Roaring Twenties: USA 1918-1929

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USA's reaction to WW1 (failure to join the League

After WW1 the USA chose not to get involved in international affairs, this is known as ISOLATIONISM

Although the League of Nations was the American President, Woodrow Wilson's, idea, America never joined because Wilson needed the approval of Congress and most Americans didn't want to join, instead they favoured 'isolationism'

Americans didn't trust the League beacause:

  • Many were against the American involvement in WW1 and were upset of loss of life
  • They worried America would become obliged to interfere with conflicts that had nothing to do with them
  • The League was linked to the Treaty of Versailles which Germans and Austrians hated and as lots of US citizens were German or Austrian immigrants they also hated the Leauge
  • Some Americans were suspicious of the British and the French and worried the League would come under their control and America would be called upon to defend their colonies which the Americans also thought was wrong with their idea of democracy 
  • The cost would be high if they had to pay for expensive peace-keeping 
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Growth of Isolationism

The USA entered late so gained from WW1

  • The economy boomed as a result
  • The USA exported weapons and food to Europe during the war
  • The USA joined in 1917 and no fighting happened on American soil
  • After the war, European countries bought American goods with American loans

Cheap European imports were seen as a threat, business men worried that Americans would buy the cheaper imports than the slightly more expensive American produce meaning loss of American jobs, lower profits for US companies and less money from taxes

What did Warren G Harding do?

  • Elected president in 1921 he brought in the Emergency Tarrif Act
  • In 1922 the Fordney-McCucumber Tariff gave the president the power to change tariffs
  • Harding used his power to raise duties on factory and farm goods 

Immigration control was also introduced removing the 'open door policy' because the WASPS disliked this and a quota system was introduced.

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Prosperity in the 1920s

A time of plenty:

  • There was low unemployment, low inflation and low interest rates
  • Cities were rebuilt with tall skyscrapers, and major road building programmes underwent
  • Due to more people being able to afford items such as radios, washing machines, refrigerators, vacuum cleaners and telephones there was a massive consumer boom
  • Adverts encouraged more people to spend money and became a big business itself
  • Hire purchase made it easier for people to buy expensive items and encouraged the purchasing of luxury goods
  • Republican government policy also contributed with low income tax people had more money to spend and encouraged banks to lend money on easier terms

Stock Market Boom: -1.5 million Americans bought shares in the 1920s, before the price of shares began to rocket unrealistically in the 1928, there were sensible reasons for buying them - people were investing in a real boom in production and consumption. It began to go bad when people bought them on credit

1 in 12 jobs were related to the motor industry, car production also boosted industries such as steel and petrol, cars were made affordable due to a quick assembly line  The model-T cost under $300- By 1929 there were 5 cars for every American

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Who were the Americans in the early 1920s?

  • The old immigrants known as 'WASPs' where the first settlers coming from Europe - they were the most wealthy with most political power
  • The Native American Indians had moved about everywhere but were affected by immigrants- most unhappy group as they were forced onto reservations they lost their traditions
  • Black Americans had been brought over as slaves but slavery ended in 1865- they were mainly farmers or labourers in the south or worked in factories in the north
  • Southern and Eastern europeans moved to escape poverty and persecution- they were poor and thought of as expendable they were cheap labour
  • Hispanics came from central and southern America - Often worked on ranches as cowboys
  • Asians came from China and Japan and often worked in manual jobs such as on the railway - attracted by the goldrush
    Melting pot- this was what America was known as supposedly people lost their identity and became 'one'
    There were problems in the US due to huge unemployment: factory workers and 4 million soldiers
    The economy wasn't great: 1914-19 prices doubled and wages froze
    Employers had the upper hand and paid poor wages
    2 Communism parties were established in 1919
    Anarchists started bomb attacks 

 

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Economic Isolation Fordney-McCucumber

Fordney-McCucumber Tarrif Act, 1922

  • A high tarrif was put on all foreign goods- therefore more American goods were bought as they were cheaper
  • American businesses believed it would be the best way for prosperity to continue
  • Because famers had overproduced, and this was causing a depression, farmers thought that prices would go up and demand would be higher if they got rid of foreign competition

The scientific tarrif placed higher tarrifs on countries which had low wages

There was an American selling price meaning American goods were always cheaper

Effects:

  • There was barely any competition - farms and factories  prospered and the economy grew
  • Poorer people could not afford the higher prices
  • American firms became inefficient due to lack of competition
  • Other countries retailiated with tarrifs and American agriculture relied on exports
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Restricting flow of immigrants

Due to the result of the war and a feeling of nationalism, people began to question their 'open door policy'

  • There was a fear immigrants would provide cheap labour and take away jobs from Americans
  • There was a fear of new ideas, particularly communism, the 'Red Scare' became particularly strong after the revolution in Russia in 1917
  • Increased crime rates were blamed on immigrants

Immigration laws:

  • in 1917, Congress passed a law where everyone entering America needed to prove they could read a passage of English biased against eastern europe and asia
  • in 1921 the Immigration Quota act was introduced- 
    -The max number of immigrants per year was 357,000
    -The number of immigrants from any one country could not exceed 3% of the number from that country living in America during 1910
  • The Natural Origins act in 1924 reduced the number to 2% and to how it was in 1980

In 1929 the number of immigrants was 150,000 (Asian and black people could not migrate) 

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Why was their an economic boom in the 1920s?

