Chapter 32 “The Politics of Boom and Bust”. Warren G. Harding Looked presidential, but was very naive and people took advantage of him. Looked presidential,

Chapter 32Chapter 32

““The Politics of Boom and The Politics of Boom and Bust” Bust”

Warren G. HardingWarren G. Harding

Looked presidential, but Looked presidential, but was very naive and was very naive and people took advantage of people took advantage of him. him.

Neither could he detect Neither could he detect the corruption of his the corruption of his cabinet cabinet

Corrupt people like Corrupt people like Senator Albert B. Fall Senator Albert B. Fall of New Mexico, a of New Mexico, a scheming anti-scheming anti-conservationist, became conservationist, became secretary of the secretary of the interior, and Harry M. interior, and Harry M. Daugherty took over Daugherty took over reigns as attorney reigns as attorney general.general.

Harding and BusinessHarding and Business

Took a Laissez-Faire approach to Took a Laissez-Faire approach to businessbusiness

Urged Business to regulate themselvesUrged Business to regulate themselves Plan was not simply for government to Plan was not simply for government to keep hands off business, but for keep hands off business, but for government to help guide business along government to help guide business along the path to profitsthe path to profits

Under Harding, corporations could Under Harding, corporations could expand again, and anti-trust laws were expand again, and anti-trust laws were not as enforced or downright ignored not as enforced or downright ignored

Supreme Court Chief Supreme Court Chief Justice TaftJustice Taft

Taft appointed Taft appointed Chief Justice of Chief Justice of the Supreme the Supreme Court by Harding Court by Harding in 1920in 1920

Justice Taft at the Washington Senators game

Post- WWI AmericaPost- WWI America

Wartime government controls disappeared Wartime government controls disappeared (i.e. the dismantling of the War (i.e. the dismantling of the War Industries Board) and Washington returned Industries Board) and Washington returned control of railroads to private hands control of railroads to private hands

The Merchant Marine Act of 1920 The Merchant Marine Act of 1920 authorized the Shipping Board, which authorized the Shipping Board, which controlled about 1500 vessels, to get rid controlled about 1500 vessels, to get rid of a lot of ships at bargain prices, thus of a lot of ships at bargain prices, thus reducing the navy. reducing the navy.

Labor membership shrank by 30% from 1920 Labor membership shrank by 30% from 1920 to 1930 to 1930

Working Toward PeaceWorking Toward Peace

Since America had never ratified the Treaty Since America had never ratified the Treaty of Versailles, it was still technically at of Versailles, it was still technically at war with Germany, so in July of 1921, it war with Germany, so in July of 1921, it passed a simple joint resolution ending the passed a simple joint resolution ending the war.war.

The Washington “Disarmament” Conference of The Washington “Disarmament” Conference of 1921-22 resulted in a plan in which a 5:5:3 1921-22 resulted in a plan in which a 5:5:3 ratio of ships that could be held by the ratio of ships that could be held by the U.S., Britain, and Japan U.S., Britain, and Japan

Frank B. Kellogg, Calvin Coolidge’s Frank B. Kellogg, Calvin Coolidge’s Secretary of State, won the Nobel Peace Secretary of State, won the Nobel Peace Prize for his role in the Kellog-Briand Pact Prize for his role in the Kellog-Briand Pact (Pact of Paris), which said that all nations (Pact of Paris), which said that all nations that signed would no longer use war as that signed would no longer use war as offensive means.offensive means.

Five-Power Treaty Five-Power Treaty (1922)(1922)

5 A battleship ratio was achieved through A battleship ratio was achieved through this ratio:this ratio: US Britain Japan US Britain Japan France Italy France Italy 5 5 3 5 5 3 1.67 1.67 1.67 1.67

5 Japan got a guarantee that the US and Japan got a guarantee that the US and Britain would stop fortifying their Far Britain would stop fortifying their Far East territories [including the East territories [including the Philippines].Philippines].

