Transcript Elaborate on the cycle of economic boom and bust in the

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Macro Concepts
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Micro Concepts
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Leadership-the act of setting
an example for others to
follow.
Industrialization-the act of
modernizing production by
using machinery.
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Change-the concept of
transformation from one
phase to another.
Laissez-faire-an economic
policy that shuns
government regulation in
order to benefit business.
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Mechanization-the use of
machinery to improve the
manufacture of goods.
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Rugged individualism-the
concept of taking
responsibility for one’s own
actions and not using help
from the government.
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Was president of the United States
for only 2 years.
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He succeeded President Wilson.
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His stated goal was for the United
States to Return to Normalcy [to
get back to normal] after a very
costly world war.
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His openness and optimism was
appreciated by the nation.
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Unfortunately Harding was in very
poor health unbeknownst to him.
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He died in the middle of a
conversation with his wife.
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It was most likely a heart attack or
stroke.
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Unfortunately before President Harding died several
corruption scandals were uncovered that
embarrassed him and the federal government.
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The first was the Forbes Scandal when an former
army colonel named Charles Forbes was accused of
selling scarce medical supplies from Veterans’
hospitals and keeping the cash for himself.
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The worst scandal was the Tea Pot Dome scandal
which involved Albert Fall the Secretary of the
Interior being bribed with $300,000 to allow
American oil companies to drill in Wyoming at a U.S.
Navy oil reserve.
Charles Forbes
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President of the United States for
7 years.
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He finished Harding’s term then
was re-elected.
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He was known as a “friend to
business” because of his Laissez
Faire policies.
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Many people because of his
economic views the United
States headed toward a reckless
financial path.
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Hoover was elected president in 1928. He believed in Laissez-Faire
economics [limited regulation].
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Without strict regulation banks and investment houses lent money to
people who could not repay loans.
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Stock brokers [people who sell stocks] allowed investors to buy on
margin [buy stocks now and pay for them later].
When stock dropped in value investors could not repay and banks went
out of business. Thousands of people lost their life savings.
 People move into shack towns called Hoovervilles.
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Prices of stocks started to plunge in value in October of 1929.
 Bad loans that were not repaid and speculation [rumors] led
to a furious sell off of stocks and the U.S. Stock dropped in
value by more than half.
 Most people lost their life savings. Many people committed
suicide.
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Many U.S. businesses believed it was best to protect American
markets buy having high tariffs [taxes on foreign imported goods].
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As a result of corporate pressure the Hawley-Smoot Tariff raised the
average tariff rate to the highest point in U.S. history.
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In retaliation foreign countries raised their tariffs and as result
American exports plunged and domestic companies suffered as did
the U.S. economy.
U.S. Senators Willis
Hawley and Reed
Smoot
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Millions of U.S. citizens pleaded with local and state governments for
financial assistance.
Bread and soup lines streamed down city streets throughout the
United States.
Local and state governments quickly ran out of funds to handle the
crisis.
Finally in 1932 outgoing President Herbert Hoover signed the
Emergency Relief and Construction Act which provided direct relief
financially for citizens by creating public works jobs [usually
construction] and emergency loans.
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http://explorepahistory.com/displayimage.php?imgI
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http://en.wikipedia.org/wiki/File:Warren_G_HardingHarris_%26_Ewing-crop.jpg
http://en.wikipedia.org/wiki/File:Teapot_WY_1.jpg
http://en.wikipedia.org/wiki/File:Calvin_CoolidgeGaro.jpg
http://en.wikipedia.org/wiki/File:Smoot_and_Hawley_
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