TChapter 32 Notes—Part 1 – The Politics of Boom and Bust, 1920 -1932

To-- “Foreign-Policy Flounderings”

Questions:

1.What was the economic philosophy of the Republican presidents of the 1920s? Did this environment help create the Great Depression?

2.What were the first tasks of the Harding administration?

3.What was the foreign policy philosophy of Coolidge and was he consistent?

4.Describe the political environment of the election of 1928? How did Hoover win the election?

5.What were the causes of the Great Depression?

6.What were the major foreign policy issues faced by the Hoover administration?

7.In what ways were the 1920s a reaction against the progressive era?

8.Was the American isolationism of the 1920s linked to the rise of movements such as the Ku Klux Klan? In what ways did movements such as fundamentalism reflect similar anti-modern outlooks, and in what ways did they reflect more basic religious disagreements?

9.To what extent did the policies of the booming 1920s contribute to the depression? Was the depression inevitable, or could it have been avoided. Why or why not?

10.How did the depression challenge the traditional belief of Hoover and other Americans in rugged individualism?

Main Ideas:

The Republican administrations of the prosperous 1920s pursued conservative, pro-business policies at home and economic unilateralism abroad.

The great crash of 1929 led to a severe, prolonged depression that devastated the American economy and spirit and resisted Hoover’s limited efforts to correct it.

Summary:

The Republican governments of the 1920s carried out active, pro-business policies, while undermining much of the progressive legacy by neglect. The Washington Naval Conference indicated America’s desire to withdraw from international involvements. Sky-high tariffs protected America’s booming industry but caused severe economic troubles elsewhere in the world.

As the Harding scandals broke, the puritanical Calvin Coolidge replaced his morally easygoing predecessor. Feuding Democrats and La Follette progressives fell easy victims to Republican prosperity.

American demands for strict repayment of war debts created international economic difficulties. The Dawes plan provided temporary relief, but the Hawley-Smoot Tariff proved devastating to international trade.

The stock-market crash of 1929 brought a sudden end to prosperity and plunged America into a horrible depression. Herbert Hoover’s reputation collapsed as he failed to relieve national suffering, although he did make unprecedented but limited efforts to revive the economy through federal assistance.

Quotes:

“My God, this is a hell of a job. I have no troubles with my enemies… but my G-D Friends!”

–Warren G. Harding (1923)

“The chief business of the American people is business… The man who builds a factory builds a temple, that the man who works there worships there.”

-Calvin Coolidge (1916)

************“We in America today are nearer to the final triumph over poverty than ever before in the history of any land…We have not yet reached that goal, but given a chance to go forward with the policies of the last eight years, we shall soon with the help of God be in sight of the day when poverty will be banished from this nation.”

- Herbert Hoover, President-Elect (1928) just under a year before the greatest economic crisis in our history begins during his Presidency 

Intro Chapter 32 (text) 33 (digital edition)

Opening quote is from Hoover above---Interesting that he makes this statement just before the worst economic crisis in our nations history--- ironic, for sure 

The 1920’s saw three Republican Presidents—Warren G. Harding, 1921-1923 (died), Calvin Coolidge, 1923 -1929, and Herbert Hoover, 1929-1933.

These Presidents guided America an the Great Roller-Coaster ride---The Boom of the majority of the 20’s and the Deepest BUST ever beginning in 1929.

These conservative Republicans turn away from Progressive Reform and return to the Gilded Age principle of Laissez-Faire---a Government controlled and in support of Big Business---

Under Harding’s short term as President, he dies of an apparent heart attack, CORRUPTION, appears again---like US Grant’s before that began the Gilded Age…

The USA retreats into a so-called isolation from the world with high tariffs and a small-unprepared military—not joining the League of Nations—but beginning a unique period of foreign policy---peace is the goal for sure.

Native Americans continue to struggle under the “Forced Assimilation” of the Dawes Severalty Act BUT—ARE FINALLY GIVEN CITIZENSHIP IN 1924.