5 LoopholeLoophole no restrictions on small no restrictions on small warshipswarships

Kellogg-Briand PactKellogg-Briand Pact

In light of the casualties In light of the casualties that resulted from World that resulted from World War I, Secretary of State War I, Secretary of State Frank B. Kellogg and French Frank B. Kellogg and French Foreign Minister Aristide Foreign Minister Aristide Briand crafted the Kellogg-Briand crafted the Kellogg-Briand Peace Pact. This Briand Peace Pact. This international peace international peace proposal committed 15 proposal committed 15 nations to outlawing nations to outlawing aggression and war in aggression and war in settling disputes. settling disputes. President Coolidge signed President Coolidge signed the Pact on January 17, the Pact on January 17, 1929. The ceremony took 1929. The ceremony took place in the East Room, place in the East Room, making use of President making use of President Grant’s old Cabinet Table. Grant’s old Cabinet Table.

Republicans Raise the Republicans Raise the TariffTariff

Congress passed the Fordney-McCumber Congress passed the Fordney-McCumber Tariff Law, which raised the tariff Tariff Law, which raised the tariff from 27% to 35%.from 27% to 35%.

Presidents Harding and Coolidge were Presidents Harding and Coolidge were much more prone to increasing tariffs much more prone to increasing tariffs than decreasing them.than decreasing them.

Hurt international trade because of Hurt international trade because of reciprocal tariffsreciprocal tariffs

Started a vicious economic cycle that Started a vicious economic cycle that will lead to a worldwide depressionwill lead to a worldwide depression

Fordney-McCumber TariffFordney-McCumber Tariff

Teapot Dome ScandalTeapot Dome Scandal

Albert B. Fall leased Albert B. Fall leased land in Teapot Dome, land in Teapot Dome, Wyoming, and Elk Wyoming, and Elk Hills, California, to Hills, California, to oilmen Harry F. oilmen Harry F. Sinclair and Edward Sinclair and Edward L. Doheny, but not L. Doheny, but not until Fall had until Fall had received a “loan” received a “loan” (actually a bribe) of (actually a bribe) of $100,000 form Doheny $100,000 form Doheny and about three times and about three times that amount from that amount from Sinclair.Sinclair.

Harding Dies in OfficeHarding Dies in Office

President Harding died in bed in San Francisco in the Palace Hotel. He had been sick with pneumonia a few days before. Doctors pronounced that his death was due to a stroke. Harding's death occurred before the full scope of the scandals that had taken place during his administration became known.

A Mysterious DeathA Mysterious Death Within minutes of Warren G. Harding's death at either Within minutes of Warren G. Harding's death at either

7:10, 7:20, or 7:30 p.m. on August 2, 1923, rumors 7:10, 7:20, or 7:30 p.m. on August 2, 1923, rumors began to circulate. No one present at his demise could began to circulate. No one present at his demise could give the correct time of death. No one seemed to be give the correct time of death. No one seemed to be sure who was on hand in the San Francisco hotel room sure who was on hand in the San Francisco hotel room when he breathed his last. Most of all, the four when he breathed his last. Most of all, the four physicians who had been caring for Harding for the physicians who had been caring for Harding for the previous week could not agree on the cause of death. It previous week could not agree on the cause of death. It had something to do with his heart. On the other hand, had something to do with his heart. On the other hand, perhaps it was a stroke. Alternatively, it could have perhaps it was a stroke. Alternatively, it could have been both, exacerbated by the ptomaine poisoning that been both, exacerbated by the ptomaine poisoning that he may or may not have experienced a few days earlier he may or may not have experienced a few days earlier in Vancouver. Despite the confusion over the time of in Vancouver. Despite the confusion over the time of death, surely an autopsy would resolve the uncertainty death, surely an autopsy would resolve the uncertainty about what killed Warren G. Harding. Except --- there about what killed Warren G. Harding. Except --- there was no autopsy. Mrs. Harding --- the "Duchess," as her was no autopsy. Mrs. Harding --- the "Duchess," as her husband called her --- would not permit it. Within an husband called her --- would not permit it. Within an hour of his death, he was embalmed, rouged, powdered, hour of his death, he was embalmed, rouged, powdered, dressed, and in his casket. By morning, he was on a dressed, and in his casket. By morning, he was on a train, headed back to Washington, D.C train, headed back to Washington, D.C

