Warren G. Harding’s Presidency: “Return to Normalcy”
“Return to Normalcy” Republicans believed Americans disillusioned by war - want isolationism again [as little Euro involvement as possible] - simpler, pre-reform life promoted laissez faire economics
Harding Deals with Post War Issues 1) Washington Naval Conference, 1921 US, Japan, GB, Fr. & Italy reduce # of warships –first time countries agree to cut military 2) Kellog-Briand Pact, 1928 outlaws war 3) Budget Accounting Act streamlined federal spending [required annual budget]
4) Dawes Plan Fr and GB want immediate payment of Ger reparations US loans Germany $, Germany pays Fr & GB pay back US
Scandal During Harding’s Presidency “Ohio Gang”: corruption of friends in cabinet positions (graft & accepting bribes) Charles Forbes [Sec’y of Veteran’s Affairs] sells Vet hospital’s supplies to private hospitals
Teapot Dome Scandal Teapot Dome land in WY & Elk Hills, CA reserved for Navy Sec’y of Interior, Albert B. Fall, secretly “loaned” land to oil companies (gets $400,000) Fall found guilty of bribery [first cabinet member convicted of a crime]
Administration in Turmoil Scandals become public few days later Harding dies [heart attack] VP Calvin Coolidge becomes Pres “I have no troubles with my enemies, its my friends that are giving me sleepless nights”
The Business of America Under Coolidge How Does Coolidge’s Conservative Policies create Economic Growth During the 1920s?
Industry flourished under Coolidge continues Laissez Faire, pro- business Low taxes, easy credit = more profits, able to expand high tariffs on foreign imports Investment in stock market Result: Wages and productivity increases
Automobile Spurs Growth Paved roads and highways are built Best known is Route 66 from Chicago to LA - businesses along highways including gas stations, motels, restaurants First underwater tunnel for cars is built connecting NJ & NY (Holland Tunnel) Urban Sprawl: cities grow as workers able to drive to work faster, houses now come with garages
Airline Industry Begins Post WWI, planes used to transport mail Lindbergh & Earhart prove airplanes can be viable transportation Pan American Airways forms, begins carrying both passengers and packages
Standard of Living Rises Avg. annual income rises 35% Advances in electricity give power to more people Electrical appliances change life in the 20s Modern Advertising begins in the 20s Electric Iron Refrigerator Washing Machine
Superficial Prosperity Signs of problems to come were ignored Growing income gap between workers & managers Iron, RR, farming industries suffering buying on creditmonthly payments more than they can afford People gambling on stock market