9.01: Elaborate on the cycle of economic boom and bust in the 1920s and 1930s

1. Competency Goal 9: Prosperity and Depression (1920-1939), appraise the economic, social, and political changes of the decades of “The Twenties” and “The Thirties” 9.01: Elaborate on the cycle of economic boom and bust in the 1920s and 1930s 9.02: Analyze the extent of prosperity for different segments of society during this period 9.03: Analyze the significance of social, intellectual, and technological changes of lifestyle in the U.S. 9.04: Describe challenges to traditional practices in religion, race, and gender 9.05: Assess the impact of New Deal reforms in enlarging the role of the federal government in American life

2. “The Roaring Twenties,” March 1921-October 1929Politics and Society

3. “Return to Normalcy”: Winning slogan of the Republican candidate for POTUS, Warren G. Harding, it refers to the idea that the U.S. should return to the ways before the War (or even before the Progressive Era). In foreign policy: return to its usual practice of neutrality, not participating in the politics and conflicts of the “Old World;” that it should avoid, as George Washington put it, permanent alliances and just worry about its own affairs. Harding argued that the government should take a less active role in regulating the economy--returning, in part, to a laissez-faire approach to business.

4. “Ohio Gang”: Group of political associates of Harding who provided refuge for the President at a “Little House on H Street” where they played poker, drank, and womanized. Members of the gang also used their connections to get rich. When their corruption was uncovered, several committed suicide or fled the country. Harding was not directly implicated in any of the scandals, but because of his poor judgment and general incompetence he is considered one of the worst Presidents in U.S. history. Teapot Dome: Most famous scandal of a scandalous administration: it involved Secretary of the Interior Albert B. Fall selling drilling rights to oil deposits at Teapot Rock, Wyoming, apparently in return for personal loans totaling $700,000 – even if the loans were not connected with the oil rights, the deal smelled bad and was a mistake politically. Conservationists who opposed exploitation of western lands for mining, etc., took advantage of the scandal to advance their political interests.

5. “Silent Cal”: Nickname given to Vice-President Calvin Coolidge, former Governor of Massachusetts who became President when Harding died of a stroke in 1923. Despite sleeping upwards of 12 hours a day while president, he cleaned up the White House (appointing special prosecutors to investigate Teapot Dome and send Albert Fall to jail), ran a competent foreign policy highlighted by the Five-Powers Treaty, controlled government spending and promoted business interests that created an era of one of the largest economic expansions in U.S. history; (thanks largely to the low corporate taxes advised by Treasury Secretary Andrew Mellon). Coolidge retired from the Presidency, not running in the election of 1928.

6. Regarding his being a man of few words: a guest at the White House bet him that she could make him say three words. “You lose,” he replied. When he did speak, however, he spoke volumes in few words. “What's good for General Motors,” he quipped, “is good for America.” “The man who builds a factory,” he said, “builds a temple.” Or most famous: “The business of America is business.” (The full quote is more telling still: “The chief business of America is business, the chief idealism of America is idealism.”) He saw it as government's responsibility to reduce corporate taxes and protect industries to promote economic development and prosperity.

7. Nativism: An anti-immigrant movement that grew out of the isolationist movement: it led Congress to enact laws regulating immigration with the -- Emergency Quota Act of 1921 (limits the number of immigrants and stops immigration from certain countries) and the National Origins Act of 1924 (closes the gates to immigrants altogether); it also led to a resurgence of white-supremacist groups, such as the Ku Klux Klan, which became a major political force in the early and mid-twenties, achieving anti-Catholic legislation in Oregon, winning the Governorship of Indiana, and nearly winning local elections in Detroit, Michigan.

