unit 1- American CaPiTaLiSm

important evdience to remember for essay writting :)

Speculative boom

Throughout the 1920s, a prolonged bull market encouraged millions of Americans to invest in shares, with stock prices becoming artificially inflated beyond the actual value of companies.

Buying on margin

Investors borrowed heavily from banks to purchase shares, expecting prices to continue rising. When prices fell, investors could not repay their loans, worsening financial instability.

Black Thursday (24 October 1929)

The first major day of panic selling, as investors rushed to sell their shares and stock prices began collapsing.

Black Tuesday (29 October 1929)

Extreme panic selling caused the stock market to crash, destroying billions of dollars in wealth and undermining public confidence.

Overproduction

Industrial output increased by approximately 50% between 1920–1929, while wages remained relatively unchanged. Factories produced more goods than consumers could afford to purchase.

Agricultural depression

Following WWI, demand for agricultural products declined while production remained high. Surpluses caused crop prices to collapse, leaving farmers unable to repay loans taken out for machinery and land.

Weak banking system

Thousands of small, unregulated banks competed against one another and accepted risky loans to remain profitable. The McFadden Act (1927) restricted banks from operating across state lines, further weakening the system.

Tariffs and international trade

The Fordney-McCumber Tariff (1922) raised import taxes to approximately 40%, while Hoover's SmootHawley Tariff Act (1930) increased import duties further, damaging American agricultural exports and restricting international trade.

Unequal wealth

The wealthiest 0.1% of Americans held as much wealth as the bottom 42% of the population, demonstrating the extreme concentration of wealth.

Limited purchasing power

Approximately 60% of American families earned less than $2,000 annually, the minimum considered necessary for a decent standard of living, while 80% had no savings.

Rugged individualism

Hoover opposed direct federal welfare, believing individuals should overcome hardship through self-reliance rather than government handouts. He instead encouraged voluntary cooperation between businesses and labour leaders to maintain wages and prevent layoffs.

Limited government intervention

Hoover established the Reconstruction Finance Corporation (RFC) in 1932 to provide loans to struggling banks and railroads. He also supported public works projects, including the Hoover Dam, to create employment.

Moving assembly line

Henry Ford revolutionised manufacturing by introducing the moving assembly line, allowing cars to be produced more quickly, efficiently and cheaply.

Falling car prices

The price of a Ford car decreased from approximately $950 to $300, making automobile ownership accessible to a much larger proportion of Americans.

Improved working conditions

Ford introduced the $5-a-day wage and an eight-hour working day, helping workers afford the products they manufactured.

Growth in car ownership

American car ownership increased from approximately 7.5 million in 1919 to 26 million by the end of the 1920s.

Household appliances

Assembly-line manufacturing expanded beyond automobiles to household appliances, making products increasingly affordable and accessible to ordinary families.

Radio ownership

By the end of the 1920s, approximately 40% of American households owned at least one radio, demonstrating the expansion of consumer culture.

Advertising

Radio advertising encouraged Americans to purchase new products and created greater demand for manufactured goods. Advertisements particularly targeted women, exploiting insecurities surrounding ageing, hygiene and homemaking.

Women's purchasing power

By the end of the 1920s, women were responsible for approximately 75–85% of consumer spending, demonstrating their significant influence on the consumer economy.

Instalment buying

The introduction of consumer credit allowed Americans to purchase expensive products through regular payments rather than paying the entire amount upfront.

Car purchases

Approximately 75% of cars were purchased through instalment plans, demonstrating how heavily consumerism relied on borrowing.

Overproduction

Industrial output increased by approximately 50% between 1920–1929, while wages remained relatively unchanged, meaning production increasingly exceeded consumers' purchasing power.

Unequal prosperity

The wealthiest 0.1% held as much wealth as the bottom 42% of Americans, while approximately 40% of the population lived in poverty.

Theodore Roosevelt (1901)

Introduced the Square Deal, which aimed to establish greater fairness through trust-busting, consumer protection and conservation.

