The Business of America is Business ~ President Coolidge
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1 The Business of America is Business ~ President Coolidge The Consumer Economy of the 1920 s
2 Warren Harding and the Return to Normalcy Warren Harding was elected President in He used the slogan Return to Normalcy, referring to life in the U.S. after WWI. As a Republican, Harding took a laissez-faire stance in economics and government. He opposed organized labor and anti-trust measures.
3 Warren Harding and the Return to Normalcy Harding took little initiative and delegated decision-making to a few key cabinet members. Secretary of the Treasury Andrew Mellon pushed through tax cuts to wealthy citizens and business, following the "trickle down" theory of economics. The influential Andrew Mellon on a postage stamp. Secretary of Commerce Herbert Hoover and Secretary of State Charles Evans Hughes worked to secure foreign markets for American interests.
4 Protective Tariffs A protective tariff is a tax on imported goods to make them less competitive with American-made goods. The Emergency Tariff Act of 1921 and the Fordney-McCumber Act of 1922 imposed the highest tariff rates in history at the time. Lawmakers wanted to protect American interests as Europe began to recover and export its goods. The tariffs made it difficult for Europe to pay war debts and eventually slowed international trade by provoking other countries to enact high tariffs on U.S. exports.
5 The Harding Presidency Foreign Policy Domestic Issues The Teapot Dome Scandal Harding and many Americans wanted a policy of isolationism, avoiding political or economic alliances with foreign countries. Harding called for international disarmament, a program in which nations voluntarily give up their weapons. He promoted the expansion of trade and acted to protect business at home. As Americans became more isolationist during the Red Scare, they also became more nativist. Nativism is a movement favoring native-born Americans over immigrants. In 1921, Congress passed a law restricting immigration. The law included a quota, or a numerical limit imposed on immigrants. In 1923, corruption scandals rocked Harding s administration. The worst was the Teapot Dome Scandal. Harding s Secretary of the Interior secretly gave drilling rights on government land to two private oil companies in return for illegal payments. There was no evidence that Harding was involved in the scandals. He died while still in office.
6 The Coolidge Presidency Calvin Coolidge assumed the presidency after Harding died in He summed up a major theme of the Republican decade: The chief business of the American people is business. Coolidge continued Harding s Laissez-Faire policies. He cut taxes to the wealthy and kept government out of big business. Coolidge wanted peace and stability without getting the United States too deeply involved in other nations. Secretary of State Frank B. Kellogg worked with the French foreign minister to create the Kellogg-Briand Pact. Under this pact more than 60 nations agreed not to threaten each other with war. Unfortunately, there were no provisions for enforcement, and many of the countries that had signed the pact would be at war with each other by 1941.
7 Postwar Prosperity The "Second Industrial Revolution" : WWI stimulated development and investment in new technology that contributed to the business boom. As electricity became widespread and industrial production more efficient, mass produced consumer goods became available to the public at low prices.
8 Postwar Prosperity Consumers were reading many materials and purchasing the same goods. Communication innovations in radio, advertising, and film contributed to the rise of national popular culture. How does this lead the business boom of the 1920s? The cycle that created the business boom in the 1920's: standardized mass production led to more efficient machines, which led to higher production and wages, which led to increased demand for consumer goods, which leads to more mass production!
9 Consumer Culture New opportunities and jobs Rise of leisure and vacations Declining cost of products Department Stores/Catalog Companies Rise of consumer goods Advertising and creating desires Buying Goods through credit, loans, and installment plans What types of goods are people buying in the 1920s?
10 Consumer Products Washing Machines Vacuum Cleaners Model T cars ($250-$850) Roads, suburbs, restaurants, gas stations, hotels, gender and youth Radios, Cosmetics, Clothes, Cigarettes All sold through Advertising! Where do you see similarities in today s economy?
11 Credit and the Consumer This ad characterizes credit as a prudent financial decision and a way to gain instant gratification. As consumerism became a hallmark of Modernism, the stigma of purchasing goods on "installment plans" faded. The automobile industry was one of the first to capitalize on the potential of consumer credit, but other industries quickly followed suit.
12 The Automobile and American Culture The explosive growth of the automobile industry revolutionized American life. Henry Ford's innovative production techniques made cars affordable for average Americans and set new standards for industry. By the end of the decade, there were enough cars on the road for every one in five persons. Related industries sprang up including service facilities, filling stations, and motels.
13 President Coolidge on Advertising (1926) It makes new thoughts, new desires, and new actions.... It is the most potent influence in adopting and changing the habits and modes of life, affecting what we eat, what we wear, and the work and play of the whole Nation. Mass production is only possible where there is mass demand. Mass demand has been created almost entirely through the development of advertising.
14 As you look at your Advertisement What images do you see? What slogans or phrases are present? What message is the ad trying to convey to the consumer? How do you think the advertisement helps to influence the consumer to purchase the product?
15 Advertising in the Jazz Age This ad uses a celebrity endorsement to glamorize smoking and exploits the image of the new woman of the 1920 s. Advertising techniques varied. Modern advertising, using popular culture and celebrities to fuel consumption, began to take shape. The array of new appliances and consumer goods available at a lower cost fueled consumption. Businesses conquered the challenge of efficiently producing enough goods; now the focus was creating desire.
16 Advertising in the Jazz Age Another ad legitimizing desire; it associates the product with glamour and modernity
17 Advertising in the Jazz Age See this ad, buy the radio, hear more ads, buy more stuff!
18 Forever Young
19 Americans and their waists
20 And the Best part is, it won t cost you anything
21 Buy Now Pay Later!
22 Personal Debt and Income Distribution in the 1920s
23 Economic Danger Signs Uneven Prosperity: The rich got richer. Personal Debt: Many Americans used easy credit and installment plans to purchase goods. Stock Market: The rapid increase of stock prices encouraged high risk investments. Overproduction: Manufacturers kept making goods even as demand began to fall. Farmers & Workers: Farmers unable to pay their debts caused rural banks to fail. Companies grew wealthy as many workers remained poor.
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