8. Sacco and Vanzetti: Two Italian immigrants to the Boston area who may have been involved in the robbery of a payroll and the murder of the paymaster at a factory in South Braintree, Mass. Later forensic studies proved Sacco's guilt, but historically that is less important that the fact that the two were convicted in a trial that focused on their ethnicity and their support of Communism and anarchism rather than on the evidence of guilt or innocence, and because of poor handling of evidence “reasonable doubt” abounded (in the 1920s and today). They were sentenced to death and despite pleas for mercy from around the world were executed in 1927. The trial and conviction became a cause celebre for radicals and civil libertarians.

9. Revivalism: Amid the pressures of Modernism and change, a new spirit of revivalism spread through urban America. Evangelists, such as Aimee Semple McPherson and Billy Sunday, brought religion to the masses. McPherson’s Los Angeles church held just over 5,000 people and was filled for three services daily. In 1924, she started on the new medium of radio and spread the revival across the country.

10. Scopes Monkey Trial: 1925 case in Tennessee. It brought into focus the tension of tradition versus modernity, pitting science against religious fundamentalism. It involved a question of whether a science teacher could teach the theory of evolution in public schools. The trial caused a national sensation as two of the most famous lawyers in the U.S. argued the case: Clarence Darrow for the evolutionists and, for the creationists, former Secretary of State and perennial Democratic presidential candidate William Jennings Bryan. The fundamentalists won the decision, but Darrow won public opinion. The trial was the basis for the play and film Inherit the Wind.

12. Volstead Act: The law that enforced Prohibition, the banning of sale and manufacture of alcoholic beverages. Gangsters and Bootleggers: People who made illegal liquor, called “Bathtub Gin” and sold it to the public, often in a secret bar or club called a speakeasy. The best-known gangsters and bootleggers included: Al “Scarface” Capone in Chicago; Arnold Rothstein (a.k.a. Mr. Big -- the fixer of the 1919 World Series, and controller of the narcotics trade into the 1950s) Dutch Schultz, Meyer Lansky, and Lucky Luciano (Murder, Inc.) in New York; the Purple Gang in Detroit; and, without the violence, Joseph Kennedy in Boston.

14. Culture of the 1920s Flapper: “New woman” of the 1920s who dressed in loose-fitting clothing, “bobbed” her hair, went to speakeasies, smoked cigarettes and danced “The Charleston” in public, “sparked” with a man in the rumble seat of his car, and did many other things that her mother never would have done.

15. “Burma-Shave”: The 1920s are known as the era when national advertising campaigns became widespread, adding to a consumer culture and suggesting prosperity. One of the most noted and inventive advertising campaigns combined consumerism, art, humor, and America’s new love affair with automobiles. The product was a shaving cream, called “Burma-Shave.” The campaign consisted of a series of road signs posted in a sequence to offer a humorous little poem. Not only did the advertisements help sell the product, they became so well-known and well-liked that the Smithsonian Institute’s Museum of American History requested a set. Among the most representative “poems” are: “Pity all / the mighty Caesars / they pulled / each whisker out / with tweezers” “The Whale / put Jonah / down the hatch / but coughed him up / because he scratched” ”Within this vale / of toil / and sin / your head grows bald / but not your chin ” “Proper / Distance / to Him Was Bunk / Pulled Him Out /of Some Guy’s Trunk “Don’t Pass Cars / On Curve or Hill / If the Cops / Don’t Get You / Morticians Will

16. George Gershwin: A composer of “serious American music” during the 1920s. He combined European musical structures with American rhythms and jazz in such pieces as Rhapsody in Blue. He also wrote numerous songs for Broadway musical, with his brother, Ira Gershwin, writing the lyrics to his music.

17. Rudolph Valentino: The romantic leading man in silent films of the 1920s. Best known for his part in the films, The Four Horsemen of the Apocalypse and The Sheik. Because he spoke with a thick Italian accent, Valentino could not make the switch to talkies in 1927 Charles Chaplin: A leading filmmaker of the silent era. His character, the little tramp, won worldwide fame and popularity in films, such as The Gold Rush and City Lights The Jazz Singer: The first “talkie” (i.e. first movie with synchronized sound). It starred Al Jolson as the son of a Jewish Cantor who refuses to follow in his father’s footsteps; instead defying his father to become a singer on the Broadway stage. Made by Warner Brothers, it opened on October 6th, 1927. It was an immediate hit, ushering in “the sound era.”

