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THE POLITICS OF
BOOM AND BUST
Chapter 32
1920s Politics: Prosperity1920s Politics: Prosperity
and Depressionand Depression
Theme 1Theme 1
TThe Republicanhe Republican
administrations of the prosperousadministrations of the prosperous
1920s pursued conservative, pro-1920s pursued conservative, pro-
business policies at home andbusiness policies at home and
economic unilateralism abroad.economic unilateralism abroad.
MEMORY DEVICEMEMORY DEVICE
FOR 1920sFOR 1920s
CONSERVATISMCONSERVATISM
HALT:HALT:
HHigher tariffsigher tariffs
AAnti-Unionnti-Union
LLaissez faireaissez faire
TTrickle Down theoryrickle Down theory
Political IdeologyPolitical Ideology
Liberalism/ProgressivismLiberalism/Progressivism
Gov’t regulation of business
Federal gov’t as an agency of
human welfare
Graduated income tax/lower tariff
ConservatismConservatism
Laissez Faire (“Rugged
Individualism”)
States’ Rights
Lower taxes/higher tariffs
Progressive-Republicans and
Wilson Democrats:1900-20
Democrats: 1932-present
“Old Guard” Republicans:
Gilded Age and 1920s
Republicans: 20th
century
Southern Democrats: 1877-1994
LibertyLibertyEqualityEquality
CYCLES IN AMERICAN HISTORYCYCLES IN AMERICAN HISTORY
Liberalism/ProgressivismLiberalism/Progressivism
Gov’t regulation of business
Gov’t Programs to Help People
Higher taxes
Civil Rights
ConservatismConservatism
“Rugged Individualism”
States’ Rights
Lower taxes
Moral reform
1. Progressive Era: 1900-1920
3. Democrats: 1932-1952
5. Democrats: 1960-1968
8. Democrats: 1992-2000
2. Republicans: 1920-1932
4. Republicans: 1952-1960
6-7.Republicans:1968-76;1980-92
9. Republicans: 2000-2008
LibertyLibertyEqualityEquality
1 23 45 6 78 9
WHO WERE THEY BETWEEN 1900-1932?WHO WERE THEY BETWEEN 1900-1932?
DemocratsDemocrats RepublicansRepublicans
Working class
Irish/“New Immigrants”
Catholics
Populists (western farmers)
Southern Whites
Middle Class/Upper Class
White Protestants
African Americans
WHO ARE THEY NOW?WHO ARE THEY NOW?
DemocratsDemocrats RepublicansRepublicans
Working class
African Americans
Latinos
Women
Intellectuals
Gays/Lesbians
Middle Class/Upper Class
White males
Evangelical Christians
White Southerners
I.I. Election of 1920:Election of 1920:
A. Republicans nominated SenatorA. Republicans nominated Senator
Warren G. HardingWarren G. Harding of Ohioof Ohio
(and(and Calvin Coolidge as viceCalvin Coolidge as vice
presidentialpresidential running mate)running mate)
1. Party platform was1. Party platform was
ambiguous regarding theambiguous regarding the
League of NationsLeague of Nations
2. Harding spoke of returning2. Harding spoke of returning
America toAmerica to “Normalcy”“Normalcy”
3. Conservative3. Conservative “Old Guard”“Old Guard”
wing of the party nowwing of the party now
dominateddominated
-- Progressive Republicans-- Progressive Republicans
lost much of theirlost much of their
influenceinfluence
Republican “Old Guard” Returns
 Warren Harding was one of the
best-liked men of his generation.
 But, weak, inept and only a mediocre
mind.
 The country wasn’t looking for more.
 Why?.
 Harding surrounded by scoundrels.
 “Ohio Gang”
LOAPUSH ch 32
GOP Reaction At The Throttle
 Harding = Laissez Faire
 Progressivism was dead.
 Goal was Laissez-faire plus; help guide
business toward profits.
 Put many like-minded people into
administration and the courts.
 In Harding’s three years as President, he
appoints four S. Ct. judges.
 Taft as Chief Justice
Rolling Back Progressivism
 In 1920s the Supreme Court supported
business. (Taft is Chief Justice)
 minimum wage law.
 federal Child Labor law,
 Adkins v. Children’s Hospital overturned a
law that gave women special protections in
the work place.
 Progressive legislation regulating business
was ignored and unenforced.
 trade associations.
The Aftermath Of War
 After war, Government got out of
the governmental control of
business
 Merchant Marine Act of 1920
 Labor saw major setbacks.
 A violent steel strike crushed in 1919
 Membership in unions declined by
nearly 30 percent between 1920 and
1930.
 Strikes were ruthlessly crushed.
 RR strike injunction.
Veterans
 Veterans were one of the few
groups to achieve lasting gains
through the war.
 1921 Veterans Bureau
 American Legion..
 Adjusted Compensation Act
 Bonus bill in 1922. Harding
vetoes.
 1924, Congress repasses the bill..
 Terms
 Cost 3.5 billion.
 Coolidge vetoes, but Congress
over-rides.
Benefits Without Burdens
 Harding was intent on isolationism, but U.S. couldn’t be
completely isolationist.
 US still technically at war with Axis
 1921 Congress passed a joint resolution that declared the war
officially ended.
 Republicans continued to despise the League of Nations
 Eventually forced to send unofficial observers
 Mid-East: GB and America were competing for oil-drilling
rights of oil-rich Arab nations
 Business wants disarmament. Why?
 Hard to draw down the navy. Why?
Five-Power Naval Treaty
 Washington “Disarmament” Conference in 1921-22.
 Two main issues: Naval disarmament and the situation
in the Far East.
 What does the US propose?.
 Becomes the Five-Power naval Treaty of 1922:
 US England and Japan agree to ratio of 5:5:3
 Brits and Americans agreed not to fortify their Far East
possessions, including the Philippines. Japan has no such
restrictions.
 Anglo-Japanese alliance replaced by the Four-Power Treaty.
Brit, Japan, France and US agree to preserve the status quo in
Pacific.
 China boosted by Nine-Power Treaty of 1922 which guarantees
a full open-door policy in China.
