Revision Notes - the USA in the 1920s and 30s.

by kartikayguptalivecouk (student)

History Unit 2

Economy in the 1920s

The world in 1919

The USA had become very independent, with its new policy of isolationism, so it did not join the league of nations or any other country's affairs. Treaty of Versailles had been put in place for Germany. USA profited from the war hugely, since they sold weapons to Europe during the war, and they start to sell Europe large amounts of food. While a lot of Americans were killed, it was less than other countries, and they manage to get over the war quickly.

Why did the USA boom?

Impact of WW1 on Europe-The war was fought in Europe, and not in USA, meaning that Europe had been badly damaged. Many were killed, and needed to import lots from USA
Impact of WW1 on USA-The lower European export levels meant that there was a gap in the market that the USA was ready to fill, helping with the booming economy. They supplied Europe with weapons during the war, and food afterwards, giving them huge profits
Effect of impact of WW1 for USA-Europe was devastated, and needed supplies from USA, gaining USA sizable profits
Industrial strength-USA had high exports and low imports, meaning that they profited hugely. They had a large amounts of natural resources, like oil in Texas, coal in Kentucky, and Iron in Chicago
New ideas and industries-Henry Ford owned Ford, who were one of the leading car manufacturers. He introduced many new ideas, like standardisation, and mass production. This created a prosperity cycle. Electricity became more widespread, so more electrical appliances could be manufactured.
Prosperity cycle-As more jobs were made available for people, there was more money going around, since more people would be buying goods, increasing demand, which requires more jobs. Another on is that Cars started to become made, which required parts, which boosted older industries like Steel and glass, giving more people jobs, so more cars were bought, increasing demand. Cars also created new opportunities, like motels, more roads, and petrol stations.
Mass Production-Standardisation, so all parts were the same. Division of labour split up the work, so that one person would do the same specific job, and moving assembly lines meant that a conveyor belt carries products to the workers.
Confidence-Americans felt very confident, meaning they would be more willing to spend their money. Hire purchases-borrowing money to buy goods. Americans also felt confident in investing in the stock market.

Republican Policies

Low Taxes-People did not have to spend all of their money on taxes, and could spend their money on other things
Laissez Faire-The government did not interfere with people's lives
Rugged Individualism-First used by Hoover, meant that people achieved their own success through their own hard work.
Tariffs-Taxes put onto imported goods, so Americans had to buy American goods-May 1921 Emergency Tariff Act-Increased tax on imported wheat, sugar, meat, wool, etc
Immigration Restriction-Before WW1, there were practically no immigration restrictions, but afterwards the government decided to 'keep America American'-1921 Emergency Quota Act restricted immigration to 3% of the number of immigrants in 1910
Election slogan-Hoover promised 'A chicken in every pot, a car in every backyard'

Growth of Industry

Construction-New materials allowed construction of new, taller buildings. More homes built in suburbs as the transport was better, so people could get into work from further away. Economic growth required more buildings to be built, like department stores, factories, etc.
Electricals-Grew very rapidly, and many homes had electricity by 1929. Better technology allowed this growth. Encouraged development of new goods, like vacuum cleaners, radios, washing machines, etc. All these new products required more advertising to sell well.
Transport-Car industry was boosted greatly, with Henry Ford's new ideas. New transport required more roads to be built. One car a minute at ford in 1929. More vehicles=More parts needed=Older industry boosted. Air travel boosted-162,000 flights in 1929.
Advertising-More firms realised the potential of advertising, making it become more important. More sophisticated advertisement methods, with colour and they became more memorable. Cleaning the home was easier(new technology) so women had more time, so more advertisement was aimed at them. More department stores meant more advertising used.
Department Stores-More consumerism, so more demand for department stores. Electrical appliances meant there were more available products, so more of a reason for them to exist. Better construction allowed them to be bigger. JC Penney opened Piggly Wiggly (supermarket). Allowed people to get all products in the same place. Customers served themselves as opposed to waiting to be served.

What industries suffered?

Coal industry-More people had cars, so there was less demand for railway, so coal was used less for this. Oil and its derivatives were becoming used more and more, and coal less and less. Coal no longer used in factories-competition from gas and electricity
Railroad Industry-More people had cars, so people no longer required railroads. Coal industry suffered, so it could not be used for steam strains. Cheaper ownership of cars, so petrol was cheap
Textile Industry-Tariffs on foreign wool and cotton was less, so there was increased competition. Rayon was a new manmade fibre that was cheaper than other textiles-required less processing and fewer workers. Women's dresses became shorter after WW1, so less material was required to make dresses-7m material was required in 1928, but 21 was required before ww1
Agriculture-Overproduction. At the end of the war, Europe needed food supplies from USA, so they supplied it. Farmers noticed that they could sell tons to Europe, so expanded. This meant that when Europe recovered, there was a surplus of food, so farmers got practically no money. Farmers invested greatly in farming equipment, and took a lot of loans, that they could not pay back. Minary-Haugen Farm Relief Bill introduced by congress to help farmers(set up federal farm board to buy and store agricultural products at 1914 prices), but President Coolidge vetoed it. Increased competition from Canada, Argentina, and Australia.

