A Booming Economy

1. A Booming Economy Chapter 16, Section 1

2. The Automobile Drives Prosperity • Henry Ford utilized the assembly line method to mass produce his first major automobile– the Model T. • This method cut down on costs, so he could reduce the price to where the average person (including his workers) could by the Model T. • The automobile led to other changes in society: • Industries that manufactured supplies for the automobile boomed; • Road construction increased– U.S. Highway System of 1926; • Development of service stations, diners and motels; • Other forms of transportation decline; • New sense of freedom and prosperity; • Movement to homes outside of the city.

3. A Bustling Economy • A consumer revolution happens whenever there is a flood of new, affordable goods on the market. • New methods of advertising attracted consumers; • Emergence of installment buying– make a small down payment and pay the rest off in monthly increments; • Surge in the stock market led people to want to purchase stock, but they had to purchase it on credit– known as buying on the margin; • This was only a successful option when the market was good, though.

4. CHANGES IN RESIDENTIAL PATTERNS • The general consensus of movement during the 1920s was to the cities– farmers, African Americans and even Mexican Americans to southwest cities. • The 1920s was the first decade where more people lived in cities than in rural areas. • There was a group that was leaving the city instead and moving to the suburb– urban, middle class workers. • This was aided by the development of the automobile. • Not every person was feeling the benefits of the 1920s. • Farm wages and industrial workers’ wages were still far below everyone else’s.

5. The Business of Government Chapter 16, Section 2

6. The Harding Administration • When Harding took office, he promised a “return to normalcy”. • This included a return to policies that benefitted big business. • After appointing Andrew Mellon as Secretary of the Treasury, Harding’s administration cut spending. • However, not all of Harding’s appointments as president were as successful. He trusted much of the decision making to his close friends, known as the Ohio Gang. • The worst of this gang was Secretary of the Interior Albert Fall.

7. The Harding Administration • Fall had the ability to transfer oil reserves between different departments. • He transferred reserves from the Navy Department to the Interior Department, which he then “loaned” to rich businessmen. • The oil was on reserve for a time of emergency. • Although Fall concocted the scheme, Harding signed the order to allow it to happen. • It became known as the Teapot Dome Scandal, named after one of the locations of oil reserves.

8. Coolidge Prosperity • When Warren Harding died, his vice-president Calvin Coolidge took over. • Coolidge looked to continue the policies of his predecessor, including: • Trimming the federal budget; • Lowering taxes for incentives to big business; • “The chief business of the American people is business.” • However, Coolidge did not act on the troubles that plagued the country, such as low wages and labor unrest.

9. America’s Role in the World • In reaction to WWI, the U.S. took precautions during the 1920s to avoid another world conflict. They used their increased role in world trade to make the following happen: • Washington Naval Conference to reduce arms race and size of navies of world powers; • Kellogg-Briand Pact “outlaw war… as an instrument of national policy.”

10. America’s Role in the World • The U.S. wanted Britain and France to repay their war debts to them. • But, Britain and France first needed Germany to pay the reparations agreed upon in the Treaty of Versailles. • An agreement in 1924 known as the Dawes Plan arranged for the U.S. to loan Germany money, which could then be paid back to Britain and France. • However, when the U.S.’ economy collapsed, other countries did not look as favorably upon the U.S.

11. Social and Cultural Tensions Chapter 16, Section 3

12. Traditionalism and Modernism Clash • There was a growing division in society between urban and rural citizens. • Modernism emphasized science and secular values; • Fundamentalism focused on the basic truths within religion, and that everything in the Bible was the literal truth. • At the center of this clash was the debate over the teaching of evolution in schools. • Biology teacher John Scopes violated Tennessee law by teaching the theory of evolution to his class. • Scopes was defended by renowned attorney Clarence Darrow. As an ‘expert’ witness on the Bible, the prosecution called William Jennings Bryan. • The trial was broadcast over the radio, connecting thousands of Americans to the trial.

13. Restricting Immigration • Nativists disliked the growing immigrant population in the United States. This dislike increased with the Red Scare. • New legislation was passed that established a quota system for various countries • This meant that only a certain amount of people could come to the U.S. in a given year from that country. • The quota system specifically targeted Asians, and used 1890 numbers, benefitting western and northern Europeans.

14. The New Ku Klux Klan • The dislike for immigrants was not central to northern cities, though. • In the south during the 1920s, there was a resurgence of the Ku Klux Klan that began at Stone Mountain, Georgia. • The ‘new’ KKK not only targeted Blacks, but Jews, Catholics and immigrants as well.

15. PRohibition and Crime • The temperance movement in the U.S. had been around for years, but found a surge during the Progressive Era, when alcohol was blamed for the many societal problems. • In 1919, Congress passed the Eighteenth Amendment which banned the manufacture, sale and transport of alcohol. • The Volstead Act was the law that enforced it. • Rural citizens especially supported these two. • However, prohibition also generated more bootlegging (illegal sale) and organized crime.