Politics & Economy in the US in the 1920 ’ s

Politics & Economy in the US in the 1920’s

Warren G. Harding • 1921-1923 (29th) • Republican • Wanted Normalcy & Isolationism • Key Policies • Immigration (Quota System) • Died in office in 1923 (heart attack) • Vice President Coolidge took over

Failures His main problem was that he didn’t understand many of the issues facing the US Several of Harding’s appointee’s were caught (implicated or convicted ) illegally selling government supplies to private companies, bribery, fraud, conspiracy, and other forms of wrongdoing (his “Poker Cabinet”) Teapot Dome Scandal Sacco & Vanzetti No real post WWI leadership Harding died before these events affected his presidency. He is now seen as one of the worst presidents in American History. Warren G. Harding Con’t

Teapot Dome Scandal • The worst case of corruption was the Teapot Dome Scandal • The government set aside oil-rich public land in Teapot, WY • Secretary of Interior Albert Fall secretly leased the land to two oil companies • Fall received $400,000 from the oil companies and a felony conviction from the courts

Calvin Coolidge • 1923-1929 (30th) • Republican • Key Policies • “What’s good for business is good for America” • Private interest over social reform • Johnson-Reed Act (bans Asian immigration) • Dawes plan of 1924 (reduces Germany’s war reparations) • Kellogg Briand Pact 1928 (Make war illegal)

Successes Restored people’s faith in government Lowered taxes Failures Did not understand the economy Did not want to interrupt the booming economy Did not see the crash coming Calvin Coolidge Con’t

Herbert Hoover • 1929-1933 (31st) • Republican • Key Policies • Raised tariffs • Reconstruction Finance Corporation (Stimulate business) • “Laisse Faire” (to let alone)

Successes Reconstruction Finance Corporation Provide food relief after WWI Failures Ignored the heartland (farming) Stock Market Crash (underestimated impact) Herbert Hoover Con’t

3 areas of unrest during the 1920s: • Labor disputes • Red Scare (communism) • Immigration (nativism)

1. Labor Disputes:During the war, workers had not been allowed to strike, because the government would allow anything to interfere w/ the war effort.

In 1919 (after ww1) • Union membership soared. • 4 mil. workers participated in more than 3,000 strikes.

The United Mine Workers’ Strike In protest of low wages & long work days, UMW president John L. Lewis called his union members out on strike • 27% pay hike

Union Membership: 1921 – 1929Tough times for Unions • Union membership dropped in these years due to the “American Plan” (plan to demoralize & destroy unions) • African Americans were excluded from membership and immigrants were willing to work in poor conditions • Open-shop associations (blacklist union members) • “yellow dog” contracts (worker agreed not to join a union or organize)

Welfare Capitalism A form of capitalism in which companies provide benefits for their workers in an effort to keep employees happy & productive. This includes: • pension plans • paid vacations • profit-sharing plans

2. The Red Scare • The Bolshevik Revolution in 1917  Communism in Russia Communism is an economic and political system based on a single-governmental party, equal distribution of resources, no private property and rule by a dictatorship • Communist leaders advocated a worldwide revolution that would put an end to capitalism. Private Property Free Enterprise

In America, about 70,000 radicals (< .1% of US population) joined the Communist Party. Public Fear

Adding to this fear was the mailing of several dozen bombs to government & business leaders including: • John D. Rockefeller • J.P. Morgan • Attorney General, A. Mitchell Palmer

In 1919, Palmer appointed J. Edgar Hoover to head the new anti-radical division in the Justice Dept. (later became the FBI). The Mission: To hunt down suspected,Communists, socialists,and anarchists

The Palmer Raids Government Agents : • invaded homes, meeting halls, & offices w/o search warrants. • jailed suspects for weeks w/o allowing them to see attorneys. • arrested those who came to see suspects. • deported hundreds of foreign born radicals w/o trying them in courts.

The Palmer Raids  creation of the American Civil Liberties Union (ACLU) in 1920 to challenge the constitutionality of laws that violate the Bill of Rights.

