Mr. K. McLaughlin, M.S. Ed. Morris Knolls High School
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1 Mr. K. McLaughlin, M.S. Ed. Morris Knolls High School
2 Chapter 32 - The Politics of Boom and Bust
3 The Republican Old Guard Return Harding inaugurated in 1921 Considered by many to be inept and easily convinced Brought his Ohio Gang to the White House Charles Evan Hughes appointed secretary of state Andrew Mellon appointed secretary of the Treasury Herbert Hoover appointed secretary of commerce Increased trade with foreign manufacturers Senator Albert Fall of New Mexico appointed secretary of interior Harry Daugherty a corrupt lawyer appointed attorney general
4 GOP Reaction at the Throttle Worked to re-implement laissez faire doctrine Gov. should help business increase profits Sought to align courts and bureaus to implement plan Harding appointed four of nine Supreme court justices Taft was appointed as chief justice Supreme Court Inhibited progressive legislation (i.e. federal child labor law, labor law, and gov. reg. of economy) Adkins vs. Children s Hospital (1923) revered reasoning of Mueller v. Oregon Invalidated set working hours and wages for women Claimed 19 th Amendment supplanted previous ruling This debate would continue
5 GOP Reaction Cont Economic Effects Antitrust laws were often ignored or barely enforced Interstate Commerce Commission was dominated by men sympathetic to managers of railroads Trade associations were accepted and encouraged by Hoover who favored self regulation (i.e. cement manufacturing)
6 Aftermath of War Wartime economic controls and the War Industries Board were quickly dismantled Railroad returned to private management Esch-Cummins Act passed in encouraged private consolidation of the railroads Merchant Marine Act of 1920 Disposed quickly of 1500 vessels Remaining vessels were not profitable because of La Follette s Seamans Act
7 Aftermath of War Labor Steel industry strike of 1919 was ruthlessly broken through exploitation of ethnicities and labeling strikers as reds Railway strike initiated by a 12 percent wage cut Ended by Attorney General Daughtery when injunction was placed on workers Union membership declined from 20 to 30 % Veterans Veterans Bureau Created provided health care American Legion lobbied for bonus bill for work leave Adjusted Compensation Act passed as Congress overrode Coolidge s veto
8 Foreign Policy of the 1920s US was still officially at war with Central Powers b/c Treaty of Versailles was not ratified Congress passed a joint resolution in 1921 to officially end the war. Unofficial observers were sent to the League of Nations Secretary Hughes secured American Oil interests in the Middle East (Britain was already there)
9 Washington Armament Conference ( ) Causes US wanted to avoid an expensive arms race US did not join the League of Nations Effects US, Britain, and Japan attended the Conference Bolshevik Russia was not invited Secretary Hughes Proposed Ten year end to construction of battleships, cruisers, and aircraft carriers Scrapped 2 million tons of ships that already existed 5 (US), 5 (Britain), 3 (Japan)
10 Washington Armament Conference ( ) Five Power Naval Treaty of 1922 US, Britain, Japan, France, and Italy Approved by all after compensation was offered to the Japanese British and US agreed note to fortify possessions in Asia Four Power Treaty Replaced twenty year old Anglo-Japanese alliance Bound Britain, Japan, France, and US to preserve status quo in the Pacific Nine Power Treaty Maintained Open Door Policy in China Protected Chinese Territorial Integrity US Naval Officers were discontent with all the treaty b/c Brtian had more ships and countries who did not sign the treaty did not need to stop building ships
11 Kellogg Brian Pact Americans clamored to outlaw war 2 million signatures arrived in Washington Coolidge's Secretary of State Kellog signed the Pact of Paris with French Foreign Minister Brian Pact stated that nations could only engage in a defensive war 62 Nations Signed Provided US with a false sense of security.
