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Pro-Business Policies of Andrew Mellon
Limited government spending
- -Established the General Accounting Office
- -Tax reductions for the rich – Resisted by western Republicans and southern Democrats.
- -Fordney-McCumber Tariff of 1922
- Federal budget balanced
the General Accounting Office
- – to limit audit spending by fed agencies.
- established by andrew mellon
Fordney-McCumber Tariff of 1922
raised rates on chem. And metal products as a safeguard against revival of German industries.
The Teapot Dome scandal
- Albert Fall of the Interior Department – allowed private companies to exploit government-owned oil deposits
- Harding troubled by the scandals – but his death spared him from public disgrace.
Kelly Act of 1925
allowed the fed gov to subsidize industry through air mail.
Air Commerce Act of 1926
provided fed funds to aid advance of air transport and navigation.
Hoover's American Individualism (1922)
prescribed a middle way b/w the regulatory and trust-busting traditions, a way of gov encouraging voluntary cooperation among competing businesses.
The American Farm Bureau Federation
represented corporate attitudes of commercial farmers
The McNary-Haugen bill
- What did it do? – Plan to dump surplus crops on world market to raise prices on home market. Vetoed by Coolidge.
- End result – made the farm issue a nat’l policy issue and defined it as a problem of surpluses. Also revived idea of a pol alliance b/w rural s and w, which would later be a large influence on nat’l farm policy.
Employers used various devices to keep out unions
the open shop allowed employers refuse to hire/recognize unionists. Started in Chicago 1921.
workers forced to agree not to join union. Employers often required them.
"Industrial democracy" and "welfare capitalism"
Employers Tried to kill unions with kindness by offering workers alternatives to unions such as bonuses, pensions, health programs, ect the benefits were often considerable.
Gastonia strike of 1929
Loray Mill, Gastonia, NC
- Governor dispatches National Guard – the managers refused to negotiate/meet w/ strikers, so the workers rebelled, and the nat’l guard was sent out to break the strike.
- Vigilante response – a gang of masked men destroyed the unions strike headquarters and assaulted workers.
- Company victory – despite lack of concrete evidence. 7 strikers convicted of conspiracy to commit murder.
For farmers, Hoover endorsedAgricultural Marketing Act
set up the fed farm board, and supported farm cooperatives.
Federal Farm Board
Manipulated crop prices and larger market.
The Hawley-Smoot Tariff
raised duties to all-time high and crippled farm prices
Reasons for the crash
- Economic factors – too many businesses had maintained retail prices and taken large profits while holding down wages, as public consumption of goods declined, the rate of investment in new plants declined.
- Governmental policies – Andrew Mellon was hostile towards labor unions and discouraged bargaining, high tariffs discouraged foreign trade and lack of enforcement of anti-trust laws encouraged high prices.
- The gold standard – led to low prices and wages which continued to decline, inflated the econ and led to a recession.
Hoover's attempts at recovery
- Asked of businessmen – to let profits suffer before purchasing power, keep shops open, maintain wage rates, spread out work and avoid layoffs.
- Increased opportunities for credit – tax reduction, fed farm bureau stepped up loans and purchases of farm surpluses.
- The "Hooverization" of America – many blamed him, but he kept to his philosophy of voluntarism.
The Reconstruction Finance Corporation
to keep financial institutions open
increased loan opportunities
Federal Home Loan Act
provided financing for home mortgages.
The Emergency Relief and Construction Act
funds for public works programs.
vet's bonus issues
- Vet’s bonus –
- Congress in 1924 had voted veterans' bonus payable in 1945.
The Bonus Expeditionary Force – marched on Washington demanding immediate payment of the bonus.
Result – Congress rejected their demands, but many veterans stayed in Washington, army was used to evict veterans.