Unit 5: Struggling for Justice at Home and Abroad
1901-1945
• Chapter 28: Progressivism and the Republican Roosevelt, 1901-1912
• Chapter 29: Wilsonian Progressivism in Peace and War, 1913-1920
• Exam: Chapters 28-29, Monday, February 13th
• Chapter 30: American Life in the “Roaring Twenties”, 1920-1929
• Chapter 31: The Politics of Boom and Bust, 1920-1932
• Chapter 32: The Great Depression and the New Deal, 1933-1939
• Exam: Chapters 30-32, Friday, March 3rd
• Chapter 33: Franklin D. Roosevelt and the Shadow of War, 1933-1941
• Chapter 34: America in World War II, 1941-1945
• Exam: Chapters 33-34, Wednesday, March 15th
• Unit Essay: Progressive Era
Chapter 31
The Politics of Boom and Bust,
1920–1932
“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 the goal-but . . . we
shall soon, with the help of God, be in sight of the day when poverty will be
banished from this nation.”
-Herbert Hoover, 1928
I. The Republican “Old Guard” Returns
II. GOP Reaction at the Throttle
• Warren G. Harding, inaugurated in 1921.
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He looked presidential but was in over his head.
Like U.S. Grant, he was unaware of corruption from the “Ohio Gang.”
Not everyone was corrupt: Hughes, Mellon, Hoover
But these guys absolutely were: Albert B. Fall, Harry M. Daugherty
• The “new Old Guard” hoped to reverse/weaken the Progressive
Era reforms – laissez-faire!
• SCOTUS killed a federal child-labor law, stripped away many of labor’s
hard-won gains, and restricted government intervention in the economy.
• Adkins v. Children’s Hospital (1923) reversed Muller v. Oregon which protected
female workers.
• Antitrust laws were often ignored or weakly enforced.
• The Interstate Commerce Commission came to be controlled by railroad cronies.
• Hoover pushed for self-regulation by industry.
President Warren G. Harding
III. The Aftermath of War
• Wartime control of the economy by the
government ended quickly – no more War
Industries Board.
• Government withdrew support for labor unions.
• Bloody strike in the steel industry in 1919.
• The Railway Labor Board ordered a wage cut of 12% in
1922.
• Needy veterans were somewhat supported when
Congress created the Veterans Bureau.
• Veterans organized into pressure groups, such as the
American Legion: anti-radical, conservative patriotism.
• Adjusted Compensation Act of 1924 gave former soldiers
a paid-up insurance policy due in 20 years.
IV. America Seeks Benefits Without Burdens
• The U.S. rejected the Treaty of Versailles, so Congress
passed a simple joint resolution that declared the war
officially over.
• Americans were lulled into a false sense of security by
these types of pacts:
• Washington “Disarmament Conference” 1921-1922.
• Disarmament: businessmen did not want to further finance naval
growth.
• Two GOALS: naval disarmament and the situation with Japan.
• Ten-year “break” from building battleships & naval restrictions –
scaled down ratios - 5:5:3 (U.S:GB:Japan)
• Four-Power Treaty: Britain, Japan, France and the United States
preserved the status quo in the Pacific.
• Nine-Power Treaty: made the Open Door Policy “permanent”
• No restrictions were placed on small warships
• Kellogg-Briand Pact: outlawed offensive war in 1928 (defense
was still allowed)
Secretary of State Frank B.
Kellogg
Limits Imposed by Washington Conference, 1921–1922
The pledge of the British and Americans to refrain from fortifying their Far Eastern possessions,
while Japan was allowed to fortify its possessions, was the key to the naval limitation treaty. The
United States and Great Britain thus won a temporary victory but later paid a horrendous price
when they had to dislodge the well-entrenched Japanese from the Pacific in World War II.
V. Hiking the Tariff Higher
• Businesspeople wanted he booming
American market to themselves.
• Fordney-McCumber Tariff Law raised tariffs to
38.5% (very high)
• Duties on farm produce were increased too.
• Flexibility: the president could increase or decrease
duties as much as 50%.
• The high-tariff course set off a chain reaction.
• Still recovering from WWI, European producers were
blocked from American markets.
• Americans did not realize how intertwined the global
economy had become.
• If Europeans can’t sell their goods, they can’t pay back
loans to Americans.
• Europe put up its own tariff walls.
