World War One and
the 1920’s
Chapters 30-32
1917- 1929
Chapter 30
I. War by Act of Germany
• Wilson won re-election in 1916 by keeping America
out of the war
• Three groups
• Isolationists- Not intervene in European affairs
• Internationalists- Work for peace, not enter war
• Interventionists- Enter war on side of Allies,
protect interests
• Wilson supported internationalists
• 1917 three events led U.S. to war
1. Unrestricted submarine warfare by Germans
2. Zimmerman note intercepted- German
proposal to Mexico to be allies and after German
victory territory lost in Mexican-American War
(1848) would be returned
3. Russian Revolution toppled tsar, America
could now focus on war for democracy not
despotism
• April 2, 1917 U.S. declares war on Germany
II. Wilsonian Idealism Enthroned
• War shattered American tradition of isolationism
• Wilson had to frame war as “making world safe for
democracy’, more glorified aim
• War not for territorial conquest or riches, but to shape
international order
• Modern world could not afford destructive wars
• Presidents appeal fired up Americans to support war
• Wilson recognized as moral leader of war
• Jan. 1918 Fourteen Points Address
A. Abolish secret treaties
B. Freedom of the seas
C. Removal of economic barriers
D. Reduction of Armaments
E. Get rid of colonialism
F. Organize a system of collective security
• Idea was to delegitimize colonial powers, open world to
political and economic freedom, not popular with many
European powers
III. Gaining American Support and Enforcing Loyalty
• During war government assumed new powers
• Changed relationship with federal government
• War relied on voluntary compliance more than formal
laws
• Build military Congress passes Selective Service Act
(1917) drafts men for war
• 4.8 million serve in WWI
• 1917- Committee for Public Information (CPI)educate public on causes and nature of war
• Advertising to “sell America” on war
• Not all Americans supported war
• Government took away individual liberties to quiet
dissent
• Resistance to the draft
• Seen as illegal intrusion into private lives, did not
cooperate with draft boards
• Conscientious objectors- moral or religious reasons
forbid fighting in wars
III. Gaining American Support and Enforcing Loyalty
• CPI stifled free expression
• 1917- Espionage Act- penalties for
obstructing war effort (print, mail, resisting
draft)
• 1918- Sedition Act- unlawful to speak out
about government. Used against socialists,
political radicals and pacifists
• Supreme Court ruled acts constitutional
(Schenck v. U.S. 1919) During wartime
freedom of speech does not apply (if it
presents a clear and present danger)
• Germany seen as primary foe against U.S.
• Harassment, violence against German
Americans
• Stopped teaching German in schools, playing
German composers music
IV. The Nations Factories go to War
• Wilson organized an effort to supply American in the war
effort
• Many Americans had fear of government control and balked
at the government effort
• Overall cooperation, not competition marked industrial effort
• To combat this Wilson formed the War Industries Board
(1918) to oversee industrial production
• American workers threatened by “work or fight” to combat
unemployment
• Labor was given a boost by war, wages rose and work days
standardized to eight hours, still no government guarantee to
organize into unions
• War effort supported by AF of L but not by more radical
groups (IWW) who committed acts of sabotage
• Wartime prices rose and this negated most wage gains
• 1919 steel strike was met with resistance by factory owners
who brought in scabs and setback the union movement
V. Changes for Women and African Americans
Women
Men left workforce , labor shortage filled
by women
Took jobs previously open to men
Women served Red Cross, Army Corps
of Nurses in Europe during war
Many progressive era feminists were
pacifists
Efforts and sacrifices during war led
Wilson to support passage of 19th
Amendment
Economic gains proved fleeting, many
women gave up wartime jobs