The Republican “Old Guard” Returns –AND SO DOES CORRUPTION UNDER HARDING 

Warren G. Harding—they say had a “weak, inept interior” a man not suited to be President. Warren had a difficult time detecting Corruption in his friends. The “Ohio Gang” (Harding was from Ohio) – was what they called his “unofficial” cabinet, late night poker games and corrupt, Fall, Daugherty, Forbes, Miller, and Smith all were his buddies—Harding had promised to find “the best minds in the party,” to appoint to federal offices and to his cabinet. Some were brilliant—Charles Evans Hughes became a brilliant and conservative Secretary of State, Andrew Mellon was made Secretary of the Treasury, one of the “Pittsburgh Millionaires” that had worked closely with Andrew Carnegie, and Herbert Hoover, the self-made orphan millionaire mining engineer that had saved Belgium as the director of the Food Administration during WWI and used Propaganda smartly with his food saving slogans was appointed Secretary of Commerce. HOWEVER---Two of his appointments were THIEVES—ALBERT B. FALL, from New Mexico, was appointed Secretary of the Interior---and as guardian of the nation’s natural resources, he created the TEAPOT DOME SCANDAL—selling the nation’s precious oil reserve lands to private corporations for bribes---and HARRY M. DAUGHERTY- Harding’s campaign manager-and appointed Attorney General---a big time crook—twice subject of corruption investigations and forced to resign…Smith ( asst. attorney general commits suicide to avoid a trial) Miller ( Property custodian) is put on trial for taking bribes in the same scandal that causes Daugherty to resign.

GOP Reaction (conservatism is some times called “reactionary”) at the Throttle

Harding crushed Progressivism---he became a tool of the large industrialists--- most big businessmen thought he a was an “amiable boob.” The industrialist’s goal was to use the government to make big profits… and Harding, Coolidge, and Hoover appointed industrialists to the Supreme Court and many Government agencies to help this along—as promised. Harding, despite being President just over three years appointed 4 Supreme Court Justices—all conservative and that will have a big impact once FDR comes in office during the Great Depression ruling some of the early “new deal” unconstitutional—and leading to a FDR’s “Court Packing” idea—Former President Taft becomes Chief Justice.

This new very conservative Supreme Court rules unconstitutional much progressive legislation passed earlier—The case Hammer v. Dagenhart overturns the Keating-Owen Child Labor protection act—They overturn Muller V. Oregon – invalidating Women’s special protection in the work place and invalidating a minimum-wage law for women---in the Case Adkins v. Children’ Hospital (1923) --stating now that Women could vote that they were legal equals of men and could no longer be afforded special protection.

Both the Clayton-Anti-trust and Sherman Anti-trust Acts as well as the Interstate Commerce Commission were ignored—or controlled by conservative big business supported appointments…Hoover encourages “consolidation-monopolization” of industry as “efficient” and saw competition as “cutthroat” ---His belief in “voluntary regulation/enforcement” led to the expectation that the big businesses should “regulate themselves” rather than the federal government doing so. hmm….

The Aftermath of War

The Federal Government after the conclusion of WWI had to dismantle its limited economic controls:

The Railroads were returned to private company control—Congress passes the Esch-Cummings Transportation Act of 1920 ---which encouraged “consolidation” and pledged the Government would “Guarantee” their profitability--- certainly an effort to save the less significant RR’s due to the rise of the Automobile-Trucks- Airplanes--- interesting---in that you can’t help people…but you can give $$$ to business owners—hmm---

Unions were strangled by the Red Scare and Government deportation of leaders to the Soviet Union—“The American Plan” – was a plan by businesses to rid themselves of Union’s by guaranteeing an “open shop,” no mandatory union representation--- publishing and sharing “black lists” of union organizers to either fire or not hire—When the Government Railway Labor Board cut wages on RR Workers by 12% in 1922—the workers went on strike for two months until the Atty Gen. got a court injunction forbidding them to strike---or go to prison--- Union Membership between 1920 and 1930 fell by 30%

