Roaring Twenties and Depressing Thirties

Unit 9

Traditionalism vs. Modernism

• Characteristics? • Characteristics?

Hope you Read!

1. Why was the 1920s called the second industrial revolution?

2. List three impacts the auto industry had on America in the 1920s.

The Second Industrial Revolution ?

• Technological innovations made it possible to increase industrial output without expanding the labor force.• Driven by electricity and automated

machinery, industry concentrated on producing consumer goods.

• A housing boom further drove the economy.

The Modern Corporation

• A managerial revolution stressed scientific management and behavioral psychology.

• To improve worker morale and reduce the challenge of unions, corporations employed “welfare capitalism.” (employee well-being)

• To undercut unions, businesses promoted an “open shop” in which non-union workers received the same benefits as union workers.

The Auto Age • The car symbolized the rise of the consumer

economy. • Business structure became the model for

other corporations• The auto industry spurred production of steel,

rubber, glass, and petroleum. • Road building triggered commercial

development along highways, promoting new businesses and changed social habits.

Ford Model T and Model A

Model T

15 million produced by 1927

Model A

2 million people Viewed in NY on First day

Business of America

• Airplanes – Primarily use for commercial purposes

• Introduction of Electric Conveniences• Radios ($75), washing machine

($150), sewing machine ($60)

• Advertising, credit, and consumer choices

The Twenties Woman

• Fashion • What do clothing styles reflect?

• Actions• Smoking, dancing, and drinking

• Relationships• Marriage• Double standard• Birth Control – Margaret Sanger• Sigmund Freud – Repression is unhealthy?

• Work• 10 million women workers (24% of the total)

Twenties Fashion

History Repeats Itself• Parents feel their

children are staying out too late

• Crime is on the rise• Drunkenness is a

serious problem• People are risking their

savings on stocks• People are spending

money on things they don’t need

• Young people spend too much time listening to music

• Young people don’t spend enough time on schoolwork

• Women spend less time at home being wives and mothers

• Young people are going out in cars and it is unsafe

• Today’s new music is terrible and ruining young people

• “Nice” girls shouldn’t smoke, wear tight clothes or drink

Entertainment of the 1920’s

• Sports Heroes• Baseball – Babe Ruth (60 HR in 1927)• Boxing – Jack Dempsey vs. Gene

Tunney (150,000 viewers @ $2.7 million)

• Football – Notre Dame & Knute Rockne (Five undefeated seasons)

• Swimming – Gertrude Ederle – first woman to swim the English Channel

Tunney vs. Dempsey

More Entertainment

• Charles Lindbergh’s Flight – first nonstop solo flight across the Atlantic (34 hours = $25,000 prize)

• Movies – from silent to sound • Music & Literature

• George Gershwin – composer• Sinclair Lewis – first American Nobel Prize

for literature• Ernest Hemingway• Newspapers and weekly magazines (Time,

Reader’s Digest)

Read 818-823

• Prohibition• What’s the Volstead Act?• Why did Prohibition fail?

• Significance of the Immigration Acts• KKK

• Why is it so popular?

• Impacts of the Scopes trial

The Prohibition Experiment1920-1933

• Causes• Various religious

groups thought alcohol was sinful

• Need to protect the public’s health

• Alcohol leads to crime, domestic abuse, and job issues

• Nativism – against foreign born brewers and immigrants that used alcohol

• Effects• Widespread disregard

for the law• Increased smuggling

and bootlegging• New source of

criminal income• Birth of organized

crime

Prohibition

Immigration Act of 1924• AKA the National Origins Act, Asian Exclusion

Act or the Johnson-Reed Act• Limited the number of immigrants who could be

admitted from any country to 2% of the number of people from that country who were already living in the United States in 1890.

• Excluded immigration to the US of Asian laborers, specifically Chinese immigrants and had the effect of preventing Japanese Americans from legally owning land.

• The law was aimed at further restricting the Southern and Eastern Europeans who had begun to enter the country in large numbers beginning in the 1890s, as well as East Asians and Asian Indians, who were prohibited from immigrating entirely.

• It set no limits on immigration from Latin America.

Immigration Changes

Red = North/WestEurope

Blue = South/EastEurope

Return of the Klan

• By 1924 membership = 4.5 million• Beliefs

• Keep “blacks in their place”• Drive Catholics, Jews, and foreign-

born out of the country• Enforce prohibition• Oppose labor unions

Picnic with the Klan

MilwaukeeWe promise a “hot” lunch!!

Welcome noteto a Madison, WIAfrican-American

What is the symbolism?

