Ch. 31: Politics of the 1920s

Politics of the 1920s

1920 election:

• Woodrow Wilson attempted to make a referendum on the LEague of nations (Solemn Referendum)

• he advocated for americans to vote for democratic candidates for congress and presidency

• He wanted to ratify treaty of versaille and American participation in the league of nations

IN Election of 1920:

• Republicans nominated: Warren Harding (Ohio)
  • His VP running mate was Calvin Coolidge (Republican gov. From Massachusetts)
• Oppose to American involvement in the League of Nations
• Advocated for: Wanted higher tariff, reduce the income tax, and restrict immigration
• Democrats: Nominated: James Cox and FDR
• Supported American involvement in the League of Nations
• Economic platform: Continuation of wilson’s economic policies which would be an attack on the triple wall of privilege (Trusts, banks, Tariffs)
• Harding and Coolidge vs. FDR and James Cox (Three become president)
• Harding delivered front porch campaign
  • he wasn’t a bright man
• Cox followed William Jennings Bryan (Delivered speeches all across the country)
• In 1920, neither of the presidential candidates mentioned the passage of the 19th amendment (January 1920 it passed)
• In 1920, the 19th amendment was in effect; all women of voting age could vote in elections
• Outcome: Landslide for Republicans
  • They took control of both houses of congress; historians have said there are two important things to note for the outcome:

1. It was a total rejection of Wilson’s idealisms (self determination  as the cornerstone of American policy for 100s of years )

2. Americans wanted simpler way of life (Don’t want to sacrifice, progressive crusade)

• US wanted to retreat into itself and go back into the past
  • That is going to have a perilous outcome for the nation and the world as America tries to go back in time

Warren Harding

• Campaign: “Return to Normalcy”
  • grown tired of upheaval from Progressive era and war and US wanted to go back to simpler America
• Harding’s administration during the 1920s was dominated by republicans (congress and presidents)
• During Roaring 1920s there was a Booming economy
  • Business thrives and prospers; however, in 1920s, farmers struggle, labor union struggled as well
• WWI and Progressive era was good for labor
  • labor lose 30 % of membership during 1920s and loses political voice (In numbers there is strength)
• In 1919 (what affected repub party)
  • Theodore Roosevelt died: drank 1 gallon of coffee today
  • Contributed to his heart not being able to survive
  • roosevelt was the leader of progressive wing of REpub party (election of 1912, change nature of repubs)
  • conservative wing has seized control of Repub party
• Prevailing idea: Nation would benefit if business profited, which would Helped workers, the money goes back into economy, and thus businesswould raise standard of living
• Harding was PRO Business
• He had a mediocre mind and had love child and mistress
• All he really did was sign into laws bills the republican party passed
• His presidency did fulfill some campaign promises:
  • He signed into law the reduction of the income tax, which would generate revenue by increasing the tariff (another promise)
• Strict laissez faire meant no tariff
• Fordney McCumber Tariff: Increased tariff from 27% to 38.5%
• Mistakes leaders were making:
• WHy would Americans think that increase tariff was a good idea:
  • The High protective tariff was necessity because  they were fearful that after the war that Europe would flood the war with cheap European goods, so they wanted Americans to buy AMerican products
  • The tariff barrier would protect American businesses and American jobs
  • But if america has tariff barriers, europe also puts up tariff barriers
• An international tariff war between Europe and US was Not good for European recovery
  • It was Initially good for US, but what we haven’t realized is global economic interdependence
  • The US economy health depends on Europe economy health
• Makes international economic situation worse
• Own tariff policies would contribute to the global depression (Self-inflicted wound), but it sold well at home
• Third accomplishment of Harding presidency:
  • Est. bureau of budget: all gov. Expenditures together in a single budget for congress to review
  • every dollar the US gov spends is put together in a single budget

Supreme Court

• Moves backward

• Conservative court in 1920s and this court is going to axe some progressive legislation

• Killed federal child labor law, but not necessarily because they believed that children should work, but the law was poorly written

• Stripped away many of the gains labor unions had made during the progressive era and WWI

• 1920s was VERY PRO business

• Court also restricted government intervention in the economy and there was no trust busting (only handful if any antitrust measures during this period of time)

• Adkins vs. Children's Hospital

  • THe court overturned Muller v. Oregon
  • Had the right to 10 hour workday for Women because women need to procreate
  • Brandeis brief
  • Women don’t need Muller V. Oregon
  • 19th amendment meant women had more say in the workforce
  • With the ratification of 19th amendment, women became political equals of men, so they no longer protect women

