Roaring Twenties - Wikipedia
What was life really like for young people in the '20s, the decade Coco Chanel) , American women shed their corsets and floor-length gowns. As the threat of war grew in the s — with the rise of the Nazis in Germany and American foreign policy was far from isolationist in the '20s. Essentially, the plan allowed Germany to meet its reparations obligations with U.S. money and. The Roaring Twenties refers to the decade of the s in Western society and Western culture. It was a period of economic prosperity with a distinctive cultural edge in the United States and .. During the lates, and especially in the s, the basketball team became known as the best in the world. The first issue of.
In the interwar period its agricultural base, combined with the continuing shift from agriculture to industry, led to a sharp decline in its share.
The regions gaining population were the Southwest and, particularly, the far West. During the s the labor force grew at a more rapid rate than population.
This somewhat more rapid growth came from the declining share of the population less than 14 years old and therefore not in the labor force. In contrast, the labor force participation rates, or fraction of the population aged 14 and over that was in the labor force, declined during the twenties from This was entirely due to a fall in the male labor force participation rate from The primary source of the fall in male labor force participation rates was a rising retirement rate.
Employment rates for males who were 65 or older fell from With the depression of the unemployment rate rose rapidly from 5. The recovery reduced unemployment to an average rate of 4. The unemployment rate rose to 5. Otherwise unemployment remained relatively low. The onset of the Great Depression from the summer of on brought the unemployment rate from 4.
Figure 5 Earnings for laborers varied during the twenties. Table 1 presents average weekly earnings for 25 manufacturing industries. For these industries male skilled and semi-skilled laborers generally commanded a premium of 35 percent over the earnings of unskilled male laborers in the twenties. Unskilled males received on average 35 percent more than females during the twenties. Real average weekly earnings for these 25 manufacturing industries rose somewhat during the s.
For skilled and semi-skilled male workers real average weekly earnings rose 5. Real average weekly earnings for females rose on 1. Real weekly earnings for bituminous and lignite coal miners fell as the coal industry encountered difficult times in the late twenties and the real daily wage rate for farmworkers in the twenties, reflecting the ongoing difficulties in agriculture, fell after the recovery from the depression.
The s were not kind to labor unions even though the First World War had solidified the dominance of the American Federation of Labor among labor unions in the United States. The rapid growth in union membership fostered by federal government policies during the war ended in A committee of AFL craft unions undertook a successful membership drive in the steel industry in that year.
Steel refused to bargain, the committee called a strike, the failure of which was a sharp blow to the unionization drive. Brody, In the same year, the United Mine Workers undertook a large strike and also lost. These two lost strikes and the depression took the impetus out of the union movement and led to severe membership losses that continued through the twenties. The AFL officially opposed any government actions that would have diminished worker attachment to unions by providing competing benefits, such as government sponsored unemployment insurance, minimum wage proposals, maximum hours proposals and social security programs.
But Irving Bernstein concludes that, on the whole, union-management cooperation in the twenties was a failure. Some firms formed company unions to thwart independent unionization and the number of company-controlled unions grew from to between and Until the late thirties the AFL was a voluntary association of independent national craft unions.
Craft unions relied upon the particular skills the workers had acquired their craft to distinguish the workers and provide barriers to the entry of other workers. Most craft unions required a period of apprenticeship before a worker was fully accepted as a journeyman worker. The skills, and often lengthy apprenticeship, constituted the entry barrier that gave the union its bargaining power. The AFL had been created on two principles: Representation in the AFL gave dominance to the national unions, and, as a result, the AFL had little effective power over them.
The craft lines, however, had never been distinct and increasingly became blurred. The AFL was constantly mediating jurisdictional disputes between member national unions. Because the AFL and its individual unions were not set up to appeal to and work for the relatively less skilled industrial workers, union organizing and growth lagged in the twenties.
As agricultural production in Europe declined, the demand for American agricultural exports rose, leading to rising farm product prices and incomes. In response to this, American farmers expanded production by moving onto marginal farmland, such as Wisconsin cutover property on the edge of the woods and hilly terrain in the Ozark and Appalachian regions.