What were the different factors that encouraged prosperity?

  • Resources- America had vast amounts of natural resources meaning they became a vast industrial power creating a sound basis for further expansions, America didn't have to rely on buying resources
  • WW1- America took over Europe's oversea's trade as well as supplying europe- it also speeded up technological change
  • Technological change- Plastics such as bakelite could be used cheaply in household products, conveyer belts and concrete mixers modernised existing industries and created new ones. The use of electricity was developed and provided power for factories and led to goods such as vacuum cleaners and refrigerators
  • Mass- Production - New technologies meant everything could be made quickly and effiecently making products cheaper. Henry Ford mass produced cars by creating a conveyer belt with an assembly line
  • Mass-Marketing - companies spent vast amounts on advertising. The expansion of mail-order comapanies meant everyone had access to more things
  • Credit- It made it easier for people to buy goods 
  • Confidence- People were more likely to take risks - take out shares and buy new things and try new ideas 
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Henry Ford's success

Ford's mass production method was revolutionary, he gave each worker one job which they stuck to and as a car passed them on a conveyer belt, they would carry out their instructions.

The advantages of this method were;

  • The process was faster and more effiecent
  • It was easier for the workers not having to know how to make a whole car
  • As it was faster it made it cheaper to produce cars, more people bought them
  • More jobs were created which created a cycle of prosperity
  • The quality of the cars were high as the workers were experts in their specific role
  • It stimulated the growth of industries as well as the building of roads and suburbs

The Model-T was so popular with Americans because it gave them a untasted sense of freedom, ecspecially those who lived and worked in rural areas that had never really had such an oppurunity to come into the city so easily

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How farmers didn't benefit from the boom:

Although in the 1920s many people had a higher state of living there were many still unaffected, these include the 30 million famers working in America.

Overfarming the field became a problem, this was largely due to machinery which made famring efficient but farmed more than was needed so there were huge surpluses which had been sold to Europe in WW1 but as they had finished in the war they were able to farm their own.

Canada was becoming experienced in farming and exporting so there was even more competition.

Due to overfarming, the price of grain had collapsed which brought ruin to many farmers

Many farmers were living on less than $1000 a year

Farmers often had to sell their land and move to Calafornia as migrant workers or to industrial cities

Large, mechanised farms prospered largely in Florida and California selling fruit

The amount of farms decreased for the first time

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How black citizens and new immigrants didn't benef

The majority of black people lived in the south as famr labourers or share croppers, many of these as well as the few who lived in the industrial north, also continued to suffer during the 1920s.

3/4 of black people lost their jobs during the decade and so many headed north and by 1930 25% of black people lived there, there they had more oppurtunities but less discrimination.

Hovever there was still discrimination, 60% of the black women in Milwaukee worked as low paid domestic servants simply because they weren't respected due to the colour of their skin.

Car factories would only hire black people in small quantities or they would have an all white policy

New immigrants also faced discrimination and would take whatever low paid jobs they could get and many worked in construction

However job oppurtunities became small when when the work became more mechanised and unemployment rates remained high during the decade and wages hardly increased (4%)

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Arguments for and against that the 1920s were boom

FOR

  • Prices dropped so more people were able to buy more products
  • Mass production meant more jobs, as well as more and cheaper products
  • Standard of living increased for the rich and middle class
  • People had an increased sense of freedom due to the ease of travel
  • People gained in confidence, encouraging them to take risks, try new things and buy more
  • Due to credit, people were encouraged to buy more
  • Society changed with more social freedom
  • White labourers were paid a lot
  • Women's jobs became easier

AGAINST

  • Working conditions for many became worse and safety was ignored
  • People were replaced by machines
  • Jobs were monotonous and people became bored and exhausted
  • 42% of people lived below the poverty line
  • People had to migrate to other cities
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Buying shares (on the margin)

When companies begin they need money, a good way to do this is through shares- people buying shares are investing in the company and receive a dividend (a share of the profits) and the shares can also be sold once bought (hopefully for more money!) 
The American stock market is based in Wall Street and is partly responsible for the boom as well as the crash...

