The Politics of Boom and Bust Chapter 32 The Politics of Boom and Bust
Election of 1920 Warren Harding “soft” Didn’t like to say no Staff tied to corruption
Industrial Gains Industrialists wanted government to stop restricting business Progressive legislation struck down Antitrust laws ignored ICC run by men who favored management/business
Pro-Business Legislation 1920: railroads returned to private ownership Lots of wage cuts
Veterans 1921: Veterans Bureau- operated hospitals and rehab for sick/injured 1919: American Legion- support/social group for veterans 1924: Adjusted Compensation Act
July 21st Congress “officially” makes peace from WWI
Foreign Policy Isolationism Except: America signed treaty with Britain to share oil reserves in Middle East
Foreign Policy Washington “Disarmament” Conference The Five Power Naval Treaty The Four Power Treaty
Kellogg-Briand Pact, 1928 Ratified by 62 nations Outlawed war EXCEPT defensive wars
Tariff Businessmen didn’t want European products sold in America Fordney-McCumber Tariff Law: raised from 27 to 35 % Problem: Europe in debt, needs to sell goods or else they can’t pay back debt to US
Scandal- Harding Veterans Scandal: $200 million federal funds stolen Teapot Dome: Albert Fall accepts a bribe to allow oil companies to drill on federal land
Harding Dies in 1923 Succeeded by “Silent” Calvin Coolidge
Coolidge Shy Boring speeches Continued policies
Farmers Machinery Crop surpluses Trade with other countries Government doesn’t help
Election of 1924 Democrat party: John W. Davis Republican: Calvin Coolidge Progressive: Robert LaFollette
Progressive Party Endorsed by Unions and farmers Government ownership of railroads Relief for farmers Opposed monopolies
Calvin Coolidge wins
Foreign Policy Isolationism Except: Latin American and Caribbean Loaned money to many struggling countries Allies couldn't pay back war debt
Dawes Plan 1924 America would loan money to Germany Germany would pay back war reparations Allies would pay back America Downturn in economy: US never got money
Election of 1928 Herbert Hoover (r): Isolationism Individualism Free enterprise Small government
Herbert’s First Moves Tried to help farmers (unsuccessful) Hawley-Smoot Tariff 1930: raised tariff to 60% Deepens economic depression Increased financial chaos in the world
5 Causes of the Great Depression 1. Farmer overproduction of crops and o veruse of land 2. Uneven distribution of income 3. Unbalanced foreign trade 4. Overextended personal debts 5. Mechanized industrialization
4 indicators of depression 1. Housing starts were declining 2. Business Inventories were up 3. stock market was overvalued 4. people were buying on credit
http://www.history.com/topics/great-depression/videos/1929-stock-market-crash
October 29, 1929 “Black Tuesday” By end of year, stockholders have lost $40 billion Businesses/banks shut down Leads to the Great Depression
Dustbowl Agricultural crisis, 1930s
Hoover’s Response Industry and self-dependence Welfare of people not the government’s responsibility Image of presidency
People’s Response to Hoover “Hoovervilles” Hoover flags Hoover leather Hoover wagons Hoover blankets
Hoover Plan: Government would help: rrds, banks, creditors Trickle down economics $2.25 million dollars for public works Vetoed “socialist” policies: Muscle Shoals Bill
Reconstruction Finance Corporation Lent money to banks, insurance companies, agricultural organizations, railroads, and state and local governments
“Bonus Army” WWI veterans organize Bonus Expeditionary Force (BEF) March on DC, demand bonuses Hoover sent in federal troops Increased public disdain
Foreign Policy 1931: Japan invades Manchuria (China) League of Nations unsuccessful Stimson Doctrine: US would not recognize any territory acquired by force Ignored by Japan
Latin America Hoover tries to improve relationships Pulls troops out of Haiti and Nicaragua “Good Neighbor” Policy