V. Changes for Women and African Americans
African Americans
Many served in military, in segregated
units and mostly behind the lines
Many went north during the war for
employment
Caused racial strife in some cities
(Chicago riots 1917)
Movement from rural South to
Chicago, Detroit, industrial Northeast
Escape racism, poverty of life in south,
promise economic advancement
Called “Great Migration” (1.2
million moved 1910-1920)
VI. Forging a War Economy
• America had to feed themselves and allies,
went into it haphazardly
• Herbert Hoover was put n charge of food
production effort, effort relied on voluntary
cooperation rather than legal means
• Used propaganda campaign to save food for
export, promoted “victory gardens”
• Spirit of self denial led to decline in
consumption of alcohol and eventually the
passage of the 19th Amendment
• Food production and export rose during war
• Other wartime administrations copied
Hoover’s lead
• Treasury Department held “liberty bond”
drives to raise money for the war effort
• Involuntary increase in taxes raised the rest
of the money to fund the war
• Government exercised power of railroads
and nationalized them during the war
VII. American Entry into the War
• At the beginning of the war, most Americans
thought America would contribute naval
power and supplies to Allies
• 1917- Central powers gained an edge on
Western Front
• March 1917 Czar of Russia overthrown in
revolution
• November 1917 Vladimir Lenin and
socialists take over Russian government,
sign treaty with Germany and leave war
• Spring 1918 Germans begin new offensive
on Western Front
• Early 1917 Allies ask for manpower and
draft was instituted, believed the US could
not raise enough men to fight in time
• Draft was more effective with fewer
loopholes than during Civil War draft
• By early 1918 the first poorly trained
American soldiers began to arrive in Europe
Technology, Trench Warfare and a Stalemate
War unlike others
• Trench warfare- built trenches, attacked, counterattacked each other across “no-mans land”
• High death toll- machine guns, artillery, tanks,
poison gas produced massive causalities
• Effective defensive weapons led to stalemate- no
side could gain advantage
VII. American Entry into the War
• Early 1918 American troops
arrive in large numbers
• Commanded by John J.
Pershing
• German offensives became less
effective, troops became
exhausted
• American troops gave Allies
military advantage
• Fall 1918 German troops were
running out of food, many
mutinied, deserted, refused to
fight
• Germans surrendered Nov. 11,
1918
VIII. End of the War
• The main US contribution to the war was food,
munitions, credit, oil and manpower
• Prospect of endless US troops and material
contributed to the end of the war
• Wilson wanted the peace based on the Fourteen
Points, he was seen at the end of the war as the
moral leader of the world
• By the time Wilson went to the peace conference he
was a diminished leader in the US due to Republican
victories in the Congressional elections of 1918
• Going to Paris personally seemed to many like
grandstanding and Wilson made a political mistake
by not including a single Republican in the peace
delegation
VIII. End of the War
• European leaders kept the new hero Wilson at arms
length, they felt that he would disrupt the status quo
• Big Four of Paris Peace Conference Wilson, David
Lloyd George (Great Britain), Georges Clemenceau
(France), Vittorio Orlando (Italy)
• Russia stayed out, Lenin thought the war was an
imperialist land grab
• Wilson’s main goal was to establish the League of
Nations controlled by the great powers
• Wilson did not want the victors to be vengeful to
their former enemies, he wanted “peace without
victory”
a) Promoted openness, independence
b) Move to end colonialism
c) National self- determination (right of people to
choose their own form of government)
d) Disarmament
e) Asked for League of Nations to promote peaceful
cooperation among nations, collective security
• The European countries had different ideas
