World War I
The
Politics
Of
Prosperity
And the
‘Roaring Twenties
World War I
“Some Damned thing in the Balkans will ignite the
next European war.” Otto von Bismarck, 1888.
June 28th Sarajevo, Bosnia and Serbian politico-a
member of the ‘Black hand’ Gavrilo Princip
gunned down the presumptive heir to the throne of
Austria-Hungary and his wife Sophia—after a
month of inept diplomacy, the battle lines were
drawn and the alliances fell into motion—By
August 1 the guns began to roar in Europe.
4yrs and 15 million lives later, peace once again fell
over Europe—though tenuous at best.
Wilson’s Reaction
• Immediately declared neutrality; thought this
might be an opportunity for the American System
of Morality and Christian values remake the world
order.
• America’s economic ties and heritage
unfortunately tied it to all sides of the combatants;
• Insisted on the right of neutrals to trade with all
sides of the warring powers—help America’s
sagging economy.
Wilson’s Reaction
• Unrestricted submarine
warfare, the sinking of the
Laconia and the Lusitania
made it abundantly clear
neutrality would be
difficult;
• 1916 election he ran on
the neutrality ticket “He
kept us out of war.”
• Zimmerman Telegram
and other issues dragged
us into war.
Wilson’s Reaction
• By 1917, after all the
neutral shipping sunk and
lives lost; unrestricted
warfare on American
shipping;
• The Zimmerman telegram,
no choice but to ask for a
declaration of war;
• Some disagreed, Jeannette
Rankin dissented as did
some others.
America Goes to War
• No longer just arsenal for Democracy—we now
fought to make democracy safe for the world—to
end all wars …
• Jumped into a war footing and business and the
economy boomed—women and AfricanAmericans prospered because of the boom.
• One reason for the Great Migrations of AfricanAmericans and Latinos—looking for work.
America Goes to War—Versailles Treaty
• Selective Service Act
• Race issues, The Houston
Riot—lashing out against
mistreatment—AfricanAmerican veterans fought back
and killed 17 whites—
discharged, tried and many
were hanged;
• 100% Americanism—
distrusted anyone not
considered loyal to America;
• Schenck vs. U.S. upheld the
Espionage Act—illegal to use
the mail for anti-war
pamphlets.
Pandemic Flu-Spanish Influenza 1918
• Began with American
Soldiers at Fort Riley—
transported to Europe—by
the time it ends 50 million
people are dead—more
than in the war;
• Everyone somewhere is
touched by the Pandemic;
• Strange it attacks the 15 to
40 yr olds, lungs fill up
with blood, swell and they
drown--terrible
Politics of Prosperity
• WWI did not make the
world safe for
Democracy—did lay the
foundation to American
global economic
dominance;
• Culture of consumerism,
better working conditions,
better wages, insurance,
personal investments,
consumer credit;
Exploding middle class
Politics of Prosperity
• What role did technology play in shaping the economy of
the 1920s? The culture of the 1920s?
• Compare the relationship between big business and
government during the 1920s to that of the ‘Gilded Age.’
• How did the automobile affect American society? The
economy?
• If Ronald Reagan, Herbert Hoover, and Andrew Mellon
were in a bar, a sign stated, “sorry, our drinks don’t trickle
down” who would be the first to leave?
Politics of Prosperity
• This “New Era” was marked by prosperity and
opportunity;
• The transition from War economy to peace
economy caused economic dislocation for many,
loss of income for farmers, stricter Race relations
and the re-emergence of “Nativism” against
foreign immigrants;
• Still, many reveled in the new culture of
consumerism.
Politics of Prosperity
• 1920s elected three republican Presidents—each
promised to promote normalcy and prosperity.
• Warren G. Harding—platform coined “Return to
Normalcy.” Very conservative—but
administration ridden with corruption and scandal.
Died of a stroke in 1923.
• Calvin Coolidge assumed the executive; quickly
to repair the scandal ridden administration—a
honest man. Elected outright in 1924.