 What is the flaw in the treaty?
Limits Imposed by Washington
Conference, 1921–1922
Kellogg-Briand Pact (1928)
 Idealistic Americans urged nations to
foreswear war as an instrument of
national policy.
 US Sec. of State Kellogg reluctantly
supports after nearly 2 Million US
signatures
 Signed by 62 nations pledging not to use
war as an instrument of national policy.
 Americans believed that this would
prevent war.
 Huge loop-hole.
“It Works Both
Ways,” c.
1922
Hiking The Tariff Higher
 Isolationism reflected in economic policy.
 Business wanted to keep American markets for
American business.
 Fordney-McCumber Tariff Law. 1922 Hiked
tariff from 27 percent to 35%.
 President given the power to raise or lower
tariffs by 50%. Mostly used to adjust rates
higher. (32 up, 5 down)
 Tariffs hurt European countries trying to recover
from the war and pay war debts.
 Leads to international tariff war and to feeling of
economic oppression in countries such as
Germany.
A 1924 political cartoon shows fallout from the Teapot Dome Scandal
The Stench Of Scandal
 Harding
Administration was
beset with scandals.
 Charles Forbes,
 Attorney General
Daugherty
 Teapot Dome
LOAPUSH ch 32
II. Harding’s administrationII. Harding’s administration
A. ScandalA. Scandal
1. “Ohio Gang” or “Poker Cabinet”1. “Ohio Gang” or “Poker Cabinet”
-- Harding used his connections-- Harding used his connections
with friends in his cabinetwith friends in his cabinet to maketo make
money in somemoney in some instancesinstances
2. Veterans Bureau chief stole2. Veterans Bureau chief stole
about $200 million from fundsabout $200 million from funds toto
build veterans’ hospitalsbuild veterans’ hospitals
3.3. Teapot Dome ScandalTeapot Dome Scandal , 1923:, 1923:
one of the biggest presidentialone of the biggest presidential
scandals of the centuryscandals of the century
a. 1921, Sec. of Interior Alberta. 1921, Sec. of Interior Albert
Fall transferred naval oilFall transferred naval oil
reserves to the Interior Dept.reserves to the Interior Dept.
b. Harding signed the orderb. Harding signed the order
c. Fall took a $400,000 bribe toc. Fall took a $400,000 bribe to
lease the land to oilmenlease the land to oilmen
d. Scandal became public afterd. Scandal became public after
Harding’s death in 1923Harding’s death in 1923
-- Oilmen were acquitted-- Oilmen were acquitted
-- The case undermined-- The case undermined
Americans’ faith in theAmericans’ faith in the courtscourts
4. Attorney General Harry4. Attorney General Harry
Daugherty forced to resign forDaugherty forced to resign for
illegal sale of pardons andillegal sale of pardons and
liquor permitsliquor permits
a. He was acquitted in twoa. He was acquitted in two
trialstrials
b. One of his advisorsb. One of his advisors
committed suicidecommitted suicide
B. Harding died in 1923 while on aB. Harding died in 1923 while on a
speech tourspeech tour
1. The scandals had not yet1. The scandals had not yet reachedreached
the publicthe public
2. Stress from the scandals may2. Stress from the scandals may
have contributed to his deathhave contributed to his death
Calvin Coolidge, Andrew Mellon and
Herbert Hoover
D. Conservative economic agenda ofD. Conservative economic agenda of
the 1920s (initiated by Harding;the 1920s (initiated by Harding;
advanced by Coolidge & Hoover)advanced by Coolidge & Hoover)
1. Role of gov’t is to make1. Role of gov’t is to make
business more profitablebusiness more profitable
a.a. “Trickle down” theory:“Trickle down” theory:
tax cuts for corporations andtax cuts for corporations and
the wealthythe wealthy
 Put forth by Andrew MellonPut forth by Andrew Mellon
 Tax cuts would result in moreTax cuts would result in more
business investment thus creatingbusiness investment thus creating
more jobsmore jobs
 Tax burden shifted to the middle classTax burden shifted to the middle class
Harding Dies
 Harding dies in
August, 1923, before
the full scope of these
scandals has come to
light.
 His administration is
the most scandal-
ridden since Grant.
 Coolidge President.
LOAPUSH ch 32
Calvin Coolidge
 Coolidge embodies Yankee
Puritanism.
 Is not a dynamic leader.
 His policies compared to
Harding?
 His five years are relatively
uneventful and isn’t forced to
grapple with any serious
crisis.
 Coolidge helps to save the
Republican Party. How?
President Calvin CoolidgePresident Calvin Coolidge
1923-19291923-1929
RepublicanRepublican
LOAPUSH ch 32
Frustrated Farmers
 Farmers hit hard after the war. Prices
plummet. Why?
 In 1920s one-in-four farms goes bankrupt.
 Great depression starts in farm economy
long before it hits the rest of the economy.
 Capper-Volstead Act.
 McNary-Haugen Bill. What would it do?
 Coolidge twice vetoes this measure. Political
ire of farmers stays high as a result.
2. A depression hit farmers in the2. A depression hit farmers in the
1920s as 25% of farms were1920s as 25% of farms were
sold for debt or back taxessold for debt or back taxes
3. McNary-Haugen Bill3. McNary-Haugen Bill
a. Bipartisan “farm bloc” froma. Bipartisan “farm bloc” from
agricultural states sought toagricultural states sought to
aid farmersaid farmers
b. Planned to keep agriculturalb. Planned to keep agricultural
prices high by authorizing theprices high by authorizing the
gov’t to purchase surplusesgov’t to purchase surpluses
and sell them abroadand sell them abroad
c. Gov’t losses would bec. Gov’t losses would be
regained by a tax on farmersregained by a tax on farmers
d. Coolidge vetoed the bill twiced. Coolidge vetoed the bill twice
Election of 1924
 Rep. nominate Coolidge to be elected in
his own right, and he campaigns on the
basis of the status quo.
 Democrats are hopelessly divided
 Nominate John W. Davis, a wealthy
corporation lawyer who didn’t excite anyone.
102 ballots
 La Follette runs as third-party Progressive
candidate.
