History > Key Stage 4 > Course Notes and Revision Lists

The USA, 1919 – 1941

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• The Roaring Twenties
• Bootleggers and Immigrants
• The Wall St Crash
• The Great Depression
• The New Deal
• New Deal – success or failure?

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The Roaring Twenties

At this time the USA was the richest country in the world. National Income (total earnings of citizens) was the highest in the world. It was rich because of its natural resources – vast areas of fertile lands, coal, iron ore and oil. The USA did not have to rely on imports – instead it made vast amounts of money on exports.

The boom in consumer goods – cars, freezers, radios, electric cleaners – poured off mass – production lines. Between 1919 – 1929 factories doubled their profits. Henry Ford produced cars – his famous Model T – that 'ordinary' Americans could afford.

As more Americans bought goods, profits increased and so did wages. People did not pay in cash, but by HP instalments.

Calvin Coolidge (President from 1923 – 28) said "The man who builds a factory builds a temple – the man who works there, worships there."

Herbert Hoover said in 1928: "We shall soon be in sight of the day when poverty will be banished from the nation."

Government and Industry

There were strong links between business and the controlling party (the Republicans). Tariffs (taxes) were put on imports encouraging people to buy American because it would create jobs/high wages.

Poor Americans

Not everyone saw the good side of life. Much use was made of immigrant labour, especially in the north. They worked in steel mills, sweatshops and slaughter – houses for long hours and low wages. The same could be said about many black and some white farmers in the southern states. A survey in 1929 showed that half of the population had barely enough money to buy sufficient food and clothing. This situation was caused by low wages.

Farmers

Share – croppers were farmers who rented their land. Normally they did not pay rent in cash, but instead gave part of what they grew – a share of the crop.

Farmers had problems – the population was no longer increasing; cars ran on petrol unlike horses which needed hay and corn (and farmers to grow these crops). Also there was great competition in prices. Too much food was being grown and many farmers were going out of business.

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Bootleggers and Immigrants

In 1919 voters amended the US Constitution (the set of rules by which the USA is governed). The 18th Amendment said that now, nobody could sell or make alcoholic drinks. The Volstead Act was passed to make sure that people obeyed this amendment. The new system was known as Prohibition. 'Dries' – people who were in favour of prohibition – said it would make the USA a healthier, happier country.

Speakeasies and Bootleggers

Many people overcame the problem of prohibition – either they brewed their own, or they became customers of illegal drinking places called 'Speakeasies.' Speakeasies spread like wildfire – there were more speakeasies than there had been saloons previously. The people who supplied the drinks were called Bootleggers. Wars erupted in places like Chicago or New York between rival bootleggers. Al Capone epitomised the gangsters who used their wealth to bribe officials/the police. The 18th Amendment was eventually repealed in 1935.

Immigrants

Between 1900 – 1915, over 13,000,000 people moved from countries in Europe to the USA. Normally they were unskilled and unable to speak English. They worked long hours for low wages.

To offset the numbers coming into the country Quota Laws were introduced in 1924. The new quota was 150,000 immigrants a year.

Ku Klux Klan

A racist organisation had been set up during the American Civil War (1860 – 65) and its members were mainly WASPS (White Anglo – Saxon Protestants). Any person who had a different language/culture/religion was a target. Being un – American was their excuse for violence against Blacks, Jews and Catholics.

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The Wall Street Crash

Wall Street is the home of the New York Stock Exchange, where 'shares' of businesses are bought and sold. The value of a company goes up or down depending on its profitability.

Herbert Hoover

Herbert Hoover became president in 1929. He was a strong supporter of American businessmen and claimed that prosperity would continue. Poverty would become a thing of the past. Soon there would be "a chicken in every pot and two cars in every garage."

Sales of all goods were rising. Profits were rising. People bought and sold shares as a means of making money. In 1923 236,000,000 shares changed hands – by 1928 it had grown to 1,125,000,000. Like goods, you could by shares on credit.

By 1929 profits seemed to be falling – share prices would follow. People began to sell their shares, slowly making share prices fall.

