Chapter 23

1. The Politics of Boom and Bust Chapter 23

2. Essential Questions What was the legacy left by the Harding and Coolidge administrations? What were the economic factors that  contributed to the stock market crash and the Great Depression? What policies are associated with Hoover in reguards to the economy and foreign affaris?

3. Vocabulary • Ohio Gang • Adkins vs. Children's hospital • Kellogg-Brand Pact • Teapot Dome Scandal • "Silent Cal" Coolidge • Reparations • Herbert Hoover • Prohibition • Agricultural Market Act 10. Hawley-Smoot Tariff 11. Black Tuesday 12. Threadbare Thirties 13. Good Neighbor Policy 14. Veteren's Bureau 15. Norris-La Guardia Anti-Injunction Act

4. The Republican “Old Guard” returns Warren G. Harding (Republican) won the election of 1921 Harding = strong on the outside, and weak on the inside Surrounded by corrupt associates (“Ohio Gang”) Couldn’t say no to his friends

5. “Best Minds” Charles Evan Hughes became secretary of state Pittsburgh aluminum king, Andrew W. Mellon, became secretary of treasury Herbert Hoover became secretary of commerce The Worst Senator Albert B. Fall of New Mexico became secretary of interior Harry M. Daugherty became attorney general (part of “Ohio Gang”)

6. GOP Reaction at the Throttle • Harding = "front" for enterprising industrialists • McKinley-style old order • Hoped to improve on Laissez-Faire • Put courts and administrative bureaus in safekeeping • Harding appointed 4 judges (including Taft) •  Supreme Court stopped progressive legislation • killed child-labor law, and many other labor gains • restricted government intervention. • Adkins vs. Children's Hospital: reversed Muller vs. Oregon decision • Women were legal equals of men • Corporations no longer persecuted • Industrialsts set up trade associations • Encouraged by secretary Hoover (businesses should fend for themselves)

7. Wartime economy swiftly dismantled War Industries Board disappeared, and so did  progressive government regulation Railroads went back to private management gov't aslo tried to stay out of shipping Labor movements hurt Veterens got benifits Congress created Veterens Bureau American Legion lobbied for veterens' benifits Adjustment Compensation Act passed (Insurance policy) The Aftermath of War

8. America Seeks Benefits Without Burdens • U.S. rejected Treaty of Versailles: Still at war with Austria, Germany and Hungary • July 1921: Congress passed joint resolution declaring war ended •  America directed attention to oil in the Middle East • Harding supported Disarmement • "Disarmament" conference in 1921-1922 • All major naval powers (except Bolshevik Russia) • Agenda = Naval disarmament and the Middle East • Four-Power Treaty replaced Anglo-Japanese Alliance • Nine-Power Treaty agreed to nail open China's Open Door

9. Americans pushed for the "outlawry of war" • Quarreling nations would pledge to forswear war as an international policy • Sec. of State Kellogg signed Kellogg-Briand Pact (Pact of Paris) with French foreign minister • Defensive wars were still permitted • Virtually useless

10. Hiking the Tariff Higher • Businesspeople wanted to protect American market from cheap goods flooding in from recovering Europe • 1922: Fordney-McCumber Tariff Law • Duties on farm products increased • Said to equalize cost of American and foreign production • President authorized to reduce or increase duties up to 50% • Harding and Coolidge supported tariff increases • together, they authorized 32 increases • Tariffs prolonged the chaos in recovering post-war European nations • High tariffs hurt not only American-made goods, but European products as well

11. The Stench of Scandal • Series of Scandals during Harding Era • 1923: Colonel Charles R. Forbes resigned as head of the Veterans Bureau after getting caught stealing about $200 mil from the government in connection with building veterens' hospitals. • Teapot Dome scandal 1921: Sec. of Interior Albert B. Fall induced SecNav to transfer naval oil reserves at Teapot Dome  and Elk Hills to interior dept. Fall then leased the land to Harry Sinclare and Edward Doheny for a generous bribe. • 1924: Attorney General Daugherty accused of the illegal sale of pardons and liquor permits •  Harding was merciful to the accused • Harding died of pneumonia and thrombosis while touring the country to give speeches

12. "Silent Cal" Coolidge • VP Coolidge took office after Harding's death • True to stern Republican ideals\ • Horrible speaker and leader • Coolidge morally fumigated the Harding Administration

13. Frustrated Farmers • During the war, farmers prospered; war brought and end to government guaranteed high prices and massive purchases • Machines caused farmers to have an overabundance crops • Surpluses lead to lower prices • "Farm bloc" (agricultural states in congress) pushed for relief for farmers • Capper-Volstead Act: farmer corporations saved from antitrust prosecution • Despite many attemps, farm prices stayed down

14. A Three-Way Race for the White House in 1924 • Republicans nominated Coolidge • Democrats were so divided that they had trouble choosing a canidate • eventually settled on conservative John Davis • Senator Robert La Follette came forward to represent progressivists • Supported by AF of L and Socialist party • Main support came from poor farmers • Coolidge won the election • everyone was too focused on prosparity to vote for a reform canidate 

