Chapter 39—The Politics of Boom and Bust

Identify and state the historical significance of the following:

Warren G. Harding Albert B. Fall John W. Davis

Charles Evans Hughes Harry M. Daugherty Robert LaFollette

Andrew Mellon Charles R. Forbes Alfred E. Smith

Herbert Hoover

“Ohio Gang” Teapot Dome Scandal Black Friday

Trade associations farm block Muscle Shoals Bill

American Legion McNary-Haugen Bill Reconstruction Finance Corp.

Washington Conference Dawes Plan Bonus Army

Kellogg-Briand Pact Agricultural Marketing Act

Hoover Stimson Doctrine Fordney-McCumber Tariff

Hawley Smoot Tariff

Weaknesses of Harding Administration

· A mediocre mind

· Inability to detect moral weaknesses in his associates

· Unwillingness to hurt people’s feelings by saying no

Harding’s cabinet (advisors)

· Charles Evans Hughes—naval arms limitation

· Andrew Mellon—taxes and tariffs

· Herbert Hoover—foreign trade and trade association

· Albert Fall—naval oil reserves

Republican economic policies under Harding hoped to encourage the government to help guide business along the path to profits.

During the 1920’s the Supreme Court often ruled against progressive legislation.

Organized labor was hurt by the demobilization policies adopted by the federal government at the end of WWI.

During WWI thousands of blacks moved north because the best paying jobs were industrial and located in the north.

The non-business group that realized the most significant, lasting gains from WWI was needy veterans.

The US became involved in the Middle East despite President Warren Harding’s policy of isolationism to secure oil drilling concessions for American companies.

Warren Harding was willing to seize the initiative on the international issue of disarmament because business leaders were unwilling to help pay for a bigger US navy.

The 1928 Kellogg-Briand Pact hoped to outlaw war as an acceptable solution to international rivalry.

In the twenties the Fordney-McCumber Tariff raised tariff rates and the Hawley-Smoot Tariff raised tariff rates so that by 1930, the tariff rates had been substantially raised from the opening of the decade.

As a result of the US raising its tariff rates in the 1920’s

· European nations raised their tariff rates

· The post war chaos in Europe was prolonged

· International economic distress was deepened

The Teapot Dome scandal involved the mishandling of naval oil reserves.

The major political scandal of the Harding administration resulted in the conviction and imprisonment of his Secretary of Interior.

President Calvin Coolidge was

· Honest

· Frugal (cheap)

· Shy

· Not a strong leader

During Coolidge’s presidency, government policy was largely set by the interests and values of the business community.

After the initial shock, many Americans reacted to the Harding scandals by excusing some of the wrongdoers on the grounds that “they had gotten away with it.”

One of the major problems faced by farmers in the 1920’s was overproduction.

In the mid 1920’s President Coolidge twice refused to sign legislation proposing to subsidize farm prices.

The intended beneficiaries of the McNary-Haugen Bill were farmers; the intended beneficiaries of the Norris-LaGuardia Act were labor unions.

The Progressive Party did not do well in the 1924 election because too many people shared in the prosperity to care about reform.

In 1924 the Democratic party convention came within a single vote of adopting a resolution condemning the Ku Klux Klan.

America’s European allies argued that they should not have to repay loans from the US made during WWI because they had paid a much higher cost in human lives, so it was only fair for the United States to write off the debt.

America’s insistence that the war debts be repaid resulted in the French and British demanding enormous reparation payments from Germany.

America’s major foreign policy problem in the 1920’s was addressed by the Dawes Plan, which tried to solve the tangle of war-debt and war-reparation payments.

Easily the most colorful presidential candidate of the 1920’s was Alfred E. Smith.

The following were political liabilities for Alfred E. Smith;

· Being Catholic

· Supporting the repeal of prohibition

· Being from the “big city”

One of Herbert Hoover’s chief strengths as a presidential candidate was his talent for administration he was not good at;

· Adaptability and give and take of politics

· Experience as a politician

· Ability to face criticism

When elected to the presidency in 1928, Herbert Hoover was a millionaire.

The Federal Farm board, created by the Agricultural Marketing Act, loaned money to farmers primarily to help them organize producers’ cooperatives.

The Hawley-Smoot tariff of 1930 caused the worldwide depression to deepen.

In America, the Great Depression caused a decade long decline in the birthrate.

President Hoover believed the Great Depression could be ended by;

· Directly assisting businesses and banks

· Keeping faith in the efficiency of the industrial system.

· Continuing to rely on the American tradition of “rugged individualism”

· He did not believe in DIRECT aid to people “handouts”

President Hoover’s approach to the Great Depression was to adopt unprecedented federal initiatives to combat it.

An “alphabetical agency” set up under Hoover’s administration to bring the government into the anti-depression effort was the Reconstruction Finance Corporation (RFC)

The RFC was established to make loans to businesses, banks and state and local governments to help them get out of economic trouble.

The Bonus Expeditionary Force marched on Washington D.C. in 1932 to demand immediate full payment of bonus payments promised to WWI veterans.

President Hoover’s public image was severely hurt by his handling of the dispersal of the Bonus Army.

In response to the League of Nations’ investigation into Japan’s invasion and occupation of Manchuria, Japan left the League.

The 1932 Hoover-Stimson doctrine declared that the United States would not recognize any territorial acquisition achieved by force of arms.