Presidential Impact on the 1920s

Warren G. Harding

High Tariffs and Reparations  Britain and France couldn’t pay back the 10 Billion they had borrowed  They could do this by selling goods to the U.S. or getting money from Germany

Tariffs  1922 Tariff: raised taxes on some U.S. imports to 60 percent the highest level ever. The tax protected U.S. businesses; i.e. chemical and metals industries- it made it impossible for GB and France to pay back debt.

Why did we increase the tariff?  This tariff was intended to protect American farmers from overseas competition. This weakened international commerce. Other nations raised their tariffs as well.

European Debts to the US

Tea Pot Dome Scandal  Albert B. Fall, Secretary of the Interior, in 1921 secured transfer to several naval oil reserves to his jurisdiction. Tea Pot Dome, WY and Elk Hills, CA  Fall secretly leased reserves at Teapot Dome in Wyoming to Harry Sinclair of Monmouth Oil

 A Senate investigation later revealed that Sinclair had given bribe in cash and bonds and a herd of cattle.  Sinclair was acquitted in 1927 of charges of defrauding the government.  1929 Fall was convicted, fined, and imprisoned for bribery.

Was The Country Still For Harding? What do you folks think? Harding dies suddenly in San Francisco on August 2, 1923

Hyper-Inflation in Germany: 1923

Calvin Coolidge

Coolidge  Born in Vermont ( )  Soldiers Bonus Bill: Veterans of war were given a 20 year endowment even though Coolidge vetoed it in 1924, 2/3 passed it.  Reduced national debt through decrease in federal budget and lowering taxes for businesses.  “The Chief business of America is business.”

Dawes Plan  Dawes Plan: U.S. provided loans for Germany. It allowed Germany to pay reparation payments to Britain and France.  It helped Britain and France to repay their debts to the U.S.

Reflection Question  How did Harding ruin his reputation as a president? Provide an example from your lecture notes and description to answer the question.

Herbert Hoover ( )

President Hoover’s Responses… He didn't believe that the government should play an active role in the economy He persuaded bankers/business to follow his policy that gave tax breaks in return for private sector economic investment economy.

 Hoover also organized some private relief agencies for the unemployed  He worked out a system with European powers that owed U.S. money as a result of WWI debts = HOOVER MORATORIUM - put a temporary stop to war debt & reparations payments

Tariffs  Smoot- Hawley Tariff Act: Raised tariffs dramatically in order to limit competition for domestic products. This sparked international trade war  Euro. countries were to purchase American goods instead to stimulate American Economy.

Black Thursday  Stock Prices increased throughout the decade which went up 16 times their earnings in 1929  Careful investors realizing that stocks were overpriced began to sell to take back their profits.  On Black Thursday October 24, 1929 almost 13 million shares were traded, a large number for that time and prices fell precipitously.

Black Tuesday  Investment banks tried to boost the market by buying, but on October 29 Black Tuesday the market fell about 40 Points with 16.5 million shares traded.  A long decline followed until early 1933, and with it, depression.