History | A3 The USA, 1918–41

Welcome to A3: The USA, 1918–41 – Boom, Bust, and New Beginnings!

Hello future historians! This chapter is one of the most exciting and dramatic periods in modern US history. We are going to explore how America went from the incredible highs of the "Roaring Twenties" to the devastating lows of the Great Depression, and how a revolutionary plan called the New Deal tried to save the country.

Understanding this period is vital because the challenges and solutions developed between 1918 and 1941 shaped the modern American economy and government forever. Don't worry if some concepts seem complex—we'll break everything down step-by-step!

Section 1: The Roaring Twenties – The Economic Boom (1918–29)

After World War I, the US experienced massive prosperity, often called the "Roaring Twenties." Think of this decade as a party where everyone felt rich, fueled by rapid industrial growth.

Key Factors Causing the Boom

The boom wasn't magic; it was built on four main pillars:

1. Mass Production and the Assembly Line:

   The greatest breakthrough was Henry Ford's Assembly Line. This allowed goods, especially cars (the Model T), to be built faster and much cheaper. More goods meant more jobs and cheaper prices for consumers.
   Analogy: Instead of one person making a whole cake, ten people each do one tiny step. The result? Hundreds of cakes made in the same time!

2. Credit and Hire Purchase:

   People could suddenly "Buy Now, Pay Later." This system, known as Hire Purchase or credit, allowed ordinary families to buy expensive items like refrigerators, vacuum cleaners, and cars, driving up demand even more.

3. New Industries and Advertising:

   New technologies like electricity powered new industries (radio, cinema, household appliances). Intense advertising created a culture where people felt they needed these new gadgets, constantly stimulating the market.

4. Republican Policies (Laissez-faire):

   The Republican presidents (Harding, Coolidge, Hoover) believed in Laissez-faire—meaning "hands-off." They kept taxes low, tariffs high (making foreign goods expensive), and interfered minimally with business. They believed what was good for big business was good for America.

Section 2: Social and Cultural Tensions in the 1920s

The prosperity of the 1920s brought huge social changes, but also deep divisions between the traditional, rural USA and the modern, urban USA.

A. Changing Roles: Flappers and Jazz

• The Flappers: These were young women who broke traditional rules. They wore shorter skirts, cut their hair short (the 'bob'), smoked, drove cars, and went out unchaperoned. They symbolized new freedoms for women.
• The Jazz Age: Music exploded, especially Jazz, which was vibrant, energetic, and often played in illegal bars (Speakeasies). Cinema and radio also boomed, creating a shared national culture.

B. The Great Experiment: Prohibition (1920–1933)

In 1920, the 18th Amendment made the manufacture, sale, and transport of alcoholic drinks illegal. This was called Prohibition.

Did you know? Prohibition was intended to reduce crime, poverty, and family breakdown.

• Failure: It was impossible to enforce. People still wanted to drink.
• Rise of Organized Crime: This policy empowered ruthless gangsters, like Al Capone in Chicago, who made fortunes smuggling and selling alcohol through Speakeasies. Crime rates soared, defeating the law's original purpose.

C. Intolerance and Fear

Many traditional Americans feared the changes, leading to increased intolerance:

• Racial Tension: The Ku Klux Klan (KKK) revived dramatically, targeting not just Black Americans, but also Catholics, Jews, and immigrants, seeing them as threats to 'WASP' (White Anglo-Saxon Protestant) values.
• Immigration Restrictions: Laws were passed (like the Quota Acts) to drastically limit the number of immigrants coming into the USA, especially from Southern and Eastern Europe, based on a fear that immigrants threatened American jobs and culture.
• The Scopes Monkey Trial (1925): A teacher named John Scopes was arrested for teaching Darwin’s theory of evolution, which conflicted with the biblical creation story. This highly publicized trial showed the deep conflict between scientific progress and traditional religious beliefs.

Section 3: The Crash and the Great Depression (1929–1933)

The prosperity of the 1920s was built on shaky foundations. By 1929, the party was over.

A. Underlying Causes of the Depression

The economy didn't collapse because of one event, but because several issues were brewing simultaneously:

1. Overproduction in Industry and Agriculture: Factories were making more goods than people could afford to buy (remember, only the wealthy truly benefited from the boom, wages for ordinary workers didn't rise as fast). Farmers were struggling because they produced huge amounts of food during WWI, and after the war, demand and prices plummeted.
2. Uneven Distribution of Wealth: Too much money was concentrated in the hands of the very rich. The majority of Americans were still too poor to keep buying all the products being churned out by mass production.
3. Speculation on the Stock Market: This is the most complex part. People weren't just investing; they were gambling. Many bought stocks "on the margin," meaning they paid only 10% of the cost and borrowed the rest, expecting stock prices to keep rising so they could quickly repay the loan. This was a dangerous, unsustainable financial bubble.
4. Weak Banking System: US banks were generally small and unregulated. If one failed, it often took others down with it (the domino effect).

