Warren Hardin’s Administration

• Elected in 1920, this marked a return to a Republican presidency (that would be continued with Presidents Coolidge and Hoover).

• Less progressive — preferred helping people by cooperating with big business instead of direct govt. action — shows how the fed. govt and big business are still close.

• Unfortunately, despite his charisma, Harding unintentionally allowed for rampant corruption in his cabinet (similar to Grant).

Harding’s Cabinet

• Sec. of State Charles Hughes: brilliant (and conservative)

• Sec. of Treasury Andrew Mellon: wealthy Pittsburgh aluminum steel king who believed high taxes on the rich were annoying (obviously) and that they brought a smaller net return to the Treasury.

  • Mellon made many tax reductions for the rich (in income, estate, and excess profit taxes) → these “spare the rich” policies shifted tax burdens to the middle class

• Sec. of Commerce Herbert Hoover: used to be food administrator during wartime, promoted because he prioritized foreign trade.

• Sec. of Interior Albert Fall: ironic because he's an anti-conservationist in charge of protecting the nation’s natural resources.

• Attorney General Harry Daugherty → really corrupt

Cabinet Actions

• Harding's cabinet set back many of the decade's progressive reforms by taking advantage of his kindness and re-establishing a laissez-faire economy, where the govt. aided business in maximizing profits.

• Harding appointed 4 out of the 9 Supreme Court Justices to push his beliefs in court decisions.

• Adkins v. Children’s Hospital (1923): reversed the decision from the case Muller v. Oregon that declared women have special protections in the workforce — argued that, bc of the 19th amendment, women are equals and therefore don't need protections.

  • sparked debate over gender differences → were women different enough from men to warrant certain protections, or should they be treated like equals

• Esch-Cummins Transportation Act (1920): encouraged private management of railroads; the ICC had to ensure they would be profitable — govt. is helping business.

• created the Veterans Bureau (1921): provided hospitals and rehab services for disabled veterans.

• Adjusted Compensation Act (1924): after some conflict, Congress agrees to pay veterans a sum of money depending on their years of service.

Foreign Policy:

• Congress officially declares WW1 over in 1921 (didnt end at the Treaty of Versailles bc technically the US didn’t accept the treaty)

• Harding sent Secretary Hughes to the Middle East, securing the right for US oil companies to have some share in the region’s resources

Harding’s Foreign Policy and Economy

• Harding maintained an isolationist foreign policy after the war — any international actions also had isolationist motives.

• Washington Naval Conference (1921): seven world powers meet to discuss disarmament (removal of some weapons) from each of their navies.

• Five-Power Treaty: limited the construction of certain types of large naval ships and applied ratio limits to how many a country could build.

• Four-Power Treaty: it replaced an old Anglo-Japanese treaty and preserved the status quo in the Pacific (?) Concession to Japan.

• Nine-Power Treaty: all powers would abide by the Open Door policy in China, which gave every country equal shares over trading

  in China and reaffirmed China's territorial integrity.

• Kellogg Briand Pact (1928): signed between the US and the French foreign minister, it was ratified by 62 other nations and outlawed war UNLESS it was defensive (meaning another country attacked first)essentially useless because all wars start when one country attacks another but shows how desperate the US is for a false sense of security

• Fordney-McCumber Tariff (1922): high tariffs like these became popular as industrialists wanted to lower foreign competition — many European countries retaliated with their own trade barriers — further the international economic distress that would culminate in the Great Depression later on

• Teapot Dome Scandal (1922): Albert Fall accepted bribes in exchange for leasing govt land to oil companies spilling tea about govt corruption; public is now suspicious reputation is worsened with more scandals throughout the years.

Coolidge’s Administration

• Calvin Coolidge, Harding’s VP, becomes president following Harding’s death in 1923 → from New England, he was brilliant but serious and extremely quiet. Followed Harding’s business-friendly policies.

Farmer Problems

• after the war, the govt stopped guaranteeing high prices for goods produced by farmers as other nations began to grow crops

• Machines unexpectedly worsened this — because they were able to produce plenty of crops, their value decreased as surpluses piled up.

• Farm Bloc est. in Congress (1921) — proposed the McNary-Haugen Bill: sought to keep high agricultural prices by mandating the fed. govt. to buy up crop surpluses and sell their abroad — although passed by Congress, Coolidge vetoed it.