Society in the 1920s

Consumerism

Consumerism was practically nonexistent before the 1920s-very few luxuries, a lack of advertising, and everything was aimed at men.
In the 1920s, people had more money, and women had more free time, due to new technologies. Women were used in adverts as it appealed to both men and women. Fridges could be used to keep food cool, so you didn't have to go to the shop every single day to buy more food. Branding becomes more important.

Prohibition and Crime

Prohibition-when something is banned, or stopped from happening. The USA government ...

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Society in the 1920s

Consumerism

Consumerism was practically nonexistent before the 1920s-very few luxuries, a lack of advertising, and everything was aimed at men.
In the 1920s, people had more money, and women had more free time, due to new technologies. Women were used in adverts as it appealed to both men and women. Fridges could be used to keep food cool, so you didn't have to go to the shop every single day to buy more food. Branding becomes more important.

Prohibition and Crime

Prohibition-when something is banned, or stopped from happening. The USA government banned the sale of alcohol, although trade and drinking of alcohol continued illegally.
Prohibition causes-Prohibition happened because: Female reformers argued clear links between alcohol, wife beating, and child abuse, Industrialists(like Henry Ford) believed that drinking reduced efficiency, many brewers were German, and there was an anti-German feeling after the war, religion saw drinking as sinful
Prohibition consequences-Prohibition meant that alcohol business went underground, into illegal speakeasies(illegal bars), in which organised crime played a large part. Much fewer people were dying due to alcoholism-dropped by 80% by 1921, but an increased number of people were killed due to poisoned alcohol(50000 in 1926). Many lost jobs in brewing industry-when prohibition ended in 1933, only 9 of 22 breweries reopened in St Louis. Organised Crime grew hugely due to this
Gangster causes-Gangsters grew for a multitude of reasons. Many ordinary Americans would happily break the prohibition law, so gangsters like Al Capone earned huge amounts of money due to prohibition. Practically no way of enforcing prohibition, with only 2500 IRS agents-much less risk in alcohol. Corruption also meant that gangsters would pay off police, IRS agents, and politicians to ignore them.
Gangster consequences-St Valentine's Day Massacre 1929-Capone organised murders of rival gang leaders in broad daylight. Increased corruption over the USA-police would be paid to ignore gangsters, public would break the law. Al Capone opened the first soup kitchen

Women

Women's hair became shorter, and wore shorter dresses(impacting on textile industry). They ditched the old hour glass silhouettes, and started wearing brighter colours

Racism and Intolerance

Attitudes to immigrants-Anti-German feelings after WW1. Isolationism meant USA wanted nothing to do with Europe's problems. Red scare, so Russians and communists were looked down upon. Had to be a WASP(White Anglo-Saxon Protestant) to be ideal citizen. Many immigrants were poor, so ghettos started to pop up around cities. Americans blamed immigrants for lack of jobs.
Immigration laws-put in place after WW1(entry was free before)-Keep America American. 1917 Literacy test-All immigrants had to pass a literacy test to enter the country. 1921 Immigration Quota Act-Number of immigrants from a certain country was limited to 3% of the number of people from that country that had been in the country since 1910-if there were 100 Germans in 1910, 3 more were allowed per year. This meant lots of Irish and Italians could get in, but almost no Asians. 1924 National Origins Act-1921 quota was changed to 2% of the 1890 census. 1929 Immigration Act-Restricted immigration to 150,000 immigrants per year.
The Monkey Trial-Creationism vs. Evolution. Six US States had banned the teaching of Darwinism, meaning they were not particularly happy when John Scopes, a biology teacher, taught his class about evolution. While Scopes was convicted, fundamentalists were mocked by the media, and it was a public image disaster for Creationists
Attitudes towards blacks-Jim Crow laws-After the civil war, 41 states introduced laws to take away black people's freedom, and segregated blacks from whites. There was a huge amount of racism in the south, so many blacks migrated north, but the racism was just as bad. The growing black middle class boycotted department stores in Chicago after 1918.
Ku Klux Klan-At its peak membership was over 4 million, which was 20% of the adult white male population. Membership rose to 40% in some areas in the south Membership grew so much because there were more foreign workers in cities, threatening many WASPs. Lynched, burned and tortured many foreigners.
Sacco and Vanzetti Case-5 May 1920 Nicola Sacco and Bartolomeo Vanzetti were arrested, charged and execute for the murder of Fred Parmenter and a security guard.

