1920s: Boom and Bust Chapter 17 Sacco and Vanzetti 1921 Most publicized “red” case- and a representation of how fear throws reason out the window. Nicola Sacco and Bartolomeo Vanzetti (Italian immigrants) arrested for the murder of a factory guard in Massachusetts. The main “evidence” against them was that the men were known to be anarchists, atheists and draft dodgers. Sentenced to death in 1927- probably innocent- case overturned in 1977 The New Economy Wars are great for the economy (as long as you aren’t fighting at home) There was a brief recession as the war ended, but from 1923-29 there was widespread prosperity and expansion- due in part to the fact that we were the only major econ left standing after the war…..Business glorified againCalvin Coolidge said “the man who builds a factory builds a temple”. Economy was shifting- industry was becoming based in consumer goods (ready made clothes, appliances, electronics etc…) Prices had dropped, wages had risen; Americans had to spend far less on “necessities” and had more to spend on “luxuries”. Industrial productivity rises 70% White Collar Workers Increasing- in 1900 18% were, by 1930 44% were Transportation We are entering the age of the automobile. Model T introduced in 1908, and prices went down as manufacturing became more efficient. By 1920 you could buy one for $400, or pay for it on credit. General Motors founded. During the 1920s 23 million cars will be purchases- which will radically change American family and social life. Airplanes invented in 1903- and used in WWI (flying “aces”) Charles Lindbergh’s solo flight 1927 made him a national hero (with a dark side….) Amelia Earhart did it in 1931. Electricity Also hallmarks of the new consumer economy. By 1930 2/3 of homes had electricity (as opposed to 20% before the war) which could be used not only for light, but appliances like washing machines, refrigerators, vacuums etc…, and ½ had telephones. Again, prices for these products were dropping, so things that had been “luxuries” became commonplace –and people saw work not as a means to survive, but to be able to buy what you WANT Credit New concept- the installment plan. During the 1800s the focus had been on thrift, now consumers are encouraged to buy with “no money down”, but the idea of “saving” also fell off- people spend full income Advertising Another burgeoning industry. Buy something not because you NEED it, but because you WANT it and “You’re worth it”. Had learned from success of CPI during war. Celebrity endorsements, (esp moviestars) catchy slogans, impossible promises….it’s all there PR is also born. Businesses would hire people to promote (or repair) their “image” Radio Guglielmo Marconi (Italian Immigrant) invented radio in 1890. 1st radio station 1920 (KDKA Pittsburgh) broadcast presidential election of Warren Harding. NBC founded 1926, CBS 1927- by 1929 there were 10 million radios in the US Huge with advertising- and allowed people to experience things as they happened. Helped create a national culture- could be used for propaganda, entertainment, politics, almost anything. “Media” quickly becomes enormously influential. Changing American Lifestyles and Values 1920s witness the birth of a widespread popular culture that crosses class lines, age brackets, and regional zones. It was a little wild and crazy (reflecting the idea that the old world order had been destroyed in the chaos of war) and from this point- every generation pushes the boundaries Fads and Fashions This is the Jazz Age (named by F. Scott Fitzgerald), with flappers, drinking (illegally) and smoking in public, dancing in shocking ways to shocking music (Louis Armstrong, Duke Ellington and Ella Fitzgerald) all taking part in a “New Morality” that puts pleasure before all else, and opens up taboos. Professional Sports players and Movie Stars become the the new American Heroes. Silly competitions (flag sitting) Farmers and the New Economy WWI had been great for farmers (they were feeding Europe and US) but, it encouraged overproduction, and when war ended, prices began to drop, tens of thousands of farms were foreclosed in the 20s. Mechanization meant that fewer people needed to be farmers, and migration to cities continued (majority of Americans became Urban)Farming also represented a ever decreasing proportion of the economy, only 12.7% in 1929. Not really able to take part in the new “prosperity” of the consumer income- a gap is widening that will become very problematic their depression actually starts well before 1929. Decline of