America: Boom, Bust & Recovery Part I: 1917-1929

Impact of WWI (1917-1920)
1. Social
  1. 112,000 American soldiers were killed in action in Europe
  2. 1919 – race riots in 23 cities, blacks discriminated in white communities
  3. Prices doubled between 1914-19
  4. Wages hardly rose
  5. 250,000 to 3 million employed in the army
2. Economic
  1. All immigration from Europe was stopped. Blacks moved to north where wages were higher = increased racial tension resulted
  2. 4 million soldiers were demobbed in 1919 = unemployment high
  3. American banks profited from lending money to the Allies during the war, in the 1920s this was being paid back with interest
  4. War-torn Europe became reliant on American grain export = more money
  5. Income tax rose to 6% and a surtax of 77% was placed on incomes of over 1 million per year
  6. Allies supplied with food and munitions = industry and agriculture prospered
  7. Advances in technology e.g. mechanisation and new materials like plastics = better and more industry
3. Political
  1. Espionage Act (1917) made it a crime to criticise the government for its conduct in the war
Immigration (1917-1929)
1. Reasons for Immigration Policies:
  1. Factor 1: WWI
    1. Rise of socialists and anarchists; began organising strikes and demands for higher wages
      1. Immigrants workers were being drawn to urban areas for work, 500,000 African Americans moved to big cities = increased racial tension
  2. Factor 2: Fear of Communism/The Red Scare
    1. Emerged because democratic states feared the spread of Communism sparked by the Bolshevik revolution in 1917, resulting in Lenin taking over Russia and introducing Socialism
      1. Palmer Raids; General Palmer felt he needed to “purge the land of the foreign-born subversives and agitators.” He ordered raids on magazine offices, union headquarters and public meetings.
  3. Factor 3: Attitudes of White Protestant America
    1. White Protestant males were able to influence governments and in Congress. Many were fundamentalist, believing the Bible is literal truth. Mainly in Southern states or backward, small communities.
      1. Scopes Monkey Trial; man prosecuted for teaching evolution in a school when it was banned, had to pay a fine of $100
  4. Factor 4: Trial of Sacco and Vanzetti
    1. Robbed and murdered two men, conservative judge wanted them executed.
      1. Were Italian immigrant anarchists = racially discriminated against and denied rights
        Coolidge: “America must be kept American”
2. Acts to Limit Immigration:
  1. 1921, The Emergency Quota Act; reduced and restricted number of immigrants to 357,000 per year, 3% quota of population
    1. 1924, National Origins Act; 150,000 per year, 2% quota
      1. Consequently, immigration fell from 2,000,000 to 350,000 from 1920-1930
3. Influence of the KKK:
  1. Factor 1: Yes
    1. 40,000-strong parade in Washington = showing support
      1. In Denver, Dallas and Detriot, not just Southern states; elected Congressmen. Al Smith (ran for Congressman) faced a vicious campaign of anti-Catholicism, causing him to lose the presidential campaign
  2. Factor 2: Yes
    1. 100,000 members in 1921 to 5,000,000 in 1925
      1. Was difficult for the government to change the attitudes of the whites in the south - and politicians were scared of losing votes
  3. Factor 3: No
    1. David Stevenson raped a woman, committed suicide, charged with 2nd degree murder
      1. Support dropped to 200,000 members by 1929
  4. Factor 4: No
    1. Hiram Wesley-Evans decided to organise camping trips to reduce radical methods e.g. lynching = lost radical members
      1. Financial scandals, people not agreeing with radical methods e.g. women
The Golden Twenties
1. Causes of the Boom:
  1. Factor 1: Motor Manufacturing Industry
    1. Henry Ford started mass-production, and wanted everyone to be able to afford a car. Mass production enabled 1 Model-T car to be produced every 60 seconds by 192 and every 10 seconds by 1925
      1. Due to the roads being constructed, an increase of 23 million cars began, making it the biggest industry in the USA. Ford produced 1,250,000 cars per year