The Americans took the process too far when they bought their shares on the margin- taking out loans and using them to buy stocks. People were allowed to do this due to the relaxed approach of the government who believed in a policy of 'laissez faire' and rugged individualism.

It was seen as something where people could get rich quick as people were doing little and gaining a lot. There was a lot of confidence from the people that prices of shares would carry on rising and in 1929 shares were on average 3 x the price they had been in 1919

This had a number of benefits:

  • People had more money to  spend on other things,
  • The businesses gained money
  • Banks mad lots of interest
  • Standard of living improved 


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Social change during the 1920s

Jazz:

  • A new form of music developed from early kinds of black music
  • Often played in nightclubs and also often in speakeasies associating itself with dangerous and exciting things added to the wild and dramatic sound, it became a craze

Women:

  • Women gained an increased sense of freedom (also greater wealth meant greater freedom)
  • It was an age of frivolity where fashions changed - women cut their hair short, smoked in public, wore rouge, lipstick and short skirts
  • The conduct of some middle age girls 'flappers' shocked parents when the stayed out late dancing
  • The older generation despised it and set up the Anti-Flirt Association

Sport:

  • American football and basketball were the most popular, radio also helped increase their poularity
  • People had more money and time and freedom to travel, making it easier to see a match
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Social change during the 1920s

Fads and crazes:

  • People would sit on top of flag poles for weeks simply to break a record and people would join in never-ending dance marathons
  • The crazes were encouraged by the media who owould report the adventures

Radio:

  • In 1920 $2million worth of radios were purchased. By 1929 it had increased to over 300 x that
  • 10 million homes had their own radio in 1929 and many young men and women would listen to jazz
  • Local and national stations were set up and lots of money was made by advertising and as people bought the consumer goods. Business boomed

Film and Hollywood:

  • By 1929 110 million Americans went to the cinema every week and 3 films were produced a week, the introduction of colour and sound played a hige part- the first talkie in1927
  • Nearly every town had their own cinema
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Summary- Roaring twenties

The 1920s were known as the 'Roaring Twenties' because:

  • People could afford to be frivolous because people had more money and leisure time 
  • The money people spent on entertainment stimulated industry to thrive and become bigger
  • Women had a new sense of freedom, they wanted to rebel against their parents
  • Technology gave people the oppurtunity to stay up late in dance halls with electric lights, technology also made work easier, creating free time and easy transportation
  • People were celebrating their lives after the war, making sure they lived to the full
  • All forms of entertainment were booming
  • People were optimistic and confident to try new things
  • Radio and cinema helped spread fads and crazes quickly
  • The prohibition outlawed alcohol, so when dance halls sold it, it made it daring and exciting

The roaring twenties were very much an urban thing- not rural where the effects were not really seen

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Prohibition and why it began

In January 1920, it became illegal to manufacture, distribute or sell alcohol. This was known as the PROHIBITION

  • pressure of prohibition had built up over a long time and some states were dry by 1917
  • temperence movements had been campaigning since the 19th century which were popular in rural areas and were often christian
  • it was claimed alcohol was to blame for violence, immoral behaviour, and the break down of family life
  • middle class blamed alchol for disorder among immigrants
  • business men blamed alcohol for making workers irresponsible
  • WW1 resulted in more support as many brewers had German origins
  • Opposition was mainly in the northern urban states

Saloons were closed down. Buying alcohol illegally was expensive so consuption decreased - ecspecially among the poor. The US authorities employed 1500 agents (2800+ later) to enforce the new amendment

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Effects of prohibition

People brewed their own beer called moonshine

  • the results were poor quality
  • often caused illness or death

In towns a whole new industry was created . People went to secret illegal bars called speakeasies

  • speakeasies sold alcohol from smugglers called bootleggers 
  • the distributers were mainly rum from the west indies and whisky from canada

The vast profits attracted gangs

  • rival gangs in cities fought to take over one another's territory and rackets
  • in Chicago 227 gangsters were murdered in 4 years without anyone being arrested
  • the gangsters operated protection rackets, prostitution and drug trafficking
  • the ban of alcohol had led to more crime
  • Al Capone, made $60million in one year
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Why did prohibition fail?

It finished in 1933 by President Roosevelt who's slogan was 'Lets go out and have a drink' 

 There was no public support or cooperation- no one thought it was wrong to have a drink and found ways to get round it

Even politicians who claimed to be behind the idea were hypocrites and would often expect alcohol at parties

There were more speakeasies than there had been bars

The authorities could do little about it and many were bribed to turn a blind eye to gangsters such as Al Capone

There weren't enough enforcement agents- only 4000 for the whole of America

Drinking alcohol wsa too profitable and popular to stop without massive forces

After the wall street crash they believed the alcohol industry might create some more jobs

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Al Capone

Al Capone was a famous gangster in Chicago during the 1920s, for many he was regarded as a hero for distrubuting the illegal substance everyone seemed to desire. Alcohol.

