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The Politics of Boom and Bust

The Politics of Boom and Bust. Chapter 32 AP. What is meant by the “Republican Decade”?. The Executive Branch was dominated by three Republican presidents Congress was Republican TR died in 1919 --- Progressive wing of the Republican party died with him. The Election of 1920.

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The Politics of Boom and Bust

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  1. The Politics of Boom and Bust Chapter 32 AP

  2. What is meant by the “Republican Decade”? • The Executive Branch was dominated by three Republican presidents • Congress was Republican • TR died in 1919 --- Progressive wing of the Republican party died with him

  3. The Election of 1920 • Rep:Warren Harding - Ohio • Dem:James Cox- Ohio HardingCox • Electoral Vote: 404 127 • Popular Vote: 16 m 9 m • Percentage: 60 % 34%

  4. The Election of 1920 • The reason Harding wins… “I am not fit for this office and should never have been here.” … WGH

  5. The Election of 1920 • 1920 is the first presidential election in which women participate

  6. Who was Warren G. Harding? • Senator from Ohio • Less than “Presidential” leadership skills • Unclear and vague • Promised a “return to normalcy”

  7. “I cannot hope to be one of the great presidents, but perhaps I may be remembered as one of the best loved.” - Harding

  8. Harding – Personal Conduct? • Never committed a crime • Gambled … • Hypocrite… • 1905 – 1920 Carrie Philips… • 1919 Nan Britton…

  9. Nan Britton & Carrie Phillips

  10. Harding’s Cabinet? • Charles Evans Hughes – Sec. of State • Herbert Hoover – Sec. of Commerce • Andrew Mellon – Sec. of Treasury • Ohio Gang… • Albert Fall – Sec. of Interior • Charles Forbes – Veterans Bureau • Harry M. Daugherty – Attorney General

  11. “John, I can’t make a …thing out of this tax problem. I listen to one side and they seem right, and then… I talk to the other side and they seem just as right… I know somewhere there is an economist who knows the truth, but I don’t know where to find him and haven’t the sense to know him and trust him when I find him…What a job!” - WGH

  12. Harding Scandals “I have no problem with my enemies…But…my Gdmn friends…, they’re the ones that keep me walking the floors at night.” WGH

  13. Harding Scandals • Charles Forbes … • Thomas Miller… • Harry Daugherty… • Albert Fall – Teapot Dome Scandal …

  14. President and Mrs. Harding

  15. Harding’s Domestic Policy • Fordney-McCumber Tariff (1922)… • Reduction of taxes… • Less spending, less government, less presidential power • Immigration Act of 1921…

  16. Harding’s Foreign Policy?“We seek no part in directing the destiny of the world” - Harding • Isolationism • Signed a Congressional joint resolution ending WWI • Opposed U.S. membership in League • Washington Naval Conference (1921)… • Foreign Debt… • Dawes Plan…

  17. Harding’s Death • Disillusioned and despondent over scandals • Took trip to Alaska and California • Died at the Palace Hotel in San Francisco in 1923 • No autopsy • Doc Sawyer – Mrs. Harding’s doctor and Surgeon General – diagnosed ptomaine poisoning – probably a stroke

  18. Calvin Coolidge • Republican President • Pro-business • Keep taxes down and profits up • Give businesses more credit to expand • High tariffs on imports

  19. “…the chief business of the American people is business…The man who builds a factory builds a temple – the man who works there worships there.” --Calvin Coolidge

  20. “Silent Cal” • “Four – fifths of all our troubles in this life would disappear if we would only sit down and keep still”

  21. The Coolidge Presidency • Honest and respectable… • Immigration Act of 1924… • Federal Income Tax and “Trickle-down Economics” • McNary-Haugen farm bill… • Kellogg-Briand Pact 1928…

  22. Herbert Hoover – The Great Engineer • Sec. of Commerce • Assist business community • Associative state… • Bureau of Standards.. • Trade associations.. • Regulatory commissions…

  23. What was the nature of the “Bull Market”? • Stock prices increased… • Speculation… • Market value… • Dow Jones Industrial Average …

  24. What weakness was developing in the market? • 4 million Americans invested (3%) • Margin accounts… • Investment trusts… • Corporations and banks ... • Dow increased from 191 to 381 in 5 months in 1929

  25. What was the nature of the Crash of 1929? • Oct. 23 – Dow lost 21 points in 1 hour • Oct. 28 – 38 points lost (13%) • Oct. 29 – Black Tuesday • 16.4 million shares sold • Over 1 million shares – no buyers • Brokers called in margin accounts • Nov. - $30 billion gone

  26. The floor of the New York Stock Exchange – Oct. 1929

  27. Panic on Wall Street –October, 1929

  28. “The fundamental business of the country…is on a sound and prosperous basis.” - Hoover

  29. What were the underlying causes of the Depression? • Overproduction – underconsumption… • Farming… • Unequal distribution of income… • Stock market crash… • Bank failures… • Tariff and foreign debt policies…

  30. Family incomes 1929? • 2.3% over $10,000 • 8% over $5,000 • 71% less than $2,500 • 60% less than $2,000 • Over 42% less than $1,500 • 21% less than $1,000 • Ave. farm income $962

  31. What was the effect of the market crash? • Undermined confidence • Production decreased • Workers laid off • Lay offs led to further decline in spending • More cut-backs • More lay-offs

  32. Unemployed in Chicago

  33. Why did banks close? • Banks had loaned money to speculators • People defaulted on their loans • Depositors began to withdraw funds • 1930-1933 – 9,000 banks closed • Millions in deposits lost • Nation’s money supply fell by 1/3 • Decline in purchasing power

  34. “Run” on the bank

  35. How does the Depression become world wide? • Europe – war debts… • Germany – reparations… • 1930 Hawley Smoot Tariff – highest protective tariff • Europe could not sell to the U.S. • Set up tariffs against U.S. products • We could not sell to Europe • International trade dropped by 40%

  36. What is the human toll of the Depression? • Farm families lost farms • Bank closing denied people savings to fall back on when they were unemployed • Unemployment in 1932: • Cleveland 50% • Akron 60% • Toledo 80% • Psychological…

  37. What was the impact of the Depression on people’s lives? • Poor diet • Poor medical and health care • Delayed lives • Families split up • Schools closed (no taxes) • Suicide rate up 30%

  38. Who helped the unemployed? • Existing relief systems inadequate • Private charities…. • State governments… • Government officials… • Soup kitchens … • Hoovervilles… • Riding the rails…

  39. Hoovervilles

  40. Bread Lines

  41. What was the condition of rural American? • Farm incomes down 60% • 1/3 of all farmers lost their land • Dust Bowl ….

  42. What was Hoover’s response to the depression? • Sec. of Treasury Mellon – “wait it out” • Hoover • commitment to localism and private initiative • Solutions outside of government • Summoned business leaders to Washington…

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