• Tariff situation led to economic distress, which allowed
men like Hitler and Mussolini to gain power.
“I Sympathize Deeply with You, Madam,
but I Cannot Associate with You,” 1923
President Harding’s secretary of state,
Charles Evans Hughes, broke the news to
a desperate, war-tattered Europe that
America was going, and staying, home.
VI. The Stench of Scandal
• Charles R. Forbes: forced to resign as head of the Veterans
Bureau after taking $200 million.
• Teapot Dome Scandal dealt with naval oil reserves in
Wyoming & California
• Secretary of the Interior Albert B. Fall convinced the secretary of
the navy to transfer these valuable properties to the Interior
Department.
• Fall then accepted bribes from oilmen for the right to access the
oil.
• Scandal of Attorney General Harry Daugherty
• A Senate investigation (1924) of illegal sale of pardons and liquor
permits forced Daugherty to resign.
• Harding died before the scandals were fully revealed
(August, 1923).
• While some went to jail, the public lost faith in courts for
acquitting others.
Washington Officials Trying to Outpace
the Teapot Dome Scandal, ca. 1922
VII. “Silent Cal” Coolidge
• Vice President Calvin Coolidge was sworn
into office (1923).
• He embodied the New England commoner
virtues of honesty, morality, industry, and
frugality.
• Not a strong leader
• Followed laissez-faire path
• Was in favor of reducing government spending
to lower taxes.
• Coolidge slowly got rid of the corrupt members
of Harding’s administration.
President Calvin Coolidge
VIII. Frustrated Farmers
• End of WWI was difficult for farmers – had to go
back to truly competitive global market.
• Machines threatened to destroy farmers through
overproduction – surplus means lower prices.
• The gasoline-engine tractor was working a revolution on
American farms: bigger crops on larger areas.
• Capper-Volstead Act: exempted farmers’ marketing
cooperatives from antitrust prosecution.
• McNary-Haugen Bill: sought to keep agricultural
prices high by authorizing the government to buy
up surpluses and sell them abroad.
• Vetoed twice by President Coolidge
• Agricultural prices stayed down.
Mechanizing Agriculture
Just as the automobile replaced the horse on
city streets, so did the gas engine tractor
replace horses and mules on the nation’s
farms in the 1920s. American farmers owned
ten times more tractors in 1930 than they did
in 1920. The smoke belching tractors
bolstered productivity but also increased the
farmers’ debt burden, as the Great Depression
made tragically clear.
IX. A Three-Way Race for the White House in
1924
• Republicans nominated Coolidge.
• Democrats had more difficulty choosing a candidate.
• The party was split between “wets” and “drys”, urbanites
and farmers, Fundamentalists and Modernists, northern
liberals and southern stand-patters, immigrants and oldstock Americans.
• Deadlocked for an unprecedented 102 ballots, the
convention turned to John W. Davis – too conservative for
some.
• Progressive Party returned with Robert La Follette
• He gained the endorsement of the American Federation of
Labor, Socialist Party, and (mostly) price-pinched farmers.
• Platform called for government ownership of railroads and
relief for farmers, anti-monopoly, and even looked to
weaken the Supreme Court.
• Returns – Coolidge 382, Davis 136, La Follette 13
Top to Bottom:
Coolidge, Davis,
La Follette
La Follette may
have lost, but he
did at least win
Mr. Congeniality.
Presidential Election of 1924
(showing popular vote by
county)
X. Foreign-Policy Flounderings
XI. Unraveling the Debt Knot
• Isolationism was king during Coolidge’s presidency.
• International debts became a major issue in the 1920s.
• Americans had become creditors – loaned $10 billion to the Allies.
• Americans wanted to be repaid, but the Allies protested that the
demand for repayment was unfair.
• America, they argued, should forgive the financial debt due to the
European human debt paid during the war.
• When America insisted on getting its money back, the Allies
demanded reparation payments from Germany – which Germany
could not pay.
• Dawes Plan (1924)
• It rescheduled German reparations payments and opened the way
for further American private loans to Germany.
• The United States never did get its money, but it was successful in
fostering resentment among both the Allies and Central Powers.
A German Woman Burns
Near-worthless Paper
Currency for Cooking Fuel,
1923
Aspects of the Financial
Merry-go-round, 1921–1933
XII. The Triumph of Herbert Hoover, 1928
• Coolidge decided not to run again.
