The mood of isolation
Most Americans thought that WW1 didnt concern them, and only worried about the USA and not the rest of the world. Woodrow Wilson, Democrat president, proposed League of Nations to keep peace. He also had fourteen points which were the basis for peace after WW1.
Republican party voted in because candidate Warren Harding talked about a return to 'normalcy' - he wanted things to be like they were before the war. Republicans led by Henry Cabot Lodge.
Treaty of Versailles and League of Nations rejected by voting Harding as president. American historians believed that 'German atrocities' cooked up by British propaganda, and the USA didnt want to get involved.
Effects of isolationism
Isolationism weakened League Of Nations because USA kept of of European affairs.
Isolationism and fear of communism helped to create Red Scare; the idea that immigrants were communists.
Also, Americans wanted to keep the USA as WASP's only (White Anglo-Saxon Protestants), causing control in immigration.
Led to tariff policy, to keep foreign goods out of USA. Tariffs were good at first, helping USA goods sell, but eventually led to tariff war with other countries.
The Boom of the 20's
USA was the richest country in the world in the 20s when it went throught a period of economic prosperity.
Between 1920 and 29, number of cars on roads rose from 9 million to 26 million, and number of telephones increased from 13 million to 20 million.
Cycle of prosperity created; increased demand for goods ----> increased production ----> increased employment ----> more money to spend on goods ----> increased demand.....
American stock market on Wall Street, New York boomed becaue people became more confident.
Growth in Industry
Henry Ford created the assembly line, his aim was to make a car for the ordinary man and his family. This car was called the Model T, first produced in 1911, by the 20s one was produced every 10 seconds. They are all identical.
Assembly line allowed mass production to happen, thus prices could be lowered because so many models were being made. The cost of a Model T in 1911 was $850, in 1920 it was $295. Model T known as the 'Tin Lizzie' and became very popular.
The expansion of the car industry helped other industries like glass, steel and rubber grow because their materials were needed to make the cars. Other industries grew also, more radios, telephones, vacuum cleaners, refrigerators and ovens were owned than ever as the new 'gadgets' attracted Americans.
Causes of the boom
USA had lots of raw materials - land, people and oil. Industry grew during WW1 because USA sold food and weapons to Europe. New production techniques - mas production, assembly line, time and motion studies (looked at ways to make a workers task as quick as possible)
Hire purchase - the ability to pay for something in installments - allowed people to pay for goods easier. Mail order extended market for goods. Advertisements on TV, radio, on billboards and in newspapers tried to convince Americans they should 'keep up with the Joneses'.
Government policy - Republicans envouraged 'laissez-faire' (leave things alone). Government alos lowered taxes, and introduced tariffs to protect American goods (protectionism), making foreign good more expensive than American one. Stock market had bull market (rise in prices). Share prices rose 50% between 1921 and 29.
Tariffs are taxes on imported or exported goods. They reduced the amount of goods being imported, so for a short time they helped the economy as people bought American goods more. After war, high tariffs were imposed because of isolationism in the USA as people thought they didnt need the rest of the world.
Businessmen wanted tariffs to ensure the boom continued, Joseph Fordney claimed tariffs protected American jobs because people bought more goods from America, thus keeping people in jobs. Farmers wanted to keep foreign grain out of the USA to keep grain prices up, because overproduction was a problem for them.
Warren Harding passed an Emergency Tariff (May 1921) which increased duties on food imports, and the Fordney-McCumber Tariff - this made sure that tariffs on foreign goods were always higher than the price of an American good.
Effects of tariffs
Fordney-McCumber Act made highest tariffs in history, with the average import duty at 40%. Tariffs helped by protecting American agriculture and industry from foreign competition, the economy continued to boom.
But after a while, the cracks started to show: Tariffs were dificult for the poor, as they kept prices high. Without foreign competition, American firms became inneficient as high wages meant it was more difficult to produce goods. Other countries repsonded with retaliatory tariffs and sparked a tariff war, and American industry relied on exports, with the trade block this was one of the causes of the Great Depression.
