APUSH Talking Points 17.2
Conservative Republican Presidents 1920–1932
POLITICS of the 1920’s
A turning away from the governmental activism of the Progressive Era.
• People looked for “return to normalcy” after sacrifices and hardships of World War I.
• Economy grew rapidly from 1920–1929.
• Republicans won three elections with conservative views.
• Supported interests of big business through tax cuts for corporations and the wealthy
and through high tariffs; believed government should not intervene in the economy
• Believed in limited role in foreign affairs and international efforts to prevent war
• Believed government should not act to protect or assist individuals
• Stock market crash of 1929 and Great Depression that followed eventually forced
Harding (1921-1923) / Coolidge (1923-1929) / Hoover (1929-1933)
• Appointed friends to
government posts; some
were corrupt
• Repealed wartime taxes
on corporate profits and
reduced taxes for wealthy
• Approved high tariffs to
protect U.S. businesses
• Approved immigration
quotas to limit European
immigrants
• Agreed to arms limits for
United States and Europe
• Continued Open Door
policy toward China to
insure access to trade
• Died in office 1923 / • Took over after Harding’s
death and then elected in 1924
• First cleaned up corruption
scandals
• Continued Roosevelt’s Big
Stick policy in Latin America
• Resisted government help to
farmers; reduced taxes for
wealthy
• Supported high tariffs; allowed
business mergers
• Corporate profits grew for
many, but some industries
and farmers suffered
• Supported treaty to prevent
international war
• Did not run for reelection / • Elected in 1928 as a symbol
of prosperity
• Wanted business to follow
government lead on economy
voluntarily
• 1929 stock market crash
wiped out economic gains;
first believed it a short term
crisis that could be solved
by private business
• Tried to help farmers and
manufacturers by raising
tariffs, but the move hurt the
economy
• Later, approved programs to
back loans for businesses,
banks, and individuals
• Resisted calls to help people
directly with payments• Easily defeated in 1932
/ YOUR NOTES:
APUSH Talking Points 17.4
The Economics in the 1920s
The 1920s was often referred to as the "Roaring Twenties", or the "Jazz age". This related to the booming period of rapid economic expansion, but also changing social attitudes. Society was becoming less regimented and discovering new found freedoms; suddenly people's expectations were changing, and this was fueled by new technologies and a booming economy. However, hidden behind the optimistic views and a booming economy, there were significant structural problems, which led to the notorious stock market crash of 1929 and the Great Depression of the 1930s.
Booming Economy
Economic Growth was high, with significant increases in living standards for many.
Reasons for booming Economy:
- Growth in Automobile industry
- High levels of Consumer confidence, increased by new attitudes to consumerism.
- Improvements in technology, partly as a result of WWI
- Improvements in labor productivity - e.g. technology and new management techniques
- Scientific Management - Taylorism
- Mass Production - Assembly line e.g. Ford's car factory
Anti trust laws were weakened This allowed the growth of monopoly power in industries like banking.
Trade Union membership declined The government offered little statutory support for unions. This is best exemplified by Henry Ford, whose revolutionary production methods for the production of cars, included banning trades unions. However, it is worth noting Ford paid wages much higher than elsewhere, therefore, most of his workers didn't seem to mind the absence of unions.
Growth in Debt The booming economy and widespread advertising, led to a shift in consumer attitudes. This encouraged greater spending through credit. This also extended to the stock market.
Boom in Stock Market The performance of the stock market, seemed to create an easy way to make money. This encouraged more speculators to enter. However, share prices became divorced from reality. It was a classic boom and bust in market sentiment. In October 1929, a few companies reported lower profits than expected, this proved to be a trigger for a dramatic change in market sentiment.
Recession in Agriculture The boom in the US economy did not extend to all areas of the economy. It was mainly confided to construction and car manufacture. During most of the 1920s the agricultural sector struggled with declining prices and orders. This led to a record number of farmers going bankrupt. It also led to shifts in the population from rural to urban areas.
Fragmented nature of banking system A structural weakness in the US economy was the limited reserves of small and medium sized regional banking companies. This meant that when the Great Depression came, the banking sector was not prepared to meet the extraordinary circumstances. Even before the Great Depression of the 1930s many regional banks faced problems. They often failed to secure sufficient funds in the case of bad debts. Therefore, when farmers when bankrupt, they didn't have sufficient reserves to meet credit demand.
There was also no system of lender of last resort. This meant that if the banks were short of money, they couldn't borrow from a Central Bank. When the Great Depression struck, people wanted to withdraw their money, but the banks didn't have enough reserves to meet this demand. This caused a fall in confidence in the banking system and many banks went under. / YOUR NOTES:
APUSH Talking Points 17.3
United States Foreign Policy in the 1920s
The Politics of Boom and Bust
1920-1932
Efforts to maintain peace in the 1920s
- Treaty of Versailles punished Germany severely
- League of Nations sought collective security but without support from the US, USSR and Germany, the League was crippled.
- U.S. Senate refused to adhere to the World Court, the League's judicial arm.
- Effectiveness of League of Nations
- Helped settle disputes between small powers
- Less successful when major powers involved
- Ultimately did not stop Japanese, Italian, or German aggression.
- Sought to reduce naval arms race between U.S., Japan & Britain and resolve disputes in the Pacific.
- The Power Treaties – a result of the Conference The 4 Powertreaty (US, GB, Fr., and Japan) discussed respect towards Pacific nations. The 5 power treaty (US, GB, Fr., USSR, and Italy) halted battleship construction for 10 years and developed the ideal tonnage ratio. The 9 PowerTreaty restated the Open Door Policy.(The United States of America, Belgium, the British Empire, China, France, Italy, Japan, the Netherlands and Portugal)
- U.S. naively gave Japan the advantage in the Pacific.
