Chapter 32: The Politics of Boom and Bust

1. Chapter 32: The Politics of Boom and Bust Alex Kurtz

2. Essential Questions: 1. What happened as a result of isolationist policies pursued in the 1920s by America? 2. What happened to progressive politics during the '20s? 3. What methods did Hoover use to try to balance individualism with economic needs at the start of the Great Depression? Why do many people dislike him?

3. Important Vocabulary Terms: -Adkins v. Children's Hospital (1923)    -Dawes Plan of 1924 -Esch-Cummins Transportation Act of 1920    -Individualism -Merchant Marine Act of 1920    -Free Enterprise    -Small Gov't -American Legion    -Radio    -Agricultural Marketing Act of 1929 -Adjusted Compensation Act    -Federal Farm Board    -Black Tuesday -Isolationism    -Grain / Cotton Stabilizing Corporations -Disarmament    -Hawley-Smoot Tariff of 1930    -Stock-Market Crash -Five-Power Naval Treaty of 1922    -Great Depression -Four-Power Treaty    -Public Works    -Muscle Schoals Bill -Pact of Paris    -Reconstruction Finance Corporation -Fordney-McCumber Tariff law of 1922    -Stimson Doctrine -Teapot Dome Scandal    -Norris-La Guardia Anti-Injunction Act -Capper-Volstead Act    -Bonus Expeditionary Force -McNary-Haugen Bill    -Manchuria    -"Good Neighbor" Policy

4. NOTES:

5. The Republican "Old Guard" Returns • President Warren G. Harding elected; he was good-looking on the outside but had a somewhat disappointing character. :( •  Charles Evans Hughes= Secretary of State •  Herbert Hoover= Secretary of Commerce •  Andrew W. Mellon= Secretary of the Treasury •  The people above were good members of the cabinet! However there were some questionable people involved.. •  Albert B. Fall= scheming anti-conservationist = secretary of the interior •  Harry M. Daugherty= attorney general • These two were involved in scandals and were not trusted by everybody.

6. Government officials advocated a very strict laissez-faire type of capitalism. Progressive ideas and laws were being disregarded and knocked down. Adkins v. Childrens' Hospital invalidated the womens' minimum wage law; they didn't deserve it because they could now vote, according to the 19th amendment. Anti-trust laws= ignored, corporations were given the proper conditions so that they could once again expand. People who were in charge of the Interstate Commerce Commission showed sympathy to railroad managers. GOP Reaction at the Throttle

7. The Aftermath of War • During war, the government controlled much of the economy. Afterwards this privilege was revoked. •  Merchant Marine Act of 1920- Shipping board could dispose of wartime fleet at low prices •  La Follette Seaman's Act of 1915- Prevented American shipping from thriving as a result of foreign competition • Labor lost much power •  Veterans Bureau created • Operated hospitals • Provided rehab for the disabled • American Legion created- became distinguished for "militant patriotism, conservatism, and antiradicalism" • Adjusted Compensation Act: paid-up insurance policies given to any former soldiers

8. July 1921- Joint resolution passed by Congress, declaring the war officially over Isolationism was still a prominent ideal, and America did not cooperate much with the League of Nations during this period.     *we couldn't completely ignore the rest of the world, and at one point US secured the rights to share oil-rich lands with Britain Disarmament Washington "Disarmament" Conference produced a plan allowing for the U.S., Britain, and Japan to have a 5:5:3 ratio of ships (respectively) Japan and Britain had to be watched and patrolled for suspicious hostile activity America Seeks Benefits Without Burdens

9. America= "ship scrapper" -Five-Power Naval Treaty of 1922 ; Britain and America wouldn't fortify possessions in the far east, but the Japanese weren't subjected to this -Four-Power Treaty- included the U.S., Britain, Japan, and France, preserved existing condition in the Pacific and Anglo-Japanese Treaty -Nine-Power Treaty of 1922 kept China's Open Door policy *no limits placed on small ships *Four-Power Treaty was basically useless because the U.S. approved it but refused to be bound Kellog-Briand Pact (Pact of Paris)- Nations that signed promised to no longer use war as an offensive means. Ratified by 62 nations. America Seeks Benefits Without Burdens cont.

10. Hiking the Tariff Higher Fordney-McCumber Tariff Law -Raised Tariff to 35% Harding and Coolidge were more likely to RAISE tariffs than to ever decrease them. Problem presented because the European nations could not sell enough goods to gain money to pay back their debts.

11. The Stench of Scandal • Charles R. Forbes caught stealing $200 million from the government- resigned as head of the Veterans' Bureau • Teapot Dome Scandal- priceless naval reserved were leased by Albert B. Fall to Harry F. Sinclair and Edward L. Doheny, after being bribed with about $100,000. • Harry Daugherty was accused of selling pardons and liquor permits illegally •  President Harding died August 2, 1923

12. "Silent Cal" Coolidge A very shy man named Calvin Coolidge became president after Harding's death. Helped morally reconstruct the "Harding regime." Wanted to reduce taxes and debts. Became an important figure in the Republican party.

