Politics in the 1920’s Conservatism, Dominance of the Republican Party Conservatism

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  Calvin Coolidge, President of the United States 1922-29
  
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  Warren Harding, President of the United States 1921-22
  
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  Herbert Hoover, President of the United States 1929-1933
  
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  Andrew Mellon, Secretary of the Treasury 1921-1933
  
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  William Taft, Chief Justice of the Supreme Court, 1921-1930
  

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  Economic Principles, see 1920’s Economic Issues notes:
  
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    ‘Laissez Faire’ (Leave it be), Capitalism, meaning Capitalism with little government regulation or interference
    
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      Could also be said that it was Hamiltonianism, named after the first Secretary of the Treasury Alexander Hamilton, believed in government policies that most favoured big business
      
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      ‘A president’s only function was to see that the government interfered with industry as little as possible’ (Leuchtenburg, talking about Coolidge)
      
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      ‘Calvin Coolidge... aspired to be the least President the country had ever had; he attained his desire’ (Irving Stone, quoted in Leuchtenburg)
      
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      ‘By allying Government with Business, the Republicans believed that they were benefiting the entire nation’
      
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    Low taxes
    
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    Fewer government regulations
    
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      Can be seen in the Appointment of many conservatives to the Federal Trade Commission, who ignored or were lenient on many ‘Anti-trust’ (anti-monopoly), and labour regulations
      
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    A general respect and appreciation for the Capitalist Free-Market economy of the United States that was during the 1920’s
    
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    High Tariffs
    
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    Anti-Unionist
    
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    Pro-Business
    
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      ‘The Chief Business of the American people is Business’, Calvin Coolidge
      
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      ‘Coolidge’s prescription for government was simple. All prosperity rested on business leadership’ (Leuchtenburg)
      
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      ‘the Republican right wing was determined to call to a halt the social welfare measures and to push legislation favourable to big business’ (Leuchtenburg)
      
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      ‘No political party, no national administration, could conceivably have been more co-operative with big business’ (Leuchtenburg)
      
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  Social Principles, broadly defined or understood as Traditionalism
  
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    Traditionalism being the White, Anglo-Saxon, Protestant, Rural society that Traditionalist believed was the true America
    
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      All of the beliefs of Social Conservatives in the 1920’s extended from this belief, and legislation was used in an attempt to preserve this kind of America
      
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    Opposition to Communism and Communists
    
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    Support for Prohibition
    
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    In the South most of them were ‘Southern Democrats’, conservatives supported the ‘Jim Crow laws’ that discriminated against Blacks.
    
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    Opposition to Immigration, who were believed to undermine US society
    
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      ‘Dislike of foreigners had been a traditional plank of American Conservatism throughout much of the history of the Republic’ (Snowman, The 1920’s: An Age of Rose- coloured Nightmares)
      
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  Foreign Policy, generally seen as Isolationist, see Isolationism noted
  
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    Opposition to the Treaty of Versailles and the League of Nations
    
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    Distrust of Communists, seen in the Intervention of the USA in the Russian Civil War in 1919, intervene on the side of the anti-communist ‘Whites’
    
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    Supported the ‘Banana wars’, wars in Central America during this period to maintain American security and interests:
    
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      The operation of the Panama canal
      
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      US Business interests
      
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        The repeated interventions of the USA in Honduras and Nicaragua, to protect the interests of the United Fruit Company
        
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        US Marine Corps General Smedley Butler, who fought in the Banana wars said in his 1935 book War is a Racket ‘I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism
        

Woodrow Wilson attempted to have the Treaty of Versailles ratified by the US Senate, as by per the US Constitution, the US Senate must pass all foreign treaties with a two-thirds majority vote. The Republicans blocked any attempt to ratify the Treaty by the Democrats.

