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The Politics of Boom & Bust. 1920 - 1932. President Harding’s Ohio Gang. Cabinet Members: - “The Ohio Gang” Sec of State – Charles Evans Hughes Sec of Treasury – Andrew Mellon Sec of Commerce – Herbert Hoover Sec of Interior – Albert Fall Attorney General – Harry Daugherty. - PowerPoint PPT Presentation
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The Politics of Boom & Bust
1920 - 1932
President Harding’s Ohio Gang Cabinet Members: - “The Ohio Gang”
Sec of State – Charles Evans Hughes Sec of Treasury – Andrew Mellon Sec of Commerce – Herbert Hoover Sec of Interior – Albert Fall Attorney General – Harry Daugherty
Harding as President “Old Guard” hoped to improve on the old
business doctrine of laissez-faire Gov’t should help guide business along the
path to profits Put a end to a lot of progressive
legislation Supreme Court - Taft as Chief Justice Adkins v. Children’s Hospital - reversed
Muller v. Oregon No different treatment for women in the workplace
Antitrust laws were ignored
The Aftermath of War War Industries Board disappeared Railroads returned to private
management in 1920 Esch-Cummins Transportation Act of 1920
Merchant Marine Act of 1920 – get rid of wartime fleet
Union membership declined by 30% American Legion founded
Lobbied for veterans’ benefits – Bonus Army Adjusted Compensation Act – 1924
Paid-up insurance policy
America Seeks Benefits Without Burdens
July 1921 – joint resolution officially ending the war Isolationism but concerned about oil in the Middle East
Sec Hughes eventually secured rights for US oil companies Washington Disarmament Conference – 1921-1922
Agenda – naval disarmament & situation in the Far East (Japan)
Five-Power Naval Treaty of 1922 Included ship ratios, US & Great Britain could not fortify
their Far Eastern possessions & replaced the Anglo-Japanese alliance
Nine-Power Treaty of 1922 Open Door in China was extended
Kellogg-Briand Pact 1927 - Aristide Briand (France)
proposed a treaty with the US to outlaw war
Frank Kellogg (US) invited other nations to join
Paris – Aug 1928 – almost all major nations signed the treaty Outlawed aggression, not self-defense, &
had no enforcement provision
Hiking the Tariff Higher
Mellon sought substantial increases in protective tariffs
Fordney–McCumber Tariff Law – 1922 Increased tariff to 38.5% Duties on farm produce were increased President could raise or lower rates to a limit of
50% on recommendation of the Tariff Commission
Harding & Coolidge favored increased tariffs Hurt not only America but also European
countries as well
Scandal 1923 – Charles Forbes – Head of the
Veterans’ Bureau Caught stealing money - $200 million//
Sentenced to 2 years 1921 - Teapot Dome Scandal
Albert Fall - Sec of Navy transferred valuable properties to the Interior Dept (with Harding’s approval)
Teapot Dome, Wyoming & Elk Hills, CA Fall leased the lands to oilmen Harry Sinclair &
Edward Dohney after receiving a bribe Fall was found guilty of accepting a bribe & sentenced
to one year
Scandal Conti. 1924 - Attorney General Daughtery
Investigated for illegal sale of pardons & liquor permits
Forced to resign & later released after 2 juries failed to agree
Harding went on a speechmaking tour across the country including Alaska Aug 2, 1923 – died in CA Coolidge takes office
Calvin Coolidge “Silent Cal”
Honest Supported the status quo “the man who builds a factory builds a
temple” “the man who works there worships there”
Frustrated Farmers Farmers were being hurt by
overproduction Coolidge twice refused to sign legislation
which proposed to subsidize farm prices Capper-Volstead Act – exempted farmers’
from antitrust legislation McNary-Haugen Bill – 1924 – 1928
Goal was to keep farm prices high by authorizing the gov’t to buy up surpluses & sell them abroad – farmers would pay a special tax
Election of 1924 Republican – Calvin Coolidge Democrat – John W. Davis Progressive – “Fighting Bob” La Follette
Platform gov’t ownership of the railroads Relief for farmers Anti-monopoly & anti-labor injunctions Limit Supreme Court’s power to invalidate laws of