VIII. End of the War
• European allies blamed Germany for starting war,
wanted them punished
• Suffered more than Americans
• Germany had to pay reparations (payment for war
damages)
• Rejected ideas to end colonialism, disarm Europe, free
trade
• Allied powers were torn by conflicting aims and the
peace was a fractured one
• French claims in the Ruhr region caused tension with
Germany
• France signed a pact with Great Britain and US to
provide for aid in case of another German invasion
• New nations emerged in Europe, liberated millions
• Austrian, German people found themselves as part of
new countries
• Breakup of Ottoman Empire clustered different ethnic
groups together
• Middle East broken up by European powers, not
allowed to practice self- determination
• Wilson did get League of Nations in a compromise with
the European leaders
IX. Selling the Treaty to the US
• Many Americans thought US was entering into “tangling
alliances” of European affairs, the League of Nations was also
seen as a “super state” and was opposed by the isolationists
• Some thought treaty was not harsh enough
• German and Italian Americans thought treaty was too harsh
• Some thought treaty gave British too much influence
• Republicans and isolationists in Senate (led by Henry Cabot
Lodge) used delay tactics to keep treaty from being passed
• Eventually apathy and confusion crept in to the treaty debate
• Wilson tried the direct appeal method to get support for the
treaty, during his tour he had a stroke and could not actively
campaign for the Treaty of Versailles
• Lodge took control of the proceedings and would not pass the
treaty if it included the League of Nations
• Wilson urged Democrats to reject the treaty Lodge proposed,
it was defeated
• The Treaty of Versailles was also defeated by traditions of
isolationism, disillusionment with the war and partisanship
X. A Return to “Normalcy”
• Public desire for change from the
progressive politics and high minded ideals
of Wilson
• Elected Republican Warren G. Harding of
Ohio as president
• Opposite of Wilson, back slapper and dull
minded
• With the election of Harding the idea of the
League of Nations was dead
• America emerged from the war a changed
country nationally and internationally
• 1920 America world economic giant,
largest creditor nation
• Compared to Europe, U.S. came out of war
strong and prosperous
Chapter 31
I. Seeing Red
• After war Americans turned
inward
• Shunning diplomatic
commitments, denounced radical
foreign ideas and “un-American”
lifestyles
• Shut out immigration (passed
literacy requirement for
immigrants) and sealed off
economy from the outside world
• New technologies, forms of
entertainment and leisure first
appeared in the US, but there
were fears that America was
losing their traditional ways
I. Seeing Red
• Flu Epidemic (1918-1919) September 1918 virus first
appears, Spring 1919 disappears
• Killed millions around the world (22m, 500,000 U.S.)
• Men and women in 20’s, 30’s hit hardest
• Combined with effects of war, gave people a sense of doom
• Red Scare- fear of communists and radicals, plotting against
the United States
• Labor unrest seen as work of communists, radicals
• Communist Soviet Union called for international workers
revolution and end of capitalism
• April 1919 40 bombs intercepted in mail, one sent to
Attorney General (Mitchell Palmer)
• Government response- Palmer Raids
• Arrested thousands of Southern, Eastern Europeans (not all were
radicals), many deported, or held in jail without ever being
charged with crime
• American Civil Liberties Union formed 1920 to protect
rights and liberties
• Conservative business leaders used this as an excuse to break
the back of labor unions
I. Seeing Red
• Anti- foreignism reflected in
Sacco and Vanzetti case
• Italian immigrants and known
anarchists
• Accused of killing two men at a
shoe factory
• ACLU provided defense
counsel
• Found guilty, little hard
evidence
• Bias against immigrants,
political climate worked against
them
• 1927 put to death in electric
chair
