Demobilization leads to economic turmoil

Unit: The 1920s

Essential Question: To what extent do the 1920s illustrate growing dichotomy in American society?

Focus: Demobilization

Demobilization leads to economic turmoil

• Demobilization- the return to a peacetime economy• Government agencies let go of their controls on Industry

– Businesses raised prices they had been forced to keep low during the war

-demand for consumer goods outsripped supply leading to the ________ in prices. (cost of living doubled)

• Effects: Rapid inflation- the lowering of the value of money.– If prices for the cost of living go up your money buys

you less. • During the war, industries were forced to raise wages (concessions

given to workers) inflation caused workers to lose their economic gains.

• Inflation caused operating costs for companies to rise- employers wanted to keep wages low.

Demobilization leads to economic turmoil Cont.

• Post War Recession• Government cancelled about $2 billion in war

contracts. (heavy industry)• Factories responded by cutting back production

and laying off workers. • Farm Crisis- American farmers were expanding

to produce food for European markets during the war – When Europe began producing their own food demand dropped- Farmers lost land.

Economic Turmoil leads to Racial Tensions

• The Great Migration- 300,000-500,000 African Americans move to North during war to fill jobs.

• Post war- job Competition/economic turmoil led to race riots – 1919 race riots broke out in

over 20 Northern cities.– Chicago- black boy swam

onto beach restricted to whites, Whites allegedly stoned boy-he drowned.

Violence spread to South– 1921- Tulsa Riot– 1923- Rosewood

Nativism Rises as a Result of Post WWI Anxiety

• Nativism- desire to protect “Old Stock” Americans from immigrants and those that possess other differences

• Causes– Inflation and economic Recession which resulted from

Demobilization of WWI. – Racial/ Ethnic tensions grow as white boys began competing

for Jobs filled by minorities and immigrants during the war. – Russian Revolution led to fear of Communists (Red Scare)– Economic turmoil leads to worker strikes- strikes seen as

“communist”– Immigration -By 1921 Immigration levels had risen to pre-war levels but

most came from Eastern and Southern Europe instead of Western Europe Many brought different ideas, cultural norms with them.

Inflation leads to Strikes• Labor strikes seen as “communist”• Seattle General Strike (1919) – all workers not just

workers from one industry.• The Steel Strike – 350,000 steelworkers, higher pay,

shorter hours and union recognition.– Company broke up strike by using anti-immigrant

feelings to divide workers.• The Boston Police Strike (1919) – 75% of the Boston

police force went on strike. All the men were fired.– Calvin Coolidge MA governor “There is no right to

strike against the public safety by anybody, anywhere, anytime.”

Strikes Lead to the Red Scare 1919-1920

• Russian Revolution leads to fear of communism (1919- creation of Communist International)

• Worker strikes added to fear of possible communist plot. (…anarchism and socialism).

• 30 bombs were intercepted by US post office, addressed to prominent business leaders and politicians.

• June-1919 eight bombs exploded in 8 cities simultaneously – seeming to confirm fears of a attempted takeover-blamed on communists and other radicals. (one destroyed part of Attorney General Mitchell Palmer’s House)

The Palmer Raids• Palmer established the General Intelligence Division

(predecessor to FBI)• Palmer organized raids of various radical

organizations, particularly Communist• Focused on foreign residents and immigrants• Agency often disregarded the civil liberties of

suspects. • Suspects were mistreated held for indefinite periods

of time• Detained and deported suspects from the country. • Raids failed to turn up evidence of revolutionary

conspiracy.

Nativism and the Legal System-The Sacco-Vanzetti Case

• 2 men shot and killed two employees of a shoe store in Braintree Ma, Robbing it of $15,000.

• Sacco and Vanzetti two Italian immigrants were arrested, charged, and tried for the crime.

• Men were anarchists (someone who opposes all forms of government)

• Sacco owned a gun similar to the one used in the crime- bullets matched.

• No conclusive proof to their committing of the crime.

• Both were found guilty and sentenced to death

The Re-emergence of the Ku Klux Klan

• Original KKK response to emancipation of the slaves

• Re-emergence included hatred towards Catholics, Jews, and Immigrants.

