Extended Essay Ib

Garcia 1 The post-war period, following the First World War, was marked by extensive production of goods. The wealthy seemed to gain profits after the war. In the United States during the 'Roaring Twenties', the urban concentration concluded shift from traditional values and dependence on industries that led to the Great Depression. The Roaring Twenties were the outset of a new era of greed and anxiety. The decade was defined by 'prosperity'—in reality, it was a fake illusion. Some industries had not been blessed with the glory of profits. The war fought overseas had left irremediable effects on the economy. The end of the war brought about the termination of many jobs. The soldiers and farmers considered cities as the adequate location for their aspirations. The introduction of new amendments changed the values of the American people. The Roaring Twenties would witness the phobia of radical movements that settled the stage for the catastrophic scenario of the Great Depression. One cannot expect to fully understand the origin of the American optimism without understanding World War One. The American machine supplied countries in Europe during the First World War. The countries in Europe were in conflict and needed products from the United States to survive. European nations fell into ruins and resorted to trade with the United States for the reconstruction. The farmers gained several successes, during this time period, taking into account the country's enthusiasm for exporting abroad. The prosperity would shortly be exterminated with the end of the war. The temporary assistance provided during the war years would seize. The output will be imbalance with the demand. The agriculture field faced the challenge of coping with the diminution of demands. So, agriculture was depressed before the actual Great Depression. During First World War, the federal government provided funds for the farms and payed the high prices for wheat and grain. This effort eased the impact of the imbalance in the workforce. The Garcia 2 farmers were encouraged to take advantage of the technological advances. After the war, the government removed the policies that aided the farmers. The government paid $2 for a bushel of wheat but now the prices had declined to sixty-seven cents. Farmer accumulated debts, and were forced to seek opportunities in the cities. In 1923, Agriculture Credit Act was introduced. The act initiated twelve credit banks to loan to commercial bank in order to help farmers. Agriculture was important but by neglecting it, the industry fell into ruins. The Roaring Twenties marked the rise of optimism to the people as the stock market was prosperous. Yet, the success of the market was based on the interchange of stocks by investing money not available. Credit expansion permitted several people to gamble their futures by involving in a strenuous attempt to gain fast profits. The country focused on a structure based on non-external influence to the nation.

Cities symbolized the realm of development. Productivity was rising in consequence of stock fanaticism. New industries expanded such as the automobile industry. Automobiles contributed to the formation of new jobs. The people lived up to a fake concept of prosperity. The people considered their economy eminent and were reluctant to see the flaws of mass speculation. The extension of credit, people invested money on stocks. In The NY Stock Exchange, 1,124,800,410 shares were traded in 1929. Buying stock on margin consists of investing a small amount and borrowing money. When selling the stock, the profit would be the money remaining after repaying the money borrowed and interest. The entrepreneurs were lured into the stock markets in hope of gaining profit. The optimism defined the speculation boom but ended with fear of losing investments. The speculations and unstable workforce triggered a major crisis. There was a gap among working class and the rich. The presidents following Woodrow Wilson were pro-business. Calvin Coolidge for instance favored business: therefore, the wealthy. The Revenue Garcia 3 Act of 1926 reduced federal income tax, and canceled excised imposts. The rate of thirteen percent was levied on the net income of corporations. While a normal tax and surtax were levied on the net income of individuals. Andrew Mellon believed in liberating rich from oppressive taxes and encouraging investment. His tax policies were implemented by the Revenue Act of 1926. Therefore, the large disparity between wealthy and middle class created an unstable country. During the 1920's the workers' wages rose by nine percent in comparison to sixty-three percent increase in corporate profits (Kyvig 178). The income of the families was provided by more than one person. The amount of money of the nation's better paid families accounted for the incomes of twelve million families receiving below $1,500. Two-fifths of the American families' annual incomes amounted to $1,500 that is considered the federal government at the time as the poverty line for a family of four. The people concentrated in the urban dwellings had the highest wages. Agriculture at this time was having difficulties coping with the transition from the war years. Poverty was common during the 1920's. The lower class struggled to accommodate the basic necessities. So, the poor did not participate in the stock market or in the consumption of the new goods. During the Great Depression, these people adapted to the turmoil surrounding the country. The consumer goods production during the Roaring Twenties was not balanced with the demands. The population was astonished by the extraordinary growth in the economy. Most of the economic prosperity was a result of the consumer products that had gained popularity. Production increased as the demand increased. Once the rich obtained all the material goods, the wealthy seized the expenditures

