SSUSH16B & 17A-C America from War to...
Transcript of SSUSH16B & 17A-C America from War to...
SSUSH16B & 17A-C
America from War to Recession
America from War to Recession
1920 Presidential Campaign
• The 1920 election reflected a couple growing trends in post-war America:
Rejection of the Progressive Ideologies of the Wilson presidency.
Desire to return to the Laissez Faire approach of the McKinley era.
• Republican candidate Warren G. Harding’s promised a “Return to Normalcy”
after World War I, reflecting:
Renewed Isolationism
Resurgence of Nativism
A Reduction of Government Activism
• His Campaign also made use of America’s newest fads:
Widespread Newsreel Coverage in Movie Theaters
Support from the Nation’s well known Hollywood Actors & Performers
America from War to Recession
The New Administration
• The 29th President of the United States, Warren G. Harding, made several
key appointments to his cabinet:
Charles Evans Hughes as
Secretary of State
Herbert Hoover as
Secretary of Commerce
Andrew W. Mellon as
Secretary of the Treasury
Supreme Court Justice Food Administrator Business Tycoon
America from War to Recession
The New Administration
• In addition, Warren G. Harding also appointed many of his old poker-playing
buddies to other cabinet positions and political offices.
• Unfortunately, the President received criticism because
some of his “Ohio Gang” accepted bribes for:
Government Jobs & Contracts
Political Pardons for Criminals
Protection from Prosecution
• 1921 - 1923: Charles R. Forbes served as the first director.
• During this period he ignored the needs of wounded veterans.
• He embezzled $225 million through fraud and kickbacks.
• He resigned in 1923 and was tried and convicted of conspiracy.
The Veterans Bureau Scandal
America from War to Recession
• 1921 – 1923: Albert B. Fall served as Secretary of the Interior.
• He allowed an oil company lease government lands in Wyoming.
• He accepted bribes totaling more than $300,000 from them.
• He became the first cabinet officer in history to go to prison.
The Teapot Dome Scandal
A Change in President
• June 1923: President Warren G. Harding died while on
vacation in California (probably from a heart attack).
• Vice-President Calvin C. Coolidge became the 30th
President of the United States.
Amid the scandals, he fired several Harding staff.
He chose to keep Hughes, Hoover, and Mellon.
He worked to restore the integrity of his office.
America from War to Recession
Promoting Prosperity
Andrew W. Mellon as Secretary of the
Treasury
• Believed the government should apply business principles
to trim its spending and improve operations.
Convinced Congress to create a General Accounting
Office to prepare the Federal Budget.
1921: President Warren G. Harding signed the
Budget Accounting Act creating a new bureau.
• He also believed that high taxes reduced business expansion and investment
He urged Congress to reduce the tax rate to improve the economy.
The Mellon Tax Bill also recommended a U.S. Board of Tax Appeals.
1924: President Calvin C. Coolidge signed the Revenue Act of 1924.
America from War to Recession
Promoting Prosperity
Herbert Hoover as the Secretary
of Commerce
• Sought to promote Economic Growth in business and
industry through a philosophy of Cooperative Individualism.
Encouraged Businesses to form their own Trade
Associations willing to share info with the government.
Promoting Peace
Charles Evans Hughes as Secretary of State
• Supported President Harding’s
decision avoid involvement in
European affairs (Isolationism).
• 1921: Proposed a 10 year moratorium (pause) on the
building of new battleships at the Washington
Naval Conference.
• 1922: The Washington Naval Treaty (also known
as the Five-Power Treaty) was the result.
America from War to Recession Promoting Peace
Charles G. Dawes: 1st Director of the
Bureau of the Budget
• Believed it was vital for European Economies to remain
healthy so the U.S. could recover their wartime debts.
1924: The Dawes Plan was an agreement to aid
Germany in paying its War Reparations.
Relied on American Loans to help Germany.
Europeans agreeing on reduce reparations
1925: He Received the Nobel Peace Prize.
1929: They Received Nobel Peace Prize.
• 1928: 14 Nations signed Kellogg-Briand Pact.
International agreement to avoid war as
a way to resolve disputes.
Foundation of International Law Today.
U.S. Senator Frank Kellogg
French Minister Aristide Briand
America from War to Recession
A Growing Economy
Henry Ford Industrialist and Founder of Ford Motor Company
• Believed that mass production could be accomplished
more efficiently:
1913: Installed the first moving assembly line at his
plant at Highland Park, Michigan.
1914: Automobiles that use to take 12 hours to make
were now made within 93 minutes.
• By 1925: A Model-T Ford was leaving the assembly line every 10 seconds.
Cost of a “Tin Lizzie” went from $850 (in 1908) to $295 (in 1924).
Worker’s wages were increased to $5 a day for an 8-hour workday.
Ford managed to increased employee loyalty and prevent unionizing.
• General Motors and Chrysler also adopted assembly lines to compete w/Ford.
America from War to Recession
A Growing Economy
• Automobiles revolutionized American Society:
Autos now affordable for Middle Class
Easier travel between city & country
New jobs and businesses grew (Garages)
• Mass Production and Assembly Lines made
other home goods more affordable:
New home appliances saved labor & time
New products improved fashion & hygiene
• Improved wages and shorter workdays created new
Middle-Class consumers who had more time & money:
“Buy now and pay in easy installments” sales pitch.
