7. Prosperity and Depression, 1920-1941
In 1920 Warren Harding was elected president, but the nation did not experience the "return to normalcy" he
had promised. The United States was more than half urban by 1920, and recent immigrants were concentrated in
the cities. The nation displayed strong political divisions: urban against rural, the educated against the religious,
young people against their parents, Protestant against Catholic, and old stock Americans against immigrants.
Given the structure of the national government, rural Americans retained a disproportionate power in
Washington. For example, senators and representatives elected by old stock and rural Americans passed laws in
1921 and 1924 limiting immigration, and establishing quotas for each nationality. They based the quotas on the
ethnic composition of the nation according to the 1890 Census, which had the effect of drastically reducing
immigration from southern and eastern Europe. They feared that non-Protestant immigrants would never fully
assimilate. In contrast, large quotas were created for immigrants from the British Isles, France, Holland, and
Germany, because most immigration from these countries had been before 1890. In fact, however, far fewer
people from these nations wanted to come after 1920. The effect of the new laws was not only to change who
came, but also to reduce drastically the total number of immigrants, which starting in 1929 was limited to
150,000 per year. (However, the restrictions did not apply to Canada or Mexico.) In practice, the new policies
halved immigration in the 1920s, but had their greatest effect between 1930 and 1945, when less than 1 million
immigrants arrived, fewer than in the single year of 1914.
The Protestant white majority also outlawed alcohol with a constitutional amendment that urbanites ignored, as
they went on a spree. Both smuggling and bootleg manufacturing of alcohol became large illegal businesses, and
organized crime became a serious problem. During the 1920s the speakeasy became common, and inebriated
patrons danced to new songs and new rhythms. Some have remained popular since, including, “Ain’t We Got
Fun,” “Sonny Boy,” “Bye Bye Blackbird,” and “Star Dust.” Henry Ford tried to revive folk dancing, but jazz and
the blues were the popular choice. Millions heard recordings or radio broadcasts of Louis Armstrong and Bessie
Smith, but such music was anathema to fundamentalist Christians, many of whom also rejected dancing, card
playing, and alcohol.
Education was another area of tension in a nation where many people still believed every word in the Bible to be
literally true. The industrial states increased funding for colleges and universities as never before, but in rural
Tennessee the state legislature prohibited teaching the theory of evolution. This led to the famous “Monkey
Trial,” in which a young man was convicted of teaching Darwin and sent to jail. Ku Klux Klan membership
soared into the millions in the South, much of the Middle West, and even the cities. The KKK focused less on
African Americans than on "the Catholic menace," and worried that the Pope was plotting to take over the
United States. Yet, at the same time, more young people went to college than ever before, Freud's psychoanalysis
became popular, and American writers produced works such as T. S. Eliot's "The Wasteland."
The writers who came of age before World War I ironized over these contradictions in American culture,
notably H. L. Mencken, Willa Cather, Theodore Dreiser, and Sinclair Lewis. Mencken quipped that you could
throw a Bible out a train window anywhere in the South and have a good chance of hitting a fundamentalist.
Younger writers born at the turn of the century at least temporarily fled the contradictions of America for
Europe, where the strong dollar made it possible for them to drink legal, vintage wines and live inexpensively on
their royalties. Among the several thousand artistic expatriates concentrated in England and France were F. Scott
Fitzgerald, John Dos Passos, T. S. Eliot, and Ernest Hemingway. Gertrude Stein, an older expatriate, called them
a "lost generation," but in fact their publications were widely appreciated back home. Hemingway's In Our Time,
Fitzgerald's The Great Gatsby, and Dos Passos's Manhattan Transfer were immediately recognized as
groundbreaking works, both in terms of their modernist form and their contemporary themes. They broke
decisively with social conservatism. The central characters in these novels had ceased to believe in patriotic
pieties. The women had short hair and smoked cigarettes, the men had been disillusioned by the War, and both
drank a good of alcohol.