18. George Herman “Babe” Ruth: The leading sports figure in an era that embraced spectator sports of all kinds. He began his career as a pitcher for the Boston Red Sox, but became world-famous as a fielder and home-run hitter for the New York Yankees. Jack Dempsey: Born in Manassa, Colorado, he was known as the Manassa Mauler, heavy-weight champion of the world from 1919 to 1926 Jim Thorpe: A Sauk and Fox Indian from Oklahoma, he was raised and educated at the Carlisle Indian School. In the 1910s, he became athlete of the decade in the Olympics and professional baseball. In the 1920s, he played professional football and is in the Pro Football Hall of Fame

19. Charles A. Lindbergh: The greatest hero of the 1920s. He was the first to fly across the Atlantic and he did it solo, flying his plane The Spirit of St. Louis from New York to Paris in 1927.

20. F. Scott Fitzgerald: From Minnesota, Fitzgerald was the leading novelist of the “Jazz Age.” He wrote numerous novels that reflected the new lifestyles of the 1920s. In 1925, he published The Great Gatsby, often referred to as the great American novel of the twentieth century. Sinclair Lewis: From Minnesota, Lewis was the leading novelist of “Middle America” during the 1920s. He published four major novels in the 1920s, including Main Street, Babbitt, and Elmer Gantry. He won the Pulitzer Prize for Literature for Arrowsmith in 1927, but refused the award. He was the first American to win a Nobel Prize for Literature (1930). Ernest Hemingway: Novelist whose early work drew on what Gertrude Stein called the “Lost Generation” – those who were so disillusioned by WWI’s destructiveness that they embraced danger and a life-style of “eat, drink, and be merry for tomorrow we die.” His great novel of the 1920s is The Sun Also Rises. It was his first novel, published in 1926

21. Harlem Renaissance: Artistic movement among blacks in New York City. It included: musicians, Louis Armstrong – trumpet; Duke Ellington – piano; Bessie Smith –singer; writers, Zora Neale Hurston – Their Eyes were Watching God; Langston Hughes – poetry; Alain Locke – essays, such as “The New Negro”; and political leaders, Marcus Garvey – the Universal Negro Improvement Association (UNIA): seen as a radical, he called for pan-Africanism, unity among all black people of the world

22. Industry Changes America • Cities and Suburbs • Detroit, Michigan, grew when Ford based his plants there, and other automakers followed. • Other midwestern cities, like Akron, OH, boomed by making car necessities like rubber and tires. • Suburbs, which started thanks to trolley lines, grew with car travel. • Car Effects • Demand for steel, rubber, glass, and other car materials soared. • Auto repair shops and filling stations sprang up. • Motels and restaurants arose to meet travelers’ needs. • Landowners who found petroleum on their property became rich. • Tourism • Freedom to travel by car produced a new tourism industry. • Before the auto boom, Florida attracted mostly the wealthy, but cars brought tourists by the thousands. • Buyers snatched up land, causing prices to rise. • Some Florida swamps were drained to put up housing.

24. Land Speculation • In Florida, the wild land boom came to a sudden and disastrous end. • Florida sank into an economic depression even as other parts of the nation enjoyed prosperity. • Farmers • American farmers who had good times during World War I found demand slowed, and competition from Europe reemerged. • The government tried to help in 1921 by passing a tariff making foreign farm products more expensive, but it didn’t help much. • Natural Disasters • Boll weevil infestations ruined cotton crops. • The Mississippi River flooded in 1927, killing thousands and leaving many homeless. • “The Big Blow,” the strongest hurricane recorded up to that time, killed 243 people in Florida. Weaknesses in the Economy • Though the “Roaring Twenties” brought prosperity to many, other Americans suffered deeply in the postwar period

25. Crash and Depression Margin: Method of buying stocks when you do not have the money – person borrows money from a stockbroker and pays him off with interest when his stock makes a profit. Of course, if the stock goes down the person still has to pay off the loan. Margin is an example of the increased availability of credit during the 1920s and a cause of the stock market crash.

