1920s/1930s
1918-1929/1930-1941
The End of the War
• Before the end of the war President Wilson formulated
his Fourteen Points as the basis for peace
• Germany signed the armistice on November 11, 1918
mainly because of the potential of the American forces
• Wilson became a hero to the people of a liberated
Europe
• During the war partisan politics did not afflict Congress
as the country united behind the war effort
• In 1918 Wilson asked for a Democratic victory, but the
Republicans ended up with a narrow advantage
• Wilson went to Paris for the peace talks and left the
country in the hands of a Republican Congress
• Wilson was the first president to travel to Europe
but he alienated the Republicans by not inviting
one republican to the Peace Conference
• The chairman of the Senate Committee on
Foreign Relations, Henry Cabot Lodge of
Massachusetts was particularly angered
• Lodge and Wilson shared a mutual hatred
• The Paris Conference was dominated by the Big
Four – Wilson, Lloyd George of Britain, Orlando
of Italy, and Clemenceau of France
• The matter which caused the greatest concern
was to stop the spread of Communism
• Wilson’s main goal was to establish a League of
Nations
• He imagined an organization of representative
who would meet to discuss world problems
• Few, especially among the Republicans, shared
his enthusiasm for a League of Nations
• The Republicans declared they would not
approve the League in its current form
• Opposition from the Republicans weakened
Wilson’s diplomatic power in Paris
• When he did return to Paris he found that the
opinion of the major powers had become much
more aggressive
The Versailles Treaty
•
•
•
•
France was determined to occupy the GermanRhineland and the Saar Valley
Wilson persuaded the French to accept
occupation of the region by the League of
Nations for 15 years
France also received a security pledge from
Britain and America – both countries promised
to help if Germany re-armed
The final treaty was given to the Germans to
sign in June 1919
• When the Germans saw the treaty they were
shocked to see so few of Wilson’s Fourteen
Points, which had been the basis under which
they had surrendered
• Wilson had been forced to compromise his
original ideals to keep the bickering Europeans
happy
• As soon as he returned to America, Wilson was
confronted with a hostile Congress
• Isolationists wanted no part of foreign treaties
• Some thought the agreement did not punish
Germany enough for starting the war
• Irish-Americans, German-Americans and
Italian-Americans all hated Wilson
The End of Wilson
• Wilson still felt confident the Versailles Treaty
would be ratified. Even Lodge only wanted to
make the treaty more “American”
• The Treaty became bogged down in Senate as
Lodge examined every page
• Wilson set off around the country to muster
public support – even though he was advised
against such a move by his own physicians
• While in Colorado in September, 1919, Wilson
collapsed from exhaustion
• He was quickly returned to Washington, but
suffered a stroke only days later
• Wilson remained out of circulation for over six
months
• Lodge saw the opportunity to step up. Lodge had
failed to get the Treaty amended but now was his
chance
• Critics were especially annoyed over Article X
which promised the United States would give aid
to any country that faced external aggression
• Lodge attached a series of amendment to the
original treaty so the Republicans could claim
some of the credit
• Wilson told the Democrats to vote against the
amended treaty
• The treaty was defeated in the Senate
• The public was angry and upset that the Senate
could not agree on a simple resolution and they
demanded a second ballot
• The Democrats would have to accept the
amended packet otherwise the whole treaty
would fail
• Wilson refused to compromise and ordered the
Democrats to once again vote against the
amended treaty
• The treaty died in the Senate
AP Outline
New Era: The 1920s
 Republican governments
– Business creed
– Harding scandals
– Economic development



Prosperity and wealth
Farm and labor problems
New culture
– Consumerism: automobile,
radio, movies
– Women, the family
– Modern religion
– Literature of alienation
– Jazz age
– Harlem Renaissance

Conflict of cultures
–
–
–
–

Prohibition, bootlegging
Nativism
Ku Klux Klan
Religious fundamentalism
versus modernists
Myth of isolation
– Replacing the League of
Nations
– Business and diplomacy
The Election of 1920
The Republicans eventually selected
Senator Warren G. Harding of Ohio with
Massachusetts Governor Calvin Coolidge
as his running mate
 Coolidge had made a name for himself by
defeating the police strike in Boston
 Democrats nominated Governor James M.
