Politics and Economics of the 1920

1
Politics and Economics of the 1920s

• Government Policies Aide the Economy
• Laissez-Faire kept taxes down and businesses
  profits up
• High Tariffs on foreign imports helped American
  Manufactures

2
The Harding Presidency

• President Warren G. Harding voices public desire
  for normalcy
• Hosts Washington Naval Conference invites major
  powers (except Russia)
• Secretary of State Charles Evans Hughes proposes
  disarmament, others agree
• In 1928 Kellog Briand Pact nations renounce war
  as national policy

3
High Tariffs and Reparations

• Fordney-McCumber Tariff raises taxes on U.S.
  imports to 60
• Britain, France cannot repay U.S.
• Germany defaults Charles G. Dawes creates plan
• Dawes Plan-U.S. investors lend reparations money
  to Germany who pays Britain and France who pays
  U.S (resentment on all sides)

4
Scandals Hit Harding Administration

• Harding favors limited government role in
  business, social reform
• Has some capable men in cabinet (Hughes, Herbert
  Hoover, Andrew Mellon)
• Also appoints Ohio gang- corrupt friends who
  cause embarrassment(some used positions to sell
  jobs, pardons, and immunity from prosecution)
  graft
• Harding in the dark

5
Teapot Dome Scandal

• Naval oil reserves used for personal gain
• Interior Secretary Albert B. Fall leases public
  land to private companies
• Takes bribes is first person convicted of felony
  while in cabinet
• August 1923, Harding dies suddenly
• VP Calvin Coolidge takes over, restores faith in
  government

6
American Industries Flourish

• Calvin Coolidge favors minimal government
  interference in business
• Allow private enterprise to flourish
• Americas standard of living soars
• Incomes rise over 35 (from 522 to 705 annual)

7
Impact of Automobile

• Henry Ford The assembly line revolutionized
  American industry and increased production
• During the 20s more than 15 million Model-Ts
  were built
• As American bought more cars cities grew and more
  people become mobile
• This results in urban sprawl

8
American Industries Flourish

• Airplane industry takes off (starts as mail
  service for U.S. Post Office)
• Weather forecasting begins planes carry radios,
  navigation tools
• Commercial companies start transporting
  passengers (Lockheed Company)
• Pan American Airways starts transatlantic
  passenger flights

9
Electricity!

• Factories use electricity to run machines
• Development of alternating current gives
  electricity to suburbs
• By end of 1920s more homes begin to have
  electrical appliances
• Appliances make housework easier, free women for
  other activities
• Appliances coincide with trend of women working
  outside home

10
Consumerism and Advertising

• Americas standard of living soars. America owns
  40 of the worlds wealth
• Advertising agencies hire psychologists to learn
  to appeal to public
• Make brand names familiar nationwide push
  luxuries as necessities
• Businesspeople work with service groups
• Promote selves as benefactors of society

11
Buying on Credit

• Most Americans believe prosperity will last
  forever
• Mergers in auto industry, steel, electrical, etc.
  Chain stores develop, national banks with
  branches, etc.
• Income gap between workers, managers grows
• Iron, railroad industries, farms are losers

12
Buying goods on Credit

• Installment plan-pay for goods over extended
  period with interest
• They didnt have to put much down at the time of
  purchase
• Banks gave low interest rates so Americans spent
  more than they made.
• Some economists, business owners think
  installment buying excessive