Prosperity to Depression: The 20’s and the 30’s

Prosperity to Depression:
The 20’s and the 30’s
1. Conservative Policies of the Twenties - return to
laissez-faire, no more progressivism.
a. Presidency of Warren Harding (1920-1923)
1. “Return to Normalcy” to the time before the
2. Teapot Dome Scandal - Sec. of Interior Albert Fall leases oil lands to oil companies
in Wyoming and received secret payoffs.
3. Did very little to regulate big business
b. Presidency of Grover Cleveland
1. “The Business of America is Business”
2. “Silent Cal”
3. Conservative policies:
a. Laissez-faire
b. High tariffs
c. Less government spending
4. Encouraged stock market boom
c. Presidency of Herbert Hoover
1. Promised “a chicken in every pot”
2. Election of 1928 – the issue was not
the economy, but the fact that the
Democratic candidate, Alfred Smith,
was a Roman Catholic – the first
non-WASP to run for office
3. half a year of prosperity
4. Stock Market collapsed in October 1929
5. Hoover didn’t see it coming
2. Social Change in the Roaring Twenties
a. Mass consumption of new products
1. Henry Ford’s assembly line – by 1916
a Model T car could be sold for $400
2. Impact of the automobile on American:
a. Spurred new industries
1. rubber
2. gasoline
3. steel
b. Led to the building of roads and
the development of housing in the
c. Problems: drunk driving, parking
speeding, pollution, accidents
3. Subways and Trolleys - by 1920 more
people lived in the cities than rural areas
4. Charles Lindberg – crosses the Atlantic
in 1927 - first solo flight from New York to
Paris - competition for $25,000.
5. First shopping center - Kansas City
6. First fast food - A & W Rootbeer
7. Radio, phonographs, and movies
1927-first talking movie – Jazz Singer
By 1930 – 70% of all families had a
radio in their home
8. Effect of the Media on Popular Culturecreated a common culture for all, and advertising became very popular.
b. Emancipation of women
1. vote was give to women in 1920 with
the 19th amendment
2. Flapper look - hemlines above the
knee, one –piece bathing suits,
short hair, smoking became the
new look.
3. Office workers - because of the
availability of labor saving devices
women could go out of the house
to work.
4. Moral questions arose – such as
Margaret Sanger and birth control
c. Prohibition and Organized Crime
18th Amendment in 1919
Volstead Act – outlawed the manufacturing
transporting, and selling of alcohol.
Introduced organized crime into the U.S.
Mass defiance of the law.
Repealed in 1933 - 21st Amendment
4. Clash of Cultures:
a. Scopes Trial – 1925
John Scopes taught evolution to his
biology classes which was against
Tennessee law.
Found guilty fined $100
b. Nativism - laws regulating immigration
based on ethnic background
c. Growth of the KKK - reached nearly
4million members in the 1920s
d. Sacco and Vanzetti Case - 1927 – found
guilty on flimsy evidence in a
murder/robbery in Mass.
b. African Americans in Northern Cities:
1. Migration to the North – between 19201930. 2.5 Million blacks moved north in search
of jobs.
2. Race riots in the North – de facto
segregation and in South de jure.
When blacks tried to mix, riots started.
3. Marcus Garvey – started “Back to Africa”
movement. 500,000 moved back but
movement never really caught on.
4. Harlem Renaissance - blossoming of
African-American talent in the U.S. Ex.
Josephine Baker(singer), Louis Armstrong
(musician) Langston Hughes(poet). Popular
music was jazz.
3. Economic Flip-flop: From Boom to Bust
a. Boom Years (1922-1929)
b. Dramatic increase in productivity - but a
small increase in workers’ salaries
c. Consolidation of big business - 200
corporations controlled 49% of the wealth
in this country
d. Bull market on Wall Street - stock market
looked good and everyone wanted to
“get rich quick” - so many borrowed $ and
bought stock on margin (buy now and pay
later) Paid 10% of value and borrowed the
Stock prices rose for a while
b. Problems in the US economy:
1. uneven distribution of wealth
5% of the people owned 25% of the
country’s capital ($)
2. Farmers were very poor as prices
of farm goods were much lower than
during wartime
3. Workers’ salaries didn’t go up as
high as prices did.
4. Consumer debt - was a result of
buying on credit
5. buying stocks on margin
6. speculation in real estate
7. overproduction brought down
8. Restricted international trade
a. High tariffs
b. Hawley-Smoot Tariff 1930
c. Depression started in Europe
9. Shaky banking
a. Were not regulated
b. Made many unsound investments
c. Over-extension of credit
10. drought in Miss. Valley in 1930
11. problems in international economy
Loans to Germany were used to
pay reparations.
All of the above were reasons for the Depression.
4. The Great Depression:
a. The Stock Market Crash - sometime in
1929, stock began to fall in price, then many
people tried to sell their stock further driving
down the price of the stock.
On Oct. 29, 1929 “Black Tuesday” billions of
savings were lost, many couldn’t pay their
bills and the stock market crashed.
There was a widespread loss of confidence
in the economy.
b. Set off a chain reaction:
1. corp. could no longer raise funds
2. business prospects became
3. people who lost money could not
pay back their debts
4. banks failed
5. thousands lost their life’s savings
6. demand for goods decreased
7. manufacturers closed their
8. leads to unemployment
9. country became caught in the grip
of a vicious downward spiral
5. The human impact of the Depression:
a. 12 million people unemployed 25% of
of the workforce
b. Soup and bread lines
c. ½ million farmers lost their farms
d. No safety nets like we have today
1. no unemployment insurance
2. no retirement benefits
3. no bank deposit insurance
e. Relief efforts by organizations like the
Red Cross and Salvation Army did
not receive enough money to help
all the unemployed
f. People went hungry
g. Children suffered from malnutrition
h. Family life was disturbed
i. families moved in with other family
j. Marriages were postponed
k. Birth rate dropped
l. Fewer were able to attend college
m. Hoovervilles
n. Increase in the number of suicides
6. The Culture of the Great Depression:
a. Dominated every aspect of life in the
b. People sought inexpensive and
escapist activities:
1. miniature golf
2. softball
3. pinball machines
4. new board games ex. Monopoly
5. read comic books
6. movie theaters:
a. King Kong
b. Gone with the Wind
c. Wizard of Oz
d. Walt Disney cartoons
e. Cowboy adventures
f. Serials
g. Musicals
7. Radio
a. Comedy
b. Soap operas
c. Serials
c. Reflected the concerns of the times:
1. literature;
a. John Steinbeck - The Grapes
of Wrath
b. William Faulkner
2. music
a. jazz
1. Louis Armstrong
2. Duke Ellington
b. The age of swing (big band)
1. Glenn Miller
2. Benny Goodman
c. Musicals became a popular form
Of theater
1. George Gershwin
2. Irving Berlin
3. Cole Porter
4. Jerome Kern
7. The Worst Years: (1930-1932)
a. By 1932 25% or 12 million unemployed
b. 5,000 banks had closed
c. “Bonus Army” – 17,000 WWI veterans
went to Washington, DC to ask for
their promised bonus early, but tanks
drove them out
8. Hoover’s Policies:
a. Cut taxes
b. Gov’t spending on public projects
(dams, highways, etc)
c. Purchase of some of the farm products
d. Providing funds to banks, railroads,
and insurance companies
e. Ordering a debt moratorium for Europe
9. Evaluating Hoover’s Policies:
a. These were too little too late
b. His rugged individualism wasn’t
c. Trickle down theory did not work
Trickle down theory:
Gov’t loans to Business
New Investment and plant expansion
New jobs
Increased production
More wages in circulation
Demand increases