USA Topic One - Boom and Crash 1920-1929 Flashcards
When was the Declaration of Independence? What did it state?
- 1776
- the new state should aim to enable ‘life, liberty, and pursuit of happiness.’
What were the 1920s seen as a decade of?
unrivalled economic prosperity
- economic growth of 50% 1921-1925
What was GNP in 1929 compared to 1920?
1920: $73.3bn
1929: $104.4bn
What was the average annual growth throughout the 1920s?
around 2% per year
What was the unemployment rate in the 1920s compared to the 1910s?
1911-1917: average of 6.1%
1920s: never rose above 3.7%
What was the inflation rate in the 1920s?
never rose past around 1%
What did real wages rise by from 1922 to 1929?
approximately 13%
What did major US corporations see their profits increase by between 1923 and 1929?
1923-1929: 62% increase
What industry epitomised the 1920s boom in the USA?
the motor car industry
What company was significant in the motor car industry?
General Motors
How did General Motors’ profits increase from 1920 to 1929?
1920: $173 million
1929: $1.5bn
What were the five main reasons for prosperity in the 1920s?
- Government Policy
- Technical Advances and Mass Production
- Development of Consumerism and Advertising
- Easy Credit
- Influence in Foreign Policy
Which four men were influential in shaping the economic, business and industrial events of the 1920s?
- President Warren Harding 1921-1923
- President Calvin Coolidge 1923-1928
- Andrew Mellon as Secretary of State 1920s
- Herbert Hoover as Secretary of Commerce 1920s
What was the name of the economic policy adopted by the Government throughout the 1920s?
laissez-faire economics adopted
What were the main factors involved in Government Policy in the 1920s?
- Fordney-McCumber Tarrif
- tax reductions introduced by Mellon
- deregulation favoured (fewer regulations )
- didn’t interfere with banking or the stock market
What was the Fordney-McCumber Tariff, when was it passed?
- 1922
- a law which passed taxes on foreign goods imported into the US
What was the 1926 Revenue Act?
taxes on the rich were lowered:
1921: 50%
1926: 20%
How were taxes decreased from 1921-1932?
$3.5 billion in tax reductions 1921-1932
What was President Coolidge’s famous statement?
‘the business of America is business.’
How did Government Policy throughout the 1920s encourage prosperity?
- businesses were allowed to operate largely unregulated
- profits were raised
- taxes decreased
- The American Industry grew massively throughout this period as American Business was not being limited by government intervention
What were Technological Advancements and Mass Production in the 1920s?
- mass production introduced
- production lines
- Scientific Management
- Electrification
Who was Mass Production introduced by, and when?
Henry Ford in 1913- introduced mass production with his Model T assembly line
What types of workers were employed on production lines as part of mass production?
- low skilled workers
- semi-skilled workers
What was the impact of Henry Ford’s model of mass production?
1920: 8 million cars in US
1929: 26 million cars in US
What was Scientific Management?
- invented by Freidrich W Taylor
- a method for maximising worker productivity by rigorously routinizing their jobs rather than increasing their working hours
What were the impacts of Electrification in the 1920s?
- by 1930: 80% of homes in cities had access to electricity
- 1912: 2.4 million electrical appliances across the US
- 1929: 160 million electrical appliances across the US
How did Technological Advancements and Mass Production encourage prosperity in the 1920s?
- reduced production time and cost
- lower prices = greater exports
- productivity increased through reward-based incentive schemes for good workers
- real wages for workers increased
- It was only in the 1950s that everyone had access to an electricity supply
What was the development of consumerism and advertising in the 1920s?
- America was becoming a consumer society
- The American Dream seemed like a reality
- It became more socially acceptable for people to live beyond their means
- Improvements in advertising = increased demand for consumer goods
How much were American Companies spending on advertising by 1929?
$3bn every year
How did the development of consumerism and advertising encourage prosperity throughout the 1920s?
- a greater demand for products led to greater production of goods
- Growth of American Industry
- helped to establish and maintain the Cycle of Prosperity
What was Easy Credit throughout the 1920s?
- the use of consumer credit
- this led to greater demand
- loans often came with interest
- repossession was possible
What was the impact of Easy Credit?
- 60% of all furniture:
- 75% of all radios:
- bought on hire purchase
How did Easy Credit help to encourage economic prosperity throughout the 1920s?
