Chapter 21 Notes

1. Chapter 21 Notes Normalcy and Good Times

2. Section 1: Presidential Politics OBJECTIVES: • Describe the corruption that tainted the Harding administration. • Explain how Calvin Coolidge restored public confidence after assuming the presidency.

3. The Harding Administration • Won the presidential election, in 1920, running on the campaign slogan to return to normalcy, or a return to “normal” life after the war. • With all his silver hair and impressive bearing he looked like a president, but he thought he lacked the intellectual qualifications for the job. • Harding made several distinguished cabinet appointments but many of his appointments were disastrous. He gave many cabinet posts and other high-level jobs to friends and political allies from Ohio. Theses poker buddies were known as the Ohio Gang.

4. The Ohio Gang • The Ohio Gang consisted of Charles “Doc” Sawyer as White House physician, Harding’s boyhood friend Daniel Crissinger as chairman of the Federal Reserve Board, and Colonel Charles Forbes-another Ohio acquaintance-to the Veterans Bureau. • Some members of the Ohio Gang used their position to sell government jobs, pardons, and protection from prosecution. • Forbes sold scarce medical supplies from veterans hospitals and kept the money for himself, costing the taxpayers about $250 million.

5. Harding’s Death • Upon learning the news of the scandals Harding complained, privately, that his friend “keep me walking the floor nights.” • In June 1923, amid the scandal of the Veterans Bureau and other unethical behavior Harding and the First Lady left to tour the West. • Harding became ill with a probable heart attack and died in San Francisco on August 2, shortly before the news of the scandals broke.

6. Harding’s secretary of the interior, Albert B. Fall, secretly allowed private interest to lease lands containing US Navy oil reserves at Teapot Dome, Wyoming and Elk Hills, California. In return, Fall received $300,000 in bribes. Eventually the Senate investigated and Fall was the first cabinet officer to go to prison. Attorney General and former Harding campaign manager, Harry Daugherty, was involved taking bribes for allowing someone to acquire a German owned American company seized during World War I. Under investigation he refused to turn over files and to testify claiming immunity, or freedom from prosecution saying he had confidential dealings with the president he was forced to resign in disgrace. The Teapot Dome and Daugherty Scandal

7. The Coolidge Administration • Born on July 4, 1872, Coolidge grew up on the Vermont farm that his family had worked for five generations. • He first stepped to the forefront of American politics for, as governor of Massachusetts, his handling of the Boston police strike of 1919. • Shortly after the strike was over he was asked to run as Harding’s vice president.

8. The Coolidge Administration • Coolidge became president when Harding in office. • Coolidge and Harding were very different, while Harding enjoyed the easy conversation and company of old friends, Coolidge was said to be “silent in five different languages.” • This remark gained him the nick-name “Silent Cal.” • Coolidge quickly distanced himself from Harding naming Harlan Fiske Stone, dean of Columbia Law School, as attorney general. • Coolidge did keep the most qualified of the cabinet members-Hughes, Mellon, and Hoover. • Following the death of Harding, Coolidge avoided crises and continued the nation’s expanding prosperity. • Coolidge easily won the election of 1924.

9. The Election of 1924 • Coolidge’s philosophy was simple, he believed that prosperity rested on business leadership and that his job was to make sure that the government did not interfere with business and industry. • He incorporated this into his campaign along with the slogan “Keep Cool with Coolidge.” • The Democrats on the other hand could not decide on a candidate that would satisfy their constituency in the Northeast, South, and agricultural West. • They settled on John W. Davis of West Virginia after 103 attempts to find someone acceptable. • Still not satisfied some from each party for the new Progressive Party and nominated Robert M. La Follette. • Coolidge was easily with over 50% of the popular vote.

10. Coolidge and Business • In a speech to the American Society of Newspaper Editors, Coolidge said, “ The chief business of the American people is business. The man who builds a factory builds a temple. The man who works their worships there.” • The Wall Street Journal joyously exclaimed, “Never before, here or anywhere, has a government been so completely fused with business.”