 Coolidge wins nearly 2-1 over Davis.
IV. Election of 1928IV. Election of 1928
A. NominationsA. Nominations
1.1. Herbert HooverHerbert Hoover was thewas the
Republican nomineeRepublican nominee
-- Platform of prosperity and-- Platform of prosperity and
prohibitionprohibition
2.2. Al SmithAl Smith nominated bynominated by
DemocratsDemocrats
a. First Irish Catholica. First Irish Catholic
nominated by anominated by a major partymajor party
b. Rural America andb. Rural America and the Souththe South
opposedopposed himhim
B. CampaignB. Campaign
1. Radio was used significantly for1. Radio was used significantly for
the first timethe first time
2. Hoover warned of “socialism”2. Hoover warned of “socialism”
and preached “ruggedand preached “rugged
individualism”individualism”
3. Religious bigotry surfaced3. Religious bigotry surfaced
regarding Smith’s Catholicismregarding Smith’s Catholicism
2. Coolidge defeated Davis and2. Coolidge defeated Davis and La FolletteLa Follette
382-136-13382-136-13
President Herbert HooverPresident Herbert Hoover
1929-19331929-1933
RepublicanRepublican
The Debt Problem
 Biggest foreign policy issue in second Coolidge
term was foreign debt owed US.
 America had gone from a debtor nation before
the war to a creditor nation after the war.
 The dollar was beginning to supplant the Pound
Sterling.
 America had loaned 10 Bill. to Allies during and
after the War, and American investors had
loaned an equal amount to Europe in the 1920s.
 US wants this money back, but Allies are having
a hard time repaying.
Europe asks for a Break
 Allies argue that US should write off as
war expense.
 What is their argument?
 Allies had sacrificed millions of lives while sat
on the sidelines. Allies can’t get repaid for
lost lives and manpower.
 US tariffs making it very hard to earn the
money necessary to repay the debt.
 Money Allies had borrowed had been spent in
US, helping to refuel the US economy.
Unraveling The Debt Knot
 American government intransigent on debt.
 Allies response?
 Effect on Germany.
 German reaction?
 Many urged that debts and reparations be
drastically scaled down or canceled.
 Coolidge response
 Contribution to isolationism.
 1924. Dawes plan.
 Why is it fatally flawed.
LOAPUSH ch 32
Election of 1928
 Coolidge decides not to run.
 Herbert Hoover.
 Hoover platform.
 Democrats, still quite
divided, nominate liberal
New York Governor Al
Smith. Seemingly and odd
choice. Why?
 Many dry, rural,
fundamentalist democrats
choked on his candidacy.
Hoover
 Hoover is American success
story.
 Against foreign entanglements.
Believed in isolationism.
 Had never run for or held office
before. He was used to the
business model.
 Uncomfortable asking for votes.
Shy and standoffish personally.
 Integrity and personal honor;
great humanitarian
administering US foreign aid.
 Very efficient and very bright.President Herbert Hoover
poses with his dog, King Tut.
Hoover Landslide
 Hoover runs as a business candidate.
 Did have some progressive instinct.
 Hoover and Smith try to keep the campaign
clean, but minions take it into the sewer.
 “Rum, Romanism and Ruin.”
 Hoover wins in a landslide, and Smith can’t even
hold all of the solid democratic South.
 Also a very solid Republican majority in
Congress.
Presidential Election of 1928
President Hoover’s First Moves
 Economy was roaring, but Farmers and non-union wage
earners were not getting their share of the prosperity:.
 Hoover did not believe in direct aid. Wanted private
sector response.
 Agricultural Marketing Act. Sets up Federal Farm
Board.
 What does it do? Why doesn’t it work?
 Farmers then turn to the tariff to cure their ills.
 Leads to the Hawley-Smoot Tariff of 1930. Probably one
of the worst pieces of legislation in US history. Why?
 Biggest tariff in US peacetime history.
 Raised tariff from 38.5 to nearly 60%.
 Foreign nations outraged.
 Seemed to be a declaration of economic warfare.
 Helped push the world toward depression. layed into the hands of
rising Nazism in Germany.
Theme #2Theme #2
TThe great crash of 1929 led to ahe great crash of 1929 led to a
severe, prolonged depressionsevere, prolonged depression
that devastated the Americanthat devastated the American
economy and spirit, and resistedeconomy and spirit, and resisted
Hoover’s limited efforts to correctHoover’s limited efforts to correct
it.it.
B.B. The Great Crash of 1929The Great Crash of 1929
1.1. Bull market:Bull market: stock valuesstock values
continued to rise during the ‘20scontinued to rise during the ‘20s
2.2. On marginOn margin buying of stocksbuying of stocks
allowed investors to purchaseallowed investors to purchase
stocks with little money downstocks with little money down
3.3. Overspeculation:Overspeculation: investorsinvestors
gambled prices would continuegambled prices would continue
to riseto rise
-- Hoover tried unsuccessfully to-- Hoover tried unsuccessfully to
curb speculationcurb speculation
Stock Market Crash
 Economy was near the
bursting point.
 Prices on the stock market
were vastly over-valued.
 Many had bought on the
margin. Problem with this.
 Black Tuesday. October
29, 1929.
 Causes
 In two months, investors
lost 40 Bill, in paper value.
More than total cost of
WWI.
Great Depression
 Opening bell of the worst and
longest depression in US and World
history.
 By the end of 1930, more than 4
Million unemployed. By 1932, 12
Mill.
 Wages and hours slashed. People
weren’t buying, so factories weren’t
producing, so there were no jobs.
 Many lost their life’s savings in the
Market.
 Was a huge hit to the America
Psyche.
 Where was Manifest Destiny?
 Where was the American Dream?
Causes of the Great Depression
 Over-production of both farm and factory.
 Too little being paid in wages.
 Over-expansion of credit through installment buying
helped over-stimulate production and over-extend the
buying power of consumers.
 Technology pushed people out of jobs.
 Economic anemia overseas caused by the debt burden
(and Hawley-Smoot). Dried up purchasing from Europe.
 Terrible drought in the Mississippi Valley caused a
number of farm foreclosures, putting farmers out of
business.
