History USA 1918-41

Economic Effects of WWI

Economic Effects of WWI

Overall
- 1.3m more jobs 1916-18
- unskilled wages up 20%, 1914-18
- more opportunities for women and black workers

Industry
- Factory production was up 35% during war
- However, from 1918 women lost jobs as soldiers returned
- By 1920, government contracts were cancelled, reducing demand

Agriculture
- During war prices were up 25%
- Average farmer's income up 30%
- By 1920, 55% of global cotton/ 30% of wheat
- However, European farming had recovered, reducing demand
- Farmers struggled to repay loans

Winners and Losers of Roaring Twenties

Positive
- Unemployment reduced below 3.7% until 1929
- Average income up 30%

Industry
1. New production methods: Henry Ford reduced time to build model T from 12 hours to 10 seconds
2. Greater availability of credit: Hire purchase - 1929, 75% of cars and 50% of electrical devices bought using HP
3. Advertisement: encourages consumerism - $2bn/year 0industry; 600,000 workers allowed companies to rebrand e.g. Listerine

Negative
- Older industries hit by lower demand + competition
- strikes/ job instability

Coal mining
1. Competition from oil (550,000 homes in 1929)
2. Production down from 568m tonnes in 1920 to 518m in 1930

Textiles
1. Competition from silk and rayon

Railroads
1. Competition from personal car ownership
2. Rate of demand for goods transportation was slower only 10% increase

Agriculture
- Caused by lower demand: Emergency Tariff Act 1921 which increase price on US goods
- Caused by over-production (9% increase in 1920s): mechanisation which led to 10x tractors in a decade
1. By end of 1920s, farm workers down 1m in 10 years
2. 1926, particularly big crop which led to a price drop and many Southern Farmers bankrupted

Leisure Industry Boom 1920s

Radio/ Advertising
- Number of radios up from 60,000 in 1920 to 10m in 1929
- Late 1920s, local stations part of networks e.g. NBC 1926
1. USA began to hear similar views
2. Influenced leisure interests

Cinema
- Colour - created by Technicolour Corporation 1922
- Sound - Jazz singer 1927
1. Most went weekly: ticket sales more than doubled 1924-29 to $2bn/year
2. Created celebrities e.g. Charlie Chaplin

Jazz and Dancing
- Jazz musicians e.g. Duke Ellington blended black and white music inspiring new dances
- New dance styles in films such as the Charleston
1. Created big stars e.g. Kid Ory
2. Generated opposition, because linked to immoral behaviour among young people

Changes in women lives 1920s

Jobs

Position in 1918:
- During WWI, 20% of workforce in weapons factories
- Mostly still worked in low-paid jobs

Improvements:
- 2m join workforce making 20% of total
- Married women working up from 1.9m to 3.1m

Limitations:
- Most still in traditional jobs e.g. secretaries
- Only 12% of married women working

Rights

Position in 1918:
- Some had right to vote in local/state elections e.g. New York 1917
- Many didn't have same employment opportunities

Improvements:
- 19th Amendment 1920 - equal right to vote
- Laws passed reflecting women interests e.g. Sheppard-Towner Act 1921: healthcare for pregnant women

Limitations:
- Most didn't vote freely, followed husband's decision
- Only 2 women in House of Representatives 1928
- Dec 1927, average pay still $12/week less than a man

Lifestyle

Position in 1918:
- Expected to do household jobs + obey husband

Improvements:
- Freedom from failing relationships divorce rate up 7%
- Fewer domestic chores - birth rate fell to 21.3/1,000

Limitations:
- Expected to look after children at home
- Proportion attending higher education fell

Flappers

Causes:
1. Rejection of clean-living 19th Century Culture of their parents
2. Challenge to traditional image of a woman

Features:
1. Short-coloured hair, make up
2. Drove around by themselves without chauffeurs

Effects:
1. Helped to tackle traditional attitudes towards women
2. Short-lived lifestyle- as flappers aged, many followed more traditional pattern of marriage and children

Anti-immigrant policies

Causes:
1. American workers worried newcomers would undercut wages and take their jobs
2. Fear of undemocratic radicalism after Russian rev 1917

Policies:
- Emergency Quota Act 1921 - limited immigration from eastern half of world to 357,000/year + max 3% of number from each country already in USA in 1920
- National Origins Act 1924 - quota down to 164,000/year
- 1929, quota further reduced to 150,000

