Transcript MR. LIPMAN’S APUS POWERPOINT CHAPTER 32

MR. LIPMAN’S APUS
POWERPOINT
CHAPTER 32
Politics of Boom and Bust
International and Domestic
KEYS TO THE CHAPTER
 Three
Republican Presidents (HCH)
 Isolationism
 Japanese Expansionist Policies
 High Tariffs
 International Debt
 Over Production on the Farms
 Black Tuesday (10/29/1929)
 Labor Movement Gains Strength
President Harding
 Pro-Business
but plagued by scandals
 Courts
become business oriented
 Adkins
v. Children’s Hospital (1923)



Reversed Muller v. Oregon (1908) that said
that women deserved special treatment
Held that women had vote, and therefore no
longer needed special legislation
Struck down minimum-wage law for women
 Consolidation



in business
Agreements made to reduce competition
Secretary of Commerce Hoover encouraged
cooperation / cut throat competition wasteful
Esch-Cummins Transportation Act of 1920

Encouraged private consolidation of railroads
1924 – Bonus Baby’s
• Money that veterans would have gotten had they
stayed in factory jobs (instead of fighting) to be paid
as “bonus” in 20 years
 1921/1922



– D.C. Naval Conference
All major powers but Russia invited
Ration of 5:5:3 (US, Britain, Japan) on naval
battleships and aircraft carriers
British and Americans promised to not fortify
possessions in Pacific, including Philippines
• Japanese not subject to these restrictions

Four-Power Treaty
• US, Britain, France, Japan promised to not seek
increased holdings or naval strength in Pacific
Open Door policy in China now international law
 Kellogg-Briand


Coolidge’s secretary of state (Kellogg) signed pact
with France to “renounce war”
Pledge by nations to forsake war (62 sign)
 Weaknesses

Pact (Pact of Paris)
of the Kellogg-Briand Pact
Defensive wars permitted
• Nations could make up excuse of self-defense


No enforcement provisions
Lulled Americans into false sense of security
 Effects

of the high tariff policies:
Europeans needed to sell manufactured
goods in US to
• Achieve economic recovery
• Pay down war debt to US
• Purchase manufactured goods from US



High Tariffs slowed international trade &
caused Europe to retaliate & increase theirs
Business in America suffer in future because
can’t sell goods competitively overseas
Cost of goods to consumers would rise

Teapot Dome Scandal
 1921 – Albert B. Fall (secy of interior) got
Secy of the Navy Denby to transfer naval oil
reserves at Teapot Dome, Wyoming and
Calif. to control of Interior Department


Fall leased these lands to oil developers Sinclair and
Doheny and received bribes from both
Case dragged on until 1929
• Fall got year in jail; Sinclair & Doheny acquited

Increased distrust of government and courts
Teapot dome investigation
(An overwhelming, advancing force that many believe would
crush everything in its path. In the long run it didn’t)
Harding’s attempt to escape the scandals
 1923 – cross-country speaking tour to Alaska
 August 2, 1923 died of pneumonia and
thrombosis (blood clot in a blood vessel)
 Harding’s legacy
 Worst news of corruption came out after death
 Too weak to be a good president


“Silent Cal” Coolidge takes over and his
philosophy says gov’t should support
business, not right social wrongs
“Silent Cal”
----------Favors
Business
and wants to
reduce
government
 Problems
for farmers in 1920s:
overproduction and declining prices



High prices drastically declined & productivity
up (over supply reduces prices forcing more
production)
Congress tries to help but President uses veto
power
Brings increase in progressive movement by
farmers again
A Three-Way Race for President 1924

Results



Coolidge won
with 54% of the
popular vote
La Follette
(progressive) only
won Wisconsin,
but polled well in
Midwest &
mountain states
Davis (Democrat)
got South and
cities with large
immigrant
populations

Coolidge continues isolationism policies except
in Latin America where we still keep troops:
 Dominican Republic until 1924
 Haiti, 1914 – 1934
 Nicaragua, off-and-on 1909, 1926 – 1933
 Mexican nationalization of oil reserves
• US businessmen want armed intervention
but Coolidge relies on diplomacy
• International debt brings the most issues