Science vs. Religion

• Fundamentalism – literal interpretation of the Bible

• Adam & Eve or a Monkey?• Evolution theory• Creation theory

• The Scopes Trial• Bryan vs. Darrow

The Defendant

The Lawyers

The Outcome

• Scopes – Guilty $100 fine• Darrow wins verbal war by:

Asking Bryan if God created the world in 6 days (as we know a day)

Bryan’s answer cast doubt on the length of the day (which weakens the fundamentalist argument)

The Harding Administration

• Republican views of the economy• Labor Issues• Washington Conference• Kellogg-Briand Pact• Tariffs and Scandals

GOP version of Laissez-Faire

• Government should stay out of business unless it can ‘aid’ business• Removal of progressive reforms • Self regulation through cooperation

(Hoover)• No help for Labor• Bonus Bills for Vets

Anti-Labor Movements

• Unions tied to Communist beliefs• Boston Police Strike• Steel Strike• Coal Strike• Decline in Union Membership

• Rise in immigration• Movement from rural areas• Exclusion of African-Americans

““If Capital & Labor Don’t Pull If Capital & Labor Don’t Pull Together” – Together” – Chicago TribuneChicago Tribune

Consequences of Labor Consequences of Labor UnrestUnrest

Consequences of Labor Consequences of Labor UnrestUnrest

““While We Rock the Boat” – While We Rock the Boat” – Washington Washington TimesTimes

Coal Coal MinersMiners

’ ’ Strike Strike - 1919- 1919

Coal Coal MinersMiners

’ ’ Strike Strike - 1919- 1919

““Keeping Warm” – Keeping Warm” – Los Angeles Los Angeles TimesTimes

Steel Steel

StrikStrike - e -

19191919

Steel Steel

StrikStrike - e -

19191919

““Coming Out of the Smoke” – Coming Out of the Smoke” – New York New York WorldWorld

““He gives aid & comfort to the He gives aid & comfort to the enemies of society” – enemies of society” – Chicago Chicago

TribuneTribune

Boston Police Strike - Boston Police Strike - 19191919

Boston Police Strike - Boston Police Strike - 19191919

““Striking Back” – Striking Back” – New York Evening New York Evening WorldWorld

Isolationism in the New World

• Washington Conference• Reduce Naval Arms race• Limit base building in Far East

• Kellogg-Briand Pact• International agreement against using war

as an instrument of national policy• Small problem:

• No way to enforce• No provision for military or economic sanctions

against any nation that violated the pact

Double Trouble

• Economic isolationism = Tariff Walls• Thirty two increases in six years• Pressures Europe to respond in kind• Future outcomes?

• Teapot Dome (or the Return of Grant)• Secretary of the Interior Fall leases oil lands

to private business in exchange for $400k (loans)

• More scandals – pardons for sale, liquor exemptions etc.

Broken Heart?

Official cause of death – “A strokeof apoplexy (cerebrovascular accident)

1924 Election / Silent Cal

• 1924 Election• Who, what, and why

• International Debt• 1928 Election• Hawley-Smoot Tariff

1924 Election – Republican Candidates

Calvin Coolidge – Incumbent President Charles G. Dawes

Vice-President

1924 Election – Democratic Candidates

• Charles W. Bryan (WJB brother) and governor of Nebraska was the V.P. candidate

• Sorry no picture!

John DavisPresidentialCandidate

Won the Nomination on the 103rd

Ballot

CompromiseCandidate

1924 Election

What happened to the Progressives?

Debt, Debt, and more Debt

• Creditor status• $16 B owed: how to collect?• Allies issues

• Tariffs reduce sales which reduce payments

• Reparations from Germany• French occupation of the Ruhr Valley• Cripples economy – hyperinflation

• Dawes Plan

Dawes Plan

Main points of The Dawes Plan were:1. The Ruhr area was to be evacuated by Allied

occupation troops. 2. Reparation payments would begin at 1 billion

marks for the first year and should rise over a period of four years to 2.5 billion marks per year.

3. Foreign loans (primarily from the United States) would be made available to Germany.

Goal: Repayment of debts by Allies to US (BIG CIRCLE)

African-Americans

• Great Migration• By the end of the 1920’s almost five

million African-Americans lived in cities (40%)

• Huge numbers of race riots (25 in 1919)• Goals – NAACP

• Protest racial violence• Promote legislation to protect African-

American rights

Marcus Garvey

• Founded Universal Negro Improvement Association• Promote African-American businesses• Support a ‘Back to Africa’ movement

• Black Star Line• Colonize a nation

• Convicted of mail fraud and jailed

• Legacy = black pride, economic independence and reverence for Africa

Harlem Renaissance

• Literary and artistic movement celebrating African-American culture• Why Harlem?

