“A Return to Normalcy”

“A Return to Normalcy” The policies of Republican presidents in the 1920s

What is “Normalcy”? • Return to “the good old days” • Get things back to “normal” • Americans tired of war, strikes, recession, race riots, fear… • Warren G Harding used this to become president • Gave simple, but emotional speeches • Promised isolation and less government

Popular, but secretly disrespected… • “Keep Warren at home. Don’t let him make any speeches. If he goes out on a tour, somebody’s sure to ask him questions, and Warren’s just the sort of… fool that’ll try to answer them.” - Senator Boies Penrose • Harding described himself as “a man of limited talents from a small town.” • “He looks like a president.” – Harry Daugherty, Harding’s political manager. • Harding was handsome, friendly, healthy looking, and focused on simple topics Americans liked hearing.

The Republican Era begins… • Free Enterprise System – All about private ownership of land and resources. Focus on competition for profit and success. • Harding lowered war-time taxes and reduced government spending. Extra money paid the national debt. This was his fiscal policy. • Prices of goods went down and unemployment dropped from 12% to 2%. • Overall policy: Less taxes, less government

Scandals! • Harding gave top jobs to his close friends • They betrayed him • Attorney General Daugherty took bribes from accused criminals • Sec. of the Interior (Albert Fall) gave oil-rich land in CA and WY to companies for bribes • Teapot Dome, Wyoming: known as Teapot Dome Scandal • Harding stood by friends, but died of heart attack in 1923

The Teapot Dome scandal

Coolidge and Hoover, the next Republicans • Calvin Coolidge • Believed in business without government interference • Cut all taxes and gov spending • Herbert Hoover • Self-made man, orphan from poverty • Worked for Wilson and Harding • Believed that if businesses prospered, there would be an “end to poverty as we know it”

Presidents are pressured to keep the US out of world affairs…

International Policy – Isolationism and Peace • After war, Americans want Isolationism • US still refused to join League of Nations, Harding wouldn’t even open mail from them • US promotes disarmament – reducing the military • Washington Naval Conference (1921) – US, GB, France, Italy, Japan agree to scrap large warships, limit navies • It had little real effect, countries kept building smaller ships • US, France, and 62 others sign Kellogg-Briand Pact, agree to outlaw war • Kind of pointless because it still allowed defensive wars

Debts from WWI • US banker Charles Dawes creates the Dawes Plan • US banks loan money to Germany • Germany pays their war reparations to GB and France • GB and France repay their loans from WWI to US banks • Everyone wins… for a little while, but now Germany owes a lot of money to the US…

US in Latin America • Harding and Coolidge both said they wanted stay out of Latin America • However, they both sent marines to stop revolutions that threatened American business investments • Only Hoover really embraced “non-intervention” • He did not send in troops even when Panama, Cuba, and Honduras had revolutions in 1931

The Boom Years • Henry Ford and mass production • Ford took cars from luxury item to something all families owned • Assembly lines made cars faster and cheaper, price went from $950 to only $290! • Mass production was so cheap that Ford doubled his workers’ salaries and reduced hours. The public loved him. • Innovation leads to new industries • Boom in cars led to other booms: steel, rubber, oil, highway construction, restaurants, gas stations, motels, and repair shops • By 1930 there were 38 domestic airlines and 5 international • Invention of plastic leads to cheaper clothes, cellophane, and RADIOS

Big businesses get BIGGER • Rep Presidents ignored anti-trust laws, allowed businesses to consolidate • Ford, General Motors, Chrysler made 90% of cars by 1929 • Large business like A&P supermarket drove small “mom-and-pop” grocery stores out of business • An “anti-chain” movement starts, but most people just go to the big stores

Speculation: Get Rich Quick! • US was doing well. Prices were low, jobs were up, and new inventions were making life easier. • People become speculators, taking the risk of buying something in the hope of selling it for more money later • Florida Land Boom – Speculators bought land in Florida without even seeing it, most of it turned out to be worthless and they lost all their money • Stock Market – Middle class people invested in stocks hoping to get rich, which made stocks increase in value… for a while

Meet Charles Ponzi… • Ponzi Scheme • Offers to invest your money and double it • People give him their money • Ponzi gives a lot of money back to some early investors, so it looks like he knows what he is doing • After a lot more people invest, he takes the money and leaves town

Left out of the boom: Not wealth for all • Wealth was unevenly distributed • A family of four needed $2,500 a year to live a good life back then • More than half of families earned only $1,500 • Farmers were deep in debt as crop prices decreased • Farmworkers (mostly Mex American and Asian American) suffered very low wages and poverty • African Americans were last to be hired, first to be fired, paid less than whites, and blocked from most unions • New tech meant less jobs for workers in old industries

“A Return to Normalcy”