11. Section 1 Quiz: True/False • Coolidge thought he lacked the intelligence to be president. False • Harding aligned himself and the government with big business. False • Attorney General Harry Daugherty resigned in disgrace after receiving bribes for allowing someone to acquire a valuable German company. True • The Ohio Gang was a group of Coolidge’s friends. False • In the Teapot Dome scandal, a government official received bribes for allowing private interests to lease lands containing US Navy oil reserves. True

12. Section 2: A Growing Economy Objectives: • Analyze how the growing importance of the automobile and other new industries improved the US standard of living. • Analyze the growing economic crisis in farming in the 1920s.

13. The Rise of New Industries • “Crazy Henry’s horseless carriage would revolutionize American transportation and with it American society. • In a 1925 survey conducted in Indiana, 21 out of 26 families who owned cars did not have bathtubs with running water. • One farmers wife explained it by saying, “you can’t ride to town in the tub.”

14. Rising Standard of Living • The automobile was just one part. • Real per capita earnings soared 22% between 1923 and 1929. • American workers wages increased while their work hours decreased. • Ford-5 day, instead of 6 day work weeks • International Harvester instituted annual 2 week paid vacation • The rise of mass production, or large-scale product manufacturing, usually done by machinery, created more supply and reduced consumer cost.

15. The Assembly Line • Another major industrial development, first adopted by Henry Ford, increased manufacturing efficiency. • The assembly line divided operations into simple task unskilled workers could do and cut unnecessary motion to a minimum. • In 1913, Ford installed the first moving assembly line at his plant in Highland Park, Michigan. • By 1925 a Ford Model T, or “Tin Lizzie,” or “Flivver” rolled off the line every 10 seconds.

16. Henry Ford • In 1908, the Model Ts first year, it sold for $850. • In 1914, mass production reduced the price to $490. • Improvements to the assembly-line brought the price down to $360 in 1917. • By 1924 Model Ts were selling for $295 and ford sold millions. • Ford said, “Every time I reduce the charge for our car by one dollar I get a thousand new buyers. • Ford created a “Sociological Department” which set requirements workers had to meet. (Ex. Had investigators visit employee’s homes to see that they spent their wages in approved ways.)

17. The Social Impact of the Automobile • Henry Ford single handedly changed the auto from a toy of the rich to an affordable necessity for the middle class. • Cars revolutionized American life, either through creating new business opportunities or through mobility. • The auto industry spurred growth in other industries such as rubber, plate glass, nickel, lead, 15% of the nations steel, and stimulated a tremendous expansion in petroleum industries. • Creating the burbs.

18. Consumer Goods • New stuff on the market to take advantage of America’s new disposable income. • There was the electric razor, disposable facial tissue, frozen food, home hair dye. • Most of the new consumer goods were household appliances and cleaning products.

19. The Airline Industry • Aviation did not receive the same post WWI boom that the automobile did. • In the 1920s most Americans still thought of the airplane as dangerous novelties. • Charles Lindbergh put aviation on the map with his transatlantic flight in 1927. • Amelia Earhart made many trips across the Atlantic by 1932 but her and her navigator disappeared two-thirds of the way through her trip around the world.(1937)

20. The Radio • In 1913, Edwin Armstrong invented a special circuit that made long-range radio transmission more practical spurring the radio boom. • In 1926 National Broadcasting Company (NBC) established a network of stations to distributes daily programming. • IN 1928 THE Columbia Broadcasting System (CBS) assembled a coast-to-coast network of stations to rival NBC. • During the broadcast of the 1928 election the radio sold more than $1 million in advertising.

21. The Consumer Society • Higher wages and shorter workdays resulted in a decade-long buying spree. • Individual Credit- credit was available before the boom but most Americans felt it shameful. • “Buy now and pay in easy installments,” became the rule of the day. • Americans bought 75% of their radios and 60% of the cars on the installment plan. • Mass advertising (commercials)-sliced bread ENOUGH SAID • The managerial revolution-freed owners from the day-to-day operations

22. Welfare Capitalism • Welfare Capitalism allowed industrial workers to prosper, also, by allowing workers to buy stock, participate in profit sharing, and received benefits such as medical care. • During the 1920 unions lost influence and membership due to the open shop which was a workplace where employees were not required to join a union.