• Mix of southerners, West Indies, Cuba, Puerto Rico, and Haiti

• World’s largest black urban community• Key figures

• Claude McKay – militant poet• Langston Hughes – poet• Louis Armstrong – Jazz musician• Duke Ellington – Jazz musician

Sacco-Vanzetti Trial

• Details• 4/15/20 – A $ 15k

payroll was stolen by two armed men (2 guards died)

• Both men were Italian and known anarchists

• Found guilty 7/21• Executed 8/27

Remaining Issues:Class Struggle?Fairness of Trial?

1928 ElectionRepublican Democrat

HerbertHooverPresident

CharlesCurtisV.P.

AlfredSmithPresident

JosephT.RobinsonV.P.

1928 Election

Where did the Democrats go?

Hoover’s Early Actions

• Help the Farmers (McNary-Haugen)• Buy surplus = boost prices• Problems with this plan?

• Hawley-Smoot Tariff• Highest protective tariff in peacetime• Decreases foreign purchases• Raises foreign tariffs• Fuels anti-American attitudes

Crash and Hoover

• Immediate impacts

• Review of causes• Hoover’s reaction• Bonus Army

Causes of a Sick Economy

• U.S. Issues• Decline in Industry

• Foreign Competition• Decreased Demand• New sources of energy threaten coal

industry• Outdated machinery

• Decline in Home Construction • Impacts all associated businesses

More Causes

• Agricultural Crisis• Decline in demand for farm goods• Falling prices• Rising farm foreclosures

• Easy consumer credit• Rising debt creates reduced consumer

spending• Uneven distribution of income

• More goods than consumers

The Stock Market Crash – The Final Straw!!!

• Crash – 10/29/29 (16 million shares traded)• By mid-November investors lost $30

Billion• By end of December investors lost

$10 Billion more……..

The Stock Market

• What is stock?• Individual ownership of a portion (share) of

a company that is publicly traded (bought and sold)

• How do you make money?• Buy low and sell high (difference = profit)• Buy and hold (company value increases

over time)• What are the risks?

• No insurance or guarantees of return

Issues with the Stock Market

• No rules!!!• Speculation – buying and selling with

the intent of making quick, large profits• Buying on margin – buying a stock with

a small down payment and borrowing the rest (up to 75%)

• See any problems?????• Mellon’s role

• Hamilton jr. or Defender of the Rich?

Two Decades of the Stock Market

Short Term Effects 1929-33

• Bank Failures• By 1933, 6000 banks closed (25% of all banks)• 9 million individual savings accounts lost

• Manufacturing output cut in half• 85,000 businesses went bankrupt

• Unemployment• 1929 – 3% of eligible workers unemployed• 1933 – 25% of eligible workers unemployed• Remaining workers take reduced pay and

hours

Impacts – Urban Areas

• Widespread homelessness • Creation of shantytowns

(Hoovervilles)• Begging, soup kitchens, bread lines• Destruction of families• “Riding the rails” > 2 million men

• Increased racial tensions• Competition for employment

Homeless

Unemployed

Sleeping in thePark

Unemployment MarchCamden, NJ

Soup Lines / Bread Lines

Waiting for the Train

Impacts in Rural Areas

• Huge numbers of farm foreclosures (over 400,000 between 1929-1932)

• Environment issues• Overproduction destroys soil• Extreme drought creates ‘Dust Bowl’

• Migrant families• Farmers move West for work

Rural America

President Hoover’s Reactions

• “Any lack of confidence in the economic future…..is foolish”• Remain optimistic!• Rugged individualism – succeed through effort

• Limited government involvement in economy• Federal building projects – Boulder Dam• Federal Farm Board – help raise farm prices• Reconstruction Finance Corp – loan money to

banks, industries, etc. (up to $2 billion)

The Bonus Army

• WWI veterans scheduled to receive a ‘bonus’ in 1945 (about $500 each)

• 20,000 march to Washington in 1932• WE WANT OUR BONUS NOW!!!!• Created a shantytown outside of Washington

• Hoover orders them to leave (most obey)• 2000 stay and are removed by US Army

with force (gas and bullets)• Nation is shocked!