Congress **** Coolidge Wins
Coolidge’s Foreign Policy Isolationism
Pursued further disarmament Armed intervention in the Caribbean
& Central America US troops removed from Dominican Republic
(1924) US troops remained in Haiti 1914 – 1934 Removed troops from Nicaragua (1909) but
sent them back in 1926 – 1933 Mexico (1926) – oil dispute
International Debt US Treasury had loaned the Allies $10
billion US demanded repayment
Allies planned to pay off debt by reparations received from Germany Germany could not pay Allies wanted the debt to be forgiven US refused
Dawes Plan of 1924 Rescheduled German reparations
payments & opened the way for further American private loans to Germany US bankers loaned Germany money Germany paid Great Britain & France
reparations Great Britain & France paid US Treasury for
war debts
The Triumph of Hoover1928
Coolidge decided not to seek reelection Republican – Herbert Hoover
Never held an office before Democrat – Alfred E. Smith
“wet” Roman Catholic
Radio – helped Hoover more than Smith Hoover was the 1st Republican to win any
Southern states
President Hoover
Stocks continued to soar Left out of the boom:
Unorganized wage earners & disorganized farmers Agricultural Marketing Act – 1929
Designed to help farmers help themselves through cooperatives
Set up a Federal Farm Board Lent money to farm organizations seeking
to buy, sell, or store surpluses Created the Grain Stabilization Corporation
& the Cotton Stabilization Corporation Goal was to buy up surpluses to increase prices
Hawley – Smoot Tariff of 1930
Increased the tariff from 38.5% to 60% Highest protective tariff in peacetime
history Infuriated European countries Plunged US & other nations deeper into
depression
The Great Crash
Hoover tried to curb speculation through the Federal Reserve Board Unsuccessful
October 1929 – Stock Market Crash Partially triggered by British who raised their
interest rates to bring back capital lured by American investments
“Black Tuesday” Oct 29, 1929 Millions of shares of stock were sold By the end of 1929, stockholders had lost $40
billion
Beginning of the Great Depression
Depression hit at home & abroad Bread lines formed, soup kitchens dispensed
food, & apple peddlers tried to make ends meet 1930 – more than 4 million US workers were
unemployed 2 years later, the number had tripled Workers who did not lose their jobs took
dramatic pay cuts Over 5000 banks collapsed in the 1st 3 years
Life savings of tens of thousands went with them Birth rate declined
Causes of the Great Depression
Overproduction by farm & factory Unbalanced Economy
Too much money was going into the hands of a few people
Credit Crisis Installment buying overstimulated production
International Depression Hastened by Hawley-Smoot Tariff of 1930
Hoover & the Depression “Hoovervilles” & “Hoover blankets” Tried to encouraged the public Encouraged local gov’ts to help their
citizens Assisted railroads, banks, & rural credit
corporations “Trickle Down Theory” Opposed direct help to the people
Pioneer of the New Deal
Public works – Congress approved $2.25 billion Hoover Dam
Opposed all schemes he deemed “socialistic” Muscle Shoals Bill – opposed by Hoover 1932 – Reconstruction Finance Corporation (RFC)
Became a gov’t lending bank to business & gov’t
1932 – Norris-La Guardia Act Outlawed antiunion contracts & legalized peaceful
strikes, boycotts, & picketing
The Bonus Army Veterans were demanding their pay now The “Bonus Expeditionary Force” went to
Washington in the Summer of 1932 Set up “Hoovervilles”
Federal troops were used to put down the protest Under Gen. Douglas MacArthur Authorized brutal force
Caused severe damage to Hoover’s public image
Japan Attacks China Sept 1931 – Japan invaded Manchuria. Why?
Stopped foreign trade with conquered area Violation of the League of Nations covenant
Geneva Meeting – League of Nations US sat unofficially on the council Nothing was accomplished Japan left the League
1932 – Stimson Doctrine US would not recognize any territorial acquisitions that
were achieved by force Japan also bombed Shanghai
Informal boycotts were launched in the US