• Gave the radicals two martyrs
for their “class struggle”
II. Hooded Hoodlums of the KKK
• Membership in the organization spiked in
the 20’s
• Manifestation of intolerance and prejudice
from anxiety of changing times
• Resembled “nativist” movement of 1850’s
• Anti- anything except Anglo, “native”
American
• Uprising against forces of modernism and
forces of diversity shaping American culture
• Movement concentrated in Midwest and
South
• At its peak had about 5 million members
• Collapsed in late 20’s after political
corruption was exposed
III. Stemming the Foreign Flood
• Country had little use for
immigration in the 20’s,
• Immigration Act of 1924- end
of open immigration
• Government created a quota
system to restrict immigration
• Geared to keep out southern and
eastern Europeans, Japanese
immigrants
• Employers used racial/ ethnic
differences to undermine class
and political solidarity
IV. Prohibition and the Rise of Gangsterisim
• Last spasm of the progressive movement was
prohibition of alcohol, legalized with the passage of
the 18th Amendment and implemented with the
Volstead Act in 1919
•
•
•
•
•
Prohibited sale, distribution and manufacture of alcohol
More popular in South and West
South seen as a way to keep blacks “in their place”
West seen as attack on vice associated with the saloon
Opposition in the east where there were large groups of
immigrants and Old World styles of sociability
• Conditions that hampered enforcement: ignored
tradition of weak control by central government over
private lives, disillusionment in aftermath of war and
wisdom of further self denial, understaffed federal
agents to enforce law
• Corner saloon replaced by “speakeasies”, alcohol still
available
• Did have some positive effect- bank savings increased,
absenteeism at work decreased
IV. Prohibition and the Rise of Gangsterisim
• Prohibition spawned criminal activity
• Profits of selling booze led to rivalries
between gangs in big cities
• Arrests were few, convictions fewer
and the bribery of federal agents was
rampant
• Organized crime developed around
sale of liquor and reached into other
areas- prostitution, drugs, gambling
• Organized crime became one of the
most lucrative businesses in the
country
V. Changes in Society
• Split in rural and urban values, Changes in standard of
living, religious values
• 1920 Census first time more American lived in urban areas
than rural areas
• Urban- enjoyed new consumer products,
• Open to social change, science, secular values important
• Formal education more important
• Rural- more traditional view of science, religion, culture
• Most new consumer products unavailable
• Many people, especially in rural areas, felt threatened by the
changing values of society--formed ways to react to these
changes
• Religious fundamentalism grew during the 1920s
• World changing in ways people don't understand and can't
control
• Children reject the values that the parents have lived with all
their life
• One way this fundamentalism manifested itself came in the
laws of a few southern states which mandated creationism,
not evolution, be taught in classrooms
VI. Monkey Business in Tennessee
Scopes “Monkey” Trial
• Scopes Trial a battle between two sets of
values--the older, rural values and the
modern, urban values
• 1925, at the urging of local community leaders,
John T. Scopes, a high-school biology teacher in
Dayton, Tenn. challenged his state's antievolution
law
• He did so with promise of assistance from the
ACLU
• ACLU hired team of lawyers headed by Clarence
Darrow to defend Scopes
• Prosecution assisted by William Jennings Bryan-who argued for inerrancy of Bible, but sometimes
found himself not knowing what the Bible said
• Scopes convicted by local jury--but received short
sentence and small fine
• Fundamentalism (and the South) ridiculed by
national press-influence of fundamentalism
diminished in mainstream churches after the trial,
it still retained a large following
VII. The Mass Consumption Economy
• Cultural issues divided Americans but…..