Effects:
1. Immigration numbers fell rapidly - down from 1.2m/year in 1914 to 280,000 in 1929
2. New enforcement measures and border control in 1925 - end of USA's reputation as 'open-door'

Palmer Raids and Red Scare

Causes:
1. Russian Revolution 1917 - promoted worldwide communist revolution, immigrants brought these ideas
2. Apr 1919 - 40 mail bombs discovered, addressed to important politicians
2. Jun 1919 - bomb attacks in 8 cities, outside Attorney General Alexander Palmer's house

Actions:
- Palmer set up General Intelligence Division led by J. Edgar Hoover
- 7 Nov 1919: GID searched offices of Union of Russian Workers and made arrests
- 2 Jan 1920: raids peaked - radical groups targeted in 33 cities

Effects:
1. Thousands arrested, 600 deported
2. Increased support for restrictive immigration policies
3. Palmer's reputation destroyed when forecast of violence on May Day 1920 proved unfounded

Sacco and Vanzetti

Timeline:
- 1920, 15 Apr: Two killed in armed robbery at shoe factory in Massachusetts
- 1921, May: Sacco and Vanzetti stood trial and convicted
- 1927, both executed after unsuccessful appeals

Evidence:

Guilty
- Sacco's gun, Vanzetti armed robbery convictions, lied to police about beliefs, both draft-dodgers

Innocent
- Gun evidence inconclusive, eye witnesses, alibis, lied due to links to Red Scare bombings

Effects:
1. Lead to worldwide protests - protests in 60 Italian cities + mail bomb sent to US embassy in Paris 1921
2. United immigrants in USA - Sacco-Vanzetti Committee raised $300,000

Racism in 1920s

Features:

Southern Racism
- Jim Crow Laws, segregated society
- Plessy vs Ferguson 1896: Supreme Court upheld legal segregation
- Educational discrimination: Few black schools + only 1% at high school

Northern Racism
- Great Migration, 1.5m black families migrated north to escape racism
- Race Riots: job fears of white industrialists workers led to violence, 24 riots in 1919

Effects:
1. Jobs - poor education led to unskilled workers
2. Housing - in South, houses lacked plumbing/electricity and in North, city ghettos grew e.g. Harlem, New York from 50,000 in 1919 to 165,000 in 1930
3. Voting - white southerners tried to stop black people voting by creating literacy tests

Ku Klux

Values:
- WASPs , a superior race
- Immigration should stop as it was a threat
- Christian morality

Methods:
1. Violence
2. Protests
3. Boycotts

Membership + Influence:
- By 1923, 5m members across 4,000 chapters
- Declined after 1925, state leader David Stephenson found guilty of rape and murder; by 1929 down to 200,000

Monkey Trial 1925

Causes:

Fundamentalists
- Believed everything in Bible
- focused on strict morals and traditional values

Modernists
- Believed in Darwin's Theory of Evolution
- Moral values couldn't stay the same for ever

- Anti-Evolution League set up to stop teaching of Darwinism in schools
- Butler Act 1925 in Tennessee ($500 fine)
- Modernists in Dayton persuaded John Scopes to break law as a test case

Effects:

Fundamentalists
1. Butler Act remained in effect
2. Anti-Evolution League convinced more states to pass laws against teaching evolution

Modernists
1. National attention on religious debate - fist trial reported on national radio
2. Fundamentalists cause damaged - Bryan's beliefs mocked by newspapers

Prohibition

Causes:

Social
1. Alcohol affected family life
2. Led to sinful behaviour

Economic
1. Drunk or recovering workers less efficient
2. During WWI, grain needed for food production not alcohol

Events:
- By 1917, 1/2 of states had alcohol banned
- 1919: Eighteenth Amendment - banned sale, manufacturing of alcohol
- 1920: Volstead Act - set up system to enforce ban

Effects:

Positive
1. Liver disease death fell from 29.5/100,000 in 1911 to 10.7 in 1929
2. Fairly popular - survey suggested 40% in favour of enforcement

Negative
1. Thousands lost jobs after ban on manufacturing
2. Turned ordinary people into criminals - speakeasies and moonshines
3. Health issues e.g. 34 died from wood alcohol poisoning in 4 days in New York

Gangsters

Causes:
1. Market for producing and selling illegal alcohol

Features of Al Capone:
- Earned up to $105m/year
- Extremely Violent - Valentine's Massacre 1929