The Great Depression

Causes of the Wall Street Crash

Overproduction-Factories were producing more goods than people could buy, as they had either already bought it, or they couldn't afford it. The US Tariff policy meant that these could not be sold abroad, since foreign countries put tariffs on American goods in response to them. This caused sales to fall, so prices and wages were cut. When this didn't help, the factories had to fire workers. Fewer workers lead to there being even fewer products sold, and this went in a cycle, causing industry to crash, and people to lose their jobs.

Unequal distribution of wealth-Even though the USA was very prosperous during the 1920s, almost 50% of families had an income under $2000, and they could not afford to buy any of the new goods. The people who owned a lot of the wealth already had all of the products that they needed to buy, and so the market was severely limited. This links with overproduction, as the factories did not realise this, and continued to produce products that nobody would buy.

US Tariff policy-Since the Americans had tariffs on foreign goods, a lot of European countries had put tariffs on American goods, so Europeans were buying European goods. When overproduction occurred, this meant that the surplus could not be shipped off to Europe, as nobody there would buy any of it.

Over-speculation of the stock market-Share prices were constantly rising during the 1920s, which lead to over-speculation. in 1928, companies were not selling as many products, and so share prices were not rising as quickly, causing a loss of confidence in the stock market. However, as soon as they started to rise again, people went straight back to speculating, and putting all of their money into the stock market, leading to the Wall Street Crash.

Panic Selling in 1929- This was the trigger cause for the Wall Street Crash. On Black Thursday, 13 million shares were sold, and only a few days later on Black Tuesday, 16.5 million shares were sold, and stock prices crashed completely, and there were even reported suicides. People had lost their confidence in the stock market, and everyone rushed to sell all of their shares.

Economic consequences of the Wall Street Crash

Banks-When the stocks crashed, people panicked and had a 'run on the banks'. The banks were small, and not large chains like they are today, and so could not afford to give all the money they owed people. This meant that people lost their money, and that led to them not paying back their debts to the bank, so the banks would take their homes away from them. 5000 banks went out of business by 1933. Hoover was optimistic about this, and did nothing.

Business-Unemployment was very widespread, so people had no money to spend on luxury goods, and the people who did have money did not want to spend it on goods. This caused many businesses to go out of business, leading to even more unemployment. The economy had stopped moving. Industrial production dropped by 45% between 1929 and 1932. Hoover kept faith in republican ideas, but did spend 1.8 billion on building and repairing roads and dams.

Citizens-Due to widespread unemployment, people could not afford food, and many had to line up for hours to get it from soup kitchens. There was a 25% unemployment rate, and William Randolph Hearst owned the biggest bread line in New York, where the line would go on for blocks and blocks and blocks. Hoover did cut taxes by $150 million, and claimed that prosperity was right around the corner.

Social Consequences of the Wall Street Crash

Unemployment-After the Wall Street Crash, people were very protective of the little money that they had, and were not spending it on luxury goods. This meant that businesses were getting very little money, and so they had to fire many workers. These people had very little money, and no home. Some men would go on freight trains to travel around the country, who were called hobos, but this was quite dangerous, and 6500 hobos were killed in train accidents, or by railroad 'bulls' who were violent men employed to stop hobos. Hoover cut taxes, encouraged people to donate to charity, and have $300 million to state governments to help the unemployed.

Dust Bowl-The states of Texas, Oklahoma, Colorado, New Mexico, and Kansas were badly hit by a drought, and the soil became dust, and simply flew away due to soil erosion by wind, causing many people to move away from these areas. The Dust Bowl affected 20 million hectares of land, and roughly 850 tonnes of soil were blown away. Hoover passed the Hawley-Smoot tariff act in 1930, but it just meant that other countries wouldn't trade with the USA.

Hoovervilles- Since many of the unemployed doubled up as homeless as well, they would build shacks out of anything, and they grouped together in shantytowns called Hoovervilles. One family was stuck living in a piano box, and the largest hooverville was in St Louis, where races were integrated, and they even had a mayor.

Bonus Marches-A group of ex servicemen from WW1 in Portland, Oregon believed that they deserved their bonus (that was due in 1945) in 1932. This wasn't justified, but an Expeditionary Force of over 12,000 unemployed veterans marched to Washington DC, and they built a Hooverville on the Anacostia Flats. When they arrived, Hoover responded with force, which was a disaster for Hoover, and it led to the death of 2 veterans.

