Chapter 32: The Politics of Boom and Bust,

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1 APUSH CH Lecture Name: Hour: Chapter 32: The Politics of Boom and Bust, I. The Election of 1920 A. Harding is Elected 1. Women voted in the presidential election in large numbers 2. Warren G. Harding (Republican) easily defeated James M. Cox (Democrat) 404 to 127 (and by over 7 million votes) 3. The League of Nations was a campaign issue as Harding would support a league and as Cox supported the League of Nations 4. Many wanted to return the nation to normalcy after what had been deemed a period of Wilsonian idealism II. The Policies & Presidents of the 1920s A. Warren G. Harding 1. Practiced isolationism when it came to foreign affairs a. Harding was reluctant to support anything that was remotely related to the League of Nations 2. Disarmament was a key issue a. The Washington Naval Conference ( ) discussed this issue i. Led to the Five-Power Naval Limitation Treaty, which stopped the building of warships (Britain, France, Italy, Japan, and the U.S.) 3. Other agreements: a. The Four-Power Treaty: The U.S., France, Britain and Japan agreed to respect each other s territory in the Pacific b. Nine-Power Treaty: nations present agreed to respect the Open Door policy in China 4. Harding supported the Emergency Quota Act of 1921 which created a quota system for immigrants (3% of the ethnic groups current total in the U.S. could come from Europe; based on the 1910 census) 5. Fordney-McCumber Tariff (1922): increased tariffs to protect farmers and factory goods a. Made it difficult for Europe to sell their goods to the U.S. and in return they increased their tariffs 6. In Adkins v. Children s Hospital (1923): the Supreme Court reversed its ruling in Muller v. Oregon that gave women special protections in the workplace and revoked a minimum wage law for women (mostly due to the fact that women now had equal rights with the passage of the 19 th Amendment) 7. Big business: Harding was pro-big business as he encouraged the Federal Trade Commission, the Justice Department, and the Interstate Commerce Commission to cooperate with corporations rather than regulate them 8. The Teapot Dome Scandal involved the sale of government-owned oil reserves by Secretary of the Interior Albert Fall 1

2 a. In 1921 Secretary Fall persuaded Harding to transfer authority over two of the nation s most important oil reserves (Elk Hills in California and Teapot Dome in Wyoming) from the Navy Department to the Department of the Interior b. Fall then leased these reserves to private oil companies for his own personal gain c. Harding failed to address the corruption within his administration which hurt his reputation 9. Harding died on August 2, 1923 and would be succeeded by his Vice President, Calvin Coolidge B. Calvin Coolidge s Administration 1. Coolidge was know as Silent Cal 2. He continued the policy of laissez faire as well as Harding s policies toward business 3. Tariffs also remained high to help U.S. farmers/businesses a. The McNary-Haugen Bill sought to keep crop prices high by buying the surplus (vetoed by Coolidge) 4. Had the Teapot Dome Scandal investigated and forced the attorney general to resign 5. In 1924 he ran for reelection and won (and Taft, now chief Justice, administered his oath) a. His slogan was Keep Cool with Coolidge b. Robert La Follette of WI ran as a Progressive and sought to bring back some progressive ideals (government regulation of the railroads and help for farmers) 6. The Dawes Plan (1924): allowed the U.S. to loan money to Germany for its war debts; with the money Germany repaid Britain and France; and then Britain and France were able to repay the U.S. 7. Signed the Immigration Act of 1924, which set strict quotas on the number of eastern and southern Europeans allowed into the U.S. and completely excluded Japanese immigration 8. Kellogg-Briand Pact (1928): an agreement signed between Secretary of State Frank Kellogg and French foreign minister Briand a. Condemned the use of war to solve international problems b. By nations signed the pact; however, it still permitted defensive wars C. Herbert Hoover 1. Won the 1928 election (Coolidge chose not to run) 2. Headed U.S. Food Administration under Wilson during World War I and served as Secretary of Commerce under Harding and Coolidge 3. Took office in March 1929 and ruled over a period of prosperity until October 29, 1929 when the stock market crashed 4. The Hawley-Smoot Tariff (1930): raised tariffs on imports even further (31-49%) a. Other nations retaliated with high tariffs and world trade decreased 5. Known for improving relations with Latin America a. Withdrew troops from Haiti and Nicaragua and ushered in what would become the Good Neighbor Policy 2