Bonus Army

Bonus Army at the Capitol

FDR and Reform Pages 795-804

• Election of 1932• FDR’s New Deal• Reality of the R’s

• Relief programs• Recovery

programs• Reform programs

Election of 1932

Rep – Herbert Hoover Dem – Franklin D. Roosevelt *Promised to end Prohibition

Election of 1932

1928 – No more Democrats!!!1932 – No more Republicans!!!

*African-Americansswitch to Democratic Party in BIG numbers

Franklin Delano Roosevelt

• Promised “A New Deal for the American People”

• Three goals:• Relief for the needy• Economic recovery• Financial reform

• Used radio broadcasts (fireside chats) to explain goals to the people

Financial Reform

• Emergency Banking Relief Act of 1933 • Close all banks (bank holiday)• Only financially secure banks reopened• Support stable banks with Federal Treasury

(print more money)• Glass-Steagall Banking Act of 1933 –

provide federal insurance for individual accounts (FDIC)• Call in the gold supply• Temporarily take US off gold standard• Treasury buy gold at market price

Relief for the Needy

• Jobs• Civilian Conservation Corp (CCC) provided

jobs for young men building roads, parks, and planting trees

• Federal Emergency Relief Administration (FERA) – payments to states for direct relief or wages for work projects

• Civil Works Administration (CWA) provided construction and teaching jobs – short term

• Works Progress Administration (WPA) – created jobs for 8 million people in everything from construction to music teachers

More Relief for the Needy

• Direct Relief• Federal Housing Administration –

government loans for home mortgages

• Agricultural Adjustment Act – raise prices by lowering production and loans to meet mortgages

Critics

• Huey Long (Kingfish)• Share the Wealth

Program• Tax Rich• $5000 per family

initially• $2000 minimum

annual income• Government support

for pensions, education, and veteran’s benefits

FDR labels him asone of the two mostdangerous men in America!

More Critics

“The great betrayer and liar, Franklin D. Roosevelt, who promised to drive the money changers from the temple, had succeeded [only] in driving the farmers from their homesteads and the citizens from their homes in the cities. . . I ask you to purge the man who claims to be a Democrat, from the Democratic Party, and I mean Franklin Double-Crossing Roosevelt."Father Coughlin

1/3 of Americans listened to his weekly radio broadcasts

Economic Populist with an Anti-Semitic twist*

More CriticsDr. Francis Townsend

$200 per month per Senior Citizen

Labor/Agriculture ReformPages 804-812

• National Recovery Administration• Issues

• Public Works Administration• Agricultural Adjustment Administration

• Issues• Impacts of the Dust Bowl

• Federal Securities Act• Tennessee Valley Authority

Economic Reform

• National Recovery Act – promote fair business practices• Set competitive prices• Establish work standards for hours and child

labor• Provide workers with the right to unionize

and conduct collective bargaining• Ruled unconstitutional (unanimously) by

Supreme Court – “Sick Chicken” Decision

Sick ChickensSchechter Poultry Corp. v. United States (1935) • Schecter Poultry was alleged to have sold unfit chicken to a

butcher. Schecter and the butcher are both based in Brooklyn New York. Schecter did no out of state business.

• Schecter Poultry Co. was charged by the federal government which argued that under the National Industrial Recovery Act Schecter Poultry can be regulated by the federal government which under the NRA set up codes in cooperation with various industries.

• Schecter Poultry argued that the NIRA was unconstitutional because the federal government had no right to regulate intrastate trade.

• The Supreme Court citing Gibbons v Ogden as the precedent reversed the lower courts decision in Schecter and struck down the NIRA as unconstitutional. The Supreme Court thus said reaffirmed the fact that the federal government may not regulate intrastate trade only interstate trade.

Who is Happy?

Who is Sad?

More Programs

• Public Works Administration (PWA) provided money to the states for school and public building construction

• Agricultural Adjustment Act – raise prices by lowering production• Subsidized scarcity or organized waste• Creates more unemployment• Taxing regulations ruled unconstitutional

Dust Bowl

Dust Bowl

• Creates massive relocation of Plains farmers to West Coast

• Migrant farmers• Regional

protection from “Okies”

Financial Reform

• Federal Securities Act requires companies to:• Provide complete

factual financial information about the company

• Created rules for ‘insider’ information

3/10/04 - Stewart convicted on all charges

Tennessee Valley Authority

• Massive Project intended to:• Control flooding (20 dams)• Generate electricity• Stimulate impoverished region• Create jobs

