The Harding Administration and the Business of America

1. The Harding Administration and the Business of America Mr. White’s US History 1

2. Main Idea and Big Questions • Main ideas: • The Harding administration appealed to America’s desire for calm, peace, and “normalcy” after the war, but resulted in scandal • Consumer goods fueled the business boom of the 1920s as America’s standard of living soared, though the prosperity had weaknesses and flaws. • Big questions: • How did the scandals of Harding’s presidency lead to a loss of credibility for Harding? • How did Coolidge and Hoover’s administrations use government to foster business and industry? • What were signs of increased prosperity and a higher standard of living in the United States? • What were signs of weakness in the economy in the 1920s?

3. Warren G. Harding’s administration worked to encourage peace and deal with post-war issues. Part I: Harding’s Postwar Issues

4. Washington Naval Conference • After the war, Warren G. Harding held the Washington Naval Conference to discuss naval disarmament between the great powers • The U.S. suggested that they, Britain, Japan, France, and Italy decrease naval armaments • All nations agreed to the Kellogg-Briand pact, but there was no way built into the agreement to enforce the treaty

5. Cycle of Debt • As a result of the war, Britain and France had debts to the U.S. – had taken out loans to pay for the war • Britain and France planned to use German war reparations to pay these debts • However, Germany was increasingly not able to pay the war reparations • When Germany defaulted on its loans, France invaded the Rhineland in Germany • To avoid further conflict, the United States agreed to lend money to Germany, to pay Britain and France, to pay the United States

6. Harding’s administration was plagued by scandals that resulted in a loss of credibility. PART II: Scandal

7. The Ohio Gang • Harding had a great deal of trouble as president • He appointed political cronies and friends to his cabinet – the “Ohio Gang.” • Many of these men got rich off government graft, kickbacks • Harding also had a great deal of trouble understanding the problems of his presidency – often couldn’t make a decision

8. Teapot Dome • The government had set aside oil reserves at Teapot Dome, Wyoming, for the use of the U.S. Navy • Albert B. Fall, secretary of the interior, had the reserves transferred from the department of the Navy to the department of the Interior • The reserves were leased to two private oil companies • Fall received nearly $400,000 in loans, bonds, and cash as “gifts” • Fall was found guilty of bribery – this basically destroys Harding’s credibility • Harding dies shortly thereafter and Calvin Coolidge takes over as president

9. Coolidge and Hoover’s administrations used government to foster business and industry, which flourished. Part III: Business and Industry

10. Coolidge and Hoover • Both Calvin Coolidge and his successor, Herbert Hoover, adopted pro-business government policies • Used protective tariffs to foster American business • Worked to keep taxes low • Worked to make credit available to business that wanted to expand

11. Automobiles • The automobile industry grew in the United States at this time • More and more people owned cars • More cars resulted in changes in society • Rural families could go into the cities for shopping and entertainment • Families could now travel long distances for vacations • Women and young people found new freedoms with the automobile • Workers could now live further away from their jobs – urban sprawl results • The automobile came to be a cultural symbol of prosperity

12. Ford and the Model T • Henry Ford’s innovate assembly line methods had sped up mass production • Cars could be produced cheaper – more people could afford them • Cars could be produced more quickly – expanding markets • Ford’s Model T was a great example of using these assembly-line methods • Parts were completely interchangeable; basically nothing was hand-crafted • As production increased, Ford streamlined and offered the car only in black

13. Airplanes • The airplane also grew as a means of transportation • In the United States, the plane was first used to carry mail – first flight was a failure, but it caught on gradually • As the science of weather forecasting caught on, planes began to carry radios and navigational instruments • In 1927, Pan American began transatlantic flights

14. As industry flourished, America’s standard of living rose. However, many signs pointed to a superficial prosperity Part IV: Rising Standards, Superficial Prosperity

15. The Growth of Industry • Industry had grown during World War I and continued to be strong after the war • The United States produced more consumer goods as time went on • Electricity and electrical conveniences and appliances grew • Advertisers, to sell their products, began to use psychology and related methods to encourage people to buy their products

16. Weaknesses in the Economy • Even though the U.S. seemed prosperous, many signs pointed to weaknesses in the economy • Consumer goods were growing; not as much growth in heavy industries • The income gap between the rich and poor grew – sign of a weak, small middle class • Iron and railroad industries weren’t making much profit • Farmers weren’t making much money, either, and many had taken out loans to meet World War I production

17. Credit • Spurred by this consumer spending, more and more people began to buy goods on credit, instead of cash • An installment plan was an arrangement to buy a product and pay over time for an interest rate • More and more people used credit to buy goods; some went into debt that they couldn’t pay • Some economists pointed to this as the sign of a weak economy, but many people felt that the economy was strong.

18. Summary • Remember our big questions: • How did the scandals of Harding’s presidency lead to a loss of credibility for Harding? • How did Coolidge and Hoover’s administrations use government to foster business and industry? • What were signs of increased prosperity and a higher standard of living in the United States? • What were signs of weakness in the economy in the 1920s? • So… • Harding lost credibility as a president because… • One way that Coolidge and/or Hoover fostered business or industry was… • One of the signs of increased prosperity and a higher standard of living in the U.S. was… • One of the signs of weakness in the economy in the 1920s was…