SSUSH16B & 17A-C America from War to Recession
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1 SSUSH16B & 17A-C America from War to Recession
2 1920 Presidential Campaign The 1920 election reflected a couple growing trends in post-war America: Rejection of the Progressive Ideologies of the Wilson presidency. Desire to return to the Laissez Faire approach of the McKinley era. Republican candidate Warren G. Harding s promised a Return to Normalcy after World War I, reflecting: Renewed Isolationism Resurgence of Nativism A Reduction of Government Activism His Campaign also made use of America s newest fads: Widespread Newsreel Coverage in Movie Theaters Support from the Nation s well known Hollywood Actors & Performers
3 The New Administration The 29 th President of the United States, Warren G. Harding, made several key appointments to his cabinet: Supreme Court Justice Food Administrator Business Tycoon Charles Evans Hughes as Secretary of State Herbert Hoover as Secretary of Commerce Andrew W. Mellon as Secretary of the Treasury
4 The New Administration In addition, Warren G. Harding also appointed many of his old poker-playing buddies to other cabinet positions and political offices. Unfortunately, the President received criticism because some of his Ohio Gang accepted bribes for: Government Jobs & Contracts Political Pardons for Criminals Protection from Prosecution The Veterans Bureau Scandal : Charles R. Forbes served as the first director. During this period he ignored the needs of wounded veterans. He embezzled $225 million through fraud and kickbacks. He resigned in 1923 and was tried and convicted of conspiracy.
5 The Teapot Dome Scandal : Albert B. Fall served as Secretary of the Interior. He allowed an oil company lease government lands in Wyoming. He accepted bribes totaling more than $300,000 from them. He became the first cabinet officer in history to go to prison. A Change in President June 1923: President Warren G. Harding died while on vacation in California (probably from a heart attack). Vice-President Calvin C. Coolidge became the 30 th President of the United States. Amid the scandals, he fired several Harding staff. He chose to keep Hughes, Hoover, and Mellon. He worked to restore the integrity of his office.
6 Promoting Prosperity Believed the government should apply business principles to trim its spending and improve operations. Convinced Congress to create a General Accounting Office to prepare the Federal Budget. Andrew W. Mellon as Secretary of the Treasury 1921: President Warren G. Harding signed the Budget Accounting Act creating a new bureau. He also believed that high taxes reduced business expansion and investment He urged Congress to reduce the tax rate to improve the economy. The Mellon Tax Bill also recommended a U.S. Board of Tax Appeals. 1924: President Calvin C. Coolidge signed the Revenue Act of 1924.
7 Promoting Prosperity Sought to promote Economic Growth in business and industry through a philosophy of Cooperative Individualism. Encouraged Businesses to form their own Trade Associations willing to share info with the government. Herbert Hoover as the Secretary of Commerce Supported President Harding s decision avoid involvement in European affairs (Isolationism). Promoting Peace 1921: Proposed a 10 year moratorium (pause) on the building of new battleships at the Washington Naval Conference. 1922: The Washington Naval Treaty (also known as the Five-Power Treaty) was the result. Charles Evans Hughes as Secretary of State
8 Promoting Peace Charles G. Dawes: 1 st Director of the Bureau of the Budget America from War to Recession Believed it was vital for European Economies to remain healthy so the U.S. could recover their wartime debts. 1928: 14 Nations signed Kellogg-Briand Pact. 1924: The Dawes Plan was an agreement to aid International agreement to avoid war as a way to resolve disputes. Foundation of International Law Today. Germany in paying its War Reparations. Relied on American Loans to help Germany. Europeans agreeing on reduce reparations 1925: He Received the Nobel Peace Prize. 1929: They Received Nobel Peace Prize. U.S. Senator Frank Kellogg French Minister Aristide Briand
9 A Growing Economy Believed that mass production could be accomplished more efficiently: 1913: Installed the first moving assembly line at his plant at Highland Park, Michigan. Henry Ford Industrialist and Founder of Ford Motor Company 1914: Automobiles that use to take 12 hours to make were now made within 93 minutes. By 1925: A Model-T Ford was leaving the assembly line every 10 seconds. Cost of a Tin Lizzie went from $850 (in 1908) to $295 (in 1924). Worker s wages were increased to $5 a day for an 8-hour workday. Ford managed to increased employee loyalty and prevent unionizing. General Motors and Chrysler also adopted assembly lines to compete w/ford.
10 A Growing Economy Automobiles revolutionized American Society: Autos now affordable for Middle Class Easier travel between city & country New jobs and businesses grew (Garages) Mass Production and Assembly Lines made other home goods more affordable: New home appliances saved labor & time New products improved fashion & hygiene Improved wages and shorter workdays created new Middle-Class consumers who had more time & money: Buy now and pay in easy installments sales pitch % of major purchases were made by credit.