since they were not satisfied with the lack of innovation. The poor were unable to buy the new products because of bad distribution. The alternatives to make up for the difference for excess supplies were harmful to the economy. Garcia 5 The roaring twenties were also a time of imbalance. People relied on credit expansion and luxury spending , and rich investment. People who could not afford goods could buy them on credit. By the end of 1920's cars and radios were bought on installment credit. The credit trend began and people were buying more than they could pay. It permitted the buying of goods that currently people count not afford but would pay later. Soon people had satisfied their needs since there were few options. People's salary went to pay for previous purchases. Luxury spending and investment was restricted to the wealthy. Too much investment and savings amounted to productivity. Overproduction was a greater burden because of the gap between the poor and rich due to income distribution. The radio and automobile industries were the leading industries. The advertising methods' aim was to built personal anxiety and promote the new products as the artificial alternative for personal satisfaction. The advertising methods' aim was to built personal anxiety and promote the new products as the artificial alternative for personal satisfaction. In 1921, Ford Motor Company's assets amounted to $345 million and more. One-sixth of Americans owned a car and twenty-one million cars were circulating by 1928. With the rise of automobiles the agriculture industry plummeted. Farm and food prices fell by 72% because of surplus of food. People whose income was derived from agriculture earned 36% less money than the average American. Prosperity was abundant among industries dependent on the automobile, and radio. For example, industries that fabricate materials for automobiles. Fifteen percent of steel production is for the automobiles. Nickel, lead, and other metals are also involved in the production of cars. Glass, leather, textile became dependent on the automobile industry because of invention of closed cars. The fuel industry received government contribution. Rubber tires were successful because replacement was necessary. Motels and hotels appealed to the travelers and tourists as tourism Garcia 6 increased. Jobs were found in construction field, maintenance of highway, city streets. Federal government helps built interstates. Industries sparked from the development of the automobile. Urbanization created a demand for many more apartment buildings, factories, offices, and stores. Between 1919 and 1928 the construction industry expanded by fifty percent. Radio was also a prosperous business. The fundamental problem with the automobile and radio industries was that they could not expand advertising. People could and would buy only so many cars

and radios. The advertising method dependent on radio to sell products, but was futile. In 1926, there was the development of new broadcasting companies, National Broadcasting Company (NBC) and Columbia Broadcasting System (CBS), respectively. Several factors permitted the concentration on these two industries. During First World War a large quantities of materials were produced to manufacture radios and cars. They were needed in war: so, the workforce gained experience in these industries. The infrastructure for the development of the industries was triggered by government support. The massive dependence on industries had a detrimental impact on smaller businesses. Similarly to the distribution of wealth among classes, certain industries dominated. Smaller industries are heavily dependent on the automobile and radio industry then the growth of such industries are reliant on whether the stronger corporations succeed. The economy would tumble if the two industries do not continue to prosper. The dependents would lose capital. The United States implemented an isolation policy. The former president, Woodrow Wilson, sought to establish a peace organization introduced as the League of Nations. Congress refused to get involved in the organization suggested by their president. So, the League of Nations came about without American involvement. The difficulty afflicting the Americans was how to put an end to the episode of war. The influx of immigrants binded the people to other states. Immigration skyrocketed Garcia 7 after 1910. A quota system was introduced in 1921 to deal with the wave of immigrants. Only three percent of the foreigners living in the United States in 1910 of each nationality would be allowed to stay in the United States. By 1924, the percentage had been reduced to two percent from the year 1890. The implementation of this national policy was due to the racial intolerance at the time. Prior to the 1920's, immigration restrictions were not applied to the Europeans during the First World One. Refugees were settling in the United States. According to the census by 1920, the total of 13,920,392 people lived in the United States. Americans were displeased with the eastern European societies. The foreign-born from the different factions of Europe were classified as “dangerous” to the country. The immigrant anxiety reached its peak in the 1920's during the Red Scare. Eastern Europeans were generalized as Bolsheviks. The United States was insisting in being repaid for the money invested abroad. The US was exporting capital to other countries. Europeans struggled to rebuild their countries after the war They were in recuperation state. The United States placed high tariffs by over 100% to protect the businesses but this disabled the countries to participate in business with the US. Two examples of a acts introduced are the Fordney-McCumber Act of 1922, and the Hawley-Smoot Tariff of 1930. If the