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  As a result of this Isolationist Conservatism from the Republicans, the United States never ratified the Treaty of Versailles, and never joined the League of Nations
  

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  It was the result of America expressing a desire to return to ‘Normalcy’, WWI and the tumultuous economic and social changes brought upon by Progressive Politics in the previous 30 years
  
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    Warren Harding, a Senator from Ohio, won 37 states and 404 electoral votes with 60.3% of the National popular vote, against his Democratic opponent James Cox
    
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    The War, the Red Scare, post-war inflation and unemployment, ‘In a word the national had had enough of Wilsonism’ (Leuchtenburg)
    

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  Conservative political stance was anti-progressive, ‘we have torn up Wilsonism by the roots’ Republican Senator Henry Cabot Lodge
  
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  ‘Harding and his friends set about dismantling or neutralising as many of the social and economic components of progressivism as they could’ (Tindall and Shi America a Narrative History 1999)
  

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  Republicans lost control of the House of Representatives and Senate in the 1930 midterm elections, the first Federal election since the 1929 Wall Street Crash and the beginning of the Great Depression
  
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  Republican Herbert Hoover lost re-election in 1932 Presidential election
  
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  Republicans were in the minority for the rest of the 1930’s
  

Progressivism was the dominant Political Philosophy from 1892-1920, yet it declined in influence, and was irrelevant, with the exception of rural states in the Midwest and Plains because of Progressive support for farm price intervention and anti-monopolist views.

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  Woodrow Wilson, President of the United States 1912-1920
  
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  Robert La Follette, Senator for Wisconsin 1906-1925
  
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  Fiorello La Guardia, Congressman from New York, 1922-1933
  

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  Economic principles
  
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    Favours Government intervention in the economy to achieve desired outcomes
    
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    Anti-Trust (anti-monopoly)
    
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    Supports Unions and the 8-Hour Day
    
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    Support restrictions on bad labour practises such as Child labour
    
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    Supports assistance for farmers through price controls
    
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    Anti-business/industrialist, against the concentration of Income and Wealth
    
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    Supports Progressive/High taxes
    
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  Social principles
  
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    Against prohibition
    
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    Not anti-immigration or foreigner
    
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  Foreign Policy
  
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    Mainly ‘Wilsonism’, the use of American economic and military power to spread democracy and democratic values in the world, drove the US entry into WWI
    
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    Supports the League of Nations and the Treaty of Versailles
    

The Progressive party ran a National Presidential ticket, with Senator Robert La Follette as its candidate. It won 17% of the national vote and carried La Follette’s home state of Wisconsin. Yet as William Leuchtenburg notes;

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  ‘In the post-war years, noted one writer, an attack on the trusts seems as outdated as the tandem bicycle, and “trust-buster” was a term as lost in the mists of the past as “free-soiler”
  

Socialism, defined by Wikipedia:

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  The economic and political system that aims to socially or collectively own the means of production (capital) through the state, and abolish the economic/social hierarchical system called ‘class’
  

Communism is a more radical form of socialism, defined by Wikipedia

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  The economic and political system that aims to totally abolish private property and all of the goods and services produced in a communist society would be equitably distributed according to a person’s need.
  

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  In 1917 the Communist Bolsheviks seized power in the November Revolution in Russia, creating the first communist state
  
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  In 1918/19 the Spartacus revolution almost turned Germany into a communist state.
  
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  In 1919/20, the ‘Red Scare’ gripped American society, thousands of foreigners were deported
  
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    ‘by the autumn of 1919, millions of old-stock Americans had come to believe that the country was faced by the menace of alien revolutionaries’ (Leuchtenburg)
    
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    Only 7% of the American Communist Party could speak or understand American English, so this fear and association of foreigners with communists and vice-versa was quite justified
    
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  See Anti-Communism notes
  

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  The Republicans aimed to reduce Federal taxes and spending by a significant amount
  
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  Andrew Mellon, Secretary of the Treasury 1921-1933
  
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    Previously a very wealthy Financier before becoming Secretary, during the 1920’s he was the third wealthiest man in America
    
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    Commonly called ‘the Greatest Secretary of the Treasury since Alexander Hamilton’ during the 1920’s
    
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  Cutting taxes to bring in more money into the US Economy, cut taxes on the top income from 65% to 20%, also cuts in low income tax brackets, estate tax, surtax and profits tax
  
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  Revenue Act of 1921 was introduced stopped the war time excess profits tax and reduced the surtax
  
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  Revenue Act of 1924 raised exemptions in the lower tax brackets reduced normal tax rates and permitted rebates on investment income
  
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  By 1929, only 2% of workers were paying the Federal income tax, because the rates were so low and applied to incomes on a very high level
  
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  Further tax cuts were introduced in the Revenue Act of 1926, 1928 and 1929
  
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  Federal Debt reduced from 24 billion in 1920 to 16 billion 1930
  
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  Government expenditures per annum fell from $6.4 billion in 1921 to $2.9 billion in 1928
  

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  The Republicans favoured high tariffs for manufactured Goods. This is because many industrial and manufacturing industries developed in the United States during the First World War, since the industrial capacity of the European nations was entirely focused on producing war materials, and not consumption goods for the US market. US manufacturing also benefitted from the European countries buying war materials and other essential goods from the United States.
  