• Feminists were somewhat happy, but it was a setback because some women don’t want to work more than 10 hours a day

• No national standards for work hours (come during Great Depression)

Foreign Policy

• The US did not join the league of nations, and if you look at our foreign policy on the surface, it would be easy to say that the US in the 1920s retreated to policy of isolationism, it’s true to a degree. There was disillusionment in the country after the war, Europe had problems: Communism in Soviet Union, Americans were fearful of another war
• Makers of foreign policy pursued international agreements and treaties that was going to promote AMerican interests while also maintaining peace
• An important part of Republican vision for 1920s: trying to promote peace AND cut back on military expenditures (Fiscally conservative)
• As they cut back on own military spending, they needed to make sure that international community does the same thing (or we could be weaker)
• Crowning achievement of Warren Harding’s presidency organized by secretary of state Charles Evans Hughes was the Washington Naval Conference
• Dignitaries and diplomats invited to Conference (Don’t invite Germany because of treaty of versaille said they can’t be armed, and they didn’t invite russia because they were communists)
• Washington Naval Conference when Hughes delivers his introductory comments shocks people with 10 year naval holiday
  • This meant to freeze navies at existing sizes and don’t increase for 10 years
  • This promotes peace and disarmament
• 10 year naval holiday doesn’t happen; sets tone for conference
• GERMANY (very small domestic police force, and no army) AND RUSSIA (communists) aren’t here
• Positions of power
• 5-Power Treaty: US, Great Britain, Japan, Italy, and France
• US and GB (5), Japan (3), Italy and France (1.5)
• Ratios represent: limit tonnage of battleships
• For every 5 tons US would have, GB would have 5 tons, Japan would have 3 tons, and Italy/France would have 1.5 tons
• US’s brokered an agreement
  • Our navy was on par with British royal navy (Japanese felt slighted, major power in Asia and they should have same respect as US/GB)
  • japan doesn’t sign this treaty
• 4-Power treaty:
• US, Great Britain, Japan, and France agree to respect territorial possessions in the Pacific
• Throw Italy out: no territorial possessions in Pacific
• Agreement is signed
• 9-Power treaty: US, Great Britain, Japan, France, Italy, the Netherlands, China, Belgium, Portuguese
• It made the open door official with respect china’s territorial integrity
• These treaties (1930s) are violated by japan and the international community doesn’t do anything
• Kellogg-Briand Pact (Pact of Paris-internationally):
• Signed by 62 nations
• Tried to outlaw aggressive war
  • Shortcomings: allows for defensive war; (Germany invades poland in 1939, which was offensive), no provision for enforcement if the pact was violated
  • Countries trying to outlaw war

Scandal in Harding Administration

• Washington could not tell a lie, but Harding could not tell a liar, he surrounded himself with liars; worst scandal since Grant
• Harding was dim-witted; so people around him took advantage of him
• Doherty doesn’t prosecute certain criminal cases (gangs gave him money)
• Charles Forbes was guilty of putting his hands on $200 million
• Teapot Dome: Wyoming
• The US Naval Oil reserves are in TEapot Dome
• Secretary of Interior: Albert Fall
• Fall Accepted bribe of $400,000; he opened up the oil reserves for private use (doheny and sinclair also involved) and he  leased it out to two oil men
• Investigation:
  • Albert fall was prosecuted and went to jail, first sitting cabinet member in US history to go to jail
  • He only got 1 year while the other men were not prosecuted
• Tarnishes Harding administration; questioned people’s faith in justice and legal system; knew multiple people were involved and their sentences were short
• Harding has no direct implication/association
• 1923: He had a massive heart attack and died; allowed him to RIP

*lower voter turnout

Calvin Coolidge

• Harding and coolidge had unremarkable presidencies;

• Coolidge had no numerous achievements

• Coolidge won popularity in 1919 during the boston police strike (gov. Of massachusetts)

• After the numerous scandals of the Harding administration which had been revealed to the public , the public was losing faith in office of the presidency

• Harding had a Scandalous presidency, and he was replaced with man of character and integrity who restored America's faith in office of presidency

• Silent Cal was a man of very few words

• REMEMBER this and sum up his philosophy/Whole era of 1920s (from political perspective: The Business of America is Business

• What he means by it: Europe has centuries of history—culture, contributed to music and art—-and look at US which is a relatively young country compared to old world

  • what America does is business and composed of innovators

• The man who builds a factory builds a temple

• Fiscal conservative

• Ex: Farmers and McNary Haugen

• Farmers did well during the war years because there was demand for farm products