• Farmers are frustrated with the President's lack of empathy for them and his frugality reaarding their problems (refuses to spend money on various farmer relief programs)

• Election of 1924: although Coolidge ultimately won re-election, Senator Robert La Follette of Wisconsin gained significant support from farmers and labor unions for his liberal and progressive reform ideas

  • govt ownership of railroads, farmer relief, preventing anti-labor injunctions, and limiting the Supreme Court’s power to invalidate laws passed by the Congress

  • he was not very popular because people wanted to enjoy the economic prosperity of the time instead of focusing on reform

Coolidge’s Foreign Policy

• Although the US remained largely isolationist, they did intervene with weapons in the Caribbean and Central America

• took out troops in some Latin American countries but later sent their back; US oil companies also wanted the govt to send an expedition to Mexico after the Mexican govt asserted sovereignty over some oil resources resolved diplomatically, but shows how govt and business are intertwined.

• Meanwhile, the US (now a creditor nation) was waiting for the other Allied nations to pay back the $10 billion they had been loaned during the war

• Allies invalidate need to repay by asserting that the US economy actually benefited from the war and that tariffs made it impossible to make the money.

• Dawes Plan (1924): adjusted German reparation payments to make them easier to pay off so that they may eventually rebuild their economy and give money to England and France, who would use those payments to reimburse the US for their loans

• The US was never completely paid back because the Great Depression deeply impacted international finance, and European nations saw the US as incredibly greedy.

• Election of 1928: Coolidge decided not to run, so Republicans nominate his Secretary of Commerce Herbert Hoover

  • Democrats choose Gov. Alfred Smith of NY, who opposed prohibition and was Roman Catholic (controversial)

  • Hoover wins, bc he supports isolationism, free enterprise, and a small govt → all policies support big business

Hoover’s Administration

• Although the economy was thriving, unorganized wage earners, especially farmers, did not benefit from the 1920s prosperity.

• Hoover wanted to help the farmers without giving them ‘handouts’

• Agricultural Marketing Act (1929): set up the Federal Farm Board to buy agricultural surpluses, which would stabilize the prices of crops however, the board ultimately failed because it couldn't handle all the surpluses

• Hawley Smoot Tariff (1930): although it was intended to mildly change the existing tariff to provide greater relief for farmers, it ended raising the tariff by 60% after numerous amendments by lobbyists deepened the financial depression that had already begun in the US and other nations. Seen as economic warfare because it didn't allow for foreign trade increased intn'l chaos.

• Black Tuesday (1929): millions of stocks were sold in a panic. Partially caused by the British, who increased their interest rates to bring back any capital taken abroad by American investments. Millions lose jobs, thousands of banks are closed — official start of the Great Depression

Causes of the Great Depression

• Overproduction: of goods and crops by factories and farms — machines are producing more than people are capable of consuming, and $ was being invested in factories instead of people's salaries.

• Income inequality: workers wages stayed the same as corporate profit increased and the general public was forced to take on the financial burdens.

• Stock Market speculation: where investors bought stocks on margin using borrowed $ — led to erroneously high stock prices

• Excessive use of credit: these installment plans stimulated consumer buying by allowing people to purchase the latest inventions and technology.

• Fed. Govt's policies: supported Hoover's "rugged individualism" beliefs in self help in order to build American character Hoover plays little role in public welfare and people resent Hoover. He does, however, eventually provide indirect help to the people because he realizes it's his obligation as a president.

• Global Economic problems: because nations were busy paying off war debts and reparations. Many also placed high tariffs on foreign goods.

• Weak Farm Economy: farmers had trouble selling their crops, which led to farm foreclosures

• Weather: severe drought in the Mississippi Valley and the Dust Bowl caused thousands of farms to be sold as farmers had to look for work elsewhere.

• Hoovervilles: slums that started after people were unable to pay off their mortgages and their houses were foreclosed — further increases resentment towards Hoover.

• Reconstruction Finance Corporation (1932): lent money to insure companies, banks, railroads and agricultural organizations, hoping that the benefits would ‘trickle down’ to workers — preserved

  Hoover's ‘self help’ ideology while also providing some relief to the public.

• Norris-LaGuardia Anti-Injunction Act(1932): banned anti-union contracts and said federal courts couldn’t stop any peaceful protests by labor unions → labor unions have little to no obstacles in protesting, so their employers would be more likely to give into their demands.

• Bonus Army: where WW1 veterans marched to DC to demand immediate payment of their entire bonus, but Hoover sends troops to teargas them → Hoover’s reputation is further tarnished.