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American History CHAPTER 9: War, Prosperity and Depression |
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American History
Ch 1 | Ch 2 | Ch 3 | Ch 4 | Ch 5 | Ch 6 | Ch 7
Ch 8 | Ch 9 | Ch 10 | Ch 11 | Ch 12 | Ch 13 | Ch 14
CHAPTER 9: War, Prosperity and Depression
An Outline of American History
"The chief business of the American people is business."
-- President Calvin Coolidge, 1925
WAR AND NEUTRAL RIGHTS
To the American public of 1914, the outbreak of war in Europe came as a
shock. At first the encounter seemed remote, but its economic and political
effects were swift and deep. By 1915 U.S. industry, which had been mildly
depressed, was prospering again with munitions orders from the Western
Allies. Both sides used propaganda to arouse the public passions of
Americans -- a third of whom were foreign-born or had one or two
foreign-born parents. Moreover, Britain and Germany both acted against U.S.
shipping on the high seas, bringing sharp protests from President Woodrow
Wilson. But the disputes between the United States and Germany grew
increasingly ominous.
In February 1915, German military leaders announced that they would attack
all merchant shipping on the waters around the British Isles. President
Wilson warned that the United States would not forsake its traditional
right, as a neutral, to trade on the high seas -- a view of neutral rights
not shared by Germany or Great Britain. Wilson declared that the nation
would hold Germany to "strict accountability" for the loss of American
vessels or lives. Soon afterward, in the spring of 1915, when the British
liner Lusitania was sunk with nearly 1,200 people aboard, 128 of them
Americans, indignation reached a fever pitch.
Anxious to avoid a possible declaration of war by the United States, Germany
issued orders to its submarine commanders to give warning to ocean-going
vessels -- even if they flew the enemy flag -- before firing on them. But on
August 19, these orders were ignored and the British steamer Arabic was sunk
without warning. In March 1916, the Germans torpedoed the French ship
Sussex, injuring several Americans. President Wilson issued an ultimatum
stating that unless Germany abandoned its present methods of submarine
warfare, the United States would sever relations. Germany agreed.
As a result, Wilson was able to win reelection that year, partly on the
strength of his party's slogan: "He kept us out of war." As late as January
1917, in a speech before the Senate, Wilson called for a "peace without
victory," which, he said, was the only kind of peace that could last.
UNITED STATES ENTERS WORLD WAR I
On January 22, 1917, the German government gave notice that unrestricted
submarine warfare would be resumed. When five U.S. vessels had been sunk by
April, Wilson asked Congress for a declaration of war. Immediately, the
government set about mobilizing its military resources, industry, labor and
agriculture. By October 1918, on the eve of Allied victory, a U.S. army of
over 1,750,000 soldiers had been deployed in France.
The U.S. Navy was crucial in helping the British break the submarine
blockade, and in the summer of 1918, during a long-awaited German offensive,
fresh American troops, under the command of General John J. Pershing, played
a decisive role on land. In November, for example, American forces took an
important part in the vast Meuse-Argonne offensive, which cracked Germany's
vaunted Hindenburg Line.
President Wilson contributed greatly to an early end to the war by defining
the war aims of the Allies, and by insisting that the struggle was being
waged not against the German people but against their autocratic government.
His famous Fourteen Points, submitted to the Senate in January 1918 as the
basis for a just peace, called for abandonment of secret international
agreements, a guarantee of freedom of the seas, the removal of tariff
barriers between nations, reductions in national armaments, and an
adjustment of colonial claims with due regard to the interests of the
inhabitants affected. Other points sought to ensure self-rule and unhampered
economic development for European nationalities. The Fourteenth Point
constituted the keystone of Wilson's arch of peace -- the formation of an
association of nations to afford "mutual guarantees of political
independence and territorial integrity to great and small states alike."
By the summer of 1918, when Germany's armies were being beaten back, the
German government appealed to Wilson to negotiate on the basis of the
Fourteen Points. The president conferred with the Allies, who acceded to the
German proposal. An armistice was concluded on November 11.
