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Politics of the 1920s
Resources on Specific Issues
Harding Administration (1921-1923)
Teapot Dome Scandal
The Teapot Dome oil reserve scandal began during the administration of President Harding. In 1921, by
executive order of the President, control of naval oil reserves at Teapot Dome, Wyo., and at Elk Hills, Calif.,
was transferred from the Navy Dept. to the Dept. of the Interior. The oil reserves had been set aside for the
navy by President Wilson. In 1922, Albert B. Fall, U.S. Secretary of the Interior, leased, without competitive
bidding, the Teapot Dome fields to Harry F. Sinclair, an oil operator, and the field at Elk Hills, Calif., to
Edward L. Doheny. These transactions became (1922–23) the subject of a Senate investigation conducted by
Sen. Thomas J. Walsh. It was found that in 1921, Doheny had lent Fall $100,000, interest-free, and that upon
Fall's retirement as Secretary of the Interior (Mar., 1923) Sinclair also “loaned” him a large amount of money.
The investigation led to criminal prosecutions. The oil fields were restored to the U.S. government through a
Supreme Court decision in 1927.
Source: infoplease.com
Immigration Quota Act (1921)
In the United States, the (Immigration) Emergency Quota Act of May 19, 1921 limited the annual number of
immigrants who could be admitted from any country to 3% of the number of persons from that country living
in the United States in 1910, according to Census figures. That was 357,802 people. Of that number just over
half was allocated for northern and western Europeans, and the remainder for eastern and southern Europeans,
a 75% reduction from prior years. The act was passed in a time of swelling isolationism following World War
I.
Source: Wikipedia
Fordney-McCumber Tariff, 1922
One of the first legislative trends of the Sixty-Seventh Congress (1921-23) was the Republican leadership's
marshaling of their overwhelming majorities in both the House and Senate to return the nation’s tariff policy
to protectionism. The Fordney-McCumber Tariff provided for raising tariff rates to their highest level to that
time, exceeding those provided by an earlier Republican Congress in the Payne-Aldrich Tariff (1909).
As a matter of actual practice, the Republican presidents of the 1920s predictably ignored recommendations
to lower tariff rates, but regularly offered protection to American producers by raising rates when given the
opportunity. The impact of the Fordney-McCumber Act was considerable. Rising tariff barriers in the U.S.
made it more difficult for European nations to conduct trade and, resultantly, to pay off their war debts.
Further, the protective shield against foreign competition enabled the growth of monopolies in many
American industries. Predictably, other nations resented the American policy, protested without result, and
eventually resorted to raising their own tariff rates against American-made goods, thus creating a significant
decline in international trade.
Source: http://www.u-s-history.com/
Washington Naval Arms Conference
The Washington Naval Conference was a diplomatic conference, called by the administration of President
Warren G. Harding and held in Washington, D.C. from November 1921 to February 1922. It was attended by
nine nations having interests in the Pacific Ocean and East Asia. It was the first international conference held
in the United States and the first disarmament conference in history.
It resulted in three major treaties:
 By the Four-Power Treaty, all parties agreement to maintain the status quo in the Pacific, by
respecting the Pacific holdings of the other countries signing the agreement, not seeking further
territorial expansion
 Five-Power Treaty, limited the naval armaments of its five signatories: the United States, the British
Empire, Japan, France, and Italy.
 The Nine-Power Treaty was a treaty affirming the sovereignty and territorial integrity of China as per
the Open Door Policy, signed by all of the attendees to the Washington Naval Conference.
Source: Wikipedia
Coolidge Administration (1923-1929)
Immigration Act of 1924
The United States Immigration Act of 1924, also known as the National Origins Act, limited the number of
immigrants who could be admitted from any country to 2% of the number of person from that country who
were already living in the United States in 1890 according to the census of 1890. It superseded the 1921
Emergency Quota Act. The law was aimed at further restricting the Southern and Eastern Europeans who had
begun to enter the country in large numbers beginning in the 1890s, as well as East Asians and Asian Indians,
who were prohibited from immigrating entirely. It set no limits on immigration from Latin America.
It passed with strong congressional support. Some of its strongest supporters were influenced by Madison
Grant and his 1916 book, The Passing of the Great Race. Grant was a eugenicist and advocate of the racial
hygiene theory. His data, which is now considered by the vast majority of scientists to be flawed, purported to
show the superiority of the founding Northern European races.
As an example of its effect, in the ten years following 1900 about 200,000 Italians immigrated every year.
With the imposition of the 1924 quota, only 4,000 per year were allowed. At the same time, the annual quota
for Germany was over 57,000. 86% of the 165,000 permitted entries were from the British Isles, France,
Germany, and other Northern European countries. The quotas remained in place with minor alterations until
the Immigration and Nationality Act of 1965.
Source: Wikipedia
Coolidge Vetoes the McNary-Haugen Farm Relief Bill: 1924-1928 Coolidge's taxation policy, and that of
his Secretary of the Treasury, Andrew Mellon, was that taxes should be lower and that fewer people should
have to pay them. The Congress agreed, and the tax burden on Americans was reduced in Coolidge's term. To
pay for these tax cuts, Coolidge proposed reciprocal reductions in federal expenditures and retiring some of
the federal debt. To that end, Coolidge declined to sign some of the spending the Congress approved. He
vetoed the proposed McNary-Haugen Farm Relief Bill of 1926, designed to allow the federal government to
purchase agricultural surpluses and sell them abroad at lowered prices. Coolidge declared that agriculture
must stand "on an independent business basis," and said that "government control cannot be divorced from
political control. He favored instead Herbert Hoover's approach of modernizing agriculture to create profits
rather than manipulating prices. When the bill passed again in 1927, he vetoed it again.