Florence HardingFlorence Harding

Calvin CoolidgeCalvin Coolidge

At 2:30 on the morning of August 3, At 2:30 on the morning of August 3, 1923, while visiting in Vermont, 1923, while visiting in Vermont, Calvin Coolidge received word that he Calvin Coolidge received word that he was President. was President.

New president Calvin Coolidge was New president Calvin Coolidge was serious and never spoke more than he serious and never spoke more than he needed to needed to

He rapidly became popular. In 1924, as He rapidly became popular. In 1924, as the beneficiary of what was becoming the beneficiary of what was becoming known as "Coolidge prosperity known as "Coolidge prosperity

Calvin Coolidge with Calvin Coolidge with Walter JohnsonWalter Johnson

Frustrated FarmersFrustrated Farmers

World War I had given the farmers World War I had given the farmers much prosperity, as they had much prosperity, as they had produced much food for the soldiers.produced much food for the soldiers.

New technology in farming, such as New technology in farming, such as the gasoline-engine tractor, had the gasoline-engine tractor, had increased farm production increased farm production dramatically.dramatically.

Overproduction a big problem for Overproduction a big problem for farmersfarmers

Election of 1924Election of 1924

Republicans – CoolidgeRepublicans – Coolidge ““the man who builds a factory builds a templethe man who builds a factory builds a temple ““The business of America is business”The business of America is business” ““Keep cool with Coolidge”Keep cool with Coolidge”

Democrats John DavisDemocrats John Davis Progressive - Robert La FolletteProgressive - Robert La Follette

He gained the endorsement of the American He gained the endorsement of the American Federation of Labor and the shrinking Socialist Federation of Labor and the shrinking Socialist Party, and he actually received 5 million votesParty, and he actually received 5 million votes

**Coolidge easily won election. People voted **Coolidge easily won election. People voted their pocketbook their pocketbook

American Foreign PolicyAmerican Foreign Policy

Isolationism continued to reign in the Isolationism continued to reign in the Coolidge era, as the Senate did not allow Coolidge era, as the Senate did not allow America to adhere to the World Court, the America to adhere to the World Court, the judicial part of the League of Nationsjudicial part of the League of Nations

In the Caribbean and Latin America, U.S. In the Caribbean and Latin America, U.S. troops were withdrawn from the Dominican troops were withdrawn from the Dominican Republic in 1924.Republic in 1924.

Troops remained in Haiti from 1914-1935Troops remained in Haiti from 1914-1935 Coolidge took out troops from Nicaragua in Coolidge took out troops from Nicaragua in

1925, and then sent them back the next year.1925, and then sent them back the next year. Latin America began to resent American Latin America began to resent American

involvementinvolvement

German InflationGerman Inflation

The German The German inflation of inflation of 1923. One dollar 1923. One dollar worth 100,000 worth 100,000 marks. marks.

A woman in A woman in Germany in the Germany in the early 1920s is early 1920s is feeding money feeding money into her stove. into her stove. The cash was The cash was worth less, worth less, pound-for-pound, pound-for-pound, than firewood.than firewood.

Hyper-Inflation in Hyper-Inflation in Germany:Germany: 19231923

German children German children with stacks of with stacks of inflated inflated currency, currency, virtually virtually worthless in worthless in 1923. 1923.

Results of Coolidge’s Results of Coolidge’s 4+ Years4+ Years

Huge gains for big-businessHuge gains for big-business No anti-trust legislationNo anti-trust legislation Farmers, factory workers and Farmers, factory workers and labor unions suffered labor unions suffered tremendouslytremendously

Election of 1928Election of 1928

Republicans – Herbert HooverRepublicans – Herbert Hoover Former Secretary of Commerce and head of the U.S. Former Secretary of Commerce and head of the U.S.