 Antiquated economic theory
 Lack of deposit insurance
Panic hits Wall Street on Black
Rugged Times For Rugged
Individualists
 Hoover trapped by
traditional economic
theory
 Had great sympathy for
those suffering.
 Wedded to the idea of
Laissez faire, saw
governmental handout as
sacrilege.
 Why did he fear
governmental handouts?
 Hoover believed that
recovery was just around
the corner.
Hoover Props Up Business
 As the depression
drags on private relief
organizations run out
of money.
 Hoover agrees to
provide aid to RR,
banks and credit
corps.
 What is the intent.
 What do critics claim?
 Why doesn’t it work?
Herbert Hoover: Pioneer Of The New
Deal
 Hoover eventually recommends that Congress
vote 2.25 Bill. for useful public works.
 1932—Reconstruction Finance Corporation
(RFC).
 Norris-La Guardia Anti-Injunction Act.
 Compared to his predecessors Hoover did a
great deal.
 Republican Congress was often very hostile to
Hoover’s plans.
The Bonus Army In Washington
 Vets of WWI were hard
hit.
 Bonus Expeditionary
Force. Congress, riots
ensue and two are killed.
 Hoover orders the army
to force the marchers to
leave.
 Gen. Douglas
MacArthur. Battle of
Anacostia Flats.
 Brings down more abuse
on Hoover.
Unemployment: 1928-1942Unemployment: 1928-1942
The U.S. Business Cycle:The U.S. Business Cycle:
1890-19401890-1940
LOAPUSH ch 32
Dorothea LangeDorothea Lange
Government-
sponsored
photographers like
Dorothea Lange
documented the
suffering that
occurred during the
Great Depression.
LOAPUSH ch 32
LOAPUSH ch 32
LOAPUSH ch 32
VIII.VIII. Hoover’s response to the GreatHoover’s response to the Great
DepressionDepression
A. Hoover did not respond quicklyA. Hoover did not respond quickly
enoughenough
1. Believed the biggest cause of1. Believed the biggest cause of
the depression was the weakthe depression was the weak
international economyinternational economy
2. Domestic measures to curb the2. Domestic measures to curb the
depressiondepression were slow towere slow to
appearappear
VIII.VIII. Hoover’s response to the GreatHoover’s response to the Great
DepressionDepression
A. Hoover did not respond quicklyA. Hoover did not respond quickly
enoughenough
1. Believed the biggest cause of1. Believed the biggest cause of
the depression was the weakthe depression was the weak
international economyinternational economy
2. Domestic measures to curb the2. Domestic measures to curb the
depressiondepression were slow towere slow to
appearappear
B. FarmingB. Farming
1. Pre-crash: Agricultural1. Pre-crash: Agricultural
Marketing Act (1929)Marketing Act (1929)
a. Designed to help farmers helpa. Designed to help farmers help
themselvesthemselves
b. Indicated Hoover’sb. Indicated Hoover’s
progressive tendenciesprogressive tendencies
-- Coolidge vetoed such-- Coolidge vetoed such
measuresmeasures
2.2. Federal Farm BoardFederal Farm Board createdcreated inin
1930 with a revolving fund of1930 with a revolving fund of $500$500
millionmillion
a. Lent funds to buy, sell, anda. Lent funds to buy, sell, and
store agricultural surplusesstore agricultural surpluses
b. Failed due to overproductionb. Failed due to overproduction
C. Attempts at economic recoveryC. Attempts at economic recovery
1. Volunteerism1. Volunteerism
a. Hoover believed in voluntarya. Hoover believed in voluntary
cooperationcooperation
b. Urged businesses to avoidb. Urged businesses to avoid lay-lay-
offs and wage cutsoffs and wage cuts
c.c. Secured no-strike pledgesSecured no-strike pledges
from labor leadersfrom labor leaders
d. Urged citizens to contributed. Urged citizens to contribute toto
charitiescharities
-- In reality, private charity-- In reality, private charity notnot
adequate to meet theadequate to meet the economiceconomic
calamitycalamity
3. Public works3. Public works
a. 1930, Congress provideda. 1930, Congress provided
$750 million for infrastructure$750 million for infrastructure
b. Hoover Dam constructionb. Hoover Dam construction
began in 1931 (completed inbegan in 1931 (completed in
1936)1936)
c. Efforts did not yieldc. Efforts did not yield
significant resultssignificant results
Hoover DamHoover Dam
Photo by Ansel Adams, 1942Photo by Ansel Adams, 1942
D.D. Bonus ArmyBonus Army
1. 14,000 unemployed veterans1. 14,000 unemployed veterans
marched on Washington in 1932marched on Washington in 1932
asking Congress for earlyasking Congress for early
payment of WWI-era bonusespayment of WWI-era bonuses
2. The Senate refused (at Hoover’s2. The Senate refused (at Hoover’s
insistence) and half the marchersinsistence) and half the marchers
went back homewent back home
LOAPUSH ch 32
E. Hoover EvaluatedE. Hoover Evaluated
1. Despite not doing enough,1. Despite not doing enough,
Hoover advocated more directHoover advocated more direct
gov’t involvement than anygov’t involvement than any previousprevious
president in U.S.president in U.S. historyhistory
2. His focus on maintaining a2. His focus on maintaining a
balanced budget throughbalanced budget through
increased taxes furtherincreased taxes further
decreased demanddecreased demand
3. By refusing to get off the gold3. By refusing to get off the gold
standard, the U.S. moneystandard, the U.S. money
supply remained stagnantsupply remained stagnant
4. Refusal of large-scale relief4. Refusal of large-scale relief
resulted in misery amongresulted in misery among
thethe massesmasses
3. 5,000 marchers remained and3. 5,000 marchers remained and
erected a Hooverville near theerected a Hooverville near the
Capitol, demanding earlyCapitol, demanding early
payment of their bonusespayment of their bonuses
4. Hoover called in the U.S. Army to4. Hoover called in the U.S. Army to
remove the Bonus Armyremove the Bonus Army
5. Hoover was seen by many as5. Hoover was seen by many as
heartless and suffered enormousheartless and suffered enormous
political damagepolitical damage
Students on Their Own
 JAPANESE MILITARISTS ATTACK
CHINA
 HOOVER PIONEERS THE GOOD
NEIGHBOR POLICY

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LOAPUSH ch 32

  • 1. THE POLITICS OF BOOM AND BUST Chapter 32
  • 2. 1920s Politics: Prosperity1920s Politics: Prosperity and Depressionand Depression Theme 1Theme 1 TThe Republicanhe Republican administrations of the prosperousadministrations of the prosperous 1920s pursued conservative, pro-1920s pursued conservative, pro- business policies at home andbusiness policies at home and economic unilateralism abroad.economic unilateralism abroad.