- more people could afford to take part in the consumer society that had been established
What was the trickle-down theory of wealth?
- financial gain would trickle-down from big businesses to the everyday man
- managers, salesmen and estate agents prospered greatly
What was limiting the effects of the Boom throughout the 1920s?
- falling agricultural prices
- over-production
What groups of people did not benefit from the economic boom of the 20s?
- mainly poor share-croppers of the South, most of whom were black
- farmers
- black people
- ethnic minorities
- workers in traditional industries
What happened to share-croppers during the 1920s?
- many chose to find a new life in the crowded ghettos of the North
How were farmers excluded from the Economic Boom of the 1920s?
- farm income dropped dramatically
- millions of farmers were forced off their land to seek unskilled, poorly paid work in the cities
- farming communities lived in poverty and squalor
- Europe bankrupted by WW1 meant they could no longer buy USA farm produce
- Europe introduced Protectionist policies against the USA
- Advancements in the farming industry led to a level of efficiency that led to over-production
- massive competition from Canadian farmers
How were black people excluded from the Economic Boom of the 1920s?
- highly limited job opportunities available to black people
- black people suffered enormously in the 1920s
- black people were poorly educated compared to white people
- black people forced to live in poor acccomodation in the worst areas of towns and cities - ghettos
How were ethnic minorities excluded from the Economic Boom of the 1920s?
- Native Americans lived on reservations which produced low crops due to bad land
- Native American population had dwindled to just 250,000
- Native American culture was dying because of white efforts to destroy their lives, beliefs and traditions
How were workers in traditional industries excluded from the Economic Boom of the 1920s?
- Coal miners suffered from low pay, seasonal unemployment, and competition from new industries like oil and electricity
- Old industries such as leather and textiles suffered heavy competition from new man made products
What were the 1920s predominantly a time of?
- predominantly a time of boom and prosperity
- for many though prosperity was merely a dream
What was the cultural identity like in rural America?
- old-time rural America was largely white and protestant
What was the cultural identity like in American cities?
growing cities teemed with immigrants
What were ‘Evangelists’?
- popular preachers
- spoke about hellfire and damnation
What occurred in Dayton Tennessee in 1925?
- “Monkey Trial”
- Fundamentalists had campaigned
- 6 states had made it illegal for evolution to be taught in school
What did the 1925 “Monkey Trial” highlight?
the difference between small town beliefs and those of many city dwellers
What type of immigrants did the USA welcome?
WASPS
How did Southern States exclude blacks from voting?
imposed literacy and tax qualifications needed to obtain the vote
How did the war impact racism and immigration?
- created an atmosphere of fear and intolerance which contributed to the anti-immigrant legislation in the early twenties
How many workers went on strike in 1919 due to growing industrial unrest?
4 million
Why did people in the US fear striking and industrial unrest?
believed strikes were led by communists who sought to undermine traditional American values
Which two events heightened fears of anarchy in America?
- WW1: heightened nationalism and suspicion of foreigners
- Bolshevik Revolution in Russia created fears of an international conspiracy to overthrow Capitalism, an increased amount of immigrants threatened American ideals
Who was targeted by Italian anarchists in 1919?
- Attorney General Mitchell Palmer
- an Italian anarchist bomber blew himself up on the steps of Palmer’s home
What were the raids of late 1919 and 1920 known as?
- the ‘Palmer Raids’
- named after Attorney General Mitchell Palmer who made himself an easy target for assassination
How significant were the Palmer Raids?
- more than 5,000 arrests
- more than 1,000 prosecutions
- 500 deportations
What was the mood like in America due to the ‘Red Scare’?
the mood at the time borded on hysteria
What caused the ‘Red Scare’ to eventually die out?
- Palmer announced there was to be a huge Communist demonstration in New York on 20 may 1920
- this failed to materialise making Palmer lose all credibility
How did wage earners reflect anti-immigration ideals in America?
it was widely believed amongst the working class that unrestricted immigration led to wage reductions
What was the case of Sacco and Vanzetti?
- two violent robberies in Massachusetts late 1919 and early 1920
- Suspicion centred on the immigrant community
- Sacco and Vanzetti were arrested and sentenced to death in July 1921
- The conduct of the trial in 1921 aroused considerable discontent: the evidence was dubious and Judge Webster Thayer was criticised
Why were Sacco and Vanzetti significant?