THE LEAGUE OF NATIONS
It was Wilson's hope that the final treaty would have the character of a
negotiated peace, but he feared that the passions aroused by the war would
cause the Allies to make severe demands. In this he was right. The concept
of self-determination proved impossible to implement. Persuaded that his
greatest hope for peace, the League of Nations, would never be realized
unless he made concessions to the Allies, Wilson compromised on the issues
of self-determination, open diplomacy and other specific points during the
peace negotiations in Paris. However, he resisted the demands of the French
premier, Georges Clemenceau, to detach the entire Rhineland from Germany,
prevented France from annexing the Saar Basin, and frustrated a proposal to
charge Germany with the whole cost of the war -- although the Versailles
Peace Treaty did levy a heavy burden of reparations upon Germany.
In the end, there was little left of Wilson's proposals for a generous and
lasting peace but the League itself -- and the president had to endure the
final irony of seeing his own country spurn League membership. Partly due to
his own poor judgment at the time, Wilson made the political mistake of
failing to take a leading member of the opposition Republican Party to Paris
on his Peace Commission. When he returned to appeal for American adherence
to the League, he refused to make even the moderate concessions necessary to
win ratification from a predominately Republican Senate.
Having lost in Washington, Wilson carried his case to the people on a tour
throughout the country. On September 25, 1919, physically ravaged by the
rigors of peacemaking and the pressures of the wartime presidency, he
suffered a crippling stroke at Pueblo, Colorado, from which he never fully
recovered. In March 1920, the Senate rejected both the Versailles Treaty and
the League Covenant. As a result, the League of Nations, without the
presence of the United States or Russia, remained a weak organization.
Wilson's belief in a moral and legal basis for war and peace had inspired
the nation. However, when events didn't live up to this optimistic standard,
Wilsonian idealism gave way to disillusion, and the nation withdrew into
isolationism.
POSTWAR UNREST
The transition from war to peace was, for many, tumultuous. A massive
influenza epidemic, which had spread rapidly throughout Europe in 1917,
broke out in the United States in the spring of 1918. Before it vanished a
year later, as mysteriously as it had begun, it claimed the lives of more
than half-a-million Americans.
The immediate economic boom right after the war led to high expectations
that were quickly sunk once the postwar economy returned to normal. In turn,
labor became dissatisfied with the rising costs of living, long hours and
unsympathetic management. In 1919 alone, over 4 million workers went on
strike. During that summer, moreover, race riots broke out in both the North
and South.
Yet the event that triggered the greatest national outcry and concern had
occurred two years earlier outside the United States: the Bolshevik
Revolution of 1917 in Russia. With morale low, Americans became fearful
that, just as a small faction had seized power in Russia, so could a similar
group take over the United States. This fear crystallized when, in April
1919, the postal service intercepted nearly 40 bombs addressed to prominent
citizens.
Attorney General A. Mitchell Palmer set up a new office of general
intelligence within the Justice Department, and appointed J. Edgar Hoover as
its head. Hoover began collecting files on known radicals, and raids on
various organizations led to deportations of scores of people. Although
Palmer's dire warnings continued to fuel what became known as the "Red
Scare," the threats never materialized; and by the summer of 1920, the
American people realized that the United States was safe from anarchy.
THE BOOMING 1920S
In the presidential election of 1920, the overwhelming victory of the
Republican nominee, Warren G. Harding, was final evidence of the general
repudiation of Wilson's internationalism and idealism. As journalist William
Allen White explained, the American people were "tired of issues, sick at
heart of ideals, and weary of being noble."
The 1920 election was also the first in which women throughout the nation
voted for a presidential candidate. In 1919 Congress had submitted to the
states the 19th Amendment, which was ratified in time to permit women to
vote the following year.
In keeping with the prevailing prosperity (at least in the urban areas of
the country), governmental policy during the 1920s was eminently
conservative. It was based upon the belief that if government did what it
could to foster private business, prosperity would eventually encompass most
of the rest of the population.
Accordingly, Republican policies were intended to create the most favorable
conditions for U.S. industry. The tariff acts of 1922 and 1930 brought
tariff barriers to new heights, guaranteeing U.S. manufacturers in one field
after another a monopoly of the domestic market. The second of these
tariffs, the Smoot-Hawley Act of 1930, embodied rates so high that more than
1,000 economists petitioned President Herbert Hoover to veto it: subsequent
events bore out their predictions of costly retaliation by other nations. At
the same time, the federal government started a program of tax cuts,
reflecting Treasury Secretary Andrew Mellon's belief that high income taxes
prevented the rich from investing in new industrial enterprises. Congress,
in a series of laws passed between 1921 and 1929, responded favorably to his
proposals that wartime taxes on income, excess profit taxes and corporation
taxes be repealed outright or drastically reduced.
