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Reading Age of Prosperity and Change

Part I Returning to Normalcy

From War to Peace

Following World War I, the United States struggled through a period ofdemobilizationthe process of

returning to a peacetime economy. Several challenges awaited the some 4.5 million American soldiers who

returned home after the war. Many of them found that the jobs they had left behind had been filled by others.

Women had entered the workforce in record numbers during the war. To make room for the returning

veterans, many women were forced to give up their jobs, particularly in industry. One labor union even said

that women had a patriotic duty to quit.

Just as veterans began looking for work, businesses began laying off employees. Huge military contracts

had helped many industries grow during the war. As a result, both wages and prices had risen. Many people

had been hoping for a bright economic future after the war. However, once the war ended the government

canceled its contracts. Companies had to slow production and cut their workforces. Prices and unemployment

continued to rise yet wages fell or stayed about the same, causing a severe recession.

Labor Unrest

Economic conditions grew worse around the nation, leading thousands of industrial workers to strike for better

pay. In 1919 alone there were more than 3,600 strikes, involving more than 4 million workers.

One of the strongest union towns was Seattle, Washington. During the war some 110 AFL unions in Seattle

had created a central labor council. The city's shipping industry suffered greatly during demobilization. In

February 1919 some 60,000 Seattle union members held a general strikea strike involving all union

members in a community.

Business leaders and city officials felt threatened by the strike, which many blamed on foreign radicals.

Mayor Ole Hanson called the general strike an attempted revolution. He deputized 2,500 additional police and

called in the state militia to patrol the streets. "Shoot on sight anyone causing disorder," Hanson ordered. The

city remained peaceful, but the majority of the public opposed the strike. After five days the strikers returned

to work without any of their demands met.

The tensions that led to the Seattle general strike were also present in the country's largest industry

steel. U.S. Steel Corporation alone employed several hundred thousand workers. Steelworkers and their

families typically lived in company-owned housing and shopped at company stores.

Thousands of steelworkers formed a union to demand eight-hour workdays, six-day workweeks, and wage

increases. Company leaders refused to recognize the union or meet with its representatives. In response,

some 250,000 steelworkers walked off the job in Pittsburgh, Pennsylvania, on September 22, 1919. They

represented more than half of the industry's workforce. By week's end, about 365,000 workers were on strike,and the steel industry was in danger of shutting down.

Company officials accused strikers of being anti-American radicals. Steel-mill owners hired armed guards

and brought in so-called scabsnonunion replacementsto run the mills. In addition, mill owners tried to use

nationalism to divide strikers. For example, some owners described the strike as a conflict between patriotic

Americans and radical immigrants. By early January 1920, 20 strikers had been killed in violent

confrontations. Some 100,000 union workers were still off the job, and lost wages totaled about $112 million.


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Union bosses finally admitted failure and called off the strike. Labor leaders would wait years before trying to

organize workers in heavy industries again.

In September 1919 a different type of strike took place in Boston. The police there wanted to unionize to

seek higher wages and better working conditions, but Police Commissioner Edwin Curtis would not allow it.

After Curtis fired 19 officers for trying to create a union, the police went on strike. This situation raised a new

question. Did government employees have the right to strike? Massachusetts governor Calvin Coolidgeinsisted that "the action of the police in leaving their posts is not a strike, it is desertion." For two days during

the strike, violence and looting took place across the city. Two people died and nine others were wounded.

Coolidge called in the state militia to restore order.

The strike was broken, but Curtis would not allow the officers back to work. Coolidge supported Curtis,

saying, "There is no right to strike against the public safety by anybody, anywhere, at any time." Curtis

replaced nearly the entire forceall those who had gone on strikewith unemployed veterans. The new police

officers received the higher wages and improved working conditions the strikers had demanded.

The Red Scare

The strikes and riots of 1919 led to fears that a communist revolution like the one in Russia might take place

in the United States. In 1919 and 1920 these worries led to a Red Scare, a widespread fear of political

radicals, particularly Communists, who were called Reds.

