Chapter 20: From Business To Great Depression: The

Twenties, 1920-1932Nathaniel Rivera, Santos Moreno, Humeraa

Khoda, Samantha Perez, Albatool Shuhayeb

The Business

of America A Decade of Prosperity

* The business of America was business- Productivity and economic output rose

dramatically as new industries- such as chemicals and electronics- flourished and

older ones like food processing and the manufacture of household appliances

adopted Henry Ford’s moving assembly line

* American companies produced 85 percent of the world's cars and 40 percent of

its manufactured goods- General electric and international telephone and

telegraph brought up companies in other countries.

-International Business Machines (IBM) was the world’s leader in office

supplies. American oil companies built new refineries overseas. American companies took

control of raw materials abroad, from rubber in Liberia to oil in Venezuela.

A New Society

* Consumer goods of all kinds proliferated, marketed by salespeople and

advertisers who promoted them as ways of satisfying Americans' psychological

desires and everyday needs- Telephones made communication easier. Vacuums,

washing machines, and refrigerators transformed work in the home and reduced

the demand for domestic servants.

* Americans spent more and more of their income on leisure activities like

vacations, movies, and sporting events- In this “mass civilization”, widespread

acceptance of going into debt to purchase consumer goods had replaced the

values of thrift and self-denial, central to the 19th century notions of upstanding

character.

* Work, once seen as a source of pride in craft skill or collective empowerment

via trade unions, now came to be valued as a path to individual fulfillment through

consumption and entertainment.

The Limits of Prosperity

* The fruits of increased production were very unequally

distributed- Real wages for industrial workers (wages adjusted

to take account of inflation) rose by one quarter between 1922

and 1929, but corporate profits rose at more than twice that rate.

- A handful of firms dominated numerous sectors of the

economy.

* By 1929, an estimated 40 percent of the population still lived

in poverty- During the 1920s, the number of manufacturing

workers declined by 5 percent, the first such drop in the nation’s

history.

The Farmer's Plight

* Farmers did not share in the prosperity of the decade- Farm

incomes declined steadily and banks foreclosed tons of

thousands of farms hose owners were unable to meet

mortgage payments.

*California received many displaced farmers- During the

decade; some 3 million persons migrated out of rural areas,

many of whom headed for southern California, whose rapidly

growing economy needed new labor.

The Image of Business

* Businesspeople like Henry Ford and engineers like

Herbert Hoover were cultural heroes- In high wages,

efficient factories, and the mass production of consumer

goods, Americans seemed to have discovered the secret

of permanent prosperity.

* Numerous firms established public relations

departments- The firms aimed to justify corporate

practices to the public and counteract its long standing

distrust of big business.

The Decline of Labor

* Business appropriated the rhetoric of Americanism and industrial freedom as weapons against labor unions- Some corporations during the 1920s implanted a new style of management where they provide their employees with private pensions and medicals insurance plans, job security, and greater workplace safety.

* Welfare capitalism- A more socially conscious kind of business leadership, employers

trumpeted the fact that they now paid more attention to the “human factor” in

employment.

* Propaganda campaigns linked unionism and socialism as examples of the sinister

influence of foreigners on American life- Employers in the 1920s embraced the

American plan, at whose core stood the open shop- a workplace free of both

government regulation and unions, except in some cases, “company unions” created

and controlled by management.

The Equal Rights Amendment

* The achievement of suffrage in 1920 eliminated the bond of unity

between various activists- Each activist was struggling for her own

conception of freedom.

- Black feminists insisted that the movement must now demand enforcement

of the 15th amendment in the South, but they won little support from white

counterparts.

* Alice Paul's National Woman's Party proposed the Equal Rights

Amendment (ERA) - This amendment proposed to eliminate all legal

distinctions “on account of sex”.

- Paul insisted that women no longer required special legal protection- they

needed equal access to employment, education, and all the other opportunities of

citizens.

Women's Freedom

*Female liberation resurfaced as a lifestyle, the stuff of advertising and

mass entertainment- No longer one element in broader program of social

reform, sexual freedom now meant individual autonomy or personal

rebellion.

* The flapper (Women in bobbed hair, short skirt, publicly smoking and

drinking, who unapologetically used of birth control) - Epitomized the

change in standards of sexual behavior, at least in bigger cities.

* Female freedom became a marketing tool- Women’s self-conscious

pursuit of personal pleasure became a device to market goods from

automobiles to cigarettes.

* New freedom for women only lasted while she was single- Having

found a husband; women were expected to seek freedom within the

confines of the home, finding “liberation”, according to advertisements, in

the use of new labor-saving appliances.

