The 1920s Between 1917 and 1920, the U.S. experienced war, strikes, recession and race riots. Americans now wanted peace and quiet.

Americans longed for a return to NORMALCY Isolationism: policy of NOT taking part in economic and political alliances with other countries Disarmament: process of removing number of weapons in nation’s arsenal or the size of its armed forces Kellogg-Briand Pact: agreement made between many nations to try to solve their problems without going to war

Dawes Plan Germany was forced to pay for damages caused by World War I Britain and France owed the U.S. for loans and supplies used to fight Germany in World War I U.S. enacts Dawes Plan which gives money to Germany to pay England and France who then use that same money to pay back the U.S.

Dawes Plan

The 1920s Traditionalists vs Modernists

Prohibition In 1919, the 18 th Amendment was passed, outlawing the production, distribution, and consumption of alcohol. Alcohol was believed to be part of the downfall of society and getting rid of it was thought to be the cure…….but was it?

Notorious gangsters like Al Capone took advantage of this time to make huge profits from bootlegging – the production, sale and transport of illegal alcohol. Alcohol could also be found in illegal drinking clubs called speakeasies.

The Automobile By the end of the 1920s, half of American families owned a car.

Henry Ford mass produces automobiles by pioneering the use of the assembly line. This allowed him to make cars cheaper and thus, sell them cheaper.

Assembly Line Ford passed his profits onto his workers. He doubled their pay and they loved him for it. Due to assembly line method, one car was produced every 10 seconds!

The Stock Market A stock is a certificate entitling the owner to ownership of part of the company. The more profitable the company, the more the stock is worth. A good investor hopes to buy a stock cheaply and then later sell the stock at a greater value. But what happens when stocks lose their value…..?

Speculators! Speculators take a risk buying something in hopes of selling it at a higher price later. During the 1920s, many took huge financial risks investing in the stock market.

Investor borrows $1000 dollars to invest in stocks. Investor buys $1000 worth of stock of Company XYZ. Company XYZ is unsuccessful and makes no profit. Stock of Company XYZ is worthless and now investor has lost money and still owes bank $1000. Company XYZ

When this happens on a massive scale, suddenly banks are losing lots of money. At the same time, a world-wide financial depression is reaching America. The stock market was shaky throughout the latter part of 1929 until October 29 th when the market crashed. Fear and panic caused investors to liquidate all of their stocks, making them virtually worthless. People ran to their bank to withdraw all of their money, creating a bank run, in which banks ran out of money.

the great depression The United States was immediately thrust into an economic catastrophe. People lost everything. Unemployment rose sharply. They could not afford to feed their families.

the great depression During the Depression, marriage, birth, and divorce rates fell. Why did this occur?

Hoovervilles Hoovervilles sprang up on the outskirts of American towns. People built these shelters out of anything they could find. They were sarcastically called Hoovervilles by those who believed that President Herbert Hoover had not done enough to fight the Depression.

The Dust Bowl At the same time, drought and windstorms turned much of the Great Plains into a “Dust Bowl.”

Response to the Depression According to Franklin Roosevelt, there were three different ideological responses to the country’s economic problems. Radical: do away with system entirely Conservative: leave it alone and it will stabilize itself Liberal: change it so that bad parts can be done away with and improved

Conservatives Believed that charities and local governments should take care of giving basic necessities to the needy.

Liberals Believed the national government should aid the U.S. economy through public works programs and social welfare.

Communists Believed that economic decisions should be taken out of the hands of private citizens and placed in the hands of government planners within the central government. According to them, “wealth should be distributed to people according to their need.”

Encouraged working class people to rise up against the “greedy capitalists”. Radicals

Franklin Delano Roosevelt FDR’s recovery program is called the New Deal and will forever change the role of the federal government.