Veterans benefitted--- congress created the Veterans Bureau which in turn built Veterans hospitals and provided rehabilitation for those injured soldiers.---Veterans soon created their own “lobbying organization”—THE AMERICAN LEGION—in 1919 by Teddy Roosevelt Jr.---the American Legion was so successful that they persuade congress to pass the ADJUSTED COMPENSATION ACT (BONUS BILL) IN 1924 (it was vetoed by Harding in 1922) –this “BONUS” GAVE EVERY FORMER SOLDIER A PAID-UP LIFE INSURANCE POLICY DUE IN 20YEARS (1944) ---AT A COST OF 3.5 BILLION $$$--- COOLIDGE VETOES THE BILL BUT CONGRESS WITH A 2/3 MAJORITY VOTE OVERRODE HIS VETO---

America Seeks Benefits Without Burdens

Since we never sign the Treaty of Versailles---we were technically still at war---so Congress in July of 1921 passed a simple joint-resolution of Congress that declared WWI officially over.

The 1920’s Republican President’s are called isolationists{A MAJOR QUESTION? IS WHAT FOLLOWS REALLY ISOLATIONISM OR “UNILATERAL ACTIONS IN THE WORLD” NOT NECESSARILY ISOLATIONIST BUT A FOREIGN POLICY WITH “BLINDERS” FOCUSED ON ONLY US INTERESTS?}—The USA ignored the League of Nations-even their World Health program---we do send unofficial observers to Geneva, Switzerland---

But true isolationism is not what happened ---we still were involved in world affairs—just not in the League and always in our best interests –for example: The Middle East—was being recognized for its huge Oil Supply—and a rivalry was developing between Britain and the USA for control of the development of this resource—Sec. of State Charles Evans Hughes signs an agreement that allows both GB and USA to control the development of this resource in the Middle East—

The “Inter-War Years” were dominated by Republican Presidents who wanted to advance American Business Interests overseas—a pseudo “dollar diplomacy” and continuation of the RC of the MD---until 1928.

The Inter-War Years Western Hemisphere Foreign Policy 1919-1941

The inter-war years were dominated by Republican presidents whose domestic and foreign policies were designed to advance American business interests- a new form of Taft’s “Dollar Diplomacy.” To this end the Coolidge administration saw to it that a new constitution passed by Mexico in 1917, which called for nationalizing Mexico’s important industries, would not jeopardize American investments in those businesses. Throughout the 1920s U.S. troops were sent to South America and the Caribbean to reinforce U.S.-backed regimes and to protect U.S. financial interests.

Throughout the 1920s and well into the 1930s, the United States continued to influence the affairs of its own hemisphere as well. Time after time it intervened in Central and Latin America in order to protect U.S. economic and political interests while simultaneously attempting to draw those nations closer to the United States, especially in light of the rise of antagonistic governments in Japan, Germany, and Italy. At the Pan-American Conferences of 1923 and 1928, the United States agreed to treat all nations on an “equal footing.” The Clark Memorandum of 1928 took this rapprochement (repairing relationships) one step further by repudiating (saying it was not our policy any more) the Roosevelt Corollary to the Monroe Doctrine. Later, in the 1930s, President Franklin Roosevelt would replace Dollar Diplomacy with the Good Neighbor policy, which stated that no nation would interfere in another’s internal affairs. For the time being, this new, less hegemonic policy satisfied most South Americans. Even in the far reaches of the American empire, the Philippines, the United States, partially recognizing the costs of maintaining an international empire, promised Filipino independence by 1946 (Tydings-McDuffie Act). Post–World War II international affairs, however, would convince U.S. administrations to pull back from these prewar agreements and statements.

