The Politics of Boom & Bust CHAPTER 32 The Politics of Boom & Bust

LECTURE 1 THE PRESIDENCIES OF HARDING AND COOLIDGE

Strong belief in “laissez-faire” economics (leave alone or hands off) 1920’S PRESIDENTS The 1920s was a period dominated by Republican presidents: Herbert Hoover, Warren G. Harding, and Calvin Coolidge In general, Republicans believed in less government and less government intervention of business (opposite of Progressive Presidents) Strong belief in “laissez-faire” economics (leave alone or hands off) I can list the major presidents of the 1920’s and common beliefs of each

WARREN G. HARDING Ohio Gang Warren G. Harding (Republican) was elected President in 1920 Harding was the MOST presidential looking candidate Campaign slogan was a “Return to Normalcy” Harding was not ready for the position and was a poor reader of his friends and their motives (remind you of Grant?) Ohio Gang Ohio Gang was the famous group of advisors that Harding had who mainly were his friends )and very corrupt) Famous members of the Ohio Gang included: Charles Evans Hughes Andrew Mellon Herbert Hoover Albert Fall (corrupt) Harry Daugherty (corrupt)

I can describe the conditions in the US after World War I POST WW1 In the 1920s, the Supreme Court killed much of the Progressive legislation passed by earlier Progressive Presidents. Under Harding, anti-trust laws were ignored or barely enforced! Labor Unions did not fair well in the early years after WWI Membership dropped dramatically! Returning soldiers also faced some difficulties and Congress eventually pushed through the ADJUSTED COMPENSATION ACT Gave every former soldier a paid-up insurance policy due in 20 years I can describe the conditions in the US after World War I

1920’s FOREIGN POLICY Washington Disarmament Conference In the early years of Harding’s administration, it was apparent that America was returning to the foreign policy of isolationism One of the key areas of foreign policy concern was disarmament Washington Disarmament Conference At the Washington Disarmament Conference, the US proposed a reduction in fleets and encouraged others to follow them Kellogg-Briand Pact There were even those who wanted to “outlaw” war and they passed an act called the Kellogg-Briand Pact that said just this (outlaw war????) The major idea is that the US and much of the world was being put into a false sense of security!!!!!!! I can summarize US foreign policy in the 1920s

FOREIGN TRADE Fordney-McCumber Tariff Hawley-Smoot Tariff In foreign trade, the US feared being flooded with cheap European goods from a quickly recovering Europe! Fordney-McCumber Tariff Pushed tariff rates back up on goods coming into the United States European nations responded by upping their tariffs on American goods!!!! Hawley-Smoot Tariff Eventually the US responded by passing the Hawley-Smoot Tariff (under Hoover) that was the HIGHEST tariff and passed during peace time (see page 759) I can assess the impact of the important tariffs of the 1920s

SCANDALS OF HARDING ADM. Much like U.S. Grant, Warren G. Harding’s Administration was known for scandals, fraud, and corruption Harding was not involved but his “friends” often were including the following scandals Teapot Dome Involved priceless naval oil reserves in Teapot Dome, WY and in California—Albert Fall the bad guy here Veterans Bureau Charles Forbes looted about 200 million from the govt Att. Gen. Harry Daugherty Sold illegally pardons and liquor permits To America’s surprise, Harding died on August 2nd, 1923 Calvin Coolidge was his VP and would assume the role of President I can list and explain the scandals of the Harding Presidency

CALVIN COOLIDGE “The man who builds a factory builds a temple Calvin Coolidge was a quiet, reserved individual who’s focus was on business!!!!! Coolidge had many famous statements about business including: “The business of America is business” “The man who builds a factory builds a temple The man who works there worships there” To Coolidge, business people were the most important thing in our nation!!!!