• They were feeding american armed forces and allies and armed forces of our allies so production was very high and during this period of time a lot of farmers took out loans

• This meant more acreage, more crops, modern machinery to increase their crop yield

• Prosperous time meant a prosperous lifestyle

• After war was over, demand dropped significantly

• Problems of the farmer included overproduction

• How does a farmer make money:

  • By selling crops
  • THey make more money then produce more crops, butanother farmer is producing the same crop so supply is going up (nothing wrong if there's high demand)
  • after war there is low demand and a great amount of supply so the price drops

• Demand is low because europeans are no longer ordering because war is over and europeans grow their own crops

• Farm income goes down, farmer has debt

  • Debt goes up and income is going down
  • The Farmer needs more money to pay off debt by selling crops
  • So they produce more crops which increase supply, price continues to drop, income goes down and farmer is stuck in a cycle debt in which they can't get out

• Farming is an independent business

• Urge congress to help them

• Congress writes McNary Haugen bill

  • This kept agricultural prices high by buying surpluses and selling it abroad ***It was a system known as price supports

• Republican congress and president passes the bill, which goes to president's desk, but Coolidge vetoed it twice (they went back there and rewrote it)

• Farmers thought he wasn't sympathetic

  • coolidge thought farmers were never going to learn the lesson and they were always going to overproduce (nature of farmers)
  • The gov would be throwing away money at a problem that would never be solved

1924 Election

• Republican nominee: Calvin Coolidge
• Democratic nominee: John Davis
• Progressives: Robert Lafalette:
• Democrats split in 1924 (Urbanites vs. farmers; new immigrants vs. old batch, wets (opposed to prohibition) Vs. dries (Support prohibition)
• Repubs want coolidge because the economy is going well
• Democrats are still Southern
• Coolidge wins in a landslide ***Robert Lafalette did perform well (5 million votes) and part of that was because conservative repub wing took control
  • conservative democrats took control
  • The liberals all voted for progressive liberalism, which emerges in 1932 election
• Prosperity reigned
• Coolidge vetoed a bunch of bills because he just wanted to maintain a balanced budget; he did nothing virtually
• Foreign policy issue regarding WWI debt:
• At the end of WWI the US was a creditor nation (people owed us money)
  • The allies (France and Britain) owed US $10 billion and we wanted it
• Allies thought debt should be forgiven
  • Reasoning: Remember when US was neutral until 1917, so for three years our countrymen bled and died, but Americans said NOPE pay me
  • Remember when you had a recession before WWI and we bought from you and lifted you out of recession, but America said NOPE pay me
• WHo owes france and britain money from the war: Germany
• America said don't demand war payments from Germany because it will ruin their economy
• Europe can flood American market with products
• Germany can't pay so France sends in troops to occupy custom houses to collect money to pay off debt, which is an act of war
• US comes up with solution:
  • Dawes Plan: US would loan $2 billion to Germany
  • Germans could use to pay French and British some of their war debt
  • The French and British could pay us back
  • We gave money to pay ourselves back
• France withdraws troops from Germany
• Alienating our allies because they're angered;
  • This only benefits the US and American bankers because we loaned and we got back interest; at the end Calvin Coolidge's son died (blood disorder)
  • Coolidge decided that he would retire from public service
  • He finishes term and IN 1928, there's a void in the republican candidacy

Mixed Economic Development

• 1921 included a brief recession for US
• Boom years of the 1920s: 1922-1928
• Lengthy period of business prosperity (not all americans share in prosperity)
• Decade ends with economic disaster (Great Depression) In 1929
• During boom years: 1922-1928,
• Unemployment was generally below 4% and that's usually a sign of a very healthy economy if unemployment is below 4%
• Standard of Living FOR MOST Americans (more than half) improves significantly
• "Real Income for both middle class and working class increased substantially"
• Real Income (Increase in income after something is taken into consideration, but what could impact standard of living—inflation)
• Standard of Living: Unemployment rates/income rise-decline vs. inflation (More income rise percent vs. less inflation which resulted in an increase in standard of living)
• Prosperity was not enjoyed by all Americans and it was Far from universal
• Approximately 40% of American families (urban and rural areas) were living in the poverty range (Family of 4, with income of less than $1500 a year)
• Two large groups of Americans who were not enjoying the prosperity: Farmers and Unorganized wage earners (people who are laborers but not in labor union)

