From New Era to Great Depression, 1920–1932

Learning Objectives

  • Explain how big business shaped the “New Era” (1920s) and how that influence unraveled in the Great Depression.
  • Analyze the challenges the Roaring Twenties posed to traditional rural / religious / moral values.
  • Trace the urban–rural rift (prohibition, immigration, KKK, Scopes Trial, 1928 election).
  • Describe Hoover’s policies during the crash and early depression and assess their limits.
  • Evaluate the human toll of the Great Depression and why optimism turned to despair.

Henry Ford & the Automobile Revolution

  • Background & Mythos
    • Born 1863, farm boy from Dearborn ➜ machinist in Detroit ➜ pioneered gasoline carriage 1893.
    • Ford Motor Company founded 1903 with 12 workers in a 250 × 50 ft shed.
  • Output & Prices
    • 6{,}000{,}000 cars by 1920; 15{,}000{,}000 by 1927.
    • Price fell from \$845 (1920) ➜ <\$300 (1928), putting ownership within reach of skilled workers.
  • Moving‐Assembly Line (1914+)
    • One Model T every minute (1920); every 10 s (1925).
    • Mass production = synonym for Model T; workers became "robots" performing repetitive micro-tasks.
  • Contradictions
    • Idolized as democratic benefactor, yet antisemitic, anti-Catholic, anti-union.
    • Nostalgic for rural past (built Greenfield Village) while spearheading modern industrialism.

“Business Government” & Republican Ascendancy 1921-33

  • Harding (1921-23)
    • Campaign for a “return to normalcy.”
    • Cabinet: talented (Herbert Hoover – Commerce; Andrew Mellon – Treasury) + corrupt Ohio Gang.
    • Policies: high tariffs, farm price supports, dismantle wartime controls.
    • Teapot Dome Scandal – Interior Sec. Albert Fall took >\$400{,}000 bribes for WY oil leases.
  • Coolidge (1923-29)
    • Maxim: “The business of America is business.”
    • Cut corporate / wealthy taxes, restricted FTC powers, favoured trade associations (voluntary self-policing).
    • Supreme Court curbed both federal & state regulation (e.g., struck DC minimum wage law 1923).
    • 1924 election slogan: “Coolidge or Chaos” ➜ landslide over Democrat John W. Davis & Progressive Robert La Follette.
  • Hoover (1929-33)
    • Evangelist of “New Era” efficiency; engineer & humanitarian.
    • Faith in individual self-reliance + limited federal power became liability post-1929.

Republican Foreign Policy: Private-Sector Internationalism

  • Washington Naval Conference (1921-22)
    • Five-Power Treaty (US-GB-FR-JP-IT) scrapped 2{,}000{,}000 tons of warships ➜ biggest disarmament success to date.
  • Kellogg–Briand Pact (1928) – \approx50 nations renounce war (symbolic, unenforceable).
  • Dawes Plan (1924)
    • Halved German reparations, injected fresh US loans, prompted French withdrawal from Ruhr – kept European trade afloat & protected US exports.

Mass Production, Welfare Capitalism & Productivity Gap

  • Industrial Efficiency
    • 1922-29: manufacturing productivity ↑ 32\% while wages ↑ only 8\%.
  • Welfare Capitalism
    • Safety, sanitation, pensions, paid vacations designed to foster loyalty & undermine unions (“company unions”).
  • Ford’s \$5 Day (1914) – blueprint: high wages ➜ loyal employees ➜ own workers become consumers.

Consumer Culture & Advertising Boom

  • Personal income ↑ 33 % during the decade; cost-of-living flat; unemployment low.
  • Explosion of big-ticket goods: cars, radios, refrigerators, washing machines.
  • Advertising revolution – linked products to happiness, beauty, social status; undermined thrift ethic.
  • Installment buying (“a little down, pay each month”) became norm; by late 1920s 4 / 5 cars & 2 / 3 radios bought on credit.
  • Middletown (1929) study: Muncie, IN now a culture “in which everything hinges on money.”

Prohibition (18th Amendment, 1920-33)

  • Intended to end crime & bolster morals; instead unleashed a 14-year “orgy of law-breaking.”
  • Enforcement problems: sacramental wine loophole; medicinal liquor; farm fermentation.
  • Organized crime – Al Capone grossed \$95{,}000{,}000/yr; St. Valentine’s Day Massacre (2/14/1929).
  • Class & ethnic bias – raids focused on working-class “poor man’s club,” not elite parlors.
  • Repealed 1933 (21st Am.), only constitutional amendment ever revoked.