Cox of Ohio with Franklin D. Roosevelt as
his running mate
 In the first election that included women,
(Nineteenth Amendment – 1920) the
Republicans won 404-127

Key Terms




















The Roaring 20’s
Ku Klux Klan
Emergency Quota Act, 1921
National Origins Act, 1924
Harlem Renaissance, Langston Hughes, Zora Neale Hurston, Duke Ellington,
Louis Armstrong
Back to Africa Movement, Marcus Garvey
Religious fundamentalism
John T. Scopes, William Jennings Bryan, Clarence Darrow
Car Culture, Henry Ford, Model T
Advertising comes of age, Radio, movies
Babe Ruth
Charles Lindbergh
The Jazz Singer, 1927, Al Jolson
Changes for Women, Flappers
Margaret Sanger
Unions in the 1920’s, “American Plan”
Dawes Plan, 1924
Democratic Party turmoil
Republican Presidents, ideals
Warren G. Harding, Return to Normalcy, scandals, Teapot Dome
































Calvin Coolidge
Herbert Hoover
Albert B. Fall
Harry M. Daugherty
Alfred E. Smith
"American Plan"
Norman Thomas
Fordney-McCumber Tariff, 1922
“Lost Generation”, F. Scott Fitzgerald, John Dos Passos, Ezra Pound,
Gertrude Stein, Ernest Hemingway, Sinclair Lewis, William Faulkner
Sacco and Vanzetti Case
House Un-American Activities Committee
Ku Klux Klan, Nativism
Emergency Quota Act 1921
Immigration Quota Act 1924
"Birth of a Nation“
Prohibition/Volstead Act
Al Capone
Organized Crime
Election of 1928,
Hoover Foreign Policy-Japan attacks China
The Great Depression
Causes of the Depression
“Hooverville”
Stock Market Crash, “Black Tuesday”
Republican Response to Great Depression, “Trickle Down,” “Pump Priming”
Economic Cycle, Chain Reaction, Unemployment
Andrew Mellon
Banking Crisis
Smoot-Hawley Tariff, 1930
Reconstruction Finance Corporation
Public Works
"Bonus Army," 1932
Election of 1932- “FDR”
• Harding gained over 7 million more popular
votes
• Socialist Eugene V. Debs ran as a Third party
from the Atlanta penitentiary and gained almost
1 million votes
• The public had shown they were tired of
Wilsonian politics and European affairs – they
wanted what Harding promised – a return to
normalcy
• Unfortunately Harding was a poor choice and
proved to be an even worse president, mainly
because of his poor choice of appointments
The Red Scare
•
•
•
•
In 1917 the Bolshevik Revolution forced Russia
out of the war, changed the Russian
government, created a small Communist party
in America, and caused fear and concern among
non-Communist nations
In the wake of the war the country was gripped
by a series of strikes
Most people assumed the strikes were part of a
Communist/Bolshevik plot
The “red scare” of 1919 created political
careers, ruined some lives, caused pain and
anguish to anguish to many innocent people
• In 1919 a bomb exploded at the home of Attorney
General A. Mitchell Palmer (the Fighting
Quaker) who had been leading the campaign
against possible Bolsheviks
• The explosion caused Palmer to increase his
efforts and gained him enormous public support
• In December 1919 the government deported 249
suspected aliens and Bolshevik sympathizers on
the Buford
• The following year another bomb exploded on
Wall Street and killed nearly forty people
• Many states joined together to pass “anti-red”
legislation
• Critics of the paranoia protested that basic
American rights were been ignored
• But the red scare served the conservatives and
businessmen well – they could now complain
about troublemakers and unions and associate
them with the Bolsheviks
• Unions found it hard to even exist. Any appeal
for a union was seen as un-American
• The most notorious case of anti-foreign sentiment
was the Sacco-Vanzetti case in Massachusetts
Sacco and Vanzetti
• Nicola Sacco a factory worker and Bartolomeo
Vanzetti a fish seller were convicted in 1921 of
murdering a Massachusetts paymaster and his
guard
• The defendants were of Italian descent and
known as anarchists and atheists
• The case lasted six years before both men were
convicted and sentenced to death
• They were executed in 1927
Prohibition
• One of the greatest social experiments in
American history was the attempt to prohibit
alcohol in the 1920s
• The Eighteenth Amendment (1919) (and the
Volstead Act) tried to abolish the manufacturing,
sale, and transportation of alcohol
• The Act was very popular in the South and the
West, but in the East there was strong opposition
• But the idea was flawed because many people,
especially foreign-born Americans found ways
around the law
• The authorities had not really considered how to enforce
a law that so many people opposed and that had been a
large part of normal society
• Speakeasies with secret passwords and tiny windows
sprouted in major cities
• Illegal alcohol was shipped from the West Indies or from
Canada by gangsters determined to supply the thirsty
market – and make a fortune
• Bootleggers produced homemade alcohol that often
caused blindness or death
• But there were some benefits to the Prohibition era
• Absenteeism from work decreased and people saved
more money
• The “noble experiment” failed because so many people
simply refused to accept the law, even though most
believed it would be permanent
Isolationism
• The large number of immigrants that were
entering the country from Europe worried many
people
• The Emergency Quota Act of 1921 was attempt
to limit immigration by only allowing a certain
quota from each country – 3% of that nationality
living in America in 1910
• Favored those from Southern and Eastern
Europe
• Congress approved the Immigration Act of 1924
which cut the quota of foreigners from 3% to 2%
and changed the date to 1890 from 1910
• This new changed favored immigrants from
Northern Europe at the expense of those from the
South and East who called the legislation
discriminatory
• Nativist believed a stronger, better America could
be attained though people with light hair and
blue eyes
• The Act also stopped completely the immigration
of Japanese
• Exempt from the quota system were Canadian
and those from Latin America – because they
were needed to take the lowest paying jobs
• Act ended the belief that all were welcome
The Ku Klux Klan
• Another element of the anti-foreign campaign
was the reemergence of the KKK
• The KKK had been around since the middle of
the nineteenth century, but after the Civil War it
had become known as an antiblack movement
• In the 1920s, the new KKK reinforced the
nativist spirit that was sweeping the country –
they were anti-foreign, antiblack, anti-Jewish,
anti-Communist, anti-Catholic, antiinternational, anti-birth control, anti-drinking,
and anti-gambling
• They were pro-American, pro-Anglo-Saxon, proProtestant – they were ultra-conservative and
dedicated to maintaining traditional American
morals, standards, and culture
• The new KKK had a great deal of support,
especially in the southern “Bible Belt” states
• At its height of popularity it claimed to have over
5 million members