3. Immigration (nativism) • National Origins Act (1924) • Sacco & Vanzetti case • KKK

Congress Passes Laws • Fear that foreign ties bring foreign wars • 1921: The Emergency Quota Act of 1921 set up a quota system to control and restrict immigration • 1924: The National Origins Act was harsher • Ended legal Chinese & Japanese immigration • Set stricter quotas for Eastern and Southern Europe

The Sacco & Vanzetti Case The crime: 2 men shot & killed a factory paymaster & his guard, grabbed $15k in payroll, jumped into a car, & made their getaway. An eyewitness said that 2 of the robbers“looked Italian.”

Sacco & Vanzetti had 3 strikes against them: • Italians • Immigrants • Anarchists

They were sentenced to the electric chair even though • They provided alibis • the evidence was circumstantial • the presiding judge was clearly prejudiced Their execution was symbolic of discrimination against radical beliefs during the Red Scare

“In all my life I have never stole, never killed, never spilled blood…We were tried during a time…when there was hysteria of resentment and hate against the people of our principles, against the foreigner…I am suffering because I am a radical and indeed I am a radical; I have suffered because I was an Italian and indeed I am an Italian…If you could execute me two times, and if I could be reborn two times, I would live again to do what I have done already.” ~Bartolomeo Vanzetti~

As a result of the Red Scare & anti-immigrant feelings, different groups of bigots used anticommunism as an excuse to harass anyone unlike themselves.One such group was the KKK.

Devoted to “100 percent Americanism,” Klan membership skyrocketed to over 4.5 million members in the United States during the 1920s. The new Klan was against everything that was not white Protestant American. Here, the Klan marches on Washington, D.C. in 1925.

By 1924, the KKK had become a potent political force in Arkansas, CA, Indiana, Ohio, Oklahoma, Oregon, & Texas, as well as a profitable business. By 1924, the Klan had 4.5 million members

An incentive program was created where KKK salesmen, known as kleagles, kept $4 of the $10 initiation fee for each new Klan member they recruited. • Kleagling became one of the most profitable industries of the decade.

Against Catholics Jews immigrants radicals African-Americans Favored prohibition religious (Protestant) fundamentalism physical intimidation Klan politics:

Back to Africa Movement • Marcus Garvey hoped to transport blacks back to Africa & bring back items to sell. • Movement quickly collapsed • Increased race consciousness & pride

Science vs. Religion Scopes “Monkey Trial” Religious Intolerance of modern scientific theories  Science teacher John Scopes arrested in TN for teaching evolution

ACLU hired Clarence Darrow to defend Scopes. • William Jennings Bryan was the Prosecutor • Scopes was convicted after admitting to violating the law

Economic Boom of the 20s • The quality of life went up resulting in higher standard of living • The average annual income rose 35% during the 1920s ($522 to $705) • Chain stores • Montgomery Wards • More consumer goods • Fords Model T, electric refrigerators, stoves, irons, toasters, vacuums, washing machines and sewing machines • Advertising • People were buying goods and stocks on credit (installment plan)

Modern Advertising • Ad agencies no longer sought to merely “inform” the public about their products • They hired psychologists to study how best to appeal to Americans’ desire for youthfulness, beauty, health and wealth

Stock Market • Many average Americans could now afford to buy stocks • Many borrowed money to buy the stock “on the margin” - pay small amount of the stock price as a down payment and borrow the rest. • In 1929 stock prices fell dramatically. Consumer confidence went down and the market crashed

PROBLEMS ON THE HORIZON? • A Superficial Prosperity • Many people believed the prosperity would go on forever • Wages, production, GNP, and the stock market all rose significantly • Businesses expanded recklessly • Iron & railroad industries faded • Farms nationwide suffered losses due to overproduction • Too much was bought on credit (installment plans) including stocks

Short Answer • Explain the installment plan and buying on the margin and how that led to a superficial prosperity.

Politics & Economy in the US in the 1920 ’ s