Alice Paul protesting for woman’s suffrage. (Top left)

Flappers during 1920s. (Top right)

1920s Propaganda. (Left)

The Retreat From progressivism:

*Progressivism: A political movement of body and thought

*Progressivism fueled an opinion which undermined Americanself-government

*In the 1920s, Walter Lippmann published Public Opinion and The Phantom Public. Both repudiated the Intelligence of mostthe American voters and described them as “ill informed”.

*1929: Robert and Helen Lynd published Middletown, A storyabout the typical community in the American Heartland.

*From 1896 to 1924 the turnout of eligible voters had dropped from 80% to less than 50%.

The Republican Era

* Late 1910s and the 1920s were decades of complete dominion for the Republican party.

* The Republicans’ major shift in power contributed to William Howard Taft’s appointing as Chief Justice in 1921

*Government policies reflected the pro-business ethos of the 1920s.* Actions that Republicans took included:

-Lower taxes

-Higher tariffs

-Anti-unionism

- The Supreme Court remained strongly conservative due to the large pro-business influence on the country.

*The Conservative government Repudiated the Muller v. Oregon case, which was a case concerning wages for women

Corruption in Government

* In 1921, William G. Harding Took office as president of the U.S

* The Harding administration quickly became one of the mostcorrupt in American history.

* Harding considered himself a “man of limited talents”

* Harding surrounded himself with “cronies” who used their officesfor private gain: despite working with Men like Charles EvansHughes and Herbert Hoover.

* In 1927: A young Ohio woman named Nan Britton published ThePresident’s Daughter, about their child whom Harding had left

* Teapot Dome scandal: A scandal where Albert Fall (Sec.of Interior) accepted nearly $500,000 from business men inexchange for government oil reserves at Teapot Dome, WY.

* Fall became first cabinet member to be convicted of a felony.

The Election of 1924

*Coolidge exemplified Yankee honesty by using statetroops to break a strike in 1919.

*He vetoed the McNary-Haugen bill: a bill whichsought to have the government purchaseagricultural products for sale overseas to raise farmprices.

*Coolidge beat John W. Davis in 1924 by a landslide.

*Robert La Follette ran on a Progressive platformin 1924. However, America’s highly conservativegovernment/ voters had forbidden a progressivistpresident from being elected.

*La Follete’s “communistic and socialistic” viewswere perceived as un-American by his oppositionand also many “patriotic” voters.

Economic Diplomacy

*Foreign affairs also reflected the close working relationship between business andgovernment

*People often Called the relationship “ Modern diplomacy”.

*Washington Naval Arms Conference: Conference held in 1922 which negotiatedreductions in the navies of The U.S, Britain, France, Japan, and Italy.

*The Fordney-McCumber Tariff of 1922 raised taxes on imported goods to their highestlevels in history.

*The United States emerged from WWI as the both the world’s foremost center ofmanufacturing and major financial power. This was due to French and British debt to the U.S for funding their war efforts.

Economic Diplomacy (Continued)

*The U.S extended loans to countries of the Americas like Chile, Nicaragua, and Venezuela.

* The Red-Line Agreement: Deal made in 1928 where French, British, and American oil companies divided oil-producing regions in the Middle East and Latin America among themselves.

* The government continued to dispatch soldiers when a change in government in the Caribbean threatened American economic interests.

* In the 20s the Americans helped Antanasio Somozo gain power in Nicaragua in order to suppress a national revolt led by General Augusto Sandino.

The Birth of Civil Liberties

* Censorship and World war I era repression persisted into the 1920s

* New appreciation of Civil Liberties arose from the war and postwar repressions as well as pro-business policies which all illustrated how the public power can become grievously wrong.

* Civil Liberties: Rights an individual may assert even against democratic majorities. ‘’.Essential Elements of American Freedom

* The 1920s saw the birth of the concept of civil liberties and the beginnings of significant legal protection of freedom of speech against the government.

Censorship

* Degradation of American Freedoms such as lynching's in Alabama, violation of freedom of speech, and mass censorship continued into the 1920s.

* Artistic works of sexual themes were rigorously censored. ThePostal service removed any books it deemed obscene. New andold works of satire were banned in entering the country.

* Because of publicity over actor Mary Pickford’s divorce and the OD of Wallace Reid, producers in Hollywood were afraid thatmovies made would promote immorality.

* In order to prevent extreme censorship by the government, in1922, the film industry enforced a set of guidelines that prohibited movies from depicting nudity, long kisses, and adultery. Scripts that portrayed clergymen as immoral or criminals in a sympathetic way, were also banned. They called this…. The Hayes codes.

Censorship (Continued)

* Many other industries followed in this similar way of self-censorship to prevent censorship by local governments. Self-censorship was EVERYWHERE!

