1921 | Commerce
Commerce
Russia's Communist Party announces a New Economic Policy (NEP) as industrial and agricultural production fall off and shortages in food, fuel, and transportation become acute. Sponsored by V. I. Lenin and approved by economists who include Nikolay Dmitriyevich Kondratev, 29, the NEP abolishes food levies to placate Russia's peasants and a limited grain tax is substituted. Some freedom of trade is restored to enable the peasants to dispose of their surpluses and some private commercial enterprises are permitted in the cities.
U.S. Secretary of State Hughes rejects a Russian plea for resumption of trade relations March 25. There will be no such trade so long as communism prevails, Hughes declares.
The Allied Reparations Committee announces in April that Germany owes 132 billion gold marks in war reparations, with the amount to be increased in the event that the defeated country is able to pay more; 1 billion gold marks is due by May 31, ultra-nationalists and some industrialists urge that the Weimar Republic refuse to pay; moderates persuade the government to adopt a "policy of fulfillment" in order to reestablish trust with a view to negotiating better terms. The Allies threaten to occupy the Ruhr if the money is not forthcoming, and the first tranche is finally paid in August, using money raised with a loan at London, where economist John Maynard Keynes ridicules reparations on economic, moral, and political grounds.
German industrialist Hugo Stinnes works to spur his country's economic recovery as he expands his holdings to Austria, the Balkans, Switzerland, Russia, and Argentina (see 1916), but he tries to abolish the 8-hour day in order to increase productivity, and he resists socialization.
British coal miners walk out of the pits March 31. British unemployment reaches 2.5 million in July but then begins a gradual drop to 1.2 million where it will remain until 1930. Seven million Britons take wage cuts; the unemployed receive allowances for dependent relatives (see 1920).
The British Medical Association estimates that a family of five needs 22s 6½d per week for food to maintain proper health, but as unemployment reaches its peak in July, the dole is 29s 3d per week, and rents in even the worst slum tenements average 6s per week.
Britain's national income falls to £1.804 billion, down from £2.021 billion in 1913; France's to 250 billion francs, down from 328 billion in 1913.
An Emergency Tariff Act signed into law May 27 raises duties on farm products such as meat, sugar, wheat, and wool, and embargoes German dyestuffs (see Fordney-McCumber Act, 1922).
The Budget and Accounting Act adopted by Congress June 10 creates the Bureau of the Budget, initially as part of the Treasury Department. Former president Woodrow Wilson vetoed a bill that would have required the president to prepare annual budgets for final disposition by the House and Senate, objecting that it barred the president from removing from office the chief government auditor (the comptroller), but President Harding has called a special session of Congress and urged passage of the budget bill. The General Accounting Office (GAO) created by the same measure is the first federally-funded arm of Congress since the Library of Congress was established in 1800. Headed by the comptroller general, the GAO will be a congressional watchdog on federal spending, conducting audits of federal government accounts.
U.S. workers strike as employers cut wages by 10 to 25 percent. United States Steel Corporation cuts wages three times during the year, and the Railroad Labor Board cuts wages 12 percent July 1.
The American Federation of Labor (AFL) elects Samuel Gompers president for the 40th time.
The United States has nearly 20,000 business failures; by September, nearly 3.5 million Americans are out of work. Secretary of Commerce Herbert Hoover serves as chairman of an Unemployment Conference convened by President Harding.
A Revenue Act approved by Congress November 23 repeals the corporate excess profits tax imposed during the Great War, reduces the minimum surtax rate from 65 to 50 percent (Secretary of the Treasury Andrew Mellon had urged a much deeper cut), and actually increases corporate income taxes from 10 to 12.5 percent. The nation has assumed a huge debt to prosecute the war and Congress has wrestled with the dilemma of meeting the demand for lower taxes and meeting the need to pay down the debt.
Columbia University medical school graduate Armand Hammer, 22, goes to Russia to help the Lenin government cope with its postwar disease plagues and collect $150,000 owed to his father's company for drugs shipped during the Allied blockade of Russian ports. Hammer's Russian-born father is in Sing Sing prison on an abortion conviction; the young physician travels to the Urals, barters a million tons of U.S. wheat for a fortune in furs, caviar, and precious stones, and meets late in August with V. I. Lenin, who persuades him to take a concession to operate an asbestos mine in the Urals. The mine will not be successful, but Hammer and his brother Victor, now 21, will open an export-import business at Moscow that will serve as agents for Ford Motor, Parker Pen, U.S. Rubber, Underwood Typewriter, and nearly three dozen other foreign companies.
The U.S. Supreme Court calls an Arizona picketing law unconstitutional. The 5-to-4 decision comes December 19 in the case of Truax v. Corrigan, but Justice Brandeis dissents from Chief Justice Taft's majority opinion.
The New York Curb Exchange moves into a new building of its own in Trinity Place following decades in which members have transacted business in all kinds of weather by signaling from curbstone street positions to clerks located in windows of surrounding buildings (see American Stock Exchange, 1953).
Wall Street's Dow Jones Industrial Average closes December 31 at 81.10, up from 71.95 at the end of 1920.