•
•
•
•
•
•
Decade after war America experienced growth
Changed the way Americans lived
Created modern consumer economy
Rising wages, shorter work weeks
More free time more disposable income
Technology, leisure activities broke down barriers
and helped form a common American culture
• Consumer Revolution- advertising, buying on
credit, electricity made new products available to
people
• Availability of electric power – washing machines,
vacuum cleaners made housekeeping easier
• Advertisers- used new methods to sell more products
(focused on desires and fears of consumers)
• Buying on credit allowed people to buy products they
would have needed to save years for
• Economy became increasingly venerable to
disruptions of the credit structure
VII. The Mass Consumption Economy
• Radio and Phonograph- result of
technological advances, business
enterprise
• Americans listened to same music, learned
same dances- contributed to mass popular
culture
• Radio- 1920 first commercial radio
station (KDKA Pittsburg, PA)- within three
years over 600 stations
• Brought events into millions of homessporting events, news
• Politicians had to learn the “art” of media
to reach millions at once that heard
promises and pleas
• Advertising and commercials made radio a
vehicle for selling American free enterprise
• Phonograph- people could listen to
music whenever they wanted
• Regional music styles were made national
VIII. Sports and the Rise of the Airplane
• Sports created nationally famous
athletes
▫ Increased newspaper readers, radio
audience boosted popularity
▫ Sportswriters captured excitement of
events
▫ Sports became big business
▫ Sports feats showed people capable of
great feats, idealized self
• 1903 first successful airplane flight
▫ During WWI used in combat
▫ After war first passenger lines operated,
mostly used for mail service, stunt fliers
traveled across country
• 1927 Charles Lindberg flies solo across
Atlantic Ocean, became American hero
▫ Feat popularized flying more than any
other event, increased idea of it being a
commercially viable industry
▫ Removed some of the “isolation” of the
American psyche
IX. Movies
• Movie industry began to grow in early
1900’s and it blossomed in the 1920’s
• Hollywood was the movie capital of
the world
• Used during the war to promote antiGerman propaganda
• Local theaters became cultural
classroom for Americans
• Americas democratic art, most
popular form of entertainment
• First movie stars
• 1927 first “talkie” Jazz Singer
• Movies represent fantasies, desires,
of Americans
• Help create a common American
culture
X. Advent of the Automobile Age
• Caused biggest change to lifestyles
during the 1920’s and beyond
• Scientific management techniquesreduce time, effort, cost to produce
cars (“Taylorisim” sought to eliminate
wasted motion)
• Cars put on assembly line- inspired
by meatpacking industry
• Best known carmaker Henry Ford,
had a one track devotion to
standardization that he used to
produce cars
• Idea of mass production used for
automobiles
• Model T- only car Ford sold ($ 260 by
mid-1920’s)
• Ford also doubled wages of workers,
weekends off, 8 hr workday
X. Advent of the Automobile Age
• Steel, glass, rubber, asphalt, gasoline, insurance,
road construction industries all benefitted
• Oil discoveries in Southwest US
• 1926 national highway system first appeared
• Service stations, motels
• Created new jobs, helped national prosperity
• Made commerce speedier
• Gave people more freedom, car became a necessity
• Go where they wanted, not tied to tracks or train
schedule, hurt railroads
• Altered residential patterns
• Suburbs grew, people could live farther from jobs
• Communities linked by highways to cities
• Improved mass transportation, car led to
development of suburbs
• Suburbs drain resources from cities
XI. Science, Social Thought and Modernism
• Rational, mechanical ideas of how
world worked changed
• Einstein’s Theory of Relativity,
Heisenberg's Theory of Uncertainty
showed absolute values of how things
worked were not true
• Freud explored subconscious,
subconscious regions seen as more
potent than reason
• Also demonstrated that repression
was responsible for a variety of social
ills
• Fundamentalist lost ground to the
modernists
XI. New Roles for Women
• New Woman” of 1920’s more liberated,
Victorian morality rejected
• Dresses shorter, wore makeup, danced, drank
• Flapper symbolized new , modern woman
• Wanted same political, social, economic rights
as men
• Alice Paul and the National Women’s party
began a campaign for an Equal Rights
Amendment to the Constitution
• Lived longer, had fewer children, freed time to
peruse other interests
• Many entered professional workforce, although
they went into low paying jobs (“women’s
work”)
• Elected as governors (TX, WY)
• Differences in material culture made life for
urban and rural women distinct
XIII. The Jazz Age
• Emerged in South (New Orleans)
where different traditions and
cultures came together
• Based on improvisation, blues and
European traditions
• Spread north with Great
Migration, became theme music of
1920’s
• Radio, phonograph spread
influence
• Bridged races, inspired white
songwriters and musicians (who
stole style and made a huge profit)
XIV. The Harlem Renaissance
• African American migration continued 1920’s
• Many found a better life, jobs, political voice
• Did not escape oppression, had worst jobs,
housing
• Period of cultural expression in music and
literature
• Development of “new black consciousness”
• Center was Harlem, NY, blend of cultures,
ideas
• Spawned charismatic political leader Marcus
Garvey
• Jamaican immigrant, promoted idea of black
nationalism, “Back to Africa” Movement
• Called for black separatism- businesses,
communities
• Founded Universal Negro Improvement
Assn. promoted black pride
• Put in prison 1925 for mail fraud, deported
• Inspired Nation of Islam, Black Panther
Movement later in century
XIV. The Harlem Renaissance
• African American literature developed
from the Harlem Renaissance
• Explored pains and joys of being African
American, some called for equality with
whites
• Langston Hughes- literary voice of HR,
captured diversity of AA life
• Jean Toomer- Cane looked at rural life in
the south and sophisticated urban life in
Washington, D.C.
