1. Chapter 24 – Section 1
“Boom Times”

2. Post WWI Economic Problems
Govt. cancelled billions of
dollars of contracts with
factories when war ended
Factories cut back production
Soldiers returned home looking for
jobs leading to a surplus of workers
Demand for products they couldn’t
buy during the war led to inflation
Wages didn’t rise with the cost of goods
Workers went on strike for higher wages
Soldiers returning
home from the
war sail past the
Statue of Liberty
in New York City

3. Presidential Election of 1920
The bad economy was a central issue and the party in power (the Democrats under Woodrow Wilson) were blamed
Americans were tired of international involvement (WWI) and the endless push for reforms (Progressive era)
Republican candidate Warren Harding promised a return to stability and prosperity – what he called a return to “normalcy”
Harding was elected president in 1920

4. Harding Strengthens the Economy
He fought to reduce the amount of money owed by the govt. and limited govt. involvement in the economy
economic theory of laissez faire: if you keep business unregulated (leave it alone) it will benefit everyone
Called for tax cuts for the wealthy so they could invest in new businesses and create jobs (known as the “trickle-down” theory
Sought economic isolationism (eg. Fordney-McCumber Tariff raised taxes on imports)
In the 1920s business boomed, and people’s income rose 35% -- giving them more money to spend on goods and leisure activities

5. Scandal Rocks Harding Presidency
Many of his appointees to govt. positions were friends of his from Ohio who used their positions to gain wealth illegally
Teapot Dome scandal – Sec. of Interior Albert Fall accepted money in exchange for allowing companies to drill for oil on federal land
Before the scandal became public Harding died (avoiding blame for the scandal)
What do you think this
cartoon is trying to describe?
How does it convey this?

6. Calvin Coolidge’s Presidency
VP who became President following Harding’s death in 1923
Fired those officials who had been involved in bribery scandals
Continued pro-business, laissez-faire policies (lower taxes on rich, fewer regulations on businesses, and high tariffs)
Did not think it was govt.’s job to solve social/economic problems of people
Vetoed bills to regulate prices for farmers (who struggled as production went up due to mechanization, but prices dropped while debts were high)
Coolidge during his
successful campaign
for re-election in 1924

7. U.S. Isolationism after World War I
U.S. followed policy of isolationism after WWI as they didn’t want to be pulled into any future foreign wars
Led to the signing of the Kellogg-Briand Pact in which 62 nations signed this pledge promising not to declare war unless in self-defense
Nations that signed the pact

8. Henry Ford
assembly line -- was introduced in 1920, and used conveyor belts to move parts and partly assembled cars from one group of workers to another, while workers stood in one place and did a specialized job, which cut production costs
Ford also raised wages (from $2-3 a day to $5), reduced the work day to 8 hours, and hired people other factories wouldn’t (eg. African-Americans)
Henry Ford introduced the Model T from his factory in Detroit
By cutting production costs, it became widely affordable (only cost $280 by 1925)

9. Automobile Industry Impact
Installment Buying – to make cars (and other expensive products in the future) more affordable, Ford let people pay a small amount of the cost each month until the debt was paid off
People could live further from work
Industries related to making cars grew (steel, rubber, glass, etc.)
Govt. built roads and bridges
Roadside businesses like garages, gas stations, restaurants, motels, grew.
People drove to distant places to vacation more

10. New Electrical Products
As more and more homes and businesses had electricity available to them more products using it were developed and sold
These included the radio, fans, dishwasher, washing machines, vacuum cleaners, refrigerators
Many of these reduced the time people spent on household chores giving them more time for leisure activities

11. Presidential Election of 1928
When Coolidge decided to not run for reelection his Sec. of Commerce, and former Food Admin. head from WWI, Herbert Hoover ran for the Republicans
During the campaign he stated that “We in America today are nearer to the final triumph over poverty than ever before in the history of any land”
He also promised Americans “a chicken in every pot and a car in every garage”
Why did he learn to regret these statements?