The Prosperity Decade and Era of Wonderful Nonsense

Ends in a Crash

Monkeys, Traitors, Consumers, and The Economics of the

Roaring Twenties – Stock Market Crash1919-1929

My best judgment of America's needs is to steady down, to get squarely on our feet, to make sure of the right path. Let's get out of the fevered delirium of war,. . . . Let us stop to consider that tranquility at home is more precious than peace abroad, and that both

our good fortune and our eminence are dependent on the normal forward stride of all

the American people. ... • Warren G. Harding "Return to Normalcy,"

Boston, MA, May 14, 1920

Return to Normalcy?

Could the nation return to what life was before the United States’ involvement in WWI?

Let’s take a look at the United States in 1919 …

Foreign Policy• “My Fellow Countrymen: the armistice was

signed this morning…. It will now be our fortunate duty to assist by example, by sobering friendly counsel, and by material aid in the establishment of just democracy throughout the world.”

• We would not have our politics distracted and embittered by the dissensions of other lands. We would not have our country’s vigor exhausted, or her moral force abated, by everlasting meddling and muddling in every quarrel which afflicts the world.”

Nothing is too good for you, my boy!

What would you like?

Returning soldiers faced unemployment or took their old jobs away from women and minorities.

A job.

Inflation: Increased Cost of Living

Product 1914 Price 1919 Price

Milk 9 cents per Quart

15 Cents per quart

Steak 27 cents per lb. 42 cents per lb.

Butter 32 cents per lb. 61 cents per lb.

Eggs 34 cents per dozen

62 cents per dozen

Anticipatory SetOften when a person is faced with something they feel threatened by they react with fear or aggression. Think about a time when you felt like you were being attacked mentally or physically and you reacted with fear or aggression. Take a minute write down what happened, how you felt, and how you reacted. Following WWI, the people and government of the United States faced new developments in the world that caused them to react with fear and aggression.

Many Americans respond to the stressful conditions by becoming

fearful of outsiders.

Fear of Communism“The nation went on thinking with a mind of a people at war. They had learned during the preceding nineteen months to strike down the thing they hated; not to argue or hesitate, but to strike. Germany had been struck down, but it seemed that there was another danger on the horizon. Bolshevism was spreading from Russia through Europe; Bolshevism might spread to the United States. They struck at it – or at what they thought was it.”

- Frederick Lewis AllenOnly Yesterday

The Red Scare

• Where does it come from?– 1919 revolutionaries led by Vladimir Lenin

overthrew the monarchical czar government– Established a communist state– Waved a symbolic red flag – a.k.a. “Reds”– Cried out for worldwide revolution that would

abolish capitalism everywhere

The Red Scare

• Where did it show up here?– Communist Party forms– Some members of the Industrial Workers of

the World (IWW) Union joined the Communist Party

The Red Scare• A Series of bombs

being sent to government and business leaders increased fears of the spread of communism.

• Attorney General A. Mitchell Palmer’s residence was bombed

Palmer Raids• Attorney General Palmer appointed J.

Edgar Hoover as special assistant• Hunted down suspected Communists,

socialists, anarchists

Palmer Raids trampled people’s civil rights

Fear of Outsiders• Nativism – Favoring the interests of native-

born people over foreign-born people– Need for unskilled labor decreased– 1919-1921 immigration increased from

141,000 to 805,000 (600%)

Limiting Immigration• Quota System – maximum number of people

who could enter the US from each country– Limited immigration to 2% of a country’s nationals

living in the US in 1890.• Discriminated against Eastern and Southern European

countries• Prohibited Japanese immigration

Return of the Klan• “100 percent Americanism”• Discriminated against blacks, Jews, Roman-

Catholics, immigrants, Communists, unions, saloons

• 4.5 Million members

Fear of Labor• During WWI the

government did not allow strikes and unions promised to adhere to this policy in support of our nation at war.

• Following WWI –– Management wanted a

return to laissez-faire– Workers pressed for

higher wages, etc.

“Plots to Establish Communism” or

Fighting for Your Rights• Boston Police Strike

– Demanded higher wages– Leaders fired; Officers

strike– Governor Calvin Coolidge

brings in National Guard to end strike

– Striking police replaced

• U.S. Steel Mill Strike– Demanded higher wages

and shorter work hours– Managements refused to

negotiate– 300,000 workers on strike– Management used

propaganda to paint strikers as Communists

– Public report displayed poor conditions – workers got 8-hour work day, but no Union

• Coal Miner’s Strike– Led by John L.

Lewis demanding better wages and shorter workdays

– Disobeyed court order to stop strike

– President Wilson appointed an arbitrator

– Coal Miners received wage increase

Labor Loses Appeal

• Much of the workforce were immigrants willing to work in poor conditions

• Immigrants spoke many different languages making it difficult to organize

• Migrating farmers used to hard work• Most unions excluded African Americans• Connected publicly to Communists

Sacco & Vanzetti• Italian immigrants and anarchists tried for

the robbery and murder of a factory paymaster in South Braintree (Boston)

Boston

• Why did Attorney General A. Mitchell Palmer launch a series of raids against suspected Communists?

• He believed Communists wanted to overthrow the government and ruin our economy. He also may have hoped to ride the wave of public support all the way to the White House.

• Communism – Economic and Political system based on a single-party led by a dictatorship

• Bolshevism – Majority, Worker – Name attributed to the communist revolution in that it was a “worker’s revolution.”

• Arbitrator - a person chosen to decide a dispute or settle differences

• Anarchist – one who believes in no established government