Advances in technology Economic boom Communications revolution A national culture Sex becomes an all-consuming topic of interest in popular entertainment Eat, drink & be merry, for tomorrow we die Return to normalcy US turned inward---isolationism Jazz Age first modern era in the U.S.

The New Economy National income rose: $63.1 bill to 87.8 GNP: $74 bill to Manufacturing rose 60% Inflation never more than 1% Unemployment: below 4%

Sources of the New Prosperity Technological innovation –Mass production Electricity as the new power source Automobile industry (key to prosperity) Advertising Credit New mgmt. techniques

Electricity: the New Power Source Replaces steam engine By 1930: almost 50% of manufacturing plants 1912: 16% of US households; 1927: 63% Home appliances Telephones

The Limits of Prosperity RRs unable to cope with trucking industry Coal displaced by petroleum Synthetic fibers replaced New England cotton textiles Lumber replaced by concrete Growing disparity b/w laborers and middle class managers

The 1920 Election

Republicans in Power People wanted stability Republicans promise small govt, end govt meddling in business Business expansion Open foreign markets Limit possibility of war Democratic Party failed to offer alternative

The Ohio Gang: President Warren Harding (front row, third from right), Vice-President Calvin Coolidge (front row, second from right), and members of the cabinet. The 1920 Election

Harding and Coolidge Republican presidents appeal to traditional American values Harding dies in office after 2 years. Scandals break after his death – Teapot Dome Scandal Calvin Coolidge becomes President after Harding ’ s death in Republican presidents appeal to traditional American values Harding dies in office after 2 years. Scandals break after his death – Teapot Dome Scandal Calvin Coolidge becomes President after Harding ’ s death in  Secretary of the Interior, Albert B. Fall leased naval reserve oil land in Teapot Dome, Wyoming, and Elk Hills, California, to oilmen Harry F. Sinclair and Edward L. Doheny  Fall had received a bribe of $100,000 from Doheny and about three times that amount from Sinclair.  Fall found guilty of taking a bribe.

Republican Policies Return to "normalcy" – tariffs raised – corporate, income taxes cut – spending cuts Government-business cooperation –“ The business of government, is business ” Return to “ isolation ” Return to "normalcy" – tariffs raised – corporate, income taxes cut – spending cuts Government-business cooperation –“ The business of government, is business ” Return to “ isolation ”

Democrats Divided 2 factions –Traditional rural South and West –Urban wing Immigrants who were part of political machines 1924 Convention –Differences boiled over the KKK---urban Dems. Fought with rural Dems over whether or not the KKK should be included in the party--- the result was a weak candidate---he lost badly!!

The 1924 Election  Calvin Coolidge served as President from 1923 to  “ Silent Cal ”.  Calvin Coolidge served as President from 1923 to  “ Silent Cal ”.

++ = $$ LAISSEZ FAIRE REPUBLICAN ECONOMY SUPPORTED LAISSEZ FAIRE AND BIG BUSINESS………. Lower Taxes Less Federal Higher Strong Spending Tariffs National Economy Fordney-McCumber Tariff Hawley-Smoot Tariff raised the tariff to an unbelievable 60%!!!

Commercial Diplomacy Goal: limit likelihood of future wars –Treaties –Conferences –Disarmament World stability Preserve the freedom to act independently Extend American influence

What factors led to the Great Depression?

Stock market crash Didn’t realize the effect it would have No money to replenish what was borrowed Many found being broke humiliating.

October 29 th,1929 Stock market crashes By 1933, nearly 140 billion dollars disappears as banks began to fail. Known as “Black Tuesday”

The Roaring 20’s The new concept of “credit” People were buying: –Automobiles –Appliances –Clothes Fun times reigned –Dancing –Flappers –Drinking

Why was this bad? Credit system –People didn’t really have the money they were spending WWI –The U.S. was a major credit loaner to other nations in need –Many of these nations could not pay us back

The Stock Market People bought stocks on margins –If a stock is $100 you can pay $10 now and the rest later when the stock price rose. Stocks fall –Now the person has less than $100 and no money to pay back

And then…. With people panicking about their money investors tried to sell their stocks –This leads to a huge decline in stocks –Stocks were worthless now People who bought on “margins” now could not pay Investors were average people that were now broke

Causes of the Great Depression: Distribution of Wealth in the 1920s * An income of $2,500 per year was considered the minimum amount needed for a decent standard of living

The Plight of the Small Farmer Good times during the war Bubble burst in 1920 –US govt stopped buying wheat –European farms recovered –Prices plummet Attempts to protect farmers fail!! –McNary-Haugen Bill-would have set minimum crop prices

Farmers were already feeling the effects –Prices of crops went down –Many farms foreclosed People could not afford luxuries –Factories shut down –Businesses went out Runs on Banks but the Banks could not pay out money. Leads to 9 thousand banks closing. People could not pay their taxes –Schools shut down due to lack of funds Many families became homeless and had to live in shanties

Wins in 1928 over Al Smith (First Catholic man to run for President) October 1929, Stock Market Crashes

Herbert Hoover was president at the start Philosophy: We’ll make it! What He Did: Nothing = poor approval ratings The poor were looking for help and no ideas on how to correct or help = loss of confidence

Smoot Hawley Tariff In June 1930, the Hoover signed the Smoot Hawley tariff into law. This law increased the tax and prices on foreign goods sold in the U.S. This led to less trade between the United States and Europe. Prices raised on nearly 20,000 items.

Many waited in unemployment lines hoping for a job.

People in cities would wait in line for bread to bring to their family.

"Once I built a railroad, I made it run. I made it race against time. Once I built a railroad, now it's done. Brother, can you spare a dime?" Photo by Dorothea Lange

Some families were forced to relocate because they had no money.

A drought in the South lead to dust storms that destroyed crops. “The Dust Bowl”

The South Was Buried Crops turned to dust=No food to be sent out Homes buried by sand Fields blown away South in state of emergency Dust Bowl the #1 weather crisis of the 20th century

Two Families During the Depression

A Farm Foreclosure