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 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 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. National income of USA was bigger than Britain, Germany, Japan, France and 18 other countries combined. Blacks made up 10% population. Most lived in squalor and misery and were seen as inferior. Many lived in the south; states of Mississippi and South Carolina were mostly black. Living conditions in the remote cotton growing areas were appalling, especially if compared with growing wealth elsewhere. Many blacks suffered at hands of Ku Klux Klan. Poor immigrants who weren't white European were seen as a threat to American culture and living standards. Native Americans were mostly on reservations across the USA. Some white groups did not benefit from the boom. Old industries of Northern USA exploited these groups with bad working conditions and low wages. These included ship building, textiles and coal mining. In 1929 71% families had incomes under $2,500. The minimum for a decent standard of living. Children were exploited in textile mills and in agricultural work. 2 million 14-15 year olds worked for up to 11 hours for very low wages. Farmers struggled because of overproduction and subsequent low prices. During WW1 demand had been high for exports. Isolationism meant the introduction of tariff barriers and with more competition many farmers fell into debt and lost land. Synthetic fibres such as rayon reduced demand for cotton. Farmers experienced the Great Depression before the Wall Street crash. Race: immigration controls Pre WW1 there was no restriction and so America had become the ‘melting-pot’ of races and nationalities. More religions and languages were in the USA than in any other country. Some Americans were concerned with this. Most immigrants came from southern and Eastern Europe. Mostly Catholic they spoke languages that seemed bewildering to those that spoke English or German. There was a feeling that recent immigrants were inferior. A form of racial prejudice. 1917 a literacy test was imposed on immigrants. This favoured those from Northern and Western Europe – mostly white protestant. This law was ineffective after WW1 leading to fears that millions of Europeans would flood into the USA. In 1921 The Emergency Quotas act. Quotas were based on nationality. Number of people admitted was restricted to 3% of all previous emigrants in 1910. Favouring Northern/Western Europe as they were the largest group of emigrants in last 200 years. 1924 – National Origins Act. Further restrictions 3% reduced to 2%, and residency moved back to 1890. Overall number now restricted to 150,000. This reflected the mood of isolationism in 1920’s. Race: The Ku Klux Klan Black Americans in early 20th Century. Blacks had received freedom in 1860’s from slavery, but still suffered from racial discrimination Segregation was legal in the southern states where the majority lived. Blacks usually had the worst jobs and houses; they could not eat and travel with whites, and could not expect fair treatment in courts where judges were white. Some states marriage between blacks and whites was forbidden. In 1896 Supreme Court gave legal approval of the ‘Jim Crow Laws’ – to treat blacks as inferior. In 1920’s with industrial expansion 1 million people left the south to migrate north where there were more jobs. Conditions were better but there was still much racial discrimination. Blacks were the lowest paid and the first to lose their jobs. Black neighbourhoods, known as ghettos grew in some cities such as New York. The activities of the Ku Klux Klan The KKK preached intolerance and spread fear amongst blacks. Klan formed in 1866, and became the focus for racist whites. Disbanded, but reformed in 1915. It now opposed Catholics, Jews, and all foreigners as well as blacks. 1920-25 around 5 million members. Included judges, policemen, and local politicians. There were many reasons for joining – excitement, fear if they didn’t support, or they believed they were defending the traditional American way of life. Klansmen met in secret at night. Some paraded in the day. They wore white sheets and white hoods, carried American flags and at night time meetings lit burning crosses. They spoke in code known as ‘klonversations’ and their book of rules was called the ‘kloran’ Blacks feared the Klan. They suffered acts of violence including beatings and rape. Extreme cases included lynching. Blacks suffered murder on the slightest suspicion of any crime being committed. 