• Republicans turned to Herbert Hoover.
• Nominated on a platform of both prosperity and
prohibition.
• He was the best businessperson’s candidate.
• Democrats nominated Alfred C. Smith.
• He drank, was Catholic, and was “too urban”.
• Radio played prominently in this campaign.
• Hoover used the radio to attack un-American “socialism
and preached “rugged individualism”.
• Smith’s enemies used the radio to appeal to religious
bigotry.
• Election returns: Hoover (444) defeated Smith (87)
• Hoover, a Republican, even won some southern states.
Candidates
Hoover (top)
& Smith
(bottom)
Presidential Election of
1928 (with electoral
vote by state)
XIII. President Hoover’s First Moves
XIV. The Great Crash Ends the Golden Twenties
• Hoover and labor/farmers
• The Agricultural Marketing Act (June 1929) – government
support of buying agricultural surpluses
• In 1930 the Farm Board (part of the AMA) created
corporations to continue buying up surpluses in the name
of stabilizing prices.
• Hoover promised to bring “limited change” to the
high Hawley-Smoot Tariff.
• Prosperity has been the word of the decade –
overspeculation in the stock market drove prices
higher and higher.
• The catastrophic crash came in October 1929.
• Partially caused by the British who raised interest rates
which caused speculators to dump their stocks.
• Tensions built up to the panicky Black Tuesday of October
29, 1929.
Pride Goes Before a Fall
The great crash of 1929 humbled many a
high-flying investor. The desperate curbside
seller of this brand-new Chrysler Model 75
paid $1,550 for it just months before.
Index of Common
Stock Prices
XV. Hooked on the Horn of Plenty
XVI. Rugged Times for Rugged Individualists
XVII. Hoover Battles the Great Depression
• Causes of the Depression
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Overproduction: both farm and factory.
Investment in expansion of industry, but not wages.
Overexpansion of credit helped to over-stimulate production.
Europe never fully recovered from WWI.
Nature: a terrible drought scorched the Mississippi valley in 1930.
• Hoover called for reliance on “rugged individualism,” but he
lost the faith of the people (and Congress) – “Hoovervilles”
• He eventually had to admit that some government involvement was
necessary – helped railroads, banks, credit corporations.
• He relied trickle down economic theory – give money to the wealthy to
build dams (Hoover) and put people back to work.
• Reconstruction Finance Corporation (RFC) gave indirect relief.
• Vetoed Muscle Shoals Bill (TN) – too close to socialism.
The iconic photograph of the depression.
Migrant Mother
Dorothea Lange, 1936
“I saw and approached the hungry and desperate mother, as if
drawn by a magnet. I do not remember how I explained my
presence or my camera to her, but I do remember she asked
me no questions. I made five exposures, working closer and
closer from the same direction. I did not ask her name or her
history. She told me her age, that she was thirty-two. She said
that they had been living on frozen vegetables from the
surrounding fields, and birds that the children killed. She had
just sold the tires from her car to buy food. There she sat in
that lean-to tent with her children huddled around her, and
seemed to know that my pictures might help her, and so she
helped me. There was a sort of equality about it.”
-Dorothea Lange
XVIII. Routing the Bonus Army in Washington
• Veterans of World War I were also hardhit victims of the depression.
• Many veterans were prepared to go to
Washington to demand payment of their
entire bonus.
• Bonus Army marched on and camped in
Washington.
• After two were killed, Hoover ordered the
army to force them out.
• Led by General Douglas MacArthur, the army
used far more severe methods than Hoover
had expected – only further damaged his
image.
• The Democrats, under FDR, would cash in
on the Republican’s woes.
XIX. Japanese Militarists Attack China
XX. Hoover Pioneers the Good Neighbor Policy
• In September, 1931 militaristic Japanese
imperialists invaded Manchuria, China
(rich in natural resources).
• Stimson Doctrine (1932): declared that the
United States would not recognize any
territorial acquisitions achieved by force.
• Japan was not deterred by this doctrine.
• Americans, dealing with the Depression, were
strongly isolationist.
• Hoover tried to abandon the
interventionist twist given by the
Monroe Doctrine of Theodore
Roosevelt – would become the Good
Neighbor Policy.
China and Korea during the Second SinoJapanese War (which would later be absorbed
by WWII