chapter 23 pages 688-692 the state, the economy, and business
TRANSCRIPT
CHAPTER 23PAGES 688-692
The State, The Economy, and Business
Objective
Summarize the continuities of the administrations of Warren Harding, Calvin Coolidge and Herbert Hoover in domestic and foreign affairs.
Essential Questions: What types of Presidents were Harding and
Coolidge? What were the scandals of the Harding
Administration? What role did the US have in the world? Why did big business flourish in the 1920’s?
New Era
New and closer relationship between the federal government and American business becomes the hallmark of Republican policy in both domestic and foreign affairs.
It is this business-government partnership that Republicans claim is responsible for the nation’s economic prosperity.
Warren Harding 1921-1923
“I knew that this job would be too much for me.”The Ohio Gang
Cards, tobacco, and whiskey “I have no trouble with my enemies…. But my damned
friends,… keep me walking the floor nights.”Scandals
Attorney General Harry Daugherty received bribes from bootleggers and fails to convict fellow crony, Forbes.
Charles Forbes steals $250 million from veterans’ hospitals. Sec. of Interior Albert Fall receives payoffs for leasing
government oil reserves to two private oil companies. First cabinet member to go to jail.
Warren Harding 1921-1923
Mr. & Mrs. Harding
Warren Harding 1921-1923
Mr. Harding & Nan Britton Affair 1917-23…30 yrs younger 1919 daughter Elizabeth Ann Child support delivered by Secret Service Sued the Harding estate Book: The President’s Daughter (1927)
Warren Harding 1921-1923
Mr. Harding & Carrie Philips Affair 1905-20…10 yrs younger Wife of a friend 1917 blackmailed Harding on WWI war vote 1920 RNC bribes Philips with $20K & a slow trip to
Japan Lives until the 1960s
Warren Harding 1921-1923
Sec. of Treasury Andrew Mellon Pittsburgh banker Serves three Republican presidents One of the richest men in America Leading investor in Aluminum Corp. &
Gulf OilCut the federal deficitCut taxes on income, corporations,
and inheritanceFree capital for new investment
Calvin Coolidge 1923-29
VP to HardingGov. of
Massachusetts and fame thru 1919 Boston police strike
“Silent Cal”Least amount of
government possible“The business of
America is business.”
Herbert Hoover 1929-1933
Sec. of Commerce under Harding & CoolidgeContinuation of government-business
partnership Business that is enlightened by government will serve the
public interest“Rugged-individualism” = self-reliance & personal
responsibility
“Associative State” Government encourages voluntary cooperation among
corporations, consumers, workers, farmers, and small businessmen.
Commitment to efficiency & rationality Standardization
Herbert Hoover 1929-1933
“Associative State” Creation of national trade associations
Improve efficiency by reducing competition Expands monopolies by ignoring anti-trust laws Supreme Court allows Regulatory boards are run by industry leaders
Ideal system for the concentration of corporate wealth & power 200 corporations own ½ the corporate wealth & 1/5 of
national wealth Vertical monopolies that control the raw materials,
manufacturing processes, and distribution networks increase
War Debts, Reparations, Keeping the Peace
WWI transforms America From debtor to creditor and the world’s strongest
economic power NY replaces London as center of international finance
and investment marketsAllies no more?
US is a loan shark Europeans are ungrateful debtors Leads to anti-American feelings in Europe and
isolationism in the US
War Debts, Reparations, Keeping the Peace
German war reparations $33 billion by ToV No means to repay
1924 President Hoover & banker Charles Dawes aid German recovery Dawes Plan
Reduced German debt Stretched out the payments Lent Germany money
Stabilized Germany’s currency to pay GB & France GB & France repay US
War Debts, Reparations, Keeping the Peace
1921 Sec. of State Charles Evans Hughes Washington Naval Conference 1st disarmament
conference GB, France, Italy, Japan, & China Reduction of navies and no new warships Agreement eventually abandoned
The US never joins the League of Nations However, maintains an active, yet selective hand in
world affairs 1926 US joins World Court (est. by League in 1920)
1928 Kellogg-Briand Pact Renounces war with 62 other nations No power of enforcement US Congress spends $250 million on new battleships
Commerce & Foreign Policy
Sec. of State Charles Evans Hughes The creation of a “Pax Americana”
Economic wealth, not military or political power, could create a new and prosperous international system free of conflict.
Capitalist economies must expand its markets to thrive Investments must help others to buy American products Close cooperation between US bankers and government
dictates US foreign policy
Commerce & Foreign Policy
1926 Sec. of Commerce Herbert Hoover GB drive up the price of rubber, a key component of
America’s growing auto industry Hoover retaliates by threatening British loans and war
debt payments Encourages US investors to grow their holdings in SE
Asia and Liberia In 3 months, Hoover drives the price from $1.21 per
pound to $.40 Simple “rugged individualism” on a global scale
Commerce & Foreign Policy
Oil, automobiles, farm equipment, and electrical equipment supplies the growing world market.
US foreign investment grows from $3.8 billion in 1919 to $7.5 billion in 1929.
US companies challenge British dominance over Middle Eastern & Latin American oil fields to form powerful cartels.
Commerce & Foreign Policy
The US policy of maximum freedom for businesses, backed with limited government advice and assistance, greatly boosted the power and profits of American investors.
US investment in Latin America doubles and stifles the ability of locals to grow their own food, diversify their economies, or establish democratic governments.
US establishes “Banana Republics” or autocratic, military regimes that can protect US investments.
