The economic boom, wall street crash and social change in the 1920's

Impacts of mass production.

- Each worker is specialised into each part of the car, allowing for faster assembly.

- Less training needed, more jobs provided and so price decreased.

- Large industrial corporations created, lowering the raw material costs

Impacts of the automobile (1920-29)

- Car ownership 1920-29 increased 20 million

-7% of manufacturing workforce in car industrustry -1929

-312,000 miles of highways built creating construction jobs

-People can go places, leisure activity rising.

Electrification

- Increased production of appliances lead to increased demand.

- 1912- 2.4 mil electrical appliances 1929 - 160 mil

- increased advertisement.

Leisure and marketing

- entertainment industry rising

- Hire-purchase used for radio etc

- advertising increased.

How did Natural resources bring the boom?

- Jobs in mining

- internal spending on resources, not imported.

how did transportation bring the boom?

- Railways developed over 1800's

- 1916, 250,000 used to transport raw materials

-Roads introduced in the 1920's

- Jobs created in rail, construction and manufacturing

How did spirit of enterprise bring the boom?

- Consumer demand rising

- immigration create new ways of doing things to achieve the 'american dream' 'rugged individualism'

- Anyone can be a millionaire (Andrew Carnegie and Henry ford)

How did hire-purchase bring the boom?

- 75% of cars brought through hire-purchase

-Real wages rose by 13% in 1923-29

-Low unemployment, increased demand for luxury items

-Jobs in manufacturing

Republican government fueling the boom

Tariffs on foreign goods.

- American goods cannot be undercut by cheap foreign production.

- Ford-McCumber Act of 1922

- Discouraged international businesses from operating in USA

Republican government fueling the boom

Tax reductions

- Federal corporation taxes cut by $3.5 bn.

- Taxes for the rich went from 50% to 20%

- Surplus of $600 million per year from 1925 to reduce national debt.

Republican government fueling the boom

Defunding the FTC

- Lack of regulations

- Child labour is cheap 56 hours a week, 18 cents an hour.

Republican government fueling the boom

No "foreign entanglements"

- no longer restricted international trade due to political affiliations.

- Foreign investments up 10bn (1919-30)

Republican government fueling the boom

the "American Plan"

- Wages kept low as no worker power

- Fewer strikes, more profits.

- 1929 Union membership reduced by 1 million

- four anti-union decisions 1921-23.

Farmers and african americans

Overproduction and WW1

- Farm population decreased by 5%

- 66% of farms operated at a loss

- Coolidge vetoed policies to push up farm prices

- Overproduction = reduction in prices

- Demand is falling ( Horses and animal food, Cotton)

-production rising due to combine harvesters

Farmers and african americans

Technology

- Increases unemployment

- Contributed to overproduction

- Decreased demand for horse feed (replacement)

Farmers and african americans

US government policies

1922 - Ford McCumber act - Tariffed foreign goods, increased american industry profits but didnt deal with overproduction and led to fall in farm prices.

1921-26 - Revenue acts ( rich taxes 50%-20%)

Prohibition (1920) reduced need for grain

Defunding of the FTC - child labour continues.

Farmers and african americans

Sharecropping and the great migration

- Rented land, paid for by a share of farming profits, bad seasons caused extreme financial hardship.

Generally black americans that did sharecropping.

-Moved away from the south, to cities like detroit, new york and chicago.

- Nearly 1,000,000 black americans took part in the great migration, and by 1929 black americans engaged with manufacturing employment in large numbers for the first time.

Cartels

combinations of corporations that control an entire industry

- Existed in USA and 'fixed' prices, which was bad for small businesses, as the consumer had to pay higher prices but businesses experienced growth

Problems for farmers

-Overproduction

-Mechanisation led to OP

-Boll Wevil parasite - destroyed cotton through disease

-High tariffs led to counter tariffs

- US governmental policies.

Limitations of the boom due to geography

- The north east was much wealthier with higher average incomes

- South was dominated by cotton growers who were impacted due to synthetic fabrics taking over and shorter skirts coming into fashion

Boom's limitations for women

- More employed than before but in clerical,domestic and sales industries which paid less

- number of women in college falls 5%

Get rich quick schemes - Financial problems

- Ponzi schemes offered a 50% on investment in 90 days

- Investors encouraged more investors

- Payments back to the investors were not from genuine profits.

