Politics of the 1920s Learning Goal- NJCCCS: 6.1.12.A.8.aRelate government policies to the prosperity of the country during the 1920s, and determine the impact of these policies on business and the consumer.
Warren G. HardingO Warren G. Harding was inaugurated in 1921.O He, like Grant, was unable to detect immoral people working for him.O He was also very soft in that he hated to say "no," hurting peoples feelings.O he promised the nation a return to "normalcy", in the form of a strong economy, independent of foreign influence.O Harding and the Republican Party had desired to move away from progressivism that dominated the early 20th century.
The Republican “Old Guard” Returns O Charles Evans Hughes was the secretary of state. O Andrew W. Mellon, Pittsburghs multimillionaire aluminum king, was the secretary of the Treasury. O Herbert Hoover was the secretary of commerce. O Hardings brightest and most capable officials (above) were offset by two of the worst: Senator Albert B. Fall, an anticonservationist who was the secretary of the interior, and Harry M. Daugherty, a big-time crook chosen to be the attorney general.
GOP Reaction at the ThrottleO The newly-elected government officials almost directed the presidents actions on the issue of government and business.O They wanted not only for the government to have no control over businesses but for the government to help guide businesses along the path to profits.O In the first years of the 1920s, the Supreme Court struck down progressive legislation.O The Supreme Court ruling in Adkins v. Childrens Hospital (1923) declared that under the 19th Amendment, women were no longer deserving of special protection in the workplace.O Corporations under President Harding could once again expand without worry of the antitrust laws.O The Interstate Commerce Commission came to be dominated by men who were sympathetic to the managers of the railroads.
Adkins v. Children’s Hospital O In 1918, Congress passed a law setting minimum wages for women and children in the District of Columbia. O As in other cases, the question was one of balancing the police power of Congress to regulate health and safety with the right of individuals to conduct their own affairs without legislative interference. O Childrens Hospital and a female elevator operator at a hotel brought this case to prevent enforcement of the act by Jesse C. Adkins and the two other members of a wage board.
JudgmentO The Court opinion, by Justice Sutherland, held that previous decisions (Muller v. Oregon, (1908) and Bunting v. Oregon, (1917)) did not overrule the holding in Lochner v. New York (1905), protecting freedom of contract.O The Muller cases, Sutherland noted, addressed maximum hours; this case addressed a minimum wage.O The maximum hour laws left the parties free to negotiate about wages, unlike this law.O Moreover, the minimum wage artificially restricts the employer’s side of the negotiation.O The Court argued that if legislatures were permitted to set minimum wage laws, they would be permitted to set maximum wage laws.O The justices that were serving at the time were William Howard Taft (1921-1930), Joseph McKenna (1898-1925), Oliver Wendell Holmes, Jr. (1902-1932), Willis Van Devanter (1910-1937), James Clark McReynolds (1914- 1941), Louis Dembitz Brandeis (1916- 1939), George Sutherland (1922-1938), Pierce Butler (1922-1939), and Edward Sanford (1923- 1930).
The Aftermath of WarO Wartime government controls of the economy were quickly dismantled.O With the Esch-Cummins Transportation Act of 1920, Congress returned the railroads to private management.O Congress encouraged private ownership of the railroads and pledged the Interstate Commerce Commission to guarantee their profitability.
Esch-CumminsTransportation Act of 1920 Caption: Gone the Limit Source/Date: Brotherhood of Locomotive Engineers Journal, September 1922 Ultimate Source(if different): Creator: (?) MacArthur Remarks: In 1921, the Railway Labor Board, created by the Esch- Cummins Act (the Transportation Act of 1920) reduced railroad wages, to the outrage of the unions.
Shipping ActsO The Merchant Marine Act of 1920 authorized the Shipping Board to dispose of the wartime fleet of 1500 vessels at extremely low prices.O Under the La Follette Seamans Act of 1915, American shipping could not thrive in competition with foreigners, who all too often provided their crews with wretched food and starvation wages.
