The document discusses politics and government policies during the 1920s in the United States. It covers the presidencies of Warren G. Harding and Calvin Coolidge. Key events included the Republican party rolling back progressive policies, the Supreme Court striking down minimum wage laws, tariffs being increased to protect businesses, and several corruption scandals erupting in Harding's administration, including Teapot Dome. Isolationism was dominant in foreign policy during this time period.

1. The Politics of Boom
& Bust
1920s Politics

2. Politics of the 1920s
Learning Goal- NJCCCS: 6.1.12.A.8.a
Relate government policies to the prosperity
of the country during the 1920s, and
determine the impact of these policies on
business and the consumer.

3. Warren G. Harding
O Warren G. Harding was
inaugurated in 1921.
O He, like Grant, was unable to
detect immoral people working
for him.
O He was also very soft in that
he hated to say "no," hurting
peoples' feelings.
O he promised the nation a
return to "normalcy", in the
form of a strong
economy, independent of
foreign influence.
O Harding and the Republican
Party had desired to move
away from progressivism that
dominated the early 20th
century.

4. The Republican “Old Guard”
Returns
O Charles Evans Hughes was
the secretary of state.
O Andrew W.
Mellon, Pittsburgh's
multimillionaire aluminum
king, was the secretary of
the Treasury.
O Herbert Hoover was the
secretary of commerce.
O Harding's brightest and most
capable officials (above)
were offset by two of the
worst: Senator Albert B.
Fall, an anticonservationist
who was the secretary of the
interior, and Harry M.
Daugherty, a big-time crook
chosen to be the attorney
general.

5. GOP Reaction at the Throttle
O The newly-elected government officials almost directed the
president's actions on the issue of government and business.
O They wanted not only for the government to have no control
over businesses but for the government to help guide
businesses along the path to profits.
O In the first years of the 1920s, the Supreme Court struck down
progressive legislation.
O The Supreme Court ruling in Adkins v. Children's Hospital
(1923) declared that under the 19th Amendment, women were
no longer deserving of special protection in the workplace.
O Corporations under President Harding could once again
expand without worry of the antitrust laws.
O The Interstate Commerce Commission came to be dominated
by men who were sympathetic to the managers of the
railroads.

6. Adkins v. Children’s Hospital
O In 1918, Congress passed a
law setting minimum wages
for women and children in the
District of Columbia.
O As in other cases, the
question was one of balancing
the police power of Congress
to regulate health and safety
with the right of individuals to
conduct their own affairs
without legislative
interference.
O Children's Hospital and a
female elevator operator at a
hotel brought this case to
prevent enforcement of the act
by Jesse C. Adkins and the
two other members of a wage
board.

7. Judgment
O The Court opinion, by Justice Sutherland, held
that previous decisions (Muller v. Oregon, (1908)
and Bunting v. Oregon, (1917)) did not overrule
the holding in Lochner v. New York
(1905), protecting freedom of contract.
O The Muller cases, Sutherland noted, addressed
maximum hours; this case addressed a minimum
wage.
O The maximum hour laws left the parties free to
negotiate about wages, unlike this law.
O Moreover, the minimum wage artificially restricts
the employer’s side of the negotiation.
O The Court argued that if legislatures were
permitted to set minimum wage laws, they would
be permitted to set maximum wage laws.
O The justices that were serving at the time were
William Howard Taft (1921-1930), Joseph
McKenna (1898-1925), Oliver Wendell
Holmes, Jr. (1902-1932), Willis Van Devanter
(1910-1937), James Clark McReynolds (1914-
1941), Louis Dembitz Brandeis (1916-
1939), George Sutherland (1922-1938), Pierce
Butler (1922-1939), and Edward Sanford (1923-
1930).

8. The Aftermath of War
O Wartime government controls of the
economy were quickly dismantled.
O With the Esch-Cummins Transportation
Act of 1920, Congress returned the
railroads to private management.
O Congress encouraged private ownership
of the railroads and pledged the Interstate
Commerce Commission to guarantee their
profitability.

9. Esch-Cummins
Transportation Act of 1920
Caption: Gone the Limit
Source/Date: Brotherhood of
Locomotive Engineers
Journal, September 1922
Ultimate Source(if different):
Creator: (?) MacArthur
Remarks: In 1921, the Railway
Labor Board, created by the Esch-
Cummins Act (the Transportation
Act of 1920) reduced railroad
wages, to the outrage of the
unions.