Radical groups challenged the political system in different ways. Communists wanted people to share all

property and wealth equally. Anarchists wanted to get rid of all forms of government. Socialists wanted the

government to control major industries. Not all radicals were willing to use violence to reach their goals.

However, U.S. leaders feared thatviolent or notthese political groups threatened the American way of life.

Many Americans stereotyped a majority of European immigrants as dangerous revolutionaries because

some recent immigrants had radical political views. In addition, major newspapers often reported that labor

strikes were the work of communist agents. Yet in 1919 U.S. communist parties had fewer than 40,000

members. Nevertheless, many Americans feared that Reds were everywhere.

Public concern grew after several bombings were aimed at business and government leaders. One bomb

damaged the house of U.S. Attorney General A. Mitchell Palmer. He ordered raids on suspected radicalorganizations, often without warrants. The largest Palmer raidstook place in January 1920. Federal agents

in more than 30 cities arrested some 6,000 suspected radicals. There was little evidence against many of

those arrested, yet hundreds of immigrants were eventually deported. Some were never officially charged

with a crime. Little by little, these civil rights violations began to upset the public. When Palmer predicted a

revolution in May 1920 that never occurred, the public began to lose faith in him.

The Red Scare added to a climate ofxenophobiathe fear and hatred of foreigners. This fear greatly

influenced the trial of Italian immigrants Nicola Sacco and Bartolomeo Vanzetti. These two men were

arrested in 1920. Authorities charged them with robbing a Massachusetts shoe factory and murdering the

payroll clerk and guard.

Sacco and Vanzetti were anarchists, and their political activities and foreign background made officials

suspicious. However, much of the evidence against the men was weak. Sacco even had witnesses who said hewas in another town on the day of the murders. Sacco and Vanzetti were found guilty in a trial that many

observers considered unfair because the judge allowed questions about the two men's political beliefs.

Thousands of people protested the verdict. Joining the protests was the newAmerican Civil Liberties

Union (ACLU), an organization formed to protect people's constitutional rights. An official commission

reviewed the case but found no grounds for retrial. The governor also refused to change the death sentence,

and Sacco and Vanzetti were therefore executed on August 23, 1927.


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Racial Tensions (again)

African Americans also became targets of violence during demobilization. The economic troubles caused by

demobilization increased existing racial tensions, particularly in cities. Hundreds of thousands of African

Americans had moved to northern cities during the war, often filling new factory jobs. Many white northerners

feared competition for housing and jobs from African American residents. In the summer of 1919, also known

as Red Summer, tensions exploded into race riots.

One deadly riot took place in Chicago, Illinois. In July 1919 a young African American named Eugene

Williams swam into a "white-only" area of Lake Michigan. Williams drowned after white people threw rocks at

him, preventing him from coming to shore. Fighting then broke out between white and African American

people on the beach. The violence spread to the city and led to a week of rioting. Nearly 40 people were killed

and more than 530 were injured.

Similar riots took place in other cities. By late 1919 there had been more than 25 race riots across the

nation. Lynchings of African American men also took place, particularly in the South. More than 70 African

Americans were lynched in 1919.

Part II Politics of the 1920s

President Warren G. Harding

In 1920 the Republicans chose Ohio senator Warren G. Harding to run for president and Massachusetts

governor Calvin Coolidge for vice president. They ran on a pro-business platform. Harding also supported

immigration restrictions and aid to farmers. He was popular with voters, but he was not a particularly gifted

leader. His main strengths were his party loyalty and ability to make political allies. Harding was often not well

informed on issues. Republican leaders, therefore, tried to keep him from making public appearances.

The Democrats chose Ohio governor James M. Cox to run for president. Franklin D. Roosevelt, assistant

secretary of the navy, was their choice to run for vice president. Both candidates tried to avoid domestic

issues and focus on foreign policy. They also supported the League of Nations.

