roaring twenties

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By Moira C Cassidy

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By Moira Cassidy

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Page 1: Roaring twenties

By Moira C Cassidy

Page 2: Roaring twenties

- In the aftermath of World War I, a period of technological innovation and lenient laws for companies led to economic growth in the USA

- New technologies, especially automobiles, moving pictures (movies) and radio proliferated 'modernity' to a large part of the population.

Page 3: Roaring twenties

- Social change, especially for women, also took hold during this period

- In 1920, American women gained the right to vote for the first time

-But the prosperity of the “boom” was not experienced equally throughout US society

Page 4: Roaring twenties

Causes of Economic Growth: Industrialization & Consumerism

- Increased demand for American products began in WWI, and helped American industry grow - Factories began to produce goods more efficiently through assembly line practices

- As the Americans became more prosperous, a culture of consumerism grew

- For the first time in history, middle-class Americans could purchase expensive consumer goods like cars and home appliances

Page 5: Roaring twenties

Causes of Economic Growth: Government Deregulation

- Attempts at government intrusion into private business were consistently blocked in favor of a “laissez-faire” economic policy

- Corporations were encouraged to grow without restriction, often forming trusts and eliminating competition

- Both the Harding and Coolidge administrations rolled back income taxes on the wealthy and created tariffs blocking foreign goods from competing with American products

- In the later part of the decade "buying on margin" entered the American vocabulary, as more and more Americans over-extended themselves to speculate on the soaring stock market and expanding credit

Page 6: Roaring twenties
Page 7: Roaring twenties

Changing Values and “The American Dream”

- More so in the 1920s than ever before, Americans came to believe that they had a “right to prosperity”

- Whereas older generations valued saving money and living simply, during this period, advertising, leftover “war effort” sentiments, and the availability of consumer goods proliferated the idea that status and American identity was related to spending money

Page 8: Roaring twenties
Page 9: Roaring twenties

Trouble in the Farming Industry

- Though there was a massive boom in industry and consumer spending in the 1920s, other sectors of the economy, like farming and mining, remained stagnant

- After World War I, Europe no longer imported as much food from the United States

- Overproduction due to improved farming technology led to a decrease in the price of crops

- About half of Americans (60 million people) lived in rural areas and were directly effected by hardship in the farming industry

- Many rural Americans abandoned farming and moved to cities to seek employment in factories

- Black Americans suffered especially from this downturn, because they were mostly employed as agricultural laborers

Page 10: Roaring twenties
Page 11: Roaring twenties

Income Inequality

- Though the overall prosperity of the USA grew during the Boom, it grew unevenly.

- 42% of Americans lived below the poverty line, and could not pay for essentials like food, clothing and housing.

- Unemployment remained a problem. Though more goods were produced by the US economy, unemployment was the same at the start of the 1920s as it was at the peak of the Boom in 1929.

- Poverty limited consumer purchasing power, and especially effected blacks, hispanics and immigrants

Page 12: Roaring twenties

Growing Cities and Changing Values

- As more Americans moved away from small towns, traditional ways of life began to fall out of favor.

- Through radio and movies, Americans were exposed to new kinds of music and ideas like jazz and looser sexual morals.

- Some conservative groups fought back against these “daring” ideas, creating censorship laws in many states.

- Increased availability of contraception, divorce, and jobs gave women more freedom than ever before.

- In spite of increased freedom, gender discrimination was still normal. Women did not achieve equality with men and most stayed in traditional roles.

Page 13: Roaring twenties
Page 14: Roaring twenties
Page 15: Roaring twenties

Prejudice and Intolerance

- Groups such as the Klu Klux Klan (KKK) targeted blacks, hispanics, immigrants, communists, Jews and Catholics with intimidation, physical violence and even murder.

- The White Supremacy movement was strongest in the Midwest and the South, where white competed for jobs with immigrants and blacks.

- White Supremacist propaganda gained favor throughout the United States, including with President Wilson.

- Lynch mobs, which falsely accused minorities of crimes, were responsible for many deaths by hanging and cases of false imprisonment.

- Immigrants, Anarchists and Communists were also targets of discrimination and persecution during this period. During the “Red Scare” the US kept records on all suspected Communists and created immigration quotas.

Page 16: Roaring twenties
Page 17: Roaring twenties

Plight of Native Americans

During the nineteenth century the population of Native Americans dropped from 1.5 million to around 250,000 in 1920.

The US Government began to take notice of the problem of demographic and cultural collapse in Native communities in the 1920s.

Native Americans suffered extreme poverty, discrimination, and exploitation from businesses who took their land.

Native American children were sent to boarding schools and many lost touch with their language and culture.

1924 Native Americans were granted full citizenship of the USA.

Page 18: Roaring twenties
Page 19: Roaring twenties

Scopes Monkey Trial

In 1925 a Tennessee law prohibiting the instruction of Darwin's Theory of Evolution came under fire in a landmark court case.

A teacher named John Scopes deliberately broke the law so that he would have the opportunity to challenge it in court.

The trial was followed closesly by Americans in all parts of the country, and symbolized the struggle between progressive urban people and conservative rural people.

Ultimately, though Scopes was convicted of breaking the law, the spectacle of the trial shaped the perspectives of many Americans. The Fundamentalists came off looking foolish and the anti-evolution lobby was dealt a major blow.

Page 20: Roaring twenties

Prohibition, Gangsters & Corruption

In 1920, the powerful temperance movement lead to the adoption of the Volstead Act, outlawing the sale or consumption of alcohol.

The law was difficult to enforce and there was not enough money to make enforcement a priority, so many illegal sources of alcohol cropped up.