the Labor Movement Unions became associated with socialism (which they are), communism and other “radical” elements. After all, workplaces are much safer now (after progressive reforms) and many firms practice “Welfare Capitalism” (benefits like medical, pensions, even company sports teams) what else do workers need? Bloody summer of 1919 had seen 4 million workers on strike- and cost them public support. Many states passed open shop laws forbidding unions from forcing membership, and businesses created blacklists of “union agitators” The Women’s Movement 19th Amendment approved in Congress in 1919- ratified in 1920 But while women had the vote, most Americans did not question that they should remain in their traditional subordinate roles. Many felt that women needed additional legal “protections”, to prevent long work hours, or force men to pay child support. Divorce laws liberalized in many states- with preference for child custody going to the mother 1 in 6 marriages ends in divorce in the 1920s. Equal Rights Amendment proposed in early 1920s by Alice Paul- proposed eliminating all legal distinctions based on sex. Failed (as it did in the 1970s too) The Politics of Prosperity Political Pendulum (I like alliteration) swings away from progressive idealism, especially as it is discredited by “scientific” theories of Freud and the unconscious, or, IQ tests which show many people just aren’t that smart…. Political participation had been falling since 1896, and by 1924, only 50% of those eligible to vote do. Republicans control the white house and congress through the 20s, ushered in by Warren G Harding’s promise of a return to “normalcy”. This is where Republicans, the party of reform under TR and Taft, become more of their modern conservative selves (the progressive element had bolted in 1912) and adopt a “Business 1st” approach. Presidential Rankings: C-Span Survey, 2009 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Abraham Lincoln Franklin Roosevelt George Washington Theodore Roosevelt Harry Truman John Kennedy Thomas Jefferson Dwight Eisenhower Woodrow Wilson Ronald Reagan Lyndon Johnson James Polk Andrew Jackson James Monroe 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. Bill Clinton William McKinley John Adams George H.W. Bush John Quincy Adams James Madison Grover Cleveland Gerald Ford Ulysses Grant William Taft Jimmy Carter Calvin Coolidge Richard Nixon James Garfield 29. Zachary Taylor 30. Benjamin Harrison 31. Martin Van Buren 32. Chester Arthur 33. Rutherford Hayes 34. Herbert Hoover 35. John Tyler 36. George W. Bush 37. Millard Fillmore 38. Warren Harding 39. William Harrison 40. Franklin Pierce 41. Andrew Johnson 42. James Buchanan The Harding Years Believed in cooperation between business and government- with gov’t main job being to help business make $$. Harding himself was one of our more “ordinary” presidentsand that was his appeal. The public was tired of big personalities and crusades and speeches…Harding was just a normal guy. Though he loved to drink during prohibition, and was having and was having an affair (and illegitimate child) the whole time he was in White House PLUS… he also did a little spoils system…. And while some were good administrators, others were known as the “ohio gang” and maybe weren’t good choices for public trust, several were implicated and convicted of bribes etc….and therefore Harding ends up fairly far down the list of American leaders – and probably the “worst” Ohio President In 1923 Harding died (natural causes- though possibly stress induced), and his VP Calvin Coolidge took over. Teapot Dome and Arms Reduction The biggest scandal came to light after Harding died. Secretary of the Interior (Albert Fall) arranged for the transfer of naval oil reserves in Teapot Dome Wyoming to his department, and leased the land to private contractors- accepting a bribe of $400,000 to do so. Secretary Fall ends up in prison One of the best achievements of the Harding presidency was the Washington Naval Arms conference in 1922. League of Nations and US worked together to slow naval buildup, and create a ratio of ships for 5 major powers (US, Eng, Jap, Fr, Italy) 5-5-3-1.7-1.7 Calvin Coolidge Cabinet scandals did not scare people away from the Rep party, Coolidge won re-election easily in 1924 Nicknamed “Silent Cal”- he neither offered or achieved much change…kept tariffs high, taxes low, and businesses running smoothly. He was a believer in “trickle down” economics: keep things good for the rich (esp low taxes), and their wealth will