Depth Study: The United States, 1919-41 - Comprehensive Study Notes
Key Terms for the United States, 1919-41
To understand the history of the United States between 1919 and 1941, one must define the core economic and political terminology. An economic boom is defined as a period of economic prosperity characterised by increased trade, higher share prices, bigger profits and higher wages. In contrast, a depression is a period of economic downturn characterised by decreased trade, higher unemployment and falling share prices. The system of laissez-faire is the belief that government should stay out of the affairs of the individual and business, a core tenet of the Republican Party, which is one of the two main political parties in the USA, broadly conservative with a belief in minimal government intervention, low taxes and isolationism. The Democratic Party is the other main party, described as broadly liberal with a belief in limited government intervention to help the poorest in society.
Legal and structural terms are equally vital. Tariffs are taxes on imported goods which make them more expensive, intended to protect domestic industry. The Federal system is a system whereby individual states look after their own internal affairs through state government, while the government in Washington DC, known as the federal government, deals with foreign affairs, taxation policy and matters of national security. The US Constitution serves as the legal framework of the nation, setting out rules on how government is elected, the powers of each branch of government and citizens’ rights. The President serves as both the head of the government and head of state, while Congress is the parliament of the USA that passes new laws. The Supreme Court is the highest court in the USA that checks the power of the President and Congress, holding the ability to declare laws or actions by the President unconstitutional.
Social and industrial terms include mass production, which is the system of producing goods in factories on assembly lines, resulting in faster production and cheaper prices. The Red Scare refers to the fear of communism spreading to the USA, often linked to immigration, which is the movement of foreign people into another country. Racism is the belief that one race is superior to others, a sentiment championed by the Ku Klux Klan, a secret racist and white supremacist organisation in the USA. Religious fundamentalists are followers who believe in the literal truth of their holy book, such as the Bible. Prohibition refers to the banning of the sale and production of alcohol. Financial terms include speculation, the act of buying and selling shares on the stock market to try to make a profit. Finally, the Hundred Days refers to the first hundred days for a new president where he sets out new legislation, often involving Alphabet agencies, which were government agencies set up to deal with the Depression.
Key Question 1: How Far Did the US Economy Boom in the 1920s?
The economic boom of the 1920s was fueled by a combination of industrial strength, the impact of the First World War, and specific government policies. The USA possessed vast natural resources, including oil, coal, and iron ore, which provided industries with cheap and easy access to raw materials, leading to lower costs and higher profits. By 1923, the population reached million, with the majority living in towns and cities, creating a massive internal market for new goods. The First World War significantly benefited the US economy as the country sold war materials, munitions, and foodstuffs to the Allies and provided loans to Britain and France. Repayment of these loans gave the USA a source of income for reinvestment. Additionally, the USA overtook Germany as the world leader in the chemical industry, and wartime improvements in aviation were successfully applied to civilian use. While there was a minor depression from to as industry readjusted to peacetime, the USA successfully took over European trade routes and formed new global markets.
Republican policies were central to the boom. Presidents followed the principle of laissez-faire, allowing businesses to expand without government regulations. Low taxation meant both individuals and companies had more profit to spend or reinvest. The government implemented tariffs on foreign goods to encourage citizens to buy American products. They also permitted the formation of trusts, allowing "captains of industry" to control vital sectors and maximize profits. The philosophy of "rugged individualism" encouraged people to solve their own problems, which decreased government spending. Technological innovation also drove growth; the assembly line, revolutionised by Henry Ford in the automobile industry, allowed goods to be mass-produced cheaply. This had a knock-on effect: increased car sales created jobs in the steel, glass, rubber, and leather industries, as well as in road building, oil production, gas stations, diners, and motels. The motor industry became the USA's single biggest employer in the 1920s and enabled people to live in suburbs, boosting the housing market.
Mass consumption was further stimulated by new marketing techniques and a specific "state of mind." Advertising on billboards and radios increased consumer awareness, and mail-order catalogues allowed the of Americans living in remote areas to access new products. Hire purchase schemes, or "buy now, pay later" plans, allowed people to pay in instalments; by the late 1920s, out of radios and out of cars were bought on credit. This led to a surge in the possession of consumer goods. For instance, the number of cars rose from million in 1919 to million in 1929, and radios rose from in 1920 to million by 1929. Telephones increased from million to million, and the number of refrigerators multiplied by a factor of over . Confidence was high, leading to increased investment and speculation on the stock market, where people began "buying on the margin"—putting down only of the cash for shares and borrowing the rest from banks.