Harding won the election with about 60 percent of the popular vote. Many citizens showed their

dissatisfaction with both major parties by voting for Socialist Party candidate Eugene V. Debs. Although Debs

was in prison for violating the Espionage Act, he received some 900,000 votes.

President Harding quickly put together his cabinet. He appointed former Supreme Court justice Charles

Evans Hughes as secretary of state. Herbert Hoover was his secretary of commerce and Andrew Mellon

became secretary of the treasury. Both men were successful business leaders. The Harding administration

focused on strengthening the economy. Harding believed that government should promote business growth

but otherwise leave the economy alone. Mellon proposed many tax cuts, several of which Congress passed.

These tax cuts often benefited businesses and wealthy Americans. The public was generally pleased as the

economy boomed and the postwar recession came to an end.

Not all of President Harding's political appointments were wise. He chose many old friends to fill

government posts, regardless of their qualifications. The so-called Ohio Gang was made up of officialsHarding had known in Ohio. Even Harding eventually saw that most of them were poorly qualified for their

jobs.

Harding had reason to worry. One investigation showed that Charles Forbes, the Veterans' Bureau chief, had

taken bribes. He was fined $10,000 and sentenced to two years in prison.

Secretary of the Interior Albert Fall took part in the biggest scandal of the Harding administration. Fall's

heavy personal spending led to a Senate investigation, which revealed that he had illegally rented two naval

oil reserves to oil companies. In return Fall received personal loans, cash, and cattle. One reserve was located


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at Teapot Dome, Wyoming. The so-called Teapot Dome scandal led to Fall's conviction for accepting bribes.

He was sentenced to a year in jail and fined $100,000.

Four members of Harding's administration resigned as a result of corruption charges. Harding was not

directly involved in these crimes. He died suddenly on August 2, 1923, before the scandals came to light.

However, the trouble that Harding's "friends" had caused greatly hurt his reputation and that of the

Republican Party.

President Calvin Coolidge

Vice President Calvin Coolidge soon helped the Republican Party recover the public's trust. He had not been

part of the scandals, and once sworn in as president, he fired those who had been involved. Coolidge easily

won the Republican presidential nomination in 1924. His conservative policies upset some progressive

Republicans, who nominated Senator Robert La Follette of Wisconsin as their Progressive Party candidate. The

Democrats were deeply divided between urban and rural interests and chose little-known lawyer John W.

Davis as their candidate. Coolidge won a landslide victory that November.

The key to Coolidge's victory was his promise of continued economic prosperity. To promote economic

growth, Coolidge kept several important members of Harding's cabinet to help build his economic plan. He

kept government activity and spending to a minimum, and his policies favored low taxes, low interest rates on

loans, high tariffs, and little economic regulation. With a strong economy, Coolidge faced few complaints from

the public.

Presidential Election of 1928

Foreign policy played only a small part in the 1928 presidential election. Each candidate focused on domestic

issues, which were of more interest to the public than international issues. The Democratic candidate was

Alfred E. Smith, the governor of New York. Smith represented urban interests. This fact worried many rural

Americans who did not trust big-city politicians. Many Protestants also opposed Smith because he was

Catholic.Calvin Coolidge decided not to run for re-election in 1928. Republicans chose Secretary of Commerce

Herbert Hoover as their candidate. In contrast to Smith, Hoover seemed to represent traditional values. The

public also linked Hoover and the Republicans to the country's economic success.

Hoover's slogan was "A chicken for every pot and a car in every garage." He won easily, receiving more

than 21 million votes to Smith's 15 million. However, voters in the country's 12 largest cities supported Smith.

These results reflected the growing political differences between urban and rural America.

Part III The Rise of Big Business

Henry Ford and the Model T

Henry Ford founded the Ford Motor Company in 1903. He wanted to develop a car made "of the best

materials, by the best men to be hired, after the simplest design." After several failures, Ford achieved his

goal in 1908 with theModel T. Fondly called the Tin Lizzie by the public, the Model T was not fancy, and it

came only in black. Ford's new car was durable, reliable, and easy to fix and maintain. The Model T could be

driven on any surface. This flexibility was important because most roads in the 1920s were unpaved and filled

with potholes and ruts.