• Claude McKay- militant writer, wrote
about struggle for dignity
• Zora Neale Hurston- collected folktales
of rural Florida, called for women’s
independence
XV. Modernism in Art and Literature
• Literature, arts were changed by WWI
• War killed millions, left many
homeless
• Seen as action of irrational people
• Began to question ideas of progress,
left people pessimistic
• Writers and artists expressed lack of
faith in a traditional worldview
• Painters moved away from traditional
representation
• Experimented with abstract styles,
represented inner mood
• Saw artistic honesty in abstract
paintings
XV. Modernism in Art and Literature
• Postwar literature represented the
exuberance of youth and the
resentment of ideals betrayed
• Called “Lost Generation”
• Searched for new truths, new ways
to express truths
• Most were expatriates living in
Paris and London
• Wrestled with meaning of war and
life
• F. Scott Fitzgerald, Ernest
Hemmingway, T.S. Elliot, Sinclair
Lewis, Gertrude Stein
• Greatest generation for American
writers
XV. Modernism in Art and Literature
• Earnest Hemmingway- novels
feature search for real life
• Hard living, athletic, masculine lifestyle
• About doomed life after the war
• Wrote in a concrete, stripped down style
• F. Scott Fitzgerald- first novel This
Side of Paradise, age 24
• Wrote about excess of Jazz Age, bible for
youth of the 20’s
• Great Gatsby about American dream and
tragedy
 William Faulkner- stories set in
Mississippi, reflected southern world
 Literature- dying way of life vs. modern
way of life
 Leader of Southern Renaissance
1919-1921
I. Wall Street’s Big Bull Market
• Right after the war scarcity of supplies, increased
demand caused inflation
▫ Agriculture- prices fell, farmers could not pay debt
▫ U.S. had a postwar recession
▫ Industrial workers wages could not buy as much after
war (inflation)
▫ Many workers went on strike to demand better
conditions (1919- 4m), racial unrest across the country
in the summer of 1919
• Decade after war America experienced growth
• Changed the way Americans live, created modern
consumer economy
• 1920’s period of rising stock prices (bull market)
• Investors take risks, buy on margin (pay small
amount up front, pay rest back over time)
• Stock was collateral for loan
• Thinking boom and bust economy would end, there
would always be prosperity
• Signals in bank failures and real estate speculation
I. Wall Street’s Big Bull Market
• More conservative policies to promote
growth of business
• Presidents wanted to serve the public
good through less government
• Sec. of Treasury Andrew Mellon, a
multimillionaire, favored low taxes on
individuals and corporations
• Tax burden shifted to the middle class
• Herbert Hoover- Commerce Sec.