However, the boom was not universal. Agriculture faced a severe crisis as total farm income dropped from in 1919 to in 1928. Factors included overproduction due to more efficient techniques and new machinery, falling demand in Europe after the war, and competition from even more efficient Canadian wheat producers. US tariffs led to retaliatory tariffs from Europe, hindering exports. While some farmers of fresh fruit and vegetables prospered (letuce production rose from crates in 1920 to in 1928), many others went bankrupt. African Americans were among those worst affected, as they held the least skilled rural jobs; approximately became unemployed. Traditional industries also suffered. The coal industry declined as manufacturers switched to electricity or oil, and more efficient boilers required less fuel. The textile industry struggled as man-made materials like rayon became cheaper and more popular, and cotton could not be sold overseas due to tariffs. By the 1920s, an estimated of the population lived below the poverty line, defined as earning less than per week. Unemployment remained around throughout the decade, partly because mechanisation meant fewer workers were needed to produce the same volume of goods.
Key Question 2: How Far Did US Society Change in the 1920s?
Social life in the 1920s, often called the "Roaring Twenties," was marked by increased urbanization and shifts in leisure. Growing numbers of Americans had more free time and spent it on radios, cinema, and sports like baseball. Jazz music, originating in the cities, became highly popular, though conservative Americans often viewed it as decadent and claimed it caused drunkenness. The moral landscape changed as Hollywood films exposed people to new role models, prompting Hollywood to eventually introduce a censorship code to appease conservative opinions. For women, the 1920s offered significant changes. The First World War had brought women into the workforce, and they gained the right to vote in 1920. Electrical appliances like vacuum cleaners and washing machines made housework easier, while the motor car provided greater mobility. The "flapper" lifestyle emerged, characterized by shorter hair, makeup, and more daring social behavior such as smoking or drinking in public. However, many of these changes were limited to urban areas. Rural women still performed heavy farm labor and domestic work. Even in cities, only a handful of women held political office by 1929, and they were consistently paid less than men for the same jobs. Divorce rates doubled between 1914 and 1929 as women became less likely to stay in unhappy marriages.
Intolerance was a defining shadow of the era. The "Red Scare" was a period of intense fear of communism and anarchism following the 1917 Russian Revolution. In 1919, workers went on strike, and race riots occurred in towns, which many saw as evidence of a coming revolution. US Attorney General Mitchell Palmer and J. Edgar Hoover led the "Palmer Raids," rounding up and deporting suspected radicals. This atmosphere of fear contributed to the trial of Sacco and Vanzetti, two Italian anarchists who were executed for murder despite flimsy evidence; their trial is widely considered a mistrial influenced by the judge and jury’s prejudice against their radical beliefs. Immigration was also restricted, particularly from eastern and southern Europe and Asia, to protect the jobs of city workers and maintain the Protestant character of the country. Racial intolerance remained systemic, especially in the South where "Jim Crow" laws enforced segregation in schools, toilets, and public spaces, and African Americans were denied the right to vote. The Ku Klux Klan (KKK), which had peaked at members by 1924, used parades, beatings, and lynchings to intimidate African Americans, Jews, Catholics, and immigrants. Many African Americans moved north in the "Great Migration," finding better jobs and a cultural "renaissance" in places like Harlem, New York, though they still faced poverty and racial prejudice.
Religious and moral conflicts were epitomized by the Monkey Trial of 1925. In Tennessee, a part of the "Bible Belt," biology teacher John Scopes was tried for teaching Darwin’s theory of evolution, which contradicted the literal Creationist belief held by fundamentalist Protestants. Although Scopes was convicted, the trial was seen as a victory for evolutionists because the creationist lawyer, William Jennings Bryan, was mocked for his literal interpretations. Another major social experiment was Prohibition, introduced in 1920 via the Volstead Act. Driven by temperance movements like the Women's Christian Temperance Union and the Anti-Saloon League, it aimed to reduce crime and improve productivity. However, it largely failed as demand for alcohol persisted. By 1925, there were more illegal "speakeasies" than there had been legal saloons in 1919. Bootleggers smuggled liquor from Canada, and illegal stills produced dangerous "moonshine." Enforcement was impossible due to the small number of poorly paid agents and widespread corruption; local officials, police, and judges were frequently bribed by gangsters like Al Capone, who made a year from illegal bars. The violence associated with organized crime, such as the St Valentine’s Day Massacre, eventually led to the repeal of Prohibition in 1933.
Key Question 3: What Were the Causes and Consequences of the Wall Street Crash?
The Wall Street Crash of 1929 was the result of an overheated and unregulated stock market. During the 1920s, the number of share owners grew from million in 1920 to million in 1929. Speculators bought shares not for long-term dividends but to sell them quickly for a profit, often using "buying on the margin." While share prices rose through most of the decade due to high confidence, signs of weakness appeared by the mid-1920s. The construction industry and coal mining declined first. By 1929, overproduction in the car and electrical appliance industries meant that sales were falling because most people who could afford the goods had already bought them. Tariffs also prevented US companies from selling surplus goods abroad. In June 1929, industrial output fell for the first time in four years. On September 5, 1929, economist Roger Babson predicted a crash (the "Babson Break"). Panic began to set in through October, culminating in "Black Thursday" (October 24) and "Black Tuesday" (October 29). On Black Tuesday, a record million shares were sold in a single day, and the ticker machines broke because they could not keep up with the volume of selling. The market index lost points, and banks stopped supporting the stock market, leading to a total collapse.
