- Warren G. Harding, like Grant, couldn't detect liars and corruption - "Ohio Gang"
- + SoS Charles Evans Hughes dominated leadership
- + SoT Andrew W. Mellon - multimillionaire
- + SoCommerce - Herbert Hoover
- - SoInterior Alber B. Fall - anticonservationalist
- - Attorney General Harry M. Daugherty -crook in "Ohio gang"
GOP Reaction at the Throttle:
- Old Guard laissez-fair -> government to help guide business to profits.
- Harding appointed 4/9 Supreme Court justices - conservatives - made Taft chief justice
- Overturned progressive legislation. Killed child labor laws, restricted government intervention in economy. Adkins vs. Children's Hospital (1923) reversed Muller vs. Oregon - ruled that women didn't need special protection in workplace, 19th amendment made them legal equal of men.
- Anti-trust laws ignored/feebly enforced. Interstate Commerce Commission came to be run by men who fel sympathy for railroad companies.
- Trade associations formed (trusts), encouraged by Secretary of Commerce, Hoover.
The Aftermath of War:
- War Industries Board disappeared, railroads returned to private management: Esch-Cummins Transportation Act of 1920 encouraged private consolidation of railroads and pledged ICC to guarantee profitability.
- Merchant Marine Act of 1920- authorized shipping board to dispose of wartime vessels at bargain prices.
- Railway Labor Board - wage cut of 12% in 1922 => 2-month strike. Attorney General Daugherty favored business => labor union membership diminished by 30%
- Veterans were well-off. In 1921 Veterans Bureau created. American Legion (veteran's association) -> lobbied for veterans to be payed bonus $$. Congress passed bonus bill in 1922- Harding vetoed. Congress passed Adjusted Compensation Act 1924 - gave every former soldier an insurance policy IN 20 YEARS - Coolidge vetoed, but congress overruled.
America Seeks Benefits Without Burdens:
- 1921 Congress passed resolution declaring the war over (this made it official since US didn't sign Treaty of Versailles)
- Harding thought the League of Nations was nastayy!
- SoS Hughes secured American oil companies the right to share oil in the Middle East.
- US navy quickly was beginning to overtake Britain (the #1 navy in the world). => Disarmament Conference - Invited all naval powers to Washington 1921-1922
- Hughes proposed 10-yr "holiday" on construction of battleships. Once navies were scaled down, Hughes proposed a 5:5:3 ratio of ships and junk (America:Britain:Japan)
- Compromise => Five-Power Naval Treaty of 1922: ship ratios kept, but compensation to Japan. Britain and America promised they wouldn't fortify far-Easter possessions (including Philippines). Four-Power Treaty: Britain, Japan, France, US must preserve status quo in Pacific.
- Other countries pumped out small warships and stuff cause that "technically" wasn't against the agreement....US lagged behind.
- SoS under Coolidge, Frank B. Kellogg -> Kellogg-Briand pact: multinational treaty that prohibited the use of war as "an instrument of national policy" (but defensive wars still permitted - loophole, since the term defensive was relative). False sense of security. US loved it.
Hiking the Tariff Higher:
- Feared flood of cheap goods from Europe
- Fordney-McCumber Tariff Law - increased the tariff to 38.5%
- President was authorized to reduce or increase duties by as much as 50%
- Harding and Coolidge loved increasing
- Europe suffered (they need to sell their goods in US to pay off debts, etc.). Europe erected tariff barriers also, both suffered, international economic distress.
The Stench of Scandal:
- 1923 Colonel Charles R. Forbes caught stealing about $200 million from Veterans Bureau which he headed - 2 yrs prison.
- Teapot Dome Scandal: SoInterior Albert B. Fall got Harding to sign off on transferring valuable naval oil reserves at Teapot Dome (WY) and Elk Hills (CA) to Interior Department. Fall leased lands to oilmen Harry F. Sinclair and Edward L. Doheny because the bribed him with lots of cazsh. Fall imprisoned for taking bribe, but the bribers acquitted.
- People were upset about corruption, and public officials selling out nation's land. Questioned courts.
- Attorney General Daugherty caught 1924 for illegal sale of pardons and liquor permits. Forced to resign, but not jailed because of jury disagreement.
- Harding died Aug. 1923 of pneumonia and thrombosis.
"Silent Cal" Coolidge:
- Virtuous, silent. Mediocre power of leadership, boring speeches. Loved status quo. Loved businesses. Thrifty, supported Mellon's tax reductions
- His open honesty gave corrupt government moral fumigation.
- Farmers prospered during war, but peace brought an end to inflated prices.
- Gas engine tractor => less man labor, surpluses, ag depression in the 20s.
- "Farm bloc". Copper-Volstead Act - exempted farmers from antitrust prosecution.
- McNary-Haugen Bill - tried to keep ag prices high by authorizing government to buy up surpluses and sell them abroad. Coolidge vetoed, prices stayed down. Pobre farmers :(
A Three-Way Race for the White House in 1924:
- Republicans nominated Coolidge
- Democratic party split between "wets" and "drys." urbanites and farmers, Fundamentalists and Modernists, northern liberals and souther pattys, immigrants and AMURRRICANS.
