usa in the 1920’s

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