* In was not until 1951…. 1951!!!(That’s like 30 years dude!), that the Supreme Court declared movie to be an artistic form that was protected by the First Amendment!

* During the time, the US was seen as a cultural wasteland. Many American writers moved to Paris. Europe, they felt valued culture, art, and appreciated unrestrained freedom of repression.

A “Clear And Present Danger”

* Arrests of antiwar dissenters under the Espionage andSedition Acts inspired the formation of the American Civil Liberties Union (ACLU) in 1917. The ACLU would take part in any case that helped bring a rights revolution.

* Before WWI, the Supreme Court had done nothing toprotect the rights of unpopular minorities.

* In 1919, the court convicted a socialist named CharlesT. Schenck of presenting “clear and present danger” ofinspiring illegal actions.

* Justice Holmes ruled that Schenck presented dangerbecause he had passed out letters through the mail thatcriticized the draft. Schenck v United States would be atemplate/basic test for many First Amendment cases.

Signs of a Shift

* Later, new cases that convicted people for criminal anarchy, such ascalling for revolution, led Holmes to declare a new meaning of free

* “The only meaning of free speech was that advocates of every set ofbeliefs, even proletarian dictatorship, should have the right to convert thepublic to their views in the great marketplace of ideas.”-Holmes

* In many cases later on, the court majority realized that the FourteenthAmendment (Rights of citizenship and equal protection of the laws)obligated the states to refrain from unreasonable limits of freedom ofspeech and press. This transformed into what seemed to be an ineffectiveBill of Right to a significant protection of Americans’ Freedom.

* Now in many cases into the late 20s and 30s, rules of the Fourteenthamendment protected the people’s freedom of speech, even those whowere communist and socialists.

* A judicial defense of civil liberties was slowly being born.

The Culture Wars   A. The Fundamentalist Revolt.

 * Many evangelical Protestants felt threatened by the decline of traditional values and the increased visibility of Catholicism and Judaism because of immigration.   * Convinced that the literal truth of the Bible formed the basis of Christian belief, fundamentalists launched a campaign to rid Protestant denominations of modernism and to combat the new individual freedoms that seemed to contradict traditional morality.   * Fundamentalists supported Prohibition of liquor, while others viewed it as a violation of individual freedom.

B. The Scopes Trial * John Scopes, a teacher in a Tennessee public school, was arrested for violating the state law that prohibited the teaching of Charles Darwin's theory of evolution.  * The Scopes trial reflected the enduring tension between two American definitions of freedom. * The renowned labor lawyer Clarence Darrow defended Scopes. * Darrow examined William J. Bryan as an expert on the Bible and this is when the highlight of the trial came. * Fundamentalists retreated for many years from battles over public education, preferring to build their own schools and colleges where teaching could be done as they saw fit and preachers were trained to spread their interpretation on Christianity.

C. The Second Klan * Few features of urban life seemed more alien to small-town, native-born Protestants than their immigrant populations and cultures. * The Klan was reborn in Atlanta in 1915 after the lynching of Leo Frank, a Jewish factory manager accused of killing a teenage girl. * By the mid-1920s the Klan spread to the North and West claiming more than 3 million members, nearly all white, native born protestants, many of them had resected positions in their communities.

D. Closing the Golden Door * Some new laws redrew the boundary of citizenship to include groups previously outside of it. * Efforts to restrict immigration made gains when large employers dropped their traditional opposition. * In 1924, ->Congress permanently limited immigration for Europeans and banned it for Asians. * To satisfy the demands of large farmers in California who relied heavily on seasonal Mexican labor, the 1924 law established no limits on immigration from the Western Hemisphere. * The law did establish a new category of "illegal alien" and a new mechanism for enforcement, the Border Patrol.

E. Race and the Law * James J. Davis commented that immigration policy, once based on the need for labor and the notion of the United States as an asylum of liberty, must now rest on a biological definition of the ideal population.

* The 1924 immigration law also reflected-> the Progressive desire to improve the "quality" of democratic citizenship and to employ scientific methods to set public policy.

G. Promoting Tolerance  * In the face of immigration restriction, Prohibition, a revived Klu Klux Klan, and widespread anti-Semitism and anti-Catholicism, immigrant groups asserted the validity of cultural diversity and identified toleration of differences-religious, cultural, and individual-as the essence of American freedom.  * In landmark decisions, the Supreme Court struck down Oregon's law that required all students to attend public schools and Nebraska's law that prohibited the teaching of another language other then English.

H. The Emergence of Harlem * The 1920s also witnessed an upsurge of self-consciousness among black Americans, especially in the North's urban ghettos. * New York's Harlem gained an international reputation as the "capital" of black America, a Mecca for migrants from the south and immigrants from the west Indies. . * The 1920s became famous for "slumming", as groups of whites visited Harlem's dance halls, jazz clubs, and speakeasies in search of exotic adventure. 