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Perhaps most important was the Model T's low cost compared to earlier automobiles. Ford's goal was to

build a car "so low in price that no man making a good salary will be unable to buy one." As he had hoped,

many Americans bought the Model T as their first car. Ford's improved production methods steadily drove

down prices. The cost of a Model T fell from around $850 in 1908 to about $290 in 1927. By 1921 Ford

controlled some 55 percent of the American market and was selling more than 1 million cars a year.

To manufacture so many cars so cheaply, Henry Ford and his engineers developed a new assembly process.

In the past, work teams had built one car at a time from start to finish. Ford's factories used a faster method

of building cars, known as the assembly line. This system of chains, conveyor belts, and slides moved parts

from one worker to another worker. Each car began as a frame with no parts. As it went down the line, the

frame stopped at work stations. At each stop another type of part, like a door or a seat, was quickly added. By

the end of the line, the car was complete.

The assembly line moved quickly because each person did one simple task repeatedly. Special machines

were also made to help workers do their jobs more efficiently. The process of building a car was thus divided

into many small steps. This approach was influenced by the theories Frederick W. Taylor described in his book

The Principles of Scientific Management.

Business owners benefited greatly from the assembly line. The time needed to build a Model T fell from

more than 12 hours to less than 2 hours. The assembly line also lowered manufacturing costs. From a

worker's viewpoint the labor was dull and tiring, however. Workers had to keep up with the line's speed at all

times. One worker explained why assembly-line work was so tiring.

This stress caused assembly-line workers to quit on a regular basis. It grew expensive for Ford's company

to find and train replacements. Unhappy autoworkers were also easier for unions to recruit, which troubled

Ford, who was strongly antiunion.

To keep his workers from quitting their jobs or joining unions, Ford tried to create a better working

environment. He offered an eight-hour workday and wages of up to $5 per daya high rate of pay at the

time. Workers were encouraged to suggest ways to improve productivity. Ford also hired African Americans

and people with disabilities at a time when this practice was not common.

In exchange for those benefits, Ford placed strict requirements on his employees. Workers who drank

alcohol, smoked, or joined unions could be fired. Immigrant employees had to attend "Americanization"classes to learn civics and English. Such programs had been common in the early 1900s, and Ford continued

the practice.

In the 1920s the term Fordism was used to describe the assembly-line approach to mass production. Not

all owners agreed with Ford's higher salaries or his work policies. However, many companies did begin to

imitate his methods.

The Car Craze

Mass production transformed the American auto industry. The industry no longer made only a few

expensive luxury cars for the rich. Mass production now supplied the general public with inexpensive

transportation.

The United States produced nearly 5 million cars in 1929. Auto-makers employed some 375,000 workersto meet the demand. Millions of other workers held jobs that supported automobile manufacturing. For

example, the automobile industry used large amounts of glass, paint, rubber, and steel. Many Americans also

worked in the oil industry because oil and gas use in the United States doubled from 1920 to 1929.

Cars also changed the landscape of America. New communities sprang up along country roads, and auto-

industry towns boomed. Trucks were commonly used to ship goods, making factories less dependent upon

railroads. Manufacturers moved to the outskirts of cities, where real estate was cheaper. Millions of people

began traveling to work by car. As more people moved to the suburbs, construction companies built new

communities.


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Although there were many cars, there were few good roads. Soon federal and state governments funded

bridge, highway, and tunnel construction. By 1925 more than $200 million a year was being spent on roads.

Greater amounts of traffic led to more automobile accidents and the need for car insurance. The insurance

industry grew to meet car owners' needs.