26. Herbert Hoover, “The Engineer”: Republican elected in 1928. He had one of the best resumes of any POTUS: a civil engineer, heading the Food Administration during WWI and the American Relief Administration that provided food aid to Europe in the 1920s, Secretary of Commerce under Harding and Coolidge. In his 1929 Inauguration Address, he said, “I have no fears for the future of our country.” Within months, however, we were in a depression that he seemed incapable of fixing. He believed the crisis was caused by worldwide problems and he believed it would run its course like any business cycle. “Black Tuesday”: October 29, 1929, it is the day of the great stock market crash that signaled the beginning of the Depression. The crash did not cause the Depression—a combination of over-production, high consumer debt, and foreign debt caused it—but it did speed it up and make bad problems worse.

27. The Great Depression

28. DISTRIBUTION OF WEALTH IN THE 1920S FACT:In 1929 the income of the richest 1% of Americans equaled the combined income of the poorest 42 percent. FACT: The average American’s disposable income (money available to spend on consumer goods) rose 9% in the 1920s. However, the richest 1% saw an increase of 75%. How did the distribution of wealth in the 1920s make the impact of the Great Depression in the 1930s more severe for a majority of Americans? A Working-class Americans formed a small percentage of the population. B Wealthy people had less money to spend on consumer goods. C The majority of Americans did not have major increases in income in the 1920s. D The increases in income were evenly distributed among all Americans.

30. Hawley-Smoot Tariff Act (1930): During the Great Depression, Congress passed this law to protect American labor and business but it made the Depression worse. It set even higher tariffs than Fordney-McCumber and all but ended the import trade. It led to high tariffs on American trade goods. It raised prices at a time when people were losing their jobs and after they had lost their savings in the stock market crash. Reconstruction Finance Corporation (RFC): Key element of President Hoover’s plan to fix the economy. Hoover saw the Depression as a severe example of a natural business cycle of boom and bust. He also saw it a crisis of banking and credit. So he called on Congress to create the RFC with $2.5 billion in funding for emergency loans to banks, life insurance companies, farm mortgage associations, and railroads. The money would help individuals and corporations avoid bankruptcy. Federal Home Loan Bank: Created by an act of Congress in 1932, it was designed to enable banks to provide discount home mortgages. This and the RFC represent a type of trickle-down economics that did not provide immediate relief to unemployed workers or farmers who were losing their homes and facing poverty.

31. Bonus Army: The Bonus Expeditionary Force, a group of WWI veterans who marched on Washington in 1932 demanding early payment of their bonuses. When Congress rejected their request, they set up a tent city in Anacostia Flats. President Hoover ordered U.S. troops, commanded by Gen. Douglas MacArthur, to clear them out. Over the next four years, they repeatedly demanded early payment and were refused. President Franklin Roosevelt order many of them transported to work camps in the Florida Keys were they were killed in a hurricane. Finally, in the summer of 1936, Congress agreed to pay the bonuses early – putting $2 billion in circulation just in time for the election.

32. Hobos: Unemployed men who rode in boxcars on freight trains, traveling from place to place picking up work when they could find it. They represent the unemployment and suffering during the Depression. “Hoovervilles”: Shantytowns – temporary, makeshift towns created by homeless people–named for Herbert Hoover, showing that people blamed him for the Depression and their suffering. Other examples of the people’s blaming Hoover include Hoover blankets (newspapers used by the homeless while sleeping)

33. Bread Lines: A symbol of urban poverty, long queues grew outside soup kitchens as the poor and unemployed in the largest cities lined up and waited for a meal.

