2. A Republican Decade By 1920, Americans were tired of war; tired of the arguments in Congress concerning the Treaty of Versailles. Republican Warren G. Harding ran for president on the slogan “a return to normalcy,” voters gave him a landslide victory over the Democrats.

4. Republican Power President Harding Elected 1920 Legacy of Scandals “Teapot Dome” Died in office

5. Americans were spooked by their memories of the war and afraid of anything foreign. The Communist Revolution in Russia created the Soviet Union, which had initially been supported by some Americans, soon sparked a "Red Scare"—fear of Communists in America.

7. Charles Schenck mailed letters urging men to avoid military service. Schenck was convicted of breaking the Espionage Act. In his appeals, Schenck said he was exercising his freedom of speech. The Supreme Court said that the government is justified in silencing free speech when there is a “clear and present danger.” Schenck v. U.S. Socialist Bernard Gitlow published calls for the violent overthrow of the government. He was convicted of criminal anarchy. The Supreme Court upheld his conviction, stating that he had urged people to engage in violent revolution. Gitlow v. New York Two anarchists were accused of a robbery and murder. Many people believed that they were singled out because they were both radicals and immigrants. After a trial that many believed was unfair, the jury found them guilty and sentenced them to death. Sacco and Vanzetti Attorney General A. Mitchell Palmer ordered the arrest of thousands of suspected “subversives” (people trying to overthrow the government) without evidence. Many were innocent, yet more than 500 were deported. The Palmer Raids Red Scare Events The country was rocked by the arrests of thousands of suspected radicals in the Palmer Raids.

8. Country Divided Controversial trial of Sacco and Vanzetti, Italian immigrants accused of murder. Despite the weakness of the evidence, Sacco and Vanzetti were convicted and executed. Many felt they were accused and convicted only because of their political beliefs. They were anarchists, people who opposed any form of government rule or authority.

11. The fear of Communism also led the U.S. government to crack down on labor unions, supposedly a hotbed of subversive, anti-American ideas.

12. ISOLATIONISM Republican Presidents Harding and later Calvin Coolidge practiced foreign policy called isolationism= avoiding any alliances with foreign nations. Also passed high tariffs to protect American businesses, –infuriated the Europeans who were trying to repay war debts

14. America resurgence of nativism=, a movement favoring native-born Americans over immigrants. –laws restricting immigration –establishing a quota system based on the population of 1890, virtually ending most immigration from southern, central, and eastern Europe

16. Harding and many Americans wanted a policy of isolationism, avoiding political or economic alliances with foreign countries. Harding called for international disarmament, a program in which nations voluntarily give up their weapons. He promoted the expansion of trade and acted to protect business at home. Foreign Policy As Americans became more isolationist during the Red Scare, they also became more nativist. Nativism is a movement favoring native-born Americans over immigrants. In 1921, Congress passed a law restricting immigration. The law included a quota, or a numerical limit imposed on immigrants. Domestic Issues In 1923, corruption scandals rocked Harding’s administration. The worst was the Teapot Dome Scandal. Harding’s Secretary of the Interior secretly gave drilling rights on government land to two private oil companies in return for illegal payments. There was no evidence that Harding was involved in the scandals. He died while still in office. Teapot Dome Scandal The Harding Presidency

17. President Coolidge “The business of America is business.” Fordney- McCumber Tariff Smoot-Hawley Tariff No help for farmers Foreign Policy

18. The Coolidge Presidency Coolidge assumed the presidency after Harding died. He summed up a major theme of the Republican decade: “The chief business of the American people is business.” Supported laissez-faire approach to business. His economic policies helped fuel the economic boom of the 1920s. Secretary of State Frank B. Kellogg worked with the French foreign minister to create the Kellogg- Briand Pact.

19. Kellogg-Briand Pact (1928) 5 15 nations dedicated to outlawing aggression and war as tools of foreign policy. 5 62 nations signed. 5 Problems  no means of actual enforcement and gave Americans a false sense of security.

