“A Return to Normalcy”

The policies of Republican presidents in the 1920s

What is “Normalcy”? Return to “the good old days” Get things back to “normal” Americans tired of war,

strikes, recession, race riots, fear…

Warren G Harding used this to become president

Gave simple, but emotional speeches

Promised isolation and less government

Popular, but secretly disrespected… “Keep Warren at home. Don’t let him make

any speeches. If he goes out on a tour, somebody’s sure to ask him questions, and Warren’s just the sort of… fool that’ll try to answer them.” - Senator Boies Penrose

Harding described himself as “a man of limited talents from a small town.”

“He looks like a president.” – Harry Daugherty, Harding’s political manager.

Harding was handsome, friendly, healthy looking, and focused on simple topics Americans liked hearing.

The Republican Era begins… Free Enterprise System – All

about private ownership of land and resources. Focus on competition for profit and success.

Harding lowered war-time taxes and reduced government spending. Extra money paid the national debt. This was his fiscal policy.

Prices of goods went down and unemployment dropped from 12% to 2%.

Overall policy: Less taxes, less government

Scandals! Harding gave top jobs to his close friends They betrayed him Attorney General Daugherty took bribes from

accused criminals Sec. of the Interior (Albert Fall) gave oil-rich

land in CA and WY to companies for bribes Teapot Dome, Wyoming: known as Teapot

Dome Scandal Harding stood by friends, but died of heart

attack in 1923

The Teapot Dome scandal

Coolidge and Hoover, the next Republicans

Calvin Coolidge Believed in business without

government interference Cut all taxes and gov

spending Herbert Hoover

Self-made man, orphan from poverty

Worked for Wilson and Harding

Believed that if businesses prospered, there would be an “end to poverty as we know it”

Presidents are pressured to keep the US out of world affairs…

International Policy – Isolationism and Peace

After war, Americans want Isolationism US still refused to join League of Nations,

Harding wouldn’t even open mail from them US promotes disarmament – reducing the

military Washington Naval Conference (1921) – US,

GB, France, Italy, Japan agree to scrap large warships, limit navies

It had little real effect, countries kept building smaller ships

US, France, and 62 others sign Kellogg-Briand Pact, agree to outlaw war

Kind of pointless because it still allowed defensive wars

Debts from WWI US banker Charles

Dawes creates the Dawes Plan

US banks loan money to Germany

Germany pays their war reparations to GB and France

GB and France repay their loans from WWI to US banks

Everyone wins… for a little while, but now Germany owes a lot of money to the US…

US in Latin America Harding and Coolidge both

said they wanted stay out of Latin America

However, they both sent marines to stop revolutions that threatened American business investments

Only Hoover really embraced “non-intervention”

He did not send in troops even when Panama, Cuba, and Honduras had revolutions in 1931

The Boom Years Henry Ford and mass production

Ford took cars from luxury item to something all families owned

Assembly lines made cars faster and cheaper, price went from $950 to only $290!

Mass production was so cheap that Ford doubled his workers’ salaries and reduced hours. The public loved him.

Innovation leads to new industries Boom in cars led to other booms: steel, rubber, oil, highway

construction, restaurants, gas stations, motels, and repair shops

By 1930 there were 38 domestic airlines and 5 international

Invention of plastic leads to cheaper clothes, cellophane, and RADIOS

Big businesses get BIGGER Rep Presidents ignored anti-trust laws, allowed

businesses to consolidate Ford, General Motors, Chrysler made 90% of

cars by 1929 Large business like A&P supermarket drove

small “mom-and-pop” grocery stores out of business

An “anti-chain” movement starts, but most people just go to the big stores

Speculation: Get Rich Quick! US was doing well. Prices were low,

jobs were up, and new inventions were making life easier.

People become speculators, taking the risk of buying something in the hope of selling it for more money later

Florida Land Boom – Speculators bought land in Florida without even seeing it, most of it turned out to be worthless and they lost all their money

Stock Market – Middle class people invested in stocks hoping to get rich, which made stocks increase in value… for a while

Meet Charles Ponzi… Ponzi Scheme Offers to invest your

money and double it People give him their

money Ponzi gives a lot of

money back to some early investors, so it looks like he knows what he is doing

After a lot more people invest, he takes the money and leaves town

Left out of the boom: Not wealth for all Wealth was unevenly distributed A family of four needed $2,500 a year to live a

good life back then More than half of families earned only $1,500 Farmers were deep in debt as crop prices

decreased Farmworkers (mostly Mex American and Asian

American) suffered very low wages and poverty

African Americans were last to be hired, first to be fired, paid less than whites, and blocked from most unions

New tech meant less jobs for workers in old industries