Review of Previous Unit

United States History

Laissez-faire Politics

American Politics and Business A Return to Normalcy

Republican Leadership

Big Business

Ford and the Automobile

Leisure and Entertainment

Hoover’s Election

A Return to Normalcy• Harding promised a return

to “Normalcy”− longing for a by-gone era

• Nation free of labor problems and racial strife

• Less filled with foreigners • Less influenced by

imported radical ideologies • More attuned to the

rhythms of small-town life • More devout in

Fundamentalist Christianity

• Less government interference

Republican Leadership• 3 Republicans elected in the 1920s

− each promised prosperity

− Harding− Coolidge− Hoover

Warren G. Harding• Generally

conservative policies− taxes, tariffs,

immigration restriction, labor rights, and business regulation

• Administration marred by Scandal− Teapot Dome

• unknown until after his death in 1923

Scandal• Teapot Dome

− oil reserve scandal that began during the administration of President Harding.

− In 1922, Harding’s secretary of the Interior, Albert Fall, leased government oil fields at Teapot Dome, Wyoming to wealth friends in exchange for hundreds of thousands of dollars in bribes.

− The investigation led to criminal prosecutions. Fall was indicted for conspiracy and for accepting bribes. Convicted of the latter charge, he was sentenced to a year in prison and fined $100,000.

Calvin Coolidge• Succeeded to the

presidency in 1923− elected in his own right

in 1924− Worked to make good

from the scandals of Harding

• Policies involved lowering federal taxes and maintaining high tariffs

Big Business• Business regained folk

hero status− relations between

business and government had never been closer

• Calvin Coolidge− “Wealth is the chief end

of man”− “The man who builds a

factory, builds a temple. The man who works there, worships there”

• Herbert Hoover− “less government in

business and more business in government"

Main Sources of the Boom• Effect of WW I on technology

• Scientific Management

• Rapid increase in worker productivity

• psychology on consumption

• relationship between federal government and big business

Effect of WW I on Technology• The war effort accelerated technological

advances

• Shortage of labor meant industry had to be more efficient

Scientific Management and Worker Productivity

• Scientific Management− mathematical formula for labor, streamlining of tasks,

and increase in production− implemented on a grand scale, with millions put into

industrial research

• Worker productivity− increased by scientific management

The Business Boom• Overall, the economy experienced growth and

expansion in the 1920s

• Three factors of production were important− Machines − Factories − The Process of Standardized Mass Production

Self-perpetuating cycle• standardized mass

production led to

• better machinery in factories, which led to

• higher production and higher wages, which led to

• more demand for consumer goods

• which led back to more standardized mass production

Consumerism• Buying on Credit

−The Installment Plan:• encouraged Americans

to build up debt in order to buy consumer goods.

Psychology of Consumerism • Americans were displaying

a desire to get rich, and to do so with little effort

• Examples of

“Conspicuous Consumption”− Radio− Motion pictures− Electric Appliances− The Automobile

Radio• Radio

− By 1922, 3 million American households had radios

− by 1929, purchases of receivers had increased by 2,500%, giving the industry annual sales of $850 million.

The Movies• Movies

− one of the ten largest industries

− 40 million tickets sold weekly in 1922, 100 million by 1929

Electric Appliances• New appliances

made household work easier for women− vacuum cleaners,

toasters, washing machines, refrigerators

• Women became America’s greatest consumers

Automobile Industry• Psychology of

consumption was most evident in the growth of the automobile industry

• production rose from 2 million in 1920s to 5.5 million in 1929

• By the late 1920s, there was one automobile for every five Americans

• Explaining the rise in popularity of cars

• Cost• Credit

Ford and the Automobile• Henry Ford was

most responsible for promoting the automobile in the 1920s− “Americans can have

any kind of car they want, and any color they want, as long as it's a Ford, and as long as it's black.”

The Model T

Impact of the Auto on American Life• Economic Impact

− promoted growth of other industries

• petroleum, rubber, steel

− national system of highways was created

• federal funds became available for roads

− created new service facilities

• service stations• “Motels”

Impact of the Auto on American Life• Social Effects of the

Automobile:− Created a more mobile

society • "Sunday drive”• Cars broke down the

distinctions between urban and rural America

• Broke down the stability of family life

Ways Government supported Business• High tariff policies.

• highest-ever schedule of tariffs for foreign-made goods.

• Andrew Mellon was Secretary of the Treasury 1921-1932

• repealed the excess profits tax and reduced the rates for corporate and personal income taxes.

• provided business leaders with a list of tax loopholes, drawn up, at Mellon’s request, by the IRS

Ways Government supported Business

• Cutbacks in the Federal Trade Commission (FTC)• The FTC had been created to regulate big business

and to look into unfair trade practices, but did less and less of this in the 1920s.

• Herbert Hoover• encouraged price-fixing • believed that the government was responsible for

helping businesses profit.

American Heroes• American Heroes

− Baseball• Babe Ruth

− Boxing• Jack Dempsey

− Golf• Bobby Jones

• Flight− Charles Lindbergh− Amelia Earhart

Hoover’s Election• Elected in 1928

− served as secretary of commerce under Harding and Coolidge

− prosperity helped get him elected

− the Stock Market Crash occurs in 1929

− the Great Depression occurs only a few months after he takes office

Preview of Next Unit

Coming Attractions

Coming Soon: Economic Crisis and

the New Deal Cause and Effect of the

Stock Market Crash

Hoover’s Failing Policies

The Depression Years

Roosevelt: A New Voice

The New Deal