Labor/Veteran WoesO Labor, suddenly deprived of its wartime crutch of friendly government support, limped along poorly in the postwar decade.O In 1921, Congress created the Veterans Bureau to operate hospitals and provide vocational rehabilitation for the disabled.O Veterans organized and formed pressure groups.O The American Legion was created in 1919 by Colonel Theodore Roosevelt, Jr.O Legionnaires met to renew old hardships and let off steam.O The legion became distinguished for its militant patriotism, conservatism, and antiradicalism.O It convinced Congress in 1924 to pass the Adjusted Compensation Act, giving every former soldier a paid-up insurance policy due in 20 years.
America Seeks Benefits Without BurdensO Because of the rejection O Isolationism was of the Treaty of Versailles, the United still the idea in States had technically Washington. been at war with Germany, Austria, and O President Harding Hungary for 3 years hated the League after the armistice. of Nations and atO To finally achieve first, refused to peace, Congress passed a joint resolution support the in July 1921 that Leagues world declared the war health program. officially over.
Foreign Policy: IsolationismO isolationism n. opposition to political and economic entanglements with other countries.
“I sympathizeDeeply WithYou, Madam, but I cannotAssociate withYou,” 1923PresidentHarding’ssecretary ofstate, CharlesEvansHughes, brokethe news to adesperate, war-tattered Europethat Americawas going, andstaying, Home.
Harding and Foreign AffairsO Harding could not completely turn his back on the world.O In the Middle East, a sharp rivalry had developed between America and Britain for oil- drilling rightsO Secretary Hughes eventually secured the rights for American oil companies to share the oil-rich land with Britain.
DisarmamentO Disarmament was one international issue that Harding eventually tackled.O Public pressure brought about the Washington "Disarmament" Conference in 1921- 1922.O Invitations to the conference went out to all the major naval powers.
Sec. Hughes Plans O Secretary Hughes laid out a plan for declaring a ten-year hiatus on construction of battleships and even for scrapping some of the huge ships already built O He proposed that the scaled-down navies of America and Britain should have the same number of battleships and aircraft carriers; the ratio being 5:5:3 (Japans navy would be smaller than Americas and Britains).
5 Power Naval Treaty of 1922O The Five-Power Naval O A Four-Power Treaty Treaty of 1922 stated that between the British and Americans Britain, Japan, France would refrain from and the United States fortifying their Far Eastern possessions, including the replaced the 20-year Philippines. The old Anglo-Japanese Japanese were not Treaty and preserved subjected to such the status quo in the restraints in their Pacific. possessions.
Washington’s ReactionO The Hardingites were satisfied with the final results of disarmament of the navy although no restrictions had been placed on small warships, and the other powers churned ahead with the construction of cruisers, destroyers, and submarines.O In the late 1920s, Americans called for the "outlaw of war.”O When petitions bearing 2 million signatures reached Washington, Calvin Coolidges secretary of state Frank. B. Kellogg signed with the French foreign minister in 1928 the Kellogg-Briand Pact.O The new parchment peace was delusory in the extreme.O Defensive wars were still permitted; causing one to wonder what scheming aggressor could not make an excuse of self-defense.O Although virtually useless if challenged, the pact accurately reflected the American mind in the 1920s
Kellogg-Briand PactThe Kellogg-Briand Pact was an agreement to outlaw war signed onAugust 27, 1928. Sometimes called the Pact of Paris for the city in whichit was signed, the pact was one of many international efforts to preventanother World War, but it had little effect in stopping the rising militarismof the 1930s or preventing World War II.
Hiking The Higher TariffO Because businessmen did O Presidents Harding not want Europe flooding and Coolidge were American markets with cheap much more prone to goods after the increasing tariffs than war, Congress passed the decreasing them; this Fordney-McCumber Tariff Law in 1922, raising the tariff presented a problem: from 27% to 35%. Europe needed to sellO Fordney-McCumber Tariff goods to the U.S. in n. a set of order to get the regulations, enacted by money to pay back its Congress in 1922, that raised war debts, and when taxes on imports to record it could not sell, it levels in order to protect could not repay. American businesses against foreign competition.