- Floridian land investments

Playing the stock market - Financial Problems

- Money was loaned and spent on stock

- If stock goes down money is lost

- More money was borrowed to buy more stocks

- Buying on the margin

Banking - Financial Problems

- Regulation was controlled by the federal Reserve board (the fed)

- Kept an official low interest rate which encouraged lending

- Nearly 30,000 small banks in the USA

International debt - Financial Problems

- Dawes/Young Plan

- Other countries (Germany) cannot repay previous debts.

- for example USA were asked for $125,000 from a Bavarian village for a new swimming pool, but USA gave $3 MILLION.

1917 Immigration act

- Only allow 2% of 1890 census to immigrate in (150,000)

- Restricted immigration fromk southern and eastern Europe

- Halted Asian immigration entirely

- Due to KKK influences, and the rejection of other cultures that may differ from the 'american dream' mindset

1921 Emergency Quota act

- Introduced a literacy test to ensure people entering the USA had a basic grasp of English

- Favoured immigrants from Western Europe and GB

1924 Johnson-Reed Act

- Limited immigration to 3% the number of each nationality already in the USA as per the 1910 census

- Quota was 357,000 per year

- Direct response to the rise of the KKK (100k-5 million)

Industrial unrest - Response to communism

- People believed that strikes had been organised by communists, due to the inflation (prices had doubled 1913-20)

- 1919 - 340,000 workers had gone on strike

- To add to this fear, a failed bomb assassination of J.D Rockerfeller occured in 1914 as a result of the anarchists from the organisation 'Industrial Workers of the world'

European Immigration - Response to communism

- Southern and Eastern European immigration was limited in the 1917 Immigration act due to the association of these cultures and communism.

The Palmer Raids - Response to communism

- Mitchell Palmer became the forerunner of the FBI and in 1920 ran the 'Palmer Raids'

- 6,000 people were arrested on charges of 'revolutionary activity', most were released after a few days due to lack of evidence.

- Only 3 pistols were discovered as a result of these raids

- Palmer then claimed in May there was a communist plot to have a rally in NYC, which failed to occur and he lost all creditability.

Sacco and Vanzetti - Response to Communism

- Two Italian immigrants neither of whom spoke English very well.

- Both were arrested and accused of carrying out armed robbery in Boston in May 1920

- Both claimed to be anarchists and were carrying guns when they were arrested.

- Little concrete evidence to confirm the armed robbery, yet both were sentenced to death, carried out in 1927

- Protest amongst liberals, but the rural areas agreed that the cities were full of dangerous immigrants.

KKK - Organisation

- USA was divided into 8 domains, each under a 'Grand Goblin', which were then divided into 'realms' by a 'Grand Dragon'.

- Leader known as the 'imperial wizard'

- Doc Simmons, key founder, was a former preacher. Foundation ceremony involved a cross burning and a pledge to 'save white, christian society'

- 1921 membership had reached 100,000, mostly in rural areas with a growing number of middle class members. By 1925 5 million members.

KKK - Finances

- Edgar Clark and Elizabeth Taylor, leaders of the KKK, were professional fundraisers and publicity agents. Incorporated modern business practices and salesmanship to raise money for the organisation.

- The Klan made money by making and selling the robes. Robes cost $3.28 to produce and sold for $6.50. They also printed and sold texts at a vast profit by the 'Searchlight Publishing Company.'

- New recruits were charged a $10 sign up fee, and were encouraged to recruit others as they would gain a commission of this fee.

Political causes of Prohibition

- A lot of beer was imported from Germany (see WW1)

- After abolition of slavery, 'Demon drink' was the next moral target

- Needed to use grain for food supplies under the Lever act during WW1 (rather than for whiskey)

- Momentum of state campaigns (27 dry states by 1917)

KKK - Beliefs

- Mostly rural communities who were scared of changes they didnt understand or have control over. They believed that the 'Whites of the Nordic stock' had brought civilisation that was being threatened by 'Lesser Races'

- The KKK wasn't only opposed to Black people but also Jews, Catholics and Foreigners. Attacked new ideas like evolution or working on sunday and borrowing from non-WASP cultures (Jazz)

- 'First KKK' emerged after the Civil War, targetted African-Americans. Re-emerged in USA after the film 'Birth of a nation' in 1915 and the increased fear of foreigners post-WW2

Social/Religious causes of Prohibition

- Christian values link alcohol to sin including gambling and prostitution

- Some cited violence by drunk husbands towards their wives and children

- WASPs associated drinking with immigrant communities and anti-alcohol campaigners played on prejudices towards immigrants

- Anti-Saloon league claims alcoholism led to idleness and crime

- 1873 'Women's Christian Temperance Union' was founded and called for prohibition

Economic causes of prohibition

- Men wasted their money on alcohol and so financially neglected their wives and children

- Support from business hoping for increased productivity e.g Heinz, Rockerfeller and Ford

What was prohibition?