They also increased output by purchasing more machinery, such as tractors, plows, mowers, and threshers. The price of farmland, particularly marginal farmland, rose in response to the increased demand, and the debt of American farmers increased substantially. This expansion of American agriculture continued past the end of the First World War as farm exports to Europe and farm prices initially remained high.
However, agricultural production in Europe recovered much faster than most observers had anticipated. Even before the onset of the short depression infarm exports and farm product prices had begun to fall.
During the depression, farm prices virtually collapsed. From tothe consumer price index fell Figure 7 Farm mortgage foreclosures rose and stayed at historically high levels for the entire decade of the s.
Figure 8 The value of farmland and buildings fell throughout the twenties and, for the first time in American history, the number of cultivated acres actually declined as farmers pulled back from the marginal farmland brought into production during the war. Rather than indicators of a general depression in agriculture in the twenties, these were the results of the financial commitments made by overoptimistic American farmers during and directly after the war.
The foreclosures were generally on second mortgages rather than on first mortgages as they were in the early s. Johnson, ; Alston, A Declining Sector A major difficulty in analyzing the interwar agricultural sector lies in separating the effects of the and depressions from those that arose because agriculture was declining relative to the other sectors.
A relatively very slow growing demand for basic agricultural products and significant increases in the productivity of labor, land, and machinery in agricultural production combined with a much more rapid extensive economic growth in the nonagricultural sectors of the economy required a shift of resources, particularly labor, out of agriculture. Figure 9 The market induces labor to voluntarily move from one sector to another through income differentials, suggesting that even in the absence of the effects of the depressions, farm incomes would have been lower than nonfarm incomes so as to bring about this migration.
The continuous substitution of tractor power for horse and mule power released hay and oats acreage to grow crops for human consumption.
Though cotton and tobacco continued as the primary crops in the south, the relative production of cotton continued to shift to the west as production in Arkansas, Missouri, Oklahoma, Texas, New Mexico, Arizona, and California increased. As quotas reduced immigration and incomes rose, the demand for cereal grains grew slowly—more slowly than the supply—and the demand for fruits, vegetables, and dairy products grew. Refrigeration and faster freight shipments expanded the milk sheds further from metropolitan areas.
Wisconsin and other North Central states began to ship cream and cheeses to the Atlantic Coast. Due to transportation improvements, specialized truck farms and the citrus industry became more important in California and Florida.
Parker, ; Soule, The relative decline of the agricultural sector in this period was closely related to the highly inelastic income elasticity of demand for many farm products, particularly cereal grains, pork, and cotton.
As incomes grew, the demand for these staples grew much more slowly. At the same time, rising land and labor productivity were increasing the supplies of staples, causing real prices to fall. Table 3 presents selected agricultural productivity statistics for these years. Those data indicate that there were greater gains in labor productivity than in land productivity or per acre yields.
Per acre yields in wheat and hay actually decreased between and These productivity increases, which released resources from the agricultural sector, were the result of technological improvements in agriculture.
Technological Improvements In Agricultural Production In many ways the adoption of the tractor in the interwar period symbolizes the technological changes that occurred in the agricultural sector. The adoption of the tractor was land saving by releasing acreage previously used to produce crops for workstock and labor saving. At the same time it increased the risks of farming because farmers were now much more exposed to the marketplace.
They could not produce their own fuel for tractors as they had for the workstock. Rather, this had to be purchased from other suppliers. Repair and replacement parts also had to be purchased, and sometimes the repairs had to be undertaken by specialized mechanics. The purchase of a tractor also commonly required the purchase of new complementary machines; therefore, the decision to purchase a tractor was not an isolated one.
These changes resulted in more and more farmers purchasing and using tractors, but the rate of adoption varied sharply across the United States. Technological innovations in plants and animals also raised productivity. Hybrid seed corn increased yields from an average of 40 bushels per acre to to bushels per acre. New varieties of wheat were developed from the hardy Russian and Turkish wheat varieties which had been imported.
