Postwar Economics and PoliticsPostwar Economics and Politics

Chapter 24Chapter 24

Section 1Section 1

America After World War IAmerica After World War I

Key ? – What did Warren G. Harding offer Key ? – What did Warren G. Harding offer Americans as president?Americans as president?

Postwar economy struggled – many people out of Postwar economy struggled – many people out of work. work.

Americans blamed Europe, immigrants, and Americans blamed Europe, immigrants, and Wilson.Wilson.

Fordney-McCumber Tariff – 1922 – bill passed Fordney-McCumber Tariff – 1922 – bill passed which set the highest tariff on foreign goods in U.S. which set the highest tariff on foreign goods in U.S. history.history.

Imported goods very expensive – enabled U.S. to Imported goods very expensive – enabled U.S. to keep their prices high.keep their prices high.

Postwar PoliticsPostwar Politics

1920 – campaign – Harding –”return to 1920 – campaign – Harding –”return to normalcy”. (Republican)normalcy”. (Republican)

Supported lower taxes and less government Supported lower taxes and less government regulation over business.regulation over business.

Rejected the League of Nations.Rejected the League of Nations. The 1The 1stst election that women could vote. election that women could vote. Chose a pro-business cabinet to help him Chose a pro-business cabinet to help him

lower taxes and balance the budget. lower taxes and balance the budget.

Mixed Industrial SuccessMixed Industrial Success

Key ? – What economic developments Key ? – What economic developments affected life in the 1920s?affected life in the 1920s?

Economy grew rapidly.Economy grew rapidly. 1913 – U.S. established income tax.1913 – U.S. established income tax. 1917 tax rate raised to 67%; 1924 reduced 1917 tax rate raised to 67%; 1924 reduced

to 46%; reduced to 25% in 1925.to 46%; reduced to 25% in 1925.

The Transportation IndustryThe Transportation Industry

Cheap fuel powered the new prosperity; electric Cheap fuel powered the new prosperity; electric vacuums, washers,toasters, fans.vacuums, washers,toasters, fans.

Created new jobs.Created new jobs. Henry Ford – Model T – wanted to make a car that Henry Ford – Model T – wanted to make a car that

everyone could afford. everyone could afford. Assembly line – helped lower costs and increase Assembly line – helped lower costs and increase

productivity.productivity. Birth of the airline industry; uses for old Birth of the airline industry; uses for old

warplanes; crop dusting, flight instructors etc.warplanes; crop dusting, flight instructors etc.

Economic ProblemsEconomic Problems

New manufacturing processes turned out products New manufacturing processes turned out products faster and cheaper. faster and cheaper.

As product demand rose, consumers relied on As product demand rose, consumers relied on credit.credit.

Installment buying allowed consumers to pay for Installment buying allowed consumers to pay for cars and purchases in small monthly payments.cars and purchases in small monthly payments.

Companies protected by tariffs faced little Companies protected by tariffs faced little competition; big companies regained monopoly competition; big companies regained monopoly control over many markets – prices rose.control over many markets – prices rose.

Con’tCon’t

Machinery allowed farmers to produce Machinery allowed farmers to produce more food than needed; drove food prices more food than needed; drove food prices down.down.

Government policies favored corporate Government policies favored corporate interests over social interests.interests over social interests.

Income gap between rich and poor – highest Income gap between rich and poor – highest ever – 50%.ever – 50%.

Allowing investors to buy stocks on credit Allowing investors to buy stocks on credit caused stock prices to rise rapidly.caused stock prices to rise rapidly.

Coolidge Takes OverCoolidge Takes Over

Key ? What challenges did Calvin Coolidge face Key ? What challenges did Calvin Coolidge face as president?as president?

Harding’s cabinet unqualified and corrupt.Harding’s cabinet unqualified and corrupt. Teapot Dome – Sec. of Interior Albert Fall.Teapot Dome – Sec. of Interior Albert Fall. Oil executives bribed Fall for access to oil-rich Oil executives bribed Fall for access to oil-rich

government land.government land. Fall first cabinet member to be imprisoned.Fall first cabinet member to be imprisoned. Harding died Aug. 2, 1923 – Coolidge became Harding died Aug. 2, 1923 – Coolidge became

president.president.

Laissez-Faire EconomicsLaissez-Faire Economics

Coolidge cleaned up scandals and promised Coolidge cleaned up scandals and promised further strengthen pro-business policies.further strengthen pro-business policies.

Laissez-Faire economics – if business is left Laissez-Faire economics – if business is left unregulated by the government it would unregulated by the government it would benefit the nation.benefit the nation.

Believed that government should not Believed that government should not address social and economic problems. address social and economic problems.

Congress passed a bill to help farmers – Congress passed a bill to help farmers – Coolidge vetoed it.Coolidge vetoed it.

ProsperityProsperity

Americans had more leisure time.Americans had more leisure time. Labor-saving appliances and shorter Labor-saving appliances and shorter

working hours, higher wages.working hours, higher wages. By the end of the 20s Americans spending By the end of the 20s Americans spending

money on movies, spent time listening to money on movies, spent time listening to radio and attending sporting events; 100 radio and attending sporting events; 100 percent jump in a decade. percent jump in a decade.

All Americans did not prosper - All Americans did not prosper -