Food Administration during WWIFood Administration during WWI Quaker from Oregon who was a Stanford GraduateQuaker from Oregon who was a Stanford Graduate Promoted prosperity, prohibition, and rugged Promoted prosperity, prohibition, and rugged

individualismindividualism Democrats – Alfred SmithDemocrats – Alfred Smith

NY governor who drank heavilyNY governor who drank heavily

**Radio turned out to be an important factor in the **Radio turned out to be an important factor in the campaign, and Hoover’s personality sparkled on this campaign, and Hoover’s personality sparkled on this new medium (compared to Smith, who sounded stupid new medium (compared to Smith, who sounded stupid and boyish).and boyish).

**Hoover triumphed in a landslide, with 444 Electoral **Hoover triumphed in a landslide, with 444 Electoral votes to Smith’s 87. votes to Smith’s 87.

Election of 1928Election of 1928

Hoover’s First MovesHoover’s First Moves

Hoover’s Agricultural Marketing Act, Hoover’s Agricultural Marketing Act, passed in June of 1929, was designed to passed in June of 1929, was designed to help the farmers help themselves, and it help the farmers help themselves, and it set up a Federal Farm Board to help the set up a Federal Farm Board to help the farmers.farmers.

The Hawley-Smoot Tariff of 1930 raised The Hawley-Smoot Tariff of 1930 raised the tariff to an unbelievable 60%the tariff to an unbelievable 60%

Foreigners hated this tariff that Foreigners hated this tariff that reversed a promising worldwide trend reversed a promising worldwide trend toward reasonable tariffs and widened the toward reasonable tariffs and widened the yawning trade gapsyawning trade gaps

Basically followed in the footsteps of Basically followed in the footsteps of the previous two Republican presidents the previous two Republican presidents

Dangerous Hawley-Smoot Dangerous Hawley-Smoot TariffTariff

The Hawley-Smoot Tariff The Hawley-Smoot Tariff raised tariffs to their raised tariffs to their highest levels in US highest levels in US history. Its proponents, history. Its proponents, including President Hoover, including President Hoover, believed that the high believed that the high tariffs would help American tariffs would help American industry and agriculture in industry and agriculture in a time of severe a time of severe depression. In fact, the depression. In fact, the opposite occurred. As the opposite occurred. As the United States was a net United States was a net exporter of both exporter of both agricultural goods and agricultural goods and industrial products, the industrial products, the ensuing worldwide tariff ensuing worldwide tariff war simply lengthened the war simply lengthened the depression. depression.

The Great Crash Ends the The Great Crash Ends the Golden TwentiesGolden Twenties

Hoover confidently predicted an end to Hoover confidently predicted an end to poverty very soon, but on October 29, 1929, a poverty very soon, but on October 29, 1929, a devastating crash caused by over-speculation devastating crash caused by over-speculation and overly high stock prices built only upon and overly high stock prices built only upon non-existent credit struck the nation non-existent credit struck the nation

Losses, even in blue-chip securities, were Losses, even in blue-chip securities, were unbelievable, as by the end of 1929, unbelievable, as by the end of 1929, stockholders had lost over $40 million in stockholders had lost over $40 million in paper values .paper values .

By the end of 1930, 4 million Americans were By the end of 1930, 4 million Americans were jobless, and two years later, that number jobless, and two years later, that number shot up to 12 million.shot up to 12 million.