Jazz was a new type of music of black origin, played in night clubs such as the Cotton Club in New York by musicians such as Duke Ellington and Louis Armstrong. Also, blues was popular too, played by guitarists such as W.C Handy. People bought radios and phonographs to listen to the music without going out. The number of radios rose from 60,000 in 1920 to 10 million in 1929. Radio stations made money by advertising, booming business.
The cinema was very popular in the 20s, more than 110 million went each week by 1929. It was an escape from the harsh, poverished reality of most people in the 20s. First movies were silent and black and white, but the first talkie was The Jazz Singer starring Al Jonson in 1927. By the 30s, films were in colour.
500 movies were made each year by companies such as Paramount and MGM. Most movies were made in Hollywood, starring stars such as Charlie Chaplin and Gloria Swanson. When Rudolph Valentino died in 1926, thousands of fans went to his funeral.
Fads and Flappers
After the war young people rebelled agianst their parents' rules and were purposely controversial. Young people turned away from the Waltz and turned to more fast-paced new dances such as the Charleston and the Bunny Hug. Young people went to the cinema, and listened to jazz. It appealed to them because it was wild and dramatic, and thought it was daring becuse of its black origin.
Flappers were young women with short, bobbed hair, tried to look flat-chested and wore short skirts and rouge lipstick. They smoked cigarettes, drove 'Tin Lizzies', some were openly lesbian. Young men wore pinstriped suits, hats and spats on their shoes.
The older generation disliked their behaviour, and the Anti Flirt Asscociation was set up to control the young. Famous personalities of the 20s included sportsmen, such as boxer Jack Dempsey and baseball player Babe Ruth.
Rich and poor
Not all Americans prospered. A survey done in 1929 shown that 60% of Americans lived below the poverty line (earned less than $2,000 per year).
Farmers struggled. With new machinery to produce food, like combine harvesters and tractors, there was overproduction of crops, causing food prices to go down. Couldn't pay mortgages or afford to employ workers, many sold their farms and went to California to work on fruit farms.
Black people too. Almost a million black farm workers lost their jobs in the 20s. Many moved to from southern to northern states to find work, as the south of America was very poverished, where people could only find jobs for low pay.
With new industries taking over, older industries like coal, cotton and textiles suffered. Coal was being replaced by new fuels; oil, gas and electricity. This led to job losses and mine closures.
More than 40 million people moved to America between 1850 and 1914. With American isolationist attitudes immigrants were feared, people thought they disrupted the population as they weren't WASPs, and the government started to restrict immigration.
Many Americans thought foreigners brought communist ideas to America, especially those from Eastern Europe and Asia. Also, people accused immigrants of taking their jobs because they were prepared to work long hours for less money.
There were a number of laws passed: The Immigration Law (1917) stated that all immigrants must be able to read and write English. The Emergency Quota Act (1921) meant that the number of immigrants coming to the USA from a certain country, couldn't be more than 3% of the amount of people of that nationality already living in the USA in 1910, it restricted the number of immigrants to 357,000. The National Origins Act (1924) reduced the quota to 2% and set back the date to 1890. By 1929, immigration from Asia was blocked completely.
The Red Scare was the idea that immigrants were communists, it was a consequence of isolationist attitudes in the USA. Immigrants treated badly, they'd generally live in parts of cities called immigrant ghettos, where crime was high and housing was poor.
After the Russian Revolution (1917) Americans became more afraid of communists, on 12 September 1920 two bombs were set off by anarchists outside Wall Street Stock Exchange. The bombs killed 38 people, and 400 were injured. The bombers were never captured. In response to this, Alexander Palmer, US attorney-general, arrested 10,000 people suspected of communism. These were called the 'Palmer Raids', any immigrants arrested were deported without trial.