For example, in the Columbia River Basin new varieties raised yields from an average of Shepherd, New hog breeds produced more meat and new methods of swine sanitation sharply increased the survival rate of piglets. An effective serum for hog cholera was developed, and the federal government led the way in the testing and eradication of bovine tuberculosis and brucellosis. Prior to the Second World War, a number of pesticides to control animal disease were developed, including cattle dips and disinfectants.
The cattle tick, which carried Texas Fever, was largely controlled through inspections. The problems that arose in the agricultural sector during the twenties once again led to insistent demands by farmers for government to alleviate their distress. Though there were increasing calls for direct federal government intervention to limit production and raise farm prices, this was not used until Roosevelt took office.
In Congress passed the Capper-Volstead Act to promote agricultural cooperatives and the Fordney-McCumber Tariff to impose high duties on most agricultural imports. The revenues were to come from taxes imposed on farmers. This act committed the federal government to a policy of stabilizing farm prices through several nongovernment institutions but these failed during the depression. Federal intervention in the agricultural sector really came of age during the New Deal era of the s.
Manufacturing Agriculture was not the only sector experiencing difficulties in the twenties. Other industries, such as textiles, boots and shoes, and coal mining, also experienced trying times.
However, at the same time that these industries were declining, other industries, such as electrical appliances, automobiles, and construction, were growing rapidly. The simultaneous existence of growing and declining industries has been common to all eras because economic growth and technological progress never affect all sectors in the same way.
In general, in manufacturing there was a rapid rate of growth of productivity during the twenties. The rise of real wages due to immigration restrictions and the slower growth of the resident population spurred this.
Transportation improvements and communications advances were also responsible. These developments brought about differential growth in the various manufacturing sectors in the United States in the s. Because of the historic pattern of economic development in the United States, the northeast was the first area to really develop a manufacturing base.
By the mid-nineteenth century the East North Central region was creating a manufacturing base and the other regions began to create manufacturing bases in the last half of the nineteenth century resulting in a relative westward and southern shift of manufacturing activity. There was considerable variation in the growth of the industries and shifts in their ranking during the decade. The largest broadly defined industries were, not surprisingly, food and kindred products; textile mill products; those producing and fabricating primary metals; machinery production; and chemicals.
When industries are more narrowly defined, the automobile industry, which ranked third in manufacturing value added inranked first by the mids. Productivity Developments Gavin Wright has argued that one of the underappreciated characteristics of American industrial history has been its reliance on mineral resources.
Wright argues that the growing American strength in industrial exports and industrialization in general relied on an increasing intensity in nonreproducible natural resources. The large American market was knit together as one large market without internal barriers through the development of widespread low-cost transportation. As a result the United States became the dominant industrial force in the world s and s.
Soule, ; Lorant, ; Devine, ; Oshima, Some changes, such as the standardization of parts and processes and the reduction of the number of styles and designs, raised the productivity of both capital and labor. Modern management techniques, first introduced by Frederick W. Taylor, were introduced on a wider scale.
One of the important forces contributing to mass production and increased productivity was the transfer to electric power. Devine, By about 70 percent of manufacturing activity relied on electricity, compared to roughly 30 percent in Steam provided 80 percent of the mechanical drive capacity in manufacturing inbut electricity provided over 50 percent by and 78 percent by An increasing number of factories were buying their power from electric utilities.
In64 percent of the electric motor capacity in manufacturing establishments used electricity generated on the factory site; by57 percent of the electricity used in manufacturing was purchased from independent electric utilities. The shift from coal to oil and natural gas and from raw unprocessed energy in the forms of coal and waterpower to processed energy in the form of internal combustion fuel and electricity increased thermal efficiency.
After the First World War energy consumption relative to GNP fell, there was a sharp increase in the growth rate of output per labor-hour, and the output per unit of capital input once again began rising.
