How and Why Did the USA Achieve Prosperity in the 1920'S? America Achieved a Degree of Prosperity Never Seen Before
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How and why did the USA achieve prosperity in the 1920's? America achieved a degree of prosperity never seen before. It was the age of the Ford Motor Car, Jazz, Cinema, and Stock Market Boom and of consumerism. This prosperity only reached half the population. Poor workers, including most blacks and farmers lived in great contrast to the rich. Society was divided and increasingly violent through the activities of groups such as the Ku Klux Klan and of gangsters during the period of Prohibition October 1929 the "Roaring 20's" came to an abrupt end with the Wall Street Crash when stocks and shares rapidly lost much of their inflated values. Mass unemployment and the Great Depression followed. Isolationism and its effects At the beginning of the First World War the USA stayed neutral. It was seen as nothing to do with the USA. USA in the late nineteenth and early twentieth century’s became the 'melting pot' for a huge mixture of immigrants. Loyalty was divided. The Democrat President, Woodrow Wilson, hated the idea of war. In 1917 Germany started its policy of unrestricted submarine warfare in the Atlantic. The USA was forced to enter the war in defense of its own shipping. After training and organizing essential equipment it was only in summer and autumn 1918 played an important part on the Western Front. 100,000 American soldiers, sailors and airmen were killed. The surviving troops were greeted as heroes as they returned. The image the soldiers gave of the fighting was very different from the romanticised version believed by civilians. Consequences for the USA 1920 - Warren Harding- Republican candidate was elected with 61% His campaign included the return to 'normality'. It also defined the mood of many people in returning to what it had been like before the war. In his opening speech as President "We seek no part in directing the destinies of the world" USA never joined the League which had major consequences for Europe. USA resumed isolationism. It wasn't until 1921 that the USA officially declared the war with Germany to be over. During the 1920's USA had poor relations with most European countries. Many resented the time that the USA had taken to come to their aid in the war. During the war, US businesses had sold armaments and food to Britain and France. The US was able to export while countries were focused on the war. By the end of the War the US had overtaken Germany in supply of Chemical products; new materials using plastic had been developed. USA had captured the markets that the old European Industrial Countries had once used. Refusal to Join the League of Nations Wilson committed to the USA playing a leading role in policing the ToV through the League of Nations. Most Americans now wanted to end 'entanglement' in European affairs not ongoing commitment. The Republican Party argued with Wilson Senator Harry Cabot Lodge led the arguments "I can never be anything but an American, and I must think of the United States first...The United States is the world's best hope, but if you tangle her in the intrigues of Europe you will destroy her power for good. Wilson went across America trying to persuade the American people. He became so exhausted he suffered a stroke. After this he became a semi invalid. In March 1920 there weren't enough votes in favour of the Senate for the ToV to be ratified. "The arrangements of the Treaty of Versailles are just, but they need the support of the combined powers of the great nations of the world" As the USA did not accept the treaty and the League was part of the treaty. The USA would not join the League either. Tariff policy: The Fordney-McCumber Tariff, 1922 The encouragement of free trade under Wilson ended in 1922 when the Fordney- McCumber Tariff put high taxes on all foreign goods sold in the USA. American goods were cheaper helping American Industries. It restored high pre-war rates but now included Farm products. It gave the President the power to raise or lower the rate as necessary. It was varied 37 times, 32 times by President Harding and his successor Calvin Coolidge. European Countries soon retaliated by putting tariffs on American made goods. Mass Production Ford built the motor car in 1896. The Ford Motor company was founded in 1903. 1909 the model T was produced, by 1914 he was using a moving assembly line. This meant each worker had the same task. It now took 93 minutes to make a car instead of 14 hours. In the 1920’2 over 1 million were produced each year. Prices went down, wages went up. By 1925 the price was less than 3 months average wage. This had huge effects on the economy and people lives. 