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Politics, Economics and Culture of the 1920's

Guiding Questions

  • Who was the Ohio Gang?
  • What was the relationship between government and business promoted by Calvin Coolidge?
  • List a factor that led to the Consumer Revolution.
  • Define Pop Culture.
  • Why were farmers’ struggles ignored by the Federal Government in the 1920’s?

The Ohio Gang

  • Overview of Warren G. Harding (1921-1923):
    • Presidency marred by scandals and corruption.
    • Appointed numerous high-ranking government officials and cabinet members from his close circle of friends known as the Ohio Gang.
  • Quote from Alice Roosevelt:
    • Described the atmosphere in Harding's administration: "The air heavy with tobacco smoke, trays with bottles containing every imaginable brand of whiskey…cards and poker chips at hand – a general atmosphere of (shirt) unbuttoned, feet on desk, and spittoons alongside".

Origins of Scandals

  • Issues with Ohio Gang's Actions:
    • Many members leveraged their positions for personal gain by selling government jobs, issuing pardons, and providing protections from prosecution.
  • Quote from Warren Harding:
    • Harding expressed his frustrations: "I have no trouble with my enemies, but my damn friends, they're the ones that keep me walking the floor at night!”

Teapot Dome Scandal

  • Key Figures:
    • Secretary of the Interior, Albert Fall.
  • Events:
    • Leased critical U.S. oil reserves to private oil companies.
    • Accepted over $300,000 in bribes.
  • Outcome:
    • Senate investigation led to Fall becoming the first cabinet member to serve prison time.

Other Scandals

  • Harry Daugherty:
    • Accused as Attorney General of taking bribes from Germany regarding chemical patents.
  • Charles Forbes:
    • Head of the Veterans Bureau who sold supplies meant for veteran hospitals and embezzled the funds, costing taxpayers over $200 million.
  • Harding's Death:
    • Died in office shortly before the Forbes scandal was exposed; Vice President Calvin Coolidge succeeded him as the 30th president.

Calvin Coolidge

  • Election and Policies:
    • Elected in 1924, promoting the slogan “Keep cool with Coolidge.”
    • Focused on restoring public trust by distancing himself from Harding’s scandals.
  • Beliefs:
    • Nicknamed “Silent Cal”; believed in minimal government interference with business affairs.
    • Famous quote: “The chief business of the American people is business.”

Mellonomics

  • Concept of Supply-side Economics:
    • Key Policies:
    • Reduce taxes on both corporations and individuals.
    • Minimize government regulations.
    • Lower interest rates to facilitate the accessibility of credit.
    • Raise tariffs to support domestic goods against foreign competition.

Economic Prosperity

  • Business Expansion:
    • Emerging in urban areas with the availability of new consumer products.
  • Henry Ford's Innovation:
    • Employed assembly line techniques to mass produce the Model-T, making cars affordable for many Americans.
  • Welfare Capitalism:
    • Some companies provided benefits such as stock purchases, medical care, and pensions to workers, which reduced the power of labor unions during this time.

Leisure and Personal Freedom

  • Cultural Shift:
    • Americans enjoyed increased leisure time and disposable income devoted to:
    • Amusement Parks.
    • Spectator Sports:
      • Baseball (notably featuring Babe Ruth).
      • Boxing (highlighting Jack Dempsey).
      • Daredevil activities (e.g., Charles Lindbergh).
    • Department Stores.
    • Movie Theaters.

The Consumer Revolution

  • Credit and Consumption:
    • Department stores and banks introduced lines of credit, known as installment loans, which spurred widespread consumer spending.
  • Consumer Goods:
    • Items readily purchased included:
    • Cars.
    • Radios.
    • Electric Razors.
    • Kitchen and Laundry Appliances.
    • Refrigerators and Vacuums.

Dawn of Popular Culture

  • Impact of Advertising:
    • Massive advertisements in newspapers, newsreels, and on radio promoted consumer goods and new lifestyles, particularly appealing to youth, forming what is commonly referred to as Pop Culture.

The Stock Market

  • Market Performance and Speculation:
    • Economic growth, speculative trades, and global demand for American exports resulted in stock market heights.
  • Dow Jones Industrial Average:
    • Daily Close in 1921: 73.3973.39
    • Daily Close in 1929: 313.54313.54
  • Bull Market Definition:
    • An extended period of growth in stock values.
  • Buying on Margin:
    • New purchasing technique which allowed stock to be bought on credit, contributing to increased speculation.

The Farm Crisis

  • Overview of Economic Disparity:

    • Economic prosperity did not extend to agriculture; farmers faced significant challenges.

  • Factors Contributing to Crisis:

    • Rising costs of farm equipment.
    • Oversupply of crops due to advancements in technology, with decreased post-WWI demand causing price falls.

  • Legislative Action:

    • Fordney-McCumber Act:
    • Raised tariffs and triggered a trade war with Europe, reducing European demand for American agricultural products.

  • McNary-Haugen Bill:

    • Proposed government purchasing of excess crops to stabilize prices, vetoed twice by Coolidge.

  • Long-term Consequences:

    • Mellon’s supply-side policies promoted business but ultimately contributed to the financial collapse of the 1930s, impairing the government’s response capacity to the crisis.

For Review

  • 1. Who was the Ohio Gang?
  • 2. What was the relationship between government and business promoted by Calvin Coolidge?
  • 3. List a factor that led to the Consumer Revolution.
  • 4. Define Pop Culture.
  • **5. Why were farmers’ struggles ignored by the Federal Government in the 1920’s?