1925 – Scandal involving one leader David Stephenson who was found guilty of rape and murder of a woman on a train. He was sentenced to life in prison. Influence of the Klan decreased as did its membership. Racism itself was still strong. Prohibition in the 1920’s Drinking of alcohol was prohibited by law in the USA in the 1920’s Jan 1919. Alcoholic drinks were forbidden through an amendment to the constitution. The Volstead act brought this into force January 1920 defining liquor was any drink containing 0.5% alcohol or more. This ‘noble experiment’ lasted until 1933 Moves against alcohol had started in the late 19th Century as poverty stricken homes suffered through alcoholic activities of the father. Groups campaigned against alcohol including Women's Christian Temperance Union, Anti-Saloon League. By 1914 12 states of the USA were ‘dry’ During WW1, evils of alcohol were stressed further – absenteeism from work. Two firms supplying peer, Pabst and Busch, were German. Patriotic Americans were told to stop buying from them. By the end of the war 75% of states were ‘dry’ Supporters of prohibition were well organised. Organisation against prohibition began in 1918 with the Association against the Prohibition Amendment (AAPA). Claims of benefits of alcohol for medicinal purposes. Attitudes varied regionally. There was more support for alcohol in the North. Law came into force 17th January 1920. The week leading up to this a huge quantity had been bought from stores by those who wished to continue drinking. The expected outburst of drunkenness did not happen. The Law came into force without major protests. Churches held thanksgiving prayer meetings. Congregations were reminded that it marked the end of a campaign against ‘the demon drink’. It would help cut down social abuses. Most Americans were either happy with the new law or resigned to it. Groups for or against Prohibition There were immediate problems of enforcement. Prohibition agents were appointed but there were far too few. Speakeasies began to appear in what had been saloons or in basements. Some disguised as Jazz clubs. 30,000 in New York, around 200,000 across the USA. The quality of alcohol varied, 5,000 a year died from drinking homemade moonshine. Alcohol was smuggled across borders with Mexico and Canada. ‘Bootleggers’ brought in alcohol and sold it at high prices. Prohibition agents were outnumbered. Many took bribes; some went to elaborate lengths to do their job. Izzy Einstein and Moe Smith wore disguises. They posed as labourers, football players, college students, bus conductors, shipyard workers, truck drivers and musicians. 3,000 speakeasies were raided. 4,900 people arrested. 3 million bottles of spirits confiscated in the first 5 ½ years. Organised Crime Selling alcohol became big business and gangsters controlled much of the trade. They supplied booze, set up speakeasies and ran ‘protection rackets’, threatening to damage property unless they were paid to protect it. Most famous gangster was . He gained control of . He bribed, officials including the police. He didn’t fear arrest and operated openly. 1,000 men were employed in a private army. His business was reckoned to be worth $60-$100 million a year. 227 murders in 4 years with no arrests. In the Famous St Valentine’s Day Massacre in 1929, some of Capone’s gang, disguised as policemen, gunned down 6 member of the rival Bugs Moran gang. It was clear prohibition was not working. After the Wall Street crash, with the onset of the Great Depression, millions unemployed, it was easy to argue to end the experiment. The drinks industry would then provide jobs. 1932 Presidential Election, Roosevelt promised to repeal the Prohibition law. The 21st amendment this came into force in 1933. Young people: fashions, flappers In 1920’s many young women gained increased freedom. Greater wealth provided more opportunities for leisure. Fashions changed and the conduct of some young middle-class girls, or ‘flappers’ shocked their parents. They cut their hair short, smoked in public, and wore rouge, lipstick and short skirts. They stayed out late dancing. An age of frivolity and they were keen to cast aside all social restraints. Why did the US Stock Exchange collapse in 1929? The Wall Street Crash, October 1929 Herbert Hoover, Republican, became President in while the economy was still booming. Hoover promised the boom would continue – ‘a chicken in every pot’ and boasted ‘We in America today are nearer to the final triumph over poverty than ever before. The poor man is vanishing from among us.’ Within 6 months things had changed. , overproduction in previous years led to industries cutting back on production. September some investors began to worry about prices, warning of a crash. Some sold their shares, during September the stock market recovered. Banks helped to restore stability by buying vast numbers of shares. Share prices plummeted Late October, panic set in. 24th October, 13 million shares were sold. Banks could not intervene by buying on this huge scale. Following days, millions of shares were sold and prices plummeted as well. No one wanted to buy. By 29th October, investors sold their shares for whatever they could get. Effects were dramatic: • Big investors lost heavily. The Vanderbilt family lost $40 million. • Smaller investors had often borrowed money from banks with their homes as security. Banks could now repossess their homes. • Some investors committed suicide. • Over 100,000 companies went bankrupt 1929-1933 • Banks went out of business when they could not repay their investors. • Unemployment rose to 12 million by 1932. • Homeless built temporary shelters in parks. These ‘homes’ were nicknamed Hoovervilles. Republican government had been taken by surprise. Hoover assumed prosperity would soon return – “Prosperity is just around the corner”. He was forced to try to help the economy by cutting taxes, for example, and by providing soup kitchens for the unemployed and homeless. The Great Depression set in and became worse in 1931 and 1932.

Economic unemployment hardship

Reduction in Slower production buying

Slow down in industry