REPUBLICAN LEADERSHIP OF THE 1920’S
How did the relationship between big business & the government aid economic
growth?
TENSION BETWEEN CITY & COUNTRY SHAPED
COURSE OF POLITICS IN THE 1920’S
• WARREN G. HARDING 1921-1923
• RETURN TO STABILITY & NORMALCY
• POWERFUL CABINET BECAUSE HE WASN’T
• STATE – CHARLES EVANS HUGHES
• TREASURY – ANDREW MELLON
• COMMERCE – HERBERT HOOVER
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ALL REPUBLICAN PRESIDENTS WISH TO
RETURN TO PRE- WWI POLICIES:
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LAISSEZ FAIRE, REDUCED TAXES ON BB & WEALTHY
PRO-BUSINESS APPOINTEES TO FRC ALA ICC
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THE OHIO GANG
ATTORNEY GENERAL: H. DAUGHERTY
VETERANS BUREAU: CHARLES
FORBES (WWI DRAFT DODGER)
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INTERIOR: ALBERT FALL
DOMESTIC AFFAIRS – MELLON AT THE HELM
*INDUSTRIAL WORKERS ONLY
MARGINAL BENEFITS
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*WHITE WOMEN’S RIGHTS
19TH AMENDMENT 1920
LEAGUE OF WOMEN VOTERS
SHEPPARD TOWNER ACT 1921
1928 7 WOMEN ELECTED TO
HOUSE OF REPRESENTATIVES
AFRICAN AMERICAN WOMEN
FORMED OWN ORGS.
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*DECLINING VOTER
PARTICIPATION AMONG ALL
VOTERS
PROSPERITY, CONSERVATISM
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ECONOMIC NATIONALISM
4 WAYS GOVERNMENT SUPPORTED
BIG BUSINESS:
1) FORDNEY-McCUMBER TARIFF
1922 HIGHEST IN HISTORY AVG. 40%
2) DEBT REDUCTION: TAX CUTS, ↓
GOV’T SPENDING
3) CUTBACKS AT FTC & PROBUSINESS APPOINTMENTS
4) HERBERT HOOVER
FOREIGN AFFAIRS – INDEPENDENT INTERNATIONALISM
INVOLVED IN FOREIGN AFFAIRS WHEN IT SERVED OUR INTEREST &
HOW IS THIS ISOLATIONIST? IT’S NOT
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WASHINGTON NAVAL CONFERENCE
1921
a. US, GB, FR, ITALY, JAPAN,
BELGIUM, PORTUGAL, UK &
NETHERLANDS
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b. 5 POWER TREATY:US, UK, FR, J, IT:
SPECIFIC RATIO OF BATTLESHIPS –
1ST ATTEMPT AT NAVAL REDUCTION
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c. 4 POWER TREATY: US, FR, UK, J
CONSULT W/ EA. OTHER BEFORE
TAKING ACTION IN E. ASIA – JAPAN
#1 THREAT TO U.S. INTERESTS
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d. 9 POWER TREATY: INTERNATIONALIZATION OF OPEN DOOR; RESPECT
TERRITORIAL RIGHTS IN CHINA
DEATH & SCANDALS “I HAVE NO TROUBLE WITH MY ENEMIES, IT’S MY
DAMN FRIENDS THAT KEEP ME UP AT NIGHT”
*JULY 1923 VACATION
OUT WEST & DIES OF
HEART ATTACK.
*1924 INVESTIGATIONS
INTO RUMORS IN FULL
SWING
*TEAPOT DOME –
LEASING OIL RESERVES
FOR BRIBE: A. FALL
JAILED
* FORBES CONVICTED
OF STEALING FUNDS &
FLED TO EUROPE
*DAUGHERTY ESCAPED
CONVICTION IN 2
CRIMINAL TRIALS
COOLIDGE TAKES OFFICE AT HOME IN VERMONT BY HIS FATHER’S SIDE
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CHOICE FOR VP SIGN OF RETURN TO
CONSERVATISM
PHILOSOHY WAS TO PRESIDE
BENIGNLY NOT GOVERN
RAISED ETHICAL TONE IN D.C.
EPITOMIZED MYTH OF AMERICAN
SELF MADE MAN
“THE BUSINESS OF AMERICA IS
BUSINESS” –EPIGRAMS NOT ACTION
MORE CONSERVATIVE: SC UNDER
TAFT OVERTURNS FED CHILD LABOR
LAW, HIGHER TARIFFS, PROMOTED
BUSINESS INTERESTS BUT NOT
OTHER GROUPS (WOMEN, BLACKS,
WORKERS)
DOMESTIC AFFAIRS
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MELLON STILL TREASURY SECRETARY,
TRICKLE DOWN CONTINUES
BIG BUSINESS & GOVERNMENT AS
PARTNERS & LESS ADVERSARIAL
REGULATORY BODIES, ICC & FTC, PROBUSINESS AGENCIES
ECONOMY CONTINUED TO RISE SO
COOLIDGE DIDN’T HAVE TO DO MUCH
MCNARY HAUGEN ACT 1924: 2X VETOED
’27 & 28 - UNSUCCESSFUL
Purchase surplus wheat at avg. price
1909-14 & resell abroad at market price
(prices highest during 09-14)
Make up difference w/ tax on domestic
sales of same commodities
Beware “tyranny of bureaucratic
regulation & control”
Veto in 1928 leads many to vote
Democratic next election
FOREIGN AFFAIRS: WAR DEBT & REPARATIONS
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LACK OF AWARENESS OF CONNECTION
BETWEEN TARIFF & REPARATIONS
DAWES PLAN 1924: $200M LOAN TO
GERMANY TO HELP STABILIZE DM
YOUNG PLAN 1929: FURTHER
REDUCTIONS BUT TOO LATE
LOANS FROM U.S. TO GERMANY CEASE,
ALLIED PAYMENTS STOP, GERMANY
DEFAULTS DUE TO ECONOMIC CRISIS
KELLOGG-BRIAND PACT 1928: 62
NATIONS OUTLAW WAR
U.S. PEACE MOVEMENT GROWING.