Women, Flappers & the Equal Rights Debate

  • 19th Amendment (1920) – women vote; expectations of feminist political bloc unmet.
  • Sheppard–Towner Act (1921) – federal aid for maternal/infant health (major legislative win).
  • Divisions:
    • National Woman’s Party pressed for Equal Rights Amendment (ERA) – defeated 1923.
    • League of Women Voters preferred protective labor laws.
  • Workforce: by 1930, 1 in 4 women employed; concentrated in “pink-collar” jobs (librarian, nurse, teacher, secretary, sales).
  • Flapper image – bobbed hair, makeup, short skirts, jazz dancing; symbolized sexual liberation & consumerism.
  • Birth-Control Movement – Margaret Sanger tied contraception to eugenics to win AMA support.

New Negro & Harlem Renaissance

  • Great Migration expanded northern black populations; Harlem’s black residents ↑ 115\% (152k ➜ 327k).
  • Marcus Garvey & UNIA (1917) – racial pride, economic separatism, “Back to Africa,” Black Star Line shipping.
  • Harlem Renaissance (mid-1920s)
    • Writers: Langston Hughes, Claude McKay, Countee Cullen, Zora Neale Hurston.
    • Painter: Aaron Douglas.
    • Theme: proclaim “We know we are beautiful and ugly too.”
  • NAACP campaigned for anti-lynching legislation; Supreme Court struck down residential segregation ordinance (1917) yet informal barriers & violence persisted.

Mass Culture: Movies, Radio & Sports Heroes

  • Film – weekly attendance 80{,}000{,}000 by 1929; stars: Rudolph Valentino, Clara Bow, Charlie Chaplin.
  • Sports Golden Age
    • Baseball: Babe Ruth “Sultan of Swat.”
    • Boxing: Jack Dempsey (people’s champ) vs. Gene Tunney.
    • Football: collegiate icon Red Grange ➜ pro Chicago Bears; coach Knute Rockne.
    • Charles Lindbergh (5/20-21/1927) solo trans-Atlantic flight – “Lone Eagle.”
  • Radio
    • KDKA Pittsburgh (1920) first commercial station; 30 ➜ 606 stations 1922-29.
    • Households with radios: 60 k ➜ 10.25 M in seven years.

Expatriates & The Lost Generation

  • Disillusioned by war & materialism; many decamped to Paris.
  • Coined by Gertrude Stein: “You are all a lost generation.”
  • Key voices: Ernest Hemingway (The Sun Also Rises), F. Scott Fitzgerald (This Side of Paradise, The Great Gatsby), Sinclair Lewis (Main Street, Babbitt), William Faulkner.

Nativism, Immigration Quotas & the Second KKK

  • Johnson–Reed Act (1924)
    • Capped annual immigration at 161{,}000; national‐origins quotas heavily favored NW Europe (e.g., GB 62,458 vs. Russia 1,992).
    • Extended Asian exclusion (except Philippines); left Western Hemisphere open ➜ \approx500{,}000 Mexican entrants in 1920s.
  • Indian Citizenship Act (1924) – enfranchised all Native Americans.
  • Sacco & Vanzetti (1920-27) – anarchist Italian immigrants executed; global protest.
  • KKK Revival (1915)
    • Platform: “100 % Americanism,” anti-black, anti-Catholic, anti-Jew, anti-immigrant, anti-feminist.
    • Spread nationwide; political clout in IN, IL, OR, TX, OK, KS.
    • Decline after scandals (e.g., IN Grand Dragon D.C. Stephenson convicted of rape & murder, 1925).

Urban–Rural Culture Wars

  • Scopes “Monkey” Trial (Dayton, TN, 1925)
    • John Scopes challenged anti-evolution law; defense Clarence Darrow vs. prosecutor William Jennings Bryan.
    • Trial broadcast live; Bryan’s literalist stance ridiculed; Scopes fined \$100; fundamentalism’s image damaged.
  • Rural grievances
    • By 1930, 40 % of farmers landless; 90 % rural homes lacked plumbing/electricity.
    • Census 1920: majority now urban ➜ country cousins felt politically & culturally eclipsed.

Election of 1928

  • Herbert Hoover (R) vs. Al Smith (D).
    • Issues: prosperity, prohibition, immigration, religion.
    • Smith – NYC, Tammany Hall, immigrant son, 1st Catholic nominee, “Sidewalks of New York,” anti-prohibition.
    • Anti-Catholic backlash (“mother of ignorance… dirty people”).
  • Results: Hoover 58 % popular vote; 444 EC vs. 87; cities trend Democratic (immigrants & many blacks).