12 Hiking the Tariff Higher McCumber Tariff Law (1922) Increased tariff from 27% to 38.5% Duties on farm produced were increased President could increase duties within 50% Harding and Coolidge favored increasing tariffs Authorized 32 increases Created an economic burden in Europe Europeans needed to sell goods to recover from the war Created a cycle of economic decline Hitler would cite economic instability in his fascist doctrine
13 Scandal s During the Harding Administration Colonel Charles R. Forbes resigned in 1923 as head of the Veterans Bureau He and accomplices stole $200 million from the government Forbes served two years in prison Teapot Dome Scandal Involved naval oil reserves in Teapot Dome Wyoming and Elk Hills California Albert B. Fall (Sec. of interior) convinced secretary of the Navy to transfer oil lands to Department of Interior Fall leased oil lands to Sinclair and Doheny, after he received a $100,000 bribe from the oil man Fall was found guilty of accepting a bribe, served one year in prison Sinclair and Doheny were acquitted
14 Scandals cont Attorney General Daugherty was accuses of the illegal sale of pardons and liquor permits Daugherty implied White House was corrupt and was released after two hung juries Harding was spared revelations of crookedness as he died on during a speechmaking tour of pneumonia in 1923 Vice President Coolidge soon took the presidential oath in his fathers Vermont farmhouse
15 Calvin Coolidge Raised in Vermont First in family to graduate from college (Amherst) Studied law privately and passed the bar. Lifelong Republican Entered politics in 1898 Known for honesty, fairness, compassion, and conservativism Quickly removed any involved in Harding s scandals
16 Frustrated Farmers Peace after WWI brought an end to government subsidized high prices and massive purchases by other nations Us of tractors created massive surpluses in the upper Midwest wheat belt, which reduced prices As a result, ¼ farms was sold to pay debt or taxes Congressional Assistance Capper-Volstead Act Exempted farmers cooperatives from antitrust lawsuits McNary-Haugen Bill Sought to keep agricultural prices high gov. bought surpluses and sold them abroad, and taxed farmers for the difference Vetoed twice by Coolidge
17 1924 Presidential Race Republican Coolidge (15,718,211 pop, 382 electorate) Keep Cool and Keep Coolidge Democrat John W. Davis (8,385,283, 136 electorate) Wealthy corporate lawyer connected to J. P. Morgan Progressive Robert La Follette (Wisconsin, 13 electorate 69 years of age Gained endorsement of AFL and the Socialist Party Progressives fielded only the presidential candidate Did not field other national and local offices
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19 US Foreign Policy Flounderings Isolationism continued to reign in the Coolidge era, as the Senate did not allow America to adhere to the World Court, the judicial wing of the League of Nations. In the Caribbean and Latin America, U.S. troops were withdrawn from the Dominican Republic in 1924, but remained in Haiti from 1914 to Coolidge took out troops from Nicaragua in 1925, and then sent them back the next year, and in 1926, he defused a situation with Mexico where the Mexicans were claiming sovereignty over oil resources. However, Latin Americans began to resent the American dominance of them.
20 Unraveling the Debt Knot WWI had revered the international financial position of the US 1914 America owed 4 billion by 1922 America was the creditor of 16 billion Key Problem was the 10 billion the US Treasury loaned to the Allies after the war America demanded repayment and the French and British asked for absolvent of debts Europeans argued that during War Allies fueled US economic boom and the tariff prevented them from earning enough to pay back US debts Because America demanded that Britain and France pay their debts, those two nations placed huge reparation payments on Germany, which then, to pay them, printed out loads of paper money that caused inflation to soar. At one point in October of 1923, a loaf of bread cost 480 million German marks. Europeans urged reductions or cancellation of war debts
21 The Dawes Plan (Unraveling the Debt Knot) Finally, in 1924, Charles Dawes engineered the Dawes Plan, which rescheduled German reparations payments and gave the way for further American private loans to Germany. Essentially, the payments were a huge circle from the U.S. to Germany to Britain/France and back to the U.S. All told, the Americans never really gained any money or were repaid Also, the U.S. gained bitter enemies in France and Britain who were angry over America s apparent greed and careless nature for others.
22 1928 Presidential Election After five years of Coolidge Luck Silent Cal said he was done as President Republican Herbert Hoover v. Democrat Alfred E. Smith Hoover believed in Rugged Individualism Al Smith was first Roman Catholic to Run for President and was wet Republican majority returned to House of Reps.
23 Hoover as President Most of the Nation was prosperous at the start of his presidency Farmers were still in need Agricultural Marketing Act (1929) passed Set up Federal Farm Board Revolving fund of 500 million dollars Lent to farm organizations to buy, sell and store surpluses Farm board created Grain Stabilization Corporation and Cotton Stabilization Corp.. Unable to stop falling prices Hoover promised to lower tariff for farmers, could not keep promise Hawley Smoot Tariff of 1930 raised tariff from 38.5% to 60% Europeans were greatly angered Plunged nations deeper into economic depression
24 1928 Election
25 The Triumph of Herbert Hoover Orphan who graduated from Stanford Self made millionaire Quaker Thin Skinned Strengths were integrity, humanitarianism interests and talent for administration Endorsed labor unions and supported gov. owned radio
26 The Stock Market Crash and Black Tuesday On October 29, 1929 a devastating stock market crash caused by over-speculation and overly high stock prices built only upon non-existent credit struck the nation. 16,410,030 stocks were sold Blue chips security losses were huge By the end of 1929 stockholders had lost 40 billion Economic depression ensued home and abroad By the end of million in the US were jobless, two years later number tripled Over five thousand banks collapsed erasing life savings of tens of thousands Thousands lost their homes and farms Breadlines formed, soup kitchens established, and birth rates declined Wages were often slashed
