Republican Policies

Case Study: Republican Policies

The impact of Republican Presidents during the 'Roaring Twenties'

The USA was led by three Republican Presidents during the 1920s. They were Warren Harding (1921-1923), Calvin Coolidge (1923-1929) and Herbert Hoover (1929-1933).
All three Presidents had quite similar policies.

They officially followed a laissez-faire policy.

They believed the government should interfere in the economy as little as possible so big businesses could expand without being held back by the government. They feared too much interference would upset the natural patterns in the economy.
Banks and the stock market were left unregulated.
There were occasions when they did take action however, on these occasions, they normally gave businesses what they wanted.
They hoped helping businesses would have a “trickle-down effect.
They encouraged employers to break the power of trade unions and strikers because they believed they were interfering with the economic boom.

They increased protectionism.

To do this, the Fordney-McCumber Tariff Act 1922 imposed high tariffs (taxes) on goods from other countries. This made foreign products more expensive than domestic goods which encouraged Americans to buy only American goods.

They encouraged people to depend on themselves and not the government.

Tax cuts were introduced.

Warren Harding (1921-23)

Harding increased protectionism to a record level, through the Fordney-McCumber Tariff Act 1922, in order to reduce competition from imported goods.
He passed the Capper-Volstead Act 1922 and the Agricultural Credits Act 1923 to help farmers.
He also reduced taxes.
This was because it would leave businesses with more money to grow and encourage Americans to work harder and to be consumers.
He balanced the budget by cutting government spending.
He gave government posts to his friends, some of whom were involved in taking bribes from big businesses, for example in the Teapot Dome scandal.

Calvin Coolidge (1923-29)

Coolidge stuck to the same policies as Harding (protectionism and laissez-faire). He had a huge respect for businessmen and he gave them the freedom to make a profit and become rich.
He said: “The business of America is business”.

Herbert Hoover (1929-33)

Hoover became President in 1929 following his promise to put two chickens in every cooking pot and a car in every garage.
He believed in laissez-faire, but also in rugged individualism.
This meant people should be self-reliant and not depend on the government for help. They should solve their own problems by working harder.
He also believed in voluntarism and that the poor was the responsibility of state governments, not the Federal government.
The impact of all of these policies was mixed

Summary

Laissez-faire meant pioneers had the freedom to develop new industries. However, it also hindered economic growth because the government did not stop big businesses forming monopolies and cartels. Too many small, unregulated banks emerged and the stock market was not monitored properly.
Protectionism did protect some American goods from foreign competition, but it also meant other countries retaliated with tariffs on American exports.