Over 5000 banks collapsed in the first three Over 5000 banks collapsed in the first three years of the Great Depression years of the Great Depression

Tough TimesTough Times

© Illinois State Museum

Causes of the Causes of the DepressionDepression

Overproduction of farms and factories which Overproduction of farms and factories which caused a surplus of goods with too few caused a surplus of goods with too few consumersconsumers

Unequal distribution of wealth – Too much money Unequal distribution of wealth – Too much money in too few hands and when the rich stopped in too few hands and when the rich stopped spending the poor could not take up the slackspending the poor could not take up the slack

Over-expansion of credit – buy now and pay Over-expansion of credit – buy now and pay laterlater

Technological unemploymentTechnological unemployment Circular economic problemCircular economic problem Lack of international trade due to high tariffsLack of international trade due to high tariffs Crash of the stock marketCrash of the stock market

HoovervillesHoovervilles

Seattle

Oakland

Sacramento

Central Park New York

Hoover CriticizedHoover Criticized

Hoover unfairly received the brunt of the Hoover unfairly received the brunt of the blame for the Great Depression, but he did blame for the Great Depression, but he did pass measures that made the depression pass measures that made the depression less severe than it could have been less severe than it could have been

Critics noted that he could feed millions Critics noted that he could feed millions in Belgium (after World War I) but not in Belgium (after World War I) but not millions at home in America millions at home in America

He did not believe in government tampering He did not believe in government tampering of the economic machine, and he felt that of the economic machine, and he felt that depressions like this were simply parts of depressions like this were simply parts of the natural economic process the natural economic process

Hoover Pioneer of New Hoover Pioneer of New DealDeal

Voted to withdraw $2.25 billion Voted to withdraw $2.25 billion to start projects to alleviate to start projects to alleviate the suffering of the depression.the suffering of the depression.

Started Hoover Dam project to Started Hoover Dam project to provide jobs for Americansprovide jobs for Americans

Established the Reconstruction Established the Reconstruction Finance Corporation, which became Finance Corporation, which became a government lending bank.a government lending bank.

Turbines Turbines

Overhead View of Hoover Overhead View of Hoover DamDam

The Bonus Army The Bonus Army

Many veterans which had Many veterans which had not been paid their not been paid their compensation marched to compensation marched to Washington, D.C. to demand Washington, D.C. to demand their their entireentire bonus bonus

The “Bonus Expeditionary The “Bonus Expeditionary Force” erected unsanitary Force” erected unsanitary camps and shacks in vacant camps and shacks in vacant lots, creating health lots, creating health hazards and annoyance hazards and annoyance

Riots followed after Riots followed after troops led by General troops led by General Douglas MacArthur came in Douglas MacArthur came in to intervene and an eleven to intervene and an eleven month old baby died from month old baby died from exposure to tear gas exposure to tear gas

““Battle of Anacostia Battle of Anacostia Flats”Flats”

Japanese Militarists Japanese Militarists Attack ChinaAttack China

In September 1931, Japan, alleging provocation, In September 1931, Japan, alleging provocation, invaded Manchuria and shut the Open Door.invaded Manchuria and shut the Open Door.

Peaceful peoples were stunned, as this was a Peaceful peoples were stunned, as this was a flagrant violation of the League of Nations flagrant violation of the League of Nations covenant, and a meeting in Geneva, Switzerland, covenant, and a meeting in Geneva, Switzerland, was arranged was arranged

Since the U.S. did no effective thing, the Since the U.S. did no effective thing, the Japanese bombed Shanghai in 1932, and even then, Japanese bombed Shanghai in 1932, and even then, outraged Americans didn’t do much to change the outraged Americans didn’t do much to change the Japanese minds Japanese minds

U.S. and League inactivity led to future U.S. and League inactivity led to future aggression of Japan and Germany that led to WWIIaggression of Japan and Germany that led to WWII

Japan Invades Manchuria, 1931

Japan Invades Manchuria, 1931

Hoover Pioneers the Good Hoover Pioneers the Good Neighbor PolicyNeighbor Policy

Hoover was deeply interested in Hoover was deeply interested in relations south of the border, and relations south of the border, and during his term, U.S. relations with during his term, U.S. relations with Latin America and the Caribbean Latin America and the Caribbean improved greatly improved greatly

Since the U.S. had less money to Since the U.S. had less money to spend, it was unable to dominate Latin spend, it was unable to dominate Latin America as much, and later, Franklin America as much, and later, Franklin D. Roosevelt would build upon these D. Roosevelt would build upon these policies policies