        Ford’s production improved transportation and gave new opportunities for industry e.g. easier to move goods
  2. Factor 2: Laissez-Faire Attitude
    1. MOST IMPORTANT REASON FOR THE BOOM
      1. Lack of business regulations enabled mass production to take place
        If not for the laissez-faire attitude, then easy credit would’ve been less popular, and the 75% of cars bought on easy credit would’ve been far less = less boom
  3. Factor 3: Technical Advances
    1. Demand from easy credit pushed through tech advances and mass production
      1. Built roads at the rate of 10,000 miles per year by 1929 (highways)
        By the end of the 20s everyone who could afford it had electricity
        Petrol stations and motels
  4. Factor 4: Easy Credit
    1. Enabled people to afford things they previously couldn’t
      1. By 1929, 75% of cars on easy credit
        However, was not regulated, causing problems in the future, did not check if borrowers could afford to pay back loans etc.
        If not for the laissez-faire attitude, easy credit would be less popular = less of an economic boom
2. Were the 20s really roaring?
  1. Factor 1: Yes (motor manufacturing industry)
    1. Motor manufacturing industry produced 1 Model-T car every 10 seconds by 1925
      1. Produced 1,250,000 cars per year
        75% of cars bought on easy credit by 1929
  2. Factor 2: Yes (technical advances)
    1. 10,000 miles per year by 1929 (highways)
      1. Everyone who could afford it had electricity by the end of the 20s
  3. Factor 3: No (uneven distribution of wealth)
    1. Women received less pay than men
      1. Women made up 24% of the working population
        Poor conditions for factory workers
        Lack of stability in employment, 72% had been unemployed at some point
  4. Factor 4: No (lack of economic stability)
    1. Fordney-Mccumber Act 1922; high tariffs on foreign export = farmers could not sell aroad
      1. 66% of farms operated on a loss
        Prohibition cut grain demand
3. Problems in the Economy:
  1. Factor 1: Uneven Distribution of Wealth
    1. Industry was uneven throughout the US, meaning many areas missed out on the prosperity
      1. Women received less pay than men
        Women made up 24% of the working population
        Lack of stability in employment, 72% had been unemployed at some point
  2. Factor 2: Rural Poverty
    1. Fordney-Mccumber Act 1922; high tariffs on foreign export = farmers could not sell abroad
      1. 66% of farms operated on a loss
        Prohibition cut grain demand
        Technical advances like tractors decreased need for as many farm workers
        Overproduction
  3. Factor 3: The Banking System
    1. FRB (Federal Reserve Board) was a centralised system that allowed banks to run their own affairs with only limited government interference
      1. Small banks were unable to cope with financial problems
        75% of cars bought on easy credit by 1929
        50,000 shares by 1928 were bought on the margin
  4. Factor 4: Slowing of the Boom
    1. Boom was dependent on continuing domestic consumption
      1. Small businesses failed
        Domestic demand fell leading to overproduction
Prohibition
1. Outcomes of Prohibition:
  1. Factor 1: The Illegal Liquor Business
    1. 1925 more speakeasies than saloons in 1919.
      1. ‘Medicinal whiskey.’
      2. Izzy Einstein was in a taxi for 35 seconds and got offered a bottle of whiskey. Prohibition agents seized over 15,000 distilleries. Al Capone made $60 million from speakeasies
  2. Factor 2: Corruption and Bribery
    1. 1/12 agents were dismissed for corruption
      1. Breweries stayed open by bribing government officials
        Hoover himself had parties with ‘every type of liquor imaginable’
  3. Factor 3: Reduced Alcohol Consumption
    1. Consumption fell by 30%
      1. Izzy Einstein and Moe Smith were really successful
  4. Factor 4: Growth of the soft drinks industry
    1. Coca Cola increased from an output of 17 million cases to 182 million by 1933

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America: Boom, Bust & Recovery Part I: 1917-1929

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	Created by Jess Seales about 9 years ago