wanted to use business and labor
leaders to manage industry, not
legislation
II. Republicans in Power
• Harding used government to guide business to
profits
• Used courts to back up policies, appointed 4 justices
to Supreme Court (would have an effect for years)
• Stripped away gains for labor, women in the
workplace, anti trust laws ignored
• Dismantled progressive and wartime controls over
the economy
• Close circle of advisers called ‘Ohio Gang”
• Saw government service as a way to get rich at
expense of others
• Teapot Dome Scandal- (1921) Sec. of Interior
arranged sale of government oil reserves in Wyo. to
private investors for “loans”
• Harding signed deal, senate investigated
• 1924- Sec. of Interior sentenced to prison
• 1923- Harding died before he could finish his term
or answer for his role in this and other scandals
III. Silent Cal Coolidge
• Replaced by VP Calvin Coolidge
• “Silent Cal” quiet, honest, frugal,
fumigated some of the stench of
Harding
• Pro- business, creation of wealth
was good for all America
• Followed same economic policies
as Harding
• American economy grew, general
prosperity for all Americans over
next six years
IV. Hiking the Tariff Higher
• True to idea of American isolationism, business
tried to keep out foreign investment in the
1920’s
• Put up high tariff walls to keep out a flood of
cheap foreign goods from recovering Europe
• Tariffs were raised throughout the decade,
Republican presidents were far more friendly to
tariff increases than the progressives of past
decades
• Set off chain reaction that kept Europe from
being able to pay war debts, spurred Europe to
pass tariffs to keep out American goods
V. Frustrated Farmers
• Farmers caught in boom-bust
cycle more than industry
• Peace brought an end to
guaranteed prices by government
and overseas purchases
• Wartime boom encouraged them
to cultivate new land
• Farmers produced surpluses that
led to price dampening
depression
• In 1920’s 25% of all farms were
sold to repay debt
• Congress tried to help farmers
but conservative financial policies
allowed farmers problems to not
be heard
VI. American Foreign Policy
• Isolationism was the rule in the 20’s, even though
America sent “observers” to the League of Nations
meetings in Geneva, Switzerland
• America was active in the Middle East where they
secured drilling rights to reap the benefits oil
• 1921-1922- Washington “Disarmament”
Conference- limit construction of navies, reduce arms
race
• 1928- Kellogg- Briand Pact- treaty to outlaw “war as
an instrument of national policy” world leaders knew
this was useless
• Defensive wars were still permitted with pact, America
had been lulled into a false sense of security
• 1920’s U.S. thought best policy was to keep rest of world
at arms length, by outlawing war U.S. hoped to never be
involved in another world war
VI. American Foreign Policy
• US did still participate in the affairs of Latin
American and Caribbean nations to protect their
investments
• Overshadowing all other foreign policy issues was
international debt, US after war was the creditor
nation of the world
• US wanted to be repaid the $10 billion it loaned
Europe during the war
• US wanted Britain, France to pay back money
borrowed for war
• They needed Germany to pay reparations
• Financial issue threatened world economy
• 1924 Dawes Plan arranged US loans to Germany
to pay Britain and France
• Damaged US reputation- Europe saw US as
heartless demanding payment after human costs of
war
• US never did get money and it led to continued
neutrality and isolationism as thing grew worse in
Europe in the 1930’s
VII. Presidential Elections 1924, 1928
• 1924 Coolidge reelected over a hopelessly
split Democratic party and the reform
minded progressives
• Times were too good to change the course
• 1928 Coolidge decides not to run, Herbert
Hoover (Sec. of Commerce) was chosen as
successor
• Hoover was a self mad millionaire, the ideal
businessperson's candidate
• Democrats nominated Alfred Smith of NY
• Many saw Smith as too Catholic, urban, too
much of a drinker
• Dry, fundamentalists help Hoover carry the
South
• First time for a Republican to carry former
Confederate states
• First election where radio played a role
IX. Hoover’s First Years
• Many did well in 1920’s; two groups that did not
farmers and wage earners
• Hoovers government philosophy- voluntary
cooperation between labor and management
• Economy needed sense of competition, little
government interference
• Decentralized government, low taxes
• Passed Agricultural Marketing Act and established
the Farm Board, agencies set up to help farmers to
help themselves through lending and farmers
cooperatives
• 1930 Farm Board agrees to buy surplus production,
causes glut of agricultural products and leads to a
decline in prices
IX. Hoover’s First Years
• 1930 Hawley Smoot Tariff designed to help
farmers
• Created the highest tariff in peacetime history (avg.
