Boom & Bust Summary

1. Boom & Bust Summary Mr. Gouge – 8th Grade Social Studies

2. Adjusting to Peacetime • One of the main goals after WW1 was to return to a “normal” non-war lifestyle as soon as possible. Many Americans lived by the creed of “if it makes me feel good and forget WWI I will do it” • The harsh reality of WWI was that many soldiers returned with severe PTSD and simply could not return to a “normal” life like they left pre-going to Europe. • During the War, American manufacturing was in high gear and after the war a surplus of goods existed, this made buying items you did not need or in excess very realistic to the average American family. • Warren Harding is elected to guide America through this rough time. While he is remembered as a likable nice person, his presidency is remembered as scandal after scandal. Harding choose the wrong people for various White House Jobs and they each in turn would get caught violating the law. The most well known would be the “Tea Pot Dome Scandal” • Calvin Coolidge is elected to restore Americans trust in the government. Coolidge is overly quiet, attempts not to disrupt the new booming economy and is given the nickname “Silent Cal” do to his dislike of public speaking. • During the 1920’s, America goes through a relatively quick post war economic recession followed by un-presidented economic boom. • The 1920’s also so a growing fear of immigration policies that allowed large or unrestricted immigration from known European socialist and soon to be communist nations. This became known as “The First Red Scare”

3. Changes in American Society • As many Americans returned home from WWI, they were not ready to deal with the normalcy of family life. Drinking, drug use and crime sky rocketed. So much that Congress begins to look for a solution. • Prohibition began with the passing of the 18th Amendment in 1919 – the official banning of the production and sale of alcohol in America. • Prohibition will fail and eventually be repealed, but the reality that all organized crime families had to do was cross the Canadian or Mexican border to purchase alcohol actually had the reversed effect and crime increased. • During this era, the automobile, the motion picture and the radio became two of America’s greatest passions. In 1920 Pittsburgh PA had the only radio station, by 1926 there would be over 700. • The 1920’s also saw a re-emergence of the Civil War hate group known as the Klu Klux Klan. By the mid 1920’s KKK membership would reach almost 5,000,000 across all 50 United States. • 1925, the Scopes Monkey Trial swept American news and dinner conversations. A teacher in Tennessee taught from a text book that included a section on evolution. The teacher John Scopes, admitted to teaching evolution in violation of Tennessee law and was eventually fired.

4. The Jazz Age • As the economy continued to grow in the 1920s, Americans fell in love with Jazz, dancing and living to excess. Dance crazes such as the Charleston, games like Mah-Jongg and flag pole sitting swept the nation. • Americans also began to idolize sports heroes such as: Babe Ruth, Red Grange, Bobby Jones and Jack Dempsey. • As African Americans began to migrate from the southern states to the rest of the nation, they brought a new form of music with them called Jazz. Typically it had been played in places like New Orleans, Kansas City and St. Louis but could now be heard nationwide. The two most famous Jazz musicians were: Louis Armstrong and Duke Ellington. • During the early 1920’s, New York City’s neighborhood “Harlem” saw the largest growth in African American population. Harlem became known for it’s artistic freedom and diversity – which would earn it the nickname “The Harlem Renaissance”. Harlem’s most famous place was called “The Cotton Club” and booked the most famous artists of the 20’s. • Perhaps one of the most influential by products of the 1920’s Jazz revolution was the inclusion of people normally considered outsiders: such as African Americans and women. Seeing the revolution that was taking place, many women began to seek full rights, acceptance and social standing as men. In silent protest of their treatment throughout history, women began to cut their hair short into bob hairdos, wear attire that revealed their arms/legs/neck lines and danced/drank in bars across the nation – they became known as the flappers

5. The Economy of the 1920’s • For a short time after WWI, America experienced an economic recession due to a surplus of most goods and limited need for wartime manufacturing goods. • Many Americans saw the ability to make large amounts of money relatively fast by investing in the stock market. What most Americans didn’t realize was that many of the practices being used in the 1920’s would come with great risk. Brokers began to borrow money from banks in order to purchase stocks that were not guaranteed a return of money. This became known as buying on margin. • Farmers did not see an economic growth in the 1920’s, many of the European nations that were buying their crops were now too poor to do so, most Americans saw the dollar value drop causing crops to sell for a small fraction of what they had cost years prior. • Factory workers saw Unions grow to new levels of power and for the first time things such as: paid vacations, sick leave and yearly pay raises occurred. • In 1928, Herbert Hoover ran for president promising to keep government out of private business so the economy could continue to grow, only 8 months into his term the unthinkable would occur – the stock market would crash officially starting the Great Depression.

