Chapter 33 Notes

• “He’d make a good center rush for somebody.”

• Practical European Politics

• Hoover, account book; Central Europe

Washington “Disarmament” Conference 1921-1922

• All major naval powers except Bolshevik Russia invited

• Agenda was naval disarmament and the situation in the Far East

• Five Power Naval Treaty of 1922:– U.S. GB agreed to refrain from fortifying their Far

Eastern possessions (including Philippines)– The Japanese would not have the same restraints– Four Power Treaty: A new pact created between

Britain, Japan, France and the U.S. – Nine Power Treaty: “Whose signatories agreed to

nail wide open the Open Door in China”

Kellogg-Briand Pact

• August 27, 1928• An agreement in which more than sixty nations

agreed to "outlaw war as an instrument of national policy."

• Also called the Pact of Paris, and organized by Secretary of State Frank Kellogg and French foreign minister Aristide Briand.

• The pact was broken when the Japanese invaded Manchuria, China, in 1931. It provided no method to enforce its provisions.

Scandals

• Colonel Charles R. Forbes: head of the Veterans Bureau and appointee of Harding; stole $200 million, mostly from Vet’s hospitals. Sentenced to two years in Federal penitentiary.

• Attorney General Daugherty: A 1924 Senate investigation on the Illegal sale of pardons and liquor permits. He was tried in 1927 but was released after a jury twice failed to agree. He implied that persistent probing may uncover issues with the now deceased Harding.

Teapot Dome Scandal

• Incident during the administration of President Warren G. Harding involving fraudulent leases of naval oil reserves at Teapot Dome, Wyoming, and Elk Hills, California.

• Secretary of the Interior Albert Fall leased the reserves to oil men Harry Sinclair and Edward Doheny in return for $300,000 in cash.

• In 1929 Fall was convicted of accepting bribes and was fined $100,000 and sentenced to one year in prison.

• He became the first cabinet member to go to jail for crimes committed while in office.

Teapot Dome Window HangerIn 1924, the Democrats tried to capitalize on the Republicans' embarrassment over the Teapot Dome scandal. They received little response because the death of Harding brought Calvin Coolidge to the presidency, and Coolidge's personal honesty and morality were unquestioned. (Collection of David J. and Janice L. Frent)

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Farmers

• In a depression before the rest of the U.S.• There was an end to high prices and the need

for high production with the end of WWI.• Machines like the tractor also made many

farmers obsolete.• McNary-Haugen Bill: Sought to keep prices

high by authorizing the govt. to buy up surpluses and sell abroad. Govt. losses would be made up by a tax on the farmers. – Congress passed it twice but Coolidge vetoed it both

times.

Hawley Smoot Tariff

• In 1930 the Hawley-Smoot Tariff raised rates sharply to protect the rest of the American market from foreign competition as the depression deepened.

• The Hawley-Smoot Tariff proved to be one of the most disastrous pieces of legislation ever enacted in America, for other nations had no choice but to follow suit with beggar-thy-neighbor tariff hikes of their own.

• This caused a general collapse of world trade, which in 1939 was less than it had been in 1914, greatly exacerbating the depression.

Dawes Plan

• 1924: a plan of reparation payments following WWI, drawn up by Charles Dawes, head of the Allied Reparations Commission.

• The most important provision of this plan — included because Germany had defaulted on its reparations payments — allowed for significant American loans to Germany, which made that country's payments to the Allies possible.

• The plan was replaced by the Young Plan in 1929.

Great Crash of 1929• October 29, 1929, also known as Black Tuesday, the day on

which thousands of investors tried to sell their stocks, ending the prosperity of the Roaring 20’s.

• The crash was caused by the overspeculation of the 1920s; investors, taking risks in hopes of profits, bought their stock on margin with money they did not have.

• On that day, over 16 million shares of stock were traded. • With an overabundance of sellers and few buyers, the prices

of stocks dropped far below the prices paid for them, and investors lost billions of dollars in paper profits within a matter of hours.

• Banks and businesses had also invested in the stock market, and with the falling prices, the values of their investments plunged, causing them to fold.

• Although the crash did not "cause" the Great Depression, it was the opening event of the era.

Stock Market crash--curb scene October 24, 1929As the stock market tumbled on October 24, 1929, a crowd of concerned investors gathered outside the New York Stock Exchange on Wall Street, unprepared for an unprecedented economic decline that would send the country into a tailspin for the next decade. (Corbis-Bettmann)

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The Great Depression• 1929-40, a period of economic failure following the stock

market crash and panic of 1929. • More than 15 million people were unemployed during the

height of the depression, thousands of homes and farms were foreclosed for failure to pay mortgages, millions lost their savings, and huge losses were incurred by businesses.

• National income declined and thousands of banks went bankrupt.

• The depression hit its lowest point in 1933, just before Franklin D. Roosevelt declared a bank holiday, ordering all banks in the country closed.

• Despite the efforts of the New Deal, full recovery was not achieved until the onset of World War II.

Unemployed by Reginald Marsh, 1932The Great Depression produced large-scale unemployment, reaching 25 percent in 1933. This picture, titled Unemployed, painted by Reginald Marsh, effectively captured the despair of men and women seeking jobs. (Library of Congress)

Cover Slide

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Reconstruction Finance Corporation

• A federal agency created by Congress on February 2, 1932, during the Great Depression to make loans to help stimulate commerce, industry, and agriculture.

• Backed by President Herbert Hoover, the RFC made loans to banks, insurance companies, industrial corporations, and railroads.

• During World War II the RFC played an important role in financing war industries.

• The agency was abolished by Congress in 1956 after lending over $13 billion.

Bonus Army

• A group of unemployed World War I veterans who demonstrated during the Great Depression.

• The Bonus Law of 1924 had given every veteran a certificate payable in 1945, but the veterans wanted the bonus immediately.

• In June 1932, about 15,000 of them and their families marched on Washington, D.C., in a futile effort to pressure the Senate into passing a bill to grant immediate payments.

• President Hoover called upon Gen. MacArthur and federal troops to disperse the Bonus Army and drive them out of the capital.

• The use of armed troops against unarmed men, women, and children shocked the nation.

• Well; Here it goes• Congress; Hunter,

soldier

Bonus ArmyThe sign in front of the "Bonus Dugout" reads, "We have come to collect the gratitude that was promised us for participating in the World War." They received neither gratitude nor the bonus. Instead, Hoover commented: "Thank God we still have a government that knows how to deal with a mob." (Library of Congress)

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Japanese Imperialism

• With Europe and America embroiled in Depression Japan takes the opportunity to take Chinese spoils and invades Manchuria Sept. 1931.

• Under the Stimson Doctrine the United States refused to recognize any territorial change effected by conquest, but lacking British support, the doctrine remained a paper declaration.

The End