Politics and Prosperity
AP Chapters 31-32

A Republican Decade
 Election of 1920
– Hardings’s campaign pledge appealed to
Americans
–
He called for
– Americans were tired of European problems and feared their spread to the USA
– Harding was elected

Demobilization
Transition from wartime to peace time
 unemployment rose; women and blacks fired, anti-immigrant sentiment
 wages fell
 prices remain inflated due to the war
 people continue to buy

Demobilization
 __________________; prices and production fell
 ____________ caused by overproduction, credit, lack of conservation
 situation in Russia worsens; fear of
___________ grips the nation

 Capitalism - Private ownership of property
- Profit motive
 Socialism - Collective ownership of property
- Peaceful means to achieve objective
- Motive is “to each as needed”
 Communism- Collective ownership through violence if necessary
- Motive is “to each as needed”

Russian Revolution
 Russia’s revolution in March, 1917 began as an attempt to bring democracy to Russia
 Czar Nicholas II was overthrow
 Instead, chaos erupted
 Alexander Kerensky led the country until he was overthrown in
November, 1917

 Civil War broke out
 Lenin and his communist followers led the Red Army
 The White Army battled for 2 1/2 yrs but was defeated
 (1924) ______________ “majority” took power

1. The government owned all land and property
2. A single political party controlled the government
3. The needs of the country always took priority over the rights of individuals

Russian Revolution
 Lenin changed the name of the country from Russia to the
_______________________________
(USSR)
 The Soviet Union was the largest country in the world in terms of land
 It was near the largest in terms of population
 The USA refused to __________ the country

Russian Revolution
 ______________ took over the country when
Lenin died
 He consolidated his power by
 He brutally oppressed all opposition
 Americans feared a communist takeover
 Feared immigrants could be
 Began a campaign to label and neutralize all

 1919 ______________ found in post office addressed to prominent Americans, including Oliver Wendal Holmes, John
D. Rockefeller.
 A Bomb was detonated at Mitchell
Palmer’s house.
 Bombs blamed on

•
Attorney General A. Mitchell Palmer
•
Nov, 1919 to May 1920
•
Interrogated and arrested thousands of
•
Deported over 500 without evidence.
•
After months of raids, they netted 3 pistols
•
By summer 1920 hysteria died down and most Americans failed to support the witch-hunts .

 Italian immigrants arrested for murder/burglary of a shoe factory near Boston
 Railroaded by Judge Thayer who allowed their trial to be about their political views and lack of service in WWI
 Convicted not from evidence but for political views, in clear violation of the Constitution
 Executed August 23, 1927 in spite of protests in many major cities here and abroad

______________________ (1919)
 called by shipyard workers for increased salary and shorter hours
 joined by 110 local unions representing 60,000 workers

 industrialists use propaganda and scare tactics – communist threat – to weaken support for the unions
 strike ends after only 5 days with

Labor Strikes
The _______________________ (1919)
 police commissioner fired 19 officers for
 _____of the police force walked out in protest
 _____________ was called in by Governor
Coolidge after 2 nights of violence
 police force was replaced by

The _______________ (1919)
 ___________ steel workers in western PA &
Midwest walked out
 lasted from Sept. 1919 to Jan. 1920
 owners hired private police – governor supported owners
 18 strikers
 recruited African Americans & immigrants for replacement workers
 returned to work with

The _______________________ (1919)
 Wages set by government in 1917; could not strike during war
 ________________ newly elected, called for strike
 President Wilson demanded they return to work; officially ended the strike but unofficially encouraged workers not to return to work
 After about a month, Wilson compromised

*After 1920 labor strikes sharply declined
* Unions did not have the support of the public
*Higher wages after the recession led to less desire for strikes






 All 3 branches were considered
_________________, meaning that they denounced ____________ changes.
– Little or no government interference for social ills (poverty, epidemics, etc.)
–
Promotion of business interests
–
Smallest government in terms of people, finances, and scopes of interests possible

 Appointments varied from friends and family to prominent business leaders to some people that were inexperienced, incompetent, or dishonest
 Foreign policy was centered on
 Domestic policy centered on social stability, which included a
 _________________ overshadowed his legacy

 Isolationism - no involvement in European, Asian, or
African conflicts
 _______________ - 1921
– USA, Great Britain, France, and Japan agree to destroy some of their navy force and limit the amounts and types of new ships
 _________________ - 1922
– High duties on many products to discourage imports
 _____________- 1924
– Restructured Germany’s reparation payments and gave them loans

