Chapter 32 The Politics of Boom and Bust 1920 -1932
President Harding • Harding considered worst president ever The Ohio Gang • Cabinet= conservative Old Guard • Charles Evans Hughes (State) • Andrew Mellon (Treasury) • Herbert Hoover (Commerce) • Albert B. Fall (Interior) • Harry M. Daugherty (Attorney General)
US Government in 1920 s • Conservative Court Adkins vs. Children’s Hospital 1923 • War Industries Board dissolved • Esh-Cummins Act • The Merchant Marine Act of 1920 (Jones Act) • Anti-labor atmosphere The Great Railway Strike of 1922= injunction • Veterans Bureau, American Legion, Adjustment Compensation Act 1924
Disarmament and Isolationism • 1921 joint resolution to end war • Washington Conference 1922 • Five Power Treaty: ratio for naval ships • Four Power Treaty: maintain status quo in Asia • Nine Power Treaty: uphold Open Door Policy in China • Kellogg-Briand Pact 1928: war is illegal
Tariff • Fordney-Mc. Cumber Tariff 1922= 38. 5% (protectionist, isolationist) • Europe needed US markets for recovery!- couldn’t pay back US debt • No money for Europe to buy US products • Europe responded with higher tariffs= spiral ↓ of international economy
Harding Scandals • Charles R. Forbes= Veterans Bureau taking kickbacks/embezzling $ • Teapot Dome Scandal: 1921 Secretary of Interior Albert B. Fall= control of navy oil fields • Took a $100, 000 bribe to lease oil fields to US oil companies (Edward L. Doheny and Harry F. Sinclair) • AG Harry Daugherty took bootlegger kickbacks- no conviction • The Voyage of Understanding- died August 1923
Coolidge and Farmers • Silent Cal “The business of the American people is business” • Farmers $ dropping after war (no war effort and consumerism) • Problem of the Commons= surpluses • Capper-Volstead Act • Mc. Nary-Haugen Bill
International Debt • US=creditor nation ($16 billion from Allies) • GB and France put pressure of Germany for their $32 billion reparations • Ruhr Valley German hyperinflation • Dawes Plan in 1924 as a solution • Created a cycle of debt would collapse with Stock Market Crash
Great Britain, with a debt of over $4 billion owed to the U. S. Treasury, had a huge stake in proposals for inter-Allied debt cancellation, but France’s stake was even larger. Less prosperous than Britain in the 1920 s and more battered by the war, which had been fought on its soil, France owed nearly $3. 5 billion to the United States and additional billions to Britain.
1928 Election • Republicans= Herbert Hoover • Self made man, efficiency, self reliance, small government, free enterprise, individualism and business • Democrats= Al Smith • NY governor, Catholic, Wet, accent on radio • “A vote for Al Smith is a vote for the Pope” • Solid South defected Hoovercrats • Hoover landslide with 444 EV to 87 for Smith
Crash of 1929 • Hoover inauguration= prosperity, high Stock market, speculation • Black Tuesday: October 29, 1929 speculative bubble burst panic and mob mentality • Stock market crash= symptom of coming Depression- contraction of economy
Causes of Depression • Overproduction, consumerism couldn’t keep up money not invested in salaries to pay for new products • Use of easy credit • Foreign economic problems tied to US • Hawley Smoot Tariff exacerbated issue
Hoover’s Response • Was a humanitarian but believed in rugged individualism • Depression too widespread for relief organizations to handle • Wanted public works (Hoover Dam) and trickle down prosperity- Reconstruction Finance Corporation (RFC) in 1932 • “prime the pump” but received criticism
“Hooverville” in Seattle, 1934
Bonus Army • Summer of 1932= Bonus Army of thousands marched on DC • Wanted bonus early set up Hoovervilles in Anacostia Flats • Rioting and army called in (Patton and Mc. Arthur) • Nail in Hoover’s coffin
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