• The organization collapsed in the late twenties
when it was investigated for corruption and
embezzlement
• The KKK was a realization of what can happen
when people are confronted with social change
The Fordney-McCumber Tariff
(1922)
• Treasury Secretary Andrew Mellon also wanted
higher tariffs
• The Fordney-McCumber Tariff increased tariffs
against chemicals and metal products that were
been imported from Germany
• During the war the United States had moved
from a creditor to a debtor nation
• The tariff made it harder for European nations to
sell in America and consequently prevented them
from making money and repaying their war debt
• Harding appointed Republicans dedicated to his
ideals to all the main committees
• In 1923 news was leaked about members of the
administration robbing the Veteran’s Bureau
• The official ran away to Europe
• Other cronies were charged with a variety of
crimes
• The biggest scandal was the Teapot Dome scandal
Crime
• Prohibition created untold opportunities for
criminals to make money
• In many major cities like Chicago, virtual gang
wars erupted as rival crime bosses competed for
the millions of dollars associated with alcohol
• The most famous crime boss was “Scarface” Al
Capone who controlled a crime empire that was
worth millions of dollars
• The gangsters were hard to catch and harder to
prosecute
• Capone was eventual found guilty of tax evasion
The “Ohio Gang”
• Many of Harding’s appointments were members
of a group called the “Ohio Gang”
• Harding met with the “Ohio Gang” on a regular
basis and often in places outside the White House
• They earned a reputation as drinking, women,
and gambling even during a time of Prohibition
• Once in office the administration started
dismantling Progressive legislation, especially the
social reforms
• Harding was able to appoint four Supreme Court
justices
McNary-Haugen Bill
• Farmers suffered in the post-war years as they
could not sell their products
• Many looked to farmer cooperatives and
associations to protect their interests and give
them greater political leverage
• In 1924 Senator McNary and Representative
Haugen introduced a bill to help the framers
• The idea was to dump surplus crop on the world
market to raise domestic prices
• In 1927 and 1928 the bill passed both Houses but
was vetoed by Coolidge
• It was clear that the administration was probusiness
• Secretary of Treasury Mellon reduced
government spending and lowered taxes mostly
for the rich
• Mellon believed that by giving money to the rich
they would have more to invest and that would
stimulate the economy
• In 1921 he persuaded Congress to pass the
Budget and Accounting Act, which created the
Bureau of Budget
• The Revenue Act of 1926 lowered taxes even
more for the rich
Teapot Dome
• Oil reserves under the Teapot Rock in Wyoming
had been set aside by Albert Fall of the Interior
Department for the naval oil reserves
• Fall signed contracts with private companies
letting them use the oil reserves
• Fall’s standard of living skyrocketed including a
“loan” of $400,000 from the oil companies which
was delivered in a bag
• Harding claimed to have had no knowledge of the
extent of the scandals, but he obviously knew
there was a problem
• In 1923 Harding went to Alaska Territory and on
the way back he stopped in Seattle
• He suffered food poisoning and died
• The public was distraught as they didn’t know
the extent of the problems
• Calvin Coolidge was sworn in as president
• Coolidge promised to return the White House to
the Gilded Age philosophies
• Even more than Harding, “silent Cal” advocated
supporting big business “the man who builds a
factory builds a temple”
• He distanced himself from the scandals and
became the Republican nominee for 1924
The Election of 1924
• The Democrats were divided and nominated
John Davis a Wall Street lawyer
• A farmer-labor coalition third party appeared
• The Progressive party led by Robert La Follette
from Wisconsin was backed by the Socialist party
and the American Federation of Labor
• Coolidge accused La Follette of wanting to turn
America into a communist and socialist state
• Coolidge won easily with Davis only winning the
South – the Progressives gained the most third
party votes
Scope Monkey Trial (1925)
• By the 1920s many states required students to
wait until they were 16 before graduating
• The type of education and the quality of
education had changed dramatically as new
philosophies swept the teaching field
• But there was always an issue about how to teach
evolution
• Fundamentalists believed the one true way was to
reinforce biblical teachings about creationism
• Science leaned more toward Darwin and
evolution
• Several states, including Tennessee, passed laws
prohibiting the teaching of evolution
• In 1925, at Dayton Tennessee, a high school
biology teacher, John T. Scopes was indicted for
teaching evolution
• Scopes was defended represented by the
American Civil Liberties Union and by famed
trial lawyer Clarence Darrow an agnostic
• The Fundamentalists hired former presidential
candidate William Jennings Bryan to lead the
prosecution
• Bryan defending creationism was made to look
foolish in the cross examination
• In the end Scopes was found guilty and fined
$100 – the fine was eventually set aside on a
technicality
• The Fundamentalists had won the case but in
doing so they had weakened their own argument
for teaching creationism
Foreign Policy
• Washington Naval Conference (1925) - attempted to
prevent a naval arms race among United States, Britain,
and Japan. Also included France, Italy, the
Netherlands, China, and Portugal and created 3 treaties
• 1. The Five-Power Pact (1922) - U.S., G.B., Japan, Italy,
and France agreed to build no more warships for 10
years. Also limited naval tonnage:
5 tons for U.S. and G.B.
3 tons for Japan
1.75 tons for France and Italy
• 2. Nine-Power Pact - Promised to maintain China’s
territorial integrity and support the “open door” policy
• 3. Four-Power Pact - U.S., G.B., France, and Japan
agreed to respect each other’s rights in the Pacific and
promised to settle disputes through negotiations
Dawes Plan (1924)
• After World War I the European nations owed $26
billion
• Hyperinflation in Germany (1923-4) caused them to
default on their payments forcing other nations to
default
• The French occupied the Ruhr - the Germans stopped
working in protest
• American banker Charles Dawes negotiated large loans
from American banks to help Germany
• Britain and France reduced the amount of reparations
over 5 years
• Geneva Naval Disarmament Conference (1927) Initiated by Coolidge to construct smaller warships, but
only attended by U.S., G.B., and Japan. No agreement
was reached
• Kellogg-Briand Pact (1928) - Negotiated by French
Foreign Minister Briand and Secretary of State Kellogg.
It outlawed war as an instrument of national policy.