The Stench of ScandalO In 1923, Colonel Charles R. O Harding indiscreetly Forbes, head of the Veterans signed the secret Bureau, was caught stealing order. $200 million from the government, chiefly in O Fall then leased the connection with the building of lands to oilmen Harry veterans hospitals. F. Sinclair and EdwardO Most shocking of all was the L. Doheny, but not Teapot Dome scandal that until he had received a involved priceless naval oil bribe of $100,000. reserves at Teapot Dome and O The Teapot Dome Elk Hills. scandal eventuallyO In 1921, the secretary of the leaked to the public interior, Albert B. Fall, convinced and polluted the the secretary of the navy to Washington transfer these valuable properties to the Interior government. Department.
Teapot Dome Scandal A 1924 cartoon shows Washington officials racing down an oil- slicked road to the White House, trying desperately to outpace the Teapot Dome scandal of President Warren G. Hardings administration. The Granger Collection, New York
Government for Sale- 1924 cartoon satirizing thecorruption of the Harding administration showing the saleof the Capitol, the White House, and even the WashingtonMonument
Scandal and DeathO More scandals still O President Harding erupted; there were died in San reports as to the Francisco on underhanded August 2, 1923, of doings of Attorney General pneumonia and Daugherty, in which thrombosis, not he was accused of having to live the illegal sale of through much of the pardons and liquor uproar of the permits. scandal.
“Silent Cal” CoolidgeO Vice President Calvin Coolidge took over the presidency following Hardings death.O He was extremely shy and delivered very boring speeches.O Coolidge sympathized with Secretary of the Treasury Mellons efforts to reduce both taxes and debts.O He gave the Harding regime a badly needed moral fumigation.
Frustrated FarmersO Peace had brought an end to government-guaranteed high prices and to massive purchases of farm products by other nations.O Machines also threatened to plow the farmers under an avalanche of their own overabundant cropsO Because farmers were able to create more crops with more efficiency, the size of surpluses decreased prices.O The Capper-Volstead Act exempted farmers marketing cooperatives from anti-trust prosecution.O The McNary-Haugen Bill sought to keep agricultural prices high by authorizing the government to buy up surpluses and sell them abroad.O President Coolidge vetoed the bill twice, keeping farm prices down, and farmers political temperatures high coming into the election of 1924.
Mechanizing Agriculture. Just as the automobile replaced the horse on citystreets, so did the gas-engine tractor replace horses and mules on the nation’sfarms in the 1920s. American farmers owned ten times more tractors in 1930 thanthey did in 1920. The smoke-belching tractors bolstered productivity but alsoincreased the farmers’ debt burden, as the Great Depression made tragically clear.
A Three-Way Race for the White House in 1924O After being split between, urbanites and farmers, Fundamentalists and Modernists, northern liberals and southern stand-patters, and immigrants and old-stock Americans, the Democrats finally chose John W. Davis to compete with Calvin Coolidge and La Follette for the presidency.O Senator La Follette from Wisconsin leapt forward to lead a new liberal Progressive party.O He was endorsed by the American Federation of Labor and by farmers.O The Progressive party platform called for government ownership of railroads and relief for farmers, lashed out at monopoly and antilabor injunctions, and urged a constitutional amendment to limit the Supreme Courts power to invalidate laws passed by Congress.O Calvin Coolidge won the election of 1924.
Foreign-Policy FlounderingsO In the Coolidge O In 1926, the era, isolationism continued Mexican to reign. governmentO The armed interventionism in the Caribbean and declared its control Central America was the over oil resources. exception to the United O Despite American States isolation policies. oil companiesO American troops remained clamoring for in Haiti from 1914- 1934, and were stationed in war, Coolidge Nicaragua from 1926-1933. resolved the situation diplomatically.
