Economic Cycles of the 1920

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Economic Cycles of the 1920s 30s
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Warren G. Harding

• His administration was rocked by a series of
  scandals

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Return to Normalcy

• Hardings idea of returning the U.S. to the
  period of peace and prosperity prior to World
  War I

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The Ohio Gang

• The group of political supporters and close
  friends of Warren G. Harding who were appointed
  to his cabinet

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Teapot Dome Scandal

• Secretary of Interior Albert B. Fall secretly
  leases oil-rich public land to private companies
  for drilling
• In return he received money and land
• Caused public to lose trust in the Harding
  administration

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Calvin Coolidge

• Supported big business and laissez-faire
  economics
• The economy did very well

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Purchasing Stocks

• Speculation making high risk investments in
  hopes of making high returns on their money
• Buying on Margin buying stocks for only a
  portion of what they cost and borrowing the
  difference

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Mechanization

• Increase in use of machinery for production
  allowed manufacturers to produce more and charge
  less

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Economic Boom

• People began to purchase more cars, clothes,
  appliances, and other goods.on credit
• Easy credit allowed the economy to boom in the
  1920s

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Farmers

• During WWI farmers did well because of a high
  demand for their products
• After WWI overproduction caused prices to fall
• Many farmers could not repay their loans and many
  lost their homes and land

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Herbert Hoover

• Elected in 1928 in hopes of continuing economic
  prosperity under Republican Party

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Black Tuesday

• October 29, 1929, the stock market plummeted and
  millions of stockholders lost their money

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Hoover

• Hoover believed the economy would fix itself but
  took small steps to help
• Hawley Smoot Tariff raised prices on European
  goods
• In return, European countries raised taxes on
  American goods

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Rugged Individualism

• Hoovers belief that its the role of the
  individual to take care of themselves and their
  families
• Do not turn to the government for help

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Direct Relief

• It was the governments job to provide a sense of
  economic security