USA in the 1920’s

1. USA in the 1920’s Ms Leslie History 12

2. After WWI • American Business had done well in the war. • Europe continued to buy American goods • Fordney-McCumber Act, 1922, Created high tarrifs on imported goods to encourage local spending. Taxes were cut so the public would havemore money to spend, • Laissez-faire attitude towards marker adopted – no government involvement with business

3. Changing climate • Privatization of telephone, telegraph, cable lines, railways • Soldiers returning home • 1920 – coal stikes • Woodrow Wilson becomes ill after Paris Peace Conference. Is replaced by Warren Harding in 1921. • Harding focuses on America

4. Depression • World in a depression immediately after the war • Harding cuts government spending • Business allowed to work with out regulation

5. Immigration • Traditionally a nation of diversity • Starting to get paranoid about ‘open door’ policy • Feared wage competition from foreigners • 1917 – minimum literacy rate for immigrants and no more Asians • 1920 – Republican party wants a stronger policy against ‘undesirables’ as they thought immigrants could not assimilate fast enough

6. Immigration con’t • 1921 – immigration at 357,000 a year • 1924 reduced to 150,000 a year • Racial percentage of immigrants to be on par with current population • Japanese immigration banned completely • Africans, Jews and Catholics also discriminated against

7. Ku-Klux Klan • Membership increasing • 1920-25 there are 5 million members (total US population ~ 100 million) • Mostly in the East and Mid-west where 75% of all African-Americans lived • Believed Jews, Blacks, Catholics, socialists and non-english speakers did not belong in America

8. KKK • Feared their way of life being lost • Would dress up in their white sheets and terrorize with beatings, tar and feathering, and lynching • Harding ran on a campaign that said he was ‘the Finest pioneer blood, Anglo-Saxon, German, Scotch-Irish and Dutch’ so the government didn’t do much

9. KKK • The ‘Jim Crow’ laws in the South were passed preventing blacks from using the same busses, hotels and schools as whites. • Many were barred from voting or participating in the judicial system. • Despite the rampant discrimination, First-Nations were granted full citizenship in 1924 and then forgotten about on reserves.

10. Prohibition on Alcohol • Started in WWI • Enforced in the Constitution in the Eighteenth Amendment in 1919 in the Volstead Act. • This amendment was to curb drunkenness and absenteeism from factories and improve society. • All the ban did was create a new generation of gangsters to illegally supply booze through the means of bootlegging.

11. Corrupt mayors, like Chicago’s Big Bill’ Thompson allowed the likes of Al Capone and John Torrio to operate openly. • Al Capone made as much at $100 million a year and had many judges, police and politicians on his payroll. • He wasn’t stopped until he was arrested for Not paying his taxes. • Harding himself continued to serve whiskey to White House guests.

12. Harding died of a heart attack in 1923 and was replaced by Calvin Coolidge (1923-29).

13. More Prohibition • Coolidge did little to enforce prohibition either • . By 1928 there were 30,000 ‘speak easies’ in New York alone, twice as many as before prohibition. • Bootlegging made enormous profits that were invested into other criminal activities such as gambling and prostitution. • Prohibition was not dropped until 1933.

14. Prosperity • Lots of growth for industry • Road infrastructure increased • More people owned cars, telephones and radios

15. cars • 1925 – Henry Ford’s factories are making a new car every 10 seconds. • Means more steels, rubber and glass needed • America had 5/6 of world’s cars • More road trips = more hotels or restaurants • The suburbs are born

16. 11 million new homes built in 1924 • Houses electrified • Vacuums and washing machines!!

17. Changing Role of Women • 19th amendment gave women the right to vote. • WWI let them work outside the home, they did not want to go back in • 10 million women gainfully employed by 1928 • Driving markets – Cotton industry took a hit when fashion changed to sleeker skirts • Stopped wearing corsets – wale bone no longer needed.

18. General mood • Americans were generally better off then ever before. • Education was also increased with literacy rates rising. • Jazz clubs were prolific as well as orchestras. • There was little radical activity and workers were happy.

19. The down side • Agriculture remained week • Although machinery allowed farmers to over-produce there was no one to sell the surplus too as the world’s nations were producing enough of their own food. • As a result food prices fell and farmers could no longer make enough money to pay their mortgages and the banks took their land.

20. Bad for industry • Over production meant the goods had less value with no one to buy them. • Workers began to get laid off. • Tariffs remained high and businesses unregulated. Prices were inflated as a result. • Although business profits increased by 72%, wages only increased by 8%. • purchasing on credit became a way of life.

21. New President • Coolidge decided not to run for election in 1928 and was replaced by Herbert Hoover (1929-33). • Hoover like other Americans believed the economy was unstoppable.

22. Markets • Company stock and shares could be bought on the ‘margin’, meaning the buyer pays a down payment and takes a loan out for the rest. • Stocks and shares were sold by ‘brokers’ who got their money from bank loans. • The brokers’ livelihood depended on finding buyers for their shares.

23. This is a system everyone bought in to. • About a million people bought in to these shares. • As shares rose in value a few began to sell of their shares to make a profit.

24. Beginning of the end • By 1927 the world economy had slowed down and less people were consuming. • Housing starts were down, automobile sales were down and food sales were down. • People started to sell their stocks and shares.

25. The Crash • This created a panic in Oct 1929 and everyone started to sell off their shares as soon as possible. • On ‘Black Tuesday’ (October 29th) 13 million shares were ‘dumped’. • The value for shares plummeted. • Hundred of thousands of people were now indebt as their shares were bought with credit and they sold for less then they were bought for.

26. Brokers and businessmen jumped out of their office windows on wall street. • Banks went bankrupt as they couldn’t collect on their loans. • And many lost their life savings.

27. World goes in to a Great Depression • More on that later