Families began taking driving vacations. Responding to a survey, one woman declared, "I never feel as

close to my family as when we are all together in the car." Motor hotels, also known as motels, appearedacross the country. Americans created auto clubs and magazines to encourage leisure travel. Motor Car

magazine explained the joys of a driving vacation: "You are your master, the road is ahead;. . . your freedom

is complete."

New roadside businesses developed because of increased traffic. Service stations provided fuel, and

roadside restaurants fed hungry drivers and passengers. Advertisers even built billboards along highways to

catch the eyes of passing motorists. The automobile had transformed the economy and the society of the

United States.

Business Booms

Many other industries also experienced economic growth in the 1920s. Telephone companies made instant

communication possible. Electrical utilities let people use modern conveniences such as home appliances.

These durable goods, or items that were not destroyed by use, ranged from large items like washing machines

to small appliances like toasters and irons. The quantity of goods manufactured nearly doubled between 1921

and 1929.

Food-processing plants produced large amounts of canned goods and packaged food products, which were

easier to prepare. Trucks affordably moved these goods across the country. As a result, chains of grocery and

retail stores spread in the 1920s. They brought a wider variety of products to small towns at lower prices than

many local stores. These stores, like A&P and Piggly Wiggly, stocked and sold items in large amounts. Catalog

retailerslike Sears Roebuck and Montgomery Wardalso began opening national department stores. These

chains offered consumers a wide range of goods such as appliances and clothing.

This growth in products and stores led to the rise of a consumer society. In a consumer society, people

are encouraged to buy products to improve their lives and help the economy.To make buying goods easier, many companies offeredinstallment plans. These programs let customers

buy goods by making a small down payment followed by additional monthly payments with interest. Although

the total cost of the item increased, the ability to buy goods on credit was convenient and popular. Before

installment plans, many people had waited to buy goods until they had enough cash. The new system let

people buy goods that had once been out of their reach. During the 1920s, Americans bought some 60

percent of all cars and furniture using installment plans.

Selling of Goods

The birth of new products led to a boom in advertising as businesses competed for consumer dollars. Large

manufacturers now had a national market. Advertisers helped create nationally known brand names, such asCoca-Cola and Campbell's Soup. Billboards, magazines, and newspapers carried ads encouraging Americans to

buy various products. Radio stations also broadcast a steady stream of commercials.

Advertising was particularly important to the automobile industry. Americans were earning more money.

As a result, people began thinking about comfort and style when buying a car. Automobile companies, like

General Motors, recognized this trend. These companies began to gain rapidly on Ford Motor Company in the

1920s by advertising the many different body styles and colors they offered.


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Many ads promised that new gadgets would allow consumers to enjoy more leisure time. Some people

accused advertisers of misleading consumers about products. Critics also said that advertisers urged

consumers to spend more than they could afford. Car ads suggested to men that new stylish cars would gain

them respect. Home appliance ads suggested that having the latest products would keep women and their

families happy. "Why drown your soul in a greasy dishpan?" asked one dishwasher ad.

Ad writer Helen Woodward admitted that her job required "a passion for converting the other fellow, evenif it is to something you don't believe in yourself." Advertising executives defended their agencies, however.

They said that encouraging people to buy new products boosted the economy.

Part IV -- The Economy of the US

Prosperity and Growth

The U.S. economy grew rapidly for much of the 1920s. The government's pro-business policies and the 1920s

production boom led to increased profits for many companies. As company profits rose, so did stock values

and the dividends paid to the stockholders.

Many Americans dreamed of achieving great wealth. More than 1 million people invested in the stock

market. From 1923 to 1928, stock sales on the New York Stock Exchange increased by nearly 400 percent.

Author Frederick Lewis Allen reported that people with little experience were investing.

Many people borrowed money to buy stock, confident that stock values would keep rising. Experts

supported this view. Irving Fischer of Yale University predicted that the stock market would continue to grow

and encouraged people to buy stocks. More cautious financial experts, however, reminded investors of the old

proverb "What goes up must come down."