The Inter-War Years in World Foreign Policy

Dawes and Young Plans –1920’s FP

Of equal concern to U.S. policymakers and financial institutions were the billions of dollars in loans extended to the Allies during the war. President Coolidge wanted the debts repaid, but the Europeans balked, claiming that they were unable to collect the billions in war reparations owed to them by a bankrupt Germany and adding that U.S. losses paled in comparison to their losses. Equally troubling was the U.S. passage of the Fordney-McCumber Tariff. The tariff made it exceedingly difficult for Europeans to sell their products in the United States and make the money that could be used to pay back the war loans. In response to this problem, the United States offered the following solutions:

•The Dawes Plan This plan significantly reduced Germany’s reparations and provided loans to Germany in a roundabout way: the United States loaned money to Germany, Germany used this to pay its reparations to the Allies, who in turn used these funds to pay off the interest on its war debts to the United States.

•The Young Plan This plan further reduced Germany’s payments and established the Bank for International Settlements to assist in the process of reparations payments.

Nevertheless, the collapse of national economies brought on by the Great Depression caused most nations to default on their debt payments to the United States. Most nations do not pay back loans made during WWI until the 2000’s.

The Washington “Disarmament” Conference 1921-22******* [SEE CHART ON P. 757 IN DIGITAL EDITION}****

Shocked by the enormous loss of life in WWI, world leaders grasped at ways to prevent such a thing from happening again. The LEAGUE OF NATIONS was seen as one method, but WITHOUT US AND SOVIET (RUSSIA) INVOLVEMENT, its potential for solving international disputes was limited. Nevertheless, various international agreements were made in the inter-war years to limit the size of militaries and resolve potential political disputes. Some were practical; others rested on naïve optimism.

This conference is brought on by concerns of the “Great Powers” about continuing unrest in the Far East (Asia) there are correct to be concerned—this is where WWII begins before Europe. Charles Evans Hughes –Secretary of State shocks the “Great Powers” who attend this conference with the following plan:

Washington Naval Disarmament Conference (1921 -1923)

•The Five-Power Naval Treaty At the Washington “Disarmament” Conference (1921–1922), convened by President Harding, the United States, Britain, Japan, France, and Italy agreed to limit their capital ships to the following ratio respectively: 5:5:3:1.75:1.75. The participants also agreed to ban the use of certain insidious weaponry, such as poison gas, and restricted submarine warfare. (Japan feels insulted with the ratio which places them below the USA and GB in the order and amount of ships---they sign this but never forget this insult !!!)

NOTE: The USA & GB would have an equal # of Battleships and Aircraft Carriers 5:5 and Japan would have 3 (5:5:3) – France and Italy would have less –1.75 each.

•The Four-Power Treaty At the same conference, the United States, Britain, Japan, and France agreed to respect one another’s Pacific territorial possessions by, in part, THE USA AND GB AGREED TOnot create forward military bases in the Pacific. (However this part of the treaty is not agreed to by Japan and they are begin to FORTIFY THEIR PACIFIC POSESSIONSwhile the USA and GB do not---and will cost American Soldiers thousands of lives as they attempt to take these islands during WWII)

•The Nine-Power Treaty Yet another product of the same conference, this treaty reaffirmed the Open Door policy in China

OUTLAWING WAR

•Kellogg-Briand Pact (1928) This international agreement outlawed war. However, it made no provision for enforcement, nor did it provide for defensive wars.

•In the two decades following WWI (Inter-War Years), as the horrors of World War I battlefields faded from public consciousness, the United States experienced an economic boom, highlighted by the “Roaring Twenties.” But the harshness of the Versailles Treaty, the onset of the Great Depression, and the rise of militarism and imperialism in Europe and Asia would guarantee that the peace would not be maintained for long. By 1939, in Europe, 1937 in Asia, the world was again at war. Two-4yearsyears later, the United States, which had emerged from World War I as a major economic and military power, would for the second time in less than twenty-five years send its young men to fight and die on foreign battlefields. But this time, the stakes seemed so much higher.