HISTORY 1DD3 Chapter Notes - Chapter 23: The American Mercury, American Civil Liberties Union, Organized Crime
22 Jun 2018
School
Department
Course
Professor
Chp 23 Identifications
Booming Businesses of the 1920s
● Background Info: A sharp recession struck in 1920, but recovery came in 1922, and
over the next few years, the economy grew rapidly.
● New consumer goods contributed to the prosperity. By the mid 1920s, more than
60% of the nation’s homes had electricity, and home electrical products including
refrigerators, washing machines, and vacuum cleaners flooded stores.
● The boom also rested on automobiles. The number of automobiles swelled from 8m
in 1920 to 23m in 1930. Again, about 60% of US families owned a car.
● By 1930, automobile industry accounted for 9% of all wages in manufacturing. It
also stimulated related industries (rubber, gasoline, advertising, highways).
● During this time, unemployment fell as low as 3% and the GNP grew by 43%!
● Wall Street’s stock prices reflected this prosperity by surging ever higher. On the
other hand, this created conditions for a catastrophic collapse.
● Workers’ overall wages rose, but discriminatory patterns were clearly evident.
Northerners were paid more than Southerners. Women, blacks, and immigrants
were paid the bare minimum. Many blacks who moved north found difficult
circumstances and usually had to settle for “last hired and first fired” menial
positions.
Fordney-McCumber Tariff (1922) and Smoot-Hawley Tariff (1930)
● Background Info: The business boom also stimulated capitalist expansion abroad,
and several companies acquired and set up up foreign factories or sources. Loans
also flowed out to a recovering Europe, especially Germany.
● Although investments abroad increased nearly fivefold between 1914 and 1930, the
era of a truly global economy lay further in the future.
● The two tariffs pushed US import duties to an all-time high, benefiting domestic
manufacturers at the cost of foreign trade.
● Farmers suffered from high tariffs. Coupled with plummeting grain prices due to EU
recovery, farm income fell by some 60% and did not bounce back in 1922.
● Farmers tried to increase production, only to find that surpluses dwindled prices even
more. Farmers who borrowed heavily during the war faced difficult circumstances.
Henry Ford and Fordism
● New assembly techniques boosted the output of industrial workers greatly. At the
same time, workers were relegated to doing simple and repetitive tasks.
● Managers discouraged expressions of individuality, including talking and laughter.
● The assembly-line did not give much chance of advancement. But the new system
had revolutionary impact, and Fordism became a word of industrial might and
assembly-line methods around the world.
Business consolidation as US capitalism matures
● Business consolidation continued after the war. By late 1920s, over a 1000
companies disappeared per year due to mergers. By 1930, 100 corporations
controlled 50% of the nation’s businesses. These companies after collaborated and
dealt with pricing items and dividing markets.
● Corporations began expanding management too. They set up separate divisions for
product development, market research, economic forecasting, and employee
relations.
● Employers also began to reject that paying workers the least was best. Led by Ford,
entrepreneurs concluded higher wages would improve productivity and increase
consumer buying power. New systems for distributing goods emerged as well.
find more resources at oneclass.com
find more resources at oneclass.com
● The business boom relied heavily on a sea of advertising. Advertisers used
celebrities, promises of success, and threats of embarrassment to put forth their
products.
● Americans also bought major purchases on credit as retailers offered installment
plans at fixed rates and payment schedules.
● President Harding and Coolidge praised American business and associated with them.
Management hostility, the open shop, and the "American Plan"
● Background Info: As wages climbed, Union members fell from 5m to 3.4m in 1920s.
● Management hostility further weakened organized labor. Thugs were hired to
intimidate and shoot striking workers.
● Companies also began providing cafeterias, facilities, and “open shops” for workers.
This new system was dubbed the “American Plan.” Some praised the system as
“welfare capitalism,” but the system was actually designed to kill off unions.
● By 1929, black membership stood low at 82k as many were barred from AFL unions
(although they officially prohibited racial discrimination). Black strikebreakers were
also hired by management. Denounced as “scabs,” blacks only took such work if
their situation forced them to: “I got the live, and I’ll scab through hell to live.”
● Women were hit hard and the proportion of women workers in unions fell to 3%.
Women in the 1920s
● In the decade’s advertising, women smiled behind steering wheels, operated new
appliances, and smoked cigarettes in romantic settings.
● Although assembly-line work was less demanding, males dominated, and the
proportion of working females hardly changed. (24%)
● Women workers also faced wage discrimination.
● Most working women found work in corporate offices as typists or secretaries, but
were clearly segregated from male managers.
● Number of women physicians declined as medical schools placed a 5% quota on
female admissions, but the proportion of female HS graduates going to college edged
upwards. Many college women combined marriage and career.