Some large breweries stayed in business by bribing or threatening local authorities. Alcohol was brought across the border from Canada and made in non-professional distilleries called “stills”. The alcohol made in homes and “stills” is called Moonshine, and was often poisonous.

Organized crime grew during this period, as Gangsters dominated the businesses of moonshining, smuggling, and running speak-easies (Illegal bars and social clubs where alcohol could be purchased).

Increased organized crime activity was tolerated in some places, like New York and Chicago, because of the power and social clout of mafias, and because of widespread corruption and bribery within the police and local government.

Prohibition was repealed in 1933, partially for economic reasons, and partially because it was so unpopular.

Page 21: Roaring twenties

The Stock Market Crash of 1929

The 1929 crash brought the Roaring Twenties shuddering to a halt.

The Wall Street Crash of 1929 (October 1929) was the most devastating stock market crash in the history of the United States. The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries.

As a result of the crash, the market lost over $30 billion in the space of two days. By 1932, the stock market had lost 89% of its value.

The decline in stock prices caused bankruptcies and severe macroeconomic difficulties including contraction of credit, business closures, firing of workers, bank failures, decline of the money supply. This increased unemployment and decreased consumer spending.

Page 22: Roaring twenties
Page 23: Roaring twenties

Causes of the Great Depression in the USA

It is widely agreed upon that the Stock Market Crash began a chain-reaction which ultimately led to the most devastating economic situation of the 20 th Century, the Great Depression.

During the Crash of 1929 preceding the Great Depression, margin requirements were only 10%. Brokerage firms, in other words, would lend $9 for every $1 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits all at once triggering multiple bank runs.

In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending. This caused businesses to stop growing, their worth fell, and bankruptcy increased. Productivity, trade and employment all fell, which caused a loss of confidence throughout the US & Europe. People began to hoard money instead of giving it to banks, and the cycle worsened.

Page 24: Roaring twenties

The Gold Standard, Loans, and the European Depression

During World War I, many European nations abandoned the gold standard, forced by the enormous costs of the war, which resulted in inflation.

Because of the huge reparations that Germany had to pay France, Germany began a credit-fueled period of growth in order to export and sell enough abroad to gain gold to pay back reparations. The U.S., as the world's gold sink, loaned money to Germany to industrialize, which was then the basis for Germany paying back France, and France paying back loans to the U.K. and U.S. This arrangement was called the Dawes Plan.

Following the war, most nations returned to the gold standard at the pre-war gold price (deflating their currencies), in part, because they hoped to recover the same value in gold that they had lent, and in part because the prevailing opinion at the time was that deflation was not a danger.

For the next decade, the problem of deflation plagued Europe, as deflation erodes the price of commodities while increasing the real value of debt.

Furthermore, after the Great Crash of 1929, European nations found it much more difficult to borrow money from the U.S. At the same time, high U.S. tariffs were making it much more difficult for them to sell their goods in U.S. markets. Without any source of revenue from foreign exchange to repay their loans, they began to default.

Page 25: Roaring twenties
Page 26: Roaring twenties

Consequences of the Depression in the US

The Great Depression was a time of massive poverty and unemployment. Urban workers struggled to feed themselves and their children, whereas farmers struggled to sell their crops.

Many people were forced out of their homes and jobs and became migrants, searching for work and food anywhere they could find it.

During the first three years of the Great Depression, under Hoover, very little was done to help those in need. The few social programs that existed did not have the resources to help everyone.

In the Great Plains of the US, the Dust Bowl ravaged farmland and forced farmers to migrate away from the central states to the coast seeking work.

Page 27: Roaring twenties
Page 28: Roaring twenties

Roosevelt's Election and the New Deal

Hoover was regarded as a “do-nothing” president because of his lack of response to the Great Depression. In 1932, the Democrats won a great political victory, gaining control of the Presidency and Congress.

In the first 100 days of Roosevelt's presidency, he created initiatives to restore American confidence in banks and the economy. The most important reforms were the passage of the Emergency Banking Act, the creation of the SEC (Securities & Exchange Commission), and the “Alphabet Agencies”. These agencies used government money to support public development projects and create jobs.

Roosevelt followed a Keynesian economic philosophy, as opposed to Hoover's belief in Supply Side economics. The debate about the merits of these philosophies continues today.

Over the next two terms of his presidency Roosevelt continued to push forward with more New Deal programs, including the Tennessee Valley Authority, the Wagner Act (which firmed up the role of unions), and the creation of the Social Security administration, which created a system of pensions for American workers and paid benefits to the disabled and unemployed.

Page 29: Roaring twenties

The Legacy of the New Deal

During Roosevelt's presidency many criticisms were leveled against the New Deal, both that the government had done too much to help struggling citizens, and that the government had done too little.

Republican opponents of Roosevelt's policies accused him of unfairly robbing from the rich, and creating socialist policies.

A Republican-led Supreme Court challenged Roosevelt's laws, until Roosevelt unsucessfully tried to have the justices replaced.

After his clash with the Supreme Court and the heavy criticism of his opponents during the election, Roosevelt began to scale back New Deal spending in the late Thirties.

This caused a minor recession, and the United States economy was not fully restored until the beginning of the Second World War.

Page 30: Roaring twenties

Recommendations on where to learn more about the Great Depression

Music:

Woody Guthrie's Recordings for the Library of Congress

Movies:

O Brother, Where Art Thou?

Bonnie and Clyde

The Grapes of Wrath

To Kill a Mockingbird

Mr. Smith Goes to Washington

Books:

Of Mice and Men

Page 31: Roaring twenties