34. Dust Bowl: Amid the economic depression that hit farmers particularly hard, the weather adds insult to injury: a drought and over-tilling caused a loss of topsoil which when pushed by winds caused a blinding dust storm that overtook the Midwest and plains; to escape the dust bowl many farmers, called Okies because so many came from Oklahoma, left to find work and opportunity in California

35. Okies

36. They used to tell me I was building a dreamAnd so I followed the mob.When there was earth to plow or guns to bear,I was always there, right there on the job.They used to tell me I was building a dreamWith peace and glory ahead --Why should I be standing in line, just waiting for bread? Once I built a railroad, I made it run,Made it race against time.Once I built a railroad, now it's done --Brother, can you spare a dime? Once I built a tower, up to the sun,brick and rivet and lime.Once I built a tower, now it's done --Brother, can you spare a dime? Once in khaki suits, gee, we looked swellFull of that Yankee Doodle-de-dum.Half a million boots went slogging through hell,And I was the kid with the drum. Say, don't you remember they called me Al,It was Al all the time.Say, don't you remember, I'm your pal --Say, buddy, can you spare a dime? Repeat last verse

37. This land is your land, this land is my land From California, to the New York Island From the redwood forest, to the gulf stream waters This land was made for you and me As I was walking a ribbon of highway I saw above me an endless skyway I saw below me a golden valley This land was made for you and me I've roamed and rambled and I've followed my footsteps To the sparkling sands of her diamond deserts And all around me a voice was sounding This land was made for you and me The sun comes shining as I was strolling The wheat fields waving and the dust clouds rolling A voice come chanting as the fog was lifting This land was made for you and me This land is your land, this land is my land From California, to the New York Island From the redwood forest, to the gulf stream waters This land was made for you and me The sun comes shining as I was strolling The wheat fields waving and the dust clouds rolling A voice come chanting as the fog was lifting This land was made for you and me  Woody Guthrie

38. Franklin Delano Roosevelt, FDR: Democratic President of the U.S. 1933-1945. He was disabled by polio—generally confined to a wheelchair, although the public did not know it. Former Governor of New York, he won the nomination for the Presidency by promising to give Americans a “New Deal”. The plan provided relief for those hurt by the Depression; and recovery for the economy through labor reform and increased government spending. In his inaugural address, he set out to restore the public's faith in the government and the economy and to relieve people's fears about the future. “Let me first assert my firm belief,” he declared, “that the only thing we have to fear is fear itself--nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” He asked Congress for “broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were invaded by a foreign foe.”

39. Congress called a special session; in FDR’s “First Hundred Days,” it enacted dozens of major pieces of legislation, creating new government agencies in the “alphabetocracy.” FDR’s determination rubbed off on the people and they came to view him as a caring parent, personalizing the presidency.

40. Roosevelt’s Brain Trust: The name given to a group of university professors who acted as an informal advisory council to FDR early in his presidency and were elemental in creating the New Deal. It included, Columbia University’s Raymond Moley (credited with coining the term “New Deal” and later an opponent of FDR’s intrusive economic system), and Rexford Tugwell (an economist in the U.S.D.A.) and Adolf Berle (who advised FDR in foreign policy, creating the “Good Neighbor Policy”). And from Harvard, Felix Frankfurter (whom FDR named to the U.S. Supreme Court). Although not officially a part of the "Brain Trust," two others who had been with FDR when he was Governor of New York rose to prominence in the New Deal: Frances Perkins as Secretary of Labor was the first woman to hold a cabinet position; and Harry Hopkins headed the Works Progress Administration, one of the three more successful New Deal agencies. The First Lady, Eleanor Roosevelt, also played a significant role as an adviser to the President.