20. A Business Boom Americans in the 1920s were more prosperous than ever as incomes resumed their upward trend after the end of the war. This prosperity helped create a consumer economy, one that depends on a large amount of consumer spending. Americans traditionally thrifty, new products, clever advertising, and easy credit encouraged them to buy new products on installment plans =paid a little each month until items were paid off..

21. Consumer Economy

22. Henry Ford had begun producing affordable automobiles by revolutionizing the assembly line. In Ford’s system, each worker did only a little job as the car moved along the assembly line.

24. Affordable Cars Transformed the nation: roads built, thousands of new businesses to service travelers: –gas stations, restaurants, and motels. The automobile industry boosts steel to build cars, rubber for tires, and glass for windshields.

25. Age of Prosperity Economic expansion Mass Production Assembly Line Age of the Automobile Ailing Agriculture…

26. Unfortunately Wealth of 1920s not enjoyed by everybody. Farmers, unskilled laborers, new immigrants, and African Americans did not get new wealth. Farmers, heavily in debt from purchasing new equipment in the previous decades, were hurt greatly by falling prices. Thousands lost their farms.

27. Industries that expanded to meet wartime needs struggled. The railroad, cotton, and coal industries suffered from shrinking demand as well.

28. The Economy in the Late 1920s Business still growing at a fantastic rate. Value of stocks increased from $27 billion in 1925 to $87 billion in 1929. Businesses became more generous to their workers, believing that doing so could ward off unions and strikes. paid time off, shorter workdays, and recreation programs This more reasonable approach to employee relations was called welfare capitalism.

30. However, signs of economic danger did exist 1. The first danger sign was the wide disparity of wealth. In 1929, only one- tenth of 1% of society held most of the wealth. These families earned over $100,000 a year compared to the 71% of all families who earned less than $2,500 a year

31. 2.Another danger sign was that personal debt had grown tremendously as people used installment plans, putting many Americans in danger of financial ruin if incomes stopped growing. ( July 20, 2008 New York Times)

35. 3. Another sign of trouble was increased speculation in the stock market as people made high-risk investments with little money down, a practice called buying on the margin. This speculation sent stock prices up artificially and made downturns in the stock market disastrous for investors

36. The stock market: the public invests in cos. by purchasing stocks; in return for this they expect a profit b/c of booming 1920's economy, $ were plentiful, so banks were quick to make loans to investors also investors only had to pay for 10% of the stock's actual value at time of purchase –this was known as BUYING ON MARGIN, and the balance was paid at a later date

37. 4. In addition, American companies continued to produce goods long after demand for them had slowed, building a stockpile of goods with no one to sell them to

38. 5. Finally, difficulties in farming had caused significant economic upheaval in rural communities as farmers could not pay their debts and rural banks began to fail. Approximately 6,000 rural banks closed their doors; thousands of people lost their savings throughout the 1920s.

39. Economic Danger Signs The rich got richer Huge corporations rather than small business dominated industry. Uneven Prosperity The rapid increase of stock prices encouraged: Speculation, the practice of making high-risk investments in hopes of getting a huge return, and Buying on margin, the practice of allowing investors to purchase a stock for only a fraction of its price and borrow the rest at high interest rates. Playing the Stock Market Rising productivity had brought prosperity, but it also created a surplus of goods. Manufacturers had more product than consumers could buy. Too Many Goods, Too Little Demand Farmers unable to pay their debts defaulted on bank loans, which caused rural banks to fail. Coolidge vetoed a farm relief bill. While companies grew wealthy, many factory workers remained poor, especially in distressed industries. Trouble for Farmers and Workers Many Americans believed that they could count on future income to cover debt. They bought on installment plans boasting “easy terms.” Personal Debt

40. Personal Debt and Income Distribution in the 1920s

41. This uneven distribution of wealth, increasing debt, stock speculation, overproduction, and the hardships of the farmers signaled that trouble was coming, and when it hit at the end of 1929, it sent America’s economy into a downward spiral that affected the whole world. THE GREAT DEPRESSION

43. 1920's had been a period of good economic times Tues. Oct. 29th, 1929 - NYC Stock market crashed, causing a depression that would last until 1942