Effects:
1. Terrorised cities - 1924, 200 gang-related murders in Chicago
2. Turned ordinary citizens into criminals - in Chicago's East Side, produced 200 gallons/day

Wall St Crash 1929

Causes:
1. Rise in share price driven by investor confidence than real value of business - 1.5m Americans bought shares 1927-29 + Value of traded shares up from $34 bn in 1925 to $64bn in 1929. Bull pool encouraged inexperienced investors to speculate
2. When confidence weakened, system collapsed - Mid 1929, stock market leaders started to sell + Federal Reserve made it difficult to borrow money for speculation

Effects:
1. By mid-Nov - shares had lost $26bn down 1/3 from Sept value
2. Brokers demanded loans back from investors --> investors withdrew savings causing bank liquidity problem

Great Depression 1929-41

Causes:

1. Under-consumption
- 71% of Americans earning below $2,500: lacked money for luxury customer goods which meant markets became saturated

2. Industrial over-production
- Older industries suffering
- By late 1920s, car manufacturing (down 1/3 by 1929) and construction (down $2bn since 1926) also in decline

3. Failing Banks
- Limited cash reserves + bank liquidity problem
- 20% of banks failed in 1920s
- Businesses couldn't receive loans e.g. New York City Bank: 400,000 lost $268m

4. Failing international trade
- Europe couldn't afford US goods
- International trade dropped from $36bn in 1929 to $12bn in 1932

5. Wall St Crash
- Investors lost saving/ workers took wage cuts
- Banks restricted credit causing businesses to cut workers

Continued Great Depression

Effects:

Industry

Falling:
1. Demand: Exports down 39% 1929-32; Car sales down 3.5m 1929-33
2. Prices: Profit of $9.6bn (1929) turns into loss of 3bn (1932))
3. Wages: In manufacturing, fell almost 50%, 1929-33
4. Production and working hours: US steel production down 38% in 1929-30

Rising:
1. Unemployment: Ford sacked half his Detroit workforce
2. Business closures: By 1933, 70,000 factories closed
3. Bank failures: 9,000 of 25,000 banks closed

Agriculture

1. Economic crisis:
- Farming income fell from $6bn (1929) to $2bn (1932)
- 1/3 of farmers lost their land
- 2m migrated to cities, early 1930s

2. Environmental crisis:
- Drought affected 17m in eastern states in 1930
- Dust storms across Great Plains, 1932; 179 small storms April 1933

Migration:
- 2m moved from rural to urban areas during 1930s
- 1m moved west from Great Plains (e.g. Oklahoma), esp. to California - "Okies" had to harvest crops and fruit for starvation wages People's lives

People's lives

1. Unemployment:
- Rose from 3.2% in 1929 to 24.9% in 1933
- Up to 1/3 of workforce had to work part-time

2. Health issues:
- Reduced spending on fuel + food (in 1932, 20,000 children in New York lacked food)
- Birth rate fell below replacement rate

3. Homelessness and migration:
- in 1931, New York tried to find homes for 20,000 children
- Hoovervilles - thousands in shanty towns

4. Protests - Bonus Marchers:
- In 1924, WWI veterans promised $625 bonus in 1945
- 1932, 20,000 marched on Washington demanding immediate payment
- 17 Jun, Congress rejected bill but gave $100,000 to veterans
- 28 July, Hoover sent in police: 2 veterans killed and reputation destroyed

Impact on certain groups

Women:
- 25% lost their jobs in domestic service but 25% more women able to find work by end of Depression

Black People:
- More likely to lose jobs
- Fascist threats: 40,000 joined Black Shirts of Atlanta vs black workers

Immigrant Workers:
- Lost jobs to white people e.g. Mexican Americans in California
- 500,000 workers left or deported back to Mexico in early 1930s

Elderly:
- Couldn't afford to retire
- Limited pensions: only 11 states had schemes + only 15% of industrial workers had private plans

Hoover's reaction to depression

Causes:
1. Volunteerism - federal government's role to bring together state/local government and businessmen
2. Self reliance - individuals should look after themselves and not be reliant upon government

Banks

Actions:
- NCC 1931 - $500m from businesses
- RFC 1932 - $2bn government money to rescue banks

Effects:
1. NCC investors spent very little
2. RFC criticised for not helping poor
3. Record number of banks failed 1931

Industry

Actions:
- RFC made money available to banks to lend
- NBSC 1929 - 400 businesses executives made promises about wages etc.
- 18 month moratorium on European WWI debts 1931

