National Study: USA 1919-1941
Table of Contents
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Nature and Impact of Industrialisation
- Industry drove employment and wealth generation throughout the first post-WW1 decade.
Nature and Impact of Consumerism
- Consumerism emerged as a driver not only in finance, but also in communications, entertainment, dress and behaviour. The development of credit also played a key role.
- Destroyed the lives of millions of Americans and resulted in Hoover not being re-elected → ultimately resulted in FDR’s election and the New Deal
- Massive post-war rise in immigration, as well as internal migration of African-Americans, led to the rise of the KKK and future Jim Crow laws
Rise of Conservatism
- The rise of Conservatism resulted in the prohibition policy, as well as America’s isolationist foreign policy
- Encouraged the wealthy to exploit and expand in search of profits, driven by the open market and post-war economic booms
America in the 1920s
After the first world war, the United states adopted a policy of isolationism and conservatism:
- Isolationism is the idea that America should not involve itself in the affairs of other countries
- It came about as a result of over 100 thousand american deaths in WW1
- Conservatism is the policy of restricting society to traditional values, and opposing innovation or change
- In the context of post-war America, conservatism came in the form of the 18th Amendment, which prohibited the sale, transport, and production, of alcoholic beverages
In addition to these policies, big business was given more economic freedom, resulting in a 42% jump in the economy through the decade:
- The Air Commerce Act resulted in the creation of commercial airlines, allowing former military pilots to become economically productive in a new industry
- The mass-production of the car by the Ford Motor Company resulted in over 26 million cars registered in America, and 1 billion dollars invested in new roads, bridges, and traffic lights
- In turn, new gas stations, restaurants, and motels became economically feasible in small towns across the country, as the American Road Trip began to become popular
Women rapidly gained political and social freedoms:
- On August 18, 1920, women gained the right to vote in elections through the 19th Amendment
The “flapper” movement saw a shift in feminist expressionism - younger feminists became more concerned with social expression as opposed to politics, a principle objected to by men and older feminists alike
Republican Economic Policies
President Warren G. Harding
- Harding instituted policies to undercut the economic regulatory agencies established during the Progressive Era
- Harding’s policies resulted in the Federal Reserve (which regulated banks), the Interstate Commerce Commission (which regulated railroads), and the Railroad Labor Board (Which upheld the rights of railroad workers) being filled with individuals “sympathetic to business concerns and hostile to regulation.”
- He also signed the Willis Graham Act, which nullified the United States Government’s commitment to preventing monopolies in the telephone market. This ultimately resulted in AT&T establishing a monopoly in the telecommunications industry.
- Harding’s economic prowess (or lack thereof) can be observed in his personal life: he died with a debt of over 180000 USD, worth nearly 2.4 million USD today.
President Calvin Coolidge
After all, the chief business of the American people is business. They are profoundly concerned with buying, selling, investing and prospering in the world.
- Coolidge’s presidency was the beginning of the period of economic growth commonly referred to as the Roaring Twenties.
- His FTC Chairman, William E. Humphrey, reduced antitrust cases, allowing companies like Alcoa to dominate their industries.
- Coolidge avoided interference with the Federal Reserve (unlike SOME conservative presidents I could mention), resulting in low interest rates and the increased popularity of stock market margin trading (essentially gambling on the price of stocks).
Long-Term Causes of the Great Depression
- During the 1920s the American stock market was steadily rising. Speculators could buy shares in a growth company to sell them again a few weeks or months later in order to pocket an easy gain.
- From the mid-1920s many speculators bought shares ‘on the margin’. This meant borrowing money from the banks to fund the share purchase. The loan was repaid when the shares were sold.
- Banks were prepared to lend up to 90% of the share price. This seemed to be fine as long as the value of shares continued to rise – although it did lead to many shares being over-valued as people lost sight of the original purpose of shares and competed to buy into what seemed to be an ever-rising market.
- When the market fell it could leave speculators and even banks themselves bankrupt.
- By 1929 US industry was producing more consumer goods than there were consumers to buy these goods. The market had become saturated as the Americans who could afford to do so had generally bought their cars, fridges and other domestic appliances.
- America had limited opportunities to sell abroad. Potential European customers were impoverished and had not financially recovered from WW1. American tariffs also led to other countries putting tariffs on American goods making it difficult for American exporters to operate in foreign markets.
- 50-60% of Americans were too poor to take part in the consumer boom. Low wages and unemployment, especially in the farming sector, the traditional industries and among blacks and new immigrants reduced the potential of the home market. Just 5% of the population was receiving 33% of the income in 1929.