 “Less government in business and more business in government.”
 Appointed businessmen to cabinet posts and encouraged pro-business policies

 Immigration Policy
–
1921 – Quota system established.
• ___________of population in USA in _________ would be admitted from each country.
–
1924 - National Origins Act
•
Quotas adjusted to________ of _____________
• does not apply to Asians - they are still subject to the ________________________
• does not apply to ____________ - they are encouraged to work on southwestern farms

 As investigations of various members of the Harding
Administration begins, the president dies naturally on Aug.
2, 1923
 The scandals that erupt after his death taint his time in office, although he was not directly involved
 Secretary of the Interior illegally granted drilling rights to private industries in Elk Hills, CA and Teapot Dome, WY.
He then accepted $300,000 in kickbacks
 Director of Veterans Bureau – Charles Forbes pocketed millions
 Attorney General Harry Daugherty was convicted of accepting bribes




VP Coolidge became president when Pres. Harding died.
He was elected in 1924.
“The chief business of the American people is business.”
Coolidge is known more for what he did not do than for what he did
 Laissez-Faire economics

 Foreign Policy
–
Kellogg - Briand Treaty (1927)
–
15 countries agreed not to declare war on each other

 Coolidge declined to run
 Republican candidate, Herbert Hoover, won over the Democrat, Alfred Smith
 Campaign revolved around religion and prohibition
–
Smith is Catholic, anti-prohibition
–
Hoover is Protestant, pro-prohibition

A Business Boom
 Recession from early part of the decade gradually declines
 Industry successfully changed to a consumer economy
 People bought consumer goods, creating demand
 Factories fulfilled that demand by hiring employees

A Business Boom
 Manufacturers introduced installment plans to consumers to keep demand high
 People were naïve about the so-called prosperity

A Business Boom
 Electric Power
– during 1920s General Electric supplied many new household appliances
– demand for electricity increased dramatically
 Advertising
– new methods and mass media contributed to a huge impact by advertisements
 Gross National Product rose

Ford & The Automobile
 Automobiles invented in 1880s
 Henry Ford used innovative techniques to increase production and profit
 Between 1896-1908 Ford developed his first original cars. He sold 30,000 Model
T’s
 In 1908 he built his 1st modern factory

Ford & The Automobile
 Principles of Mass Production

Ford & The Automobile
 Increased production leads to economies of scale
 Ford dropped prices on Model T to $390, making it affordable to
 _________________________ - Ford owned glass companies, iron mines, steel mills and coal mines

Ford & The Automobile
 Ford raised wages for his workers but strictly enforced his rules
 Hired immigrants but insisted on their going to school to learn English and he had investigators inspect their homes
 By 1936 he declined to 3rd place in the auto industry partly due to resistance to change

 Automobile related industries led the boom
 Other industries, like movie theaters, oil refineries, airplane manufacturers, grew by leaps and bounds
 The top 200 American companies total worth grew from 43 billion to 81 billion
(1919-1929)

Bypassed by the Boom
 __________________________ did not fare as well in the job market
 Farmers continued to struggle with

The Economy in the Late 1920s
 The economy in the 1920s appeared to be in good shape on the surface
 Underneath, there were warning signs of impending disaster
 The stock market was taken as an indicator of the general economy
 If stock prices went up, the whole economy must be alright
 Stock value increased from $25 billion in 1927 to $87 billion in 1929
 Average Americans invested in the stock market

Economy Appears Healthy
 Stock prices are subject to supply and demand
 The more people that invest in the market, the higher the demand, and consequently the price of stocks
 Two ways to make money from the stock market -

Economy Appears Healthy
 Welfare capitalism
–
– organized labor membership declined in the 1920s

Economy
Appears
Healthy

Economic Danger Signs

Economic Danger Signs

Economic Danger Signs
 Trouble for Farmers & Workers
–
Many could not meet their mortgages, forcing 6000 rural banks to fail in the 1920s
–
Congress passed relief bills in 1927 & 1928
– Many industry workers continued to work in dangerous jobs for small wages
– Textile workers in Tennessee -

Summary
Clear signals of trouble in the economy
Uneven wealth
Rising debt
Hardships of farmers and workers
Stock speculation
Overproduction