Election of 1936 / Court Packing Pages 812-818

• Social Security Act 1935• National Labor Relations Board

• New actions• New unions

• Election of 1936• Trying to ‘pack’ the Court

SSA 1935

• Social Security Act provided:• Retirement insurance – supplemental

insurance for retirees 65 or older• Unemployment compensation• Aid to families with children and the

disabled• Financed by a payroll tax on

employers and employees

Labor Reforms

• National Labor Relations Act (Wagner Act) • protects workers from unfair labor practices• reaffirms the right to organize and bargain

collectively• Committee for Industrial Organization

(CIO)• John L. Lewis forms union of unskilled labor• Successful with GM, USS

• Fair Labor Standards Act – set modern labor rules on hours, ages, and minimum wages

Candidates for 1936

Dem – FDR Rep – Alf Landon

Campaign Cartoon

Election of 1936

Election Trivia

• FDR won 46 of 48 states• 98.5% of Electoral Votes (two party record)

• FDR won almost 61% of popular vote (record at that time)

• George Gallup accurately predicated the winner using a ‘scientific’ poll for the first time

• FDR believes the landslide equates to complete public support for New Deal

The Issue with the Court• "A part of the problem of obtaining a sufficient number of

judges to dispose of cases is the capacity of the judges themselves. This brings forward the question of aged or infirm judges--a subject of delicacy and yet one which requires frank discussion. In exceptional cases, of course, judges, like other men, retain to an advanced age full mental and physical vigor. Those not so fortunate are often unable to perceive their own infirmities. . . A lower mental or physical vigor leads men to avoid an examination of complicated and changed conditions. Little by little, new facts become blurred through old glasses fitted, as it were, for the needs of another generation; older men, assuming that the scene is the same as it was in the past, cease to explore or inquire into the present or the future."

• FDR note to Congress proposing legislation to allow the Executive to add judges to courts where sitting judges were 70 or older and refused to retire

The Court

1937 Supreme Court

The Public’s View

After 6 months of debate,Congress voted againstchanging the Constitution.

However, most Courtdecisions after the debatesupported New Deal legislation.

Controversial New DealPages 818-822

• Keynesian Economics (Deficit Spending)

• Successes and Failures of the New Deal

• Long Term impacts

Keynesian Economics 1,2,3

1. Modern economies are driven by demand for goods and services. When demand is high, the economy is healthy. When demand drops, the economy goes into recession.

2. When an economy goes into recession, it might recover by itself, but it might not. Sometimes demand needs to be stimulated.

3. There are three segments of the economy that drive demand, and each responds to different stimuli:

• Consumers. For the most part, consumers simply spend what they earn, so there's not much that can be done to stimulate consumer demand (though this has changed since 1936 — see below for more details).

• Business. Spending by businesses can be stimulated by lowering interest rates so that loans for capital equipment are cheaper. This is the first line of attack during a downturn.

• Government. If that's not enough, government can pick up the slack by running deficits and buying more goods and services itself. This is the second line of attack.

More on Keynesian Economics

• Of course, the opposite is also true: if the economy is overheating, you can cool it down by raising interest rates or running a budget surplus. The basic idea is simply that aggregate demand drives the economy, so the goal of fiscal policy should be to manage demand in order to achieve sustainable long term growth rates.

National Debt

• Debt doubles from $19.5 B to $40.4 B in eight years!

• Lots of critics• Brain trust =

commies• Pro Jewish• Handout state

Success or Failure?

No end to the Depressionbut what did it accomplish?

Long Term Impacts of the New Deal

1. Deficit spending2. Expanding government’s role in

the economy3. Protection of workers’ rights4. Banking and Finance Reform5. Social Security6. Environmental protection

End of the Depression?

• Although the New Deal programs relieved the nation’s suffering and provided hope for the American people……..

• The massive spending for equipment and supplies for WWII truly ended the Great Depression!!!

Domestic Focus

• London Economic Conference 1933• Attempt to develop a coordinated

attack on the Great Depression• Stabilize currencies and exchange rates• Revive global trade

• US chooses to not participate• Currency agreements would limit FDR’s

financial recovery plans• Impacts of US non attendance?

Foreign Policy Shifts

• Expensive imperialist policy• Release Philippines (1946)

• Recognize Soviet Union• Why?

• Trade and balance of power• Good Neighbor Policy

• Abandon cousin Teddy’s corollary (no armed intervention in Latin America)

• Reciprocal Trade Agreements• Reduce tariffs to increase free trade• Reversed tariff=prosperity trend• Improved foreign relations

Science / Business of America

Pages 755-762• Scopes Trial• Consumer Changes• Impact of Innovations

• Automobile• Airplanes• Radio