The Twenties

							Chapter 23
 Harding  won the presidency in 1920 due to
 his call to “return to normalcy”
    The postwar economy underwent drastic changes
        Increase in efficiency of production
        Climb in real wages
        Decline in the average worker’s hourly week
        Boom in consumer goods industry
    This economic boom changed how Americans
     organized business, earned their living, and
     enjoyed their leisure time
    It also led to the worst economic depression
     America has ever seen
 America underwent a second industrial
 revolution
    Electricity replaced steam as the main source of
     power (30% of factories in 1914 vs. 70% in 1929)
    The new machines could be operated by
     unskilled or semiskilled workers
    The average worker produced 3/4ths by 1929
     than they had in 1919
 New   consumer goods of the time included:
    Radios, washers, telephones, automobiles
    Canning, chemicals, synthetics, plastics also
     became a part of everyday life
   The construction industry also saw a boom
     Residential housing in the suburban areas became
      desirable due to the auto
     Credit expanded to allow for such development
           National mortgage debt jumped from $8B in 1919 to $27B
            in 1929
   Corporations underwent change in the 1920s
     Prior to the 20s people like Rockefeller and Carnegie
      maintained both corporate control (ownership) and
      business leadership (management) of their businesses
     The new business model would be demonstrated by
      Alfred P. Sloan (GM) and Owen D. Young (Radio
      Corporation of America)
   The new business model had salaried executives,
    plant managers, and engineers who made
    decisions but did not have a controlling interest
    in the company they worked for (didn’t own
    51%+ of the stock)
       They stressed scientific management and behavioral
        psychology to make the workplace more productive,
        stable, and profitable
   Companies such as Du Pont had specialized in
    things like gunpowder before 1920 but moved
    into consumer goods such as fabrics, paints, and
    dyes
       GE and Westinghouse moved into radios, washers, and
        refridgerators
 By 1929 200 companies controlled half of the
  corporate wealth
 The top 100 companies controlled 50% of the
  revenues made per year
    Oligopolies were common
    Four companies packed 3/4ths of the countries
     meat
    National grocery chain stores, clothing shops,
     and pharmacies began squeezing out local
     business
        The Great Atlantic and Pacific Tea Company (the A&P)
         had 15,000 stores across the country
 Tocombat government favoritism toward
 labor unions, corporations created a system
 known as welfare capitalism
    Incentives offered under welfare capitalism
     included insurance policies, stock purchase
     programs, improved work conditions, and sports
     and recreation programs
        This system did not solve seasonal unemployment, low
         wages, long hours, and unhealthy factory conditions
    The corporations used the “American Plan,”
     which involved creating open shops
        Open shop meant that non-union employees received
         the same benefits as union members
 Incompany union systems, corporations
  created company unions
     These unions were used as substitutes for
      collective bargaining, and were largely symbolic
      and created for appearance’s sake
     These strategies led to a sharp decline in union
      membership
 Other things that caused a decline in union
  power were the timid leadership of William
  Green over the AFL, the government moved
  back to a pro-business stance, and the
  Supreme Court was unsympathetic toward
  labor
   The automobile changed the American way of
    life more than any other development or
    invention
     Henry Ford’s revolutionary new assembly system
      made it possible to produce a car every 10 seconds by
      1925 (it took 13 hours in 1913)
     Ford doubled the average industrial worker wage to
      $5/hr for an 8-hour day
           Note: this was more pay for less hours
           He did this for two reasons: he knew that his producers
            were consumers, and it reduced his high turnover rate
       By making the cars more affordable, millions more
        would drive the $300 Model T car that he produced
   1927, Ford had produced 15,000,000
 By
 Model T’s
    By this time, General Motors had become a stiff
     competitor
    GM developed a new marketing strategy by
     dividing the company into separate divisions that
     each targeted a particular audience
        Cadillac = Wealthy
        Chevrolet = Working and middle class
    GM also developed market research and sale
     forecasting, which has since become a model for
     large American corporations
   The auto industry helped steel, rubber, glass,
    and petroleum markets
       It stimulated spending for roads, and is credited for
        the boom in suburban communities
       It led to the development of showrooms, repair
        shops, gas stations, motels, billboard advertising, and
        roadside diners
       It is credited with the rapid development of California