Signed by 48 countries, but no means of enforcement
• Young Plan (1929) - Reworked the Dawes Plan to reduce
the payments even more and allow Germany even more
time
Consumerism
• Business and industry saw the election of
Coolidge as a vindication of their practices
• The American economy changed dramatically as
consumerism became the order of the day
• Leisure and advertising became huge enterprises
as the economy moved from thrift and saving to
spending and consumption
• During the first part of the decade many people
invested in real estate, especially in Florida
• People eager to make money gambled with
property, but in 1926 the bubble burst
• Treasury Secretary Mellon reduced more taxes to
keep the economy flowing
• People shifted their money to Wall Street and
purchased stock on margin
• For a small payment investors could buy stocks
with a promise of paying later
• Between 1927 and 1929 the number of broker
loans doubled
• But consumption was reaching saturation point
The Election of 1928
• Coolidge decided not to seek re-election in 1928
• The Republicans nominated Herbert Hoover
• The Democrats nominated Governor Alfred
Smith of New York
• Hoover represented big business and middle
America
• Smith, the son of immigrants and a Catholic
represented big cities
• Hoover won 444-87 in a vindication of
Republicanism
• 1929 promised continued prosperity, but there
were some signs of problems
• Also in 1929 Congress passed the Agricultural
Marketing Act, which created the Federal Farm
Board to allow loans to farmers
• The Hawley-Smoot Tariff of 1930 sent duties to
an all-time high
• Over 1,000 economist petitioned Hoover to veto
the bill as it would hurt consumers
• Hoover ignored the appeal
Life in the Roaring Twenties
• Life in the twenties was based on a fast-paced,
big city mentality. Living in small towns with
small town values was frowned upon
• In 1920 Sinclair Lewis wrote Main Street about
the cramped life of a prairie town
• F. Scott Fitzgerald dubbed the twenties the Jazz
Age symbolized by experimentation with music
and sexuality
• African and European music blended to form
jazz which became popular with the younger
crowd
• New music meant new dances and the gyrations
of the Charleston and the Black Bottom became
all the rage
• The development of the radio allowed people all
over the country to be connected
• Now ideas from one area could be spread almost
immediately across the country
• People listened to jazz and rag time, but even
more popular were sporting events
• The movies became the entertainment of choice
as people thrilled at action on the big screen
• In 1927 the introduction of sound increased the
popularity of movies
• One of the biggest changes witnessed during the
decade came from a shift in morality
• Traditional values of what was acceptable were
cast aside as the twenties created a “new woman”
• Novels, magazines, and the movies quickly
showed the public what life was going to be like
for these independent females who wore make
up, smoked, drank, and were often kissed in
public.
• At the start of the decades skirts were expected to
be just off the ground. By 1927 skirt length was
at the knee.
• The women who wore these short skirts were
called “flappers” and they came to represent the
new feminism of the twenties
• The most controversial issue of the 1920s was
birth control
• Margaret Sanger promoted the use of birth
control in 1912.
• Sanger opened the first family- planning clinic in
New York in 1916 by asking women if they could
afford to keep having large families?
• By 1920 women found themselves able to gain
access to contraception
• In 1921 she started the American Birth Control
League
Women’s Right
• Women had supported the plight of emancipation
and rights for the former slaves and many were
disappointed when they were not included in
legislation
• The women’s suffrage movement which had
started much earlier became a focal point in the
years prior to the 1920s
• In 1912 Alice Paul became the head of the
National American Woman Suffrage
Association’s Congressional Committee
• Paul was very militant and urged woman to go on
the offensive for their rights
• Carrie Chapman Catt became the head of the
National Suffrage Association in 1915
• In 1916 Alice Paul helped create the Woman’s
party which copied the tactics of British
suffragettes
• In 1917 Paul and some followers were arrested
for picketing the White House. In prison they
went on hunger strike
• President Wilson avoided the issue until 1916
when he supported women’s suffrage as part of
the Democratic platform
• In 1918 the “Anthony Amendment” passed the
House but failed in the Senate by 2 votes
• Eventually it was passed in 1919, but was not
ratified as the Nineteenth Amendment for
another 14 months
• In 1919 the League of Women Voters was formed
• After attained the franchise many women
stopped working for more rights
• Paul and the Woman’s party introduced an
Equal Rights Amendment into Congress in 1923,
but her amendment would not be adopted until
1972
African Americans
• Starting in roughly 1915 thousands of African
Americans migrated north to the cities to work in
the factories
• With the sudden and large increase in African
Americans there were some noticeable changes in
society, particularly in politics
• Blacks felt more inclined to participate in the
political process in the North
• In addition to an economic and political change
there was a social change
• The Harlem Renaissance was a rebirth of the
black cultural spirit
• Claude McKay wrote Harlem Shadows (1922)was
one of the first writers to participate in the
Renaissance spirit
• James Weldon Toomer and Langston Hughes
became widely read black authors
• There was also a new spirit of “Negro
nationalism” which allowed people like Marcus
Garvey to express the importance of black
culture and the uniqueness of being black
• Garvey formed the Universal Negro
Improvement Association in 1916
• Garvey told blacks to liberate themselves from
the whites and his words found a receptive
audience in the racially-heated twenties
• Not all black leaders agreed with Garvey’s
rhetoric – W.E.B. DuBois called Garvey an
enemy of the Negro race
• Garvey spoke at the UNIA convention in 1920
and told blacks that their best hope was to leave
America and move back to Africa
• He was found guilty of mail fraud and sentenced
to prison in 1925 where he stayed until President
Coolidge pardoned him in 1927 and sent him to
Jamaica
• The organization Garvey started would reemerge
much later in the form of the Black Power
Movement
