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Boom to Bust

Barnett UHS APUSH. Boom to Bust. I. The New Era A. Rise of conservatism B. Laissez-Faire. II. Harding – A return to “normalcy” A. Hardworking B. Unwilling to offend C. Influenced by cabinet “Ohio Gang” 1. Charles Hughes- Secretary of State

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Boom to Bust

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  1. Barnett UHS APUSH Boom to Bust

  2. I. The New Era • A. Rise of conservatism • B. Laissez-Faire

  3. II. Harding – A return to “normalcy” • A. Hardworking • B. Unwilling to offend • C. Influenced by cabinet “Ohio Gang” • 1. Charles Hughes- Secretary of State • 2. Andrew Mellon Secretary of Treasury- one of the richest men in the world. • 3. Herbert Hoover Secretary of Commerce • 4. Secretary of Interior- Albert Fall • 5. Charles Forbes- Veterans Administration Chief

  4. III. Regulating Business • A. Andrew Mellon-  Trickle Down Economics or Supply Side Economics. He opposed lowering tax rates for those earning less than $66,000 • B. reduced inheritance taxes and income tax on the wealthy by 2/3.B • C. Bureau of Budget 1921- reduce WWI debt. • D. Farmers suffered • E. Mellon ignored the Farm Bloc • F. Revenue Act of 1921  • G. Fordney - McCumberTariff of 1922. • H. Mellon's programs did pay off the war debt and reduced the national debt by $500 million a year. • I. ICC, FTC, and Federal Reserve to be pro-business.

  5. IV. Harding Scandals • A. The Veteran's Administration, led by Charles Forbes, stole millions • B. Secretary of the Interior Albert Fall leased Navy lands in Wyoming (Tea Pot Dome) and in California (Elk Hills) to oil companies • C. Harding died in August 1923 late in his term.

  6. V. Coolidge • A. Coolidge untouched by scandal • B. Henry Ford- Anti-semitic- Collapse in support • C. Democrats split on a nominee, compromise on John Davis • D. Old Progressive Robert La Follette (Liberal/Socialist)  "Wisconsin Bolshevism”

  7. VI. Coolidge: "a man who builds a factory...builds a temple…the man who works there worships there.” • A. Replaced Attorney General Daugherty with Harlan Fiske Stone • B. Laissez-Faire • 1. Andrew Mellon was Secretary of Treasury • C. Norris LaGuardia Injunction Act- Passed in 1932 to protect workers' rights. • D. Other Consumer goods- Installment purchases • E. Ads and Mass marketing • F. Later Speculation • 1. land and stocks

  8. VII. Foreign Policy- Rise of Isolationism • A. Charles Evans Hughes (Secretary of State) • B. Steer clear of foreign entanglements which led to isolationism • C. The Open Door Policy continued to dominate US business goals and foreign policy

  9. D. Foreign Policy • 1. German hyperinflation • 2. Financial Crisis in Europe • 3. 5 Power Treaty to reduce naval power and 9 Power Treaty agree to respect China's independence. • 4. Japan - Co-prosperity Sphere (Asia for the Asians) • 1. Stance on China

  10. 5. Kellogg-BraindPact - Outlawed War as a means of foreign policy • a) Jane Addams • b) FDR • c) Carnegie Endowment for International Peace • 6. Good-Neighbor Policy - Clark Memorandum • 1. Hoover Administration stated that Roosevelt's Corollary to the Monroe Doctrine was improper. • 2. US withdrew Marine units from Haiti, Dominican Republic and Nicaragua.

  11. E. Diplomacy in the Depression Isolationist • 1. Continue Good Neighbor Policy-does not go after business debts • 2. Monetary Diplomacy- • a) Debts with German-Hoover Moratorium 1931 • (1) 1933 Hitler is in power • (2) Rise of Third Reich • b) Failure of the gold standard

  12. 3. Japan's aggression in Manchuria • a) Violated the Kellogg- Briand and Nine Power Treaty • b) Stimson Doctrine (1932) • Did not recognize • still traded oil and steel • “Not World’s Policemen”

  13. 4. Hawley Smoot Tariff 1930 - increase 59% • Farm & Industrial Goods • Global Reprisals • 5. Dawes Plan - provided Germany with $200 million loan designed to stabilize it's currency • 6. World Court -USA did not join

  14. VIII. Election of 1928 • A. Herbert Hoover (R) • 1. Conservative • 2. Rugged Individualism • 3. He was pro tariff and prohibition. • 4. McNary-Haugen Bill- created price supports for farmers • B. Al Smith (D) • 1. Accused of being wet, and a socialist. • 2. Anti-Catholicism from rural areas • 3. Democrats look in trouble.

  15. VIII. 1928

  16. 1929 Crash - decline of conservativism • A. Stock Market Crash - October 29, 1929 • B. Great Depression Causes • 1. Income Inequality

  17. 1929 Crash - decline of conservativism • A. Stock Market Crash - October 29, 1929 • B. Great Depression Causes • 1. Income Inequality • 2. Gold Standard • 3. Federal Reserve Policy • 4. Protective tariffs (Hawley-Smoot Tariff) • 5. Over use of credit and buying stocks on margin • 6. Agri-depression (The Dust Bowl) • A. 1921 Agriculture Marketing Act • 7. Unemployment-production slow down

  18. C. 3 phases of Hoover's policies for recover • Phase 1Conservative - Mellon's Liquidation policy rejected by Hoover. • a) Mellon liquidate - follow the business cycle & stay calm • b) Tariff more protectionism • c) Cut corporate and wealthy taxes • d) Monetary Policy-Tight-no inflation • E) Fiscal Policy - keep balanced budget

  19. Phase 2 Slightly moderate - European panic on falling off Gold Standard 1931 and defaulted on WWI debts to USA • a) Business should voluntarily maintain wages • b) Local charities overwhelmed. • c) Charities received minimal funding and relief

  20. Phase 3 Slightly liberal • a) Glass Steagall Act- freed up 1 billion in gold for Euro • b) Reconstruction of Finance Corporation lent money • c) Created Deficit • d) $1.5 Billion in Public works

  21. D. Suffering and Poverty • 1. Hoovervilles (small shanty towns),  • Hoover Blankets (newspapers),  • Hoover Flags (empty pockets)

  22. 2. Dust Bowl - Okiesand Arkies fled west • Demographic change

  23. 3. Bread lines and soup kitchens, Hoboes and beggars • a) Loss of ambition and hope. • b) Many never applied for public assistance • c) Poor nutrition and public health • d) Children became burdensome.

  24. 4. Bonus March on Washington DC • WWI veterans - World War Adjustment Act of 1924 (1945) • Burned out of AnnicostaFlats • Hoover's brutal suppression of the protest further lessened his hopes for reelection

  25. D. Election of 1932 • 1. Rugged Individualism V. The New Deal • 2. Hoover was considered negative • 3. FDR was considered positive and vague-promised gold standard and no deficits and gave the impression of a moderate or even conservative • 4. FDR was the big winner people wanted proactive change

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