PEOPLE WANTED PEACE BUT, “NEITHER
SURRENDER THEIR PREJUDICES &
DISLIKES NOR BUILD THE DEFENSES
NECESSARY TO MAKE IT SAFE TO
INDULGE THESE PASSIONS”
RISE OF HOOVER & 1928 ELECTION
• AS SECRETARY ENCOURAGED
VOLUNTARY COOPERATION IN PRIVATE
SECTOR – CREATES STABILITY IN ECON
• PROMOTED TRADE ASSOCIATIONS W/I
INDUSTRIES TO PROMOTE EFFICIENCY IN
PRODUCTION & MARKETING
• AL SMITH DEMOCRATIC CANDIDATE
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WET, CATHOLIC, URBAN, VS. HOOVER’S DRY,
PROTESTANT, RURAL UPBRINGING
• HOOVER 58% OF VOTE; VICTORY
APPEARED TO SIGNAL DEMS WERE
DOOMED FOR EXTINCTION
• BUT! GREAT DEM GAINS IN THE CITIES
SHOWED SHIFT IN THE ELECTORATE – 12
LGST IN 24 VOTED REP. & IN 28 VOTED
DEM.
• PROSPERITY MORE WIDELY SHARED
THAN AT ANY OTHER TIME BUT MORE
THAN ½ AMERICAN POPULATION FAILED
TO ACHIEVE ANY REAL BENEFITS
HE’S NOT YOUR FATHER’S REPUBLICAN
• OPPOSED CUT-THROAT
COMPETITION
• CORPORATE COOPERATION
• WELCOMED WELFARE
CAPITALISM
• ADVOCATED VOLUNTARISM
• WASHINGTON BUSINESS
CONFERENCES (CONTINUED
AS DEPRESSION HIT TO HELP
AMELIORATE SITUATION)
• TRADE ASSOCIATIONS
• 8 HOUR WORK DAY
• DIVISION OF CO. RIVER H2O
BLACK THURSDAY 10/24/29 & THE ONSET OF THE
DEPRESSION
• UNDER COOLIDGE 5 YR ARTIFICIAL RISE
• MELLON TAX BILL CONTRIBUTED TO
RAMPANT CONSUMER SPENDING:
SPECULATION MAJOR MARKET
CHARACTERISTIC
• CAUSES: UNDERCONSUMPTION &
OVERPRODUCTION OF MFG GOODS;
INADEQUATE PROTECTION OF STOCK
MARKET
• HOOVER CLOSES MARKET FRIDAY &
MONDAY “BUSINESS OF U.S. IS ON A
SOUND & PROSPEROUS BASIS”
• CONSTRUCTION INDUSTRY TANKED ‘28
• FRB INCREASED IR BUT BANKS KEPT
MAKING LOANS
• TIGHT $ POLICY IN ‘30’S REDUCED $
AVAILABLE FOR INVESTMENT & GROWTH
& HURT RECOVERY EFFORTS
• 13 MILLION SHARES SOLD THURSDAY &
BLACK TUESDAY ANOTHER 16 MILLION
HOOVER’S RESPONSE –
THOUGHT OUTSIDE THE BOX
• RUGGED INDIVIDUALISM
*LOCAL GOV’T & CHARITIES RESPONSIBLE
*PUBLIC WORKS: HOOVER DAM
*WASHINGTON BUSINESS CONFERENCES
*DEPRESSION MASSIVE, 9K BANKS GONE
*SMOOT HAWLEY TARIFF: PROTECTIONIST
*FEDERAL FARM BOARD – RAISE FARM
PRICES BUT TOO LATE
*REJECTED LAISSEZ FAIRE APPROACH
*RECONSTRUCTION FINANCE CORP – AID
TO BUSINESSES STILL IN OPERATION BUT
NO INDIVIDUAL OR FAILED BUS. RELIEF
THE BONUS MARCH 1932 OF THE BONUS ARMY
• demand for immediate cashpayment redemption of their service
certificates
• World War Adjustment Act of 1924
had awarded them bonuses in the
form of certificates redeemable in
1945. Each Service Certificate bore a
face value equal to the soldier's
promised payment plus compound
interest
• AG Wm Mitchell ordered to clear
vets from gov’t property – 2 vets
killed
• D. MacArthur with cavalry & tanks
forcibly moved vets & families off of
property & burned their makeshift
houses
FOREIGN POLICY!
• Clark Memorandum 1930 -The
primary point was that the Monroe
Doctrine was based on conflicts of
interest between the United States
and European nations, rather than
between the United States and
Latin American nations.
• STIMSON DOCTRINE 1932 as a
result of Japan’s invasion of
Manchuria in 1931. Letters sent to
China & Japan that US will NOT
recognize legality of seizures made
in violation of treaties. HH “We’re
not the world’s policeman”
• No impact on Japan & they bomb
Shanghai in 1932 & withdraw from
League