B. Black Thursday and Black Tuesday (October 1929)

When investors realized that company values were inflated and profits were slowing down, they started selling their stocks rapidly.

• On October 24, 1929 (Black Thursday), stock prices plummeted.
• On October 29, 1929 (Black Tuesday), the market completely crashed. Panic set in.

C. The Spiral into Depression

The Stock Market Crash triggered a chain reaction:

1. Investors lost fortunes and demanded repayment of loans.
2. Banks, unable to recover loans, failed (millions of people lost all their savings).
3. Companies, unable to raise money and facing falling demand, cut production and laid off workers.
4. Unemployment soared (reaching 25% nationally).
5. People had no money to spend, so demand dropped further, causing more factories to close.

Section 4: Living Through the Depression and Hoover’s Response

Life during the Depression was incredibly harsh. People faced starvation, homelessness, and despair.

• Homelessness: Millions were evicted from their homes. Shantytowns—collections of crude shacks built by the homeless—sprang up near cities. These were bitterly nicknamed Hoovervilles, reflecting the public's anger at President Hoover.
• The Dust Bowl: In the Midwest, years of poor farming combined with severe drought created massive dust storms. This forced hundreds of thousands of farming families, known as Okies (because many came from Oklahoma), to abandon their land and migrate west to California, searching for work.

President Hoover's Response

President Herbert Hoover (1929–33) believed in Rugged Individualism—the idea that people should help themselves and that excessive government aid would weaken the national character.

• Initial Policy: He initially refused direct federal aid (charity) to the poor, believing relief should come from state governments or private charities.
• Later Changes: As the Depression worsened, he did take some action, such as setting up the Reconstruction Finance Corporation (RFC) to lend money to banks and businesses to help them recover.
• Failure: His actions were "too little, too late." He was blamed for the suffering, and he lost the 1932 election in a landslide.

Section 5: Franklin D. Roosevelt and the New Deal

In 1932, Franklin Delano Roosevelt (FDR) won the presidency, promising a "New Deal" for the American people. He offered hope and confidence, famously saying, "The only thing we have to fear is fear itself."

The Goals of the New Deal: The 3 Rs

The New Deal programs were designed to achieve three immediate goals:

1. Relief: Immediate help for the unemployed, the homeless, and the hungry.
2. Recovery: Getting the economy going again (creating jobs, boosting industry).
3. Reform: Changing the financial system to prevent a future depression.

Key New Deal Programs (The First New Deal, 1933–34)

FDR used his first 100 days to pass a massive number of laws:

• Banking Crisis Relief (Reform): He closed all banks for four days (the Bank Holiday) to restore confidence, only allowing financially healthy banks to reopen. This stopped the panic.
• Civilian Conservation Corps (CCC) (Relief/Recovery): Gave jobs to young, unmarried men (aged 18–25) planting trees, fighting fires, and building infrastructure in national parks. They received food, shelter, and a small wage.
• Agricultural Adjustment Act (AAA) (Recovery): Paid farmers subsidies (money) to produce less food. The goal was to reduce oversupply and drive up farm prices.
• Tennessee Valley Authority (TVA) (Recovery/Reform): Built huge dams in the impoverished Tennessee Valley region to control flooding, generate cheap electricity, and create jobs. This fundamentally changed the area.

The Second New Deal (1935–38)

FDR realized the first New Deal hadn't ended the Depression, and faced increasing political pressure. The Second New Deal was more focused on permanent reforms and welfare.

• Works Progress Administration (WPA) (Relief/Recovery): Became the largest New Deal agency. It employed millions of people (not just manual labourers, but also artists, writers, and musicians) to build schools, hospitals, and cultural centers.
• Social Security Act (SSA) (Reform): Established a national system of old-age pensions, unemployment insurance, and aid for dependent mothers and children. This created the foundation of the modern US welfare state.
• Wagner Act (Reform): Also known as the National Labor Relations Act (NLRA). It strengthened the rights of workers to join trade unions and bargain collectively with employers.

Opposition to the New Deal

FDR faced major opposition from two sides:

• The Right (Conservatives/Republicans): Argued the New Deal was too expensive, created a huge national debt, and interfered too much with business freedom (attacking Laissez-faire). They claimed FDR was acting like a socialist or a dictator.
• The Left (Radicals): Argued the New Deal did not go far enough. They demanded a complete redistribution of wealth. Famous critics included Senator Huey Long (who proposed "Share Our Wealth").
• The Supreme Court: The conservative Supreme Court declared several key New Deal agencies (like the AAA and the National Recovery Administration, NRA) unconstitutional, claiming the federal government was exceeding its powers.