POLITICS AND PROSPERITY 22-1 Enormous social and cultural change in America took place during the 1920s.

AFTER WORLD WAR I The economy went into a recession, or an economic slump. Do people spend more or less during a recession? People were spending less money Is unemployment up or down during a recession? An increase in the number of unemployed workers. Who do people typically blame for a recession? The Government Troops that returned from Europe needed jobs. So…..what’s the problem? The war had BOOSTED the economy, but after the war the factories stopped making war materials. Government contracts had expired. What major changes do factories NOW have to make to bounce back?

POLITICS AND THE 1920S Upset with the present conditions in the U.S., voters turned to a Republican President .. Warren G. Harding Harding won the presidency with the promise of “return to normalcy” Americans wanted to return to calmness after years of war and reform. Labor strikes, racial violence, and threats of communism disturbed Americans.

republicanism Harding’s term as President ushered in an era of prosperity, rapid industrialization, social experiments, and artistic growth. Harding and his successor Coolidge believed that the country’s future lay in big business Both President’s supported industrial growth. Harding wanted to isolate America from the rest of the world and focus on issues at home. Domestic issues

HARDING AND POLITICAL SCANDALS Harding appointed men with strong pro-business policies to be in his cabinet. Other Cabinet posts were given to his old friends from Ohio – “The Ohio Gang” Corrupted friends from Ohio that filled his cabinet posts. His friends used the government and its agencies to make money for themselves.

TEAPOT DOME SCANDAL SCANDAL: Secretary of the Interior Albert Fall secretly leased land in California and Teapot Dome, Wyoming to two oil executives. So…….. What’s the big deal? Doesn’t he own the land? Fall kept the money and was caught. He was the first Cabinet member ever sent to jail.

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“SILENT CAL” President Harding died of a heart attack in 1923. Hmmmmmmm…….. Could this have anything to do with his friends? Harding’s Vice President – Calvin Coolidge took office. Coolidge was known for being tight with money and words. He was a soft spoken, serious New Englander who was known for his honesty and integrity. Coolidge helped to restore the public’s trust in government by cooperating with the investigations into the Harding White House. Like Harding, he believed American prosperity depended on business.

“THE BUSINESS OF AMERICA IS BUSINESS” There was rapid economic growth with President Coolidge! The postwar recession was over, and the economy had rebounded. The 1920s had begun to “roar”. Factories began turning out consumer goods. American incomes rose and people were able to buy new products for the home. Refrigerators Radios Washing machines Vacuum Cleaners Businesses allowed installment buying, or buying on credit (buy now, pay later). Businesses used catchy advertisements making Americans believe that their happiness depended on owning new products

THE STOCK MARKET IMPROVES Economy saw a BULL MARKET a period of increased stock trading and rising stock prices. What are stocks? A share in a corporation Some investors made fortunes overnight! People began buying stocks ON MARGIN: Borrowing money in order to buy stocks. The investor put down a portion of a stock’s cost and paid the rest later with the profits earned from selling the stock. So long as the market continued to rise, the investor had no problem paying the loan back.

On MARGIN 10% What is the problem with buying stocks on margin??? If stock prices goes down, the buyer is responsible to pay back what he/she bought the stock for plus the loss in value of the share (stock). $100 - value of stock The buyer pays $10. How much does the buyer owe?_____ The buyer expects the stock value to increase. $100 to $200 (In terms of dollars, how much did the value increase? _____) Will the increase in value cover what the buyer stills owes on the stock? Y/N What if…. The value of stock drops to $50. How much does the buyer owe on the stock? _____

Farmers struggle to survive Why did farmers NOT share in the prosperity of the 1920s? Overproduction (supply and demand) RESULT: Food prices drop!

THE SOVIET UNION (U.S.S.R.) Lenin created the first Communist state. Russia is now known as the Soviet Union. CHARACTERISTICS OF COMMUNISM Classless society State, or the community, owns all businesses (Government). State controls distribution of goods and services. State provides social services.

The red scare Many American’s feared communism would spread to the U.S. Labor strikes During the Red Scare, thousands of anarchists and Communists, or “REDS,” were hunted down and arrested. Red Scare = Fear of communism Palmer Raids Many were deported. To expel from a country

Sacco and vanzetti In May 1920, at the height of the Red Scare, two Italian immigrants, Nicola Sacco and Bartolomeo Vanzetti, were arrested. They were charged with robbing and murdering two payroll employees in Massachusetts. At the trial, little evidence was presented that Sacco and Vanzetti, were guilty of the charges. Rather, the prosecution focused on the fact that both defendants were foreigners and anarchists. Sacco and Vanzetti were convicted in 1921 and executed in 1927. So……… lets summarize. Why were Sacco and Vanzetti executed? Because they were foreigners and anarchists, that’s why. It had nothing to do with the charges that were brought against them. They were found guilty for the wrong reasons!! Innocent people were put to death because of public hysteria.

Limiting immigration Quota Act The Emergency Immigration Law of 1921 was passed by Congress. It limited the number of people admitted from eastern and southern Europe. Fears about radicals, mainstream culture was being overwhelmed , and American workers concerned over their jobs led to new limits on immigration into the U.S. In 1924 and 1929, Congress imposed even more restrictions on immigrants. The new immigration limits did not apply to people from the Americas.

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DISARMAMENT Militarism had helped cause WWI. After WWI, many people favored DISARMAMENT or the reduction of armed forces and weapons of war. In 1921, the U.S. joined the Washington Naval Arms Conference which resulted in several countries limiting their navies. 1927: the U.S. and 61 other nations signed the Kellogg-Briand Pact. This treaty condemned military aggression and outlawed war. There was one MAJOR flaw to this treaty It did not set up any way to keep peace or prevent war. There was NO punishment to countries that acted aggressively.