10. Shipping Acts
O The Merchant Marine
Act of 1920 authorized
the Shipping Board to
dispose of the wartime
fleet of 1500 vessels at
extremely low prices.
O Under the La Follette
Seaman's Act of
1915, American
shipping could not thrive
in competition with
foreigners, who all too
often provided their
crews with wretched
food and starvation
wages.

11. Labor/Veteran Woes
O Labor, suddenly deprived of its wartime crutch of friendly
government support, limped along poorly in the postwar
decade.
O In 1921, Congress created the Veterans Bureau to operate
hospitals and provide vocational rehabilitation for the
disabled.
O Veterans organized and formed pressure groups.
O The American Legion was created in 1919 by Colonel
Theodore Roosevelt, Jr.
O Legionnaires met to renew old hardships and let off steam.
O The legion became distinguished for its militant
patriotism, conservatism, and antiradicalism.
O It convinced Congress in 1924 to pass the Adjusted
Compensation Act, giving every former soldier a paid-up
insurance policy due in 20 years.

12. America Seeks Benefits
Without Burdens
O Because of the rejection O Isolationism was
of the Treaty of
Versailles, the United still the idea in
States had technically Washington.
been at war with
Germany, Austria, and O President Harding
Hungary for 3 years hated the League
after the armistice. of Nations and at
O To finally achieve first, refused to
peace, Congress
passed a joint resolution support the
in July 1921 that League's world
declared the war health program.
officially over.

13. Foreign Policy: Isolationism
O isolationism n.
opposition to
political and
economic
entanglements with
other countries.

14. “I sympathize
Deeply With
You, Madam, b
ut 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.

15. Harding and Foreign Affairs
O Harding could not completely turn his back on
the world.
O In the Middle East, a sharp rivalry had
developed between America and Britain for oil-
drilling rights
O Secretary Hughes eventually secured the rights
for American oil companies to share the oil-rich
land with Britain.

16. Disarmament
O Disarmament was one
international issue that
Harding eventually
tackled.
O Public pressure brought
about the Washington
"Disarmament"
Conference in 1921-
1922.
O Invitations to the
conference went out to
all the major naval
powers.

17. Sec. Hughes Plans
O Secretary Hughes laid out a
plan for declaring a ten-year
hiatus on construction of
battleships and even for
scrapping some of the huge
ships already built
O He proposed that the
scaled-down navies of
America and Britain should
have the same number of
battleships and aircraft
carriers; the ratio being
5:5:3 (Japan's navy would
be smaller than America's
and Britain's).

18. 5 Power Naval Treaty of 1922
O The Five-Power Naval O A Four-Power Treaty
Treaty of 1922 stated that between
the British and Americans Britain, Japan, France
would refrain from
and the United States
fortifying their Far Eastern
possessions, including the
replaced the 20-year
Philippines. The old Anglo-Japanese
Japanese were not Treaty and preserved
subjected to such the status quo in the
restraints in their Pacific.
possessions.

19. Washington’s Reaction
O The Hardingites were satisfied with the final results of
disarmament of the navy although no restrictions had been
placed on small warships, and the other powers churned
ahead with the construction of cruisers, destroyers, and
submarines.
O In the late 1920s, Americans called for the "outlaw of war.”
O When petitions bearing 2 million signatures reached
Washington, Calvin Coolidge's secretary of state Frank. B.
Kellogg signed with the French foreign minister in 1928 the
Kellogg-Briand Pact.
O The new parchment peace was delusory in the extreme.
O Defensive wars were still permitted; causing one to wonder
what scheming aggressor could not make an excuse of
self-defense.
O Although virtually useless if challenged, the pact accurately
reflected the American mind in the 1920s

20. Kellogg-Briand Pact
The Kellogg-Briand Pact was an agreement to outlaw war signed on
August 27, 1928. Sometimes called the Pact of Paris for the city in which
it was signed, the pact was one of many international efforts to prevent
another World War, but it had little effect in stopping the rising militarism
of the 1930s or preventing World War II.