23. The Farming Crisis • American farmers did not share in the prosperity of the 1920s as they earned less than one-third of the average income for workers in the rest of the economy. • Technological advances allowed the farmers to produce more, but the demand did not rise causing a flood on the market. • Because of the flood prices fell, for example, corn prices fell 19% and wheat went from $1.83 a bushel to $1.03. • The cost of the new technologies continued to rise.

24. Changing Market Conditions • During the war the government encouraged farmers to produce more and farmers borrowed heavily to buy more land and more machinery. • During the war American farmers prospered after the war Europe began farming again. • The government passed the Fordney-McCumber Act in 1922 which raised tariffs to protect American industry. • The McNary-Haugen Bill, which called for the government to buy excess produce and sell to foreign markets, was proposed and passed by Congress, but was vetoed by Coolidge. • The Great Depression, starting 1929, only made matters much worse.

25. Section 2 Quiz: True/False • In the 1920s, wages were generally falling. False • Ford’s system for making cars increased efficiency by training workers to do every task. False • The purpose of Henry Ford’s Sociological Dept. was to improve employee relations. False • Commercial radio began its rise in November 1920, with the news that World War I was over. False • Unions declined in the 1920s in part because many corporations instituted welfare capitalism. True

26. Section 3: The Policies of Prosperity • Andrew Mellon became the architect of economic policy of the United States in the 1920s and he served as secretary of the treasury in three successive Republican administration. • His policies encouraged growth and led to a stock market boom. • The Mellon program (supply-side economics) called for the government to reduce spending as well as taxes under the presumption that business and consumers would spend and invest their extra money, causing the economy to grow and as the economy and as the economy grew Americans would earn more money and the government would collect more taxes at the lower rate.

27. Cooperative Individualism • Herbert Hoover also sought to promote economic stability with his philosophy. • Cooperative Individualism encouraged manufacturers and distributors to form their own trade associations, which would voluntarily share information with the federal government. • This would allow a reduction in cost and promote economic efficiency.

28. Trade and Arms Control • Isolationism- Americans wanted to stay out of the baffling, mutually hostile, and dangerous politics of Europe and upon Harding’s election and declaration that the issue of America’s involvement with the League of Nations officially “deceased,” began to promote peace with other governments individually. • The Dawes Plan was an agreement negotiated, by Charles G. Dawes, with France, Britain, and Germany by which American banks would make loans to Germany so that they could meet their reparations to Britain and France so that they could make payments on their war debts. • The Dawes Plan sent Europe deeper into debt.

29. Despite economic hardships after the war, the major powers were involved in a costly naval arms race. The United States invited representatives of the eight major countries, Great Britain, France, Italy, China, Japan, Belgium, the Netherlands, and Portugal to Washington to discuss disarmament. The Washington Conference opened on November 12, 1921. Secretary of State, Charles Evan Hughes proposed a 10 year moratorium or pause on the construction of new warships. The conference produced three agreements, the Five-Power Naval Limitations Treaty, the Four-Power Treaty, and the Nine-Power Treaty. (see chart on page 649) The results of the conference boosted the belief that written agreements could abolish war altogether, leading to Senator Frank Kellogg and French Minister Aristide Briand to propose a treaty to outlaw war. The Kellogg-Briand Pact was signed by the United States and 14 other nations, eventually ratified by 62 nations, on August 27, 1928. The Kellogg-Briand Pact and the Dawes Plan were the most notable foreign policy of the Coolidge presidency. The Washington Conference

30. Section 3 Quiz: True/False • After World War I most Americans wasted to avoid further war by joining the League of Nations. False • The result of the Dawes Plan was Europe’s gradual economic recovery. False • Supply-side economics was growth through investment and higher taxes. False 4. The document written and signed to outlaw war was the Kellogg-Briand Pact. True • The idea of cooperative individualism was to form trade associations and share information with the federal government. True