From Normalcy to the New Deal

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From Normalcy to the New Deal

• American Politics and Life, 1921-1933

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Harding, Coolidge, Hoover
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Warren Gamaliel Harding (1921-1923)

• Not nostrums, but normalcy
• Cabinet leaders like C. E. Hughes (State), A. W.
  Mellon (Treasury) and Herbert Hoover (Commerce)
  among the best ever
• Cabinet Cronies like A. W. Fall (Interior) among
  the worst
• Ohio Gangwhiskey, poker, and women of
  questionable virtue

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Major Policy Thrusts

• Taft appointed to Supreme Courtconservative
  opinionsAdkins v. Childrens Hospital (1923)
• Andrew Mellonlower taxes and lower government
  spendingtax cuts for wealthy but also maintained
  balanced budget
• High Tariffs made post-war European Recovery
  difficult
• Capture theoryprogressive regulation gutted by
  conservative appointees to regulatory agencies

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Scandal

• Teapot Dome Scandal
• Harding died before scandal led to public
  disgrace

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Calvin Coolidge (1923-1929)

• Silent Cala steward, not a leader
• Pro-businessfollowed Mellons lead on the
  Economy
• Huge election in 1924Democrats too disorganized
  and Progressives considered too radical by
  mainstream America

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Origins of the Great Depression

• Rise of consumer culturebuying on credit
• Automobile craze8 million cars in 192023
  million in 1930
• Ford Model T is metaphor for new economy,
  marketing, and mode of production
• Buying Stock on Margin
• What happens if scores of people struggle to
  service their personal debt loads?

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Model T
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Origins of the Great Depression

• Farm prices in slump from 1922 onward
• McNary-Haugen Tariff Bill vetoed twice by
  Coolidge
• Hoovers voluntary cooperation plans in industry
  dont lead to economic boom
• Open Shop and Yellow-Dog contracts hamper
  labors ability to organize collectively
• Owners respond with Welfare Capitalism

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Gastonia Strike--1929

• Stretch Outs, wage cuts, and mill closures in N.
  C. textile industry
• Walkout supported by Communist National Textile
  workers Union
• Lack of s, oppression by the National Guard, and
  demands of racial equality by Union killed off
  strike
• How can poor workers continue to consume enough
  to keep economy going?

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Herbert Hoover (1929-1932)

• 1928 Election versus Al Smith
• Engineer, Humanitarian, and Progressive
• Agricultural Marketing Act--500 million to
  market commodities
• Hawley-Smoot Tariff (1930)
• Bull Market Collapsed on Oct. 29, 1929
• Market fell from 452 to 52 between 1929 and 1932

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Onset of Great Depression

• Market collapse pointed to structural flaws and
  corruption
• Factory Orders were cancelled, leading to
  unemployment
• 13 million unemployed by 193325 of work force
• Hoover tried to responddemanded easier credit
  from Federal Reserve, but it wasnt enough
• Hoover signed bill creating Reconstruction
  Finance Corporation in 1932

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Hoovers Image Problem

• Bonus Army suppressed
• Hoovervilles

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1932 Election

• FDR wins Democratic Nominationpromises New
  Deal for the American Peoplejust what was this
  New Deal?
• Interregnum of Despair80 of nations banks
  were closed
• FDR evoked war powers image to grapple with New
  Deal

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Run on a Bank
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FDR(1882-1945)