1920’s economics SIGNS OF A DEPRESSION?? “Buying on Credit” For the most part, the 1920’s appeared to be a boom for the economy US came out of World War I the world’s largest creditor nation (what about Obama???) “trickle down” Secretary of Treasury Andrew Mellon advocated “tricle down” tax policies that gave tax breaks to the upper income brackets SIGNS OF A DEPRESSION?? “Buying on Credit” Buying on credit became common and popular Productivity us the US rose about 70 percent and wages were at an all time high BUT…farmers found the 1920s not to be so great after all!!!!!!!!! I can analyze and discuss the economics of the 1920s

Dawes Plan COOLIDGE FOREIGN POLICY Coolidge also had to deal with some problems in the foreign arena as well The biggest problem was foreign debts including German reparation payments French and British didn’t want to have to pay, Germany couldn’t really pay which made France and G. Britain even more angry Solution was the DAWES PLAN of 1924 which rescheduled debt payments from Germany and US bankers would loan the money to Germany, who would pay GB and France, who would pay the US (pretty much a big circle) When the Great Depression hit, this was all worthless anyway!!!! I can describe the foreign policy of Calvin Coolidge

LECTURE 2 HOOVER & THE GREAT DEPRESSION

“Rugged Individualism” ELECTION OF 1928 “A chicken in every pot, a car in every garage” Herbert Hoover The two major candidates in the presidential election of 1928 were Herbert C. Hoover (Rep) and Alfred E. Smith (Dem) Coolidge had chosen not to run again… “I choose not to run” Hoover ran on the continued prosperity of past Republican administrations Smith was a Roman-Catholic and supporter of alcohol (what his changes in the 1920s???) Radio was significant in this election and helped Hoover Hoover won in a landslide “Rugged Individualism” I can summarize the election of 1928

I can assess the importance of the Hawley-Smoot Tariff One of the most controversial acts of the Hoover Administration was the passage of the Hawley-Smoot Tariff of 1930 Was the highest tariff in American history Rate was at nearly 60% The other nations of the world saw it as an economic declaration of war and responded in kind Probably plunged the US further into a coming depression than we had to be!! I can assess the importance of the Hawley-Smoot Tariff

THE CRASH BEGINS On October 24th, 1929 there was a big drop in the Stock Market October 29th, 1929 —known as “Black Tuesday” as the Stock Market crashed down!!!! 5000 banks closed their doors Unemployment rose to 25% Soup and breadlines occurred Song of the period was “Brother, Can You Spare a Dime” I can describe the beginning of the Great Depression

HOOVER’S RESPONSE? RFC Hoovervilles/Hoover Blankets As the Depression set in, many Americans blamed Hoover for not doing enough to help Hoover, the “Great Humanitarian” of WWI was hated Hoovervilles/Hoover Blankets Hoover Blankets and Hoovervilles began to spring up and out Hoover was a believer in “Trickle Down Economics” or the idea that you cut tax rates at the top and prosperity will trickle down the economic ladder and create jobs Hoover responded with “rugged individualism” instead of government intervention…well, almost! The Reconstruction Finance Corporation was designed to provide indirect relief by assisting insurance companies, banks, agricultural organizations, railroads, and hard pressed states and local governments (sounds New Dealish, huh?) Hoover Dam —public money spent for jobs to build a dam on the Colorado River RFC I can discuss Herbert Hoover’s response to the Great Depression

I can explain the situation regarding the Bonus Army The reaction of Hoover to the Bonus Army destroyed any credibility Hoover had left THE EVENTS? WWI vets marched to Washington demanding their promised money early Hoover would not meet with them and sent the Army led by Gen. Douglas MacArthur (later famous in WWII) to remove them Made Hoover look very unsympathetic I can explain the situation regarding the Bonus Army

CAUSES OF GREAT DEPRESSION Over-speculation Overproduction by the farms and factories Overexpansion of credit through the installment plan Technological unemployment Worldwide depressions High tariffs Drought—”Dust Bowl”—see next chapter I can list and discuss the causes of the Great Depression

THE RISE OF JAPAN Manchuria Hoover Stimson Doctrine Hoover had some foreign policy issues during his presidency to deal with too Japan invaded Manchuria, China in 1931 and the League of Nations did nothing Some claim this is really the start of WWII Collective Security died and WWII was born in 1931 on the plains of Manchuria Hoover Stimson Doctrine Declared the US would not recognize any territorial acquisition that were achieved by force Herbert Hoover will treat Latin America well, but will not receive credit for it…FDR will!!! I can explain the rise of Japan in the 1930’s and the US response