The Business of Government
20.2
The Nation Returns to Normalcy
and Isolation
• Republican Candidate,
Warren G. Harding, “a
respectable Ohio
politician of the second
class”- NY Times
• However, he was
handsome , goodnatured, and “looked as
a president ought to
look.”
• Massachusetts Gov.
Calvin Coolidge was
nominated VP.
• Harding & Coolidge easily defeated
Democrats James M. Cox and Franklin D.
Roosevelt in the 1920 Presidential
election.
Harding Maintains Status Quo
• Harding favored a two-party system.
• His domestic policy pushed a “return to
normalcy”
• He opposed the federal gov’t taking a role
in the economy & he disapproved of most
social reforms.
• Harding also apposed Wilson’s League of
Nations. “We seek no part in directing the
destinies of the Old World”
• Harding’s Cabinet was
made up of some very
intelligent and
promising men.
• Charles Evans
Hughes, Sec. of State.
• Andrew Mellon,
Pittsburgh banker
served twelve years
and is considered to
be one of the great
Sec. of Treasury.
• Henry C. Wallace,
Sec. of Agriculture
• Herbert Hoover, Sec.
of Commerce.
The Ohio Gang
• The Ohio Gang, Harding’s poker-playing cronies
from back home who made up the remainder of
the Cabinet.
• They were mostly greedy, small minded men
who saw government service as a chance to get
rich.
Scandals Plague Harding’s Cabinet
• In 1923, Sec. of State’s assistant Jesse
Smith was exposed as a “bagman”- later
committed suicide.
• Charles F. Cramer, advisor to the
Veteran’s Bureau took his life for similar
reasons.
• Charles Forbes swindled the country of at
least $250 million through kickbacks from
contractors building the veteran’s hospital.
Teapot Dome Scandal
• The most daring wrongdoing.
• Oil-rich public land at Teapot Dome, Wyoming
and Elk Hill, California had been set aside for
use by the US Navy.
• Sec. of the Interior Fall got the reserves
transferred to the Interior Department and then
leased the land to two private companies.
• He then became the owner of $325,000 in
bonds.
• “I have no trouble with my enemies…. But
my damned friends,… they’re the ones
that keep me walking the floors nights!”
• August 2, 1923 died.
Coolidge Prosperity
• Known as “silent
Cal” – put the
government in the
hands of men who
held the values of
old America.
• He wanted to keep
taxes down and
business up.
• “The chief business of the American people is
business.”
• “Keep it cool with Coolidge”
• Coolidge easily won the 1924 election.
• Andrew Mellon, Sec. of Treasury, was the
kingpin of Coolidge’s Cabinet.
• Mellon was pro-business. Favored cutting
excess profits tax and reducing the public debt.
• “Let the rich keep their wealth”- “They will invest
it and so create jobs”
• The number of millionaires rose from
4,500 to 11,000 in 1926.
• Construction of industrial plants , homes,
office buildings, and hotels boomed.
Nations Agree on Arms Control
• In August 1921, Harding invited all the major
powers, except the Soviet Union, to a
conference in Washington D.C. to discuss
reducing naval armaments and preserving the
peace in Asia.
• Sec. of State Hughes suggests a ten-year naval
holiday.
• Five Power Treaty- US, GB, Japan, France, and
Italy to adjust their size of their fleets. Reduce
fleet of capital ships to a fixed ratio(5:5:3:1:1)
Washington Naval Conference
• The US, GB, France, and Japan signed the
Four-Power Treaty.
• They agreed to respect one another’s interest in
the Pacific.
• The same nations later joined with Italy, China,
Belgium, Netherlands, and Portugal to sign the
Nine-Power Treaty.
• These treaties headed-off an arms race, but
there was no success in limiting submarines and
other small vessels nor any land armaments.
Higher Tariffs
• The United States urged GB and France
not to press their demands on Germany.
• Than in 1922, the US raised its tax on
imported goods to its highest level to date.
• Fordney-McCumber Tariff Act openly
aimed at keeping foreign goods out
American Markets.
• As a result, GB and France could not pay
back their debts.
The Dawes Plan
1. Only way to repay those
debts would be for Germany
to pay its war reparations;
Charles Dawes was
instrumental in getting the US
to pass the Dawes Act which
provided loans to Germany
helping the nation to ease its
payments
2. When the Great Depression
hit, the US withheld its loans
to Germany
Seeking and End to War
• Kellogg-Briand Pact- This treaty outlawed
war, “as an instrument of national policy.”
• Originally signed by the US and France to
outlaw war and it would be signed by a
total of 62 countries