        and Florida
       Autos changed the experience of American people by
        allowing them to travel to far-off places, visit other
        cities for shopping or to see family
       It changed the way young people dated
 Cities     grew a significant amount by 1930
     Cities promised business opportunities, good
      jobs, cultural opportunities, and personal
      freedom
     Most people moving into cities were black or
      immigrant
     Cities grew horizontally and vertically
     Skyscrapers began to appear, including the
      Empire State Building
         Completed 1931, tallest in the world at 102 stories
New York City, 2006
Above: Cityscape from 80th floor of the
Empire state building
Right: Skyline pictures from Statue of
Liberty and ferry
   The automobile allowed the suburbs to have
    lower residential density, as well as workplaces
    and shopping centers outside of the interior of
    the city
     Despite advancements in industrial workers’ lives and
      urban living, parts of the country lagged behind in
      prosperity
     One-third of American workers in the 1920s were
      employed in agriculture
     Due to record high prices of crops during World War I
      and a massive surplus left over from the war, prices
      began to drop in 1920
     Prices also declined on property, wiping out billions in
      capital investment
 Due to expanded debt coupled with lower
 prices for crops, farmers were in need of
 bailout (which was unsuccessful)
    Wheat was one of the few exceptions to this
     trend
 While a handful of agricultural products were
 at least breaking even, the income gap
 between farmers and non-farmers increased
 ($223 : $870)
 The main relief act, passed by Congress but
 vetoed by President Coolidge (McNary-
 Haugen Bill) proposed that the government
 purchase the farmers’ surplus and then sell it
 on world markets or when domestic prices
 rose
    Farmers would not see any government relief
     until the New Deal programs of the 1930s
 Coal, railroad, and textile industries lost
 significance as oil, cars, and cost-cutting
 measures rose in prominence
    Areas such as Appalachia became significantly
     poorer than more urban areas of the country
 Therise of mass media (communication to a
 large audience) led to a standard of habit,
 dress, language, and social behavior
    The Roaring 20s was so named because of the
     explosion of image and sound machinery
    While most people had limited access to this up-
     and-coming way of life, those who did found the
     new definition of “the good life”
    Initially, Americans saw movies in nickelodeons at
     a rate of about 7,000,000 daily admissions
    As the movie industry shifted to Hollywood, large
     studios such as Paramount, Fox, MGM, and
     Warner Brothers dominated the business
   These studios were founded by European
    immigrants who came to America and started in
    menial jobs
     With the invention of “talkies” (the first being The
      Jazz Singer in 1927), Hollywood came to rely heavily
      on Wall Street for funding
     Just like today, Hollywood emphasized liberal social
      themes and used celebrity fanaticism to “teach”
      people, particularly the youth, how to live their lives
     As Hollywood became more permissive in its themes,
      people began to push for censorship
           Studio moguls brought in Will Hayes to develop their own
            form of censorship to avoid governmental involvement
 Radio   was launched by Harry P. Davis
    The first thing aired on public radio was the 1920
     election results
    After that KDKA offered regular nightly
     broadcasts heard by a few hundred people
    By 1923 600K radios had been sold and programs
     included music, talks by college professors,
     church services, as well as news and weather
    Radio provided a link to a larger national
     community
    Soon, advertisers began footing the bill for radio
     broadcasting
    Amos ‘n’ Andy was the nation’s first hit show
A new form of journalism emerged called
 tabloids
    Know for scandalous, racy headlines about public
     figures
    Most often bought by poor, uneducated people
    Was criticized for being in bad taste and vulgar
 Advertising   emerged as a profession
    Many techniques were used to persuade
     consumers to buy certain products
 Sports     grew increasingly popular in the 1920s
    Athletes were ideally rich, famous, glamorous,
     and a rebel (Babe Ruth and A-Rod have similar
     traits)
    Ruth is the most well known name in baseball,
     America’s national pastime
        When a reporter commented on Ruth’s $80,000 salary
         being more than Pres. Hoover’s Ruth replied “Well, I
         had a better year than he did.”
    College football also saw a growth in popularity
        Focus on Ivy league teams decreased while schools like
         Notre Dame gained in importance
           became the model of
 Celebrities
 achievement in the new age
     The “new morality” of more liberal behaviors
      began to emerge in common culture
     The flapper is one of the most iconic images of
      new morality, but were flappers new?