These trends can be seen in the data in Table 3. Labor productivity grew much more rapidly during the s than in the previous or following decade. Capital productivity had declined in the decade previous to the s while it also increased sharply during the twenties and continued to rise in the following decade. Alexander Field has argued that the s were the most technologically progressive decade of the twentieth century basing his argument on the growth of multi-factor productivity as well as the impressive array of technological developments during the thirties.
However, the twenties also saw impressive increases in labor and capital productivity as, particularly, developments in energy and transportation accelerated. Electricity brought about an increased flow of production by allowing new flexibility in the design of buildings and the arrangement of machines.
In this way it maximized throughput. Electricity made possible the use of portable power tools that could be taken anywhere in the factory. Electricity brought about improved illumination, ventilation, and cleanliness in the plants, dramatically improving working conditions. It improved the control of machines since there was no longer belt slippage with overhead line shafts and belt transmission, and there were less limitations on the operating speeds of machines.
Finally, it made plant expansion much easier than when overhead shafts and belts had been relied upon for operating power.
The mechanization of American manufacturing accelerated in the s, and this led to a much more rapid growth of productivity in manufacturing compared to earlier decades and to other sectors at that time.
There were several forces that promoted mechanization. One was the rapidly expanding aggregate demand during the prosperous twenties. Another was the technological developments in new machines and processes, of which electrification played an important part. Finally, Harry Jerome and, later, Harry Oshima both suggest that the price of unskilled labor began to rise as immigration sharply declined with new immigration laws and falling population growth.
Technological changes during this period can be documented for a number of individual industries. In bituminous coal mining, labor productivity rose when mechanical loading devices reduced the labor required from 24 to 50 percent.
The burst of paved road construction in the twenties led to the development of a finishing machine to smooth the surface of cement highways, and this reduced the labor requirement from 40 to 60 percent. Mechanical pavers that spread centrally mixed materials further increased productivity in road construction.
These replaced the roadside dump and wheelbarrow methods of spreading the cement. Jerome reports that the glass in electric light bulbs was made by new machines that cut the number of labor-hours required for their manufacture by nearly half. New machines to produce cigarettes and cigars, for warp-tying in textile production, and for pressing clothes in clothing shops also cut labor-hours.
The U.S. Economy in the s
The Banbury mixer reduced the labor input in the production of automobile tires by half, and output per worker of inner tubes increased about four times with a new production method. For example, the organic chemical industry developed rapidly due to the introduction of the Weizman fermentation process. As Avi Cohen has shown, the continuing advances in these machines were the result of evolutionary changes to the basic machine.
Mechanization in many types of mass-production industries raised the productivity of labor and capital. In the glass industry, automatic feeding and other types of fully automatic production raised the efficiency of the production of glass containers, window glass, and pressed glass.
Though not directly bringing about productivity increases in manufacturing processes, developments in the management of manufacturing firms, particularly the largest ones, also significantly affected their structure and operation.
Until the First World War most industrial firms were centralized, single-division firms even when becoming vertically integrated. When this began to change the management of the large industrial firms had to change accordingly. Because of these changes in the size and structure of the firm during the First World War, E. The firm found that the centralized, divisional structure that had served it so well was not suited to this strategy, and its poor business performance led its executives to develop between and a decentralized, multidivisional structure that boosted it to the first rank among American industrial firms.To Live In The 1920's
General Motors had a somewhat different problem. By it was already decentralized into separate divisions. In fact, there was so much decentralization that those divisions essentially remained separate companies and there was little coordination between the operating divisions.
A financial crisis at the end of ousted W. Durant and brought in the du Ponts and Alfred Sloan. Sloan, who had seen the problems at GM but had been unable to convince Durant to make changes, began reorganizing the management of the company. Over the next several years Sloan and other GM executives developed the general office for a decentralized, multidivisional firm. Though facing related problems at nearly the same time, GM and du Pont developed their decentralized, multidivisional organizations separately.
As other manufacturing firms began to diversify, GM and du Pont became the models for reorganizing the management of the firms. In many industrial firms these reorganizations were not completed until well after the Second World War. Competition, Monopoly, and the Government The rise of big businesses, which accelerated in the postbellum period and particularly during the first great turn-of-the-century merger wave, continued in the interwar period.
