U.S. History Chapters 22,23

The Roaring Twenties

Chapter 22



"The Jazz Age"





-The US never accepted the

Treaty of Versailles and never joined the League of Nations



-We made a separate peace with Germany.





Warren Harding -A Return to Normalcy





United States Foreign Policy



Isolationism



-US President refused to cancel war

debts made by the Allies



-Germany was forced to pay huge amounts of money

(war reparations)



-High Tariffs on European goods

increased American productivity



-American sale increased at home but decreased overseas



United States Domestic Policy



Prohibition - 18th Amendment (1919)

The Great Experiment



The Noble Experiment





a) Temperance-high rate of alcoholism

b) sobriety in the US Military

c) Conserve Grain - war effort

d) Automated Factories - machinery

e) An attack on German Americans



Reaction-

People drank anyway!

Open disrespect to the law

A business for organized crime



The Speakeasy





Prohibition was repealed with the

21st Amendment(1933)







1920's motto-

"Keep cool with Coolidge"



Calvin Coolidge (Republican)



"The Business of America is Business"



Less government control,

let business take care of itself



Government Helps Business

1) FTC - deregulation

2) Dept of Commerce - working together with business -Secretary of State Herbert Hoover

3) Supreme Court- challenges v Big Business usually dismissed





Comparing the 1920's to the 1980's

(Tax cuts to the wealthy,

Business incentives, deregulation)



Automobile - Tremendous effect on US

1) Assembly Line (Ford)

- increased efficiency, low costs, mass producing



2) Jobs - Plants sprang up all over the Country. Car related component production



3) Paved Roads- Highways, better roads, shopping centers





4) Suburbs - live outside of city and drive to work



5) Installment Buying - buy now and pay later.



**The beginning the Consumer Culture**



Refrigerator - reduced spoilage and allowed the public to buy more



Radio - united people (sports)

Dempsey v Tunney, Baseball Games, Babe Ruth



Phonograph - different styles of music, eg The Jazz Age



Movies - at first silent - talking

Clara Bow - Valentino



**Live in Westchester, drive to a New York Factory or office, go to Yankee Stadium in the Bronx. Travel on the Parkway system designed by William Ward.





Lou Gerhig - New Rochelle

Harry M. Stevens - Babe Ruth



Iona Grammar





Farming- always a problem. Cities were rich and prosperous, except certain areas(slums)



- At first, During WWI, farmers sold grain to both sides



- borrowed money to invest in new machinery to improve their productivity



- WWI ended, huge market vanished, sales dropped,

profits dropped



Loans were still there





-Socially - Better Healthcare

Diphtheria, Typhoid and the measles were controlled



-Education reached more people



-America enjoyed a higher standard of living





However.....





Xenophobia

- an acute fear of foreigners



The Red Scare of the 1920's



A. Mitchell Palmer - Palmer Raids



Sacco and Vanzetti





***



The Stock Market Crash of 1929



A stock is worth what you are willing to pay for it.(usually determined by the companies performance and fundamentals). The price of a stock rises as more people want it.



Marginal Buying of the 1920's

Stockbrokers suggested "stock accumulation" on marginal buying







System works as long as prices rise.

They Did!





But they soon stopped and prices began to fall. = heavy losses



Investors had to cover their losses to the Brokers.



Banks called in their loans to Brokers



Banks called in their loans to public

many who invested in stock



The Result - Panic!!!!!!!!!!



In Sept,1929, banks stabilized market by investing in it



By Oct 1929, prices dropped because of heavy selling, bottom falls out







Causes of the Great Depression

The Domino Effect



1. Over expansion -



a) agriculture - the need for grain because of the war and foreign sales caused higher prices.(Inflation) overproduction - caused prices to drop (Deflation)

b) industry - Prices rose steadily(Inflation) and business thrived. Warehouses were filled. Overproduction. Too many goods produced. Prices drop(Deflation)

c) credit - installment buying was abused. Banks made loans for business expansion easily attainable.



2. Decline in foreign trade

a)caused by high tariffs

(Fordney-McCumber),

war debts and war reparations

b) foreign markets closed



3. Use of labor saving devices

a) fewer people were required to produce more.

Technology effect

b) output of worker increased 40% between 1920 - 1930.

Out of work people do not purchase non-necessities



4. Decline in purchasing power

a) income and wages did not keep pace with rising prices. The purchasing power of the population decreased and the need for labor decreased





5. Uneven distribution of wealth

a) during the prosperous 20's a good percent of the population lived in poverty. 40% of the nation's population lived in poverty.

The nation's 25,000 richest families did not put earnings back into the economy.