- Open Door in China preserved.
- Concluded at a conference held at Locarno, Switzerland, by representatives of Great Britain, France, Germany, Italy, Belgium, Czechoslovakia, and Poland.
- Western Europe guaranteed existing borders and sought peaceful solutions.
- Germany promoted peaceful settlement of disputes with neighbors in Eastern Europe--Poland & Czechoslovakia
- Many Europeans believed "spirit of Locarno" meant no future war in Europe.
Kellogg-Briand Pact (1928)
- Ratified by 62 nations: made war illegal except for defensive purposes.
- Major flaws: No enforcement mechanism; aggressors could use "defensive purposes" argument when attacking.
- Gave Americans a false sense of security into the 1930s.
- US the largest creditor nation after WWI; Allies owed US $16 billion
- Allies couldn't pay; depended on Germany's reparation payments to pay back the US
- U.S. tariff policies hurt European recovery
- Germany economy couldn't handle pressure and collapsed in 1923
- Dawes Plan (1924)
- U.S. bankers gave Germany loans; Germany paid Britain & France, who in turn paid back the U.S.
- . U.S. credit continued to help this finance issue until crash of 1929.
- Hoover declared debt moratorium in 1931 and before long, all debtors defaulted (except Finland which paid its loan ending in 1976).
- U.S. policies harbored ill-will among European nations toward U.S.
- Contributed to neutrality legislation passed by Congress during 1930s.
APUSH Talking Points 17.5
The Crash and the Great Depression
ECONOMIC WOES
Industry and Trade: Lack of spending and surplus goods led to reduced prices and profits. Thousands of factories closed their doors and/or laid off workers. By 1932, factories in the U.S. were producing only one-half of the goods they produced in 1929. World trade was also curtailed as the U.S. and many of the industrial nations placed high tariffs on foreign goods.
Small Business: Small businesses were hardest hit and had the most difficult time recovering from the Great Depression. Many family-owned businesses collapsed due to bank losses. Others were affected by the rapid decrease in consumer spending.
Banking: Due to poor investments and the “run on banks” by depositors, over 5,000 banks had closed by 1932.
HUMAN MISERY
Farmers: Farmers of the Great Plain’s faced several years of drought during the early 1930”s. Dust storms swept across the plains removing much needed topsoil. Many “Okies,” or migrant farmers, moved westward to find work. Such hardships were depicted in John Steinbeck’s novel, The Grapes of Wrath. Due to problems such as the Dust Bowl and surplus food stuffs, over one-half million farmers lost their farms during the Great Depression.
Workers: By 1932, twelve million people, or 25% of the labor force, were unemployed. Those workers who kept their jobs were forced to work for low wages. Many of the unemployed lived in “Hoovervilles,” or rundown towns, whose makeshift houses were made of cardboard and tin collected from dumps. For millions of Americans, soup kitchens offered their only meals.
Minorities: African Americans and women were extremely hard hit by the depression since they were the first to lose their jobs. Both lost jobs at a more rapid rate than white males. In fact, the unemployment rate for them was twice that of whites.
Bonus Army: In the summer of 1932, thousands of World War I veterans, many of whom were unemployed, marched to Washington, D.C. They set up camp and vowed to stay until they received their war service bonuses due to be paid to them in 1945. When a bill in Congress to provide early payment was defeated, all but 2,000 of the veterans grudgingly left the Capital. President Hoover sent in the U.S. Army to forcibly remove the remaining veterans.
PRESIDENTIAL RESPONSE
Herbert Hoover : A Republican, President Hoover believed the economy would repair itself and did not want to implement government remedies to “cure” it. As the depression worsened, Hoover began to take actions to increase business profits, believing business prosperity would “trickle down” to the average American by way of employment and increased income. To accomplish this, he cut taxes and created the Reconstruction Finance Corporation. The Corporation gave $2 billion in loans to banks, railroads, and large corporations. However, many Americans felt that President Hoover’s actions were too little, too late. He was soundly defeated by Franklin D. Roosevelt in the presidential election of 1932.
Franklin Roosevelt: A Democrat, President Roosevelt felt the federal government should guide the country out of the depression. He created a Relief, Recovery, and Reform program which called for a tremendous increase in taxes and the use of deficit financing in order to create millions of jobs for the unemployed. Called “pump priming,” Roosevelt wanted to increase employment and create new programs to aid the poor. Roosevelt hoped this would lead to increased consumer spending and in turn help businesses prosper as sales increased.
Franklin D. Roosevelt
First Inaugural Address
Saturday, March 4, 1933
RECOGNIZE
the problem/crisis
ASSERTION
we will survive and prosper
LEADERSHIP
This nation asks for action, and action now
The Great Depression fundamentally reshapes the way the American people think about the role of government
#1 Creates security in the system to change the length and harshness of business cycle
#2 Changes the expectations about what government could and should do
Federal Budget: 1920 $3 billion to 1930 $6 billion / YOUR NOTES:
The Dust Bowl or the Dirty Thirties1930 to 1936
The Dust Bowl was an ecological and human disaster caused by misuse of land and years of sustained drought. Millions of acres of farmland became useless, and hundreds of thousands of people were forced to leave their homes; many of these families, since so many came from Oklahoma) traveled to California and other states, where they found economic conditions little better than those they had left. Owning no land, many traveled from farm to farm picking fruit and other crops at starvation wages. Author John Steinbeck later wrote The Grapes of Wrath, which won the Pulitzer Prize, and Of Mice and Men about such people.1