Between and the share of manufacturing assets held by the largest corporations rose from Niemi, As a public policy, the concern with monopolies diminished in the s even though firms were growing larger. But the growing size of businesses was one of the convenient scapegoats upon which to blame the Great Depression.
However, the rise of large manufacturing firms in the interwar period is not so easily interpreted as an attempt to monopolize their industries. Some of the growth came about through vertical integration by the more successful manufacturing firms. Livesay and Porter suggested a number of reasons why firms chose to integrate forward. In some cases they had to provide the mass distribution facilities to handle their much larger outputs; especially when the product was a new one.
The complexity of some new products required technical expertise that the existing distribution system could not provide. The producers of automobiles, petroleum, typewriters, sewing machines, and harvesters were typical of those manufacturers that integrated all the way into retailing.
In some cases, increases in industry concentration arose as a natural process of industrial maturation. Of the several thousand companies that had produced cars prior towere still doing so then, but Ford and General Motors were the clear leaders, together producing nearly 70 percent of the cars. During the twenties, several other companies, such as Durant, Willys, and Studebaker, missed their opportunity to become more important producers, and Chrysler, formed in earlybecame the third most important producer by Many went out of business and by only 44 companies were still producing cars.
The Great Depression decimated the industry. Dozens of minor firms went out of business. Ford struggled through by relying on its huge stockpile of cash accumulated prior to the mids, while Chrysler actually grew. Byonly eight companies still produced cars—GM, Ford, and Chrysler had about 85 percent of the market, while Willys, Studebaker, Nash, Hudson, and Packard shared the remainder.
The rising concentration in this industry was not due to attempts to monopolize. As the industry matured, growing economies of scale in factory production and vertical integration, as well as the advantages of a widespread dealer network, led to a dramatic decrease in the number of viable firms.
Chandler, and ; Rae, ; Bernstein, It was a similar story in the tire industry. The increasing concentration and growth of firms was driven by scale economies in production and retailing and by the devastating effects of the depression in the thirties. Although there were firms in5 firms dominated the industry—Goodyear, B. During the twenties, firms left the industry while 66 entered.
The share of the 5 largest firms rose from 50 percent in to 75 percent in During the depressed thirties, there was fierce price competition, and many firms exited the industry. By there were 30 firms, but the average employment per factory was 4. French, and ; Nelson, ; Fricke, The steel industry was already highly concentrated by as U. Steel had around 50 percent of the market. However, the initiation of the National Recovery Administration NRA codes in required the firms to cooperate rather than compete, and Baker argues that this constituted a training period leading firms to cooperate in price and output policies after McCraw and Reinhardt, ; Weiss, ; Adams, Mergers A number of the larger firms grew by merger during this period, and the second great merger wave in American industry occurred during the last half of the s.
Figure 10 shows two series on mergers during the interwar period.
The FTC series included many of the smaller mergers. The series constructed by Carl Eis only includes the larger mergers and ends in Stigler, This merger wave created many larger firms that ranked below the industry leaders.
Much of the activity in occurred in the banking and public utilities industries. Markham, In manufacturing and mining, the effects on industrial structure were less striking. Eis found that while mergers took place in almost all industries, they were concentrated in a smaller number of them, particularly petroleum, primary metals, and food products.
In the s there was relatively little activity by the Justice Department, but after the Great Depression the New Dealers tried to take advantage of big business to make business exempt from the antitrust laws and cartelize industries under government supervision.
Though minor amendments were later enacted, the primary changes after that came in the enforcement of the laws and in swings in judicial decisions. Their two primary areas of application were in the areas of overt behavior, such as horizontal and vertical price-fixing, and in market structure, such as mergers and dominant firms. Horizontal price-fixing involves firms that would normally be competitors getting together to agree on stable and higher prices for their products.
As long as most of the important competitors agree on the new, higher prices, substitution between products is eliminated and the demand becomes much less elastic.