  • 3. MEMORY DEVICEMEMORY DEVICE FOR 1920sFOR 1920s CONSERVATISMCONSERVATISM HALT:HALT: HHigher tariffsigher tariffs AAnti-Unionnti-Union LLaissez faireaissez faire TTrickle Down theoryrickle Down theory
  • 4. Political IdeologyPolitical Ideology Liberalism/ProgressivismLiberalism/Progressivism Gov’t regulation of business Federal gov’t as an agency of human welfare Graduated income tax/lower tariff ConservatismConservatism Laissez Faire (“Rugged Individualism”) States’ Rights Lower taxes/higher tariffs Progressive-Republicans and Wilson Democrats:1900-20 Democrats: 1932-present “Old Guard” Republicans: Gilded Age and 1920s Republicans: 20th century Southern Democrats: 1877-1994 LibertyLibertyEqualityEquality
  • 5. CYCLES IN AMERICAN HISTORYCYCLES IN AMERICAN HISTORY Liberalism/ProgressivismLiberalism/Progressivism Gov’t regulation of business Gov’t Programs to Help People Higher taxes Civil Rights ConservatismConservatism “Rugged Individualism” States’ Rights Lower taxes Moral reform 1. Progressive Era: 1900-1920 3. Democrats: 1932-1952 5. Democrats: 1960-1968 8. Democrats: 1992-2000 2. Republicans: 1920-1932 4. Republicans: 1952-1960 6-7.Republicans:1968-76;1980-92 9. Republicans: 2000-2008 LibertyLibertyEqualityEquality 1 23 45 6 78 9
  • 6. WHO WERE THEY BETWEEN 1900-1932?WHO WERE THEY BETWEEN 1900-1932? DemocratsDemocrats RepublicansRepublicans Working class Irish/“New Immigrants” Catholics Populists (western farmers) Southern Whites Middle Class/Upper Class White Protestants African Americans
  • 7. WHO ARE THEY NOW?WHO ARE THEY NOW? DemocratsDemocrats RepublicansRepublicans Working class African Americans Latinos Women Intellectuals Gays/Lesbians Middle Class/Upper Class White males Evangelical Christians White Southerners
  • 8. I.I. Election of 1920:Election of 1920: A. Republicans nominated SenatorA. Republicans nominated Senator Warren G. HardingWarren G. Harding of Ohioof Ohio (and(and Calvin Coolidge as viceCalvin Coolidge as vice presidentialpresidential running mate)running mate)
  • 9. 1. Party platform was1. Party platform was ambiguous regarding theambiguous regarding the League of NationsLeague of Nations 2. Harding spoke of returning2. Harding spoke of returning America toAmerica to “Normalcy”“Normalcy” 3. Conservative3. Conservative “Old Guard”“Old Guard” wing of the party nowwing of the party now dominateddominated -- Progressive Republicans-- Progressive Republicans lost much of theirlost much of their influenceinfluence
  • 10. Republican “Old Guard” Returns  Warren Harding was one of the best-liked men of his generation.  But, weak, inept and only a mediocre mind.  The country wasn’t looking for more.  Why?.  Harding surrounded by scoundrels.  “Ohio Gang”
  • 12. GOP Reaction At The Throttle  Harding = Laissez Faire  Progressivism was dead.  Goal was Laissez-faire plus; help guide business toward profits.  Put many like-minded people into administration and the courts.  In Harding’s three years as President, he appoints four S. Ct. judges.  Taft as Chief Justice
  • 13. Rolling Back Progressivism  In 1920s the Supreme Court supported business. (Taft is Chief Justice)  minimum wage law.  federal Child Labor law,  Adkins v. Children’s Hospital overturned a law that gave women special protections in the work place.  Progressive legislation regulating business was ignored and unenforced.  trade associations.
  • 14. The Aftermath Of War  After war, Government got out of the governmental control of business  Merchant Marine Act of 1920  Labor saw major setbacks.  A violent steel strike crushed in 1919  Membership in unions declined by nearly 30 percent between 1920 and 1930.  Strikes were ruthlessly crushed.  RR strike injunction.
  • 15. Veterans  Veterans were one of the few groups to achieve lasting gains through the war.  1921 Veterans Bureau  American Legion..  Adjusted Compensation Act  Bonus bill in 1922. Harding vetoes.  1924, Congress repasses the bill..  Terms  Cost 3.5 billion.  Coolidge vetoes, but Congress over-rides.
  • 16. Benefits Without Burdens  Harding was intent on isolationism, but U.S. couldn’t be completely isolationist.  US still technically at war with Axis  1921 Congress passed a joint resolution that declared the war officially ended.  Republicans continued to despise the League of Nations  Eventually forced to send unofficial observers  Mid-East: GB and America were competing for oil-drilling rights of oil-rich Arab nations  Business wants disarmament. Why?  Hard to draw down the navy. Why?
  • 17. Five-Power Naval Treaty  Washington “Disarmament” Conference in 1921-22.  Two main issues: Naval disarmament and the situation in the Far East.  What does the US propose?.  Becomes the Five-Power naval Treaty of 1922:  US England and Japan agree to ratio of 5:5:3  Brits and Americans agreed not to fortify their Far East possessions, including the Philippines. Japan has no such restrictions.  Anglo-Japanese alliance replaced by the Four-Power Treaty. Brit, Japan, France and US agree to preserve the status quo in Pacific.  China boosted by Nine-Power Treaty of 1922 which guarantees a full open-door policy in China.  What is the flaw in the treaty?