• Public Relations campaign claiming that the Klan was fighting for “Americanism” solicited 4 million members nationwide

–See Political cartoon

Nativism and Public Policy• Immigrants Seen as a threat to cultural order• Threat to soldiers of WWI who needed jobs in the

post-war weak economy.• Emergency Quota act (1921) – created a quota

system limiting immigration.– Only 3% of the total population of an ethnic

group that was living in the US as recorded in the 1910 US census could be admitted into the US per year.

• Result is that it discriminated heavily against Immigrants from eastern and southern Europe.

Political Cartoons – On Immigration

"Come unto Me, Ye Opprest!"Literary Digest, 7/5/19.Originally from the Memphis Commercial Appeal.

Coming Ashore.Literary Digest, 7/12/19.Originally from the Brooklyn Eagle.

Close the Gate.Literary Digest, 7/5/19.Originally from the Chicago Tribune.

The Gauntlet Flung Down.Outlook, 5/21/19. Originally from the Brooklyn Eagle.

The Patriotic American.Literary Digest, 6/28/19. Originally from the Chicago Tribune.

"Say - Do I look Sick?"Literary Digest, 7/5/19.Originally from the Farm Life, Spencer, Ind..

Ghosts of WarLiterary Digest, 7/12/19.Originally from the Brooklyn Eagle

Immigration Restriction • The National Origins Act (1924)- made immigrant

restriction a permanent policy.• Set quotas at 2% of people living in the US of a

particular nationality as recorded in the 1890 census.

• Result: scaled back where immigrants could come from- favoring Northern Europe

• Second part of the act that took effect in 1929 limited immigration to 150,000 people a year.

• Exempted people from the Western Hemisphere• Huge influx of Mexicans to fill need of cheap

labor in agriculture, mining, railroads

The Economics of the 1920’s- Creating a Boom

• Republicans controlled the Whitehouse from 1920-1932

• Both Harding and Coolidge believed in laissez-faire

• “The business of America is business”

The Roaring 20’s beginCauses of Boom

• Supply-side economics• New Business Techniques (assembly lines, mass

production, advertising, credit) • Rise of New Industries (automobile, radio, motion

picture, advertising, other consumer goods)• New attitude

Economic Philosophy of the 20’sto promote economic growth

• Supply-side economics a.k.a Trickle Down economics

• Laizzez faire approach

The Roaring 20’s Begin

• Between 1923 and 1929 earnings increased 22 % while work hours decreased

– What made this Possible?• Expansion of Mass Production and Assembly

Line system into most industries. • Effect – more products at a lower cost

Ford Motors

• Model T 1908- $850 1914- $490 (mass production) 1924- $295 (improved assembly

line techniques)Question: What other industry’s began because of the

automobile?

New Technologies lead to New Industries

• Airline• Beginning planes during WWI• 1918- government created first airmail service• 1925 – Kelly Act –postal officials were allowed to

contract with private airplane providers to carry mail nationwide

• 1926- Air Commerce Act – provided federal aid for building airports

• 1927- Charles Lindberg 1st solo flight across the Atlantic – won popular support for commercial flights

• 1928- 48 airlines serving 355 American cities.

The Radio Industry• 1913 – Edwin Armstrong Invented Radio• 1926 – National Broadcasting Company (NBC)

created.• 1927 – NBC has 700 stations nationwide• 1928 – Colombia Broadcasting System (CBS) created

a coast to coast network • Both sold advertising time and hired popular

musicians, actors and comedians to appear on their shows

• 1928 – sold $1 million of advertising time to Republicans and Democrats.

The Consumer Society Emerges• New industries led to more employment

opportunities and higher wages (8%)• Higher Wages and shorter workdays (more

leisure time) resulted in a decade long buying spree

• Shift in attitude – people went from being “thrifty” to wanting to consume goods.– Let go of the “Protestant Ethic”

• Installment plans – buying things now and paying for them over time – People bought cars, radios, phones,

washing machines with the use of credit

New Industries lead to the Rise of Mass Advertising

• Mass advertising emerged to respond to the “need” to create “needs” for new inventions.

• Consequently has become one of the largest industries in US.

• Advertisers created appealing, persuasive messages that linked their clients’ products with qualities associated with the modern era. i.e. progress, convenience, leisure, success– Comparing Ads

How Stable is this economy?

• In 1929 Henry Ford recorded a personal income of $14 Million dollars While the average personal income was $750

• Disposable income did grow during the decade 9% for most while the top 1% gained a 75% increase in the disposable income

• Overall increase in production-Worker productivity increased 32% while wages increased only 8% Where does the excess go?