• A more influential organization was the National
association for the Advancement of Colored
People (NAACP) which was founded in 1910
• The organization focused on getting public
attention on the Fourteenth and Fifteenth
Amendments – the Amendments intended to
allow the black man to vote
• Gradually through the work of the Supreme
Court the NAACP was able to make significant
changes to the voting laws
The Automobile
• The policies of Treasury Secretary Andrew
Mellon favored those who were willing to invest
and invest heavily
• Capitalists looked for industrialists and
industrialists looked for a product and a market
• The greatest symbol of American ingenuity was
Henry Ford’s assembly line which turned out a
new car every 10 seconds
• Perhaps nothing symbolizes the 1920s and the
new culture of America than the automobile
• By the middle of the decade Ford’s Model T (the
Tin Lizzie) was cheap enough that most workers
could afford one
• By the end of the decade there were almost 30
million automobiles in the United States
• Thousands of new jobs were created to
accommodate the new automobile industry
• Production of rubber, glass, and steel all
increased dramatically – roads had to be laid –
motels appeared by the side of the road as did gas
stations
• Demand for oil was gripped the nation
• Once a luxury, the automobile became seen as a
necessity
• On a weekend American families would climb
into their cars and visit the countryside
• No longer were city dwellers confined to the cities
• Great areas of the country suddenly became
popular as tourism became a major industry
• Workers no longer had to live in the cities they
could travel to work, so living in the suburbs
became fashionable
Flight
• In 1903 Orville and Wilbur Wright created a
plane that stayed in the air for 12 seconds – the
door to air travel had been kicked open
• During the First World War airplanes were
commonly seen above the battlefields – although
they were poorly used and referred to as “flying
coffins”
• After the war private companies started offering
travel by airplane and the first commercial
flights from New York to San Francisco started in
1920
• In 1927 Charles Lindbergh became the first man
to fly west to east across the Atlantic Ocean
• His plane the Spirit of St. Louis flew from New
York to Paris in a little over 33 hours –
Lindbergh was able to claim the $25,000 prize
Sports
• In the 1920s baseball became America’s game
• Babe Ruth, who had been sold by the Boston Red
Sox, became a living legend in New York playing
for the Yankees
• Yankee Stadium became commonly known as the
“house that Ruth built”
• In 1921 Jack Dempsey knocked out Georges
Carpentier in front of the first crowd to pay a
million dollars to see a fight
The Arts
• The first real movie was The Great Train Robbery,
made in 1913 and shown in theaters called
“nickelodeons” because they charged five-cents
• D. W. Griffith produced The Birth of a Nation in
1915 about the Ku Klux Klan during
Reconstruction was one of the first full-length
movies
• The Jazz Singer with Al Jolson was the first talkie
• Southern California quickly became the center of
the movie making business
The Wall Street Crash
• By 1929 many advised caution but making money
seemed almost too easy
• The president even urged the Stock Market to
discourage speculation
• The Federal Reserve Board raised the interest
rate but with no effect
• In September prices dropped but it was seen as a
slight adjustment and not a problem
• October 29 became the most devastating single
day for the market
• People unable to meet their margin were forced
to sell at a loss
• During October over a third of the value was lost
• In September the New York Times stock average
was 452, in July 1932 it was 52!
• As prices fell companies started laying people off
and increasing unemployment
• Without work there was no income
• Banks started to close, farmers went bankrupt,
and factories closed
• The crash did not cause the Great Depression but
the policies of the government and the reluctance
of the administration to interfere with business
practices prevented any form of recovery
The Great Depression
1929-1941
Stock Market Crash (1929)
• In the days prior to the crash there were some
warning signs – but most people ignored them
and continued speculating
• In October the British raised their interest rates
in an attempt to regain some investment money
lost to America
• Investors started to dump their investments and
look for something more secure
• On October 29, 1929 “Black Tuesday” people
sold over 16 million shares in an attempt to
salvage some money
• Stockbrokers sold stock they held for buyers who
could not meet their margin calls
• President Hoover tried to calm the people by
saying everything was fine
• In a few months stockholders had lost over $40
billion
• By 1930 over 4 million were out of work; banks
collapsed; people lost their savings; farms were
foreclosed
• The crisis seemed to feed on itself as more and
more people lost their jobs
• Most people were saved from starvation by soup
kitchens
Causes of the Crash and Depression
• 1. The country had been producing more than it
could sell
• 2. Profits had gone to a small, wealthy group and
not to the workers who would have spent the
money and probably prevented the crisis
• 3. Credit was too easy to obtain and for too little
security
• 4. The Hawley-Smoot Tariff of 1930
• 5. In 1930 a terrible drought ruined many
farmers
• By 1933 over 13 million were out of work, others
worked for reduced wages and/or shorter hours
• People created shelters called “Hoovervilles”
• People made shelters from cardboard and used
newspapers “Hoover blankets” to keep
themselves warm
• Many just abandoned everything, became hobos
and traveled the country by “riding the rails”
• Treasury Secretary Mellon and Hoover both
believed the economy would cure itself
• Both asked business owners to keep factories
open
• Gradually Hoover realized more needed to be
done – he rushed through government contracts
• However local governments cut back on spending
• Hoover asked the Federal reserve to make credit
more available, while Congress passed a small tax
cut
• The Hawley-Smoot Tariff (1930) raised duties to
an all-time high to protect American
manufacturers – but other nations retaliated and
it ultimately hurt the economy
• Economist asked the president to remove the
tariff, but it was an election year so he refused
• In 1931 the failure of Austria’s largest bank put
even greater pressure on European economies
and even less likelihood for the payment of war
debts
• In 1932 Congress established the Reconstruction