In short, the moralistic tone of 1920 had not lasted very long, and the nation never returned to "normalcy."
Harding's government was not a notable success. Several of the men he appointed to the Cabinet proved to be
corrupt. His Attorney General sold alcohol from federal warehouses to bootleggers. The director of his Veterans
Bureau stole millions of dollars, and his Secretary of the Interior took bribes from oil companies in exchange for
giving them leases on federal oil reserves. Harding himself was not implicated in the scandals, but he did little to
distinguish himself before dying on a trip to Alaska. His Vice-President, Calvin Coolidge, was an austere smalltown New Englander, and an old-school laissez-faire liberal in economics. He once declared, "The business of
America is business." Coolidge was soon nicknamed "Silent Cal." Allegedly a woman seated next to him a dinner
told him she had bet a friend that she could get him to say more than three words. He replied, "You lose," and
said nothing more to her the rest of the evening.
Many Americans could not identify with such old-fashioned leaders. After visiting Europe, soldiers often did not
feel like settling back into small town America with its ideals of prohibition and hard work. As a popular song
asked, "How you goin' to keep 'em down on the farm, after they've seen Paree?" Many high school and college
students saw themselves as part of a rebellious "flaming youth" culture that rejected old moral standards. To
them, prohibition seemed a joke. Young women began to smoke cigarettes, and to do so in public places. They
got their hair cut short and wore short skirts revealing their legs, something unheard of a few years earlier. They
went dancing in speakeasies. The new “flapper look” emerged even before World War I was over and became
extremely popular during the 1920s.
New novels ridiculed small towns and middle class life, most notably Sinclair Lewis (Babbitt and Main Street) and
Sherwood Anderson (Winesburg, Ohio). Bohemian communities of artists and self-styled rebels grew up in major
cities, particularly New York and Chicago. Both bohemians and young people were drawn to the expanding
African-American communities, particularly Harlem in New York. It became fashionable to go hear jazz at the
Cotton Club and to take an interest in emerging "Negro writers" such as Jean Toomer, Claude McKay, or the
Danish-American mulatto, Nella Larsen, author of Quicksand (1928) and Passing (1929).
During the 1920s the majority of Americans embraced industrial modernity. Urban homes were electrified
between 1917 and 1930, and people began to buy many new appliances from irons to miniature electric trains to
toasters to the first electric stoves and refrigerators. Lighting in public spaces also intensified, as no respectable
city lacked a "white way" of electric signs and every major road installed streetlights. Moreover, powerful
overhead lights made it possible to hold sporting events at night, notably baseball and football games. Radio was
another popular new technology. No one had one in 1920, but virtually every home did by 1930. Radio became a
veritable craze among young men, much as the computer would two generations later. Film also developed from
short one-reel comedies to serious feature length presentations. The films were silent until 1927, but
accompanied by orchestras, and they attracted large crowds to purpose-built movie theaters that had lavish
décor. Every week 40 million Americans went to the movies, including “The Ten Commandments,” romances
of the desert starring Rudolf Valentino, and slapstick comedies.
Yet popular as lighting, appliances, radio and film were, the automobile quickly became an even more central
part of the new material culture. The cost of a new Model T Ford dropped every year during the 1920s until it
was discontinued in 1927. By then Ford had made 15 million of them, and a new one cost less than $300,
roughly the wages for an average worker over just two months. Ford’s competitors also adopted the assembly
line and made a range of models, creating a ladder of consumption that stretched from the Model T to the
Cadillac, with many gradations in between. By 1926 there was one automobile for every six people, or one for
every middle class family. Using the car, Americans transformed travel from a scheduled trip on the train to a
more spontaneous adventure, including flat tires and mechanical problems, but allowing ordinary people to
explore more widely than ever before. Farmers could get into town much more often once they did not need a
horse to do so, and young people quickly found the car the ideal way to escape from parental supervision. New
roadside amusements grew up along the roads, from miniature golf to small museums to hot dog stands and ice
cream wagons. Tourist cabins and the first motels began to appear in scenic areas. The "car culture" also signaled
the rapid decline of passenger trains and streetcars.