Where’s My Money? $$O World War I had reversed the international financial position of the United States; it was now a creditor nation in the sum of about $16 billion.O American investors had loaned about $10 billion to the Allies in WWI, and following the war, they wanted to be paid.O The Allies, especially the French and British, protested the demand for repayment pointing out that they had lost many troops and that America should just write off the loans as war costs.O Americas postwar tariff walls made it almost impossible for the European Allied nations to sell their goods to earn the dollars to pay their debts.
Unraveling the Debt KnotO Americas demand for repayment from France and Britain caused the two countries to press Germany for enormous reparations payments, totaling some $32 billion, as compensation for war-inflicted damages.O The Allies hoped to settle their debts with the United States with the money received from Germany.O Disputes in government on whether or not war debts and reparations should have even been paid broke out.O Negotiated by Charles Dawes, the Dawes Plan of 1924 resolved this issue.O It rescheduled German reparations payments and opened the way for further American private loans to Germany.O United States bankers loaned money to Germany, Germany paid reparations to France and Britain, and the Allies paid war debts to the United States.O After the well of investors dried up in 1931, the jungle of international finance was turned into a desert.O President Herbert Hoover declared a one-year debt suspension in 1931.O The United States never did get its money from Europe.
Aspects of the Financial Merry-go-Round, 1921-1923. Great Britain, with a debt ofover $4 billion owed to the U.S. Treasury, had a huge stake in proposals for inter-Allied debt cancellation, but France’s stake was even larger. Less prosperous thanBritain in the 1920s and more battered by the war, which had been fought on itssoil, France owed nearly $3.5 billion to the United States and additional billions to
The Election of 1928O When Calvin Coolidge chose not to run for president in the election of 1928, the Republicans chose Herbert Hoover.O Hoover was a small-town boy who worked his way through StanfordO His experiences abroad strengthened his faith in American individualism, free enterprise, and small government.O His real power lay in his integrity, his humanitarianism, his passion for assembling the facts, his efficiency, his talents for administration, and his ability to
OppositionO The Democrats nominated Alfred E. Smith.O He was a Roman Catholic in an overwhelmingly Protestant country, and was "wet" at a time when the country was still devoted to prohibition.O For the first time, the radio was used prominently in election campaigns.O It mostly helped Hoovers campaign.O The combination of Catholicism, wettism, foreignism, and liberalism of Smith was too much for the southerners.O Herbert Hoover won the election of 1928 in a landslide, becoming the first Republican candidate in 52 years, except for Hardings Tennessee victory, to win a state that had seceded.
President Hoovers First MovesO Two groups of citizens were not getting rich in the growing economy: the unorganized wage earners and the disorganized farmers.O The Agricultural Marketing Act, passed in 1929, was designed to help the farmers.O It set up the Federal Farm Board, which could lend money to farm organizations seeking to buy, sell, and store agricultural surpluses.O In 1930, the Farm Board created the Grain Stabilization Corporation and the Cotton Stabilization Corporation.O Their goal was to boost falling prices by buying up surpluses.O The two agencies eventually failed.O The Hawley-Smoot Tariff of 1930 started out as a mild tariff before 1,000 amendments were added to it.O It raised the tariff to 60%, becoming the nations highest protective tariff during peacetime.O The tariff deepened the depression that had already begun in America and other nations, and it increased international financial
The Great Crash Ends the Golden TwentiesO The catastrophic stock-market crash came in October 1929.O It was partially triggered by the British, who raised their interest rates in an effort to bring back capital lured abroad by American investments.O The British needed money; they were unable to trade with the United States due the high tariffs.O On "Black Tuesday" of October 29, 1929, millions of stocks were sold in a panic.O By the end of 1929, two months after the initial crash, stockholders had lost $40 billion.O As a result of the crash, millions lost their jobs and thousands of banks closed.O No other industrialized nation suffered so severe a setback as the United States.