1928 Presidential Election:

• Calvin Coolidge retires from Public life because of his death of his son and he wanted to Spend more time with the family
• Republicans nominee: Herbert Hoover
  • SPotless reputation (for his character)
  • Continuation of Coolidge
  • After scandals of Harding, America needed a man of integrity and character at ballot
• Most able administrator in US history
• Served WIlson (head of food admin—heroic for feeding Belgiums in WWI), Harding, and Coolidge
• Hoover was a self-made millionaire (no such thing really)
• Position on big issues: opposed to american participation in the league of nations; for a higher tariff, a dry (supported federal regulation of prohibition), stood for continued prosperity
• Democratic nominee: Al Smith–NY
• Smith for state control of alcohol regulation (leave it up to the states) so his position was wet
• He Wanted a lower tariff and he supported "Constructive foreign policy" (he didn't even know what that means)
• Politicians throw terms and it sounds good and they never answer what it is

Campaign

• 18th amendment was hotly debated (8 years into prohibition; prohibition lasted for 13 years)
• *the republican campaign promised (be made fun of during depression for it): Promised a chicken in every pot and a car in every garage (always be fed and prosperous enough to afford an automobile)
• Al Smith (IRish-Catholic) was the First catholic presidential candidate
  • America was overwhelmingly a protestant nation
  • They did not want catholic candidate because they feared the extension of the papacy and pope would influence too much
• Candidates tried to keep it distinguished and dignified
• Religious bigotry played a role in the election
• Radio plays a role in the election
  • Popular medium of the era and Al Smith did not have a voice for radio
  • He had a THick NY accent (from the battery), which Doesn't play well with certain parts of the country
• Hoover wins in a landslide: Numerous reasons for this—Al SMith's irish-catholic background, wet in a dry time
• Hoovercrats were democrats (didn't like smith for his catholicism and prohibition) who voted for Herbert Hoover
• Al Smith did NOT lose (technically)
• Why he won:
  • Prosperity of the era was why Herbert Hoover won
  • There was prosperity under republican leadership
• Inauguration: March of 1929
  • Hoover was sworn in and the economy is on the surface rolling along

Fall of 1929: Great depression

• NY Stock exchange: Stocks increasing for 18 months (march 1928-September 1929)
• SEptember 3rd, 1929—DJIA (Barometer of the stock market's health—30 major stocks that are that measure—-reached a high in 381)
• Average investor who put 1000 investors on the day Hoover was elected had doubled their investment in a year (remarkable return)
• By november of 1929 DOW index lost nearly half of its value
• Bottomed in 1932 and Lost almost 90% of its value
• The crash came in Black Tuesday: October 29, 1929 and signified beginning of Great Depression
• Cause of the crash: Overspeculation

Reasons why it happened: CAUSES OF THE DEPRESSION (NOT THE CRASH)

• Uneven distribution of income
• Stock market speculation—investing (long-term sharing in company's profits) speculation (make profit quicker; bubble in market)
• Excessive use of credit—-buying margin on stock market and installment plan
• Overproduction of consumer goods
• Weak farm economy
• Gov. policies (self-inflicted wounds) High tariffs, lack of gov. Regulation of business
• Global economic problems; unhealthy european economy hurt ours

Economic Depression

• GNP—Gross national product: Value of all the goods and services produced by the nation in a year
• Before depression: $104 billion (1928)
• 1932: $56 billion—-decline in goods and services being produced
• 1928-1932: income declined by over 50% (National income cut in half)
• Wiped out 10 million dollars in saving accounts and 20% banks closed (money was gone, no insurance program)
• By 1933 (Worst year of depression): 13 million people were unemployed and 25% of the non agricultural workforce (Average rate of depression number)

Hoover's Policies

• Belief that hoover didn't do anything, and it's far from the truth
• Philosophy that was common of the era that a depression was a natural part of the business cycle (can't predict when it was going to come, how long it was going to last, nor the levels of devastation; knew that it would come and wreak havoc and then we´d recover and return to prosperity)
• For generations:
  • The attitude was laissez faire (economy repairs itself; gov. is hands off)
• ***Throughout his presidency, Herbert Hoover opposed direct relief—gov. handout/dole (Stark contrast to FDR)
• Believed it would create a large bureaucracy
• Concerned about the cost (increase national debt)
• Initially (during head of food administration; no mandates–voluntary):
  • Asks business and labor to voluntarily help the american economy
  • Requested presence of business and labor leaders
  • Asked Business leaders: Don't cut wages and don't lay off workers
  • Asked laborers: Don't ask for higher wages and don't go on strike
  • All voluntary! Because what most people believed was that it was going to be a short lived depression
• Hoover's philosophy in 1929/1930 was that Americans should be rugged individuals
• Rugged individualism: During hard times, Americans lift themselves up through hard work and character; people believe he's out of touch with people's situation
• To prove that he wasn't unfeeling, he did believe in offering relief (not responsibility of federal gov. tho )---believed local and state gov. And private charities should assist the people; How would a bureaucrat in Washington know what individuals need?
• Crisis is deepening and getting worse
• In 1930—-Hoover's change of action
• Cynic or optimist: some say that by 1930, Hoover realized that the depression was the worst and gov. Needed to change its philosophy to address American people need vs. political reality smacked him in the face
• Midterm elections (referendum on party in power—traditionally party in power lose seats); democrats crushed them (unhappy with hoover administration policy)
• From 1930-1932: By end of presidency, Hoover would have taken more action to shape the national economy than in president in history up to that point in time; so you can't say that he did nothing to address the problem because that's factually inaccurate (didn't do enough, timing was wrong, or whatever but not that he didn't do anything)