Aviation also excited Americans. In the 1920s airplanes were somewhat rare and people still came out of their
houses to look whenever one appeared. Stunt flyers thrilled crowds at county fairgrounds. Charles Lindbergh
became perhaps the greatest hero of the decade when in 1927 he piloted the first plane to fly non-stop from
New York to Paris. The son of a Norwegian immigrant, he had grown up in rural Minnesota and yet mastered
the complexities of aviation. He seemed to bridge the gap between country and city, agriculture and industry, old
stock Americans and new immigrants. On his return he received an almost hysterical greeting from millions of
New Yorkers in a ticker-tape parade. His plane, "The Spirit of St. Louis," is still on prominent display in
Washington, DC.
The 1920s were prosperous, as wages rose in most industries. The federal income tax rate had been increased to
pay for World War I, as high as 60 percent for the wealthy, but in 1926 the maximum fell to just 20 percent.
Thousands of people invested in Florida real estate, only to lose their money when that bubble collapsed. This
did not deter millions of others from investing in the New York Stock Market for the first time, in the belief that
the assembly line and modern management had made prosperity perpetual. But the prosperity was fragile, as
farmers struggled with low crop prices and factory workers had no minimum wage or unemployment insurance.
Furthermore, manufacturing was becoming far more efficient. Assembly lines produced more consumer goods
but they needed fewer workers. Government statisticians in 1926 found that productivity had increased in
various industries between 40 and 59% since 1919, even as factory employment declined. The economy needed
to create new kinds of white-collar jobs, but these were not appearing fast enough.
When the stock market crashed in 1929, the new president, Herbert Hoover, faced enormous economic and
social problems, which his laissez-faire approach to government could not begin to solve. A successful mining
engineer and former Secretary of Commerce, Hoover would have been far better suited to the presidency during
a period of prosperity. He understood business and was a good organizer. But his political philosophy prevented
him from using the federal government to deal with the massive unemployment and the many bankruptcies of
the early depression. Hoover insisted that rugged individualism and a little charity were enough to weather the
storm. But this response was inadequate for the one quarter of the nation that was unemployed by the 1932
presidential election.
By then most Americans realized that the economy would not rebound without some help. In that year, the hit
song took a street beggar’s viewpoint, “Brother, Can You Spare Me a Dime?” Critics on the political left
proclaimed that the final crisis of capitalism had arrived, and many people believed that revolution lay just
around the corner. Literally millions of people were living in hobo camps, tents, shacks, and temporary shelters
of all kinds. Derisively, these were known as Hoovervilles.
The new president, Franklin D. Roosevelt had been one of the most promising young figures in the Democratic
Party before becoming ill with polio in early 1920s. While he never could walk again, he recovered from the
disease and made a political comeback as Governor or New York State. Running against Hoover, he won an
enormous victory, with a large majority in both houses of Congress that gave him a free hand. In the face of the
Depression, he believed only government intervention could restore the economy. In the first one hundred days
of his presidency, he inspired the Democrats to pass a large number of important laws. He temporarily closed
the banks, and rushed through Congress legislation that created Federal Deposit Insurance. It guaranteed
everyone with a savings account that the government would make certain they could not lose their money, even
if the bank failed. To deal with unemployment, FDR created government work through the Civilian
Conservation Corps (CCC), which restored forests and watersheds. To help the rural South and West, he started
hydroelectric dam building programs, notably a series of dams on the Tennessee River (TVA). These created
jobs, stimulated local economies, and resulted in enormous, iconic structures such as Hoover Dam on the
Colorado River that still remain tourist attractions. In urban areas he created jobs through the Works Progress
Administration (WPA) that put people to work repairing roads, refurbishing city parks, building recreation areas,
and even writing a series of guidebooks to every state. At first, FDR did not have a grand theory to explain his
actions, but rather experimented his way toward solutions. However, during his first term the economic theories
of Lord Keynes became known and they were used to explain the logic of deficit spending in the New Deal.