"The chief business of the American people is business," declared Calvin
Coolidge, the dour, Vermont-born vice president who succeeded to the
presidency in 1923 after Harding's death, and was elected in his own right
in 1924. Coolidge hewed to the conservative economic policies of the
Republican Party, but he was a much abler administrator than the hapless
Harding, whose administration was mired in charges of corruption in the
months before his death.
Throughout the 1920s, private business received substantial encouragement,
including construction loans, profitable mail-carrying contracts and other
indirect subsidies. The Transportation Act of 1920, for example, had already
restored to private management the nation's railways, which had been under
government control during the war. The Merchant Marine, which had been owned
and largely operated by the government from 1917 to 1920, was sold to
private operators.
Republican policies in agriculture, however, were meeting mounting
criticism, for farmers shared least in the prosperity of the 1920s. The
period from 1900 to 1920 had been one of general farm prosperity and rising
farm prices, with the unprecedented wartime demand for U.S. farm products
providing a strong stimulus to production. Farmers had opened up poor lands
long allowed to remain idle or never before cultivated. As the value of U.S.
farms increased, farmers began to buy goods and machinery that they had
never before been able to afford. But by the end of 1920, with the abrupt
end of wartime demand, the commercial agriculture of staple crops such as
wheat and corn fell into sharp decline. Many factors accounted for the
depression in American agriculture, but foremost was the loss of foreign
markets. U.S. farmers could not easily sell in areas where the United States
was not buying goods because of its own import tariff. The doors of the
world market were slowly swinging shut. When the general depression struck
in the 1930s, it merely shattered agriculture's already fragile state.
TENSIONS OVER IMMIGRATION
Restriction of foreign immigration during the 1920s marked a significant
change in U.S. policy. Immigration had soared in the late 19th century and
peaked in the early 20th century. Between 1900 and 1915, for example, more
than 13 million people came to the United States, with the preponderance
from Southern and Eastern Europe. Many of these people were Jewish or
Catholic, a fact that alarmed many older Americans who were predominately
Anglo-Saxon and Protestant. Some resented the newcomers because they
competed for low-wage jobs, others because the new immigrants maintained Old
World customs, often lived in urban ethnic enclaves, and seemed to resist
assimilation into the larger American culture.
As a result of this immigrant surge after World War I, nativist appeals
intensified. A reorganized Ku Klux Klan emerged calling for "100-percent
Americanism." Unlike the Klan of Reconstruction, the new Klan restricted its
membership to native-born white Protestants, and campaigned against
Catholics, Jews and immigrants as well as African Americans. By redefining
its enemies, the Klan broadened its appeal to parts of the North and
Midwest, and for a time, its membership swelled.
Anti-immigration sentiment was codified in a series of measures, culminating
in the Immigration Quota Law of 1924 and a 1929 act. These laws limited the
annual number of immigrants to 150,000, to be distributed among peoples of
various nationalities in proportion to the number of their compatriots
already in the United States in 1920. One result of these restrictions was
to reduce the appeal of nativist organizations; the Great Depression of the
1930s also caused a sharp drop in immigration.
CLASH OF CULTURES
Some Americans expressed their discontent with the character of modern life
in the 1920s by focusing on family and religion, as an increasingly urban,
secular society came into conflict with older rural traditions.
Fundamentalist preachers such as Billy Sunday, for example, a professional
baseball player turned evangelist, provided an outlet for many who yearned
for a return to a simpler past.
Perhaps the most dramatic demonstration of this yearning was the
fundamentalist crusade which pitted biblical interpretation against the
Darwinian science of biological evolution. In the 1920s, bills to prohibit
the teaching of evolution began appearing in Midwestern and Southern state
legislatures. Leading this crusade, improbably, was the aging William
Jennings Bryan, who skillfully reconciled his anti-evolutionary activism
with his earlier radical economic proposals, saying that evolution "by
denying the need or possibility of spiritual regeneration, discourages all
reforms."
The issue came to a climax in 1925 in Tennessee, when the American Civil
Liberties Union challenged the nations's first anti-evolution law. A young
high school teacher, John Scopes, went on trial for teaching evolution in a
biology class. In a case that drew intense publicity, Bryan, representing
the state, was subjected to a withering examination by defense attorney
Clarence Darrow. Scopes was convicted but released on a technicality, and
Bryan died a few days after the trial ended.