Structural Weaknesses of the 1920s Economy

  • International
    • Allied war‐debt burden (\$33 B German reparations, etc.); US high tariffs block foreign earnings ➜ foreigners can’t buy US goods.
    • US banks prop trade via loans ➜ fragile credit web.
  • Domestic
    • Maldistribution of income
    • Top 1\% ↔ 15\% income; 2/3 families
    • Farm crisis – low prices, heavy debt; avg farm family income \$240/yr.
    • Over-reliance on installment credit; shaky banking (5,000 bank failures 1921-28).
    • Early slowdown: construction & auto sales dip mid-decade.

Stock-Market Mania & Crash (1929)

  • 1924-29 NYSE value ×4; rampant margin buying.
  • Coolidge: stocks a “bargain”; Yale economist: “permanently high plateau.”
  • Black Thursday 10/24/1929 ➜ panic; Black Tuesday 10/29/1929 worst fall; within 6 mo market lost \frac{6}{7} of value.
  • Crash didn’t cause Depression alone but shattered confidence & froze credit/consumption.

Hoover’s Response to Crisis

  • Voluntarism Conference (Nov 1929) – asked business to maintain wages & output; collapsed quickly.
  • Agricultural Marketing Act (1929) ➜ Farm Board, \$500 M to buy surpluses; ineffective.
  • Hawley–Smoot Tariff (1930) – highest ever; provoked foreign retaliation, worsened exports.
  • Public Works – \$420 M (1930) + doubled spending over term; not enough.
  • Reconstruction Finance Corp (RFC, 1932) – loans to banks, RRs, corporations; “trickle-down,” little reached needy.
  • Rejected direct federal relief as moral hazard; allowed small loans to states & Red Cross surplus food distribution.

Human Toll of the Great Depression

  • Economic Indicators (1929 → 1933)
    • National income: \$88 B ➜ \$40 B.
    • Unemployment: 3.1\% (1.5 M) ➜ 25\% (≈13 M). Cleveland 50 %, Toledo 80 %.
    • Bank failures: >9,000.
  • Desperation
    • Hoovervilles (shantytowns); “Hoover blankets” (newspapers); “Hoover flags” (empty pockets).
    • Hobos riding rails (≈1 M).
    • Soup kitchens, scavenging; NYC hospitals reported 95 starvation deaths (1931).
  • Farmers – tenant/sharecroppers (8.5 M people) in cabins w/o plumbing/electricity; subsisted on salt pork & cornmeal.
  • Mexican Repatriation – \approx500,000 Mexicans/Mex-Americans deported or fled.
  • Family Strain – delayed marriages/births; female employment ↑ 25\% (1930-40), men’s self-esteem plummeted.

Protest & Radicalization

  • Industrial Unrest – Ford River Rouge march (3/7/1932): security killed 4; 40 k attended funerals.
  • Farmers’ Holiday Association (1932) – market “holiday,” penny auctions to reclaim foreclosed farms.
  • Bonus Army (1932) – 10s of thousands of WWI vets demanded early pension; army (MacArthur) dispersed camp w/ bayonets & tear gas, public outrage.
  • Rise of the Left
    • Communist Party membership ≈100 k; led Harlan County coal strike & Scottsboro defense (1931).
    • Socialist Party (Norman Thomas) attacked sharecropping system.
  • Growing sentiment: “the biggest and finest crop of revolutions you ever saw is sprouting all over the country.”

Key Terms & Legislation (Chronological Highlights)

  • 1920: Prohibition begins; 19th Am; Harding elected.
  • 1921: Sheppard–Towner Act; immigration quota 1st law.
  • 1922: Teapot Dome scandal surfaces; Five-Power Treaty.
  • 1923: Harding dies; Coolidge president; ERA defeated.
  • 1924: Dawes Plan; Coolidge wins; Johnson–Reed (immigration); Indian Citizenship.
  • 1925: Scopes Trial.
  • 1927: Lindbergh flight; Sacco & Vanzetti executed.
  • 1928: Kellogg–Briand Pact; Hoover elected.
  • 1929: Middletown; St. Valentine’s Day; Crash.
  • 1930: \$420 M public works; Hawley–Smoot Tariff.
  • 1931: Scottsboro arrests; Harlan County strike.
  • 1932: Reconstruction Finance Corp; Bonus March; River Rouge shootings.

Big-Picture Connections & Significance

  • Mass Production ↔ Mass Consumption created dazzling prosperity but masked deep inequality & credit fragility.
  • Cultural ferment (women, jazz, Hollywood) thrived alongside reactionary backlashes (KKK, quotas, fundamentalism).
  • Republican “business government” & laissez-faire courts dismantled Progressive regulation, limiting tools when crisis hit.
  • International entanglements (war debts, tariffs) demonstrated that US could not remain isolationist economically.
  • Failure of voluntarism & trickle-down policies discredited market self-correction ideology, paving way for New Deal activism (next chapter).