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28 Stock Market Crash Documentary
29 The Great Depression, Japanese Militarism, and Hoover s Foreign Policy
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31 What Caused the Great Depression ( ) Overproduction by both farm and factory Caused by abundance rather than want Nation s ability to produce goods outran the consumers capacity to consumer or pay for them The rich were getting richer while the working class salaries and wages were not parallel with inflation Overexpansion of credit through installment-plan buying over stimulated production Easy term buying caused many consumers to buy items they could not afford (think recent housing market collapse) Technological innovations replaced many workers
32 Great Depression Abroad Britain and Europe never fully recovered from WWI Chain reaction of financial collapse in Europe 1931 prominent Vienna banking house failed Hawley Smoot Tariff of 1930 stagnated trade Europeans reacted negatively to war reparations, war debts, and defaults on American loans
33 Mississippi Drought Terrible drought Thousands of farms sold at auction Neighbors intimidated some buyers, purchased property and returned it to original owner Peonage individuals were forced to work to pay off debt
34 Social Effects Many lost their life savings People wanted to work, but couldn t find work Effected nation economically and socially Many were forced to sleep in Hoovervilles in shantytowns I don t live that the power and duty of the General Gov. out to be extended to the relief of individual suffering The lesson should be constantly enforced that though the people support the Government, the Government should not support the people. Herbert Hoover
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37 Rugged Times for Rugged Individuals Hoover reputation of efficiency and as a problem solver was greatly challenged The famed humanitarian was distressed by the widespread yet lacked the willingness and forethought to initiate needed gov. intervention As the depression deepened Hoover was force to initiate government amelioration Focused on financial health banks, railroads, and rural credit corporations Believed in the trickle down effect Partisan critics jeered he had feed the Belgians but refused to use federal funds to help Americans Provide bankers with money but not the people
38 Unfair Criticism? His efforts most likely prohibited a more serious collapse Relief expenditures paved the way for FDR s New Deal Hoover s efforts proved that rugged self resolve was not enough If Jesus Christ had been there, he d have the same problem. It is too bad for poor old Herbie that he happened to be there. This was a worldwide Depression. It wasn t Hoover s fault. Banker Martin Devries
39 Hoover Battles the Great Depression Hoover at last reverted from trickle down philosophy and recommended that Congress vote immense sums of money Secured appropriations totaling 2.25 billion Hoover Dam ( ) Colorado River Fought against plans he deemed as socialist Muscle Shoals Bill to develop TN Valley Opposed gov. selling electricity RFC (Reconstruction Finance Committee) Provided money to businesses and organization and not individuals
40 Hoover Battles the Great Depression Cont RFC was dubbed the millionaires dole by critics The gov. did profit from lending Norris-La Guardia Anti Injunction Act (Nebraska Senator Norris NY House Rep. LaGuardia) Outlawed anti-union yellow dog contracts (makes a man less than a dog), forbade federal courts from restraining strikes, boycotts, and peaceful picketing Republican majority was extremely uncooperative to liberal amelioration efforts Insurgent Republicans and the newly appointed democratic House harassed Hoover.
41 Routing the Bonus Army in Washington ( Veterans were also impacted by the Great Depression Veterans wanted the bonus due to them in 1945, now in Bonus Expeditionary Force (1932) 20,000 Military Veterans converged on D.C. (unsanitary public camps gigantic Hooverville) Bonus Bill failed in Congress. Hoover paid bonus to 6,000 soldiers The rest refused to leave 2.asp? ItemID=WE52&iPin=WPA0289&Si nglerecord=true
42 General McArthur Evicts Bonus Army Riots Cost two lives Ordered army to evacuate soldiers Hoover alleged that the Bonus Army was led by riffraff and reds - in truth minimal # of convicts and communists MacArthur was chose to evict the veterans 600 troops utilized tear gas, bayonets, and fire Allegedly a baby died when an encampment was set aflame Hoover was booed and belittled throughout the country
43 Japanese Militarists Attack China (Second Sino-Japanese War) Don t forget Russo Japanese War and Japanese and Imperialism Japan moved to conquest China as the west sought to rebuild economically Japan alleged provocation and attacked Manchuria China Violated League of Nations covenant as well as recent treaties signed in D.C. Could a us led League of Nations blockade of Japan stopped the onslaught US was stunned by the attack A minority urged a military response Stimson Doctrine (1932) US would not recognize territorial acquisitions achieved by force. Boycotted Japanese Goods Majority remained strongly isolationists and concerned with Great Depression
44 The League of Nations Balks Chinese responded to invasion by boycotting Japanese goods Japan then bombed Shanghai thousands of Chinese were killed Japan would commit even greater genocidal atrocities leading up to WWII WWII essentially begins in 1931 The League of Nations had the military power to intervene, by failed to act. Could not count on America s support
45 Hoover Pioneers the Good Neighbor Policy Embarked on goodwill tour of Latin America on a US battleship Economic imperialism was less popular during Great Depression The US could use Latin American assistance. Hoover withdrew US troops from Haiti Sough to end Monroe Doctrine policies Marines left Nicaragua in 1933 FDR would soon win the 1932 presidential election He inherited Hoover s legacy.
46 FDR
47 Exit Ticket Write your name on a piece of paper, answer the following questions and submit the paper before you leave. 1. How did economic prosperity of the US contribute to the 1929 stock market crash? 2. How did the US role as a creditor impact the European perception of the US? 3. Why was Hoover vilified by the unemployed living in Hoovervilles?
48 Do Now 1. How did economic prosperity of the US contribute to the 1929 stock market crash?
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