Finance Corporation to allow loans to banks,
mortgage associations, railroads, and insurance
companies
• In the first six months they issued $1.2 billion in
loans
Bonus Army March (1932)
• In some areas farmers took the law into their
own hands and formed the Farmers’ Holiday
Association calling on farmers to strike and block
delivery of farm products
• There was even some talk of revolution
• In the Spring of 1932 over 15,000 veterans
formed the Bonus Expeditionary Force and
marched on Washington demanding payment of
a war bonus approved in 1924
• The House passed the bill, but when the Senate
refused most marchers went home
• Those that stayed camped near the Capitol
• Congress offered to pay their fare home if they
left – some did
• In a scuffle in July a policeman opened fire and
killed two veterans
• Hoover ordered General MacArthur aided by
Dwight D. Eisenhower and George Patton to
disperse the crowd
• The soldiers forced the veterans to leave, but
injured many and killed one (an eleven year-old
boy)
• The administration claimed the Bonus Army was
full of Communists and troublemakers intent on
revolution
The Election of 1932
• Hoover had won the election in 1928 by
promising a “chicken in every pot”
• The Republicans re-nominated Hoover for 1932,
but he had little interest
• The Democrats nominated Franklin D. Roosevelt
(a distant cousin of Theodore)
• Roosevelt was well-educated and well-spoken, he
had also held many important positions in past
administrations, but had suffered from polio
which left him wearing leg braces
• During the campaign Roosevelt promised a New
Deal for America, but did not elaborate
• He blamed Hoover and the Republicans for the
Depression and gradually elaborated on his New
Deal – a balanced budget, regulation of utilities
companies, and a promise to repeal Prohibition
• Roosevelt won the election 472-59
• In the Winter of 1932-3 the situation continued to
get worse
• At the inauguration in March the people
expected action
• Roosevelt claimed “the only thing to fear is fear
itself”
• The first plan was to relieve the conditions of the
unemployed
• Second part was to stimulate industry
• Third part was pay farmers for reducing their
crops which would ultimately raise the price of
commodities
• Roosevelt called Congress to meet for a special
session and then closed the banks for a four day
holiday
• Immediately Congress passed the Emergency
Banking Relief Act which allowed sound banks to
reopen and provided managers for those in
trouble
Fireside Chats
• On March 12, Roosevelt talked to the nation in
the first of his “fireside chats”
• He told the people to keep their money in the
banks and reassured the nation that he was
working to solve the problem
• Congress passed the Economy Act which granted
the president power to cut federal salaries and
they passed the Beer-Wine Revenue Act which
amended the Volstead Act and permitted the sale
of low levels of alcohol
• The Twenty-First Amendment was passed in
December ended Prohibition
The Hundred Days
• From March 9 to June 16 was known as the
Hundred Days
• Congress received and enacted 15 major pieces of
legislation
• After solving the banking problems the
administration focused on helping the farmers
and homeowners
• Roosevelt created the Farm Credit
Administration to consolidate all farm credit
agencies and to offer refinancing at lower interest
rates
Financial Help (1932)
• In April the country abandoned the gold
standard
• The Federal Securities Act required full
disclosure of information about stocks and bonds
• The Home Owners’ Loan Act allowed
homeowners to refinance mortgages at lower
rates
• The Glass-Steagall Banking Act created the
Federal Deposit Insurance Corporation to
guarantee bank deposits up to $5,000. It also
increased the power of the Federal Reserve to
regulate credit
Relief for the People
• Congress created the Civilian Conservation
Corps (CCC) which was intended to create work
for the unemployed and unmarried men between
18 and 25. The program employed nearly 3
million young men
• The workers were paid about $30 a month and
spent their time building roads, campgrounds,
and planting trees
• The Federal Emergency Relief Administration
(FERA) sent money through state agencies in the
form of grants to create education programs as
well as direct cash payments to individuals
• The first federal attempt at work relief was
through the Civil Works Administration – the
CWA provided federal jobs for those who could
not find work. The CWA was dissolved in the
spring of 1934, but immediately afterwards the
number of unemployed skyrocketed
• Roosevelt advocated giving people jobs as
opposed to financial hand-outs
• In 1935 Roosevelt asked Congress for $4.8 billion
in the Emergency Relief Appropriation Act to
pay for the programs
• Congress created the Works Progress
Administration (WPA) to manage the programs
Relief for Farmers
• With the drop in the price of farm commodities
in the late 1920s, many farmers could not afford
to plant crops
• The Agricultural Adjustment Act of 1933 planned
to pay farmers to destroy their crops in an
attempt to raise prices
• The decline in supply did increase the prices, but
the shortage was as much due to the “dust bowl”
which wiped out many farms on the Great Plains
between 1932 and 1935
• In 1936 the Supreme Court ruled in United States
v. Butler the AAA’s tax on food processors as
unconstitutional
• Congress responded by passing the Soil
Conservation and Domestic Allotment Act which
removed quotas, but still provided funds for
farmers who took land out of production
• In 1938 Congress passed the Second Agricultural
Adjustment Act
Industrial Relief
• The National Industrial Recovery Act (NIRA)
• The act had two parts: one dealt with economic
recovery, the second created the Public Works
Administration (PWA)
• The NIRA also created the controversial National
Recovery Administration (NRA) to help
businesses by setting wages and prices and to
create more jobs
• The symbol of the NRA was the “Blue Eagle” and
the words “We do our part” started to appear in
windows and on products
• In response the NRA changed to allow workers to
form unions
• Problems started when larger companies began
to dominate industries and eliminated
competition
• The legislation was terminated by the Supreme
Court in 1935 because it was deemed
unconstitutional in the Schechter Poultry
Corporation v. United States case
• Although the act was a failure it did establish the
forty-hour work week and ended child labor
The Tennessee Valley Authority