Thus, increasing the price increases the revenues and the profits of the firms who are fixing prices. Vertical price-fixing involves firms setting the prices of intermediate products purchased at different stages of production. It also tends to eliminate substitutes and makes the demand less elastic. Price-fixing continued to be considered illegal throughout the period, but there was no major judicial activity regarding it in the s other than the Trenton Potteries decision in In that decision 20 individuals and 23 corporations were found guilty of conspiring to fix the prices of bathroom bowls.
The evidence in the case suggested that the firms were not very successful at doing so, but the court found that they were guilty nevertheless; their success, or lack thereof, was not held to be a factor in the decision. Scherer and Ross, Though criticized by some, the decision was precedent setting in that it prohibited explicit pricing conspiracies per se.
The Justice Department had achieved success in dismantling Standard Oil and American Tobacco in through decisions that the firms had unreasonably restrained trade. These were essentially the same points used in court decisions against the Powder Trust inthe thread trust inEastman Kodak inthe glucose and cornstarch trust inand the anthracite railroads in The criterion of an unreasonable restraint of trade was used in the and decisions that found the American Can Company and the United Shoe Machinery Company innocent of violating the Sherman Act; it was also clearly enunciated in the U.
This became known as the rule of reason standard in antitrust policy. A series of court decisions in the twenties and thirties further reduced the possibilities of Justice Department actions against mergers. From whale oil to coal oil to kerosene to electricity, the search for better and less costly ways to light our lives, heat our homes, and move our machines has consumed much time and effort. The energy industries responded to those demands and the consumption of energy materials coal, oil, gas, and fuel wood as a percent of GNP rose from about 2 percent in the latter part of the nineteenth century to about 3 percent in the twentieth.
Changes in the energy markets that had begun in the nineteenth century continued. The evolution of energy sources for lighting continued; at the end of the nineteenth century, natural gas and electricity, rather than liquid fuels began to provide more lighting for streets, businesses, and homes. In the twentieth century the continuing shift to electricity and internal combustion fuels increased the efficiency with which the American economy used energy.
These processed forms of energy resulted in a more rapid increase in the productivity of labor and capital in American manufacturing. From tooutput per labor-hour increased at an average annual rate of 1. The productivity of capital had fallen at an average annual rate of 1. As discussed above, the adoption of electricity in American manufacturing initiated a rapid evolution in the organization of plants and rapid increases in productivity in all types of manufacturing.
The change in transportation was even more remarkable. Internal combustion engines running on gasoline or diesel fuel revolutionized transportation. Trucking began eating into the freight carried by the railroads. These developments brought about changes in the energy industries. Coal mining became a declining industry. As Figure 11 shows, in the share of petroleum in the value of coal, gas, and petroleum output exceeded bituminous coal, and it continued to rise.
These changes, especially the declining coal industry, were the source of considerable worry in the twenties. Income in the industry declined, and bankruptcies were frequent. Strikes frequently interrupted production.
Anthracite or hard coal output was much smaller during the twenties. Real coal prices rose from toand bituminous coal prices fell sharply from then to Figure 12 Coal mining employment plummeted during the twenties. Annual earnings, especially in bituminous coal mining, also fell because of dwindling hourly earnings and, from on, a shrinking workweek. Figure 13 The sources of these changes are to be found in the increasing supply due to productivity advances in coal production and in the decreasing demand for coal.
The demand fell as industries began turning from coal to electricity and because of productivity advances in the use of coal to create energy in steel, railroads, and electric utilities. Keller, In the generation of electricity, larger steam plants employing higher temperatures and steam pressures continued to reduce coal consumption per kilowatt hour. Similar reductions were found in the production of coke from coal for iron and steel production and in the use of coal by the steam railroad engines.
Rezneck, All of these factors reduced the demand for coal. Productivity advances in coal mining tended to be labor saving. Mechanical cutting accounted for By the middle of the twenties, the mechanical loading of coal began to be introduced. Between andoutput per labor-hour rose nearly one third in bituminous coal mining and nearly four fifths in anthracite as more mines adopted machine mining and mechanical loading and strip mining expanded.
