Lesson 1: Harding and Coolidge Flashcards
Bull Market Definition
a period of increased stock trading and rising stock prices
Communism Definition
an economic system in which all wealth and property are owned by the state
Disarmament Definition
a reduction of armed forces and weapons of war
Installment Buying Definition
buying on credit, with regular payments to cover the full price plus interest
Interest Definition
a fee charged for a loan, usually a percentage of the loan, to be paid monthly along with part of the original loan, until the loan is repaid
Kellog-Briand Pact Definition
a 1928 treaty outlawing war
Margin Definition
a strip along the edge; in stock trading, a fraction of the stock price given as a down payment to gain ownership of stock
Recession Definition
an economic slump that is milder than a depression
Stock Definition
share of ownership in a corporation
Teapot Dome Scandal Definition
a political scandal during President Harding’s administration involving the secret lease of government land to oil companies
True or False (Review): World War I had helped the economy. Europeans ordered vast amounts of supplies from American factories. After the United States entered the war in 1917, American factories expanded rapidly to meet the demand for military supplies.
True
When soldiers came back from World War I, what were they looking for? What other factor contributed to the economic recession after the war?
When the war ended, more than 2 million soldiers came home and began to look for jobs. At the same time, factories stopped turning out war materials. The result was a sharp recession, or economic slump.
How did the recession after the war help Republican Warren Harding win?
The recession fed voter discontent with the Democrats, who had held power for eight years. In the 1920 election, Warren Harding swamped his Democratic opponent James M. Cox.
Who did President Warren Harding choose to serve in the top cabinet posts, in the Secretary of Treasury and Secretary of Commerce positions? Why? What did they do?
For the top Cabinet posts, Harding chose able men who strongly followed pro-business policies. Andrew Mellon, a wealthy banker, became secretary of the treasury. Mellon balanced the budget and lowered taxes. Herbert Hoover became the new secretary of commerce. During World War I, Hoover had earned the world’s admiration by organizing efforts to supply food to millions of starving Belgians. As secretary of commerce, he worked to help American businesses expand overseas.
To fill most cabinet posts, who did President Warren Harding choose? What was the Ohio Gang? What characteristics did Harding have? How about the “Ohio Gang”? What was Charles Forbes’s scandal? Why did Harding view this as betrayal? How did President Warren Harding pass away in August 1923? What do many think contributed to his death?
To fill most other Cabinet posts, however, Harding brought in his old friends. They became known as the “Ohio Gang.” Harding himself was honest and hard-working, but the Ohio Gang saw government service as a way to enrich themselves. A series of scandals resulted. For example, Harding made Charles Forbes head of the Veterans Bureau. Forbes was later convicted of stealing millions of dollars from the bureau. Harding looked upon Forbes’s crime as a betrayal. When rumors of new scandals surfaced, he grew even more distressed. In August 1923, Harding died of a heart attack. Many believed that the scandals contributed to his sudden death.
What was the Teapot Dome Scandal that came to light after President Warren Harding’s death? What role did Secretary of the Interior Albert Fall play in the Scandal? Due to this, Fall became the first cabinet member to go where?
After Harding died, new scandals came to light. The most serious involved Secretary of the Interior Albert Fall. Two oil executives had bribed Fall. In return, he secretly leased them government land in California and at Teapot Dome, Wyoming. As a result of the Teapot Dome Scandal, Fall became the first Cabinet official ever sent to prison.
Where was Vice President Calvin Coolidge when he learned that he would become President?
On the day Harding died, Vice President Calvin Coolidge was visiting his father’s farm in Vermont. Coolidge recalled, “I was awakened by my father. … I noticed that his voice trembled.” Coolidge’s father, a justice of the peace, used the family Bible to swear his son in as President.
How was President Coolidge different from President Harding?
“Silent Cal” Coolidge was very different from Harding. Harding loved throwing parties and making long speeches. Coolidge was tight with both money and words. A woman reportedly told Coolidge she had bet that she could get him to say more than two words. “You lose,” Coolidge replied.
How did Coolidge move to repair the damage caused by the scandals? In 1924, who did Coolidge run up against? What motto won him the Presidency?
Coolidge set out to repair the damage caused by the scandals. He forced the officials involved in scandals to resign. In 1924, Coolidge ran against Democrat John Davis and Progressive Robert La Follette. Voters chose to “Keep Cool With Coolidge” and returned the cautious New Englander to office.
How did Coolidge share similar business ideals as Harding?
Like Harding, Coolidge believed that prosperity for all Americans depended on business prosperity. Coolidge cut regulations on business. He also named business leaders to head government agencies.
How did Coolidge’s pro-business policies contribute to a period of rapid economic growth? What was “Coolidge Prosperity”? What happened to the quantity of goods in the period from 1923 to 1929?
Coolidge’s pro-business policies contributed to a period of rapid economic growth. People referred to this boom as “Coolidge prosperity.” As factories switched to consumer goods, the postwar recession ended. From 1923 to 1929, the quantity of goods made by industry almost doubled.
During “Coolidge Prosperity”, how did an increase in income affect products in American homes?
For most Americans, incomes rose. As a result, they were able to buy a flood of new consumer products. Electric refrigerators, radios, phonographs, vacuum cleaners, and many other appliances took their places in American homes.
How did businesses use advertisements to encourage consumers?
Businesses used advertising to boost sales of consumer goods. Advertisements encouraged people to think that their happiness depended on owning a wealth of shiny, new products.
Why were people buying things they could not afford? What did businesses do in response? What is installment buying? How does it work? What is interest? How did the new policy “buy now, pay later” influence the amount of buyers and debt?
Faced with so many goods, people often wanted to buy things they could not afford. In response, businesses allowed installment buying, or buying on credit. For example, buyers could take home a new refrigerator by putting down just a few dollars. Each month, they paid an installment until they had paid the full price, plus interest, or a percentage of the price charged as a fee for the loan. The new policy of “buy now, pay later” increased the demand for goods. At the same time, however, consumer debt jumped. By the end of the decade, consumers owed more than the amount of the federal budget.
