The USA Roaring 20s

Achieving Prosperity in the 1920s

Isolationism - 1919

Causes

• Americans didn't want more American's to be killed trying to keep the peace in Europe becaus they were rich
• They had made money producing the goods Europe needed, but couldn't produce, during war time
• They voted for Warren Harding who was a Republican and wanted to leave the Leauge of Nations
• They also rejected the Treaty of Versailles

Consequences

• Led to the Red Scare (keeping America exclusively for White Anglo Saxon Protestants) and to attempts trying to control immigration
• Lead to a Tarrif Policy

Mass Production

• Assembly lines were used to speed up production
• Each person only needed to be qualified for one part
• Henry Ford started it with the Model T being made every 10 seconds
• Prices decreased, and it helped other industries

Consumer Industries

• Advertisements tried to convince people to keep up with other people in their class/lifestyle
• Hire Purchase was introduced meaning paying for things over a period of time
• Mail order extended the market of goods beyod towns and cities

Republican Government policies

• Laissez faire was introduced meaning leaving things alone
• They didn't put controls on any industry or financial institutions

Tariff policies

Causes

• Wartime boom – Leaders wanted the boom to continue
• American wages – In Europe wages were lower and so products were cheaper unlike in America  but if tariffs were introduced Americans would buy USA products guaranteeing American jobs
• Isolation – USA felt it didn’t need the rest of the world
• Farming – Farmers were overproducing and wanted foreign crops out so they could sell and keep prices high
• Tariffs - 1921 - Emergency Tariff – introduced on food imports
• 1922 – Fordney McCumber Tarff – Placed higher tariffs on goods from countries with low 
• 1922 – Fordney McCumber Tarff – Placed higher tariffs on goods from countries with low wages
• Adjusted the tariff so the price was always higher than the US'

Consequences

• Made life more difficult for poor people
• Protected from foreign competition
• Retaliatory tariffs – tariffs from other countries on American goods
• Damaged global economy as America couldn’t trade

Achieving Prosperity in the 1920s

Purchases of shares

• In the 1920s the price of shares rose by 500% and the amount of shareholders rose from 4 million to 20 million
• People speculated and bought on the margin

Developments in entertainment

• The Jazz music industry boomed
• The movie industry boomed and by 1929 110 million were going
• It became affordable and500 films were being filmed a year

Divided Society in the 1920s

Rich vs Poor (poverty)

• The 3 main poverty stricken groups were the farmers, Black Americans and workers in old industries
• 60% Americans lived below the poverty line earning less than $200 a year
• Half of American people were farmers so there was overproduction causing food prices to drop and them to get lower pay
• Laissez faire meant the government didn’t provide a welfare or security system for the poor
• In some industries workers lost their jobs because the more efficient factories needed fewer workers
• On the other side the rich were enjoying a care free life living in the cycle of prosperity
• Increased demand for goods, causing increased production, causing increased employment, giving people more money

Divided Society in the 1920s

The Ku Klux Klan

• An organisation of white supremacists who launched a crusade to ‘save’ the USA
• Membership increased from 500 to 5 million between 1920 and 1925
• They only accepted White Anglo-Saxon Protestants (‘true Americans’)
• They felt their jobs were threatened by blacks and immigrants who could work for less
• They attacked black people but were often protected by police and judges who were members of the clan

Flappers

• Flapper girls were single young middle aged women who often had short bobbed hair and wore short dresses and engaged in active night life
• They wore lots of makeup and were often dancers at night clubs
• They rebelled against society and were looked down on by the older population

Divided Society in the 1920s

Prohibition

• Prohibition was a law stating making, selling or transporting alcohol was illegal in the USA
• It was caused by Poverty, Crime, Ill health, an Anti-German feeling, religious moral reasons and disrupted industry
• The Anti-Saloon League wanted alcohol banned
• It was not popular increasing illegal activity as people produced home-made alcohol which caused illness and death

Organised Crime

• Secret bars called speakeasies were set up selling alcohol smuggled from bootleggers
• Gangsters ran speakeasies and so gang murders increased as gangs fought for their ‘territory’
• Al Capone was a celebrity gangster who murdered 100s of people

The US Stock Exchange Collapse 1929

Over production

• Demand fell when customers had consumer goods causing factories to lose money and staff meaning less people could afford consumer goods

Unequal Distribution

• 60% of Americans were still below the poverty and they could not afford consumer goods

Tariff Policies

• Americans couldn’t sell goods elsewhere due to the retaliatory tariffs

Speculation

• People couldn’t pay back the money they were borrowing from the bank

Orange Umbrellas Threaten Showers

The US Stock Exchange Collapse 1929

The Wall Street Crash

• Confidence dipped in September 1929 causing share prices to fall
• Investors panicked and sold shares leading to tumbling prices
• Black Thursday – 13 million shares sold, prices were diving
• Bankers sold their shares to cover losses levelling the market
• Black Tuesday – 16 million shares sold leaving people broke

 Consequences

• Cycle of depression – Reduced demand for goods caused reduced production caused increased unemployment caused less money to spend
• Confidence in economy was destroyed
• More than 100,000 businesses shut down between 1929 and 1933
• There was a ‘run on the banks’ causing banks to collapseMany Americans lost all their money

Immigration controls

• Millions of immigrants were living in America who were poorly educated and had very low wages. They were of 100 nationalities
• White native born Americans were resentful of new arrivals and so they suffered increasing prejudice
• 1917 – Immigrants had to take a Literacy test before they could enter
• 1921 – An Emergency quota act began limiting the number of immigrants from each country to 3% of the amount in 1910
• In 1924 the National Origins Act reduced this number to 2% and pushed the date back to 1890
• 1927 – The quota from Europe was reduced to 150000 a year
• By 1933 only 23,000 immigrants were entering America each year
• Sacco and Vanzetti were 2 Italian immigrants  charged with the murder of 2 guards despite 107 immigrant witnesses proving them innocent