Capone was a rich man and in many ways a celebrity. His face ended up on time magazine - even after the scandalized Valentines Massacre affair in 1928 where public opinion dropped. Murdering in cold blood didn't keep him down for long. It seemed all was forgotten, he was regarded for many as a family man who gave generously to the poor as well as someone who opened up longed for clubs and brought in famous celebrities such as the awe-inspiring Duke Ellington.

Control of the gangs wasn't enough for Al, with the $60million he earnt from beer and liquor, the $5million from gambling, the $10million on protection rackets and the $10million from dance halls he was able to bribe the powerful and the influential. With $250,000 he got his own man 'Big Bill Thompson' elected as mayor.

America was a nation of hypocrites as the so called 'dry' politicians, officials, judges and police were bought off with money as well as parties with liquor

Nothing lasts for ever. Capone was eventually arrested for dodging taxes and spent many years behind bars

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Intolerance - KKK

  • The KKK belived that the WASPs were above everyone else, anti-communist, anti-*****, anti-jewish, anti-catholic and against all foreigners, they fought for native white 'supremacy'
  • In 1920 there were over 100,000 members and then increased to that of around 5million in 1925 though this number subsequently rapidly declined
  • WASPs were the only people allowed to join, members were often poor - people who believed that their jobs were threatened and of course, their jobs were much more important. Ha. However the rich and poweful didn't keep away including state politicians. The klan was the most powerful in southern states were there was a large black community and a history of slavery.
  • Secret and selective meetings, white robes, 'Klanversations' and nicknames weren't all for fun and games. They would form mobs and carry out lynchings, violence, beatings, **** and destroying homes all in cold blood whilst keeping their identities secret.
  • Against the people they didn't like they performed horrendous atrocities, black people were targeted the most. An occasional method of torture was tar and feather to humilate as well as cause immense pain and suffering.
  • Unfortunately members were influential, including police, judges, sherrifs and senators so punishing was difficult- a jury would likely be intimidated to find a member guilty
  • Most juries would also contain mostly white members who would be unlikely to find another white man guilty against a black man
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Causes of the wall street crash

There were many causes of the Wall Street Crash, most long term, although the panic and lack of confidence was the tip of the iceburg

  • Poverty of almost 50% of Americans was a long term cause
  • An unequal distribution of wealth meant that not enough Americans were buying goods from businessed when the richer population had bought the main necessities
  • Almost 50% were living on less than $2000 yearly, able to purchase only the bare minimum 
    Overproduction caused by efficient technology
  • Once most Americans that could afford the products had them, it was difficult to sell all that had been made, creating a large and expensive surplus
  • Companies were investing too much in resources and employees
    Trade, or lack of
  • The many surplus products were having trouble selling but countries couldn't afford the prices since they were still paying off their debts
    Buying on the margin
  • A risky scheme and when the share prices rose out of proportion, giving confidence but when in 1928 they didn't rise as much... people began to sell, causing a panic 
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Crash events

  • Saturday, 19 october 1929 - 3,488,100 shares were bought + sold. There was heavy trading as prices fell
  • Sunday, 20 october 1929 - The market was closed and the New York Time's headline read 'stocks driven down as wave of selling engulfs market'
  • Monday, 21 october 1929 - 6,091,871 shares changed hands, prices fell then rose as there were still some buyers
  • Tuesday, 22 october 1929- Prices rose again slightly :)
  • Wednesday 23 octover 1929 - The heavy selling of car company shares spread to other stocks. In the last hour 2,600,000 shares were sold at falling prices. Speculators who had bought on the margin were called by banks to put up more cash to pay their loans, to get this money they needed to sell shares
  • 'Black thursday' 24 october 1929 - 12,894,650 shares were traded, prices fell so panic set in and there was a wild scramble to sell. Sometimes no buyer coul be found. Prices fell
  • Friday 25 october 1929 - at mid day top bankers met to find a solution and decided to support the market. Prices steadied and then rose. Richard Whitney strolled around buying shares for more than their price
  • Saturday 26 october - Herbet Hoover made a speech that the fundemental part of their country is business
  • By the 29th it was the worst day on the stock market. All were badly hit
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Effect of the Wall Street Crash

Confidence was lost and many Americans had lost a lot of money and were in a lot of debt

Houses were repossessed and the banking system collapsed

There were riots and bankers had to bail people out

It led to the great depression

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Comments

laurenicole1802

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