1919 - Eighteenth ammendment was passed, banning the sale, transportation and manufacture of 'intoxicating liqour'.

The 1920 'Volstead' act defined 'intoxicating liquor as any drink containing 0.5% or more abv.

Reasons the KKK were influential

- David Stephenson was highly influential in IN

- 5 Million members by 1925

- Impacted the immigration laws (Johnson-Read '24)

-1920 Impacted prohibition

-Clark and Taylor were publicists and fundraisers

-Both of the georgia senate were members

Reasons the KKK was not influential

- Klan members concentrated in Mid-west and south, poorer areas

- End of 1920's membership was at 200k

- Stephenson rape and murder case

- Participation in violence was varied, some members saw it as a social club

- Localised movement only.

Why did prohibition fail - Geography

- The USA had 18,700 miles of coastline and many miles of border. Makin it hard to regulate how much was coming through

- Only 5% of illegally imported alcohol was intercepted.

Why did prohibition fail - Bootleggers

- People would take legitimate methods of buying alcohol and resell them

- For example communion wine and prescriptions were often resold

Why did prohibition fail - Industrial alcohol

-Alcohol was diverted and redistilled into a drinkable liquor 'Moonshine

- This caused poisoning from wood alcohol, in one instance it killed 34 people in NYC. This poisoning was rare however

Why did prohibition fail - Treasury agents

- Employed to shut down illegal breweries

- Only 3,000 were employed and only made $2,500 a year

- Corruption amongst treasury agents was not uncommon, One agent was said to have made $7 Million in selling forged licenses and pardoning bootleggers

Why did prohibition fail - Divisions amongst supporters

- Anti-saloon league was divided between stricter enforcement laws and the league being responsible for appointing officers vs the belief that educational programmes should be used to stop the drinking in the first place

Why did prohibition fail - Role of government

- Congress did not take much action to enforce prohibition

- Government didn't want to alienate the wealthy, who still regularly consumed alcohol.

Why did prohibition fail - Popularity of speakeasies

- Illegal bars were known as speakeasies

- around 30,000 speakeasies were estimated to exist in NYC by 1930.

Evidence of prohibitions failure

- Presidents (Truman, Wilson, Harding) continued to drink

-+400% in 1920s deaths from poisoned alcohol

- Alcoholism rose 600%

- Arrests for drunkeness rose 300%

- homicide rose 78%

- Per capita alcohol consumption rose 155% 1919-29

- Rise in gangsterism and crime

- Bars in NYC doubled.

Benefits of prohibition

- Improved productivity

- Fewer workplace accidents

- Fewer drunk drivers leading to safer roads

-Growth of the soft- drinks industry

The scopes monkey trial 1925

- John Scopes taught evolution , breaking the 1925 butler act.

- Prosecution of William Jennings Bryan, an avid anti-evolution activist and Clarence Darrow a leading member of the ALCV as his defense

- Highlighted the cultural differences between rural and urban america.

- Darrow spoke for 2 hours on why the act was illegal for promoting religious view

- argued that the bible was being taken too literally

- Scopes found guilty and charged $100

Prohibition's impact on crime and gangsterism

- Mobsters formed monopolies on areas for the production and trade of alcohol

-John Torrio ran Chicago's alcohol business and retired in 1925 with $30 million

Baseball's significance

- Baseball allowed for people to get famous, Babe Ruth signed for $100,000 in 1920

- Bans on doping and corruption

- Consumer boom allowed large stadiums to be built , radio was helped by airing the games

- Despite its popularity, MLB remained segregated. But did allow for black americans to have a rewarding job, depite the lower pay and less prestige. (less than half pay)

- 30,000 people in the crowd for some games.