Nicola Sacco and Bartolomeo Vanzetti were italian immigrants and open anarchists who suffered extreme injustice when they were charged with the murder of two guards in an armed robbery. Although there were 107 witnesses proving their innocence, they were executed anyway as most of them were Italian immigrants too.
The Ku Klux Klan (KKK) were white supremacists, who wanted to save the USA by removing people who weren't WASPs. These being black people, Jews, Catholics, immigrants from Southern and Eastern Europe and Asia.
They mainly targetted black people, and gang was strongest in the southern states because more black people lived there. Their methods involved lynching, ****** and setting fire to peoples homes. They dressed in long white robes, held ceremonies, and spoke in Klonversations.
Membership - In 1920 there were 5000 members, by 1925 there were nearly 5 million. Members were mainly white people who felt threatened by black people and immigrants, as they were willing to work for a lower wage.
No one was ever convicted of a crime because the government was corrupt with Klan members, judges; the police force and politicans were a part of it. However, in 1925, David Stephenson was convicted of ****** and killing a black woman on a train to Chicago, and after that membership fell.
The temperance groups 'Womens Christian Temperance Union' and the 'Anti Saloon League' campaigned for banning of alcohol, and they acheived their goal in 1919 when the 18th Ammendent made Prohibiton part of the US Constitution, and the Volstead Act was passed the same year which defined an alcoholic drink as any drink with more than 0.5% alcohol in it.
Some people made homemade alcohol called moonshine made from potatoes, but it could be poisonous and many died from it. Instead, most people went to speakeasies, secret bars, where people were only let in if they had a password.
Alcohol was imported by bootleggers, they brought in whisky from Canada and rum from the West Indies. By 1930 there were over 250,000 speakeasies in the USA, and 30,000 in New York alone.
Gangsters were attracted to the alcohol trade as it made a lot of money. The most famous gangsters of the 20s was Al Capone, with a gang of 700 men, who killed opposition, and operated in Chicago. He was a celebrity and many people of authority were in his pay. They ran speakeasies and protection rackets, and were involved in prostitution and drug trafficking. Gangs became a real problem, over four years 227 murders were commited and no one was convicted. In the St. Valentines Day massacre in 1929, Al Capones men shot 7 members of a rival gang led by 'Bugs' Moran.
4000 agents were employed by the Prohibtiion Bureau to keep control. Most were unsuccesful and took bribes, but the most notable were Izzy and Moe, they made nearly 5,000 arrests during their time as agents. They would sneak into speakeasies by saying they were Prohibition agents (the guard thought they were joking) and arrested everyone who consumed and sold alcohol in there. Franklin D Roosevelt repealed the 18th Amendment in December 1933, and the only crime they could convict Al Capone of was tax evasion, he went to prison in 1932.
Weaknesses in economy
Overproduction - once everyone had consumer goods, they didn't want to buy them again. Demand fell, so people laid off because they weren't needed, so people had less spending power.
Unequal distribution of wealth - 60% below the poverty line, money wasn't going into the pcokets of those who needed it most.
Tariffs - high American tariffs caused retaliatory tariffs from other contries, so businessmen had difficulty selling goods abroad.
Financial speculation - People bought shares 'on the margin', paid 10% of cot, then borrow remaining 90% from banks. This form of gambling was called 'speculation' in the stock market.
By 1928, share prices didn't really rise, and the 'bull' market turned into a 'bear' market.
Wall Street Crash
Black Thursday (24 October 1929) 13 million shares sold, prices kept falling. Some bankers spent 250,000 buying shares to encourage investors to buy instead of sell, it worked. But on Monday 28 October, over 9 million shares sold. Then, on Tuesday 29 October, 16 million shares sold at any price they could get. Shareholders lost $8 billion on that day alone.
Share prices finally 'bottomed out' in November, but damage was already done, and cycle of depression created. In 1929, 700 banks collapsed because there was a 'run' on the banks. They called in loans from people who didn't have that money, so people got homes repossessed, and companies closed down. From 1929-33, more than 100,000 businesses shut down.