21. Hiking The Higher Tariff
O Because businessmen did O Presidents Harding
not want Europe flooding and Coolidge were
American markets with cheap much more prone to
goods after the increasing tariffs than
war, Congress passed the decreasing them; this
Fordney-McCumber Tariff
Law in 1922, raising the tariff presented a problem:
from 27% to 35%. Europe needed to sell
O Fordney-McCumber Tariff
goods to the U.S. in
n. a set of order to get the
regulations, enacted by money to pay back its
Congress in 1922, that raised war debts, and when
taxes on imports to record it could not sell, it
levels in order to protect could not repay.
American businesses against
foreign competition.

22. The Stench of Scandal
O In 1923, Colonel Charles R. O Harding indiscreetly
Forbes, head of the Veterans signed the secret
Bureau, was caught stealing order.
$200 million from the
government, chiefly in O Fall then leased the
connection with the building of lands to oilmen Harry
veterans' hospitals. F. Sinclair and Edward
O Most shocking of all was the L. Doheny, but not
Teapot Dome scandal that until he had received a
involved priceless naval oil bribe of $100,000.
reserves at Teapot Dome and O The Teapot Dome
Elk Hills. scandal eventually
O In 1921, the secretary of the leaked to the public
interior, Albert B. Fall, convinced and polluted the
the secretary of the navy to Washington
transfer these valuable
properties to the Interior government.
Department.

23. Teapot Dome Scandal
A 1924 cartoon shows
Washington officials
racing down an oil-
slicked road to the White
House, trying desperately
to outpace the Teapot
Dome scandal of
President Warren G.
Harding's administration.
The Granger
Collection, New York

24. Government for Sale- 1924 cartoon satirizing the
corruption of the Harding administration showing the sale
of the Capitol, the White House, and even the Washington
Monument

25. Scandal and Death
O More scandals still O President Harding
erupted; there were died in San
reports as to the Francisco on
underhanded August 2, 1923, of
doings of Attorney
General pneumonia and
Daugherty, in which thrombosis, not
he was accused of having to live
the illegal sale of through much of the
pardons and liquor uproar of the
permits. scandal.

27. “Silent Cal” Coolidge
O Vice President Calvin
Coolidge took over the
presidency following
Harding's death.
O He was extremely shy and
delivered very boring
speeches.
O Coolidge sympathized with
Secretary of the Treasury
Mellon's efforts to reduce
both taxes and debts.
O He gave the Harding
regime a badly needed
moral fumigation.

28. Frustrated Farmers
O Peace had brought an end to government-guaranteed high
prices and to massive purchases of farm products by other
nations.
O Machines also threatened to plow the farmers under an
avalanche of their own overabundant crops
O Because farmers were able to create more crops with more
efficiency, the size of surpluses decreased prices.
O The Capper-Volstead Act exempted farmers' marketing
cooperatives from anti-trust prosecution.
O The McNary-Haugen Bill sought to keep agricultural prices
high by authorizing the government to buy up surpluses and
sell them abroad.
O President Coolidge vetoed the bill twice, keeping farm prices
down, and farmers' political temperatures high coming into
the election of 1924.

29. 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.

30. A Three-Way Race for the
White House in 1924
O After being split between, urbanites and
farmers, Fundamentalists and Modernists, northern liberals
and southern stand-patters, and immigrants and old-stock
Americans, the Democrats finally chose John W. Davis to
compete with Calvin Coolidge and La Follette for the
presidency.
O Senator La Follette from Wisconsin leapt forward to lead a new
liberal Progressive party.
O He was endorsed by the American Federation of Labor and by
farmers.
O The Progressive party platform called for government
ownership of railroads and relief for farmers, lashed out at
monopoly and antilabor injunctions, and urged a constitutional
amendment to limit the Supreme Court's power to invalidate
laws passed by Congress.
O Calvin Coolidge won the election of 1924.

31. Election of 1924

32. Election Buttons

34. Foreign-Policy Flounderings
O In the Coolidge O In 1926, the
era, isolationism continued Mexican
to reign.
government
O The armed interventionism
in the Caribbean and
declared its control
Central America was the over oil resources.
exception to the United O Despite American
States' isolation policies. oil companies
O American troops remained clamoring for
in Haiti from 1914-
1934, and were stationed in war, Coolidge
Nicaragua from 1926-1933. resolved the
situation
diplomatically.