- There were signs that the boom was coming to an end long before October 1929. By 1927 fewer new houses were being built, sales of cars were beginning to decline and wage increases were levelling off.
- Financial experts were aware that stock levels in warehouses were beginning to increase, suggesting the economy was slowing down. This made investors nervous and anxious to sell their shares.
- The stock market began to lose value from early September 1929.
Reactions to the Wall Street Crash of 1929
- The Wall Street Crash was not the primary cause of the Great Depression, but it significantly contributed to it.
- Losses on Wall Street caused many individuals and some banks to go bankrupt.
- As loss of confidence set in there was a further fall in demand, loans were recalled, new loans weren’t made, businesses closed and a vicious cycle set in whereby more people becoming unemployed or having their wages reduced led to ever greater reductions in demand as fewer people could afford goods.
- America was the largest capitalist economy in the world and when it went into recession the other major capitalist economies were dragged down too.
- This was because Americans could no longer afford to buy foreign goods and US lenders recalled their overseas loans.
- The rising unemployment in Europe and Japan also further reduced demand for US goods so made unemployment in the US worse.
Social Consequences of the Great Depression
- Lack of education
- Broken families
- Farms/lack of produce
- Decrease in consumerism
- Hooverville/hoover blankets
- Rise in crime
- Loss of homes
- Businesses closed
- Loss of life savings
- Cities going bankrupt
- Soup kitchens
- Widened class gap further
- Trade stopped
- Migration out
- Movies/music escape
- Rampant alcoholism
Effect on Workers
- Family was placed under great stress
- Collapse of morale
- People lost their homes
- Creation of shanty towns
- As competition for jobs increased, even those in work suffered. Employers reduced wages and increased hours. Some governments employees, for example teachers, were not paid when city councils, for example in Chicago, went bankrupt
- 1931 100 died directly of starvation in New York
- One third of children in New York were malnourished
- Homelessness soared- by 1932 over 250,000 people could not pay their mortgages
- Those who fell behind with their mortgages or their rent were evicted
- Most ended up either on the streets sleeping on park benched or living in Hooverville
- Hobos travelling around America
- Reliance on charity and relief schemes escalated
- Angry protests
- 1929 unemployment was 3.2%, 1933 it rose to 24.9% and 26.7% in 1934
- More than a quarter of the workforce was jobless
- Malnutrition and starvation
- Originally hit workers in the old industries, for example coal mining, textiles, railroads and shipbuilding
- By 1929 it also affected workers in the consumer industries
- No social security system
- 1930 there were 6,000 men on the streets of New York trying to survive by selling apples
- More or less collapsed overnight. Construction fell from $8.7 billion to $1.4 billion between 1929 and 1932
- By 1932 US manufacturing had declined by around 77%
- Soup kitchens began to pop up I towns and cities with massive lines
- Middle class lost their savings and position in society
- Working class and those below the poverty line were hit even harder
- Veterans protesting due to poverty. Owed bonus cash
- Veterans march to Washington in 1932 and May 1933 as a second ‘bonus Army’
Effect on Women
- Had to support their family
- Wages were less than men
- Found it easier to get jobs as clerks
- Kept jobs like cleaning and waitressing
- Maintained household
- Women with clerical and teaching jobs fared better than many men in the manufacturing industry
- Family breakdowns increased due to men on the road
- Increased social tensions as many women became the primary breadwinners, overturning traditional gender roles
- Revenue for agricultural production halved
- Couldn’t afford basic items
- Farmers declared bankruptcy
- Rural banks closed
- Dust bowl- couldn’t grow crops
- Thousands of families left for California
- Crop prices dropped dramatically
- Gross income fell from $12 Billion in 1929 to $5 billion in 1932
- Banks stopped lending money for farms, many went under
- Missed out on the economic boom in the 1920s
- Their income was very low due to overproduction and under consumption of their produce
- Impact of prohibition had reduced demand for arable crops
- Fewer markets abroad for their goods because of the tariff war
- Many were in massive debt and large numbers of farmers who could not repay their mortgages became homeless
- Left crops to rot in fields
- 40% of farms were mortgaged to banks
- Agriculture continued to decline under Hoover
- Prices so low farmers could not afford to harvest crops
- Many became hobos
- Many from the south moved to California
- First to lose jobs
- Established shanty towns
- Increase in racism
- There was to be no ‘American Dream’
- Unemployment was twice that of whites
- Revival of KKK in the deep south contributed to social tensions
- Klan activists incited violence towards black people with lynching
Attempts to halt the Depression
- Hoover did very little to alleviate the effects of the depression
- Pressured state and local governments to take more responsibility, essentially absolving himself of blame
- Used the term ‘depression’ rather than ‘crisis’ to avoid mass hysteria
- In an attempt to halt the Depression, FDR:
- Closed banks for four days and only let those that were secure reopen.
