1. Starter Question
Write the following question in your starter notebook and answer it below.
How did the American economy change during World War One? (think about what was being produced and how much) What effect(s) could this have on the U.S. in the 1920s?

2. A Changing Economy

3. The automobile drives prosperity
Henry Ford utilized the assembly line method to mass produce his first major automobile– the Model T.
In this method, parts are added along a line, until a final product is produced.
This method cut down on costs, so he could reduce the price to where the average person (including his workers) could by the Model T.

4. The automobile drives prosperity
The automobile led to other changes in society:
Industries that manufactured supplies for the automobile boomed;
Road construction increased– U.S. Highway System of 1926;
Development of service stations, diners and motels;
Other forms of transportation decline;
New sense of freedom and prosperity;
Movement to homes outside of the city.

5. A Booming Economy
A consumer revolution happens whenever there is a flood of new, affordable goods on the market.
New methods of advertising attracted consumers;
Emergence of installment buying– make a small down payment and pay the rest off in monthly increments;
Surge in the stock market led people to want to purchase stock, but they had to purchase it on credit– known as buying on the margin;
This was only a successful option when the market was good, though.

6. Changes in residential patterns
The consensus of movement during the 1920s was to the cities– farmers, African Americans and even Mexican Americans to southwestern cities.
The 1920s was the first decade where more people lived in cities than in rural areas.
There was a group that was leaving the city instead and moving to the suburb– urban, middle class workers.
This was aided by the development of the automobile.
They could afford to live out of the city and commute in.
Not every person was feeling the benefits of the 1920s.
Farm wages and industrial workers’ wages were still far below everyone else’s.

7. The Changing role of Government

8. The Harding administration
When Harding took office, he promised a “return to normalcy”.
This included a return to policies that benefitted big business.
After appointing Andrew Mellon as Secretary of the Treasury, Harding’s administration cut spending.
However, not all of Harding’s appointments as president were as successful. He trusted much of the decision making to his close friends, known as the Ohio Gang.
The worst of this gang was Secretary of the Interior Albert Fall.

9. The Harding administration
Fall had the ability to transfer oil reserves between different departments.
He transferred reserves from the Navy Department to the Interior Department, which he then “loaned” to rich businessmen.
The oil was on reserve for a time of emergency.
Although Fall concocted the scheme, Harding signed the order to allow it to happen.
It became known as the Teapot Dome Scandal, named after one of the locations of oil reserves.

10. Coolidge Prosperity
When Warren Harding died, his vice-president Calvin Coolidge took over.
Coolidge looked to continue the policies of his predecessor, including:
Trimming the federal budget;
Lowering taxes for incentives to big business;
“The chief business of the American people is business.”
However, Coolidge did not act on the troubles that plagued the country, such as low wages and labor unrest.

11. America’s Role in the world
In reaction to WWI, the U.S. took precautions during the 1920s to avoid another world conflict. They used their increased role in world trade to make the following happen:
Washington Naval Conference to reduce arms race and size of navies of world powers;
Kellogg-Briand Pact “outlaw war… as an instrument of national policy.”

12. The New Ku Klux Klan
The dislike for immigrants was not central to northern cities, though.
In the south during the 1920s, there was a resurgence of the Ku Klux Klan that began at Stone Mountain, Georgia.
The ‘new’ KKK not only targeted Blacks, but Jews, Catholics and immigrants as well.

13. Restricting Immigration
Nativists disliked the growing immigrant population in the United States. This dislike increased with the Red Scare.
New legislation was passed that established a quota system for various countries
This meant that only a certain amount of people could come to the U.S. in a given year from that country.
The quota system specifically targeted Asians, and used numbers, benefitting western and northern Europeans.

14. Prohibition and Crime
The temperance movement in the U.S. had been around for years, but found a surge during the Progressive Era, when alcohol was blamed for the many societal problems.
In 1919, Congress passed the Eighteenth Amendment which banned the manufacture, sale and transport of alcohol.
The Volstead Act was the law that enforced it.
Rural citizens especially supported these two.
However, prohibition also generated more bootlegging (illegal sale) and organized crime.

16. Traditionalism and Modernism Clash
There was a growing division in society between urban and rural citizens.
Modernism emphasized science and secular values;
Fundamentalism focused on the basic truths within religion, and that everything in the Bible was the literal truth.

17. Traditionalism and Modernism Clash
At the center of this clash was the debate over the teaching of evolution in schools.
Biology teacher John Scopes violated Tennessee law by teaching the theory of evolution to his class.
Scopes was defended by renowned attorney Clarence Darrow. As an ‘expert’ witness on the Bible, the prosecution called William Jennings Bryan.
The trial was broadcast over the radio, connecting thousands of Americans to the trial.