I. The Harlem Renaissance * In art, the term "New Negro", meant the rejection of established stereotypes and a search for black values to put in their place.

* Poets and novelists like Countee Cullen, Langston Hughes, and Claude McKay were befriended and sponsored by white intellectuals and published by white presses. 

The Great DepressionThe Election of 1928

* Hoover seemed to exemplify what was widely called the new era of American capitalist.* Published “American Individualism” in 1922 condemning government regulation interference with economic opportunity  but saw self interest as subordinate to public service * Saw himself as progressive, but preferred “associational action” in which private agencies directed regulatory and welfare policies, to government intervention in the economy. * B. Hoover's opponent in 1928 was Alfred E. Smith of New York.* Born into poverty, became a fixture in tammany hall politics * considered spokesmen for the immigrants * Triangle fire made him an advocate of progressive social legislation* As Governor, he established secured passage of laws limiting the hours of work for women and children and establishing widows pension.

* Denounced the Red Scare and called for repeal of prohibition C. Smith's Catholicism became the focus of the race.* Democratic, first catholic to be nominated by majority party* Denounced by Protestant ministers and religious publications * First time since reconstruction, Republicans carried several southern states. It showed the strength of anti-Catholicism and nativism among religious fundamentalist. •Hoover won by a landslide but Smith’s campaign laid the foundation for the triumphant Democratic coalition of the 1930’s based on urban ethnic voters, farmers, and the south.

The Coming of the DepressionD. On October 29, 1929 (Black Tuesday), the stock market crashed.* more than 10 million dollars in market value vanished in five hours.E. The stock market crash did not, by itself, cause the Depression.* California and Florida experienced frenzied real-estate speculation and then spectacular burst, with banks failing, land remaining undeveloped, and mortgages foreclosed.

* Unequal distribution of income and prolonged depression in farm regions reduced American purchasing power.* European demands for goods declined due to industrial recovery from war.F. The global financial system was ill-equipped to deal with the crash.* Germany stopped paying reparations fee’s to France and Britain so they stopped repaying debts to American Banks.*As banks failed as depositors withdrew money, fearful that they could no longer count on the promise to redeem paper money in gold. Families lost their life savings.

Americans and the DepressionG. The Depression transformed American life.* Thousands of families, evicted from their homes, moved into ramshackle shantytowns, dubbed Hoovervilles, that sprung up in parks and on abandoned land. * Cities spent their little money on relief for the poor*Suicide rates rose while birth rate fell.

H. The image of big business, carefully cultivated during the 1920s, collapsed as congressional investigations revealed massive irregularities among bankers and stockbrokers.* Banks knowingly sold worthless bonds* Wall streeters had unloaded their own portfolios while advising small investors to maintain their holdings

Resignation and ProtestTwenty thousand unemployed World War I veterans descended on Washington in the spring of 1932 to demand early payment of a bonus due in 1945.* Federal Army was used to break up these groups* Through out the country the unemployed demonstrated for jobs and public relief* Led by Milo Reno, former Iowa populist, the National Farmers Holiday Association protested low prices by temporarily blocking roads in the midwest to prevent farm goods from getting to the market.* Hoovers administration in 1931 opposed efforts to save money by reducing the size of the army, warning that it would “lessen our means of  maintaining domestic peace and order”

Hoover's ResponseJ. Businessmen strongly opposed federal aid to the unemployed.* Publications called for individual “Belt-tightening” as the road to recovery.K. Hoover remained committed to "associational action."* Relied on business to maintain investment and charity organizations to assist needy neighbors. •Established commissions to encourage firms to cooperate in maintaining prices and wages without governmental dictation.

The Worsening Economic OutlookL. Some administrative remedies made the economic situation worse.* Hawley-Smoot Tariff raised the already high taxes on imported goods, it inspired similar increases abroad, further reducing international trade. * A Tax increase in 1932 reduced Americans’ purchasing power even more.M. In 1932, Hoover created the Reconstruction Finance Corporation.* Loaded money to failing banks, railroads and other businesses, and the Federal Home Loan Bank System, offered help to homeowners.

Freedom in the Modern World

M. In 1927, the definition of freedom celebrated the unimpeded reign of economic enterprise yet tolerated the surveillance of private life and individual conscience.N. By 1932, the seeds had already been planted for a new conception of freedom.* Combined the two different elements in a sometimes uneasy synthesis* Progressive Belief: socially conscious state making what philosopher John Dewey called “positive and constructive changes” in economic arrangements. * The other arose around respect for civil liberties and cultural pluralism, and declared that realms of life like group identity, personal behavior, and the free expression of ideas lay outside legitimate state concern