By Moira Cassidy

1. By Moira C
Cassidy

2. - In the aftermath of World War I, a period of technological
innovation and lenient laws for companies led to economic growth
in the USA
- New technologies, especially automobiles, moving pictures
(movies) and radio proliferated 'modernity' to a large part of the
population.

3. - Social change, especially for women, also took hold
during this period
- In 1920, American women gained the right to vote
for the first time
-But the prosperity of the “boom” was not
experienced equally throughout US society

4. Causes of Economic Growth:
Industrialization & Consumerism
- Increased demand for American products began in
WWI, and helped American industry grow
- Factories began to produce goods more efficiently
through assembly line practices
- As the Americans became more prosperous, a
culture of consumerism grew
- For the first time in history, middle-class Americans
could purchase expensive consumer goods like cars
and home appliances

5. Causes of Economic Growth: Government Deregulation
- Attempts at government intrusion into private business were
consistently blocked in favor of a “laissez-faire” economic
policy
- Corporations were encouraged to grow without restriction,
often forming trusts and eliminating competition
- Both the Harding and Coolidge administrations rolled back
income taxes on the wealthy and created tariffs blocking
foreign goods from competing with American products
- In the later part of the decade "buying on margin" entered the
American vocabulary, as more and more Americans over-
extended themselves to speculate on the soaring stock market
and expanding credit

7. Changing Values and “The American Dream”
- More so in the 1920s than ever before, Americans
came to believe that they had a “right to prosperity”
- Whereas older generations valued saving money
and living simply, during this period, advertising,
leftover “war effort” sentiments, and the availability
of consumer goods proliferated the idea that status
and American identity was related to spending
money

9. Trouble in the Farming Industry
- Though there was a massive boom in industry and consumer spending
in the 1920s, other sectors of the economy, like farming and mining,
remained stagnant
- After World War I, Europe no longer imported as much food from the
United States
- Overproduction due to improved farming technology led to a decrease
in the price of crops
- About half of Americans (60 million people) lived in rural areas and
were directly effected by hardship in the farming industry
- Many rural Americans abandoned farming and moved to cities to seek
employment in factories
- Black Americans suffered especially from this downturn, because they
were mostly employed as agricultural laborers

11. Income Inequality
- Though the overall prosperity of the USA grew during
the Boom, it grew unevenly.
- 42% of Americans lived below the poverty line, and
could not pay for essentials like food, clothing and
housing.
- Unemployment remained a problem. Though more
goods were produced by the US economy, unemployment
was the same at the start of the 1920s as it was at the
peak of the Boom in 1929.
- Poverty limited consumer purchasing power, and
especially effected blacks, hispanics and immigrants

12. Growing Cities and Changing Values
- As more Americans moved away from small towns, traditional
ways of life began to fall out of favor.
- Through radio and movies, Americans were exposed to new
kinds of music and ideas like jazz and looser sexual morals.
- Some conservative groups fought back against these “daring”
ideas, creating censorship laws in many states.
- Increased availability of contraception, divorce, and jobs gave
women more freedom than ever before.
- In spite of increased freedom, gender discrimination was still
normal. Women did not achieve equality with men and most
stayed in traditional roles.

15. Prejudice and Intolerance
- Groups such as the Klu Klux Klan (KKK) targeted blacks,
hispanics, immigrants, communists, Jews and Catholics with
intimidation, physical violence and even murder.
- The White Supremacy movement was strongest in the Midwest
and the South, where white competed for jobs with immigrants and
blacks.
- White Supremacist propaganda gained favor throughout the United
States, including with President Wilson.
- Lynch mobs, which falsely accused minorities of crimes, were
responsible for many deaths by hanging and cases of false
imprisonment.
- Immigrants, Anarchists and Communists were also targets of
discrimination and persecution during this period. During the “Red
Scare” the US kept records on all suspected Communists and
created immigration quotas.

17. Plight of Native Americans
During the nineteenth century the population of Native
Americans dropped from 1.5 million to around 250,000 in 1920.
The US Government began to take notice of the problem of
demographic and cultural collapse in Native communities in the
1920s.
Native Americans suffered extreme poverty, discrimination, and
exploitation from businesses who took their land.
Native American children were sent to boarding schools and
many lost touch with their language and culture.
1924 Native Americans were granted full citizenship of the USA.

19. Scopes Monkey Trial
In 1925 a Tennessee law prohibiting the instruction of Darwin's
Theory of Evolution came under fire in a landmark court case.
A teacher named John Scopes deliberately broke the law so
that he would have the opportunity to challenge it in court.
The trial was followed closesly by Americans in all parts of the
country, and symbolized the struggle between progressive
urban people and conservative rural people.
Ultimately, though Scopes was convicted of breaking the law,
the spectacle of the trial shaped the perspectives of many
Americans. The Fundamentalists came off looking foolish and
the anti-evolution lobby was dealt a major blow.

20. Prohibition, Gangsters & Corruption
In 1920, the powerful temperance movement lead to the adoption of the Volstead
Act, outlawing the sale or consumption of alcohol.
The law was difficult to enforce and there was not enough money to make
enforcement a priority, so many illegal sources of alcohol cropped up.
Some large breweries stayed in business by bribing or threatening local
authorities. Alcohol was brought across the border from Canada and made in
non-professional distilleries called “stills”. The alcohol made in homes and “stills”
is called Moonshine, and was often poisonous.
Organized crime grew during this period, as Gangsters dominated the businesses
of moonshining, smuggling, and running speak-easies (Illegal bars and social
clubs where alcohol could be purchased).
Increased organized crime activity was tolerated in some places, like New York
and Chicago, because of the power and social clout of mafias, and because of
widespread corruption and bribery within the police and local government.
Prohibition was repealed in 1933, partially for economic reasons, and partially
because it was so unpopular.