  • 18. Limits Imposed by Washington Conference, 1921–1922
  • 19. Kellogg-Briand Pact (1928)  Idealistic Americans urged nations to foreswear war as an instrument of national policy.  US Sec. of State Kellogg reluctantly supports after nearly 2 Million US signatures  Signed by 62 nations pledging not to use war as an instrument of national policy.  Americans believed that this would prevent war.  Huge loop-hole.
  • 21. Hiking The Tariff Higher  Isolationism reflected in economic policy.  Business wanted to keep American markets for American business.  Fordney-McCumber Tariff Law. 1922 Hiked tariff from 27 percent to 35%.  President given the power to raise or lower tariffs by 50%. Mostly used to adjust rates higher. (32 up, 5 down)  Tariffs hurt European countries trying to recover from the war and pay war debts.  Leads to international tariff war and to feeling of economic oppression in countries such as Germany.
  • 22. A 1924 political cartoon shows fallout from the Teapot Dome Scandal
  • 23. The Stench Of Scandal  Harding Administration was beset with scandals.  Charles Forbes,  Attorney General Daugherty  Teapot Dome
  • 25. II. Harding’s administrationII. Harding’s administration A. ScandalA. Scandal 1. “Ohio Gang” or “Poker Cabinet”1. “Ohio Gang” or “Poker Cabinet” -- Harding used his connections-- Harding used his connections with friends in his cabinetwith friends in his cabinet to maketo make money in somemoney in some instancesinstances 2. Veterans Bureau chief stole2. Veterans Bureau chief stole about $200 million from fundsabout $200 million from funds toto build veterans’ hospitalsbuild veterans’ hospitals
  • 26. 3.3. Teapot Dome ScandalTeapot Dome Scandal , 1923:, 1923: one of the biggest presidentialone of the biggest presidential scandals of the centuryscandals of the century a. 1921, Sec. of Interior Alberta. 1921, Sec. of Interior Albert Fall transferred naval oilFall transferred naval oil reserves to the Interior Dept.reserves to the Interior Dept. b. Harding signed the orderb. Harding signed the order c. Fall took a $400,000 bribe toc. Fall took a $400,000 bribe to lease the land to oilmenlease the land to oilmen d. Scandal became public afterd. Scandal became public after Harding’s death in 1923Harding’s death in 1923 -- Oilmen were acquitted-- Oilmen were acquitted -- The case undermined-- The case undermined Americans’ faith in theAmericans’ faith in the courtscourts
  • 27. 4. Attorney General Harry4. Attorney General Harry Daugherty forced to resign forDaugherty forced to resign for illegal sale of pardons andillegal sale of pardons and liquor permitsliquor permits a. He was acquitted in twoa. He was acquitted in two trialstrials b. One of his advisorsb. One of his advisors committed suicidecommitted suicide B. Harding died in 1923 while on aB. Harding died in 1923 while on a speech tourspeech tour 1. The scandals had not yet1. The scandals had not yet reachedreached the publicthe public 2. Stress from the scandals may2. Stress from the scandals may have contributed to his deathhave contributed to his death
  • 28. Calvin Coolidge, Andrew Mellon and Herbert Hoover
  • 29. D. Conservative economic agenda ofD. Conservative economic agenda of the 1920s (initiated by Harding;the 1920s (initiated by Harding; advanced by Coolidge & Hoover)advanced by Coolidge & Hoover) 1. Role of gov’t is to make1. Role of gov’t is to make business more profitablebusiness more profitable a.a. “Trickle down” theory:“Trickle down” theory: tax cuts for corporations andtax cuts for corporations and the wealthythe wealthy  Put forth by Andrew MellonPut forth by Andrew Mellon  Tax cuts would result in moreTax cuts would result in more business investment thus creatingbusiness investment thus creating more jobsmore jobs  Tax burden shifted to the middle classTax burden shifted to the middle class
  • 30. Harding Dies  Harding dies in August, 1923, before the full scope of these scandals has come to light.  His administration is the most scandal- ridden since Grant.  Coolidge President.
  • 32. Calvin Coolidge  Coolidge embodies Yankee Puritanism.  Is not a dynamic leader.  His policies compared to Harding?  His five years are relatively uneventful and isn’t forced to grapple with any serious crisis.  Coolidge helps to save the Republican Party. How?
  • 33. President Calvin CoolidgePresident Calvin Coolidge 1923-19291923-1929 RepublicanRepublican
  • 35. Frustrated Farmers  Farmers hit hard after the war. Prices plummet. Why?  In 1920s one-in-four farms goes bankrupt.  Great depression starts in farm economy long before it hits the rest of the economy.  Capper-Volstead Act.  McNary-Haugen Bill. What would it do?  Coolidge twice vetoes this measure. Political ire of farmers stays high as a result.
  • 36. 2. A depression hit farmers in the2. A depression hit farmers in the 1920s as 25% of farms were1920s as 25% of farms were sold for debt or back taxessold for debt or back taxes 3. McNary-Haugen Bill3. McNary-Haugen Bill a. Bipartisan “farm bloc” froma. Bipartisan “farm bloc” from agricultural states sought toagricultural states sought to aid farmersaid farmers b. Planned to keep agriculturalb. Planned to keep agricultural prices high by authorizing theprices high by authorizing the gov’t to purchase surplusesgov’t to purchase surpluses and sell them abroadand sell them abroad c. Gov’t losses would bec. Gov’t losses would be regained by a tax on farmersregained by a tax on farmers d. Coolidge vetoed the bill twiced. Coolidge vetoed the bill twice
  • 37. Election of 1924  Rep. nominate Coolidge to be elected in his own right, and he campaigns on the basis of the status quo.  Democrats are hopelessly divided  Nominate John W. Davis, a wealthy corporation lawyer who didn’t excite anyone. 102 ballots  La Follette runs as third-party Progressive candidate.  Coolidge wins nearly 2-1 over Davis.
