The Politics of Normalcy (1920’s)

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The Politics of Normalcy (1920’s) Chapter 27

Normalcy What is normalcy? Why would Americans be craving normalcy in the 1920’s? Who would Americans look to for some normalcy?

A Republican Era Begins – Warren Harding Ohio newspaper owner won presidency in 1920 Republican congress Committed to free enterprise system = capitalism Repealed taxes, reduced spending, greater efficiency Renewed prosperity: prices ↓, unemployment ↓ (12%  2%)

A Republican Era Begins – Warren Harding Harding Administration Scandal Teapot Dome Scandal: Members of Harding’s administration were involved in taking bribes for public land The head of the Veteran’s Bureau stole money from the bureau “I can take care of my enemies all right, but my friends keep me walking the floors at night!” He took a long trip west to escape his troubles. He died while on the trip.

Calvin (“Silent Cal”) Coolidge Promotes Business Americans appreciated his small town values Integrity Hard work Thriftiness Continued many of Harding’s policies Cut taxes and spending Elected in 1924 Chose not to run in 1928

Herbert Hoover Elected in 1928 Believed in promoting business Believed that strong business would end poverty

Declaring Peace · After World War I, the U.S. resumed an isolationist world view. · The United States worked towards disarmament in the 1920’s in an attempt to reduce the world’s supply of armed forces and weapons of war.

Kellogg-Briand Pact – signed by the U. S Kellogg-Briand Pact – signed by the U.S., along with 60 other nations, this treaty outlawed war. * However, there were no plans on how to keep the peace or how to punish a country that declared war on another. Calvin Coolidge, Herbert Hoover, and Frank B. Kellogg, standing, with representatives of the governments who have ratified the Treaty for Renunciation of War (Kellogg-Briand Pact), in the East Room of the White House. (July 24, 1929)

Settling Europe’s War Debts

Republican Boom Years Post WW1 recession fades Unemployment ↓ Productivity ↑ Wages ↑ x2 US has 40% of world’s manufacturing Ford Motor Company Mass production  lower prices Lower prices  more sold

Stocks Surge · Millions of Americans invested in the bull market, becoming rich as stock prices rose.

How does the stock market work? You buy 100 shares of stock of x $5.00 per share How much money have you invested? $500.00 Scenario #1 stock increases to $20 per share How much are your 100 shares of stock now worth? How much profit have you made? 100 shares of stock $2,000.00 stock value x $20.00 per share - $500.00 initial investment $2,000.00 $1,500.00 net profit

How does the stock market work? You buy 100 shares of stock of x $5.00 per share How much money have you invested? $500.00 Scenario #2 stock decreases to $1 per share How much are your 100 shares of stock now worth? How much money have you lost? 100 shares of stock $100.00 stock value x $1 per share - $500.00 initial investment $100.00 $400.00 net loss