Economic Boom

Hard Times After WWI So many people were killed or injured Economy was in for big changes

Returning Home Not unusual for a country to go into a depression after war Suffered serious post-war depression after WWI Shift from building warships, etc. and not enough jobs when soldiers returned Farm prices dropped as European farms were back up and running

Anti-Communism From Government Red Scare Communist Party USA grew to 70,000 Government repression increased – Palmer Raids Any radical movement was considered communist Espionage Act was still in effect – Used to weed out anarchists, communists, and radicals.

3 Things People Wanted: Peace Prosperity Limited Government

President Harding Called for “ a return to normalcy ” – Isolationism in foreign affairs Less government involvement in business  “ laissez faire ” Republican Formula: – Lower spending – Lower taxes – Higher tariffs Will pull us out of post-war depression

Teapot Dome Scandal Most famous scandal didn’t come about until after his death. Secretary of Interior Albert Fall got money for selling government oil contracts – Allows private oil company to have the oil when it is for ships and navy

Calvin Coolidge, Harding ’ s VP, takes over “Cool” Calvin Hands off president Worked 4 hours a day A nap in the afternoon 10 hours of sleep a night

“ The Business of America is Business ” Coolidge’s slogan Laissez-faire approach towards economy Raised tariff Rich got richer…poor got poorer

Economic Increases Jobs and production grew Rise in the standard of living Mechanization People are working-there is no need for unions

Consumer Credit For the first time, individuals began to regularly borrow money and go into debt to purchase consumer goods (cars, appliances, radios, etc.) because credit became easy to come by and carried no social stigma “Installment Plans” are used to buy expensive items

Consumer Credit: Good or Bad?

Things that were luxuries are now necessities – Phone, washing machines, automobiles – 1907 a car cost $2123 by 1924 is cost $290 The car created new business: gas station, motels, restaurants Big and small businesses thrived Americans begin to invest in stock market – Provided business with capital to get bigger

Growth of the Middle Class As corporations began to expand and have specialized departments such as sales, marketing, accounting, engineering, and management, the number of people living at the middle-class level grew tremendously

Welfare Capitalism Companies began allowing workers to buy shares of stock, participate in profit sharing, and receive benefits such as medical care and pensions (allowance) This led to increased spending among the working class and less reliance on unions, since they no longer seemed necessary

Crisis on the Farm Farmers are already in a depression By 1929 the farmer made less than 1/3 of the rest of the population Government efforts to help farmers were repeatedly vetoed by Pres. Coolidge, who believed in laissez-faire Causes: 1. Technology- farmers increased produce which lowered prices 2. Exports decreased

The Roaring 1920s: Extent of Prosperity Segments of SocietyHow Much Prosperity Did They Achieve During the 20’s? (Provide examples/explanation) Farmers Working Class Immigrants Women Business (Small/Big) African Americans