• One of the largest and most successful programs
was the creation of the Tennessee Valley
Authority (TVA)
• The Tennessee Valley was a very underdeveloped
and impoverished area
• The idea was to build a series of dams on the
Tennessee River. The result would be more
industry, better schools and libraries, and cheap
hydroelectric power
New Deal Critics
• Not everyone approved of the New Deal
legislation and attacks from all sides
• H. L. Mencken complained that Roosevelt was
creating a welfare state
• Father Charles Coughlin “the radio priest”
preached to millions every week via his radio
show. In initially he supported the New Deal and
blamed the Depression on wealthy bankers, but
by 1934 he had turned against Roosevelt – calling
the president a liar
• Dr. Francis Townsend suggested that all people
over 60 receive $200 a month, the money could be
raised through a sales tax. The plan was for the
older people to spend the money in the same
month and thereby generate far more purchasing
power
• Needless to say the plan attracted plenty of
followers
• The most vocal critic was Huey Long, once
governor and senator of Louisiana
• Long was nicknamed the modern-day Robin
Hood for his “share our wealth” plan
• Long proposed to make “every man a king” by
limiting the amount of money the wealthy could
possess
• The government would take control of all
incomes over $1 million and estates over $5
million. This money would then be distributed to
the less fortunate
• Long and Coughlin both appealed to the mass
through populist movements that feed on
dissatisfaction and disappointment
• In 1935 Long was assassinated and while the
movement continued it did not thrive without
Long
• The Communist party attacked the New Deal for
being too conservative
• In 1934 the muckraker Upton Sinclair was
nominated as the Democratic candidate for
governor on a platform of “End Poverty in
California” – Sinclair lost
• Membership in the Communist party increased
during the Depression. While it communism
never really attracted a mass appeal it did
became especially appealing to Hollywood people
The Second New Deal
• With opposition from Congress and the Courts
Roosevelt launched his Second New Deal in
which he demanded legislation must be passed
• Congress passed the legislation, but some of it
proved very controversial
• The National Labor Relations Act (Wagner Act)
gave workers the right to negotiate through
unions of their choice. It also prevented
employers from interfering with union activities
• The Social Security Act (1935) included pensions
for retired workers
• Starting in 1937 workers would contribute
money from their payroll
• The act also created a federal-state
unemployment insurance program
• These programs initiated the belief that the
federal government is responsible for the welfare
of those people who can not be employed
• A major problem was the Social Security payroll
tax was regressive – a fixed fee was paid by all,
regardless of earnings. The tax also took money
out of circulation
• The Revenue Act (1935) raised taxes on incomes
over $50,000
The Election of 1936
• By 1936 the New Deal and its supporters held the
advantage
• The Republicans had trouble finding anyone who
even wanted to run for president. They ended up
with Alfred Landon of Kansas
• Landon was a moderate and even approved of
some of the New Deal legislation
• Roosevelt won in a landslide (523-8)
The Court-Packing Plan
• After winning the election, Roosevelt believed he
had a mandate for his New Deal
• Many of his plans had been thwarted by the
Supreme Court – none of whom had been
appointed by Roosevelt, six were older than 70
• Roosevelt couldn’t wait for time to change the
Court
• Roosevelt asked Congress to allow him to appoint
an extra Justice for each one who was over 70
who would not retire. (But never more than 15)
• Roosevelt claimed the Court needed new blood
and help with extra cases
• Congress, and the nation immediately rebuked
the president for trying to “pack” the Supreme
Court
• Many accused the president of trying to create a
dictatorship
• After the court-packing scheme the Court
became more sympathetic to New Deal legislation
• Ironically, before he left office Roosevelt was able
to appoint nine Justices
• Attempts to pack the court seriously backfired on
the president and cost him a great deal of support
The End of the New Deal
• In 1937 the short-term benefits of the New deal
were disappearing as the country faced another
severe economic downturn
• Early indications had seemed to promise
recovery as unemployment declined and
industrial output increased, but so did the deficit
• To help stop the deficit Roosevelt cut back on
federal spending, which precipitated a new
recession
• Nearly 4 million workers lost their jobs – causing
heated debate in the administration about how to
cure the problem
• The debate was over either limiting regulation on
businesses and cutting spending or increase
government control through regulation
• Eventually Roosevelt decided to use consumer
spending to end the Depression
• His ideas came from the book The General
Theory of Employment, Interest, and Money
(1936) written by British economist John
Maynard Keynes
• The main idea was that government should spend
its way out of a depression regardless of trying to
maintain a balanced budget
• Roosevelt increased spending but recovery was
still slow
• The public turned against Roosevelt and the
Democrats
• Roosevelt made matters worse when he promised
to rid the party of those who opposed the New
Deal – the Republicans made huge gains in the
1938, midterm election
• By the end of 1939 the New Deal was practically
dead as people demanded a more conservative
approach
• However, events in Europe were about to shape
the next period of American history
Foreign Policy
• During the 1930s the nations of western Europe
the United States were too busy with their own
problems to interfere with the political events in
Germany or China. The Americans adopted a
policy of increasing isolationism
• In 1931 the Japanese occupied Manchuria and
made it a puppet state
• The occupation violated the Nine-Power Treaty
and the Kellogg-Briand Pact. When China asked
the League of Nations for help they received
nothing
• In 1932 Secretary of State Henry Stimson issued
the Stimson Doctrine: the United States refused
to recognize any treaty, or agreement that
violated American treaties or the Open Door
policy with China – the doctrine had no effect on
the Japanese
• 1933 Japan withdrew from the League of Nations
• Soviet Union - In 1933, forced by the need to