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  These industries became exposed after WWI, so the Republicans passed the Emergency Tariff Bill which protected the infant industries, but Wilson vetoed the bill saying ‘If we wish to have Europe settle her debts, governmental or commercial, we must be prepared to buy from her’
  
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  WWI saw the growth of a number of infant industries; since the European countries were in a war, these industries were automatically protected.
  
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  Republican President Warren Harding signed the Emergency tariff act
  

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  Introduced tariffs on foreign textiles, chemicals, minerals and manufactured goods, but failed to introduce tariffs on agricultural goods.
  
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  Before WWI, the Underwood Tariff reduced tariffs and encouraged free trade
  
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  The US became a creditor nation during the First World War because the European nations borrowed from the US to fight the war, the US lost much foreign investment and Europe was still economically weakened by the war
  
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  The tariffs made it difficult for the European countries to sell their goods in the United States, which kept the European nations economically weakened, thus making it more difficult to raise the revenue to pay back the US for the loans that were given to Europe during the War.
  
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  Republicans cut immigration quotas, the Immigration Act 1924, the population growth reduced the number of consumers in the United States, thus farmers suffered.
  

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  When the First World War ended, the ‘infant’ industries that had developed during the First World War came under threat from the revering European manufacturing industries, and threatened to outcompete them in the US domestic market, potentially ruining the industries.
  
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  In response to this, the Republican Congress passed the Emergency Tariff Act in 1921, which increased the tariff on foreign agricultural products.
  
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  In 1922 Congress passed the Fordney-McCumber Act, which increased the tariff rates on foreign goods. They achieved this through two methods:
  
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    Scientific Tariff: This was a tariff based on the average wages paid in a foreign country; if France paid its workers an average lower wage then this tariff would increase the cost of the imported goods which negated to saving in the cost of production caused by the lower wage
    
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    American Selling Price: This tariff linked the price of the imported goods to the cost of the same American good, the tariff deliberately increase the price of the imported good above the cost of the same American good, which meant that the American good was always cheaper.
    

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  The impact of these tariffs was that farmers was that farmers were exposed to foreign agricultural products in the American market, which decreased the prices received by farmers for their products
  
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  The tariffs influenced developments in that it caused farmers income to decrease, which weakened the US agricultural sector as well as farmers and rural communities.
  
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  The tariffs influenced developments in that it caused the manufacturing industries of the United States to grow enormously, which helped the companies in the manufacturing industries, as well as the communities in which they set up their operations. This contributed to the increased urbanisation, because factories were constructed in industrial cities such as Pittsburg which contributed to their growth.
  
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  The tariffs influenced developments in that is caused the Economy’s of Europe to fail to totally recover, the tariffs made it almost impossible for European businesses to sell their goods in the United States, so the European economies were unable to totally recover. This also influenced developments in that is weakened Europe’s ability to pay back the United States the loans that they borrowed.
  

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  The Republicans supported a Laissez-Faire approach to business, meaning ‘leave it be’, the Republican attitude was to leave the business sector alone and it would produce better outcomes for society.
  
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  The Republicans stopped prosecuting companies that were merging, that would have been illegal under restrictions put in place by the Sherman Anti-trust act. The result of this was that from 1919-1929 4000 mergers took place in manufacturing and mining, and the US Economy began to become dominated by a few large corporations. US Steel Corporation controlled ½ to 2/3 of iron ore during this period.
  
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  The Republicans also supported the business community during strikes; the Herrin Massacre and the Great Railroad Strike of 1922 are examples of how the government supported the employers against Union workers on strike during this period.
  
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  This influenced developments because it allowed the growth of monopolies, business mergers increased, profits also increased 61%, it influenced the development of large corporations.
  

Industrialisation is the process by which there is growth in the industrial sector of the economy that causes it to eclipse the other sector of the economy, characterised by increased use of machines, electrification and large increases in productivity, as well as the development of an urban workforce and urban society.

The effect was a significant increase in the size and output of the manufacturing sector, and the production of consumer goods. Combined with this was an increase in economic productivity as a result of industrialisation, lowering the cost of production for goods, and increasing the real wages of workers.