60-75% of major purchases were made by credit.
America from War to Recession
A Growing Economy
• Working-Class Americans also prospered:
Industries introduced Welfare Capitalism
Worker profit sharing & stocks
Medicare and Pensions Benefits
Technological Advances changed America
• WWI introduced Airplanes to transportation:
1918-19: Postal Air Service Established
1927: Charles Lindbergh fly’s Transatlantic
1932: Amelia Earhart crosses the Atlantic
• New Farm Technology Increase Crop Yields:
1918-26: Light Farm Tractors & Combines
1920’s: Fertilizers and Pesticides Increase
America from War to Recession
A Growing Crisis
• World War I and the 1920’s created a Wave of Optimism in America:
Agriculture Industry
Technological Advances created Increased Crop Yields
Technological Advances produced More Goods at Cheaper Prices
Farmers Borrowed Heavily to Purchase more Land & Machinery
Americans Purchased more Goods on Credit than ever before
Federal Reserve kept Rates on Loans Low giving Americans false security.
Post-WWI: Foreign Competition created World Food Surplus
Post-WWI: America Manufactured Half of all the World’s Goods
1922: Congress passed the Fordney-McCumber Tariff Act to Protect Industry and Agriculture – Ultimately causing Increased Foreign Tariffs.
Foreign and Domestic Crop Sales began to Decline Rapidly
Increased Production drove Stock Prices Up for Industries
America from War to Recession
A Growing Crisis
5% of Population (Upper & Middle Class) Controlled 33% of Nation’s Wealth.
33% of Population (Working & Lower Class) Became Too Poor to Buy Goods.
Agriculture Industry
Farmers experience significant Drop in Profits.
Industries begin Reducing Production due to Cut Backs on Orders
• Americans Experience Uneven Distribution of Wealth:
Farmers are Unable to Pay Back Farm Loans.
Laid Off Workers are Unable to Buy Goods or Pay Back Debts
Americans Withdraw Savings from Bank Accounts to Pay Off Debts.
Banks Foreclose on Farms, Homes, and Businesses due to Failure to Pay Debts.
ECONOMIC SITUATION SET
THE STAGE FOR DISASTER
America from War to Recession
Risky Bank Loans were being made due to Low Rates by the Federal Reserve.
Banking & Investment Issues
Giving Business Leaders False Security that the Economy was still Expanding.
America Experienced a Long Period of High Stock Prices (Bull Market).
At Least 10% of All Americans were Investing in Stocks.
Many Investors were Buying Stocks on Margin (Paying only 10% Down)
Some Investors Engaged in Speculation hoping to make an Overnight Fortune.
Some Bankers Invested Depositors Money on the Stock Market.
Sep 1929 – Professional Investors Sensed Danger and Began Selling Stocks
Slipping Stock Prices caused Margin Calls by Brokers wanting their Money
Investors Lost Money, Speculators Defaulted, Banks Closed, & People Panic
America from War to Recession
24 Oct 1929 = Black Thursday (Initial Drop)
The Stock Market Crash
29 Oct 1929 = Black Tuesday (Steepest Drop)
America from War to Recession
The President Responds
• March 1929: Herbert Hoover had become the 31st President.
He stated: “I have no fears for the future of our country.”
• Oct 1929: He assured Americans that the Nation’s Industry was still sound.
He stated: “The worst effects of the crash,” will pass in the next 60 days.
• He preferred a policy of “Volunteerism” instead of Government Coercion to
solver the Nation’s Problems.
Although Industrial Leaders pledged to keep factories open and stop
cutting wages – they failed to keep their promises.
He tried to increase government financing of Public Works, but this only
provided a small fraction of the needed jobs.
He tried to avoid any major government spending that would raise taxes.
America from War to Recession
The President Responds
• 1929 – 1931: He endorsed the Mexican Repatriation Program.
Forced mass-migration of Mexicans out of the United States
• Jan 1931: Hunger Marches occurred. “Feed the Hungry; Tax the Rich!”
• Jun 1930: He signed the Smoot-Hawley Tariff Act, passed by Congress.
Raised Tariffs on Foreign Goods to highest level in 100 years
• 1931 - 1935: Construction of Boulder Dam
Created Employment for 3,000+ men
Provided Water for Farm Irrigation
Produced Hydroelectric Power
Allowed for growth in the Southwest
• 1928: Approved by President Coolidge
• 1947: Official named Hoover Dam
America from War to Recession
The President Responds
• Oct 1931: He encouraged Bankers to help each other
by establishing the National Credit Corporation:
But they were reluctant to make loans
• Jan 1932: He approved the Reconstruction Finance Corporation to make
loans backed by the U.S. Treasury: The Loan Process was too restrictive.
• Summer 1932: The Farmer’s Revolt occurred over debt and low crop prices.
Farmers burned their crops and slaughtered their animals
• June 1932: Congress passed the Revenue Act of 1932.
Tax rates on the rich went from 25% to 63%.
• July 1932: Emergency Relief & Reconstruction Act passed
Too Late to reverse the Economic Collapse