USA in the 1920’sMs LeslieHistory 12
After WWIAmerican Business had done well in the
war.Europe continued to buy American goodsFordney-McCumber Act, 1922,
Created high tarrifs on imported goods to encourage local spending. Taxes were cut so the public would hav emore money to spend,
Laissez-faire attitude towards marker adopted – no government involvement with business
Changing climatePrivatization of telephone,
telegraph, cable lines, railwaysSoldiers returning home1920 – coal stikesWoodrow Wilson becomes ill after
Paris Peace Conference. Is replaced by Warren Harding in 1921.
Harding focuses on America
DepressionWorld in a depression
immediately after the warHarding cuts government
spendingBusiness allowed to work with
out regulation
ImmigrationTraditionally a nation of diversityStarting to get paranoid about ‘open
door’ policyFeared wage competition from foreigners1917 – minimum literacy rate for
immigrants and no more Asians1920 – Republican party wants a
stronger policy against ‘undesirables’ as they thought immigrants could not assimilate fast enough
Immigration con’t1921 – immigration at 357,000 a
year1924 reduced to 150,000 a yearRacial percentage of immigrants
to be on par with current population
Japanese immigration banned completely
Africans, Jews and Catholics also discriminated against
Ku-Klux KlanMembership increasing1920-25 there are 5 million
members (total US population ~ 100 million)
Mostly in the East and Mid-west where 75% of all African-Americans lived
Believed Jews, Blacks, Catholics, socialists and non-english speakers did not belong in America
KKKFeared their way of life being lostWould dress up in their white
sheets and terrorize with beatings, tar and feathering, and lynching
Harding ran on a campaign that said he was ‘the Finest pioneer blood, Anglo-Saxon, German, Scotch-Irish and Dutch’ so the government didn’t do much
KKKThe ‘Jim Crow’ laws in the South
were passed preventing blacks from using the same busses, hotels and schools as whites.
Many were barred from voting or participating in the judicial system.
Despite the rampant discrimination, First-Nations were granted full citizenship in 1924 and then forgotten about on reserves.
Prohibition on AlcoholStarted in WWIEnforced in the Constitution in the
Eighteenth Amendment in 1919 in the Volstead Act.
This amendment was to curb drunkenness and absenteeism from factories and improve society.
All the ban did was create a new generation of gangsters to illegally supply booze through the means of bootlegging.
Corrupt mayors, like Chicago’s Big Bill’ Thompson allowed the likes of Al Capone and John Torrio to operate openly.
Al Capone made as much at $100 million a year and had many judges, police and politicians on his payroll.
He wasn’t stopped until he was arrested for Not paying his taxes.
Harding himself continued to serve whiskey to White House guests.
Harding died of a heart attack in 1923 and was replaced by Calvin Coolidge (1923-29).
More ProhibitionCoolidge did little to enforce
prohibition either. By 1928 there were 30,000 ‘speak
easies’ in New York alone, twice as many as before prohibition.
Bootlegging made enormous profits that were invested into other criminal activities such as gambling and prostitution.
Prohibition was not dropped until 1933.
ProsperityLots of growth for industryRoad infrastructure increasedMore people owned cars,
telephones and radios
cars1925 – Henry Ford’s factories are
making a new car every 10 seconds.
Means more steels, rubber and glass needed
America had 5/6 of world’s carsMore road trips = more hotels or
restaurantsThe suburbs are born
11 million new homes built in 1924
Houses electrifiedVacuums and washing
machines!!
Changing Role of Women19th amendment gave women the right
to vote.WWI let them work outside the home,
they did not want to go back in10 million women gainfully employed by
1928Driving markets – Cotton industry took a
hit when fashion changed to sleeker skirts
Stopped wearing corsets – wale bone no longer needed.
General moodAmericans were generally better
off then ever before. Education was also increased
with literacy rates rising. Jazz clubs were prolific as well as
orchestras. There was little radical activity
and workers were happy.
The down sideAgriculture remained week Although machinery allowed farmers
to over-produce there was no one to sell the surplus too as the world’s nations were producing enough of their own food.
As a result food prices fell and farmers could no longer make enough money to pay their mortgages and the banks took their land.
Bad for industryOver production meant the goods had
less value with no one to buy them. Workers began to get laid off. Tariffs remained high and businesses
unregulated. Prices were inflated as a result.
Although business profits increased by 72%, wages only increased by 8%.
purchasing on credit became a way of life.
New PresidentCoolidge decided not to run for
election in 1928 and was replaced by Herbert Hoover (1929-33).
Hoover like other Americans believed the economy was unstoppable.
MarketsCompany stock and shares could be
bought on the ‘margin’, meaning the buyer pays a down payment and takes a loan out for the rest.
Stocks and shares were sold by ‘brokers’ who got their money from bank loans.
The brokers’ livelihood depended on finding buyers for their shares.
This is a system everyone bought in to.
About a million people bought in to these shares.
As shares rose in value a few began to sell of their shares to make a profit.
Beginning of the endBy 1927 the world economy had
slowed down and less people were consuming.
Housing starts were down, automobile sales were down and food sales were down.
People started to sell their stocks and shares.
The CrashThis created a panic in Oct 1929 and
everyone started to sell off their shares as soon as possible.
On ‘Black Tuesday’ (October 29th) 13 million shares were ‘dumped’.
The value for shares plummeted. Hundred of thousands of people
were now indebt as their shares were bought with credit and they sold for less then they were bought for.
Brokers and businessmen jumped out of their office windows on wall street.
Banks went bankrupt as they couldn’t collect on their loans.
And many lost their life savings.
World goes in to a Great Depression
More on that later