‘Industrial production almost doubled during the decade... without any expansion of the labour force; Manufacturing employed precisely the same number in 1929 as in 1919’ (Leuchtenburg)

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  The United States had already been industrialising since the end of the Civil War
  
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  By 1900 already the World’s largest economy, and largest industrial output
  
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  Manufacturing output up 264% from 1899 to 1929
  
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  Boom in the:
  
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    Iron and Coal industry
    
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    Steel, Aluminium
    
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    Synthetic chemicals and plastics
    
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    Automobile sector, in 1909 annual output was 4000 cars, by 1927 it was 7,000,000
    
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    Electricity sector
    

‘Without the Automobile industry, the prosperity of the 1920’s would scarcely be possible’ (Leuchtenburg)

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  Stimulated growth and employment, in the Midwest where the Major US car manufacturer plants were located, as well as surrounding car parts manufacturers
  
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  Increased growth in accompanying industries of Steel, Glass, Rubber
  
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  ‘There was scarcely a corner of the economy that the automobile industry did not touch... created dozens of new enterprises from hotdog stands to billboards’
  
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  By 1925, a Ford rolled off an assembly line every ten seconds
  
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  In the USA there were one automobile per five citizen compared to
  
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    1 to 43 for Britain
    
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    1 to 345 for Italy
    
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    1 to 7,000 for Russia
    

Consumerism, defined as the social idea that individuals purchase goods and services for consumption that is not required for sustaining basic needs; rather for enjoyment, entertainment and to save labour.

The 1920s was a period of a realisation of the American Dream by ordinary Americans, the American dream defined as economic prosperity and opportunity for Americans in material terms. Characterised by an improvement in the comfort, security and overall prosperity of ordinary life. This was due to the development of methods of mass production which enabled higher economic output, lower prices, higher wages and a far wider range of consumer goods available for sale.

Consumerism grew in the United States because of increased demand from ordinary workers, real wages grew 22% in 7 years, and this gave workers a much greater disposable income that could be spent on consumer goods and services.

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  Mass consumerism was mobilised by ‘Big Business’
  
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    As characterised by an emergence of oligopolies and consequent demise of small family-operated business
    
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    Prompted improvements in efficiency, productivity, and growth of inequality in the distribution of income, wealth
    
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      Spurred by the development of technology and a consequent decline in the demand for workers in manufacturing industries, incline in demand for workers in booming industries such as services
      
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      Spurred by the development of business strategy, such as:
      
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        The assembly line approach to production ‘Fordism’, as introduced in 1913-14
        
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        A ‘Welfare capitalism’ approach to industrial relations
        
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          A system under which companies provide employees w stock bonuses, profit sharing plans, life insurance, old age pensions intending to maintain industrial contentment. Such as the Combine harvester company giving a 2 week paid vacation in 1925, unheard of at that time.
          
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      Spurred by the movement of production operations abroad as encouraged by Republican economic policy
      
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        Eg General Electric factories established in Latin America, China, Japan , Australia, effecting a reduction to labour, resource costs and an improved access to raw materials
        

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  Encouraged an increase in the rate of education retention
  
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    There was an increase in the prestige of the image of the educated businessman and an increase in employment opportunities and access to education services
    
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  Encouraged a decline in trade unionism
  
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    Primarily the Growth of prosperity, and welfare capitalism meant that Unions were becoming less attractive and relevant, Unionism dropped to its lowest levels in the 1920’s
    
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    Due to: growth of ‘welfare capitalism’; prevalence ‘yellow dog contracts’; use of intimidation by major firms; adverse social, political opinion of unions; government efforts to deter unionist activity (eg Gov banned strikes by railroad workers, miners in 1922, 1923)
    
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    Led to a decline in union membership from 5m (1920) to 3.5m (1929)
    
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  Mass consumption signalled a variety of social trends
  
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    Encouragement to spend elicited by persuasive advertisement, mass production, supply of a wide range of goods
    
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    Encouraged conformity in dress, diet, house, as the development of oligarchies inhibited industrial competition and advertisement became national
    
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    Advertisement was heavily influential of consumer spending patterns
    
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      Eg Edward Bernays, Bruce Barton
      
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      Appealed to the social aspirations and insecurities of ordinary Americans to sell luxury goods
      
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      Spending became item of pleasure
      
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    Increase in spending gave rise to increase in credit
    
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      Lending to purchasers was 10^th largest business by 1929