6. Hoover and the crash • By 1928, the economy was now showing very serious signs of decline. Farming was at an all time low, factories were getting rid of workers and stores were seeing a decline in sales. • Stock prices were growing at a rate that many could not buy or sell fast enough over a long decade, yet in 1928 those prices became very stagnate and even began to decline some. • On the morning of October 29th, 1929 banks across America physically ran out of money. Stock brokers had been buying on margin for so long without repaying their original debt there was no more money. With no money, no one can buy stocks, with no one buying stocks, the price drops. Sadly so many brokers lost not only their life savings but all of their clients that many jumped to their death from New York city skyscrapers. • Over the next month, banks closed, businesses went bankrupt, citizens panicked and the Great Depression began. The government had to use the police to protect banks that remained open as angry mobs began to tear them apart looking for any money possible. • Unemployment jumped from 3 to 25% (13,000,000 Americans were now unemployed). Even those who kept their jobs saw a drastic reduction in salary. • As poverty grew, Hoover took more and more heat to spend federal monies to offset the depression. Hoover believed that by keeping government out of the equation the market would naturally correct itself over time. What Hoover didn’t know was how long it would take. When he finally did act, it was too little too late and the homeless populations soared across America • Cities began to house the homeless in make shift shacks on the outskirsts of town. These ghettos became known as Hoovervilles.

7. Roosevelt and the New Deal • In the election of 1932, wealthy New Yorker FDR was elected. Most Americans saw his wealth during the Depression as a sign of hope and his ability to connect to the average American gave the feeling that together the Depression could be beaten. • Roosevelt ordered all banks closed to inventory their money, assistance was given to homeless and unemployed Americans, he took to the radio every week to give updates on the current economic situation. They became known as “Fireside Chats”. • Roosevelt next used federal funds to create jobs that rebuilt the infrastructure of America. Many of these jobs used acronyms for their names and quickly became known as Roosevelt’s Alphabet Soup. To FDR it was called “The New Deal”. • While many of Roosevelts programs were technically illegal for him to create, it did stimulate the economy faster than what Hoover had and gave America hope that the Depression would soon pass. • One of the biggest myths is that Hoover caused the Depression and that Roosevelt ended the Depression. Hoover’s plan took too long, Roosevelts were questionable in law and WWII production eventually saved the day. • Many of the jobs FDR created would not last for long, but they did give hope to the unemployed and attempted to rebuild America’s buildings, bridges, roads, bridges and riversystems.

8. Life in the Great Depression • Prior to the Great Depression, many Americans believed that a woman was to work in the home for her family. Now that times were at an all time low economically, many families saw the need to have the wife also looking for employment out of the home. • The Great Depression all but collapsed most southern farms forcing most sharecroppers to move north looking for factory jobs. The large scale mass migration of African Americans into northern cities was called “The Great Migration”. • Due to FDR’s physical limitations by his Polio illness, Mrs. Roosevelt began to travel the nation speaking with the jobless and trying to help bridge the gap between whites and blacks, rich and poor, unemployed and working class citizens. She is credited with redesigning the role of the First Lady. • While all Americans were hit very hard during the Depression, immigrants from Mexico and African Americans were hit the hardest as they filled many of the agriculture jobs of the era that no longer existed due to the closing of many family sized farms. • Years of poor farming techniques combined with an extended drought, saw the southwest USA hit with massive erosion of the land. As the storms slowly returned to the SW, there was nothing but dirt left to absorb the winds and rain. This led to severe dust storms spreading across the bread basket of America further worsening the living conditions of the Depression. These storms became known as “Dust Bowls” or “Black Blizzards” (the dirt was so heavy in the air you could not see any day light until it passed). • Finally because many Americans had become dependent on the modern technologies of the day, we had forgotten how to live on meager means and off the land – skills that only a few generations prior were considered common knownledge.

9. Legacy of the New Deal • FDR believed that those who were experiencing economic hardships at no fault of their own should be guaranteed the right to ask government for help – he called that system “welfare”. The original intent was that in order to collect government assistance you needed to work a full day for the government. No work = no pay. • Roosevelt next signed the Social Security Act – this guaranteed that anyone who had verifiably worked all their life could receive government funds to secure their retirement. He would further expand the SSA to cover dependent children, disabled persons and those who lost their pensions due to the market crash. • In 1935, Congress passed the National Labor Relations Act which became known as the Wagner Act. The act allowed unions to negotiate salary and benefits for all workers so the average factory worker did not have to meet with the factory owners and usually get taken advantage of. • Many of FDR’s New Deal programs were created through proper legislative process and therefore closed down. FDR created a 2nd New Deal following procedure towards the end of the Great Depression but at that point the economy was self correcting and the threat of a second world war in Europe was on the horizon. • Some historians argue that FDR violated federal law during the Great Depression, others argue that in order to save America he had to (Congress would not do it on their own). Some argue that his policies gave too much power to the federal government and others argue that they gave hope to a wounded nation.