International debt problem $10B loaned by US to
Allies during WWI



US wants to be paid back
Allies thought US should write it off
• They had suffered the casualties
• Their $ had financed boom in US economy
• US’s tariffs made it impossible to sell goods
US insistence on repayment led to cycle of
financial problems in Europe
• France & Britain demand reparations from G. of $32 billion
• Berlin inflated its currency to repay debts
German Inflation- Might as well burn it


The Dawes Plan of 1924 further complicated
the international financial system

US bankers loaned $ to Germany

Germany paid reparations to France and Britain

Allies paid war debts to US
System would break down if US credit ended

This occurred with 1929 crash
 Effects




of the financial meltdown (in 1929)
European nations defaulted on their debts
US never got its money
Bitter feelings against US in Europe
A cause of isolationism in the US in the 1930s

Results of 1928 Election {Hoover vs. Smith}
 “Hoover wins some democrats”
• Southerner Democrats broke from Smith because of
his Catholicism, “wettism”, foreignism, liberalism


Hoover wins a landslide with 58% of the vote
Not a typical politician
• Never before elected to public office
• Not used to criticism, compromise and
asking for votes
• Real power was in humanitarianism,
organization, and honesty

Hoover’s first moves are to try and help farmers
and to seek increase in tariff

Effects of the Hawley-Smoot Tariff (60%)




Reversed worldwide trend for more
reasonable tariffs
Huge trade gaps between US and
foreigners
Plunged US and world deeper into
(already begun) depression
Forced US to retreat further into
isolationism

October 1929 - Great Crash ends roaring 1920s


Foreign and domestic investors began a sell-off
October 29, 1929 – “Black Tuesday”
• Scramble to sell of over 16 million shares

December 1929 - $40 billion in paper wealth erased
 Effects

of the Crash
Unemployed workers
• 1930 – 4 million
• 1932 – 12 million



Wages slashed
5,000 banks failed erasing savings
Homes and farms foreclosed on
Panicked Stock Traders outside the NYSE
A BANK RUN AFTER THE CRASH
Unemployment
Line in the
Depression
Causes of
the Great
Depression
----------Sound
familiar to
issues
today?
Consumer
Borrowing in the
1920s
----------------It will rise even
higher in the late
1990s and 2000s
-------------In 2007 America
has a negative
savings rate
Note
skater is
so happy
he is not
looking
ahead
 Weak




farm economy
1/2 of all Americans still lived in rural areas
Farmers never shared in prosperity of 1920s
Suffered from overproduction, high debt, and
low prices since end of World War I
Further hit with severe droughts during 1930s
 Government



policies
Lack of regulation over business
High tariffs hurt international trade
Low taxes put tax burden on middle class
 Hoover
does not believe in all out
government aid: individuals should help
themselves – Makes a compromise policy:
assist those at the top of the economic
pyramid (such as banks and railroads)
 Relief would trickle down to poor (same
policy as R. Reagan)
Spending on relief revolutionary for the time,
turned away from decades of laissez-faire
beliefs sets up idea for New Deal under FDR

Popular
feeling
in 1932
election
 Hoover
finally recommends Congress
appropriate massive sums for public works

Total of $2.25 billion spent
 Hoover


Dam begins 1930 & finished 1936
Created lake for irrigation, flood control,
electric power
1932: Reconstruction Finance Corporation (RFC)


$1/2 billion government lending bank
loans to business but not to individuals
– Norris-La Guardia Act
greatest law ever passed for labor
 1932



Outlawed “yellow-dog” contracts
(agreement not to join a union as a
condition of employment)
Forbade federal courts from issuing
injunctions to prevent strikes

W W I soldiers want bonus now - Voted in 1924;
payable in 1945
 Bonus

Expeditionary Force (BEF)
20K marched on Washington to demand
entire bonus and set up public camps
 Bonus
bill fails in Congress
 Several


thousand refused to leave
Riots kill 2 people
Hoover orders General Douglas MacArthur to
disperse the Bonus Army & he overdoes it
Police and Bonus Army Clash 1932
Invasion violates league of nations and shocks America
Japan as Breaker of Treaties After Manchuria
Japanese
portrayed as
the
aggressor
nation

US takes paper action against Japan:
 Secretary of State Henry L. Stimson doctrine:
• US would not recognize territorial
acquisitions gained by force

Japan is not deterred
 1932 – Japan bombs Shanghai, killing many
 US remains isolationist – refusal during
depression to intervene in China
• Some say this is when war actually started