- He supplied government guarantees to bank deposit amounts over $5000.
- This provided bank customers with confidence in the system and stopped the rush on the banks to withdraw their funds
- Removed America from the Gold Standard which allowed the government to produce more money
- He ended prohibition by repealing the Volstead Act
- Alphabet agencies - the New Deal
Historian’s Assessments of The New Deal™
- First new deal was primarily conservative and aimed simply at recovery rather than reform
- Second new deal was more radical and gave the rise to progressive measures
Tugwell and Schlesinger
- First new deal was radical- radical nature of the early period was evident in a commitment to national planning
- Second new deal was more traditional, more conservative and increasingly pro-business
- They should distinguish between features of the new deal in terms of legacy
- What piece of legislation had a lasting effect
- First new deal addresses the immediate economic crisis
- Second new deal includes all of the enduring changes that came out of the reforms from 1933 onward
- Made significant changes
- Helped defend the two party system
- In providing moderate change, helped prevent more radical change such as a revolution
- Communist and socialist parties had increasing membership
- Saw the new deal as continuing an American tradition of pragmatism
- FDR victory as a triumph for centrism
Stolberg and Vinton
- New deal did not go far enough
- Failed to alter basic injustices
- Limitations of social security
- Lack of concern for the black population
- Inadequate unemployment relief programs
Burns and Conkin
- New deal benefited the wealthy and those with vested interests
- Helped farmers and the middle class
- Did not lead to fundamental change
Opposition to the New Deal
- Opposed to ending the laissez faire capitalism and the increase in state intervention.
- Thought Roosevelt had ‘socialistic’ tendencies.
- Opponents on both the left and right of politics found support amongst those dissatisfied with the pace of recovery.
- Huey P Long, the governor of Louisiana, “ran the place like a personal kingdom”.
- He was assassinated in 1935.
Social and economic conservatives
- Conservative groups such as the American liberty league, founded in 1934, attacked the New Deal as a threat to state’s rights.
- These included a radio broadcasting roman catholic priest, father Coughlin, who blamed international bankers for the depression.
- His speeches started to become quite anti-Semitic and nationalistic .
- Employers challenged the new deal in the US supreme court.
- It declared that certain new deal laws were unconstitutional.
- Revisionist historians in the 1950’s and 1960’s said the new deal prevented significant reform.
Implications of Growing Urbanisation and Industrialisation
- Foreign immigrants moved to USA
- Internal migration - African Americans from the South to the North
- Movement from rural communities to bigger cites
- By the end on the First World War, the USA was the leading economic power in the world. It had a strong farming economy, although this sector was suffering with very low prices in the 1920s, but its great strength was its industrial might. This had important social consequences for America. As the farming industry became more mechanical and as the price of farming products dropped, farmers went bankrupt and there was a strong movement of people to the cities.
- Whilst the movement had already been seen previously, the 1920’s and 1930’s saw a dramatic increase. Combining this with high levels of immigration meant that the cities swelled and began feeling the pressure
- New industries such as the automobile and rubber industries grew and took in these new people. Mass production and mass consumption were born and new products such as refrigerators and the wireless only maintained the rapid grow of industry.
- Slums were evident around the cities and these became much worse in the 1930s with the great depression. Crime and poverty began to thrive
- Ethnic groups stayed close together for security and as a result cities developed ethnic ghettos e.g. the Irish and Italian sections of New York and Boston. Racial and cultural problems were highlighted and became even worse.