The Wall Street Crash, 1929

24th October 1929 became known as Black Thursday – 13,000,000 shares were sold. On the following Tuesday 16,500,000 shares were sold. By the end of the year, $40,000,000,000 of shares had dropped off in value. Thousands who had invested their life savings in shares were ruined. By 1933 over 100,000 companies had closed. Industrial production had fallen by half – 15,000,000 workers (25% of the work force) had lost their jobs.

Reasons

Some blamed politicians, others blamed investors. Quite simply, not enough people were buying American products: there were problems with overproduction and saturated markets.

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The Great Depression

A depression comes about in this sequence:

• Share prices fall
• Panic
• Less trade
• Less money for banks
• Factories close
• Unemployment
• Less spending power
• More factories close
• More unemployment
• Depression

Unemployment

American sales dried up and goods piled up in warehouses. Unemployment brought hardship: no benefits were paid under the USA system. Soup kitchens/breadlines were formed by charity organisations.

Farmers

Farmers had been feeling the pinch in the good times – now they were desperate. They could not sell their food. Many had their land taken away from them: others protested – sometimes violently. "In Hoover we trusted, now we are busted."

Bonus Army

A group of out – of – work ex – servicemen demanded bonus payments which they claimed the Government owed them. They set up temporary camps outside Washington. The President ordered them to be moved: soldiers and police cleared them away. America was in a mess.

Franklin D. Roosevelt

The Governor of New York and a Democrat, Roosevelt was chosen to stand for President in 1932. He went on a whistle – stop tour of the USA explaining to the people that he understood their problems and, given the opportunity, would help them. He promised Americans a New Deal – that the Government would help people by providing help in financial ways. Hoover said this was un – American.

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The New Deal: Putting People to Work

Immediately after his inauguration, Roosevelt set about putting people to work. One of his ideas was the Civilian Conservation Corps (CCC) – young people were put to work doing community service type tasks. Payment was a dollar a day.

Alphabet Agencies

Other organisations, known as 'Alphabet Agencies' (because of their names were shortened to their initial letters) were set up:

• WPA Works Progress Administration. Built schools and roads. Even used unemployed writers as guides for tourists.
• PWA Public Works Administration. In charge of heavy construction work. 8,000,000 jobs were found.
  The money paid by these agencies meant that people now had cash to spend in shops. Demand increased as did job prospects.

Trade Unions

Many workers did not like the old way of being told what they were worth. Roosevelt made unions legal, but many employers saw them as un – American. This caused real conflict.

Social Security Act 1935

In case a similar depression hit the USA again, Roosevelt set up the first social security system – pensions for the disabled, national insurance.
Of course these had to be paid for by higher taxation. Some felt this to be un – American.

Fair Labor Standards Act 1938

Maximum hours of work/minimum wages were set for many jobs. This law meant pay rises/shorter hours of work for many. Again, industrialists said this cost money and was un – American.

The New Deal: Farmers

AAA The Agricultural Adjustment Agency. The Government asked farmers to grow less, but compensated them for doing so. Many people could no understand this – Americans needed food. But the plan worked at first.

Dust Bowl An area in the south where drought was a persistent problem. Many tenant farmers were thrown off the land and thousands ended up leaving places like Oklahoma and heading for California. This caused conflict as Californians were afraid of these hungry and ragged strangers.

TVA The Tennessee Valley is an area which, once rich, by 1930 had been exhausted. Roosevelt set up the Tennessee Valley Authority to stop floods, make electricity and make the land fertile again. Dams were built: hydro – electric plants were set up and farmers were taught how to make the land rich again.

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New Deal: Success or Failure?

Opposition said it was Un – Americand that there should be no government interference (the strongest survive). It costs a great deal in taxation. The Supreme Court ruled that significant sections of the National Industrial Recovery Act (NIRA) were unconstitutional. Many people in positions of power opposed Roosevelt, but the voters loved him. In 1936 he was re – elected with the largest majority ever in USA history.

The New Deal's Importance

Changed image of USA. Government did not interfere in life before the Depression. Now it became an important means of showing that everyone had a right to a decent standard of living. Set a precedent for future government intervention.

Pages created by J Reeve, 2006.