duty 60%)
• Hawley-Smoot Tariff raised prices on foreign goods
• Added to farm, manufacturing problems, could not
sell glut of goods
• European countries retaliate and pass protective
tariffs, seen as an act of economic war
• Destroyed international trade
• Countries could not repay loans to U.S., business’
bank collapses in Europe
X. Great Crash End the Twenties
• When Hoover took office the speculative
bubble and good times on the stock
exchange were coming to an end
• In mid-1929 British raised interest rates
to bring investment back to the country,
foreign investors dumped money in US
market for British market
• Sept- Oct 1929 stock market begins to
drop
• October 29- Black Tuesday bottom
fell out of stock market, billions of dollars
lost
• Investors lost confidence in market, many
lost all of their money, jobs, homes
• Hoover tells Americans economy healthy
XI. Causes of the Great Depression
• Industrial production increased
and corporate profits rose
• Wealthiest 1% made same amt.
as bottom 42%
• Problem- overproduction,
under consumption, over
expansion of credit
• Problems caused by HawleySmoot Tariff caused chain
reaction across Europe
• Farms sold at auction and many
became tenant farmers across
the South and Midwest
XII. Chain Reaction
• Stock market crash caused chain reaction of
events
• Banks Collapse
• Depositors tried to withdraw money (run on
banks), many banks failed (over 2,000 from
29-32)
• Misguided Monetary Policy
• Federal Reserve tightened money supply to
discourage lending
• Too little money in circulation, not enough
for banks
• Business Closes, Unemployment
Rises
• Reduced spending, production cutbacks
• Led to job layoffs, by 1933 25% of
Americans out of work
XIII. Rugged Times for Rugged Individualists
• Many Americans did not understand the
reasons the Depression happened
• Attacked most American families, many men
lost initiative and self respect
• Men felt that they betrayed family, birthrates
dropped, families broke up, children
dropped out of school
• Unemployment at 25%, those that had jobs
had wages, hours cut
• Many went hungry, waited in bread lines for
food, many lost their homes
• Grouped together in Hoovervilles,
makeshift shacks, tents built on public land
• Feeling of loss of American Dream, zapped
American spirit and uniqueness
• Most popular song 1933 “ Brother Can You
Spare a Dime?”
XIII. Rugged Times for Rugged Individualists
• Hoover struggled to respond to America’s problems
• Tried hands off policy, downturn part of natural
business cycle
• Business should voluntarily combat depression, act
in best interest of the community
• Asked business, industry to keep employment,
wages, prices at current levels, wanted more money
in hands of businesses
• Local relief agencies were overwhelmed, did not
have funds to battle economic downturn
• Hoover begins to realize that government needed to
help, efforts probably prevented further collapse of
the economy
XIV. Hoover Battles the Great Depression
• Hoover finally began to use federal resources to
battle economy
• 1932- Reconstruction Finance
Corporation (RFC)
• Loaned billions for business, railroads, state and
local governments
• Money for banks, to provide loans, stimulate
business (trickle down economics), no money to
individuals
• Succeeded with construction project on
Colorado River (Boulder/Hoover Dam), brought
irrigation, employment to Southwest
• Benefits to labor through the Norris-La Guardia
Act (1932) outlawed using court injunctions to
restrain labor
• Policies by Hoover paved the way for the
expansion of the federal government under the
New Deal
XV. Routing the Bonus Army in Washington
• 1932- Group of WWI veterans went
to D.C. to demand payment for
service that was to be paid in 1945
• Called Bonus Army
• Government did not have the money
• Set up camps and occupied
government buildings
• Hoover used federal troops to
remove them
• Army used excessive force, Gen
MacArthur called them
revolutionaries
• Photographs of army action shocked
Americans
• Election of 1932 was time for
change