Only a few Americans actually became extremely wealthy during the 1920s. Some earned their fortunes

outside the stock market by inventing new machines or creating successful businesses. Henry Ford, for

example, went from tinkering in his garage to earning millions. J. C. Penney was a store clerk who went on to

found a successful chain of department stores. He offered stock options to his managers so they could share

in company profits. This profit sharing encouraged hard work. By 1929 the J.C. Penney Company had nearly

1,400 stores nationwide.

Problems for Unions and Industries

Not everyone was profiting from the boom, however, and many workers faced financial difficulties. Skilled

workers at large corporations generally earned good pay and benefits. But workers in service industries, such

as retail or grocery stores, were often less fortunate. In addition, unskilled factory workers still received poor

pay and few benefits.

Organized labor also struggled. After enjoying higher wages and increased membership during World War

I, unions lost government support during peacetime. Many businesses stopped hiring union workers. The

violent strikes of 1919 had led to strong antiunion feelings. Many Americans believed that unions were radical

political organizations run by people who wanted to weaken American society. During the 1920s unionmembership dropped sharply, falling from more than 5 million in 1920 to about 3.6 million in 1923.

However, many industries had become "closed shops" where only union members could work. Union

leaders could usually rely on full member support in a closed-shop industry. Business leaders began an open-

shop campaign called the American Plan. In an open shop, union membership was not required and was

sometimes even forbidden.

Republicans, like Attorney General Harry Daugherty, openly backed the movement against unions. "So

long and to the extent that I can speak for the government of the United States, I will use the power of the


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government to prevent the labor unions of the country from destroying the open shop." Unions fought the

American Plan, but with little success. One of organized labor's worst defeats occurred in July 1922. Some

400,000 railroad workers went on strike to oppose wage cuts. Daugherty secured a federal restraining order

against the strikers in September, and the strike collapsed. As union membership declined in the 1920s,

business leaders no longer pushed for open shops.

Certain "sick," or economically depressed, industries also did not share in the nation's prosperity.Struggling industries included coal, lumber, and textiles. Hydroelectric power, natural gas, and oil were

replacing coal as a source of energy. Overproduction of cotton combined with the introduction ofsynthetic,

or artificial, fabrics such as rayon hurt the textile industry. The lumber industry faced a similar challenge as

materials such as concrete replaced wood in many buildings. All of these industries had been slow or unable to

adapt to changing technology and consumer demand. As a result they did not share in the prosperity of the

1920s.

Hard Times for Farmers

The postwar years were also difficult for farmers. During World War I, the Allied demand for food had raised

prices. In response to greater demand, farmers had increased production, often buying new land and

equipment on credit. When the war ended, so did the huge Allied demand for American farm products. Many

farmers found themselves producing much more than they could sell. Food prices dropped dramatically.

Nebraska corn, which had sold for $1.22 a bushel in 1919, sold for only 41 cents in 1920. Many farmers could

not pay their debts and lost their land. Farm laborers, particularly migrant workers, faced even greater

difficulties.

Farmers in the Midwest elected a group of pro-agriculture congressmen known as the Farm Bloc, who

helped pass laws intended to ease the farm crisis. For example, the Fordney-McCumber Tariff Actwas

designed to raise the demand for domestic crops by taxing imported farm products. This high tariff prevented

the sale of many foreign farm goods, such as cattle, corn, cotton, and wheat, in the United States. However, it

also raised the cost of many consumer goods, which hurt everyone, including farmers.

Other Farm Bloc suggestions included government subsidy, or aid. One plan proposed that the government

buy basic goods, such as cattle, cotton, and wheat, from American farmers at higher than market-valueprices. The government would then sell the crops to other countries at the lower world-market rates.

President Coolidge vetoed this plan twice.

Farmers kept urging the federal government to help. Republican leaders, however, did not want to

interfere with the free-enterprise system by regulating prices. As a result, large-scale farms with modern

machinery had the greatest success during the 1920s.

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