41. Keynesian Economics: Along with taking the country off of the gold standard, this theory of British economist John Maynard Keynes called for deficit spending. Keynes argued that the best way to end a depression was for the government to spend more and put more money into consumers’ hands through make-work projects or even welfare.

42. Since tax revenues were low because of the Depression, government had to borrow the money—to go into debt. But FDR feared too much debt and budget hawks reduced deficit spending in FDR’s Second Term, causing the economy to go into recession in 1938.

43. “Bank Holiday”: Established by the Federal Emergency Banking Relief Act of 1933, the holiday was the first plank in the New Deal because in large part the Depression was a banking/credit crisis. It involved closing banks for a period of no less than a week so that they could review their books and reopen for business. It restored people’s trust in banks and ended panic. “Fireside Chat”: Approach used by President Roosevelt to speak directly to the American people via radio. They informed the people of the New Deal policies and won tremendous personal support for FDR. In another example of this personal attachment that people felt, FDR's portrait commonly hung in people's foyers in the place where Catholics would often hang a picture of Jesus Christ.

44. Civilian Conservation Corps: New Deal program designed to keep young men (18-25) busy and out of trouble by sending them to camps in the woods. Men whose families were on relief were enrolled and paid thirty dollars per month to build roads through forests, plant trees, build erosion walls along rivers, etc. Because room and board was paid for in the camps, twenty-five dollars of the pay had to be sent home to their families.

45. Tennessee Valley Authority: A New Deal program designed to provide jobs in some of the hardest hit parts of the South along the Tennessee River. The government built hydroelectric dams along the river to control flooding and harness the river’s power to make electricity. It helped foster the Rural Electrification Program and had an indirect role as the power source for the building of the A-Bomb.

46. Federal Deposit Insurance Corporation: Part of the Glass-Steagall Banking Act of 1933, the FDIC is a government insurance company that guarantees the security of bank deposits: people will get their money even if the bank goes out of business. It restores trust in the banking system. Securities and Exchange Commission (SEC): Created in June 1934, the SEC will regulate the stock and bond markets; among other things it tightens rules for buying stocks on margin, raising minimum down payments to reduce speculation.

47. Agricultural Adjustment Act: New Deal program designed to raise farm and crop prices by reducing supply – farmers were paid to take their land out of production. It was found unconstitutional in the case of United States v. Butler, but did give some relief to farmers while it lasted. FDR’s other farm programs in the First Hundred Days were the Emergency Farm Mortgage Act and the Farm Credit Act, which enabled farmers to refinance their property and extended new low-interest loans to farmers.

48. National Recovery Administration: Created by the National Industrial Recovery Act, the NRA was designed to provide work relief for the unemployed. Under the "Blue Eagle" campaign, it set wage and price controls on industries, regulates competition, and moves to protect Labor's right to collective bargaining. It ran "afowl" of the Constitution's interstate commerce clause and was found unconstitutional in the “sick chicken case” – Schechter Poultry Co. v. U.S. (1935)

49. Opponents of the New Deal: (1) Senator Huey P. Long of Louisiana, “The Kingfish,” attacked Roosevelt from the Left in his book, Every Man a King (1933); he argued that the federal government should raise income taxes on the wealthy and “Share Our Wealth” by guaranteeing every family an annual allowance of $5,000 and every worker annual income of $2,500. Dr. Francis E. Townsend attacked FDR from the Left, insisting that government create “old age pensions,” paying $200 per month to every person over sixty years old who retired (opening up a job for someone else) and who promised to spend the money within the month.

50. Opponents of the New Deal: 3. Father Charles E. Coughlin, the “radio priest,” his National Union for Social Justice called for free coinage of silver (a la the Populists) and attacked bankers and other economic leaders; his radio “sermons” also included a heavy dose of anti-Semitism. 4. From the right, the American Liberty League, led by past Democratic presidential candidates Al Smith and John W. Davis, criticized the New Deal for not respecting “the rights of person and property.”