Economic Transformations of the 1920s: Prosperity, Challenges, and Cultural Shifts

1. Ch. 23: The 1920s

2. Booming Business, Ailing Agriculture • Recession hits when wartime defense contracts end • But by 1922 business bounces back • Age of electricity brings new consumer goods- by 1925 60% of households have electricity • Automobile was the major industry- by 1930 60% of families have a car • Ford led in the beginning, then GM, back to Ford • Automobile industry accounts for 9% of all wages in manufacturing and stimulates many other industries

3. Rising stocks reflect the speculative nature of Wall Street • Business boom stimulates capitalist expansion overseas • corporations built facilities abroad • U.S. investors loaned European nations money to repay WWI debt • Private investment abroad increases five-fold

4. Economic nationalism prevails- high protective tariffs • Fordney-McCumber Tariff (1922) and Smoot-Hawley Tariff (1930) • http://www.youtube.com/watch?v=dxPVyieptwA • As a percent of GDP U.S. exports fell • However, manufactured goods rose to 61% of exports by 1920s

5. Even though wages did rise in the decade, workers benefitted unequally • North faired better than the South • Women, blacks, Mexicans, and recent immigrants faired the worst • For farmers, grain prices plummet • Government purchases end, European agriculture is revived, farm exports slow • Farm income falls by 60%

6. New Modes of Producing, Managing, and Selling • The assembly line boosts output by 40% • Managers discourage individuality, etc. – “Fordization of the face” • The assembly line doesn’t foster pride in skill or provide opportunity for advancement • However, this created American industrial might • Business consolidation continues after the war

7. Giant corporations begin setting up divisions within the company, making day-to-day oversight highly complex • The gradual increase in wages came because leaders recognized that higher wages would improve production and consumer buying power • Ford paid his workers $5 a day • New systems of delivering goods developed • Dealer networks in the automobile industry; Chain stores and department stores (air conditioning helps popularize these stores)

8. Advertising takes off • Buying on credit soars • Installment plans with fixed payment schedules • Was mostly confined to big ticket items • Accounts for 75% of automobile sales by 1929

9. Women in the New Economic Era • Cigarettes for women as “torches of freedom” • Cosmetics were “hope in a jar” • Male workers dominated the manufactoring plants • The number of working women increased to 2 million, but their number as a percent of the total female population hovered at 24% • Women went to work in corporate offices • Medical schools even capped female admissions

10. Struggling Labor Unions in a Business Age • Union membership fell from 5 – 3.4 million during the 20s • Why? • Overall wage rates climbed • Older craft-based unions were ill suited for the new mass-produced factories • Management hostility • Anti-union campaign (employee associations) • Welfare capitalism

11. Stand Pat Politics • Republican dominance of the 1920s • Northern farmers, corporate leaders, businesspeople, native-born white-collar workers and some blue-collared workers • Warren G. Harding • Bland with a soothing appeal • Known for his womanizing and his poor cabinet appointments

12. Scandals • Charles Forbes (head of the Veteran’s Bureau) – a draft dodger who stole funds fled the country • Harry Daugherty (Attorney General) – influence peddling; escaped two criminal trials • Albert Fall (Sec. of Interior) – leased government oil reserves for a $400,000 bribe. The Teapot Dome Scandal; went to jail

13. Republican Policymaking in a Probusiness Era • Congress lowers taxes and inheritance taxes for the wealthy (supported by Sec. of Treasury Andrew Mellon) • Supreme Court overturns business regulatory laws • Coolidge opposes government assistance to other groups – 1927 Mississippi flood victims or a price-support plan for farmers (McNary-Haugen bill) • This does move some farmers to the Democratic Party

14. Independent Internationalism • U.S. refuses to join the League or its International Court of Justice • Washington Naval Arms Conference • Specific ratio of ships amongst the world powers (reduced tonnage: U.S., GB, Japan, Italy, France) • Kellogg-Briand Pact- 60 nations and purely symbolic

15. Women and Politics in the 1920s: A Dream Deferred • Polling places shift from saloons to schools and churches • Women’s Join Congressional committee lobbies for child-labor laws, protection of women workers, and federal support for education • Sheppard-Towner Act (1921) – funded rural prenatal and baby care centers staffed by public health nurses • However, the 19th Amendment had little political effect • Reformers could not go so far as to get an ERA- felt it would undermine gender-based law protecting women • Those who continued to “push buttons” were labeled communist • Women expressed their liberation through consumption

16. Immigration Restriction • National Origins Act of 1924- 2% of each nation’s 1890 representation in America • “America must be kept American” • The law excluded Asians and South Asians as person ineligible for citizenship but place no restrictions on immigrants from the Western Hemisphere • Need for large scale, low-paid migratory workers in growing agribusiness sector • Mexican American found little support from the Catholic Church

18. Nativism, Anti-Radicalism, and The Sacco-Vanzetti Case • Red Scare and A. Mitchell Palmer • “Those anarchist bastards”

19. Fundamentalism and the Scopes Trial • John T. Scopes • Dayton, TN • ACLU • William Jennings Bryan • Clarence Darrow • H.L. Menken of the American Mercury

21. http://www.youtube.com/watch?v=l5Kdc0LLSW8

22. KKK and the Garvey Movement • 1915 revival and Birth of a Nation • Membership drive- expansion to 5 million • Dismal end • Garvey and the UNIA • Unpopular with mainstream black organizations • He eventually served prison time and was deported

24. http://www.youtube.com/watch?v=2jAPdm9OU5k

25. Prohibition • Rural vs. urban values; anti-immigrant; impact of women’s movement; continuance of WWI conservation and anti-German sentiment • 18th Amendment • Volstead Act • By 1929 alcohol consumption was at about 70% of prewar era

27. http://www.youtube.com/watch?v=bJdKK6L8Z2o

28. Election of 1928 • Al Smith (D) – Catholic and a wet from NY vs. Herbert Hoover (R) – brilliant, professional with wartime service • Business and conservatism wins • There is a fear of the pope • Election began a new political realignment • Some in the Midwest abandon Republicans due to Coolidge’s insensitivity; Democrats begin to carry the biggest cities

29. Herbert Hoover’s Social Thought • Hoover did not believe in cutthroat capitalism; he sought a more rational approach, welcoming welfare capitalism • He encouraged corporate consolidation and cooperation- some 250 conferences • Supported the 8-hr workday and higher wages to increases purchasing power • However, his belief was that capitalists would embrace such policies because of ethics

30. Cities, Cars, and Consumer Goods • By 1930, 40% of African Americans lived in cities • Electricity meant women spent less time on household chores • Food prep declined and fresh food was available all year • Automobile and all its impact for both city and farm life; pricing • Advertising • Chain and department stores

33. Soaring Energy Consumption • Electrification and autos impact the nation’s natural resources • Electrical use triples; by 1929 20 million cars on the road • Need for oil • U.S. access to Mexican oil • Plays a role in Teapot Dome • Triggered wildcats • Did it help or hurt the conservation movement? • Sierra Club and Audubon Society kick in • Hoover actually create a National Conference on Outdoor Recreation to set national recreation policies

34. Mass-produced entertainment • Light reading for diversion • Saturday Evening Post and Reader’s Digest • Book of the Month Clubs and Literary Guilds • Radio • NBC formed in 1926, followed by CBS a year later- this is standardization of radio • Amos ‘n’ Andy • Movies • Chaplin, Pickford, Valentino, Jolson, Steamboat Willy • MGM, Warner Brothers, and Columbia

37. Celebrity Culture

38. The Jazz Age and Postwar Crisis of Values