         No…they were just new to the middle-class white
          people
         Black ghettos, bohemian enclaves, and working-class
          dance halls had seen these “rebels” long before they
          became mainstream
 Thenew morality promoted sex as a positive,
 health impulse, that if repressed would
 result in psychological issues
         were
 Flappers
 known for:
  Sexual
   experimentation
  Jazz dancers
  Heavy makeup
  Cigarette smoking
  Bobbed hair
  Short/revealing
   skirts
 The1920s ushered in a era of confident
 Republicans controlling the White House:
    Warren Harding
    Calvin Coolidge
    Herbert Hoover
 The  Republicans boosted the government-
  business partnership as the reason for
  economic prosperity
 Harding did little active campaigning during
  his election due to fear of being discovered
    He was somewhat shallow and intellectually
     weak
   Upon taking office, Harding surrounded himself
    with “the Ohio gang” (his friends)
     By 1923, he caught wind of scandals produced by his
      cronies
     He commented, “This is a hell of a job! I have no
      trouble with my enemies…But my damned
      friends…they’re the ones that keep me walking the
      floor nights.”
 Scandal one: Attorney General Harry Daugherty
  took bribes
 Scandal two: Teapot Dome scandal—Interior Sec.
  Albert Fall pocketed money in exchange for
  secretly leasing oil reserves to two private
  investors
       He was the first cabinet member to be imprisoned
   Harding administration wasn’t all bad
     Andrew Mellon, who served as Sec. of the Treasury
      under all three Republicans lead America through its
      prosperous period
     Mellon’s economic plan included tax cuts for the
      wealthy, corporations, and on inheritance
           He also sought to cut spending
           Under his plan, America’s economy grew significantly
   Harding died in office (heart attack, 1923)
     “Silent Cal” Coolidge was different from Harding
     He wanted as little government as possible, he only
      spent 4 hours per day at the office
     Believed people like Mellon were best suited to be
      making the money decisions
     “The business of America, is business.”
 After Coolidge’s second term, Herbert
  Hoover got a crack at the White House
 His ideology is summed up in:
    “Reactionaries and radicals would assume that
     all reform and human advance must come
     through government. They have forgotten that
     progress must come from the steady lift of the
     individual and that the measure of national
     idealism and progress is the quality of idealism in
     the individual.”
 Hoover sought to create an “associative
 state” between the government and
 businesses
 The  Bureau of Standards developed
  standardized engineering and consumer
  goods
 The Commerce Dept. spoke about the
  significance of cooperation between
  government and business
    The Antitrust Division of the Justice Dept.
     relaxed their responsibilities due to the
     partnership
    By the end of the 1920s much of the wealth was
     consolidated/owned by only a few companies
        emerged from WWI as the strongest
 America
 economic power in the world
    By 1929 America had an $8B (yes, billion) surplus
        Clinton had a public deficit of $5,727,776,738,304.64
        The current public deficit is $6,434,552,796,939.87
         (an additional $4T in intergovernmental debt also
         exists now)
 Debtsundertaken by Britain and France from
 the US during WWI would not be reclaimed
    The US brokered a deal to cut the amount of
     debt they owed
    The Europeans viewed Americans as loan sharks
     and insistence on repaying at least some of the
     money fueled anti-American campaigns
 Germany  felt the reparations under the
 Treaty of Versailles was too much and unfair
     Hoover and Charles Dawes created a plan (the
      Dawes Plan) to stretch out Germany’s payments,
      reduced the overall debt, and finance the debt
      through American banks
     This in turn helped Britain and France better pay
      back their debts to the US
        restraint was negotiated in the Five-
 Military
 Power Treaty
     US, Britain, France, Japan, Italy, and China
      agreed to reduce navies and build less ships, etc.
     Italy and Japan bailed leading to the demise of
      the treaty
 Despitenot joining the League of Nations,
 the US played a role in world affairs
    In 1928 the Kellogg-Briand Pact was signed
     denouncing war
    Many peace loving groups celebrated its passing
    Critics claimed it had no power, and therefore
     was essentially meaningless
 The   pact proved meaningless within weeks
    The US Congress approved $250 M for new
     battleships
   Sec. of State Charles Hughes sought to establish
    a Pax Americana meaning have a relationship of
    respect with other nations based on economic,
    not military or political power
     Capitalism would have to play an outstanding role in
      this
     Economic threats against European and Asian
      governments kept them in line with US capitalistic
      prosperity
     In Latin America, military presence was required to
      maintain a level of democracy that would encourage
      “fair trade” with the US
           This intervention is why our relations with Latin American
            countries is still rocky today
 Prohibition
     18th Amendment took effect on Jan. 1, 1920
     It was a “noble experiment”
     The Volstead Act of 1919 was passed to establish
      a federal Prohibition Bureau to enforce it
     Illegal stills and breweries, smuggling, and
      “speakeasies” were common (bribes to overlook
      were often accepted)
     Organized crime grew due to the profitableness
      of illegal alcohol
         Al Capone saw himself as a businessman
     The 21st Amendment passed in 1933