America was in a fortunate position when the first world war had ended. The war hadn't damaged American society, in fact as America had sold weapons and food supplies to Britain there was an increased demand for American goods, resulting in a rapid growth in industry and agriculture. Between 1919 and 1920, America's GNP rose from $78 billion to $104 billion, the number of houses with radios rose from 60,000 to 10 million, and the number of airline passengers rose from under 6000 in '26 to 173,000 in '29.
Jobs were easy to find and paid better than before. The link between prosperity and social change was evident, for example middle-class women were able to enjoy greater social freedom- they wore make up, shorter skirts, and smoked and kissed in public. The motor industry grew rapidly thanks to Henry Ford, and as cars drove off production lines there was an increased need for rubber, glass, and leather, to make tyres, windscreens, and seats.
The cycle of propserity soon began; there was an increased demand for consumer goods (consumerism), which lead to an increased production of these goods, meaning that there was more employment and more money available to spend on the consumer goods, leading back to an increased demand.
Causes of the Boom
Policies of Presidents: The Republican government, under the presidency of Harding, Coolidge, and Hoover, kept a policy of 'Laissez Faire' which meant that they left businesses alone. They had low taxes but kept high tariffs on imported goods to limit foreign competition They also kept a policy of isolationism, meaning that they kept out of foreign affairs.
Credit and Confidence: The 'buy now, pay later' scheme was introduced, which meant that there was more money available for people to buy consumer goods. People also gained confidence by buying shares and selling them again once their value had increased to make more money.
Natural Resources and New Technology: Coal, oil, and other natural resources industries, including agriculture, increased greatly during this time. New technology, especially electricals, were developed in this time, such as radios, and fridges.
Marketing and Manufacturing: Companies were making much more money as the demand for consumer goods increased. The production line was introduced by Henry Ford who used them to make cars, which meant that people could travel easier and were able to live in the suburbs.
Jazz was very popular during the 20s, it had originated in the South and was loved by youth as it was thought of as rebellious to be listening to music that was different and new. Famous jazz musicians included Louis Armstrong and Bessie Smith. New dances such as the Charleston and Black Bottom evolved. The radio grew and succeeded because of advertising; most houses owned a radio.
Cinema's became very popular, and were a large influence on people's fashion and behaviour. Movies were silent and in black and white, and featured film stars such as Charlie Chaplin; it was the start of hollywood.
Sports such as baseball were also popular at the time, crowds flocked to watches baseball games with favourites like Babe Ruth. Boxing was also popular after the first world war.
Problems with the Boom
Industry and Agriculture: For many farmers in the '20s there was a constant struggle against poverty. During WWI farmers were encouraged to grow as much food as they could, this continued in the 20s until there was more cotton and wheat than they could sell; overproduction was a large problem as the population was falling. As prices dropped, many farmers lived in unhygienic conditions without electricity or running water, they were earning around $49 a month. 3/4 million farm workers became unemployed and farm income dropped from $22 billion in '19 to $13 billion in '28. Europe important less food after the war in response to the US tariff that stopped Europe exporting to the US. General unemployment was high, with 42% of Americans below the poverty line, and workers in industry recieving low wages- especially women. Only 5% of the American population owned a third of the country's wealth.
Racisme: Before WWI, many Americans saw their country as a place where people could live in harmony despite their differences. The Statue of Liberty symbolised the welcome offered to everyone who entered America. But this changed due to the red scare- fear of communism spreading, and due to the fear of immigrants filling the country and taking jobs. Racisme began to increase at the revivial of the KKK in the deep South, which soon spread to other parts of America.
Fear of immigrants was increasing rapdily, so the goverment made a direct response to this fear of radicals; The Emergency Quota Act of 1921 and the National Origins Act of 1924 were introduced. These quotas restricted the amount of immigrants being allowed into the country, especially limited those from South-East Europe.
The Ku Klux Klan
The KKK was a white supremacy organisation that was revived in 1915 by William J Simmons. They were mainly based on religion- White Angelo Saxon Protestants (WASPs) and believed that African-American deserved a lower/no place in society. They causes terror amoung the African- American population through violent attacks of lynching, burning and various forms of murder. The organisation had great political power, and were an influence through governers, lawyers, police, and doctors. By 1924 it had reached 4.5 million members, and in 1925 it's 'Grand Wizard' had been convicted of **** and murder.
In 1920, the 18th Ammendment of the Volstead Act was passed, making the manufacture, selling, and buying of alcohol illegal. The reasons that prohibition came about is because of the temperance movement- people such as the Anti-Saloon League and conservative, rurual, christian ,and protestant women believed that that alcohol lead to poverty and damaged family life, and that it was wrong for it to be enjoyed while the country's young men were at war. Furthermore, a ban on alcohol would boost supplies of improtant grains like barley.
Initially levels of alcohol consumption fell by 30% in the early 1920s. However there weren't enough prohibition agents to enforce this law (only 1500 in '20) and the size of America's boundaries made it hard for them to control alcohol being smuggled. Speakeasies and bootleggers sold alcohol across the country, in Chicago you could even get it in under 30 minutes. As pharmacy's were able to legally sell 'medicinal whiskey' to treat everything from toothaches to the flu, people were able to get legal prescribed alcohol every 10 days- many speakeasies opened in this way. Crime soon became normal and gang leaders like Al Capone were popular celebrities and fought for control of Chicago's speakeasies. Between 1927 and 1930 more than 500 gangland murders took place, including the infamous St Valentine's Day massacre in '29 where Capone's men killed seven members of Moran's gang while Capone lay innocently on a beach in Florida. Prohibition ended in 1933.
The Wall Street Crash & Causes
The wall street crash left 13 million people unemployed, living in conditions close to famine, in shacks made from metal and boxes, one family even moved into a cave in central park. Stock market shares went down dramatically, leaving many in irretrieval debts.
Some of the main causes of the crash include; overproduction- too many goods were being produced and not enough was being bought, unequal distribution of wealth, too much speculation- people were buying too many shares and getting loans to pay for them that they were unable to pay back, share prices collapsed so selling shares was not enough to retrieve people from their debt, high import duties- America's import was too good meaning that few countries were buying their imported goods so the country was making little money, and the world financial crisis- many countries had borrowed from each other during the war and were left in debt.