The Business of America The Roaring 20’s (1919-1929) Chapter 25 Section 1

The Business of America

The Roaring 20’s (1919-1929)

Chapter 25 Section 1

Essential Questions:

• What is the purpose of government?

• Is the U.S. Government intervening in YOURYOUR life now? How? Is that right?

Warren G. Harding• Won the 1920

Presidential Election

• Promised America a “Return to Return to NormalcyNormalcy,” & “Prosperity at Home Prosperity at Home & Peace Abroad Peace Abroad.”

• What Did He Mean?

1920’s Booming Economy

• Harding Wanted to Help Americans EconomicallyEconomically $$$

• Lowered Taxes:– Americans Have

More $$$ to Spend

• Higher Tariffs On Foreign Goods:– Domestic (USA)

Goods Cheaper

Foreign vs. Domestic

Harding’s Economic Philosophy

• “There should be less government in business and more business in government.”

• What did he mean?

The Teapot Dome Scandal

• Harding Chose His Friends From Ohio to be in His Cabinet (Advisors)

• The “Ohio GangOhio Gang”

• Many of Were Corrupt!– Used Their Positions

in Government to Make $$$

The “Ohio Gang”

• Harding’s Cabinet “Friends” Took Illegal Bribes to Drill for Oil

• Oil Companies Had Found Oil in Teapot Dome, Wyoming

• It was Government Preserved Land

• “Ohio Gang” Gave Oil Companies the Right to Drill (Against the Law)

Presidential Scandals

Harding Dies: VP Calvin Coolidge Becomes President (1923)

• During Summer of 1923, Harding Went on a Campaign Tour

• Learns of Teapot Dome Scandal While On Tour

• Dies a Few Days Later

• Vice President Calvin Coolidge is Sworn in as President

Calvin Coolidge

• Calvin Coolidge Cleaned Up the Teapot Dome Scandal

• Ran for Election in 1924 & Won!

• Believed in Laissez-FaireLaissez-Faire Economics

Laissez Faire Economics• “Laissez Faire”

Means “Hands-Off” in French

• Coolidge Believed:– “Business, if left Business, if left

unregulated by the unregulated by the government, would act government, would act in a way that would in a way that would benefit the nation.”benefit the nation.”

• Coolidge Also Believed:– “The Chief Business of The Chief Business of

the American People is the American People is Business.”Business.”

Laissez Faire Economics• Coolidge Also

Believed Government Should NOTNOT Help Citizens with Social or Economic Problems

• Not Government’s Problem!

• Coolidge Refused to Help Struggling Farmers in the 1920’s

Problems of the Farmers• In the 1920’s,

Farmers Had MajorMajor Problems

• New Machinery = More Production

• Supply & Demand:– U.S. Farmers Made

More Food = Prices $$$ Dropped

– Farmers Went Broke

Congress Tried to Help• Congress Passed a

Law to Buy Farmers Extra Food:– Buy the Extra Food,

Less Supply– Prices Would Rise

• Coolidge VetoedVetoed the Bill:– Laissez Faire!

• Coolidge Feared Citizens Would Rely on the Government to Always Solve Problems!

Isolationism

• Harding & Coolidge Were Isolationists

• IsolationismIsolationism – U.S. Would Stay Neutral, OUTOUT of the World’s Problems

• Coolidge Signed the Kellogg-Briand PactKellogg-Briand Pact:– 15 Countries Agreed

Never to Fight Each Other Unless in Self-Defense

“Roaring” Economy of the 1920’s

• Economy was “Booming” in the 1920’s:– No Government

Interference

• Annual Income Went Up 35%:– $512 to $722

• If You Were Making $50k & Got a 35% Increase, What Would Your Salary Be?

• What Would YOUYOU Spend it On?

Business Cycle (Booms)• People Buy More

Products & Invest in Companies More

• Companies Get MOREMORE Investment Capital, Hire More Workers, Make More Goods, Sell More

• More Workers = More Paychecks = More Spending!

• Business Grows!

More $$$ = More Spending!

• Americans Had More $$$ to Spend on Leisure Activities & Goods

• More Spending = Business Make More $$$ = Hire More Workers = More Spending = Etc...

Henry Ford• Determined to

Make a Car Everyone Can Afford! WhyWhy?

• Who Makes More $$$? Honda or Ferrari?

• 1st Car Ever was the Model T

• Cost $335

The Assembly Line• Speeds Up Production

• More Goods Produced Lowers the Price

• 1 Model T was Produced Every 10 Seconds

• Tough on Workers!

• Standard of Living Goes Up for All!– More Americans Can

Afford More Goods!

“I Love Lucy”

Installment Buying• Buying a Product on

Credit (Just Like a Credit Card)

• Pay Off in Payments Once a Month

• More Americans During the 1920’s Started Buying Products on Credit

• My Bose Stereo/Car/ House/Etc…

Life Made Easier

• Cheap Petroleum/Fuel & Electricity were Widely Used

• Powered New Inventions

• Vacuum Cleaners, Sewing Machines, Dishwashers, Washer & Dryers, Toasters, Fans, Etc…

• More Americans Bought More New Products

Beginning of the Air Age• Planes Were Now

Used for Crop Dusting, Stunt Shows & Training Pilots

• The Post Office Began Mail Service in 1918

• Pan American Airlines was the 1st Ever Passenger Airliner (1927)

Charles Lindbergh & Amelia Earhardt

• Charles Lindbergh Was the 11stst Man Man Ever to Fly Across the Atlantic Ocean in 1927

• Amelia Earhardt Was the 11stst Woman Woman Ever to Fly Across the Atlantic Ocean in 1928

Essential Questions:

• What is the purpose of government?

• Is the U.S. Government intervening in YOUR life now? How? Is that right?