1. W ORLD W AR I AND ITS A FTERMATH The War’s Impact

2. L EARNING T ARGETS After this lesson you will: Know the causes and effects of inflation in the United States after WWI. Describe the events taking place in Seattle, Boston, and U.S. Steel related to inflation Relate hundreds of thousands of American soldiers returning home to racial unrest Understand and give examples of how a “red scare” swept across the nation and placed blame on communism Know the beginning of the FBI, its leader, and its activities Understand how Progressivism came to an end in the U.S.

3. E CONOMIC T URMOIL Inflation Government agencies released their controls over businesses People raced to buy goods that had been rationed Businesses rapidly raised prices (law of supply and demand) This resulted in rapid inflation (15% in 1919-1920) Cost of Living : the cost of food, clothing, shelter, and other essentials people need to survive

4. E CONOMIC T URMOIL Inflation Leads to Strikes Workers wanted higher wages to keep up with inflation Companies wanted to hold down wages because inflation was also driving up their operating costs During the war, the number of workers in unions increased dramatically as well as their ability to strike Business leaders were determined to break the power of unions Workers fought back: By the end of 1919: More than 3,600 strikes More than 4,000,000 workers had been on strike

5. E CONOMIC T URMOIL The Seattle General Strike First major strike in the country 35,000 shipyard workers walked off the job demanding higher wages Other unions joined Over 60,000 people involved A “general strike” was a common occurrence in communist European countries and other radical groups.

6. E CONOMIC T URMOIL The Boston Police Strike 75% of the police force walked off the job The Governor of Massachusetts, Calvin Coolidge, sent in the National Guard. When the strikers tried to return, the police commissioner refused to accept them.

7. E CONOMIC T URMOIL The Steel Strike 350,000 steel workers went on strike: higher pay, shorter hours, and recognition of the union Elbert H. Gary —head of U.S. Steel refused to talk to union leaders Issues of immigration were blamed for the strike by U.S. Steel U.S. Steel hired African Americans and Mexican Americans to replace the strikers. In Gary, IN 18 died after a clashes and a riot broke out The strike failed and Steelworkers remained disorganized until 1937

8. RACIAL UNREST American Soldiers Returning From the War: Looking for jobs and housing Race riots broke out in over 20 cities in the north: Chicago An African American teenager swimming in Lake Michigan on a hot July day happened to drift toward a beach restricted for whites. Whites on shore allegedly stoned him unconscious, and he drowned. Angry African Americans almost immediately marched into white neighborhoods to retaliate, while white mobs roamed African American neighborhoods attacking people and destroying property. For almost two weeks, Chicago was virtually at war. In the end, 38 people died—15 white and 23 black—and over 500 were injured.

9. T HE R ED S CARE Americans Blamed Communists for Race Riots Seattle Mayor, Ole Hanson, condemned the leaders of the Seattle general strike as revolutionaries who wanted to “take possession of our American government and try to duplicate the anarchy of Russia.” In April 1919, the U.S. Post office intercepted more than 30 parcels addressed to business people and politicians that were triggered to explode.

10. T HE P ALMER R AIDS Attorney General A. Mitchell Palmer reacted to the riots by establishing the General Intelligence Division and placed J. Edgar Hoover in charge. In late 1919 through the spring of 1920, Palmer organized a series of raids on the headquarters of various radical organizations. The civil liberties of suspects were often violated.

11. T HE E ND OF P ROGRESSIVISM Ohio Governor James M. Cox and Franklin D. Roosevelt ran for the presidency to keep Woodrow Wilson’s progressive ideas alive. Americans were weary of more crusades to reform society and the world. They lost. Warren G. Harding ran for the Republican Party on the platform calling for a return to “normalcy”. Americans hoped to put racial and labor unrest behind them and build a more prosperous society. He won.

12. R EVIEW Q UESTIONS What were the events taking place in Seattle, Boston, and U.S. Steel as a result of inflation? How did hundreds of thousands of American soldiers returning home lead to racial unrest in the U.S.? Give examples of how a “red scare” swept across the nation, placing blame on communism for labor strikes? How did the FBI get started, who was its leader, and what activities did it engage in? How did Progressivism come to an end in the U.S.?

13. E SSAY Q UESTION What caused inflation after WWI, and how did inflation help cause the wave of strikes in the U.S.?

14. E SSAY A NSWER What caused inflation after WWI, and how did inflation help cause the wave of strikes in the U.S.? When the war ended, government agencies removed their controls on the economy. This released pent up demand. People raced to buy goods that had been rationed, while businesses rapidly raised prices they had been forced to keep low during the war. The result was rapid inflation. Workers wanted to raise their wages to keep up with inflation. On the other hand, companies wanted to hold down wages because inflation was also driving up their operating costs. These competing desires helped spark the wave of strikes.