Chapter 24 – Section 1

1. Chapter 24 – Section 1 “Boom Times”

2. Post WWI Economic Problems • Govt. cancelled billions of dollars of contracts with factories when war ended • Factories cut back production • Soldiers returned home looking for jobs leading to a surplus of workers • Demand for products they couldn’t buy during the war led to inflation • Wages didn’t rise with the cost of goods • Workers went on strike for higher wages Soldiers returning home from the war sail past the Statue of Liberty in New York City

3. Presidential Election of 1920 • The bad economy was a central issue and the party in power (the Democrats under Woodrow Wilson) were blamed • Americans were tired of international involvement (WWI) and the endless push for reforms (Progressive era) • Republican candidate Warren Harding promised a return to stability and prosperity – what he called a return to “normalcy” • Harding was elected president in 1920

4. Harding Strengthens the Economy • He fought to reduce the amount of money owed by the govt. and limited govt. involvement in the economy • economic theory of laissez faire: if you keep business unregulated (leave it alone) it will benefit everyone • Called for tax cuts for the wealthy so they could invest in new businesses and create jobs (known as the “trickle-down” theory • Sought economic isolationism (eg. Fordney-McCumber Tariff raised taxes on imports) • In the 1920s business boomed, and people’s income rose 35% -- giving them more money to spend on goods and leisure activities

5. Scandal Rocks Harding Presidency • Many of his appointees to govt. positions were friends of his from Ohio who used their positions to gain wealth illegally • Teapot Dome scandal – Sec. of Interior Albert Fall accepted money in exchange for allowing companies to drill for oil on federal land • Before the scandal became public Harding died (avoiding blame for the scandal) What do you think this cartoon is trying to describe? How does it convey this?

6. Calvin Coolidge’s Presidency • VP who became President following Harding’s death in 1923 • Fired those officials who had been involved in bribery scandals • Continued pro-business, laissez-faire policies (lower taxes on rich, fewer regulations on businesses, and high tariffs) • Did not think it was govt.’s job to solve social/economic problems of people • Vetoed bills to regulate prices for farmers (who struggled as production went up due to mechanization, but prices dropped while debts were high) Coolidge during his successful campaign for re-election in 1924

7. U.S. Isolationism after World War I • U.S. followed policy of isolationism after WWI as they didn’t want to be pulled into any future foreign wars • Led to the signing of the Kellogg-Briand Pactin which 62 nations signed this pledge promising not to declare war unless in self-defense Nations that signed the pact

8. Henry Ford • Henry Ford introduced the Model Tfrom his factory in Detroit • By cutting production costs, it became widely affordable (only cost $280 by 1925) • assembly line -- was introduced in 1920, and used conveyor belts to move parts and partly assembled cars from one group of workers to another, while workers stood in one place and did a specialized job, which cut production costs • Ford also raised wages (from $2-3 a day to $5), reduced the work day to 8 hours, and hired people other factories wouldn’t (eg. African-Americans)

9. Automobile Industry Impact • Installment Buying – to make cars (and other expensive products in the future) more affordable, Ford let people pay a small amount of the cost each month until the debt was paid off • People could live further from work • Industries related to making cars grew (steel, rubber, glass, etc.) • Govt. built roads and bridges • Roadside businesses like garages, gas stations, restaurants, motels, grew. • People drove to distant places to vacation more

10. New Electrical Products • As more and more homes and businesses had electricity available to them more products using it were developed and sold • These included the radio, fans, dishwasher, washing machines, vacuum cleaners, refrigerators • Many of these reduced the time people spent on household chores giving them more time for leisure activities

11. Presidential Election of 1928 • When Coolidge decided to not run for reelection his Sec. of Commerce, and former Food Admin. head from WWI, Herbert Hoover ran for the Republicans • During the campaign he stated that “We in America today are nearer to the final triumph over poverty than ever before in the history of any land” • He also promised Americans “a chicken in every pot and a car in every garage” • Why did he learn to regret these statements?