- the pair became icons for many socialist and anarchist groups
- they were both executed in 1927
When was the Wall Street Crash?
24th October 1929
What were the main causes of the Wall Street Crash?
Banking
Industry
Agriculture
Stock Market
What is the cycle of deflation?
- Deflation
- Job / income loss
- Less consumption
How many shares were sold on 24th October 1929?
12.8 million
What had share value fallen by at the end of 24th October 1929?
$4 billion
What did unemployment rise to from October - December 1929?
from 500,000 to 4 million
Why was overproduction an issue with new industries?
- over-producing to keep up with the high demand from the 1920’s
- people already had consumer goods and didn’t need to purchase any more
- Industries were making a loss and this lead to high unemployment
What impact did overproduction have on traditional industries?
- traditional industries such as coal-mining and textiles began to decline because of overproduction and falling demand
How did over-production led to poor industrial relations?
- mine owners attempted to respond to prices falling with wage cuts
- led to vicious labour disputes
How many days were lost to strikes in 1931?
2.2 million
In 1931, what percent of the urban workforce lost their jobs?
15.9%
How was banking in America run?
Ran by small, local banks rather than the Federal Government
What did a lack of insurance schemes mean for banking in America?
People had to trust the banks entirely
What was the Federal Reserve Bank and why was it unsuccessful in managing the hysteria of the banking crisis?
- its decision making process was decentralised and ineffective
- The Federal Reserve Bank couldn’t act without general consensus from the governors in each state who often disagreed and halted action
- It believed that the boom was everlasting
What is a ‘bull market’?
a market that is on the rise where the economy is sound
What is a ‘bear market’?
A market that exists in an economy which is failing in which stocks are declining in value
What is buying on the margin?
Investors buying assets such as stocks through money borrowed from a bank or broker
The vast amounts of unregulated speculation on the stock market meant what for ordinary people who were buying on the margin?
Investors were running up huge debts which they assumed would become easily repayable as their stocks rose in value
Between September and November 1929 industrial stock fell by what?
50%
What had the debt level of agriculture risen to from 1910-1920?
- 1910: $3.2 billion
- 1920: $8.4 billion
What act introduced the Federal Farm Board?
The 1929 Agricultural Marketing Act
What was the funding of the Federal Farm Board?
$500 million
What was the purpose of The Federal Farm Board?
to buy, store and dispose of surplus farm supplies in an orderly way
Why was the Federal Farm Board unsuccessful?
- it had no power to order reductions in production
- huge surpluses in 1931 and 1932 both and home and abroad saw prices fall
- the corporations were paying above-market value for produce
Why did the KKK re-emerge and develop rapidly in the 1920s?
- increasing immigration and the 1915 film ‘The Birth of a Nation’ which was the first film to be shown in the White House and glorified the Klan of the 1860s
What was the KKK’s aim?
- wanted to defend rural America and the WASPs
What was KKK membership by 1921?
100,000 members
By 1925, what had KKK membership reached?
5 million across the whole of the USA
Why was the KKK so powerful?
Had members in positions of power such as police officers, senators and judges
Why did the KKK decline rapidly from 1925?
- the Grand Dragon, David Curtis Stephenson, was convicted of the rape of a 28 year old
- other scandals followed in other states’ Klans
By 1930, what had KKK membership fallen to?
back to 200,000
How was the KKK’s influence limited?
- its influence varied geographically to a considerable degree
- In its peak year of 1925: 40% of members were across only three states, with a further 25% in the old south
What was the international impact of the Bolshevik Revolution (1917)?
caused a widespread panic in the USA which was known as the ‘Red Scare’
Why did Americans fear immigrants?
Feared that they were ‘un-American’ and may try to overthrow the government
What was the case of Sacco and Vanzetti, and what did it highlight?
What was launched in 1920 which saw the arrest of 6,000 alleged communists?
The Palmer Raids
When did the Red Scare die down?
In the mid 1920s
Why was immigration increasing throughout the 1920s?
People wanted to live the ‘American Dream’ meaning immigration increased greatly, particularly from new areas such as Poland and Russia
What did the 1917 Immigration Act do?
Denied entry to immigrants who couldn’t read or write in English
What did the 1921 Emergency Immigration Act do?
Limited immigration to 3% of the total number already living in the US (approximately 357,000 each year)
What did the 1924 Johnson Reed Act (Quota Act) do?