be invested in business which will flow down to lower levels of society. Deliberately rejected programs that would help ordinary citizens or local issues, for ex, to help after a devastating flood that hit Mississippi, or building dams in Tennessee- these are jobs for local governments and charities- not the federal system. Decided not to run in 1928 with the following speech “I do not choose to run” A Return to Isolationism Wilson might have had a vision of the US exerting international influence, but we’re not so sure- there is a marked foreign policy retreat during the 20s exemplified by the fact that we don’t join the league of nations. We have occasional activities – like hosting the Washington Naval Conference on Arms reduction (look how well that worked) and stay strong on international economics Dawes plan: Both the US gov’t and private banks help European nations keep going in 20s – esp the Weimar republic in Germany, loaning them billions so they can keep making their reparations payments Conflicts Between Old and New Values Obviously not everyone was going to jump on board with new ideas… One group strongly opposed were Evangelical (Born Again) who resented the secular nature of the age, and the pushing of boundaries away from biblical standards Fought hard when pushed to try and maintain “traditional values” Civil Liberties During the war, the courts had used a strict interpretation of free speech, defining “freedom” rather narrowly, which carried over into 20s. Censorship of artistic works (esp in films, though many books banned as well – See Lost Generation on next slide) Justice Louis Brandeis instrumental in beginning shift- first as a dissenter- saying: ◦ “those who won our independence believed in the freedom to think as you will and speak as you think are indispensible to the discovery and spread of political truth” The Lost Generation Many people who had survived the war found themselves struggling to create a place in the world. Traditional values no longer seemed solid, emerging culture seemed shallow after all they had been through – what had all that death and sacrifice been about? Quest to find meaning inspired great art, esp in literature Great writers: ◦ TS Elliot- the Waste Land (a collection of poems about pessimism of the modern world) ◦ F Scott Fitzgerald- The Great Gatsby (the glamour and cruelty of materialistic society) ◦ Sinclair Lewis – Main Street (debunked small town hypocrisy) ◦ Ernest Hemingway- A Farewell to Arms (disillusionment of WWI) Ex-patriots- many young intellectuals left US- feeling stifled by artistic limitations on free speech. Scopes Trial In 1925 a Biology teacher named John Scopes was arrested in Tennessee for teaching evolution (which many fundamentalist Christians felt was representative of a “moral breakdown” in US Christian values- ACLU had asked for a teacher to challenge in order to get the case) Trial became a national sensation- and debate about freedom of thought. Clarence Darrow (pro) vs. William Jennings Bryan (against)- broadcast on the radio. Scopes found guilty, but case essentially disappeared. Evolution became more accepted in schools. (still controversial in some) Prohibition The last of the great progressive reforms- 18th amendment ratified in 1919, prohibiting the sale of alcohol. Unfortunately the age of reform had passed, and people weren’t really interested in restriction- they are interested in pushing boundaries- and this became one more thing to rebel against Volstead Act: set criminal penalties for sale- and created Prohibition Bureau within the Treasury Department. At first it seems to go well- by 1921 alcohol consumptions drops to 1/3 of where it had been in 1914…. But… Problems with Prohibition It’s hard to enforce a ban on something most people don’t think of as a real crime, plus there are loopholes. Doctors can “prescribe” alcohol, and it wasn’t a crime to manufacture or drink- just sell (bathtub gin) People still want alcohol, and were there is a demand, a supply will follow. Bootlegging became a huge business, bars become “speakeasies”. Organized crime really born in US during 1920sgangsters like Al Capone/Lucky Luciano made $$ off illegal alcohol, and took care of competition however they needed to- over 500 gangster related murders in Chicago in the 1920s, and once prohibition ended, gangsters moved on to gambling, prostitution, drugs etc… Bu 1929 alcohol consumption was 70% of what it had been in 1914- and the Volstead Act was a national joke Nativism, Immigration and Racism Red scare