21. The Stock Market Crash of 1929
The 1929 crash brought the Roaring Twenties shuddering to a
halt.
The Wall Street Crash of 1929 (October 1929) was the most
devastating stock market crash in the history of the United States.
The crash signaled the beginning of the 10-year Great Depression
that affected all Western industrialized countries.
As a result of the crash, the market lost over $30 billion in the
space of two days. By 1932, the stock market had lost 89% of its
value.
The decline in stock prices caused bankruptcies and severe
macroeconomic difficulties including contraction of credit,
business closures, firing of workers, bank failures, decline of the
money supply. This increased unemployment and decreased
consumer spending.

23. Causes of the Great Depression in the USA
It is widely agreed upon that the Stock Market Crash began a chain-reaction
which ultimately led to the most devastating economic situation of the 20th
Century, the Great Depression.
During the Crash of 1929 preceding the Great Depression, margin requirements
were only 10%. Brokerage firms, in other words, would lend $9 for every $1 an
investor had deposited. When the market fell, brokers called in these loans,
which could not be paid back. Banks began to fail as debtors defaulted on debt
and depositors attempted to withdraw their deposits all at once triggering
multiple bank runs.
In the face of bad loans and worsening future prospects, the surviving banks
became even more conservative in their lending. This caused businesses to
stop growing, their worth fell, and bankruptcy increased. Productivity, trade and
employment all fell, which caused a loss of confidence throughout the US &
Europe. People began to hoard money instead of giving it to banks, and the
cycle worsened.

24. The Gold Standard, Loans, and the European Depression
During World War I, many European nations abandoned the gold standard, forced
by the enormous costs of the war, which resulted in inflation.
Because of the huge reparations that Germany had to pay France, Germany began
a credit-fueled period of growth in order to export and sell enough abroad to gain
gold to pay back reparations. The U.S., as the world's gold sink, loaned money to
Germany to industrialize, which was then the basis for Germany paying back
France, and France paying back loans to the U.K. and U.S. This arrangement was
called the Dawes Plan.
Following the war, most nations returned to the gold standard at the pre-war gold
price (deflating their currencies), in part, because they hoped to recover the same
value in gold that they had lent, and in part because the prevailing opinion at the
time was that deflation was not a danger.
For the next decade, the problem of deflation plagued Europe, as deflation erodes
the price of commodities while increasing the real value of debt.
Furthermore, after the Great Crash of 1929, European nations found it much more
difficult to borrow money from the U.S. At the same time, high U.S. tariffs were
making it much more difficult for them to sell their goods in U.S. markets. Without
any source of revenue from foreign exchange to repay their loans, they began to
default.

26. Consequences of the Depression in the US
The Great Depression was a time of massive poverty and
unemployment. Urban workers struggled to feed themselves and
their children, whereas farmers struggled to sell their crops.
Many people were forced out of their homes and jobs and became
migrants, searching for work and food anywhere they could find it.
During the first three years of the Great Depression, under
Hoover, very little was done to help those in need. The few social
programs that existed did not have the resources to help
everyone.
In the Great Plains of the US, the Dust Bowl ravaged farmland
and forced farmers to migrate away from the central states to the
coast seeking work.

28. Roosevelt's Election and the New Deal
Hoover was regarded as a “do-nothing” president because of his lack of
response to the Great Depression. In 1932, the Democrats won a great political
victory, gaining control of the Presidency and Congress.
In the first 100 days of Roosevelt's presidency, he created initiatives to restore
American confidence in banks and the economy. The most important reforms
were the passage of the Emergency Banking Act, the creation of the SEC
(Securities & Exchange Commission), and the “Alphabet Agencies”. These
agencies used government money to support public development projects and
create jobs.
Roosevelt followed a Keynesian economic philosophy, as opposed to Hoover's
belief in Supply Side economics. The debate about the merits of these
philosophies continues today.
Over the next two terms of his presidency Roosevelt continued to push forward
with more New Deal programs, including the Tennessee Valley Authority, the
Wagner Act (which firmed up the role of unions), and the creation of the Social
Security administration, which created a system of pensions for American
workers and paid benefits to the disabled and unemployed.

29. The Legacy of the New Deal
During Roosevelt's presidency many criticisms were leveled against
the New Deal, both that the government had done too much to help
struggling citizens, and that the government had done too little.
Republican opponents of Roosevelt's policies accused him of unfairly
robbing from the rich, and creating socialist policies.
A Republican-led Supreme Court challenged Roosevelt's laws, until
Roosevelt unsucessfully tried to have the justices replaced.
After his clash with the Supreme Court and the heavy criticism of his
opponents during the election, Roosevelt began to scale back New
Deal spending in the late Thirties.
This caused a minor recession, and the United States economy was
not fully restored until the beginning of the Second World War.

30. Recommendations on where to learn more about the Great
Depression
Music:
Woody Guthrie's Recordings for the Library of Congress
Movies:
O Brother, Where Art Thou?
Bonnie and Clyde
The Grapes of Wrath
To Kill a Mockingbird
Mr. Smith Goes to Washington
Books:
Of Mice and Men