The increasing supply and falling demand for coal led to the closure of mines that were too costly to operate. A mine could simply cease operations, let the equipment stand idle, and lay off employees. When bankruptcies occurred, the mines generally just turned up under new ownership with lower capital charges.
When demand increased or strikes reduced the supply of coal, idle mines simply resumed production. As a result, the easily expanded supply largely eliminated economic profits. The average daily employment in coal mining dropped by overfrom its peak inbut the sharply falling real wages suggests that the supply of labor did not fall as rapidly as the demand for labor. Soule notes that when employment fell in coal mining, it meant fewer days of work for the same number of men. Social and cultural characteristics tended to tie many to their home region.
The local alternatives were few, and ignorance of alternatives outside the Appalachian rural areas, where most bituminous coal was mined, made it very costly to transfer out.
Petroleum In contrast to the coal industry, the petroleum industry was growing throughout the interwar period. By the thirties, crude petroleum dominated the real value of the production of energy materials. As Figure 14 shows, the production of crude petroleum increased sharply between andwhile real petroleum prices, though highly variable, tended to decline. The growing demand for petroleum was driven by the growth in demand for gasoline as America became a motorized society.
The production of gasoline surpassed kerosene production in The development of oil burners in the twenties began a switch from coal toward fuel oil for home heating, and this further increased the growing demand for petroleum. The growth in the demand for fuel oil and diesel fuel for ship engines also increased petroleum demand. But it was the growth in the demand for gasoline that drove the petroleum market. The decline in real prices in the latter part of the twenties shows that supply was growing even faster than demand.
The discovery of new fields in the early twenties increased the supply of petroleum and led to falling prices as production capacity grew. Charles Lindbergh's solo flight to Paris in seemed to capture the spirit of the age.
The business community was praised for its values and productivity. Henry Ford and his system of cheap mass production of automobiles for people of modest incomes was regarded as symbolic of the new era. Three Republican presidents occupied the White House during the s. Warren Harding, a conservative, was swept into office by a landslide victory in He proved an inept president, and his administration was racked by scandals, including that of Teapot Dome. Calvin Coolidge, who succeeded to the office on Harding's deathworshiped business as much as he detested government.
Herbert Hoover, an engineer, brought to the presidency a deep faith in the essential soundness of capitalism, which to him represented the fullest expression of individualism. In the U. The stock market crash of October initiated a long economic decline that accelerated into a world catastrophe, the Depression of the s.
American Foreign Policy in the 20s
By14 million Americans were unemployed, industrial production was down to one-third of its level, and national income had dropped by more than half. In the presence of deep national despair, Democratic challenger Franklin D. Roosevelt easily defeated Hoover in the presidential election. After his inauguration, the New Deal exploded in a whirlwind of legislation. A new era commenced in American history, one in which a social democratic order similar to that of Western European countries appeared.
The federal government under Roosevelt and the presidency itself experienced a vast expansion in its authority, especially over the economy. Roosevelt had a strong sense of community; he distrusted unchecked individualism and sympathized with suffering people.
He nourished, however, no brooding rancor against the U. He sought to save capitalism, not supplant it. Recovery was Roosevelt's first task. In the First New Deal he attempted to muster a spirit of emergency and rally all interests behind a common effort in which something was provided for everyone. Excessive competition and production were blamed for the collapse.
Therefore, business proprietors and farmers were allowed to cooperate in establishing prices that would provide them with a profitable return and induce an upward turn under the National Recovery Administration and the Agricultural Adjustment Administration.
Byhowever, 10 million were still unemployed, the economy seemed lodged at a new plateau, and the U. Supreme Court was ruling such agencies unconstitutional. The Second New Deal was more antibusiness and proconsumer.
Roosevelt turned to vastly increased relief spending under the Works Progress Administration to pump up consumer buying power. In he had decided to take the nation off the gold standard, except in international trade.