  • 38. IV. Election of 1928IV. Election of 1928 A. NominationsA. Nominations 1.1. Herbert HooverHerbert Hoover was thewas the Republican nomineeRepublican nominee -- Platform of prosperity and-- Platform of prosperity and prohibitionprohibition 2.2. Al SmithAl Smith nominated bynominated by DemocratsDemocrats a. First Irish Catholica. First Irish Catholic nominated by anominated by a major partymajor party b. Rural America andb. Rural America and the Souththe South opposedopposed himhim
  • 39. B. CampaignB. Campaign 1. Radio was used significantly for1. Radio was used significantly for the first timethe first time 2. Hoover warned of “socialism”2. Hoover warned of “socialism” and preached “ruggedand preached “rugged individualism”individualism” 3. Religious bigotry surfaced3. Religious bigotry surfaced regarding Smith’s Catholicismregarding Smith’s Catholicism
  • 40. 2. Coolidge defeated Davis and2. Coolidge defeated Davis and La FolletteLa Follette 382-136-13382-136-13
  • 41. President Herbert HooverPresident Herbert Hoover 1929-19331929-1933 RepublicanRepublican
  • 42. The Debt Problem  Biggest foreign policy issue in second Coolidge term was foreign debt owed US.  America had gone from a debtor nation before the war to a creditor nation after the war.  The dollar was beginning to supplant the Pound Sterling.  America had loaned 10 Bill. to Allies during and after the War, and American investors had loaned an equal amount to Europe in the 1920s.  US wants this money back, but Allies are having a hard time repaying.
  • 43. Europe asks for a Break  Allies argue that US should write off as war expense.  What is their argument?  Allies had sacrificed millions of lives while sat on the sidelines. Allies can’t get repaid for lost lives and manpower.  US tariffs making it very hard to earn the money necessary to repay the debt.  Money Allies had borrowed had been spent in US, helping to refuel the US economy.
  • 44. Unraveling The Debt Knot  American government intransigent on debt.  Allies response?  Effect on Germany.  German reaction?  Many urged that debts and reparations be drastically scaled down or canceled.  Coolidge response  Contribution to isolationism.  1924. Dawes plan.  Why is it fatally flawed.
  • 46. Election of 1928  Coolidge decides not to run.  Herbert Hoover.  Hoover platform.  Democrats, still quite divided, nominate liberal New York Governor Al Smith. Seemingly and odd choice. Why?  Many dry, rural, fundamentalist democrats choked on his candidacy.
  • 47. Hoover  Hoover is American success story.  Against foreign entanglements. Believed in isolationism.  Had never run for or held office before. He was used to the business model.  Uncomfortable asking for votes. Shy and standoffish personally.  Integrity and personal honor; great humanitarian administering US foreign aid.  Very efficient and very bright.President Herbert Hoover poses with his dog, King Tut.
  • 48. Hoover Landslide  Hoover runs as a business candidate.  Did have some progressive instinct.  Hoover and Smith try to keep the campaign clean, but minions take it into the sewer.  “Rum, Romanism and Ruin.”  Hoover wins in a landslide, and Smith can’t even hold all of the solid democratic South.  Also a very solid Republican majority in Congress.
  • 50. President Hoover’s First Moves  Economy was roaring, but Farmers and non-union wage earners were not getting their share of the prosperity:.  Hoover did not believe in direct aid. Wanted private sector response.  Agricultural Marketing Act. Sets up Federal Farm Board.  What does it do? Why doesn’t it work?  Farmers then turn to the tariff to cure their ills.  Leads to the Hawley-Smoot Tariff of 1930. Probably one of the worst pieces of legislation in US history. Why?  Biggest tariff in US peacetime history.  Raised tariff from 38.5 to nearly 60%.  Foreign nations outraged.  Seemed to be a declaration of economic warfare.  Helped push the world toward depression. layed into the hands of rising Nazism in Germany.
  • 51. Theme #2Theme #2 TThe great crash of 1929 led to ahe great crash of 1929 led to a severe, prolonged depressionsevere, prolonged depression that devastated the Americanthat devastated the American economy and spirit, and resistedeconomy and spirit, and resisted Hoover’s limited efforts to correctHoover’s limited efforts to correct it.it.
  • 52. B.B. The Great Crash of 1929The Great Crash of 1929 1.1. Bull market:Bull market: stock valuesstock values continued to rise during the ‘20scontinued to rise during the ‘20s 2.2. On marginOn margin buying of stocksbuying of stocks allowed investors to purchaseallowed investors to purchase stocks with little money downstocks with little money down 3.3. Overspeculation:Overspeculation: investorsinvestors gambled prices would continuegambled prices would continue to riseto rise -- Hoover tried unsuccessfully to-- Hoover tried unsuccessfully to curb speculationcurb speculation
  • 53. Stock Market Crash  Economy was near the bursting point.  Prices on the stock market were vastly over-valued.  Many had bought on the margin. Problem with this.  Black Tuesday. October 29, 1929.  Causes  In two months, investors lost 40 Bill, in paper value. More than total cost of WWI.
  • 54. Great Depression  Opening bell of the worst and longest depression in US and World history.  By the end of 1930, more than 4 Million unemployed. By 1932, 12 Mill.  Wages and hours slashed. People weren’t buying, so factories weren’t producing, so there were no jobs.  Many lost their life’s savings in the Market.  Was a huge hit to the America Psyche.  Where was Manifest Destiny?  Where was the American Dream?
  • 55. Causes of the Great Depression  Over-production of both farm and factory.  Too little being paid in wages.  Over-expansion of credit through installment buying helped over-stimulate production and over-extend the buying power of consumers.  Technology pushed people out of jobs.  Economic anemia overseas caused by the debt burden (and Hawley-Smoot). Dried up purchasing from Europe.  Terrible drought in the Mississippi Valley caused a number of farm foreclosures, putting farmers out of business.  Antiquated economic theory  Lack of deposit insurance
  • 56. Panic hits Wall Street on Black
  • 57. Rugged Times For Rugged Individualists  Hoover trapped by traditional economic theory  Had great sympathy for those suffering.  Wedded to the idea of Laissez faire, saw governmental handout as sacrilege.  Why did he fear governmental handouts?  Hoover believed that recovery was just around the corner.
