Republican Economic Policy in the 1920s

The legacy of the First world war

The USA was the biggest creditor to other nation during the war.
between 14 and 16 $2.3 billion in loan were made to the Allies
They become the most dominant industrial power in the word
They were able to mobilise male and female worker of all races.
War lead to the development of stronger bureaucracy, so the government should implement it wishes.
Ecomice rival in Europe had suffered badly due to the war.
for example, German suffered Hyperinflation in 1923
The US began to capture this market supplied by this nation.
strengthening their economy and weakening their economies further

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The there policy should be defined as a Laissez Faire. The economy was largely left to run it itself.
The Frist republican president was Warren Harding, he was viewed as being not particularly good with Corruption rife within his administration.
Calvin Coolidge was a very quiet man who concentrated on administration rather than intervention.
They both come from small towns and had little experience of national politics.
Coolidge was succeeded by Herbert Hoover believed recovery the wall street crash depended on aiding big business.

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Elected on the platform of a return to "normalcy".
He was popular but ill qualified to be president.
He relied heavily on group of corrupt cronies know as the "Ohio Gang"
Cut government Spending through measures such as the Budget and Accounting act (1921)
in 1920 government spending was $500m but by 1922 this had fallen to $3373m
Introduced the Sheppard-Towner Maternity aid act(1921) providing finance aid to pregnant women. Some see this a base for some new deal programme under FDR.
Harding often demonstrated favouritism toward the wealthy.
The Emergency Tafrid Act 1921 reduced taxes on the wealthy and corporation.
The Fordney- McCumber tariff act 1922 made imported good more experience helping America Thrive.
Evdecinvce of corruption in the Administration emerged in what become know as the Teapot Dome scale.
This damaged the reputation of Administration further after it poor handling of strikes the year before.

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He Assumed the presidency and would retain the position in 1924
He was a firm believer in Laissez-faire policies.
Some have criticised him for his low work rate, as well as his reluctance to address important social & economic issues.
ØHe was not afraid to court publicity & grew increasingly popular, especially with ‘Middle America’. ØThe public generally regarded him as calm & unflappable. He gave off an aura of confidence which persuaded many Americans that prosperity was secured for the long-term.

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Could be seen as a key figure in shaping America economic policy in the 1920s and early 30s
He believed if the economy grew, wealth would filter down natural down to all class.
He favoured high tariffs on imported goods, as well as low taxes.
He was a strong support of big business.
high traffic led to a huge budget surplus, so allowed him to reduce taxation level on a regular basis.
low taxes helped to stimulate consumer spending during the 20s
Ofen credited with bringing the prosperity of the 20s
his policies can be seen as a cause of Both the Great Depression and the Wall street crash.

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