World War I

The

Politics

Of

Prosperity

And the

‘Roaring Twenties

World War I“Some Damned thing in the Balkans will ignite the

next European war.” Otto von Bismarck, 1888.

June 28th Sarajevo, Bosnia and Serbian politico-a member of the ‘Black hand’ Gavrilo Princip gunned down the presumptive heir to the throne of Austria-Hungary and his wife Sophia—after a month of inept diplomacy, the battle lines were drawn and the alliances fell into motion—By August 1 the guns began to roar in Europe.

4yrs and 15 million lives later, peace once again fell over Europe—though tenuous at best.

Wilson’s Reaction• Immediately declared neutrality; thought this

might be an opportunity for the American System of Morality and Christian values remake the world order.

• America’s economic ties and heritage unfortunately tied it to all sides of the combatants;

• Insisted on the right of neutrals to trade with all sides of the warring powers—help America’s sagging economy.

Wilson’s Reaction• Unrestricted submarine

warfare, the sinking of the Laconia and the Lusitania made it abundantly clear neutrality would be difficult;

• 1916 election he ran on the neutrality ticket “He kept us out of war.”

• Zimmerman Telegram and other issues dragged us into war.

Wilson’s Reaction• By 1917, after all the

neutral shipping sunk and lives lost; unrestricted warfare on American shipping;

• The Zimmerman telegram, no choice but to ask for a declaration of war;

• Some disagreed, Jeannette Rankin dissented as did some others.

America Goes to War• No longer just arsenal for Democracy—we now

fought to make democracy safe for the world—to end all wars …

• Jumped into a war footing and business and the economy boomed—women and African-Americans prospered because of the boom.

• One reason for the Great Migrations of African-Americans and Latinos—looking for work.

America Goes to War—Versailles Treaty

• Selective Service Act• Race issues, The Houston Riot

—lashing out against mistreatment—African-American veterans fought back and killed 17 whites— discharged, tried and many were hanged;

• 100% Americanism—distrusted anyone not considered loyal to America;

• Schenck vs. U.S. upheld the Espionage Act—illegal to use the mail for anti-war pamphlets.

Pandemic Flu-Spanish Influenza 1918• Began with American

Soldiers at Fort Riley—transported to Europe—by the time it ends 50 million people are dead—more than in the war;

• Everyone somewhere is touched by the Pandemic;

• Strange it attacks the 15 to 40 yr olds, lungs fill up with blood, swell and they drown--terrible

Politics of Prosperity• WWI did not make the

world safe for Democracy—did lay the foundation to American global economic dominance;

• Culture of consumerism, better working conditions, better wages, insurance, personal investments, consumer credit;

Exploding middle class

Politics of Prosperity• What role did technology play in shaping the economy of

the 1920s? The culture of the 1920s?

• Compare the relationship between big business and government during the 1920s to that of the ‘Gilded Age.’

• How did the automobile affect American society? The economy?

• If Ronald Reagan, Herbert Hoover, and Andrew Mellon were in a bar, a sign stated, “sorry, our drinks don’t trickle down” who would be the first to leave?

Politics of Prosperity• This “New Era” was marked by prosperity and

opportunity;

• The transition from War economy to peace economy caused economic dislocation for many, loss of income for farmers, stricter Race relations and the re-emergence of “Nativism” against foreign immigrants;

• Still, many reveled in the new culture of consumerism.

Politics of Prosperity

• 1920s elected three republican Presidents—each promised to promote normalcy and prosperity.

• Warren G. Harding—platform coined “Return to Normalcy.” Very conservative—but administration ridden with corruption and scandal. Died of a stroke in 1923.

• Calvin Coolidge assumed the executive; quickly to repair the scandal ridden administration—a honest man. Elected outright in 1924.

Politics of Prosperity• Coolidge was basically okay executive; distrusted

the media—so he said very little—”Silent Cal.”

• One term President—preferred to fish and be with family—he did cut taxes, kept tariffs rather high(helped industry, hurt farmers). Very popular for some oddity of reason.

• Herbert Hoover, very qualified for the office. Sec of Commerce, successful relief program for Europe after WWI—economy busted after he began his duties.

Business Boom, 1920s• Technology and Consumer spending:

– As industrial economy matured, more consumer goods became available

– Improved productivity helped keep prices down– How did it accimplish this?

Economy experienced steady growth and expansion—three factors fueled this success:

1) Machines

2) Factories

3) The process of standardized Mass production

Business Boom, 1920s• These three factors create

a self-perpetuating cycle:• Standardized mass

production led to,• Better factory machinery,• Higher production, higher

wages,• Increased consumer

product and more demand for consumer product.

• Led to more standardized mass production

Upward Spiral• There are five main sources of the economic

boom:• 1)Effect of WWI on technology.

• 2) Scientific Management: “Taylorism”

• 3) Rapid increase in worker productivity.

• 4)Psychology of consumption• 5) Relations between Government and Big

Business.

Psychology of Consumption• Thorstein Veblen

suggested Americans wanted to get rich with little effort—Theory of the Leisure Class—

• Coined the term “Conspicuous consumption” it was a cultural mindset.

• Radio, Motion Pictures, Electric appliances, and the Automobile.

Automobile• All of these things created

leisure time and cultural continuity—none better than the car.

• Two popularity factors:• 1) Cost—low price, very

affordable: Model T $290;

• 2) Consumer Credit—75% of all automobile purchases were on installment plan

Economic Effects• 1) promoted growth of other industries

(petroleum, rubber, steel);

• 2) Helped established the national Highway system—cars required better roads than wagon trails and ruts; road construction big business;

• 3) Created a service industry, gas stations, garages, roadside restaurants (Diners) and Motels; added to the desire to plan vactions and see America.

Social Effects• 1) A more mobile society—broke down rural and

urban barriers; the “Sunday Drive” now in American lexicon. Urban people saw rural America, Rural people drove into cities to see the sites and visit Amusement parks etc …

• 2) Weakened family life stability—much easier for the young folks to go out on their own—something beside the farm, go west or wherever;

• 3) Weakened traditional morality—escape Parental supervision—”Bedroom on Wheels.”

Social Effects

Social and Self Image

Government and Big Business• 5) American businessmen regained the ‘Gilded

Age’ folk hero status—to be admired and not scorned as the reformers had done …

• Many began to equate Prosperity with Progress and Cultural evolution; Calvin Coolidge “The business of America is business.” It would be laissez faire at its most grandest—non-governmental interference …

• Coolidge, “Wealth is the chief end of man.”

Government Supports Business• 1) High Tariff. The Fordney-McCumber Act (1922);

Smoot-Hawley Act (1930)—protected domestic business and industry.

• 2) Andrew Mellon-Sec of Treasury (1921-1932) got congress to repeal excessive profit tax (1099 capital gains); reduced rates for corporate and personal income tax—offered business a list of tax loopholes;

• 3) Cutbacks in the federal trade Commission (FTC); less government oversight into fair trade policies—not enough personnel to handle all the complaints;

Government Supports Business• 4) Herbert Hoover—Secretary

of Commerce and President;

• Encouraged price fixing and believed government was designed to help businesses grow;

• Used two major vehicles to disseminate this message: Chamber of Commerce and National Association of Manufactures

Consumer Critics• Materialism was

destroying the family unit, spirituality, and the moral fiber of America.

• People were amoral and superficial—Look at Jay Gatsby, Babbit and Middletown—The Man Nobody Knows: A Biography of Jesus. Bruce Barton. (1925).