  • 58. Hoover Props Up Business  As the depression drags on private relief organizations run out of money.  Hoover agrees to provide aid to RR, banks and credit corps.  What is the intent.  What do critics claim?  Why doesn’t it work?
  • 59. Herbert Hoover: Pioneer Of The New Deal  Hoover eventually recommends that Congress vote 2.25 Bill. for useful public works.  1932—Reconstruction Finance Corporation (RFC).  Norris-La Guardia Anti-Injunction Act.  Compared to his predecessors Hoover did a great deal.  Republican Congress was often very hostile to Hoover’s plans.
  • 60. The Bonus Army In Washington  Vets of WWI were hard hit.  Bonus Expeditionary Force. Congress, riots ensue and two are killed.  Hoover orders the army to force the marchers to leave.  Gen. Douglas MacArthur. Battle of Anacostia Flats.  Brings down more abuse on Hoover.
  • 62. The U.S. Business Cycle:The U.S. Business Cycle: 1890-19401890-1940
  • 64. Dorothea LangeDorothea Lange Government- sponsored photographers like Dorothea Lange documented the suffering that occurred during the Great Depression.
  • 68. VIII.VIII. Hoover’s response to the GreatHoover’s response to the Great DepressionDepression A. Hoover did not respond quicklyA. Hoover did not respond quickly enoughenough 1. Believed the biggest cause of1. Believed the biggest cause of the depression was the weakthe depression was the weak international economyinternational economy 2. Domestic measures to curb the2. Domestic measures to curb the depressiondepression were slow towere slow to appearappear
  • 69. VIII.VIII. Hoover’s response to the GreatHoover’s response to the Great DepressionDepression A. Hoover did not respond quicklyA. Hoover did not respond quickly enoughenough 1. Believed the biggest cause of1. Believed the biggest cause of the depression was the weakthe depression was the weak international economyinternational economy 2. Domestic measures to curb the2. Domestic measures to curb the depressiondepression were slow towere slow to appearappear
  • 70. B. FarmingB. Farming 1. Pre-crash: Agricultural1. Pre-crash: Agricultural Marketing Act (1929)Marketing Act (1929) a. Designed to help farmers helpa. Designed to help farmers help themselvesthemselves b. Indicated Hoover’sb. Indicated Hoover’s progressive tendenciesprogressive tendencies -- Coolidge vetoed such-- Coolidge vetoed such measuresmeasures 2.2. Federal Farm BoardFederal Farm Board createdcreated inin 1930 with a revolving fund of1930 with a revolving fund of $500$500 millionmillion a. Lent funds to buy, sell, anda. Lent funds to buy, sell, and store agricultural surplusesstore agricultural surpluses b. Failed due to overproductionb. Failed due to overproduction
  • 71. C. Attempts at economic recoveryC. Attempts at economic recovery 1. Volunteerism1. Volunteerism a. Hoover believed in voluntarya. Hoover believed in voluntary cooperationcooperation b. Urged businesses to avoidb. Urged businesses to avoid lay-lay- offs and wage cutsoffs and wage cuts c.c. Secured no-strike pledgesSecured no-strike pledges from labor leadersfrom labor leaders d. Urged citizens to contributed. Urged citizens to contribute toto charitiescharities -- In reality, private charity-- In reality, private charity notnot adequate to meet theadequate to meet the economiceconomic calamitycalamity
  • 72. 3. Public works3. Public works a. 1930, Congress provideda. 1930, Congress provided $750 million for infrastructure$750 million for infrastructure b. Hoover Dam constructionb. Hoover Dam construction began in 1931 (completed inbegan in 1931 (completed in 1936)1936) c. Efforts did not yieldc. Efforts did not yield significant resultssignificant results
  • 73. Hoover DamHoover Dam Photo by Ansel Adams, 1942Photo by Ansel Adams, 1942
  • 74. D.D. Bonus ArmyBonus Army 1. 14,000 unemployed veterans1. 14,000 unemployed veterans marched on Washington in 1932marched on Washington in 1932 asking Congress for earlyasking Congress for early payment of WWI-era bonusespayment of WWI-era bonuses 2. The Senate refused (at Hoover’s2. The Senate refused (at Hoover’s insistence) and half the marchersinsistence) and half the marchers went back homewent back home
  • 76. E. Hoover EvaluatedE. Hoover Evaluated 1. Despite not doing enough,1. Despite not doing enough, Hoover advocated more directHoover advocated more direct gov’t involvement than anygov’t involvement than any previousprevious president in U.S.president in U.S. historyhistory 2. His focus on maintaining a2. His focus on maintaining a balanced budget throughbalanced budget through increased taxes furtherincreased taxes further decreased demanddecreased demand 3. By refusing to get off the gold3. By refusing to get off the gold standard, the U.S. moneystandard, the U.S. money supply remained stagnantsupply remained stagnant
  • 77. 4. Refusal of large-scale relief4. Refusal of large-scale relief resulted in misery amongresulted in misery among thethe massesmasses
  • 78. 3. 5,000 marchers remained and3. 5,000 marchers remained and erected a Hooverville near theerected a Hooverville near the Capitol, demanding earlyCapitol, demanding early payment of their bonusespayment of their bonuses 4. Hoover called in the U.S. Army to4. Hoover called in the U.S. Army to remove the Bonus Armyremove the Bonus Army 5. Hoover was seen by many as5. Hoover was seen by many as heartless and suffered enormousheartless and suffered enormous political damagepolitical damage
  • 79. Students on Their Own  JAPANESE MILITARISTS ATTACK CHINA  HOOVER PIONEERS THE GOOD NEIGHBOR POLICY

Notes de l'éditeur

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  2. public domain (author unknown)
  3. public domain
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  5. Wikipedia
  6. Wikipedia
  7. Wikipedia
  8. Wikipedia
  9. Taken from J. Bradford DeLong, Slouching Toward Utopia? An Economic History of the Twentieth Century
  10. public domain
  11. public domain
  12. public domain
  13. Courtesy of Washington State Archives
  14. Wikipedia
  15. Wikipedia
  16. public domain
  17. National Archives