- Democrats nominate wealthy lawyer John W. Davis - just about as conservative as Coolidge.
- 3rd-party Progressives ran "Fighting Bob" La Follette from Wisconsin - support from AFL, socialists, and farmers. -> Government ownership of railroads, help farmers, against monopolies, etc.
- Coolidge won
- Held up armed intervention in Caribbean and Central America
- US had loaned $10 billion to Allies during war, and wanted repayment. British and French protested they had lost lives in the war, and US tariff walls made it impossible for them to raise the money.
Unraveling the Debt Knot:
- Allies sent troops to Germany to get $32 billion in reparations for Allies to then pay the US with -> major inflation in Germany!
- US would not cancel debts!
- Dawes Plan of 1924 (Charles Dawes, VP under Coolidge): US loaned Germany money, Germany payed reparation to Allies, Allies payed debt to US.
The Triumph of Herbert Hoover, 1928:
- Republicans nominated SoCommerce, Herbert Hoover - prosperity and prohibition
- Democrats nominated Alfred E. Smith, liberal, "wet", Roman Catholic -> given a dry running mate and dry platform, but let's face it - he was doomed (being an alky-lovin Catholic and all).
- Radio was a big part of the campaign, Hoover sounded better, preaching rugged individualism.
- Hoover was a small-town boy who made himself. Integrity, efficiency, humanitarianism. Self-made millionaire. Endorsed labor unions and supported(ish) government-owned radio.
- Hoover won huge electoral majority. Even many southern states!
President Hoover's First Moves:
- Farmers had it hard => Agricultural Marketing Act 1929 - set up Federal Farm Board, givern half a billion dollars for farm organizations to buy, sell, and store ag surpluses.
- 1930 Farm Board created Grain and Cotton Stabilization Corporations to bolster prices by buying up surpluses. Failed. Farmers need higher tariff!
- Hawley-Smoot Tariff of 1930 rose duty to 60%
- Hurt US economy and foreign economies -> economic isolationism.
The Great Crash Ends the Golden Twenties:
- Stock prices rose and rose!
- BAM! Crash October 1929. British rose interest rates, investors began to dump "insecurities" -> Oct. 29 "Black Tuesday"
- End of 1929, stockholders had lost $40 billion.
- Unemployment, wage cuts, biggest depression ever! 5,000+ banks collapsed w/ people's life savings. These were some hard times!
Hooked on the Horn of Plenty:
- Great Depression was caused by overproduction of farm and factory. Depression of abundance, "plague of plenty"
- Too much money going into the few wealthy hands, and not enough going into wages for the working
- Buying on credit overstimulated production
- Financial collapse in Europe
- 1930 drought in Mississippi Valley -> farms auctioned
- Beggars, shantytowns (see District 9 if you wanna see a slum). People wanted to work, but there was no work!
Rugged Times for Rugged Individualists:
- Hoover finally had to give up his doctrine of individualism and realize that the national government needed to do something about the welfare of the people.
- Decided to help railroads, banks, and credit corporations, hoping the prosperity would trickle down.
- Criticized for not directly using federal funds to help the individual.
- Hoover proved the "pull yourself up from the bootstraps" technique wouldn't work because people didn't have boots!
Herbert Hoover Battles the Great Depression:
- Hoover secured $2.25 billion from Congress for public works projects.
- Hoover Dam (1930-1936 construction) -> created huge lake for irrigation, flood control, electricity
- Hoover vetoed Muscle Shoals Bill (damming Tennessee River for federally owned electricity)
- 1932 Reconstruction Finance corporation established => given half a billion dollars to assist insurance companies, banks, ag orgs, railroads, state and local governments. These were LOANS. Government and big business profited from this "The Millionaire's Dole"
- Norris-La Guardia Anti-Injunction Act 1932 - outlawed antiunion contracts and allowed strikes, boycotts, peaceful picketing.
Routing the Bonus Army in Washington:
- Veterans wanted their bonus now!!
- "Bonus Expeditionary Force" (20,000 peeps) set up nastyass shantytowns in Washington. Riots!
- Hoover ordered army to evacuate the idiots, army used excessive force
- Got Hoover more boo-ing from the public.
Japanese Militarists Attack China:
- 19391, Japs invaded Manchuria, slamming Open Door in conquered area -violated League of Nations covenant
- League of Nations with help of America wanted to blockade and boycott Japan. US refused to do anything.
- SoS Henry L. Stimson - Stimson Doctrine 1932 - declared that the US would not recoqnize territorial acquisitions acquired by force
- Japanese didn't listen, bombed Shanghai, US sliiightly boycotted them, but no more than that.
Hoover Pioneers the Good Neighbor Policy:
- Depression = less ability to intervene in Latin America
- Hoover made an agreement with Haiti that provided for full withdrawal of American military by 1934 => "Good Neighbor Policy"