- made the changes of the 1921 Emergency Act permanent and reduced the number further to only 2% (approximately 164,000 each year)
What Amendment introduced prohibition and when?
The 18th Amendment was passed in 1919 and banned the sale, consumption and manufacture of intoxicating alcohol
How did the 1920 Volstead Act build on prohibition?
Ruled all intoxicating alcohol as anything over 0.5% proof
What were the anti-alcohol lobby groups?
- Anti saloon league - middle class protestants who were critical of the immoral behaviours alcohol caused
- Women’s Christian Temperance Union
- Big Business
Why did prohibition fail?
- Geographical difficulties
- Bootleggers
- Industrial alcohol
- Problems for treasury agents
- Popularity of speakeasies
- Divisions among supporters
- Role of government
How did prohibition develop organised crime?
- it gave organised crime groups huge wealth
- allowed organised crime groups to become involved in other areas such as gambling, drugs and prostitution
What was the most famous gang rivalry?
the St. Valentine’s Day Massacre between the Italian Capone gang and the Irish Moran gang
How did the prohibition lead to an increase in crime?
Made criminals out of ordinary citizens as they broke the law in speakeasies and through drinking moonshine
How did the 1920s effect women?
A period of considerable change for women
What was a ‘flapper’?
young independent minded women who didn’t feel that a woman’s place was in the home
How did the economic boom impact women?
Provided new opportunities for women
How did prohibition impact women?
allowed women to drink in speakeasies alongside males
What Amendment gave women the right to vote?
the 19th Amendment to the constitution
What was the Prohibition?
- a crusade against liquor inspired by the misery, poverty, depravity and violence that alccohol was perceived to produce
What did the Anti Saloon League object to?
- membership was drawn from middle class, Protestant, church going Americans
- especially critical of behaviour and morality in big, crime-ridden cities such as New York and Chicago
Why did Big Business owners support Prohibition?
- Henry Ford
- Frederich W Taylor
- John D Rockafeller
- all felt workers would be far more productive if their minds and bodies were free from the debilitating influence of alcohol
What and when was the St Valentine’s Day Massacre?
- 1929
- a “turf war” as rival gangs struggled to control the supply of alcohol in an area
- between the Irish Moran Gang and the Italian Capone Gang
What was the annual income of Al Capone?
$60m by 1927
What impact did the Prohibition have on organised crime?
- it stimulated organised crime as gangsters exploited it for profit
- the law triggered a significant rise in organised crime
How can prohibition be argued to have promoted race and gender equality?
- women were allowed to enter speakeasies and had greater access to social events
- speakeasies became famous for their black jazz musicians
Why was prohibition ultimately a failure?
- it did not stop the drinking of intoxicating liquor
How many speakeasies were there throughout the Prohibition?
32,000 illegal speakeasies in New York City - this was twice the number that had existed before the prohibition
When did Prohibition end?
1933
Where was the Ku Klux Klan first established?
- KKK had its roots in small towns and rural communities
- first established in Tennessee
What was Doc Simmons’ saying for the KKK?
“Morality, Americanism, Protestantism and White Supremacy.”
How did the Red Scare impact the KKK?
it provided the perfect breeding ground for bigotry
What was life like for women before WW1?
- middle class women led restricted lives
- in most states women couldn’t vote
- very few jobs open to women
- working women were in low paid jobs like cleaning, dressmaking and secretarial work
When did women get the vote in all states?
1920
How did women’s role change throughout the 1920s?
- the car made them freer
- domestic work was made easier by labour saving devices such as the vacuum and the washing machine
- women in urban areas took on more jobs
How many more women worked in 1929 compared to 1920?
24% more
How many more divorces were there in 1929 compared to 1914?
2 times as many divorces
How were women still limited in the 1920s?
- women were paid less than men for the same job
- women did not achieve political equality to men
- traditional religious and old country values restricted American women
How many women were in domestic jobs by 1930?
Over 10 million
Who was the ‘It Girl’ in the 1920s?
- Hollywood star Clara Bow
- she symbolised the changes in the freedoms of women
How did the cosmetic industry grow in the 1920s? What did this show?
- grew from being worth $17 million per annum to $200 million per annum by the end of the decade
- women were taking control of their sexualities
What did the National Women’s Party do in 1923?
- it failed to get an Equal Rights Amendment accepted into law