increase trade, America recognized the Soviet
Union. In return the USSR promised not to
interfere in American affairs
• In November 1933 the United States formally
recognized the Soviet Union and renewed
diplomatic relations
• In 1934 the Platt Amendment was repealed. The
navy kept a base at Guantanamo Bay
• Buenos Aires Conference (1936) - American
states promised to consult each other if
threatened or remain neutral if aggression was
between any two of them
• The Neutrality Act of 1935, signed by Roosevelt it
promised to keep America out of any wars and it
prohibited the sale of weapons and ammunition
to all warring nations
• Weeks after the treaty was signed Italy invaded Ethiopia
• Mussolini did not need to buy arms but he did need oil,
which was not part of the Neutrality Act
• In 1936 Adolf Hitler ordered German troops into the
Rhineland in violation of the Versailles Treaty
• Also in 1936 General Franco led an uprising in Spain
• In 1937 Congress passed another Neutrality Act –
prohibited Americans from traveling on ships of nations
at war, prohibited the sale of arms and loans, and
prohibited the arming of American merchant ships
trading with warring nations
• By 1939, with help from Hitler and Mussolini,
Franco had established a fascist dictatorship in
Spain
• In 1937 Japan and China embarked on a fullscale war. Japan also joined Germany and Italy
in the Anti-Comintern Pact
• In December 1937 Japanese planes attacked and
sank the American gunboat Panay which had
been anchored in the Yangtze River, China. They
also attacked 3 American oil tankers
• The Japanese government apologized and paid
reparations
• Declaration of Lima (1938) - 38 American nations
would resist threats to their peace
• 1938 Hitler forced the Anschluss (union) with
Austria. Later the same year he invaded the
Sudeten region of Czechoslovakia
• Still support for isolationism was strong
• Roosevelt became openly supportive of European
nations fighting fascism and asked to be able to
sell material to Britain and France on a cashand-carry basis. His request was refused
• When Germany invaded Poland on September 1,
1939, Roosevelt called a special session of
Congress and asked to amend the Neutrality Act
Aid to Britain
• The Neutrality Act of 1939 allowed Britain and
France to send their own planes to the United
States to pick up supplies that had been
purchased with cash
• By 1940 only Britain remained free from German
control and the while Winston Churchill
promised to never surrender they did need
supplies
• Roosevelt order an increase in military
production
Undeclared War
• In 1940 Roosevelt created the National Defense
Research Committee to coordinate the war effort
and examine the possibility of developing atomic
weapons
• Britain negotiated a secret deal with the United
States in which they would receive 50 “old”
destroyers in return for a 99 year lease on bases
in various locations
• Congress also authorized the first peacetime
conscription which required all men between 21
and 35 to register for service
The Election of 1940
• The Republican choice was Wendell Wilkie, a
former Democrat, who supported aiding the
Allies
• Roosevelt probably would not have wanted a
third term but when war broke out he felt he had
no other choice. He kept silent about his
intentions to join the fight
• Roosevelt won a third term (449-82), but it was
the closest margin of all his victories
Lend-Lease
• Britain informed the United States that they were
running out of money, but they still needed the
supplies
• The Johnson Act of 1934 prohibited loans to
belligerent nations – Roosevelt needed another
way to keep Britain supplied but not violate any
laws
• In a fireside chat he told the American people of
the Lend-Lease Bill that had been introduced
into Congress
• America was to be the “Arsenal of Democracy”
• The Bill authorized the president to sell, transfer,
exchange, lend, or lease any equipment necessary
to continue the defense the United States
• The Bill was hotly contested for several months
before being passed
• By 1941 the Germans and their allies had taken
invaded Greece, Yugoslavia, and Egypt
• Hitler now seemed destined to gain the whole
Middle East region
• In the summer of 1941 the Germans suddenly
invaded Russia, in violation of their nonaggression pact with the Soviets
Atlantic Charter (1941)
• In August 1941 Churchill and Roosevelt met at
Newfoundland to issue the Atlantic Charter:
It called for self-determination for all people
equal access to raw materials
freedom of the seas
economic cooperation
• By September 15 nations endorsed the Charter
• On September 4, the first attack on an American
ship took place. The destroyer Greer was
attacked by a German submarine – Roosevelt
ordered American ships to shoot any German or
Italian ships
Pearl Harbor (1941)
• In September 1940 Germany, Italy, and Japan
signed the Tripartite Pact – each nation promised
to declare war on any other nation that declared
war on any of the three
• The Germans wanted the Japanese to attack
Russia from Manchuria, but in 1941 the Japanese
signed a non-aggression pact with the Soviet
Union
• The Japanese were more interested in the natural
resources of the Pacific – especially oil, rubber,
and iron
• In July 1941 the Japanese declared a protectorate
over all of French Indochina
• Roosevelt:
A) froze Japanese assets
b) restricted oil exports to Japan
c) joined the army of the Philippines with the
United States army under the command of
General MacArthur
• The Japanese, desperate for oil, formulated a
plan to capture Dutch and British colonies in the
Pacific
• The Japanese underestimated the determination
of the United States, a move that eventually cost
them the war
• The Japanese planned a surprise attack on the
American base at Pearl Harbor – the purpose
was to sink the aircraft carriers
• Even while both nations negotiated the Japanese
prepared for war
• On the morning of December 7, 1941 the
Americans decoded a Japanese message ordering
the diplomats to break off negotiations at exactly
1 p.m. Eastern time (7:30 a.m. Honolulu time).
The message was not received in Hawaii in time
• Japanese planes attacked Pearl Harbor for
almost two hours with little resistance
• Over 2,400 servicemen and women were killed
• Fortunately the American carriers were all at sea
and so they remained in tact
• Now there was no issue of neutrality
• The next day Roosevelt asked Congress for a war
resolution against the Japanese
• December 7, he said would be “a date which will
in infamy”
• On December 11, Germany and Italy both
declared war against the United States