The Crash led to a devastating depression. As demand for goods dropped, company profits fell, leading to workers being laid off. By 1933, there were million unemployed people in the USA. The banking system collapsed because banks had lent money irresponsibly and people rushed to withdraw their savings; banks failed in 1929, in 1930, and a total of by 1933. Industrial and farm output was cut by between 1928 and 1933. For farmers, the crisis was worsened by the "Dust Bowl" in the Midwest, where overfarming and drought turned topsoil to dust, forcing many to abandon their land. Homelessness became common, with people living in shanty towns known as "Hoovervilles." President Herbert Hoover’s response was widely seen as inadequate. He initially insisted prosperity was "just around the corner" and stuck to Republican ideals of laissez-faire and self-help, believing relief should come from charities, not the federal government. Although he eventually invested in public works like the Hoover Dam and set up the Reconstruction Finance Company to prop up banks, it was viewed as "too little, too late." His popularity was further destroyed by his treatment of the "Bonus Marchers"—war veterans seeking early payment of their bonuses—who were forcibly cleared out of Washington DC by the military.
In the 1932 Presidential Election, Franklin D. Roosevelt (FDR) defeated Hoover by a margin of million votes. Roosevelt, who had been the Governor of New York, promised a "New Deal" for the American people. He campaigned on the belief of "active government" to improve the lives of ordinary citizens. He traveled the country by train, giving inspiring speeches and attacking the Republican record. The election resulted in a Democratic majority in Congress, giving Roosevelt a mandate for drastic action to combat the Depression.
Key Question 4: How Successful Was the New Deal?
Upon taking office, Roosevelt initiated the "Hundred Days," a period of intense legislative activity guided by his "Brains Trust" of advisers. His first priority was the banking crisis. He passed the Emergency Banking Act, closing all banks for inspection and allowing only trustworthy ones to reopen, which restored public confidence. He also created the Securities Exchange Commission (SEC) to regulate the stock market and prevent reckless speculation. Roosevelt engaged the public through "fireside chats," radio broadcasts listened to by Americans, where he explained his policies in plain language. His aims were the "Three Rs": Relief (helping the poor and unemployed), Recovery (reviving the economy), and Reform (passing laws to prevent future crises). He established a series of "Alphabet Agencies" to implement these goals. The Federal Emergency Relief Administration (FERA) spent on soup kitchens and employment schemes. The Civilian Conservation Corps (CCC) provided jobs for young men in national parks. The Agricultural Adjustment Administration (AAA) helped farmers by setting production quotas to force prices up. The Tennessee Valley Authority (TVA) was particularly ambitious, building dams across seven states to provide irrigation and electricity, and creating thousands of jobs.
A "Second New Deal" was launched in 1935 to make the USA a fairer society. This included the Wagner Act, which forced employers to allow trade unions, and the Social Security Act, which provided state pensions for the elderly and widows, as well as unemployment insurance. The Works Progress Administration (WPA) consolidated job creation agencies and even provided work for artists, actors, and photographers. The Farm Security Administration (FSA) replaced earlier agencies to help tenant farmers buy their own land. Despite these successes, Roosevelt faced significant opposition. Radical critics like Huey Long argued the New Deal did not go far enough; Long proposed a "Share Our Wealth" scheme to limit personal fortunes to . Conservative critics, including many in the Republican Party and big business, complained that Roosevelt was acting like a dictator and that the New Deal was too socialist. The Supreme Court, dominated by Republicans, declared some agencies like the NRA and AAA unconstitutional. In the Schechter Poultry case, the Court ruled that the federal government had no right to prosecute a company for breaking NRA rules. Roosevelt responded by attempting to "pack" the court with six new sympathetic judges, a move that was unpopular and perceived as an overreach of power.
The impact of the New Deal was mixed. On the positive side, it restored confidence in the banking system, provided relief to millions of workers and farmers, and strengthened labor unions, which grew to over million members. However, the New Deal did not fully solve unemployment; levels rose again in 1937 when Roosevelt tried to cut the budget, and the problem was only truly solved when the USA entered the Second World War. Furthermore, the New Deal failed to address the systemic challenges faced by many groups. Roosevelt failed to pass civil rights legislation, meaning lynchings and segregation of African Americans continued. While some African Americans were helped by agencies like the CCC, they often faced racial segregation within those programs. Similarly, while women like Eleanor Roosevelt achieved prominent positions, most New Deal legislation was designed for male breadwinners, and local governments often avoided paying social security to women. By 1941, although the economy was more stable, unemployment was still higher than it had been in 1929, and the outbreak of war in Europe and the Far East ultimately shifted the nation's focus away from domestic reform.