3 II. The Onset of the Great Depression A. What Led to the Great Depression? 1. The immediate cause of the Depression was the stock market crash 2. However, there were other causes: a. The overproduction of goods (including factory goods and farm products) b. Buying stock on margin/speculating in the stock market c. Buying goods on installment plans d. An unstable banking industry e. High tariffs, which protected some industries but hurt farmers f. The rest of the world faced economic problems too due to WWI B. Hoover and the Depression 1. When the economic crisis hit, Hoover met with business leaders and urged them not to lay off workers or cut wages 2. He also asked Congress to authorize money for public-works projects (think Hoover Dam) 3. Opposed direct relief payments and believed in rugged individualism: people should take care of themselves a. Was still concerned with being fiscally responsible/having a balanced budget 4. Signed the Hawley-Smoot Tariff (1930) which raised tariffs so high that foreign countries could not sell goods in the U.S. a. As a result, those countries would not purchase U.S. goods, which further damaged the already struggling economy 5. Created the Reconstruction Finance Corporation (RFC; 1932), which gave loans to big companies, banks, etc. a. The idea was that prosperity would trickle down to smaller businesses and the rest of the economy 6. Hoover was a proponent of labor and signed the Norris-La Guardia Anti-Injunction Act (1932) a. It forbade anti-union contracts and prevented courts from stopping or restraining strikes 7. If the Depression didn t make Hoover look bad enough, there was the Bonus Army the WWI veterans seeking their bonus payments who marched on Washington, D.C. a. They wanted their bonus payments early due to the depression, but were denied (protesters were put down by General MacArthur who used more force than authorized by Hoover, which made Hoover look extremely bad) 8. People tended to hold Hoover directly responsible for the Great Depression homeless people lived in shantytowns called Hoovervilles 3

4 Chapter 33: The Great Depression and The New Deal, I. The 1932 Presidential Election A. The Candidates 1. The Republicans nominated Herbert Hoover despite the fact that unemployment was about 13 million 2. The Democrats were committed to their candidate: Franklin D. Roosevelt (Governor of New York) a. When Roosevelt accepted the Democratic nomination he called for a new deal for the American people a title which stuck 3. FDR won with 22.8 million votes to 15.8 million (472 to 59 electoral votes) II. FDR, the Depression, and the New Deal A. FDR Takes Office 1. Although elected in November, FDR would not be inaugurated until March 1933 (this would change to January after the ratification of the 20 th Amendment) a. During this period of time he refused to work with Hoover on any policies 2. On March 6, 1933, FDR closed all of the nation s banks and declared a nationwide banking holiday a. Prior to 1933, over 10,000 banks had already suspended business in the U.S. 3. FDR also summoned an emergency session of Congress to determine how to respond to the country s deepening depression B. The Hundred Days (see chart on page 755 of textbook) 1. The Hundred Days refers to FDR s first 100 days in office (March-June 1933) and what he accomplished 2. FDR surrounded himself with a brain trust of individuals to help him decided how to help the nation 3. FDR focused his New Deal on the three R s: relief, recovery, and reform a. Relief: immediate help for the people suffering b. Recovery: helping the economy to get back on track c. Reform: new programs to correct the problems that caused the Great Depression 4. The first piece of legislation passed during the 100 Days was the Emergency Banking Relief Act of 1933 a. To help the people understand the problems with the banking industry, FDR used the radio to communicate with Americans i. These firesides chats helped to reassure the nation that when times were tough that the president would take care of everything 5. Prohibition was also repealed by the 21 st Amendment (1933) a. For the most part it had been a failure and with its repeal the government could gain valuable revenue by taxing beer and liquor 4

5 C. A New Deal for Americans A. The Alphabet Agencies 1. The Glass-Steagall Banking Act (June 1933): provided further protection for investors a. Gave the Federal Reserve Board more power to regulate loans made by banks b. Created the Federal Deposit Insurance Corporation (FDIC), which first insured bank deposits up to $2,500 (in July 1934, up to $5,000) 2. Securities Act of 1933: required firms issuing new stocks to give investors full and accurate financial information a. Congress created the Securities and Exchange Commission (SEC) in 1934 to regulate the stock market 3. The Agricultural Adjustment Administration (AAA) (1933): goal was to raise farm prices by limiting production a. The AAA gave farmers benefit payments if they agreed not to produce as much as they had before (in 1936 the AAA was ruled unconstitutional by the Supreme Court) 4. The Dust Bowl made farming more difficult a. Drought, high winds, and poor farming techniques led to dried top soil to blow away b. Farmers known as Okies from Oklahoma headed for California to find work c. John Steinbeck wrote about this tragedy in his book The Grapes of Wrath 5. The National Industrial Recovery Act (June 1933): created the National Recovery Administration (NRA) to enforce codes of fair practices for business and industry a. Representatives of firms within each industry wrote the codes, which allowed the firms to set quality standards and minimum prices (he codes primarily aided businesses) b. The industrial codes set minimum wages and maximum hours, and supported the right of workers to join unions c. There were limitations as some unions refused to admit African Americans d. In 1935 the NIRA was ruled unconstitutional by the Supreme Court 6. The Civilian Conservation Corps (CCC): aimed at relief a. It put young men from needy families to work on conservation projects, such as planting trees and building dams 7. The Tennessee Valley Authority (TVA): built dams to control floods and to provide electricity for residents of the Tennessee River Valley D. Critics of the New Deal 1. Huey Long: Senator from Louisiana a. Advocated the Share Our Wealth program, where every American would receive $5,000 based on wealth redistribution b. Wanted to run for the presidency but was killed before he had a chance to do so 2. Father Charles Coughlin a. A Catholic priest who used the radio to reach millions of people b. Became very vocal regarding the New Deal after originally supporting FDR 5