Effects:
1. Most RFC money went to largest companies
2. NSBC promises broken as Depression deepened
3. Moratorium didn't prevent collapse of international economy

Agriculture

Actions:
- Federal Farm Board 1929 to buy crops
- Federal Land Banks - $125m for farm mortgages

Effects:
1. FFB couldn't stop falling prices
2. FLBs provided no help to repay mortgages

Unemployed + poor people

Actions:
- RFC - federal gov lent states $300m for relief
- PECE 1930-31 encouraged relief donations
- Double spending on federal gov projects

Effects:
1. Didn't raise huge sum for relief

Roosevelt's Alphabet Agencies

Agricultural Adjustment Administration- AAA
National Reconstruction Administration- NRA
Civilian Conservation Corps- CCC
Public Works Administration- PWA
Civil Works Administration- CWA
Rural Electrification Administration- REA
Federal Emergency Relief Administration- FERA
Reconstruction Finance Corporation- RFC
National Labor Relations Board- NLRB
Tennessee Valley Authority- TVA

Roosevelt's New deal- Recovery of Banks and Businesses

Banks

Actions:
- Emergency Banking Act closed banks for 4 days in Mat 1933
- RFC lent money to failing banks
- FDIC insured saver's deposits up to $2500

Effects
1. RFC helped 6,000 banks reopen after closure
2. 106 banks that received extra funds from RFC forced to close

Industry

Actions:
- NRA introduced quotas for production + 2.3m businesses joined Blue Eagle Scheme

Effects:
1. Industry began to recover- most businesses that survived 1933 able to make profit
2. Many businesses ignored NRA codes + old industries remained unprofitable, country in deep recession 1927-38

Farms

Actions:
- AAA subsidised famers to limit production, bought up and slaughtered 8.5m piglets
- Second New deal: AAA introduced compulsory farming quotas, limiting production

Effects:
1. During 1930s, farm income rose from $2.6bn/ year to $4.6bn
2. Farmers received $4bn of direct help
3. Tenant farmers thrown off their land
4. Recovery relied on regular gov payments

Roosevelt's New Deal - relief for unemployed + poor people

Job creation

Actions:
- CWA organised school repairs, roadbuilding (helped 4.3m)
- CCC did trail building, reservoir digging > only 500,000 by 1935
- TVA built dams, model farms
- PWA did construction projects ($3.3bn), e.g. Grand River Dam, Oklahoma
- SECOND NEW DEAL: WPA spent $11bn to employ 8m in range of jobs; WPA/CCC/PWA all provided work relief for poor ($4bn)

Effects:
1. WPA employed 8m.
2. Projects improved infrastructure
3. Work relief projects provided work for only 40% of those in need.
4. Recovery seemed to rely on government spending: after 1937 cuts, unemployment rose by 5% > Roosevelt had to ask Congress for $3bn more for work relief.

Food and shelter

Actions:
- ERA gave $500m to states to spend on relief (not loans like Hoover: basic income to survive
- SECOND NEW DEAL: RA built only 3 new suburbs for urban people; plus resettlement of a few thousand farmers
- HA built new homes for shanty dwellers

Effects:
1. 35% of population received relief.
2. Government did not spend enough on relief.
3. Relief varied from state to state.
4. Little social housing for poor.

Roosevelt's New Deal - reform of the way economy worked

Regulations of banks/stock markets

Actions:
- SECOND NEW DEAL:
- Banking Act 1935 > Board of Governors of Federal Reserve System
- Securities and Exchange Commission to regulate stock market

Effects:
1. Banking system centralised + greater controls on stock market
2. Little deposit insurance paid out

Protection of industrial workers

Actions:
- NRA > Banned child labour; controlled working hours
- NIRA > legal right to join union
- SECOND NEW DEAL: Wagner Act > NLRB > allowed union "closed shops"; ban on firing union members; helped unions gain employer recognition

Effects:
1. Minimum wages introduced, working hours limited
2. Unions recognised; membership rose to 9m by 1940
3. NLRB grew to defend workers - had 226 lawyers by 1939
4. Many unions had to strike to force companies to recognise them officially (violent)

Rural electrification

Actions:
- TVA built dams to generate electricity and lent money to co-operatives to lay power cables
- EHFA helped farmers buy electrical appliances
- SECOND NEW DEAL: TVA scheme expanded nationwide by REA

Effects:
1. 35% of farms had electricity by 1941.
2. 417 co-operatives helped to lay cables by 1939
3. 100,000 contracts for appliances by 1938
4. Utility companies tried to stop co-operatives by laying spite lines
5. By 1945, 60% of farms still without electricity

Social Security

Actions:
- SECOND NEW DEAL: Social Security Act 1935 > federal pension scheme; federal unemployment insurance; federal funds matching state grants for elderly poor, disabled, dependent children

Effects:
1. Help to families, elderly, unemployed and disabled
2. Social security left out large groups - agricultural workers; payments relatively small
3. Did little to reduce gap between rich and poor - most social security payments paid out of wages rather than federal money.