11 A Growing Economy Working-Class Americans also prospered: Industries introduced Welfare Capitalism Worker profit sharing & stocks Medicare and Pensions Benefits Technological Advances changed America WWI introduced Airplanes to transportation: : Postal Air Service Established 1927: Charles Lindbergh fly s Transatlantic 1932: Amelia Earhart crosses the Atlantic New Farm Technology Increase Crop Yields: : Light Farm Tractors & Combines 1920 s: Fertilizers and Pesticides Increase
12 A Growing Crisis World War I and the 1920 s created a Wave of Optimism in America: Agriculture Technological Advances created Increased Crop Yields Industry Technological Advances produced More Goods at Cheaper Prices Federal Reserve kept Rates on Loans Low giving Americans false security. Farmers Borrowed Heavily to Purchase more Land & Machinery Post-WWI: Foreign Competition created World Food Surplus Americans Purchased more Goods on Credit than ever before Post-WWI: America Manufactured Half of all the World s Goods 1922: Congress passed the Fordney-McCumber Tariff Act to Protect Industry and Agriculture Ultimately causing Increased Foreign Tariffs. Foreign and Domestic Crop Sales began to Decline Rapidly Increased Production drove Stock Prices Up for Industries
13 A Growing Crisis Americans Experience Uneven Distribution of Wealth: 5% of Population (Upper & Middle Class) Controlled 33% of Nation s Wealth. 33% of Population (Working & Lower Class) Became Too Poor to Buy Goods. Agriculture Farmers experience significant Drop in Profits. Farmers are Unable to Pay Back Farm Loans. Industry Industries begin Reducing Production due to Cut Backs on Orders Laid Off Workers are Unable to Buy Goods or Pay Back Debts Americans Withdraw Savings from Bank Accounts to Pay Off Debts. Banks Foreclose on Farms, Homes, and Businesses due to Failure to Pay Debts. ECONOMIC SITUATION SET THE STAGE FOR DISASTER
14 Banking & Investment Issues America Experienced a Long Period of High Stock Prices (Bull Market). Giving Business Leaders False Security that the Economy was still Expanding. At Least 10% of All Americans were Investing in Stocks. Many Investors were Buying Stocks on Margin (Paying only 10% Down) Some Investors Engaged in Speculation hoping to make an Overnight Fortune. Risky Bank Loans were being made due to Low Rates by the Federal Reserve. Some Bankers Invested Depositors Money on the Stock Market. Sep 1929 Professional Investors Sensed Danger and Began Selling Stocks Slipping Stock Prices caused Margin Calls by Brokers wanting their Money Investors Lost Money, Speculators Defaulted, Banks Closed, & People Panic
15 The Stock Market Crash 24 Oct 1929 = Black Thursday (Initial Drop) 29 Oct 1929 = Black Tuesday (Steepest Drop)
16 The President Responds March 1929: Herbert Hoover had become the 31 st President. He stated: I have no fears for the future of our country. Oct 1929: He assured Americans that the Nation s Industry was still sound. He stated: The worst effects of the crash, will pass in the next 60 days. He preferred a policy of Volunteerism instead of Government Coercion to solver the Nation s Problems. Although Industrial Leaders pledged to keep factories open and stop cutting wages they failed to keep their promises. He tried to increase government financing of Public Works, but this only provided a small fraction of the needed jobs. He tried to avoid any major government spending that would raise taxes.
17 The President Responds : He endorsed the Mexican Repatriation Program. Forced mass-migration of Mexicans out of the United States Jun 1930: He signed the Smoot-Hawley Tariff Act, passed by Congress. Raised Tariffs on Foreign Goods to highest level in 100 years Jan 1931: Hunger Marches occurred. Feed the Hungry; Tax the Rich! : Construction of Boulder Dam Created Employment for 3,000+ men Provided Water for Farm Irrigation Produced Hydroelectric Power Allowed for growth in the Southwest 1928: Approved by President Coolidge 1947: Official named Hoover Dam
18 The President Responds Oct 1931: He encouraged Bankers to help each other by establishing the National Credit Corporation: But they were reluctant to make loans Jan 1932: He approved the Reconstruction Finance Corporation to make loans backed by the U.S. Treasury: The Loan Process was too restrictive. Summer 1932: The Farmer s Revolt occurred over debt and low crop prices. Farmers burned their crops and slaughtered their animals June 1932: Congress passed the Revenue Act of Tax rates on the rich went from 25% to 63%. July 1932: Emergency Relief & Reconstruction Act passed Too Late to reverse the Economic Collapse
From Prosperity to Depression: From Prosperity to Depression:
Topics of Discussion A. Role of the Federal Government B. Democrats: Divided C. Republicans: Pro-Business D. Warren Harding, 1921-23 E. Calvin Coolidge, 1923-1929 F. Hoover Inherits a Troubled Economy
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