1. 1920-1929

2. Russian Revolution Bolsheviks led by Vladimir I. Lenin- “Reds” vs. landowners, gov’t officials, Russian army leaders, and others- “Whites” Bolsheviks win and create Union of Soviet Socialist Republics (USSR)- Communism Government owned all land and property Single political party controlled the gov’t Needs of the country always took priority over rights of ind.

3. The Red Scare For communism to survive, Lenin believed that it would have to be spread throughout the world American’s distrust of Europeans grew after WWI and Am. worried about foreigners from Europe Red Scare- an intense fear of communism and other politically radical ideas Americans called for known Communists to be jailed or driven out of the country Wave of labor strikes helped fuel Red Scare in 1919- many Am. Believed communist “agitators” were the cause

4. Red Scare consequences Am. Felt that Republicans were more likely to restore stability than Democrats Decade of Rep. pres: Warren G. Harding, Calvin Coolidge, Herbert Hoover

5. Harding Presidency “return to normalcy” Domestic Policy Nativism- resulted in immigration restrictions Quota imposed on immigrants representing certain ethnic groups or nations Foreign Policy Isolationism Disarmament Expansion of trade Fordney-McCumber Tariff- raised import taxes to historically high levels Dawes Plan- set a payment schedule, reorganized the German national bank, and approved a loan to Germany Teapot Dome Scandal- Harding’s Secretary of the Interior secretly gave oil-drilling rights on gov’t oil fields in Elk Hills, CA and Teapot Dome, WY to two private oil companies in return for more than $300,000 in illegal payments and gifts disguised as loans

6. Coolidge Presidency “The chief business of the American people is business” Laissez-faire business policies- fueled economic boom Insistent on a minimal role for government Refused to regulate the buying of stocks on easy credit urged by Sec. of Commerce, Herbert Hoover Refused to help Mississippi flood victims- gov’t has no duty to protect citizens “against the hazards of the elements” Kellogg-Briand Pact- 15 nations pledged not to use the treat of war in their dealings with one another Unrealistic and unworkable because it had no provisions for enforcement

7. Hoover presidency Prohibition = “noble experiment” Rising productivity Rising personal debt Stock market boom Uneven prosperity

8. Business Booms: a Consumer Economy Consumer Economy = one that depends on a large amount of spending by consumers (indiv. who use, or consume, products) Factors that helped spark more buying in this decade Higher wages Clever advertising- mass media; spoke less about the product and more about how the product coud enhance the consumer’s image; association of celebrities w/products New products- cars; furniture; vacuum cleaners; radios; refrigerators; washing machines Lower costs Widespread availability of credit- installment plan

9. Boom Times General rise in productivity Growth of the automobile industry and related businesses (i.e. garages, car dealerships, campgrounds, etc.) Henry Ford wanted to produce more cars that ordinary people could afford Adapted assembly line for his factories Economy of scale = the more automobiles he made, the less each one cost Growth of other industries: movie making, radio broadcasting, publishing, aviation

10. Bypassed by the Boom Farm economy As huge wartime demand shrank, farm prices plummeted Farmers expanded during wartime by borrowing money- could not pay debts in post-war era Cotton textiles Bituminous (soft) coal railroads

11. “Everybody ought to be rich” Economy appeared healthy in 1925 Low unemployment (4%) High consumer confidence stock prices continued to soar Am. made risky investments Welfare capitalism- Employers raised wages and provided benefits such as paid vacations, health plans, recreation programs, and English classes to combat labor unions

12. Economic Danger signs Uneven prosperity- only the rich got richer while must Am. struggled to make ends meet Personal Debt- Am. Became accustomed to credit spending and counted on future income to cover their debts Playing the Stock Market- widespread speculation (the practice of making high-risk investments in hopes of getting a huge return) Buying on margin- allowed investors to purchase a stock for only a fraction of its price and borrow the rest Brokers charged high interest rates and could demand payment of the loan at any time Too many goods, too little demand Hardships of farmers and workers