President XXIX: Warren G. Harding
● Background Info: With TR’s progressives bolting in 1912, the conservative
Republican party nominated Harding in 1920 and beat Cox. (see Chp 22; Election of
1820)
● Harding’s blandness and empty oratory had a soothing appeal after stresses of war
and Wilson’s moral principles.
● Harding made some prominent cabinet selections. On the other hand, he made
some disastrous ones too, and confessed that he has “no trouble with enemies” but
his “goddamn friends” keep him “walking the floor” each night.
● In July 1923, Harding suffered a heart attack and he died on Aug 2nd. In 1924, a
Senate investigation revealed the full scope of scandals in the Harding
administration.
● In one case, Interior Secretary Albert Fall went to jail for leasing govt. oil reserves,
one in Teapot Dome, WY, in return for a $400k bribe. “Teapot Dome” became a
shorthand label for a tangle of presidential scandals during Harding’s administration.
● (also see section titled “Washington Naval Arms Conference”)
President XXX: Calvin Coolidge
● With Harding’s death, VP Calvin Coolidge took office. Unlike Harding, Coolidge was
reserved, and his taciturnity became legendary. People believed in his honesty.
find more resources at oneclass.com
find more resources at oneclass.com
● The moral tone of the White House improved under Coolidge, but the pro-business
climate continued (eg: high tariffs).
● Urged by Treasury Secretary Andrew Mellon, Congress lowered income taxes and
inheritance taxes for the wealthy. (today called the “trickle down” theory)
● The Supreme Court also reinforced the pro-business spirit. Chief Justice William
Howard Taft, appointed by Harding in 1921, overturned several reform measures
opposed by businesses, including a 1919 anti-child-labor law.
● Coolidge, while eager for businesses, opposed govt. assistance for other groups.
● Despite a huge flood in 1927, Coolidge rejected calls for govt. aid to thousands of
flood victims. Coolidge, however, did reluctantly sign the Flood Control Act (1928)
which gave funds for a 10 year program to construct levees along the Mississippi.
● (continued below)
McNary-Haugen Bill (1928)
● Further evidence of Coolidge’s pro-business stance came when hard-pressed
farmers’ call for the McNary-Haugen bill was vetoed twice by Coolidge.
● The bill called for a price-support plan under which the govt. would purchase surplus
at a reasonably high price and sell these surpluses abroad.
● Coolidge claimed that measure only helped farmers at the general public’s expense,
although businesses benefited from his tariffs and other special measures.
● These vetoes led many angry farmers to vote Democratic in 1928.
Independent Int’lism and Washington Naval Arms Conference (1921/22)
● Background Info: Despite refusing to join the League of Nations and having an
isolationist tendency, the US remained a world power.
● In the 1920s, US pursued global policies that they believed to be in America’s
national interest. Historians have given this policy the name independent
internationalism.
● President Harding’s most notable achievement was the Washington Naval Arms
Conference. In 1921, Harding called this conference as the US, GB, and Japan
edged toward a dangerous and costly naval-arms race.
● Secretary of State Hughes startled delegates by proposing a fixed ratio of ships
among the world powers.
● In Feb 1922, the three nations and France and Italy pledged to reduce their tonnage
by specified amounts and to halt all battleship constriction for ten years. The US and
Japan also agreed to respect each other’s territorial holdings in the Pacific.
● Although the treaty ultimately failed in preventing a war, it represented early effort
to control arms.
Kellogg-Briand Pact (1928) and Mexico
● The US, France, and 60 other nations signed the Kellogg-Briand Pact, renouncing
aggression and calling for the outlawing of war. However, the pact lacked any
enforcement mechanism and did nothing to prevent WW2.
● With US investments expanding, the govt. worked to advance American business
interests abroad. When Mexico tried to reclaim title to oilfields earlier granted to US
companies, Coolidge appointed Morrow to negotiate the issue.
● The Mexican president was assassinated in 1928 and Mexico recognized USSR in
1924. US-Mexican relations were clouded, with fears that Mexico might go
communist.
Election of 1824
● The reform spirit survived feebly in the legislative branch with the formation of the
Conference for Progressive Political Action (CPPA) by labor and farm groups.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Background info: a sharp recession struck in 1920, but recovery came in 1922, and over the next few years, the economy grew rapidly. New consumer goods contributed to the prosperity. 60% of the nation"s homes had electricity, and home electrical products including refrigerators, washing machines, and vacuum cleaners flooded stores. The number of automobiles swelled from 8m in 1920 to 23m in 1930. Again, about 60% of us families owned a car. By 1930, automobile industry accounted for 9% of all wages in manufacturing. It also stimulated related industries (rubber, gasoline, advertising, highways). During this time, unemployment fell as low as 3% and the gnp grew by 43%! Wall street"s stock prices reflected this prosperity by surging ever higher. On the other hand, this created conditions for a catastrophic collapse. Workers" overall wages rose, but discriminatory patterns were clearly evident. Women, blacks, and immigrants were paid the bare minimum.