Mobilization of the Military
- US business played key role in mobilising US economy
- US production alone exceeded the combined production of the axis powers of Germany, Italy and Japan
- Production boosted economy and enabled millions to return to work
- By 1930 most American homes had electricity
- Boom of mass consumption
- Fear of offering aid to Britain could lead to USA becoming a part of the war in Europe
Growth of Consumerism in the Entertainment Sector
- 1921-29 saw a hundred times increase in national income
- Prosperity was not universal, farming communities struggling as well as the textile industry
- electric power generation and the boom in electric consumer appliances
- expenditures on radios rose from just $10.5 million in 1920 to $411 million in 1929
- Americanisation of immigrant communities
- Mail-order catalogues
- Personal transport now affordable (Ford)
- Industrial output doubled in the USA between 1921 and 1929
- Bobbed hair and short and shapeless dresses became the new fashion
- Contraception gave women control over reproduction
- More people had leisure time and money to spend on entertainment
- Made idols out of Hollywood stars
- Sports became big business
- Silent movies
- Introduction of talkies
- Italians were stereotypically viewed as having links to the mafia
- Due to racial tensions, approximately 60% of Hungarian immigrants and 50% of Italian immigrants went back to their homelands during 1899-1924
- The great depression was a slow period for immigration
- Rise in ‘nativism’ due to KKK revival
- Sacco and Vanzetti case spiked protest over poor treatment of immigrants/anarchists
- During the 1920’s and 30’s an extreme form of Christian theology took hold in the South and became racist, anti-Semitic and more militant toward the end of World War II
- Rise of the KKK
- Influenced Prohibition and immigration restrictions
I cannot explain how much I enjoy discussing Prohibition-era politics. I’m sorry that this is just a block of text
- The prohibition era of the 1920s saw the 18th Amendment to the U.S. Constitution banning the transportation, manufacture and sale of alcoholic beverages. Alcohol abuse had become an increasing problem for the American people after World War 1. Thus, the temperance movement was created, consisting mainly of the wives and mothers of alcohol abusers as well as members of evangelical protestant churches who viewed alcohol as the root of all Americans problem. This was further intensified by the agitation of anti-immigrant and anti-Roman Catholic groups consisting of many in the Protestant middle class. Prohibition also had the support from employers who viewed drunkenness as the cause of industrial accidents and inefficiency. Supporters of the Prohibition hoped that in the absence of licensed saloons, the churches would have a chance to persuade the American people to give up drinking. The Volstead Act 1919, was passed on the 29th January 1919 and came into effect one year later.
- With the Volstead Act now in place drinking was driven underground, especially in the big cities. As an illegal drug the price of alcohol rose exponentially, which effectively made drinking a middle and upper-class pastime. Drinking levels soon fell to about 30% of the pre-1920 level but began to rise during the later years of Prohibition. While Prohibition intended to drive the ethnic minorities into Anglo-Saxon conformity, it instead allowed them to consolidate their position in organised crime, and the Anglo-Saxons emerged as the major customers of the bootleggers.
- John Dillinger
- Bonnie and Clyde
- Machine Gun Kelly
- ‘Pretty Boy’ Floyd
- Bootlegging became a massive underground business
- A rise in speakeasies especially in big cites
- Crime was often a response to the GD and lack of employment
- Emergence of Robin Hood Heroes burning bank statements and home loans
- Government backlash in the form of the FBI under the Hoover Administration
- increase because they thought immigrants and people of colour were taking white jobs
- Resurgence of the KKK
- Birth of a Nation film
- migration of African-Americans from south to north
- Jim Crow laws
Anti-Communism and Union Busting (Red Scare)
- 1919-1920 communism spread through Europe
- Social party and social politicians were held suspect because they were seen as closely linked to communism
- 6000 suspected revolutionists held and convicted without trial
- Red Scare died quickly but lived on in the form of Anti-Unionism
- anti-liberal equals anti-American
- significant rise in workers right movement
- collapse of post-war rural prosperity
- Boston Police strike 1919, 75% of police force boycotted work when denied right to a union
- They were nicknamed the ‘agents of Lenin’
- The strike caused an increase in crime, riots and looting
- The Wobblies formed in 1905 by several unions fighting for better conditions in mining industry
- Espionage Act (1917) and Sedition Act (1917) protected Wobblies and socialists
- Unions equals communism in republican America’s eyes
- America had strong economic involvement with Europe
- Provided millions in loans
- Was keen to take advantage of European markets and therefore needed to restore the power of European countries to spend and buy American goods
- American business invested $3 billion in Germany in the 1920s
- Tried to ignore the communist Soviet Union even though they sold millions of dollars’ worth of industrial equipment to them
- Officially recognised Soviet Union in 1933 under Roosevelt
- Outbreak of war in 1939: America in position to support Britain and France
- The Lend Lease Act provided aid to Britain
Central and South America
- Used military force to intervene in affairs of southern neighbours
- Twin aims were security and trade
- 1920s polices softened
- Withdrawn from Dominican Republic
- After depression, less eager to risk investment or exploitation capital
- Hoover improved relations
- Roosevelt ‘good neighbour policy’
- More tactful and diplomatic strategies
- Cooperation and diplomacy had replaced force as the prime instrument of American foreign policy with its nearest neighbours
- Expansionist policies of Japan resulted in the 1921 Washington Conference to ease tensions