The New Deal

Hoover's Defeat

Hoover was defeated in the 1932 elections for a multitude of reasons:

Hoover stayed in Washington for most of the campaign, and did not visit other states.
It was the tariffs introduced by Hoover that led to overproduction, which was one of the major factors causing the depression
Used charities to help people, rather than directly giving the unemployed and homeless help from the government.
Hoover used force against the bonus marchers, and even killed 2 of the veterans, which looked very bad for Hoover.
Very few people actually supported prohibition, and it actually caused more problems than it solved.
Banks were failing, partly due to Hoover's policy of Laissez-Faire, as the government did not bail them out.
Hoover's Reconstruction Finance Corporation was too little too late, so even though he attempted to help, it wasn't good enough.
The relief schemes that he set up were not big enough, and therefore were not effective.

Roosevelt's policies

Roosevelt introduced many new policies once he had one the depression. In the 'First Hundred Days', Roosevelt:

Ended prohibition, famously saying 'I think that now would be a good time for a beer'
Helped farming industry
Reduced power of organised crime and gangsters via the end of prohibition
Introduced a large number of Alphabet Agencies in the First New Deal

Roosevelt had 3 main aims-The 3 Rs. These were Relief, which was to give relief to the worst affected; Recover, which was to recover from the depression and rebuild the economy; Reform, which was to prevent any further depression and make the country a fairer place.

Roosevelt also had his Fireside Chats, where he would directly talk to people about their problems and what he was doing on the radio. This allowed him to connect with people, and make it seem like people's opinions were getting through, and having their voice heard. This was extremely successful, and was a major factor towards his 1936 landslide victory where he won a majority in 46 of 48 states.

Alphabet Agencies of the First New Deal

Success of the First New Deal

The Tennessee Valley Authority

The TVA is still in operation today, and has its headquarters in Knoxville, Tennessee, and made $9 billion in revenue in 2006.

During the depression, over half of the population of Tennessee was receiving some form of relief. The area had been very badly hit by the depression, and was even suffering from malaria. There was an average family income of $639 per year, with some families surviving on just $100 per year. The area was very badly hit by the dust bowl, and was very poor even before the depression.

The TVA aimed to modernise the region with electricity and by controlling flooding via Hydro Electric Power Stations (HEPs). It also aimed to develop fertilisers and teach farmers how to increase crop yields. Less than 20% of homes had electricity supply, so the TVA aimed to provide as many people as possible with electricity, allowing for electric lights and modern appliances.

15,000 families were displaced by the creation of dams and reservoirs, which ended up creating an anti-TVA feeling amongst those living in rural areas. The TVA was also very interventionist, and seemed socialist to many.

Overall, the TVA was hugely successful, with the following improvements:

Flooding was controlled
Electricity became widespread
River Navigation was developed
Fertiliser industry created to improve yields and create jobs
Improved quality of life, making it a much nicer place to live
Created many jobs

Alphabet Agencies of the Second New Deal

Success of the Second New Deal

1936 election landslide

In the 1936 elections, there were 3 candidates:

Roosevelt-Democrat candidate and obvious choice to continue New Deal
Alf Landon-Republican who was focused on the needs of Big Business
Huey Long-Independent with 'Share the Wealth' campaigns

Roosevelt won the election with 61% of the vote, which was a landslide victory, showing how popular he was. The reasons for this were:

Entered the election as the favourite due to the new deal
had multiple opponents, such as Huey Long and Charles Coughlin
Republicans disliked him, but did not have any strong candidates to oppose him
Roosevelt's fireside chats led to people believing that he sympathised with them. They made him seem approachable, and that he understood their worries.

Opposition to the New Deal

The Supreme Court

The role of the supreme court is to keep a check on Congress and the President, and making sure that everything that they do is constitutional. When a judge is appointed, they are appointed for life, meaning that it generally goes from being republican, to being democrats, and back again. Judges only leave when they die or retire, and they pretty much never retire. The supreme court during the 1930s was mainly made up of Republicans, which caused nothing but problems for Roosevelt. From 1935-36, the supreme court declared 11 New Deal measures unconstitutional, and blocked them, with two famous cases: The Sick Chickens case, 1935, and The US vs. Butler case, 1936.

The Sick Chickens case: The Schechter brothers were selling diseased chickens which were unfit for consumption, and the NIRA was trying to stop them. The Schechters took NIRA to court, claiming that it was the state's responsibility to do that, and not NIRA's, and the supreme court actually ruled in favour of the Schechters

The US vs. Butler Case:AAA declared unconstitutional for overriding state poweres, similar to the sick chickens. It is the state that has the responsibility to give bonuses for killing livestock, and not the federal government, and was against the 10th commendment.

Revision Notes - the USA in the 1920s and 30s.

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