Chapter 35

The Politics of Boom and Bust1920-1932

President Warren Harding• Nice, charming, drowning as the

President• Had a lot of immoral staff and

bad cronies he couldn’t say NO to.

• His posse wanted to go back to Laisse-Faire and for govn’t to HELP businesses make profits

• Harding starts these Republican economic policies for the decade

• Put 4/9 justices on Supreme Court who axed progressive legislation

• Anti-Trust laws ignored, Corporations can expand

Adkins v. Children’s Hospital (1923)

The Supreme Court reverses progressive legislation in Muller v. Oregon which gave women special protection in the workplace.

Now that women are able to vote, they were legal equals to men and could no longer be protected by “special” legislation.

Are women different from men that they deserve special legal and social treatment or are they equal in the eyes of the law and do

not deserve special protection and preferences?

Hands-off Harding (Laissez Faire)

• RR go back to the private management after WWI under the Esch-Cummins Transportation Act of 1920.

• Strikes are broken because they are called “Reds”. Unions wilted during this hostile time period.

• The American Legion was pro-WWI veteran and lobbied for veterans’ benefits. The Adjusted Compensation Act gave every soldier got an insurance policy for 20 years.

Harding is a major isolationist but…• ended up sending “unofficial

observers” to Geneva b/c it was too important not to go to.

• We didn’t want to miss out on making friends with the Middle East since GB was our competitor for oil there.

• One thing Harding supported in the League was disarmament b/c he was scared that our army wouldn’t be able to outdo Britain in case Japan attacked us (Britain had an alliance with them so they’d have to go to war against us, too)

Washington Conference 1921-22• A disarmament conference with all the

major naval powers – except Bolshevik Russia

• We declared a 10-year “holiday” on construction of battleships.

• Five-Power Naval Treaty of 1922: America and Britain and Japan should have a 5:5:3 ratio when it came down to weapons, which is like “Mercedes, Mercedes, Ford” – but we would have to compensate Japan by– Promising GB and US would not fortify our

Far East possessions like the Philippines, while Japan could.

– The Four Powers Treaty was declared which replaced the Anglo-Japanese Treaty. This, rather, stated that GB, Japan, France, and the U.S. have to preserve the existing state of affairs in Asia (No touchy!)

– Nine-Power Treaty of 1922: keep the Open door OPENED in China.

Harding and his men believed to have achieved DISARMAMENT. But, what about small warships, destroyers, and submarines? This is an illusory agreement.

Kellogg-Briand Pact (Pact of Paris)• France, U.S., Germany, and 62

other nations signed.• This is a pledge to do without

war as a national policy. Talk it out or do something else than have war.

• Defensive war still permitted, and what aggressor isn’t going to create an excuse for self-defense?

• ***This shows America’s false sense of security in treaties, but there are tons of holes in them that will make us pay a decade later in WWII.

Tariff Wall shoots up high• All about isolationism and this shows

in our foreign economy. We don’t want cheap foreign goods coming in.

• Fordney-McCumber Tariff Law: Brought what Wilson lowered back to 38.5 Percent.

• In exchange, duties/taxes on farm produce went up with the justification

• Both Harding and Coolidge cool with tariff increases than reductions.

• European Reactions to High Tariffs: After the war, America needs to give foreign countries a chance to make money to rebuilt and pay debt. It’s a two way street. Foreign markets will not buy your products if you won’t let them sell their products in your markets. Europe raised their tariff walls. This hurts everyone.

Harding and Scandals• Teapot Dome Scandal: Secretary of

the Interior, Albert Fall, got his friend, the secretary of Navy, to transfer these oil reserves to the Interior Department

• Harding signed this secret order.• Fall then leased these lands to

famous oil men like Harry Sinclair and Edward Doheny but with a bribe of $100k and $300K.

• This made citizens question what was going on when public officials were selling out national resources.

• Attorney General Daugherty was illegally selling pardons and liquor permits.

• Harding ended up dying in SF in 1923 after a speech making tour. He, just like Grant, couldn’t keep their friends in line and it disgraced the Republican party

Calvin Coolidge• From Vermont,

embodied New England virtues of honesty, morality, industry and frugality.

• Was about the status quo and wasn’t going to mess up what was already established

• Believed in Big Business and isolation

Frustrated Farmers• During war time, they made bank.

Wheat shot up to $3 a bushel. Foreign nations were buying their wheat to feed war time soldiers.

• Post war, no more govn’t-guaranteed prices and no more massive purchases from foreign countries

• Efficient practices and machine made farmers have too much surplus (OVERPRODUCTION)

• McNary-Haugen Bill kept agricultural prices high by getting the govn’t to purchase the surplus and sell it abroad but it put a tax on the farmers. NOT HAPPY.