Some of FDR’s initiatives failed, notably attempts to fix agricultural prices and to control industrial output.
Others succeeded. The creation of Social Security (1935) granted unemployment benefits to all workers and
created a mandatory pension scheme. The Rural Electrification Administration (1935) brought electricity to the
countryside, and with it such modern conveniences as lighting, refrigeration, radio, and washing machines. Yet
despite these successes, too many factories remained closed, and drought, debt, and dust storms forced farmers
off the land. The nation was making the transition from rural to urban, from blue collar to white collar, and from
heavy industry to high-tech. The economy grew in some areas, such as the production of aluminum, airplanes,
chemicals, radio, film, and office machines. But workers in coalmines, steel mills, and automobile plants, were
often out of work, and they unionized as never before, especially after the Wagner Act (1935) established more
clearly the rights to organize and to engage in collective bargaining. Moreover, the New Deal created the
National Labor Relations Board to protect these rights in practice. The Wagner Act also made it illegal to fire
workers because they joined a union or to create company unions to replace independent ones.
Roosevelt easily won the election of 1936 receiving 61% of all the votes cast, with great support from workers
and farmers who appreciated what he had done for them. In addition, most African-American voters left the
Republican Party, which they long had supported because it was the party of Lincoln. They too had benefitted
from the new federal programs, and they felt that Eleanor Roosevelt in particular supported them. The victory
was national in scope, as FDR received 523 Electoral College votes, while his opponent, Alf Landon, got only 8.
Roosevelt thus cemented together a reform-minded coalition that dominated American politics until the late
1960s, establishing the welfare state required for an urban, industrial nation. The Jeffersonian ideal of selfsufficient independence retained its rhetorical popularity, but in reality the nation had become an interdependent,
highly technological society that needed to ensure all citizens had electricity, unemployment insurance, the right
to join unions, and the security of an old age pension.
Capitalism seemed an outmoded system that exploited the majority, and the apparently permanent crisis of the
capitalist economy after 1929 spurred an unprecedented interest in radical politics. Not only did the Socialist and
Communist parties recruit many new members, but also thousands of writers, artists, filmmakers, and
intellectuals shifted toward the Left. By comparison, the 1920s had been rather apolitical. Striking US workers
found that many writers came to their aid, including Theodore Dreiser and Sherwood Anderson. The Spanish
Civil War engaged the sympathies of many, including Hemingway and Dos Passos, each of whom supported the
Republicans against Franco, who had Mussolini and Hitler's backing. Many visited the USSR and were fascinated
by efforts to create a new politics and culture there, including the critic Edmund Wilson and the AfricanAmerican novelist Claude McKay. The folk singer, Woody Guthrie, composed songs that workers sang during
their drives for unionization. In a nation with 25% unemployment, that had both starving people and food
surpluses, it seemed that the future must belong to some form of socialism, which could harness the idle
factories for the benefit of all.
Roosevelt’s second term was not as notable as his first. Frustrated by the conservative Supreme Court, which
kept invalidating New Deal programs as unconstitutional, he proposed appointing more justices than the
customary nine. This idea was widely denounced as “court packing” and an attempt to change the balance of
powers set out in the Constitution. No new justices were appointed, but the Court decided by a 5-4 vote that the
Wagner Act was constitutional. Shortly afterwards Roosevelt got his first opportunity to appoint a justice to the
Court, and by 1940 he had filled four vacancies with more liberal-minded judges.
Labor unions proved extraordinarily active, particularly after 1935 with the formation of the Committee for
Industrial Organizations (CIO). It broke away from the older American Federation of Labor, which still
organized strictly along the lines of specific skills. Such craft unions were inappropriate for the new mass
production industries, where most workers were only semi-skilled. The CIO successfully organizing the
automotive industry through a series of dramatic strikes that employed a new tactic, the “sit down” strike.