Effects of New Deal on Specific Groups

Women

Improvements:
- More political influence, owing to work of FDR's wife, Eleanor Roosevelt
- Specific help from Women's and Professional Division of WPA
- Grants to women with dependent children under Social Security Act

Limitations:
- Paid less than men (about half, 1937)
- Number of female professionals fell from 14.2% to 12.3%
- Alphabet Agencies provided more help to men, e.g. CCC created 2.5m jobs for men, 5,000 for women

Black People

Improvements:
- "Black Cabinet" advised Roosevelt, giving black people more political power
- 30% of black families received relief
- Early signs of desegregation (e.g. in some CCC camps)

Limitations:
- AAA forced black tenants off farmland
- NRA caused many to lose jobs
- Relief payments often lower than for white people

Native Indian

Improvements:
- Indian Reorganisation Act 1934: restored 7.4m acres of land to tribes
- Given chance to vote (including women) and govern themselves

Limitations:
- Most still very poor
- Reliance on agencies, e.g. WPA, left without help when agencies closed

Opposition to New Deal

Supreme Court

Causes:
1. Duty to defend US Constitution
2. Majority of judges selected by Republicans

Actions:
- Ruled NRA had no power and made it ineffective: Sick Chicken Case 1935
- Ruled AAA had no right to regulate in 1936

Effects:
1. NRA closed down
2. AAA closed down
3. Promoted Congress to defeat Roosevelt 'court-packing' plan 1937
4. Public against SC's actions

Republicans

Causes:
1. Political rivals
2. Hated size of AA, interfering in states; rights
3. Opposed high spending

Actions:
- 1936, Alfred Landon campaigned for power to return to states + end of New deal

Effects:
1. In 1938, Republicans won more Congress seats > effectively ended New Deal
2. Cut federal work relief programmes + blocked new measures, e.g. 1939 housing plan
3. However, lost to Roosevelt 1936

Businesses

Causes:
1. Believed in laissez-faire policies (no restrictions)
2. Opposed higher taxes

Actions:
- 1934: American Liberty League argued charities handle relief
- 1935: US Chamber of Commerce criticised New Deal
- Supported court challenges

Effects:
1. Liberty League struggled to recruit, 150,000 members
2. Unpopular: Republicans told them not to get involved
3. SC's change in attitude in 1937 made them ineffective

Radical opposition to New Deal

Senator Huey Long

Arguments:

1. NRA controlled by big businesses

2. AAA left tenant farmers homeless

3. Social Security Act didn't reduce inequality

Actions:

- 1934: Proposed Share Our Wealth Programme: take all income over $1.8m and give to poor

Effects:

1. 8m joined SOW clubs.

2. Credited with pushing Roosevelt into Second New Deal (Social Security Act, NLRA, Revenue Act)

Charles Coughlin

Arguments:

1. GD caused by Wall St financiers + bankers

2. New Deal ineffective - supported by communists

Actions:

- 1934: National Union for Social Justice, arguing bank reform

- 1936: National Union Party

Effects:

1. 1935: Roosevelt put in place some of Coughlin’s ideas in Second New Deal

2. 1936: Lemke got 828,000 votes, Roosevelt 27.8m.

3. Coughlin became more unpopular by attacking well-liked president and becoming increasingly anti-Semitic.

Francis Townsend

Arguments:

1. Give money to elderly to spend, help economy

Actions:

- Old Age Revolving Pensions - everyone 60+ gets $200/month to spend within 3 days

Effects:

1. 500,000 joined Townsend Clubs

2. 20m signed petition

3. Figures didn't add up so not a threat

Upton Sinclair

Arguments:

1. Empty land + closed factories should open for unemployed

Actions:

- 1934: ran for Governor of California

Effects:

1. 1934: defeated by Republican candidate