929 to 1.1 million in 1932

• Financial system cracked under strain – more than 1300 banks closed doors in 1930, 3700 more in next 2 years

• Each bank failure deprived people of funds to buy goods

• Agriculture worsened as demand for farm products dropped

• Unemployment rose from 1 million at height of economic boom to 13 million

• Hoover tried to end depression – lowered taxes, lowered interest rates, made loans available to businesses

• Hoover failed to help local and state agencies and failed to allow federal funds to be given to individuals – he also relied too much on private charities

• Charities were drying up and state/local governments overwhelmed

• When drought impacted farmers Hoover allowed federal funds to be used for seed and food for livestock but not for farmers themselves

• Hoover put more stress on the economy by balancing the budget instead of spending

• 1930 Hawley-Smoot Tariff Act – dramatically raised tariffs on imports

• Tariff made it hard for Europe to earn money to repay US and helped bring financial collapse to Europe

• Spring of 1932 – many families unable to find public aid

• Many evicted and forced to live in communities of shacks near dumps or swamps called “Hoovervilles”

• Food prices so low farmers burned corn for fuel – farmers dumped milk – and blocked transport of crops to market

• Mexicans were rounded up and deported so they would not compete for jobs and food

• Summer 1932 – Veterans marched on Washington DC demanding their WWI bonuses

• “Bonus Army” shacks in Washington were attacked and burned by US troops

• US in revolutionary situation• Communists gained support in

intellectual circles

• Unemployment led to apathy• Unemployment brought shame – many never applied for

public assistance• High food costs resulted in diets low in protein creating

listlessness• Depression resulted in dramatically lower birth rate • Some families were strengthened while others were

destroyed

• The influence of wives increased

• Attitudes of husbands and wives magnified

• Some children caused strain while others helped the family

• The Depression caused Hoover to turn defensive and petulant• Franklin D. Roosevelt

Governor of New York Roosevelt’s sunny attitude contrasted with Hoover’s glum demeanorRoosevelt crippled by polioHad no real plan and contradicted himself but was the face of hopeAfter election, FDR developed economic plan called the New Deal

• The Twentieth Amendment1933Provided for convening new

Congresses in January instead of the following December (eliminated the lame-duck Congress)

Advanced the date of the presidential inauguration from March 4th to January 20th