Another example of a fundamental clash of cultures -- but one with far
greater national consequences -- was Prohibition. In 1919, after almost a
century of agitation, the 18th Amendment to the Constitution was enacted,
prohibiting the manufacture, sale or transportation of alcoholic beverages.
Prohibition, although intended to eliminate the saloon and the drunkard from
American society, served to create thousands of illegal drinking places
called "speakeasies," and a new and increasingly profitable form of criminal
activity -- the transportation of liquor, known as "bootlegging."
Prohibition, sometimes referred to as the "noble experiment," was repealed
in 1933.
The common thread linking such disparate phenomenon as the resurgence of
fundamentalist religion and Prohibition was a reaction to the social and
intellectual revolution of the time -- variously referred to as the Jazz
Age, the era of excess, the Roaring '20s. Many were shocked by the changes
in the manners, morals and fashion of American youth, especially on college
campuses. Among many intellectuals, H.L. Mencken, a journalist and critic
who was unsparing in denouncing sham and venality in American life, became a
hero. Author F. Scott Fitzgerald captured the energy, turmoil and
disillusion of the decade in his short stories and novels such as The Great
Gatsby.
Fitzgerald was part of a small but influential movement of writers and
intellectuals dubbed the "Lost Generation," who were shocked by the carnage
of World War I and dissatisfied with what they perceived to be the
materialism and spiritual emptiness of life in the United States. Many of
them -- such as their most celebrated member, writer Ernest Hemingway --
traveled to Europe and lived as emigrs in Paris.
African Americans also engaged this spirit of national self-examination.
Between 1910 and 1930, a huge black migration from the South to the North
took place, peaking in 1915-1916. Most settled in urban areas such as
Detroit and Chicago, which held greater opportunities for jobs and personal
freedom than the rural South. In 1910 W.E.B. DuBois and other intellectuals
founded the National Association for the Advancement of Colored People
(NAACP), which helped black Americans gain a national voice that would grow
in importance with the passing years.
At the same time, an African-American literary and artistic movement, termed
the "Harlem Renaissance," emerged. Like the "Lost Generation," these
writers, such as Langston Hughes, rejected middle-class values and
conventional literary forms, even as they addressed the realities of
American life.
THE GREAT DEPRESSION
In October 1929 the stock market crashed, wiping out 40 percent of the paper
values of common stock. Even after the stock market collapse, however,
politicians and industry leaders continued to issue optimistic predictions
for the nation's economy. But the Depression deepened, confidence evaporated
and many lost their life savings. By 1933 the value of stock on the New York
Stock Exchange was less than a fifth of what it had been at its peak in
1929. Business houses closed their doors, factories shut down and banks
failed. Farm income fell some 50 percent. By 1932 approximately one out of
every four Americans was unemployed.
The core of the problem was the immense disparity between the country's
productive capacity and the ability of people to consume. Great innovations
in productive techniques during and after the war raised the output of
industry beyond the purchasing capacity of U.S. farmers and wage earners.
The savings of the wealthy and middle class, increasing far beyond the
possibilities of sound investment, had been drawn into frantic speculation
in stocks or real estate. The stock market collapse, therefore, had been
merely the first of several detonations in which a flimsy structure of
speculation had been leveled to the ground.
The presidential campaign of 1932 was chiefly a debate over the causes and
possible remedies of the Great Depression. Herbert Hoover, unlucky in
entering The White House only eight months before the stock market crash,
had struggled tirelessly, but ineffectively, to set the wheels of industry
in motion again. His Democratic opponent, Franklin D. Roosevelt, already
popular as the governor of New York during the developing crisis, argued
that the Depression stemmed from the U.S. economy's underlying flaws, which
had been aggravated by Republican policies during the 1920s. President
Hoover replied that the economy was fundamentally sound, but had been shaken
by the repercussions of a worldwide depression -- whose causes could be
traced back to the war. Behind this argument lay a clear implication: Hoover
had to depend largely on natural processes of recovery, while Roosevelt was
prepared to use the federal government's authority for bold experimental
remedies.
The election resulted in a smashing victory for Roosevelt, who won
22,800,000 votes to Hoover's 15,700,000. The United States was about to
enter a new era of economic and political change.
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The U. S. Constitution