Because assembly-line work required few skills of most men, the traditional strike tactic of walking off the job
was not effective. In a nation with widespread unemployment, a corporation could immediately find new
workers instead of negotiating with striking employees. However, factory machinery was valuable and could not
be quickly repaired or replaced. In a sit-down strike, workers held the machinery hostage as they occupied the
factory day and night, and so halted any possibility of production. This tactic was tried successfully in 1936 and
shortly afterwards was used against General Motors. Beginning at Christmas time with a sit-down strike in Flint,
Michigan, more and more GM plants were closed down during the following month until 240,000 men and
women were on sit-down strikes. The workers established systems of food supply, internal government, and
even mail service, and did not sabotage equipment. Outside, thousands more picketed the plant in their support.
GM claimed the strike was caused by communists and tried to intimidate the workers, who stood firm and had
widespread public support. In February GM was forced to accept the union, which then used the same tactic to
force the other automakers to recognize workers’ new rights under the Wagner Act. These events electrified
workers across the nation, and many more joined unions and claimed their right to representation and collective
bargaining. By the end of 1937, more than 500,000 autoworkers and steelworkers had been unionized, and CIO
membership had increased to 4 million.
Nevertheless, the late 1930s economy was fragile. The stock market fell sharply in the fall of 1937 and
unemployment rose again. Ironically, the New Deal that had embraced deficit spending in 1933 before there was
a widely recognized theory to support it, had become cautious, and tried to balance the budget in 1936. In fact,
the federal budget briefly was in surplus, but as a consequence the economy faltered.
Perhaps because Americans felt the nation’s fate hung in the balance, they often wanted to escape into the
comedies of the Marx Brothers, Laurel and Hardy, or the elegant Fred Astaire and Ginger Rogers. The public
also searched for “a useable past,” embracing folk music, Shaker furniture, and things that seemed
quintessentially American. Films that sentimentalized the past were also popular, notably Gone With the Wind. The
Star Spangled Banner, over a century old, became the national anthem. Composers, such as Aaron Copeland,
found musical themes in folk song, and painters, such as Grant Wood, explored local material. Likewise, William
Faulkner's novels explored the history of an imaginary Mississippi county, developing universal themes out of
local material, and showing how the mistakes, conflicts, and passions of the past were passed down through the
generations.
Yet the 1930s were equally obsessed with the future. Worlds Fairs, notably in Chicago (1933) and New York
(1939), depicted marvels only one generation ahead: visitors heard their first coast to coast telephone call, saw
their first television program, and viewed enormous miniaturized models of the streamlined cities of the future.
In the frightening present of the 1930s, Americans celebrated new technological achievements, such as The
Empire State Building, Hoover Dam, and the Golden Gate Bridge, but they also celebrated their forefathers in
the newly completed Lincoln Memorial and Mount Rushmore. Either the past or the future seemed better than
the present. Yet Americans did not avoid confronting their problems, as eloquently expressed in the songs of
Ella Fitzgerald and Billie Holliday, in John Steinbeck's The Grapes of Wrath, and in vivid documentary
photographs produced by the Farm Security Administration that depicted the millions of poor people struggling
to survive.
What ultimately stimulated the economy and brought recovery was less the New Deal than World War II.
Suddenly all the American agricultural surpluses could be sold abroad, and American factories became busy
producing not consumer goods but weapons and supplies, first for France, Britain, and Russia and later for the
US’s own military buildup. The nation remained neutral from the outbreak of war in 1939 until the end of 1941,
when the Japanese made a devastating surprise attack on the US naval base at Pearl Harbor, Hawaii. It was the
first serious foreign attack on US soil since 1815, and it galvanized the country. The next day thousands of men
lined up to volunteer for the armed forces. Pearl Harbor ended two decades of foreign policy isolation, forcing
the United States into a vast war in both the Pacific and in Europe.