Politics of Prosperity
• Coolidge was basically okay executive; distrusted
the media—so he said very little—”Silent Cal.”
• One term President—preferred to fish and be
with family—he did cut taxes, kept tariffs rather
high(helped industry, hurt farmers). Very popular for
some oddity of reason.
• Herbert Hoover, very qualified for the office. Sec
of Commerce, successful relief program for
Europe after WWI—economy busted after he
began his duties.
Business Boom, 1920s
•
Technology and Consumer spending:
–
–
–
As industrial economy matured, more consumer
goods became available
Improved productivity helped keep prices down
How did it accimplish this?
Economy experienced steady growth and expansion—
three factors fueled this success:
1) Machines
2) Factories
3) The process of standardized Mass production
Business Boom, 1920s
• These three factors create
a self-perpetuating cycle:
• Standardized mass
production led to,
• Better factory machinery,
• Higher production, higher
wages,
• Increased consumer
product and more demand
for consumer product.
• Led to more standardized
mass production
Upward Spiral
• There are five main sources of the economic
boom:
• 1)Effect of WWI on technology.
• 2) Scientific Management: “Taylorism”
• 3) Rapid increase in worker productivity.
• 4)Psychology of consumption
• 5) Relations between Government and Big
Business.
Psychology of Consumption
• Thorstein Veblen
suggested Americans
wanted to get rich with
little effort—Theory of the
Leisure Class—
• Coined the term
“Conspicuous
consumption” it was a
cultural mindset.
• Radio, Motion Pictures,
Electric appliances, and
the Automobile.
Automobile
• All of these things created
leisure time and cultural
continuity—none better
than the car.
• Two popularity factors:
• 1) Cost—low price, very
affordable: Model T $290;
• 2) Consumer Credit—
75% of all automobile
purchases were on
installment plan
Economic Effects
• 1) promoted growth of other industries (petroleum,
rubber, steel);
• 2) Helped established the national Highway
system—cars required better roads than wagon
trails and ruts; road construction big business;
• 3) Created a service industry, gas stations, garages,
roadside restaurants (Diners) and Motels; added to
the desire to plan vactions and see America.
Social Effects
• 1) A more mobile society—broke down rural and
urban barriers; the “Sunday Drive” now in
American lexicon. Urban people saw rural
America, Rural people drove into cities to see the
sites and visit Amusement parks etc …
• 2) Weakened family life stability—much easier
for the young folks to go out on their own—
something beside the farm, go west or wherever;
• 3) Weakened traditional morality—escape
Parental supervision—”Bedroom on Wheels.”
Social Effects
Social and Self Image
Government and Big Business
• 5) American businessmen regained the ‘Gilded
Age’ folk hero status—to be admired and not
scorned as the reformers had done …
• Many began to equate Prosperity with Progress
and Cultural evolution; Calvin Coolidge “The
business of America is business.” It would be
laissez faire at its most grandest—nongovernmental interference …
• Coolidge, “Wealth is the chief end of man.”
Government Supports Business
• 1) High Tariff. The Fordney-McCumber Act (1922);
Smoot-Hawley Act (1930)—protected domestic business
and industry.
• 2) Andrew Mellon-Sec of Treasury (1921-1932) got
congress to repeal excessive profit tax (1099 capital
gains); reduced rates for corporate and personal income
tax—offered business a list of tax loopholes;
• 3) Cutbacks in the federal trade Commission (FTC); less
government oversight into fair trade policies—not
enough personnel to handle all the complaints;
Government Supports Business
• 4) Herbert Hoover—Secretary
of Commerce and President;
• Encouraged price fixing and
believed government was
designed to help businesses
grow;
• Used two major vehicles to
disseminate this message:
Chamber of Commerce and
National Association of
Manufactures
Consumer Critics
• Materialism was
destroying the family unit,
spirituality, and the moral
fiber of America.
• People were amoral and
superficial—Look at Jay
Gatsby, Babbit and
Middletown—The Man
Nobody Knows: A
Biography of Jesus. Bruce
Barton. (1925).