Chapter 23

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Chapter 23
The 1920s: Coping with Change (1920-1929)

I.Economy
A.Booming business
1.Unemployment as low as three percent, steady prices, and the GNP grew by 43 percent from 1922 to 1929
2.Consumer goods such as home appliances (vacuums, refrigerators, washing machines, etc.)
i.Sixty percent of US homes electrified by mid 1920s
3.Automobiles
i.By end of decade, automobile industry accounted for about nine percent of all wages in manufacturing and stimulated other industries
4.Soaring stocks set market up for disaster in 1929
5.Capitalism abroad
i.US meatpackers in Argentina
ii.Anaconda Copper acquired Chile’s biggest copper mine
iii.United Fruit Company established processing plants across Latin America
B.Tariffs
1. The Fordney-McCumber Tariff (1922) and Smoot-Hawley Tariff (1930) pushed US import duties to all-time highs, benefiting domestic manufacturers but stifling foreign trade
2.Manufactured goods, less than half the value of total US exports in 1913, rose to 61 percent of the total by the end of the decade
C.Workers
1.Wage rates rose
2.Women workers, blacks, Mexican-Americans, and recent immigrants clustered at the bottom of the wage scale
i.Blacks were “last hired, first fired”
3.Higher wages would promote productivity – Henry Ford started it
D. Farmers
1.Did not share in prosperity
2.Grain prices plummeted when army purchases dwindled
3.High tariffs reduced exports
4.Large surpluses and weak prices
5.Had to pay back debts and loans
E.Assembly-line production
1.Discouraged individuality
2.Fordism
F.Business consolidation
1.Corporate giants dominated the major industries
2.By 1930, 100 corporations controlled almost half of US business
G.Chain stores accounted for about a quarter of all retail sales by 1930
H.Advertising
1.Used celebrity endorsements, promises of social success, and threats of social embarrassment
2.Offered seductive vision of new era – portrayed fantasy world of elegance, grace, and boundless pleasure
3.Encouraged consumerism
I.Credit purchases were much more common
J.Women in the workplace
1.The assembly-line did not increase employment opportunities
2.Faced wage discrimination
3. Only three percent belonged to unions by 1929
4. Worked in corporate offices as secretaries, typists, or filing clerks
K.Labor unions
1.Membership fell from 5 million in 1920 to 3.4 million in 1929
i.Higher wages reduced incentive to join
ii.Management hostility (ex: Ford hired thugs to intimidate union workers)
2.Welfare Capitalism
i.Giving workers benefits so they wouldn’t join a union
3.1929 – black membership about 82000
II.Harding
A.Bland Republican appealing after war and Wilson
B.Scandals
1.Example: Interior Secretary Fall went to jail for leasing government oil reserves, one in Teapot Dome, WY, for bribes III.Coolidge
A.Lowered income taxes and inheritance taxes for the wealthy
B.“Trickle down” theory – tax cuts for the wealthy would promote business investment, stimulate the economy, and benefit everyone
C.Refused to help flood victims in 1927
D.McNary-Haugen bill
1.Price-support plan under which the government would annually purchase the surplus of cotton, corn, rice, hogs, tobacco, and wheat at their average price in 1909-1914 and sell them abroad.

2.Passed by Congress twice, Coolidge vetoed
E.Independent internationalism
1.US refused to join League or World Court
2.Washington Naval Arms Conference – set specific ratio of ships among the world’s naval powers and US and Japan agreed to respect territorial holding in the Pacific
i.Showed effort for arms control
3.Kellogg-Briand Pact 1928
i.US, France, and eventually sixty other nations
ii.Renounced aggression and called for outlaw of...
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