led to calls to restrict immigration- esp from southern and eastern Europe who are thought to be polluting “native” values (good news is- we now like Germans and Irish whom original “know nothings” had protested) 1921 Immigration Act: Congress limited immigration to 350,000 people a year, 1924 National Origins Act lowered to 164,000. It also set “quota system” saying that of those people allowed to come it could only represent 3% of that country’s immigrants in 1890 (heavily favoring western Europeans) Cut immigration in half- actually more people left the country in 1930 than arrived. No limitations on immigration from other parts of the Americas- significant numbers of Mexicans and French Canadians arrive KKK Revived in the 20s (Birth of a Nation 1915- great recruiting film- and 1st “blockbuster” movie in history)targeting not only African Americans, but immigrants, esp Communists, Catholics and Jews (you have to be a WASP to be KKK) In 1925 there are 5 million klansmenwho make no effort to hide activities saying that they are “cleansing” society (they are an extremist reaction to Jazz age shifts in morality) Eventually their violence (along with some other scandals like embezzlement and affairs) will discredit Cultural Pluralism The idea of a society that embraces ethnic diversity rather than attempting to suppress it. Some people looked at immigration restrictions, increased Klan activity, anti-semitism and anti-catholicism and saidwe need to change this…. Not saying people should assimilate, but boundaries of a good “American” don’t have to be so narrow. Anti Defamation League (B’nai B’rith) and NAACP, and National Catholic Welfare League fought discriminatory laws New interpretation of 14th Amendment: Citizenship means right to “live as you choose with out interference from the state” (will lead the way for right to privacy in later decades) Harlem Renaissance The same feelings of confidence and despair that existed in society overall could be found in the African American community as well. Had fought, worked, and still were not being allowed to move forward in society. So they decide to stop “apologizing” and revel in their own culture “I am Negro, and I am beautiful”. Creators of Ragtime (Scott Joplin) and Jazz (Louis Armstrong, Duke Ellington) Moved north from New Orleans- A generation of artists and writers made Harlem (Cotton Club) a center of poetry, music, and art that came from African inspiration (Chicago important as well) Langston Hughes- poet, voice of Harlem, disillusioned with society, but proud of culture. Marcus Garvey- Political leader. United Negro Improvement Movement- promoted return to Africa, which didn’t happen often, but spoke of racial pride, reclaiming roots, and separation by choice as superior group. Hoover in the White House Republicans ran Herbert Hoover in 1928, who was well qualified to be president- had served with distinction as head of Food Board in WWI and Secretary of Commerce for 2 administrations. Radio speeches (national campaigning) significant for the 1st time promising “Poverty will be banished from the nation, there will be a chicken in every pot”…and the Democrats ran Al Smith- a Catholic (Nativist uproar) Even a couple southern states vote for Hoover! As Hoover entered the white house in March of 1929 the US had never been more optimistic, more sure that they were heading towards and endlessly bright future….. What Goes Up….. The Great Depression The Stock Market Crash: Roots The Depression came from a variety of factors- a “perfect storm” of economic issues- and while the Crash was the explosion, it wasn’t really the start Overproduction of Agriculture all through 20s- falling crops prices meant farmers were losing $$, and therefore less able to buy manufactured goods (so overproduction there too) Many industries were weak- stuck in 1880s (cotton textile, RR, coal- the backbones of the 2nd IR). Uneven distribution of income and taxation from trickle down. Unstable banking system with no federal protection. Weak International econ b/c of war and tariffs Speculation in stocks- with buying “On the Margin” (10% down, which only works as long as value of stock goes up) Many people counseled caution- including Hoover “Easy Credit” was too easy- people in debt Results A Recession began in August of 1929, and then on October 29th 1929 (Black Tuesday) a selling frenzy began- which led to a dip, then a crash ($30 billion in “paper profits” lost in a month)…market and economy fall until rock bottom of July 1932 Major blame for gov’t