Radio and its impact from the boom

- 50 million people listened to the 1927 boxing match

- Radios cost ~$150, usually paid for through hire purchase

- 1927 33% of all furniture money was spent on radios

- 1930 60% of all families owned a radio

- $842 million spent on radios in 1929

Cinema and its impact on the boom

- Allowed for advertisement, comedy show ' amos n andy' was sponsered by pepsodent toothpaste

- Cinema industry was the 4th largest industry in the 1920s

- 10 million people visited 20k cinemas each year

- The Roxy in NYC cost 7-10 million to build

- Created celebrities like Clara Bow, Douglas Firbanks and Rudolf Valentino

- Fist sound film 1927 - The Jazz Singer

Changes to american culture - Music

- Migration of 850,000 Black americans to the north helped increase jazz popularity, enjoyed by white and black communities

- Jazz was condemned by groups like the KKK and the protestant revival as it was viewed as a decline in society and as music of the devil

- Jazz enabled new dance crazes like the Charleston and the Turkey Trot

Changes to american culture - Art

- 1913 an art show displayed european art, accused of trying to overthrow christianity and was denounced as a threat to the country by Roosevelt

- Art became more accessible due to the increase in disposable income. 60 new museums opened

- Frank Lloyd Wright was an architect who believed that buildings should be designed to fit its location not the other way around. He used local materials and combined building design with natural beauty.

Changes to american culture - Literature

- Concentration on realism following the first world war, reflecting individual experiences including moral issues such as prohibition and the horrors of the first world war

- F. Scott Fitzgerald became famous for capturing the spirit of the rebellious youth of flappers , the new rich and those who defied prohibition. 'The great gatsby' critisised the age of excess he viewed the 20s to be

- Ernst Hemingway wrote about the lives of americans abroad as well as his own experiences of ww1

Changes for women - Political

- Some women like eleanor roosevelt and Harriet Taylor Upton had influence in political parties.

- 1919 women granted the right to vote in federal elections, politicians had to cater towards women needs

- New womens divisions were created in both dem. and rep. parties and women attended and spoke at both national conventions

-by 1928 145 women won state legislatures and 2 had been appointed state govenor

Changes for women - Economic

- Women could become typists or secretaries new employment options

- Labour saving devices were purchased like washing machines and irons

- 25% increase in working women in the 1920s. by 1929 10.6 million women were employed in the USA

- Increase in women buying stocks and shares, as reported by the NYT.

- Women filled jobs that men had left following ww1, however most of these jobs were taken back. This did aid in changiing public perceptions

Changes for women - Social

- Divorces were made easier and the number doubled.

- Women began using cosmetics, value of industry increased x10

- Maternity health programmes were granted funding by the Sheppard-Towner act 1921 and 3000 child and maternal healthcare centres set up in rural areas. DECLINE IN INFANT AND MATERNAL MORTALITY RATES

Causes of the entertainment boom

- Increased wages (Unskilled production line and second wages)

- Mass production of radio (Hire purchase)

- New Technologies (Cinema, Cars)

- More free time ( working week decreased time)

- ADVERTISEMENT

Greenwood Race Riot

estimated 300 people dead, 10,000 homeless after white citizens of tulsa rampage through black neighborhood

$2 million in damages

Previously an areas of black affluence, nicknamed 'Black wall street'

Factors contributing to the great depression - Weaknesses of the banking system

- Banks regulated themselved through the federal reserve board, which represented the interests of the banks

- Favoured low interest rates, which fuelled easy credit

- Most people used local small banks, leading to 30,000 banks existing on 1920s

- Small banks cannot handle their own collapse and will lose peoples money

Factors contributing to the great depression - Overproduction

- Lots of businesses opening and failing (3/7 would fail)

- High unemployment in construction by 1926 as demand fell for new housing offices and highways

- Cement and brick industries also impacted

- Production exceeded demandin many industries, stores stopped ordering more goods

- Credit is exhausted, people cant afford anything more

- 80% of americans lived close to subsistence eben when in work

Factors that contributed to the great depression - Land speculation

- people were investing money in unseen developments in Florida

- People were lied to about the distance of these developments from the sea and the areas predisposition to hurricanes

- People were bankrupted by this

- Fuelled by the few success stories that existed eg 1900 investment of $25 became $150,000 in 25 years

Factors contributing to the great depression - The Bull Market

- Buying on the margin (paying 10% of a stocks worth upfront, and the rest later) had become popular

- Demand to buy shares is known as the bull market

- Insider dealing and market manipulation are common occurrences due to lack of regulation