4 million jobs depended on the motor industry. Modern production techniques and electric motors saw other industries expand. Industrial production almost doubled during the 20’s with the workforce staying the same size. Telephones doubled. Canned fruit and veg doubled. Synthetic industries also mushroomed, e.g. Rayon transformed the textiles industry. Electric light and power companies prospered. Local companies became interconnected in regional grids. Small firms merged into great utility empires. By 1930 10 large company groups controlled 72% of country’s electric power. The construction industry boomed, with visible signs of prosperity. New York gained a new skyline with 20 storey sky scrapers being replaced with 60 storey high sky scrapers Consumer industries and advertising Mass production techniques were used across many industries, vacuum cleaners, washing machine, cookers, type writers, and so on. New advertising techniques were being used – billboards, mail-order, newspapers, and radio. Chain stores developed, e.g. Woolworths. By the end of the 1920’s the largest companies possessed 20% of the Nations wealth, 40% of business wealth. Big businesses grew as they bought up smaller ones. Hire Purchase Goods were often bought on Hire Purchase. A deposit is paid and the remaining balance is paid off in instalments. Loans were relatively easy to get with low interest rates. As long as wages continued to increase people could afford to pay what they owed. Higher Boom in wages sales More Higher jobs demand Share Purchase; the stock market boom Companies sell shares on the stock exchange to raise money for investment. Investors bought with the hope to sell at a higher price, making profit. In 1920’s prices went up 300% It seemed an easy way of making money, more ordinary people invested. More people More profit buy shares Demand goes Prices increase up Investors began buying shares ‘on the margin’ – borrowing money to by, confident that the money could be paid back as the value increased. Banks would use the borrower’s house as a guarantee. Banks loaned more money than they actually had in the deposits, confident the loans would be paid back before the customers wanted to withdraw. Government encouraged this with low taxes and little interference in business activities. They believed in ‘laissez-faire’ (let them get on with making money) and ‘rugged individualism’ (make individuals responsible for their own lives) Development in entertainment industries 1920’s many people, especially whites, were better off, and had more leisure time. More money was spent on entertainment stimulating industry and business. All part of the “roaring 20’s” Jazz was popular and developed out of ragtime and blues music among the black people in southern parts of the USA. It gave a way of black musicians gaining self-respect and admiration. Jazz clubs developed where young people would go. The cotton club in New York became a famous nightclub. Black musicians such as Duke Ellington and Louis Armstrong became famous. Jazz style also spread with the availability of radio and early gramophone records. By 1929 10 million homes had a radio, local and national stations were set up. Radios increased the popularity of sports; baseball, boxing, and American football. More money and more leisure time meant more people watched sports and the increased ownership in cars meant more could travel to watch matches. New dances became fashionable. The Charleston, tango and the black Bottom became popular among the young. These were sexually suggestive and frowned on by older generations. In the 1920’s dance marathons became poplar as did other stunts including sitting on a flag pole or climbing the outside of a tall building. 1927 Charles Lindbergh was the first man to fly solo across the Atlantic. The Cinema The most glamorous aspect of the Roaring 20’s. By 1929 going to the movies was a national habit. 110 million people each week. Before late 20’s movies were Silent. There were only captions. Emotions needed to be conveyed through body language, Charlie Chaplin, and Rudolf Valentino, both famous actors. Some were romantic others slapstick. Piano players provided appropriate background music. Most film studios were in Hollywood, a suburb of Los Angeles. Big Film companies developed, such as Warner Bros, Paramount and MGM. Each had large publicity departments. The First ‘talkie’ was in 1927 with Al Johnson starring in The Jazz Singer. After this, silent screen stars tried to adapt their skills to the new era, many failed. Their voices were unattractive and often didn’t match their ‘silent’ reputation. How far was the USA a divided society in the 1920’s? Rich V’s Poor 1920’s was a decade of contrasts. Extreme wealth and poverty. 1/3rd of the Nations wealth was shared by 5% of the total population.