13. The government could no longer guarantee high prices, and there was less of a chance that foreign nations would make big purchaces after peace was declared.  Machines made overabundant crops more likely by dramatically increasing production Capper-Volstead Act exempted farmers' marketing cooperatives from anti-trust prosecution. McNary-Haugen Bill attempted to keep prices high on agricultural products by letting the government buy surpluses and sell them abroad.     **Coolidge vetoed this twice. Frustrated Farmers

14. A Three-Way Race for the White House in 1924 Democrats: John W. Davis VS. Progressives: La Follette (Endorsed by the American Federation of Labor, and by farmers. Platform called for gov't ownership of railroads, relief for farmers, hated monopoly, wanted Congress to have less power.) VS. Republicans: Calvin Coolidge (who WON)

15. **Isolationism** -Except, American troops stayed in Haiti 1914-1934, and Nicaragua from 1926-1933 1926 Coolidge diplomatically resolved a conflict over oil reserves brought about by Mexico European debt to America causing problems; American investors had loaned >$10 million and they wanted repayment, but many Europeans thought that these loans should just be written off as war costs. It was also difficult for Europe to pay because of American postwar tarriff laws. Foreign-Policy Flounderings

16. Unraveling the Debt Knot Britain and France placed huge reparation payments on Germany, because so much was demanded of them from the United States. Should war debts and reparations even be paid? Dawes Plan of 1924 resolved this issue. Rescheduled German payments, and allowed for more American loans to germany. $$$ from U.S. ---> Germany ---> Britain/France ---> U.S. (We never really gained or lost anything). And, we never did really get our money from Europe.

17. Calvin Coolidge chose not to run. Herbert Hoover = logical successor. (Alfred E. Smith was his competitor from the Democrats, who was not a supporter of prohibition and was a Roman Catholic in a mostly protestant country) -Faith in American individualism, free enterprise, and small government -Radio mixed well with his personality which helped him win the campaign -Poverty ---> Prosperity -Hoover won 444 to 87 electoral votes The Triumph of Herbert Hoover, 1928

18. President Hoover's First Moves Agricultural Marketing Act set up the Federal Farm Board and was designed to help the farmers. -They set up a Grain Stabilization Corporation, and a Cotton Stabilization Corporation to buy surpluses and hopefully boost falling prices Hawley-Smoot Tariff raised the tariff to 60%! -Made depression worse -Increased financial chaos internationally     *foreigners hated this tariff as it widened trade gaps

19. British raised interest rates and that helped trigger this "Black Tuesday" , October 29, 1929, millions of stocks sold in a panic. By the end, stockholders had lost $40 million Millions lost their jobs and thousands of banks failed! :( The Great Crash Ends the Golden Twenties

20. Hooked on the Horn of Plenty Causes/Contributions to the Great Depression: -Farm and factory overproduction (people could produce goods more quickly than they could sell or consume them) -Overexpansion of credit -Worsening of Britain and France's conditions -Terrible drought in the Mississippi valley in 1930 Loss of jobs led to popular discontent with the current government, including hoover. 

21. Rugged Times for Rugged Individuals Hoover received most blame for the depression. This was unfair, but, he didn't pass all of the possible preventative measures that he could have that might have helped boost the economy. He believed that the government should play no role in the welfare of the people. He eventually came up with a plan so that the government could assist the railroads, banks, & rural credit corporations. He hoped that the prosperity would "trickle down." Even so, he was criticized for giving money to the people who had supposedly started the depression.

22. Got $2.25 billion from Congress to use for public works. Strongly opposed to "socialistic" plans. Vetoed: Muscle Schoals Bill designed to dam Tennessee R. and sell gov't-produced electricity. Reconstruction Finance Corporation (RFC) designed to help insurance companies, banks, ag organizations, RRs, and state/local gov'ts. Norris-La Guardia Anti-Injunction Act outlawed anti-union contracts, didn't allow federal courts to restrain strikes, boycotting, peaceful protesting, etc. Herbert Hoover Battles the Great Depression

23. Routing the Bonus Army in Washington Bonus Expeditionary Force- over 20,000 people, veterans demanding the immediate payment of their bonus Hoover sent in army to evacuate the group when they were gathering in Washington D.C. Americans began to hate him even more because he falsely accused the leaders of the BEF to be communists.

24. Japanese imperialists invaded Manchuria. They "shut" the Open Door. ^ This was a violation of a League of Nations covenant. Meeting arranged in Geneva, Switzerland. Ended up driving Japan out of the League. Japanese bombed Shanghai in 1932. Stimson Doctrine- issued by the U.S., declaring that we would not recognize territory that had been acquired by force. Japan ignored this and continued to move into Shanghai. Japanese Militarists Attack China

25. Hoover withdrew troops from Latin America. This showed signs of international goodwill. Good Neighbor Policy. Hoover Pioneers the Good Neighbor Policy

26. 1919- American Legion founded 1920- Esch- Cummins Transportation Act, Merchant Marine Act 1921- Veterans Bureau, Capper- Volstead Act 1922- Five-Power Naval Treaty, Four-Power and Nine-Power Treaties, Fordney-McCumber Tariff Law 1923- Adkins v. Children's Hospital, Teapot Dome scandal, Coolidge assumes presidency 1924- Adjusted Compensation Act, Dawes Plan 1924- Coolidge wins 3-way election 1926- US occupies Nicaragua 1928-Kellog-Briand Pact, Hoover wins presidency, goodwill tour of Latin America 1929- Agricultural Marketing Act sets up Federal Farm Board, stock-market crash 1930- Hawley-Smoot Tariff 1931- Japanese invade Manchuria 1932- Reconstruction Finance Corporation established, Norris-La Guardia Anti- Injunction Act Chronology: Important Events

27. REVIEW You should be able to answer each of these questions with a concise and thoughtful paragraph! What were the main causes of the Great Depression? What resulted from American demands for Europeans to pay their debts? Name and describe a few scandals associated with this period. For what reasons did Hoover probably pioneer the Good Neighbor Policy? Why the sudden need for international goodwill? Choose and define 3 vocabulary terms from the list at the beginning of this slideshow.

28. THE END (but not of the depression..)