35. Where’s My Money? $$
O World War I had reversed the international financial
position of the United States; it was now a creditor
nation in the sum of about $16 billion.
O American investors had loaned about $10 billion to the
Allies in WWI, and following the war, they wanted to be
paid.
O The Allies, especially the French and British, protested
the demand for repayment pointing out that they had lost
many troops and that America should just write off the
loans as war costs.
O America's postwar tariff walls made it almost impossible
for the European Allied nations to sell their goods to earn
the dollars to pay their debts.

36. Unraveling the Debt Knot
O America's demand for repayment from France and Britain
caused the two countries to press Germany for enormous
reparations payments, totaling some $32 billion, as
compensation for war-inflicted damages.
O The Allies hoped to settle their debts with the United States
with the money received from Germany.
O Disputes in government on whether or not war debts and
reparations should have even been paid broke out.
O Negotiated by Charles Dawes, the Dawes Plan of 1924
resolved this issue.
O It rescheduled German reparations payments and opened the
way for further American private loans to Germany.
O United States bankers loaned money to Germany, Germany
paid reparations to France and Britain, and the Allies paid war
debts to the United States.
O After the well of investors dried up in 1931, the jungle of
international finance was turned into a desert.
O President Herbert Hoover declared a one-year debt suspension
in 1931.
O The United States never did get its money from Europe.

37. Dawes Plan and Young Plan

38. Aspects of the Financial Merry-go-Round, 1921-1923. Great Britain, with a debt of
over $4 billion owed to the U.S. Treasury, had a huge stake in proposals for inter-
Allied debt cancellation, but France’s stake was even larger. Less prosperous than
Britain in the 1920s and more battered by the war, which had been fought on its
soil, France owed nearly $3.5 billion to the United States and additional billions to

39. The Election of 1928
O When Calvin Coolidge chose not
to run for president in the
election of 1928, the
Republicans chose Herbert
Hoover.
O Hoover was a small-town boy
who worked his way through
Stanford
O His experiences abroad
strengthened his faith in
American individualism, free
enterprise, and small
government.
O His real power lay in his
integrity, his
humanitarianism, his passion for
assembling the facts, his
efficiency, his talents for
administration, and his ability to

40. Opposition
O The Democrats nominated Alfred E. Smith.
O He was a Roman Catholic in an overwhelmingly
Protestant country, and was "wet" at a time when the
country was still devoted to prohibition.
O For the first time, the radio was used prominently in
election campaigns.
O It mostly helped Hoover's campaign.
O The combination of Catholicism, wettism, foreignism, and
liberalism of Smith was too much for the southerners.
O Herbert Hoover won the election of 1928 in a
landslide, becoming the first Republican candidate in 52
years, except for Harding's Tennessee victory, to win a
state that had seceded.

41. The Triumph of Herbert
Hoover, 1928

42. President Hoover's First
Moves
O Two groups of citizens were not getting rich in the growing
economy: the unorganized wage earners and the disorganized
farmers.
O The Agricultural Marketing Act, passed in 1929, was designed
to help the farmers.
O It set up the Federal Farm Board, which could lend money to
farm organizations seeking to buy, sell, and store agricultural
surpluses.
O In 1930, the Farm Board created the Grain Stabilization
Corporation and the Cotton Stabilization Corporation.
O Their goal was to boost falling prices by buying up surpluses.
O The two agencies eventually failed.
O The Hawley-Smoot Tariff of 1930 started out as a mild tariff
before 1,000 amendments were added to it.
O It raised the tariff to 60%, becoming the nation's highest protective
tariff during peacetime.
O The tariff deepened the depression that had already begun in
America and other nations, and it increased international financial

43. The Great Crash Ends the
Golden Twenties
O The catastrophic stock-market crash came in October 1929.
O It was partially triggered by the British, who raised their
interest rates in an effort to bring back capital lured abroad by
American investments.
O The British needed money; they were unable to trade with the
United States due the high tariffs.
O On "Black Tuesday" of October 29, 1929, millions of stocks
were sold in a panic.
O By the end of 1929, two months after the initial
crash, stockholders had lost $40 billion.
O As a result of the crash, millions lost their jobs and thousands
of banks closed.
O No other industrialized nation suffered so severe a setback as
the United States.