Chapter 35 ~ The Politics of Boom and Bust ~ 1920 – 1932
I. The Republican “Old Guard” Returns
Newly elected President Warren G. Harding was tall, handsome, and popular, but he had a mediocre
mind and he did not like to hurt people’s feelings.
Nor could he detect the corruption within his adminstration.
His cabinet did have some good officials, though, such as Secretary of State Charles Evans Hughes, who
was masterful, imperious, incisive, and brilliant, Secretary of Commerce Herbert Hoover, and Secretary
of the Treasury Andrew W. Mellon.
However, people like Senator Albert B. Fall of New Mexico, a scheming anti-conservationist, became
secretary of the interior, and Harry M. Daugherty took over the reigns as attorney general.
These two became the worst of the scandalous cabinet members.
II. GOP Reaction at the Throttle
A good man but a weak one, Harding was the perfect front for old-fashioned politicians to set up for the
nation a McKinley-style old order.
It hoped to further laissez-faire capitalism, and one of the examples of this was the Supreme
Court, where Harding appointed four of the nine justices, including William H. Taft, former
president of the United States.
In the early 1920s, the Supreme Court killed a federal child-labor law.
In the case of Adkins v. Children’s Hospital, the court reversed its ruling in the Muller v. Oregon
case by invalidating a minimum wage law for women.
Under Harding, corporations could expand again, and anti-trust laws were not as enforced or downright
Men sympathetic to railroads headed the Interstate Commerce Commission.
The Supreme court "buttressed the dike" against popular currents for nearly two decades.
III. The Aftermath of the War
Wartime government controls disappeared (i.e. the dismantling of the War Industries Board) and
Washington returned control of railroads to private hands by the Esch-Cummins Transportation Act of
The Merchant Marine Act of 1920 authorized the Shipping Board, which controlled about 1,500 vessels,
to get rid of a lot of ships at bargain prices, thus reducing the size of the navy.
Labor lost much of its power, as a strike was ruthlessly broken in 1919, and the Railway Labor Board
ordered a wage cut of 12% in 1922.
Labor membership shrank by 30% from 1920 to 1930.
In 1921, the Veterans’ Bureau was created to operate hospitals and provide vocational rehabilitation for
Many veterans wanted the monetary compensation promised to them for their services in the
The Adjusted Compensation Act gave every former soldier a paid-up insurance policy due in
twenty years. It was passed by Congress twice (the second time to override president Calvin
IV. America Seeks Benefits Without Burdens