Source: http://www.reference.com/browse/wiki/Calvin_Coolidge
Tax Policies of Andrew Mellon
Andrew Mellon was appointed Secretary of the Treasury and became a member of the Cabinet put together by
President Warren G. Harding in 1921. The President, in his address on March 4, 1921, had called for a prompt
and thorough revision of the tax system, an emergency tariff act, readjustment of war taxes and creation of a
Federal budget system, among others.
Secretary Mellon believed that high taxes increased the cost of living, and that, as far as possible, taxes should
be reduced and the cost of living lowered. He proceeded, therefore, as he repeatedly pointed out to Congress,
to attack the fixed expenses, especially interest on the public debt paid out by the Government. He acted to
reduce the public debt, and as it was paid off, the interest charges became less, thus effecting a saving each
year in the Government's budget expenses. With these lowered expenses, taxes could also be lowered.
Mellon believed that the government should give tax breaks to large corporations, allegedly so that money
could "trickle down" to the general public, in the form of extra jobs.
In November 1923, Secretary Mellon presented to the Chairman of the House Ways and Means Committee a
letter in which he outlined what has come to be known as "Mellon Plan". It was a program for tax reform
based upon the idea of lowering taxes out of surplus revenues. It subsequently became law as the Revenue
Act of 1924, although without some of the reforms Mellon advocated. It did reduce the taxpayers' bill by
some $400 million annually over what would have been collected if the 1921 tax rates had remained in effect.
Mellon reduced the public debt (largely inherited from World War I obligations) from almost $26 billion in
1921 to about $16 billion in 1930, when the depression caused it to rise again.
Source: Wikipedia
Kellogg-Briand Pact (1928)
Kellogg-Briand Pact , agreement, signed Aug. 27, 1928, condemning “recourse to war for the solution of
international controversies.” In June, 1927, Aristide Briand, foreign minister of France, proposed to the U.S.
government a treaty outlawing war between the two countries. Frank B. Kellogg, the U.S. Secretary of State,
returned a proposal for a general pact against war, and after prolonged negotiations the Pact of Paris was
signed by 15 nations. The contracting parties agreed that settlement of all conflicts that might arise among
them should be sought only by peaceful means and that war was to be renounced as an instrument of national
policy. Although 62 nations ultimately ratified the pact, its effectiveness was minimized by its failure to
provide measures of enforcement. The pact never made a meaningful contribution to international order.
[Source: The Columbia Electronic Encyclopedia]
Dawes Plan—See American Pageant, p. 756-757
Hoover Administration (1929-1933)
Smoot-Hawley Tariff Act (1930)
The Hawley-Smoot or Smoot-Hawley Tariff Act raised US tariffs on over 20,000 imported goods to record
levels, and, in the opinion of many economists, protracted or even initiated the Great Depression. U.S.
President Herbert Hoover signed the act into law on June 17, 1930.
The act was championed by Senator Reed Smoot, a Republican from Utah, and Representative Willis C.
Hawley, a Republican from Oregon. President Herbert Hoover had asked Congress for a downward revision
in rates, but Congress raised rates instead. While many economists urged a veto, Hoover thought he could
finesse the law through the U. S. Tariff Commission, and signed the bill.
The Smoot-Hawley Tariff Act "imposed an effective tax rate of 60% on more than 3,200 products and
materials imported into the US," wrote Richard M. Salsman. "Tariff rates had quadrupled."
Although the tariff act was passed after the stock-market Crash of 1929, many economic historians consider it
a factor in deepening the Great Depression. Unemployment was at a troublesome 9 % in 1930, when the
Smoot-Hawley tariff was passed, but it jumped to 16 % unemployment the next year and 25 % unemployment
two years after that. The annual rate of unemployment in the United States never got back down to the 9 %
level again during the entire decade of the 1930s.
As countries resorted to protectionism, the general amount of international trade radically decreased, causing
the world economy to slow.
[source: Wikipedia]
Hoovers’s Response to the Depression: See American Pageant, Ch. 32
The Bonus Army
Thousands of World War I veterans and their families demonstrated and camped out in Washington, D.C.,
during June 1932, calling for immediate payment of a bonus that had been promised by the Adjusted Service
Certificate Law for payment in 1924. Although offered money by Congress to return home, some members of
the "Bonus army" remained. Washington police attempted to remove the demonstrators from their camp, but
they were unsuccessful and the conflict grew. Hoover sent U.S. Army forces, led by General Douglas
MacArthur and aided by junior officers Dwight D. Eisenhower and George S. Patton to stop a march.
MacArthur, believing he was fighting a communist revolution, chose to clear out the camp with military
force. In the ensuing clash, hundreds of civilians were injured and several were killed. The incident was a
black eye for Hoover in the 1932 election.
[Source: Wikipedia]
Stimson Doctrine
The Stimson Doctrine is a policy of the United States government, enunciated in a note of January 7 1932 to
Japan and China, of non-recognition of international territorial changes effected by force.
Named after Henry L. Stimson, United States Secretary of State in the Hoover Administration (1929–1933),
the policy followed Japan's unilateral seizure of Manchuria in north-eastern China following action by
Japanese soldiers at Mukden (now Shenyang), on September 18 1931.
Good Neighbor Policy—See American Pageant p. 768