Actions hoover took

• Over 700 million dollars spent on Federal works programs: they built over 800 public buildings (school, municipal offices), paved 37000 miles of highways (Shovels in the Ground: gives people work because people have to dig, pave, and etc. and asphalt from somewhere, helps people with jobs, which means they aren't being foreclosed on—spending money, going into businesses, helps with profits, increase wages and add members to payroll); Most famous works programs: Hoover Dam (Nevada and Arizona)

• Hawley Smoot Tariff

  • BEFORE 1930 (before dems win midterm elections)
  • 1000 economists urging him to not sign hawley tariff—said it would be disastrous
  • The president signs it into law
  • The Hawley SMoot tariff was the highest protective tariff in American peacetime history (Raised upto 60%)
  • The US has raised its economic barriers much higher than it had been, and Europe did the same thing—Economic situation gets worse
  • National economy gets worse, international economy gets worse
  • Self-inflicted wound (a disaster)

• RFC:

  • Reconstruction Finance Corporation (1932)
  • Federally funded government owned corporation with a budget of $2 billion
  • Going to give that money to railroad companies, banks, life insurance companies, and other financial institutions
  • Benefits trickle down to smaller businesses and eventually workers
  • Program utilized by Herbert Hoover and then FDR keeps it when he becomes presidency
  • Most Americans were highly critical of the program because Herbert Hoover won't give money to AMerican citizens during the depression, with the RFC he just gave money to big business (1932; it was created by a democratic congress—Republican president took the heat for it)

• Summer of 1932: Bill before Congress—Patman bill

  • Bill was Going to give WWI Veterans their promise bonus immediately instead of waiting until 1945
  • There were a lot of veterans who were struggling because of depression, they heard about the bill—-marched to washington to urge congress to pass the bill (thousands show up—The Bonus Army: Camped out in Washington)
  • Bill dies in committee
  • Most of bonus marchers go home; few thousands stay there all summer and they were a reminder to the american people and herbert hoover the failings of the hoover administration to address the needs of the common man during the depression
  • Incident in Bonus Army (police needed to be called in) resulted in president hoover ordering the US Army to march on the bonus camp and disband the camp
  • The public believed that it was a parade to honor the bonus army; the army was there to force them out of Washington DC
  • And the scene got ugly: Bonus Army did scorched earth (light shacks on fire and retreated) and the US Army attacked (threw tear gas at bonus army–2 people died)
  • It's a public image nightmare for Herbert Hoover—he sent the US Army to attack veterans who were struggling during hard times
  • THe man in charge of Army who led the attack: General douglass MacArthur (Hero during WW2): top aids—george patton (another american hero during ww2 for liberating france from the nazis) and dwight eisenhower (lead allies and eventually become president)

• By this point in time, FDR was a democrat nominee

• FDR: As long as I don't kill somebody, i'm going to become president

• In 1932, Hoover was the most hated person in america

Foreign Affairs

• Very little attention paid to foreign affairs –economic depression
• Japanese invade China violation of open door note, kellogg-briand pact, and 9 power act
• League of nations condemns Japan so japan quits league of nations
• Historians believe that this was the unofficial beginning of WW2: sent message to International community (not going to do anything against aggressors)
• US response to Japan invading manchuria: Stinson Doctrine—US would not recognize legitimacy of any regime that had come to power under force
• GOod neighbor policy: Hoover trying to improve relations between latin america and US; Teddy Roosevelt destroyed latin american relations w/ Corollary
• Hoover did it in two ways: He pledged to withdraw American troops from nicaragua by 1933 and withdraw American marines from Haiti by 1934
• the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain. Without the prospect of substantial gains, there would be little motivation to engage in speculation