Trust-busting

Roosevelt used the Sherman Antitrust Act (1890) to file 46 antitrust lawsuits. The landmark Standard Oil case resulted in the company being dissolved into 34 separate companies, reducing monopolistic power.

Consumer protection

Following public outrage caused by Upton Sinclair's The Jungle (1906), Roosevelt supported the Pure Food and Drug Act (1906), which introduced food safety and accurate labelling requirements.

Woodrow Wilson

His New Freedom programme introduced economic reforms, including the Clayton Antitrust Act (1914), which strengthened restrictions on anti-competitive business practices, and the Adamson Act (1916), establishing an eight-hour working day for railroad employees.

Mass production

Henry Ford's moving assembly line reduced the price of cars from $950 to $300, while car ownership increased from 7.5 million in 1919 to 26 million by the end of the decade.

Consumerism

By the end of the 1920s, approximately 40% of American households owned a radio, while advertising and instalment buying encouraged greater consumption.

Women's changing roles

Following the 19th Amendment (1920), women gained the right to vote. The emergence of flappers challenged traditional Victorian expectations through shorter dresses, bobbed hair, smoking and greater social independence.

Cultural transformation

The Harlem Renaissance created a significant African American cultural movement in 1920s New York, while jazz music introduced African American culture to wider white middle-class audiences.

Unequal wealth distribution

The wealthiest 0.1% held as much wealth as the bottom 42% of Americans, while approximately 40% of the population lived in poverty. Additionally, 60% of families earned less than $2,000 annually.

Farmers and rural poverty

Overproduction following WWI caused agricultural prices to collapse, while land prices fell by approximately 40%. Many farmers faced bankruptcy after being unable to repay loans for machinery and land.

Racial discrimination

Jim Crow laws enforced segregation under the false principle of 'separate but equal'. The Ku Klux Klan expanded to approximately five million members by the mid-1920s, promoting white supremacy and racial violence.

Nativism and discrimination

The Immigration Act (1924) introduced strict immigration quotas, limiting immigration from each country to 2% of the existing population from that country. Prohibition (1920–1933) also failed to achieve its aims, encouraging speakeasies, bootlegging and organised crime.

Civilian Conservation Corps (CCC)

Employed thousands of young American men in manual labour, particularly conservation projects, providing employment and income during the Depression.

Works Progress Administration (WPA) (1935)

Employed millions of Americans to construct infrastructure, including roads and public buildings, while also funding creative projects.

Emergency Banking Act (1933)

Introduced a four-day banking holiday to allow banks to be audited, ensuring only financially stable banks could reopen and helping restore public confidence.

Fireside Chats

Roosevelt used radio broadcasts to communicate directly with Americans, explaining government policies in simple terms and restoring confidence in the banking system and federal leadership.

Agricultural Adjustment Administration (AAA)

Paid farmers to reduce crop production and slaughter excess livestock to decrease agricultural surpluses and increase prices.

National Recovery Administration (NRA)

Established codes of fair business practices, including minimum wages and maximum working hours, to improve working conditions and stabilise industry.

Economic intervention

Unlike Hoover's largely laissez-faire approach, Roosevelt's administration used increased federal involvement to influence agricultural and industrial production, attempting to restore economic activity.

Brain Trust

Roosevelt gathered a group of experts to develop policies addressing the Depression, demonstrating a more organised and interventionist approach to economic recovery.

Social Security Act (1935)

Established a national safety net through unemployment insurance, pensions for the elderly and support for disabled Americans.

Wagner Act (1935)

Protected workers' rights to organise trade unions and participate in collective bargaining, strengthening workers' ability to negotiate with employers.

Long-term government responsibility

The New Deal represented a major shift away from traditional laissez-faire economics, establishing a greater federal responsibility for economic security and social welfare.

Lasting significance

Unlike temporary relief measures, Social Security and workers' rights legislation established protections that continued beyond the immediate Depression.