comes not from letting crash happen…but for inactivity once it did…. A world wide issue….. As market had begun to stumble in early 1929, US had stopped making loans to Germany… which is how they had been paying their reparations to France and England, which is how France and England had been repaying their war loans to the US (House of Cards) As banks struggle in Europe and US with international $$ issues- they stop making loans to businesses, who then lay off workers, who then can’t buy goods Japan also very hard it- heavily dependent on exports to US (they fix it by shifting to military production…) Effect on the Economy At first it seemed impossible…things had been so good for so long- which is one reason that there was such panic as the fall started (which helped the bottom drop out entirely) By 1932- 5,761 banks (22%) had failed, and 20,000 businesses were bankrupt, business investment had dropped by 95%. 13 million Americans (25% of working population) were unemployed nationally- as high as 50% in certain areas- unskilled labor hit hardest (unemployment had been 3.2% in 1929) American confidence turns to despair The Great Depression Remember- Adam Smith says this is perfectly normal, and laissez faire capitalism is the American way (at that point) so gov’t should just ride it out, and things will take care of themselves eventually (the Depression actually ends up discrediting and destroying this as a viable theory) Hoover’s Policies Hoover is a Laissez Faire guy- and he genuinely thinks government “Interference” in the econ crisis will hurt American character he calls “Rugged Individualism” (determination overcomes adversity) Advocated “Volunteerism” urging all citizens to contribute to charities to ease suffering (he donated generously – his entire pres. salary) and asking business to economize where possible Raises the Tariff (Hawley Smoot Tariff 60%) to protect US Business, which actually made things worse as it restricted trade So as the economy continued to freefall….he did very little (though he did try, and paved way for new deal)….which is what puts him near the bottom of the list….. Presidential Rankings: C-Span Survey, 2009 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Abraham Lincoln Franklin Roosevelt George Washington Theodore Roosevelt Harry Truman John Kennedy Thomas Jefferson Dwight Eisenhower Woodrow Wilson Ronald Reagan Lyndon Johnson James Polk Andrew Jackson James Monroe 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. Bill Clinton William McKinley John Adams George H.W. Bush John Quincy Adams James Madison Grover Cleveland Gerald Ford Ulysses Grant William Taft Jimmy Carter Calvin Coolidge Richard Nixon James Garfield 29. Zachary Taylor 30. Benjamin Harrison 31. Martin Van Buren 32. Chester Arthur 33. Rutherford Hayes 34. Herbert Hoover 35. John Tyler 36. George W. Bush 37. Millard Fillmore 38. Warren Harding 39. William Harrison 40. Franklin Pierce 41. Andrew Johnson 42. James Buchanan Pump Priming Hoover did feel that the gov’t could put a LITTLE $$ into the econ to jump start. Gov’t hired people for public works projects (New Deal will do the same thing- just on a massive scale), Created an Agricultural Marketing Act (Farm Coops) and The Reconstruction Finance Corporation (RFC) to lend $500m to banks, who were then supposed to lend the $$ to start new businesses. None of these programs were really successful, Hoover wasn’t willing to create gov’t debt, so didn’t spend enough for programs to be effective. And administered foolishly too- gov’t would buy farm surplus, and throw it away rather than give “handouts” Bonus Army WWI Soldiers were owed a Bonuswhich was to be paid in 1945 (kind of random in the 1st place) 14,000 veterans marched on Washington in 1932- demanding the bonus. Senate refused to consider- though offered soldiers free tickets homeabout ½ accepted. But 5000 marchers lived in shanties for months and continued to lobby for their cause. Hoover called in army to clear marchers out their camps set on fire- 2 killed. Made hoover appear heartless to already angry Americans Assessment of Hoover Often criticized for “not doing enough” but he did advocate more direct gov’t intervention in the economy than any previous president. Prevented a more serious collapse (we could have been Weimar Republic) and paved way for new deal. BUT: Refusal of large scale relief resulted in increased misery – Hoover vetoed use of federal funds to be given directly to public, he thought that was socialistic and would destroy the nation’s work ethic.