BOOM TO BUST Barnett

UHSAPUSH

I. The New Era A. Rise of conservatism B. Laissez-Faire

II. Harding – A return to “normalcy” A. Hardworking B. Unwilling to offend C. Influenced by cabinet “Ohio Gang”

○ 1. Charles Hughes- Secretary of State○ 2. Andrew Mellon Secretary of Treasury- one of the richest

men in the world.○ 3. Herbert Hoover Secretary of Commerce○ 4. Secretary of Interior- Albert Fall○ 5. Charles Forbes- Veterans Administration Chief

III. Regulating Business A. Andrew Mellon-  Trickle Down Economics or Supply Side Economics.

He opposed lowering tax rates for those earning less than $66,000 B. reduced inheritance taxes and income tax on the wealthy by 2/3.B C. Bureau of Budget 1921- reduce WWI debt. D. Farmers suffered E. Mellon ignored the Farm Bloc  F. Revenue Act of 1921  G. Fordney - McCumber Tariff of 1922. H. Mellon's programs did pay off the war debt and reduced the national

debt by $500 million a year. I. ICC, FTC, and Federal Reserve to be pro-business.

IV. Harding Scandals A. The Veteran's Administration, led by Charles Forbes, stole millions B. Secretary of the Interior Albert Fall leased Navy lands in Wyoming

(Tea Pot Dome) and in California (Elk Hills) to oil companies C. Harding died in August 1923 late in his term.

V. Coolidge A. Coolidge untouched by scandal B. Henry Ford- Anti-semitic- Collapse in support C. Democrats split on a nominee, compromise on John Davis D. Old Progressive Robert La Follette (Liberal/Socialist)  "Wisconsin Bolshevism”

VI. Coolidge: "a man who builds a factory...builds a temple…the man who works there worships there.” A. Replaced Attorney General Daugherty with Harlan Fiske Stone B. Laissez-Faire

○ 1. Andrew Mellon was Secretary of Treasury C. Norris LaGuardia Injunction Act- Passed in 1932 to protect workers'

rights. D. Other Consumer goods- Installment purchases E. Ads and Mass marketing F. Later Speculation

○ 1. land and stocks

VII. Foreign Policy- Rise of Isolationism A. Charles Evans Hughes (Secretary of State) B. Steer clear of foreign entanglements which led to isolationism C. The Open Door Policy continued to dominate US business goals and

foreign policy

D. Foreign Policy○ 1. German hyperinflation○ 2. Financial Crisis in Europe ○ 3. 5 Power Treaty to reduce naval power and 9 Power Treaty agree

to respect China's independence. ○ 4. Japan - Co-prosperity Sphere (Asia for the Asians)

1. Stance on China

5. Kellogg-Braind Pact - Outlawed War as a means of foreign policy○ a) Jane Addams○ b) FDR○ c) Carnegie Endowment for International Peace

6. Good-Neighbor Policy - Clark Memorandum ○ 1. Hoover Administration stated that Roosevelt's Corollary

to the Monroe Doctrine was improper. ○ 2. US withdrew Marine units from Haiti, Dominican

Republic and Nicaragua.

E. Diplomacy in the Depression Isolationist1. Continue Good Neighbor Policy-does not go after

business debts2. Monetary Diplomacy-

○ a) Debts with German-Hoover Moratorium 1931(1) 1933 Hitler is in power(2) Rise of Third Reich

○ b) Failure of the gold standard

3. Japan's aggression in Manchuria○ a) Violated the Kellogg- Briand and Nine Power Treaty○ b) Stimson Doctrine (1932)

Did not recognizestill traded oil and steel“Not World’s Policemen”

4. Hawley Smoot Tariff 1930 - increase 59%○ Farm & Industrial Goods○ Global Reprisals

5. Dawes Plan - provided Germany with $200 million loan designed to stabilize it's currency

6. World Court -USA did not join

VIII. Election of 1928 A. Herbert Hoover (R)

1. Conservative2. Rugged Individualism3. He was pro tariff and prohibition.4. McNary-Haugen Bill- created price supports for

farmers B. Al Smith (D)

1. Accused of being wet, and a socialist.2. Anti-Catholicism from rural areas3. Democrats look in trouble.

VIII. 1928

1929 Crash - decline of conservativismA. Stock Market Crash - October 29, 1929B. Great Depression Causes

○ 1. Income Inequality

1929 Crash - decline of conservativismA. Stock Market Crash - October 29, 1929B. Great Depression Causes

○ 1. Income Inequality○ 2. Gold Standard○ 3. Federal Reserve Policy○ 4. Protective tariffs (Hawley-Smoot Tariff)○ 5. Over use of credit and buying stocks on margin○ 6. Agri-depression (The Dust Bowl)

A. 1921 Agriculture Marketing Act○ 7. Unemployment-production slow down

C. 3 phases of Hoover's policies for recoverPhase 1 Conservative - Mellon's Liquidation policy rejected by

Hoover.○ a) Mellon liquidate - follow the business cycle & stay calm○ b) Tariff more protectionism○ c) Cut corporate and wealthy taxes○ d) Monetary Policy-Tight-no inflation ○ E) Fiscal Policy - keep balanced budget

Phase 2 Slightly moderate - European panic on falling off Gold Standard 1931 and defaulted on WWI debts to USAa) Business should voluntarily maintain wagesb) Local charities overwhelmed.c) Charities received minimal funding and relief

Phase 3 Slightly liberala) Glass Steagall Act- freed up 1 billion in gold for Eurob) Reconstruction of Finance Corporation lent moneyc) Created Deficitd) $1.5 Billion in Public works

D. Suffering and Poverty1. Hoovervilles (small shanty towns), 

○ Hoover Blankets (newspapers), ○ Hoover Flags (empty pockets)

2. Dust Bowl - Okies and Arkies fled west○ Demographic change

3. Bread lines and soup kitchens, Hoboes and beggars○ a) Loss of ambition and hope.○ b) Many never applied for public assistance○ c) Poor nutrition and public health○ d) Children became burdensome.

4. Bonus March on Washington DC○ WWI veterans - World War Adjustment Act of 1924 (1945)○ Burned out of Annicosta Flats○ Hoover's brutal suppression of the protest further lessened

his hopes for reelection

D. Election of 19321. Rugged Individualism V. The New Deal2. Hoover was considered negative3. FDR was considered positive and vague-promised

gold standard and no deficits and gave the impression of a moderate or even conservative

4. FDR was the big winner people wanted proactive change