The Politics of Boom and Bust
I. The Republican “Old Guard” Returns
Newly elected President Warren G. Harding was tall, handsome, andpopular, but he had
a mediocre mind and he did not like to hurtpeople’s feelings.
Nor could he detect the corruption within his adminstration.
His cabinet did have some good officials, though, such as Secretaryof State Charles
Evans Hughes, who was masterful, imperious, incisive,and brilliant, Secretary of
Commerce Herbert Hoover, and Secretary ofthe Treasury Andrew W. Mellon.
However, people like Senator Albert B. Fall of New Mexico, ascheming anti-
conservationist, became secretary of the interior, andHarry 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 forold-fashioned politicians to
set up for the nation a McKinley-style oldorder.
It hoped to further laissez-faire capitalism, and one of theexamples of this
was the Supreme Court, where Harding appointed four ofthe nine justices, including
William H. Taft, former president of theUnited States.
In the early 1920s, the Supreme Court killed a federal child-labor law.
In the case of Adkins v. Children’s Hospital, the courtreversed its ruling in the
Muller v. Oregon case by invalidating aminimum wage law for women.
Under Harding, corporations could expand again, and anti-trust laws were not as
enforced or downright ignored.
Men sympathetic to railroads headed the Interstate Commerce Commission.
III. The Aftermath of the War
Wartime government controls disappeared (i.e. the dismantling ofthe War Industries
Board) and Washington returned control of railroadsto private hands by the Esch-
Cummins Transportation Act of 1920.
The Merchant Marine Act of 1920 authorized the Shipping Board,which controlled about
1,500 vessels, to get rid of a lot of ships atbargain prices, thus reducing the size of the
Labor lost much of its power, as a strike was ruthlessly broken in1919, 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 the disabled.
Many veterans wanted the monetary compensation promised to them for their
services in the war.
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 Coolidge’s veto).