The Beginnings of Prosperity and the Roaring Twenties

Fear Following WWI Following WWI, the people and government of the United States faced new developments in the world that caused them to react with fear and aggression.

Returning to Normalcy “My best judgment of America's needs is to steady down, to get squarely on our feet, to make sure of the right path. Let's get out of the fevered delirium of war,…Let us stop to consider that tranquility at home is more precious than peace abroad, and that both our good fortune and our eminence are dependent on the normal forward stride of all the American people.” Warren G. Harding "Return to Normalcy," Boston, MA, May 14, 1920

Two Foreign Policy Opinions Woodrow Wilson “My Fellow Countrymen: the armistice was signed this morning…. It will now be our fortunate duty to assist by example, by sobering friendly counsel, and by material aid in the establishment of just democracy throughout the world.” Senator Henry Cabot Lodge We would not have our politics distracted and embittered by the dissensions of other lands. We would not have our country’s vigor exhausted, or her moral force abated, by everlasting meddling and muddling in every quarrel which afflicts the world.”

Problems Facing Veterans Returning soldiers faced unemployment or took their old jobs away from women and minorities. Nothing is too good for you, my boy! What would you like? A job.

Postwar Economy After WWI, America actually entered a recession as the economy moved from wartime to peacetime production Production, farm income, and exports all fell causing increased unemployment By 1923 the economy began to boom when Coolidge became President

Inflation and Increased Prices Product1914 Price1919 Price Milk9 cents per Quart 15 Cents per quart Steak27 cents per lb.42 cents per lb. Butter32 cents per lb.61 cents per lb. Eggs34 cents per dozen 62 cents per dozen

Fear in America Many Americans respond to the stressful conditions by becoming fearful of outsiders. “The nation went on thinking with a mind of a people at war. They had learned during the preceding nineteen months to strike down the thing they hated; not to argue or hesitate, but to strike. Germany had been struck down, but it seemed that there was another danger on the horizon. Bolshevism was spreading from Russia through Europe; Bolshevism might spread to the United States. They struck at it – or at what they thought was it.” - Frederick Lewis Allen Only Yesterday

Red Scare – Palmer Raids Attorney General Palmer appointed J. Edgar Hoover as special assistant Hunted down suspected Communists, socialists, anarchists

Fear of Outsiders Nativism – Favoring the interests of native-born people over foreign-born people Need for unskilled labor decreased immigration increased from 141,000 to 805,000 (600%)

The Klan Returns “100 percent Americanism” Discriminated against blacks, Jews, Roman-Catholics, immigrants, Communists, unions, saloons 4.5 Million members

Economic Problems for Other Groups - Labor Strikes dropped during the war because Pres. Wilson encouraged collective bargaining so work continued – union membership grew as a result In the 20s the government took a tough stance against unions and strikes using troops and injunctions Supreme court struck down child labor and minimum wage for women laws

Fear of Labor During WWI the government did not allow strikes and unions promised to adhere to this policy in support of our nation at war. Following WWI – Management wanted a return to laissez-faire Workers pressed for higher wages, etc.

Beginnings of Communism or Fighting for Rights Boston Police Strike Demanded higher wages Leaders fired; Officers strike Governor Calvin Coolidge brings in National Guard to end strike Striking police replaced U.S. Steel Mill Strike Demanded higher wages and shorter work hours Managements refused to negotiate 300,000 workers on strike Management used propaganda to paint strikers as Communists Public report displayed poor conditions – workers got 8-hour work day, but no Union

Labor is Hurt Much of the workforce were immigrants willing to work in poor conditions Immigrants spoke many different languages making it difficult to organize Migrating farmers used to hard work Most unions excluded African Americans Connected publicly to Communists

Economic Problems for Other Groups -Farmers Produced more during the war due to increased prices and demand Bought more land and machinery with more money which allowed them to produce more When the war ended demand fell and European farms were operating again so demand fell while American farmers still produced a lot, driving down prices People stopped farming

Prosperity Under Coolidge Coolidge’s policies benefited big corporations and the wealthy Reduced taxes for business and wealthy Reduced debt and balanced budget by raising tariffs and demanding repayment of war debts Tariffs were raised for protectionism which helped industry and agriculture but hurt world economy Regulatory agencies helped business more than regulated Mergers were not regulated

Stock Market Speculation With more money, people began investing in the stock market more People figured the economy would always be good so encouraged large investments Problem Stocks traded on margin meaning people could buy stocks with a tiny down payment Borrowed the rest from brokers assuming they could pay it off with the profits from the stock

Mass Consumption Large amount of manufactured goods available and with good economy people had money to buy them with Areas of Mass Consumption Automobile Industry The Electrical Industry Radio and Motion Pictures Use of installment buying