6 E. The Second New Deal 1. Attributed to Roosevelt s second term in office ( ) 2. Works Progress Administration (WPA): provided over 8 million jobs building highways, streets, bridges, and parks a. It also created work for artists, writers, and performers 3. The New Deal, Unions, and Labor a. The National Labor Relations Act, or Wagner Act (1935) i. This act granted workers the right to unionize and bargain collectively ii. It also guaranteed democratic union elections and penalized unfair labor practices by employers, such as firing workers for belonging to a union b. The Committee for Industrial Organization, CIO, was formed in 1935 by John L. Lewis i. In 1936 the CIO broke away from the AF of L and renamed itself the Congress of Industrial Organizations and fought for rights for unskilled workers in the automobile, steel, and other industries c. Strikes i. At the GM plant in Flint, MI workers engaged in a sit-down strike in an effort to declare their right to unionize aa. The UAW was later recognized as a union d. The Fair Labor Standards Act (1938) set a minimum wage (40 cents/hour) and a maximum standard work week of 40 hours with extra pay for overtime; child labor restrictions on hiring children under 16 years of age 4. The Social Security Act (1935): provided pensions for the aged and insurance for the jobless a. It was meant to be a short-term program for the elderly, handicapped, blind, and the unemployed 5. Recession hit in 1937 as the government was trying to put the brakes on rising inflation (this was called the Roosevelt Recession) F. FDR s Court-packing Scheme 1. FDR felt that the justices were strictly interpreting the Constitution and failing to take into account the crisis of the Depression 2. His plan: to add justices to the Supreme Court to replace the old, conservative justices with younger liberal justices a. This became known as FDR s court-packing plan 3. With the Social Security Act and National Labor Relations Act ruled as constitutional, FDR dropped this idea by 1937 G. How Did the New Deal Affect Other Groups? 1. African Americans a. Still faced racial discrimination b. Had high unemployment rates during the Depression c. Some were able to get jobs through the CCC and the WPA 6

7 2. American Indians a. In 1934, Congress repealed the Dawes Severalty Act and replaced it with the Indian Reorganization Act i. This Act returned lands to the control of tribes and supported Indian culture 3. Mexican-Americans a. Many returned to Mexico as whites looked for farm jobs H. Foreign Policy 1. FDR continued Hoover s Good Neighbor Policy with Latin America: The U.S. would be a good neighbor and not interfere in Latin American affairs a. The U.S. nullified the Platt Amendment with Cuba in 1934 b. The U.S. signed trade agreements with a number of Latin American countries between 1934 and 1937 (Brazil, Colombia, Costa Rica, Cuba, El Salvador, Guatemala, Haiti, Honduras, and Nicaragua) 2. FDR also recognized the Soviet government for the first time in an effort to open diplomatic relations (1933) III. Final Thoughts on the New Deal A. Assessment of the New Deal 1. FDR set out to reform the nation s banking system and did a. Banks became sound, the run on banks ended and deposit insurance was created 2. Roosevelt implemented new strategies to solve old problems a. FDR was not afraid to experiment, which added to his successes b. He learned from his mistakes; when one thing did not work he discarded it and came up with something new i. And when the Supreme Court attacked parts of the New Deal he still found ways to institute other reforms 3. The New Deal did not get us out of the Depression but made it more manageable, if that was possible a. The New Deal set into motion some of the programs that are still with us today: such as Social Security, unemployment compensation, and welfare b. The final recovery of the economy occurred as the United States prepared to join World War II 4. Women also made gains: Francis Perkins served as the first female cabinet member (Secretary of Labor) 5. The Depression led to the development of macroeconomics characterized by the theories of John Maynard Keynes (Keynesianism), which focused on government spending in times of economic crisis 6. We also saw a shift in the Democratic Party at this time a. Its main strength shifted from the rural South to the urban North b. Minorities, immigrants, union members, and reformers became more prominent in the party 7

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