Review of Previous Unit

United States History Laissez-faire Politics

American Politics and Business fA Return to Normalcy fRepublican Leadership fBig Business fFord and the Automobile fLeisure and Entertainment fHoover’s Election

A Return to Normalcy Harding promised a return to “Normalcy” −longing for a by-gone era Nation free of labor problems and racial strife Less filled with foreigners Less influenced by imported radical ideologies More attuned to the rhythms of small-town life More devout in Fundamentalist Christianity Less government interference

Republican Leadership 3 Republicans elected in the 1920s −each promised prosperity −Harding −Coolidge −Hoover

Warren G. Harding Generally conservative policies −taxes, tariffs, immigration restriction, labor rights, and business regulation Administration marred by Scandal −Teapot Dome unknown until after his death in 1923

Scandal Teapot Dome − oil reserve scandal that began during the administration of President Harding. − In 1922, Harding ’ s secretary of the Interior, Albert Fall, leased government oil fields at Teapot Dome, Wyoming to wealth friends in exchange for hundreds of thousands of dollars in bribes. − The investigation led to criminal prosecutions. Fall was indicted for conspiracy and for accepting bribes. Convicted of the latter charge, he was sentenced to a year in prison and fined $100,000.

Calvin Coolidge Succeeded to the presidency in 1923 −elected in his own right in 1924 −Worked to make good from the scandals of Harding Policies involved lowering federal taxes and maintaining high tariffs

Big Business Business regained folk hero status −relations between business and government had never been closer Calvin Coolidge −“Wealth is the chief end of man” −“The man who builds a factory, builds a temple. The man who works there, worships there” Herbert Hoover −“less government in business and more business in government"

Main Sources of the Boom Effect of WW I on technology Scientific Management Rapid increase in worker productivity psychology on consumption relationship between federal government and big business

Effect of WW I on Technology The war effort accelerated technological advances Shortage of labor meant industry had to be more efficient

Scientific Management and Worker Productivity Scientific Management −mathematical formula for labor, streamlining of tasks, and increase in production −implemented on a grand scale, with millions put into industrial research Worker productivity −increased by scientific management

The Business Boom Overall, the economy experienced growth and expansion in the 1920s Three factors of production were important −Machines −Factories −The Process of Standardized Mass Production

Self-perpetuating cycle standardized mass production led to better machinery in factories, which led to higher production and higher wages, which led to more demand for consumer goods which led back to more standardized mass production

Consumerism Buying on Credit −The Installment Plan: encouraged Americans to build up debt in order to buy consumer goods.

Psychology of Consumerism Americans were displaying a desire to get rich, and to do so with little effort Examples of “Conspicuous Consumption” −Radio −Motion pictures −Electric Appliances −The Automobile

Radio −By 1922, 3 million American households had radios −by 1929, purchases of receivers had increased by 2,500%, giving the industry annual sales of $850 million.

The Movies Movies −one of the ten largest industries −40 million tickets sold weekly in 1922, 100 million by 1929

Electric Appliances New appliances made household work easier for women −vacuum cleaners, toasters, washing machines, refrigerators Women became America’s greatest consumers

Automobile Industry Psychology of consumption was most evident in the growth of the automobile industry production rose from 2 million in 1920s to 5.5 million in 1929 By the late 1920s, there was one automobile for every five Americans Explaining the rise in popularity of cars Cost Credit

Ford and the Automobile Henry Ford was most responsible for promoting the automobile in the 1920s −“Americans can have any kind of car they want, and any color they want, as long as it's a Ford, and as long as it's black.”

The Model T

Impact of the Auto on American Life Economic Impact −promoted growth of other industries petroleum, rubber, steel −national system of highways was created federal funds became available for roads −created new service facilities service stations “Motels”

Impact of the Auto on American Life Social Effects of the Automobile: −Created a more mobile society "Sunday drive” Cars broke down the distinctions between urban and rural America Broke down the stability of family life

Ways Government supported Business High tariff policies. highest-ever schedule of tariffs for foreign-made goods. Andrew Mellon was Secretary of the Treasury repealed the excess profits tax and reduced the rates for corporate and personal income taxes. provided business leaders with a list of tax loopholes, drawn up, at Mellon’s request, by the IRS

Ways Government supported Business Cutbacks in the Federal Trade Commission (FTC) The FTC had been created to regulate big business and to look into unfair trade practices, but did less and less of this in the 1920s. Herbert Hoover encouraged price-fixing believed that the government was responsible for helping businesses profit.

American Heroes −Baseball Babe Ruth −Boxing Jack Dempsey −Golf Bobby Jones Flight −Charles Lindbergh −Amelia Earhart

Hoover’s Election Elected in 1928 −served as secretary of commerce under Harding and Coolidge −prosperity helped get him elected −the Stock Market Crash occurs in 1929 −the Great Depression occurs only a few months after he takes office

Preview of Next Unit Coming Attractions

Coming Soon: f Economic Crisis and the New Deal f Cause and Effect of the Stock Market Crash f Hoover’s Failing Policies f The Depression Years f Roosevelt: A New Voice f The New Deal