15. Foreign-Policy Flounderings • Isolation continued • Only exception to isolation: armed interventionism in the Caribbean and Central America • Troops remained in Haiti, and sent back to Nicaragua • Oil companies wanted military expedition in Mexico (Coolidge defused the situation) • International debts: America went from debtor to creditor during WWI • The Allies owed America $10 billion; Europeans strongly argued against their debts

16. Unraveling the Debt Knot • America insisted on getting paid back, and that made the Allies come down even harder on Germany • increased reparations = increased chance of anarchy in Germany • Statesman called for war debts and reparartions be scaled down, but America refused • Dawes Plan of 1924: rescheduled German reparations payments • U.S. bankers loaned money to Germany • U.S. was never fully paid (except by Finland)

17. The Triumph of Herbert Hoover, 1928 • Coolidge didn't run in 1928 election; Herbert Hoover was his chosen successor • Platform included prosperity and prohibition • Democrats nominated Alfred E. Smith • Alcoholic when most people supported prohibition

18. Radio figured prominantly in this election for the first time • Helped Hoover more than Smith • Below-the-belt tactics were employed • Religous bigotry (Smith = Catholic) •  Klu Klux Klan and the rest of the south hated Smith • Hoover was the ideal canidate, and won by a landslide

19. President Hoover's First Moves • Wage earners and farmers not enjoying the prosperity • Agricultural Marketing Act: designed to help farmers help themselves. Set up a Fedeal Farm Board to give money to farm organizations • Grain Stabilization and Cotton Stabilization Corporations to buy surpluses • Hoover used Congress and attempted to help farmers • Hawley-Smoot Tariff of 1930 started out to help farmers, but ended up being the highest protective tariff in the nation's peacetime history • Tariff made foreigners mad too, and caused depression in American and overseas

20. The Great Crash Ends the Golden Twenties • When Hoover took office, the "long boom" seemed endless • Everyone was prospering (except for the farmers) 

21. Catastrophic crash came in October 1929 • In part due to British raising interest rates • "Black Tuesday" October 29, 1929 • 16,410,030 shares of stock were sold • suicides increased drastically • Stock-market collapse caused business depression • 4 million Americans were jobless • Over 5,000 banks collapsed

22. Hooked on the Horn of Plenty • Main cause of the Great Depression was overproduction of both farm and factory • The nation's ability to produce goods had outrun it's ability to consume and pay for them • Overexpansion of credit stimulated production • Europe's economy also collapsed • "Threadbare Thirties" • Terrible drought hit the Mississippi in 1930

23. Rugged Times for Rugged Individuals • The Depression destroyed Hoover's popularity • Hoover was unable to relieve the Depression • Against government handouts (would destroy nationalism) • Hoover finally broke down and began to provide government aid to the poor and unemployed • Gave money to the top of the economic pyramid, and hoped it would trickle down to the unemployed • For the first time, indvidualism prooved unsuccessful • Hoover's efforts prevented an even worse depression

24. Hoover Battles the Great Depression • Hoover finally recommended that Congress vote immense sums for public works projects in line with his "trickle-down" philosophy • Hoover Dam on Colorado River • Fought any shemes that he reguarded "socialistic" • Reconstruction Finance Corporation became a government lending bank • benifited Americans, but came too late for maximum usefulness

25. After debate, Congress passed Norris-La Guardia Anti-Injunction Act in 1932 • Outlawed antiunion contracts and forbade the federal courts to issue injunctions to restrain strikes, boycotts and peaceful picketing • Hoover's efforts not supported by Republicans in Congress • Combined with Democrats to harass Hoover

26. Routing the Bonus Army in Washington • Veterens wanted paid for their service prematurely • Moved on Congress for the immediate payment of their entire bonus • Camped out in Washington hoping to intimidate Congress • Were kicked out of Washington by the army after causing riots • Carried out by General Douglass MacArthur with tear gas and bayonets • This action made Hoover disliked even more

27. Japanese Militarists Attack China • In September 1931 the Japanese imperialists attacked Manchuria • Overran and converted the province, and shut it's open door • Violated League of Naitons, and various other treaties • League was handicapped by the nonmembership of the United States • Stimson doctrine: U.S. refused to recognize any territories gained by force (Didn't slow down Japan at all) • Japanese bombed Shanghai in 1932 • Americans launched informal booycotts on Japanese goods • The League had the power and resources to stop Japan, but lacked the courage...WW2 was born

28. Hoover Pioneers the Good Neighbor Policy • The Depression made Americans less agressive toward Latin America • Economic imperialism became less popular • 1932: Hoover negotiated an new treaty with Haiti • Provided the complete withdrawal of American platoons by 1934 • Americans left Nicaragua after almost 20 years • Foundations of the "Good Neighbor Policy"

29. Review A.  William Howard Taft                                                     1. Passed as an insurence policy for B.   Hoover Dam                                veterens                                                     2. Constructed to help relieve the                                           Great depression ("trickel down" philosophy) C. Japanese invading Manchuria                                                     3.  A leading cause of WW2 D. Adjustment Compenstation Act                                                     4. Appointed a supreme court justice E.  Harding administration                      by Harding                                                     5. Remembered for it's scandals

30. Answers A - 4 B - 2 C - 3 D - 1 E - 5