The Politics of Boom and Bust Chapter 32 AP What is meant by the “Republican Decade”? The Executive Branch was dominated by three Republican presidents Less direct govt action, more cooperation with big business Congress was Republican TR died in 1919 --- Progressive wing of the Republican party died with him The Election of 1920 Rep: Warren Harding - Ohio Dem: James Cox - Ohio Harding Cox Electoral Vote: 404 127 Popular Vote: 16 m 9 m Percentage: 60 % 34% The Election of 1920 The reason Harding wins… Charming character Political maneuvers of his friends “I am not fit for this office and should never have been here.” … WGH The Election of 1920 1920 is the first presidential election in which women participate Harding was popular with women Handsome Supported women’s suffrage Who was Warren G. Harding? Senator from Ohio Less than “Presidential” leadership skills Unclear and vague Promised a “return to normalcy” Harding – Personal Conduct? Never committed a crime Gambled … Hypocrite… 1905 – 1920 affair with Carrie Philips… 1919 Nan Britton…claimed to be Harding’s mistress Nan Britton & Carrie Phillips President and Mrs. Harding Harding’s Cabinet? Charles Evans Hughes – Sec. of State Herbert Hoover – Sec. of Commerce Andrew Mellon – Sec. of Treasury Ohio Gang… Albert Fall – Sec. of Interior Charles Forbes – Veterans Bureau Harry M. Daugherty – Attorney General “John, I can’t make a …thing out of this tax problem. I listen to one side and they seem right, and then… I talk to the other side and they seem just as right… I know somewhere there is an economist who knows the truth, but I don’t know where to find him and haven’t the sense to know him and trust him when I find him…What a job!” - WGH Harding Scandals “I have no problem with my enemies…But…my Gdmn friends…, they’re the ones that keep me walking the floors at night.” WGH Harding Scandals Charles Forbes … 1923 stole $200 million that was allocated to Vets Hospital Thomas Miller…accepting bribes Harry Daugherty… 1924 illegal sale of pardons and liquor permits Albert Fall – Teapot Dome Scandal …1921 leased public oil lands to private company and received bribe Harding’s Domestic Policy Fordney-McCumber Tariff (1922)… raised tariffs Reduction of taxes… Less spending, less government, less presidential power Immigration Act of 1921…quotas Harding’s Foreign Policy? “We seek no part in directing the destiny of the world” - Harding Isolationism Signed a Congressional joint resolution ending WWI Opposed U.S. membership in League Washington Naval Conference (1921)…disarmament Foreign Debt…scale reparations down/cancel? Dawes Plan…rescheduled German reparations and gave private American loans to Germany Harding’s Death Disillusioned and despondent over scandals Took trip to Alaska and California Died at the Palace Hotel in San Francisco in 1923 No autopsy Doc Sawyer – Mrs. Harding’s doctor and Surgeon General – diagnosed ptomaine poisoning – probably a stroke Calvin Coolidge Republican President Pro-business Keep taxes down and profits up Give businesses more credit to expand High tariffs on imports “…the chief business of the American people is business…The man who builds a factory builds a temple – the man who works there worships there.” --Calvin Coolidge The Coolidge Presidency Honest and respectable Immigration Act of 1924…2% quota, Asian exclusion Federal Income Tax and “Trickle-down Economics” McNary-Haugen farm bill…post WW1 farm surplus – govt would buy surplus and sell them abroad – Coolidge VETO Kellogg-Briand Pact 1928…renounced war, but had no enforcement Herbert Hoover – The Great Engineer Sec. of Commerce Assist business community Rugged individualism Small government What was the nature of the “Bull Market”? Stock prices increased… Speculation… Market value… Dow Jones Industrial Average … What weakness was developing in the market? 4 million Americans invested (3%) Margin accounts… Investment trusts… Corporations and banks ... Dow increased from 191 to 381 in 5 months in 1929 What was the nature of the Crash of 1929? Oct. 23 – Dow lost 21 points in 1 hour Oct. 28 – 38 points lost (13%) Oct. 29 – Black Tuesday 16.4 million shares sold Over 1 million shares – no buyers Brokers called in margin accounts Nov. - $30 billion gone The floor of the New York Stock Exchange – Oct. 1929 Panic on Wall Street – October, 1929 “The fundamental business of the country…is on a sound and prosperous basis.” - Hoover What were the underlying causes of the Depression? Overproduction – underconsumption… Farming… Unequal distribution of income… Stock market crash… Bank failures… Tariff and foreign debt policies… Overuse of credit Family incomes 1929? 2.3% over $10,000 8% over $5,000 71% less than $2,500 60% less than $2,000 Over 42% less than $1,500 21% less than $1,000 Ave. farm income $962 What was the effect of the market crash? Undermined confidence Production decreased Workers laid off Lay offs led to further decline in spending More cut-backs More lay-offs Unemployed in Chicago Why did banks close? Banks had loaned money to speculators People defaulted on their loans Depositors began to withdraw funds 1930-1933 – 9,000 banks closed Millions in deposits lost Nation’s money supply fell by 1/3 Decline in purchasing power “Run” on the bank How does the Depression become world wide? Europe – war debts… Germany – reparations… 1930 Hawley Smoot Tariff – highest protective tariff Europe could not sell to the U.S. Set up tariffs against U.S. products We could not sell to Europe International trade dropped by 40% What is the human toll of the Depression? Farm families lost farms Bank closing denied people savings to fall back on when they were unemployed Unemployment in 1932: Cleveland 50% Akron 60% Toledo 80% Psychological… What was the impact of the Depression on people’s lives? Poor diet Poor medical and health care Delayed lives Families split up Schools closed (no taxes) Suicide rate up 30% Who helped the unemployed? Existing relief systems inadequate Private charities…. State governments… Government officials… Soup kitchens … Hoovervilles… Riding the rails… Hoovervilles Bread Lines What was the condition of rural American? Farm incomes down 60% 1/3 of all farmers lost their land Dust Bowl …. What was Hoover’s response to the depression? Sec. of Treasury Mellon – “wait it out” Hoover commitment to localism and private initiative Solutions outside of government Summoned business leaders to Washington… Called for state and local governments to create public works 1930 President’s Committee for Unemployment and President’s Organization for Unemployment Relief… Hoover’s response? National Credit Corporation… Crisis worsened Election of 1930… Unemployment… Hoover Dam – Public Works What was the Reconstruction Finance corporation? $2 billion in loans to banks, insurance companies, and railroads Public upset… Later: $2 billion to state and local governments for job creating public works – only $30 million allocated Hoover: against this – said it would open the door to socialism and collectivism Nature of Protests? 1932 – mood desperate Hunger March – communist organizers led march against Ford – 4 killed and 50 wounded How did farmers respond to falling prices? Farms were foreclosed Burned crops – corn and wheat Spilled milk “Farmers Holiday” Blocked roads – prevent food from getting to market Used force to try to prevent foreclosures What was the Bonus Army? 10,000-20,000 unemployed WWI veterans Patman Bill – government should pay a bonus to WWI veterans that was due in 1945 House of Rep. approved/Senate voted down Hoover ordered Gen. Douglas McArthur to disperse the Bonus Army Bonus Army Camp Bonus Army at “Anacostia Flats”