sales to American counterparts lowered to a considerable amount, the Europeans would not be able to buy American goods or pay the debt from the war they owed USA. By 1929, ten percent of the GNP was from exports. When the countries couldn't afford goods the amount of exports fell by thirty percent. The minorities were urgent to receive better conditions. The new laws were too radical for the conservatives who noticed feared an uprise. This added on to the previous tensions among races. African Americans hoped that after fighting in the First World War they would receive a better stake in America. Ironically, the Ku Klux Klan membership increased. Four and a half million people joined the Ku Klux Klan by 1924. They were intolerant of Jews, immigrants, Catholics, and foreigners. Race Garcia 8 Riots and Massacres were held such as Chicago Race Riot of 1919. Racial tension increased because Great Migration from the South. The jobs were reduced and it brought competition among various groups. The population was growing discontent. Women received their right to vote in 1920. Jobs weren't equally distributed among women and men. Some common women' jobs are nurse, teacher, and clerk. Technology liberated women from household duties. Some examples of technology are the vacuum, the fridge, the washer, electrical powered appliance, and packaged food. New fashions exposing more skin than the modest traditional fashions of the previous century. People were more rebellious. People were drinking and ignoring Prohibition. Disillusion from actual gains from the First World War influenced people's attitude about affairs abroad. The masses settled in the United States believed that the intentions in Europe were closely tied to business. People emphasized on domestic affairs. Yet, the Americans did not want the government to extend their influence over their lives. The reluctance of the government to be involved in people's lives was a problem. The radical reforms introduced could not be enforced without involvement. People focused on better working conditions, better salary, and less hours of work. Many temperance enthusiasts collaborated to ban the circulation of alcohol. Women were often the victims of men abandoning the household to engage in the intake of alcohol. In the quest to stop the habits of their husbands, women found the Women's Christian Temperance Union (WCTU). According to the Eyewitness History The Roaring Twenties, one important element in the sponsoring of Prohibition was Wayne B. Wheeler of the Anti-Saloon League. Wayne B. Wheeler began a movement against alcohol consumption that exposed it to political leaders (28). The First World War brought about a debate about whether sobriety should be banned for the benefit of the soldiers fighting overseas. Many industrialists such as Carnegie, Rockefeller, and Ford supported Prohibition since

intoxicated Garcia 9 individuals did not fulfill their expectations in the workforce. Directing attention to supplying the resources was thought be effectively accomplished if the people were not sober. In order to successfully prohibit alcohol, the government needed to present an amendment. The Eighteen Amendment banning alcohol came into effect in January 16, 1920. The Volstead Act enumerated the punishments for abusing the law by consuming alcohol. At the time of Prohibition, stocks of alcoholic beverages were permitted within the United States only if purchased prior to July 1, 1919. There were exceptions to ban on alcohol; alcohol for medical purposes, religious ceremonies, or under 0.5 percent could be manufactured. A vast majority of people were against Prohibition. So, criminals wavered past laws to provide individuals with illegal alcohol. An amount of $12 million by 1927 were intended for the enforcement of the new amendment. The capacity of the government to keep order was challenged with people's reluctance to have the government involve in the domestic affairs at time of prosperity. Agents and commissioners had the job of closing any business involved in illegal selling of liquor. The most disturbing effect of Prohibition was the union of mobs to sell alcohol resulting in a wave of violence. Like the instant wealth promoted by stock market, bootleggers promoted intoxicated beverages. The beverages were not created in most sanitary places but despair led to consuming unhealthy liquor. The debate at the time was whether the eighteen amendment was effective in reducing the figures of drunks. Statistics show the intoxication figures doubled five years after the law was ratified. Still devices were available to create the liquor. Home production of gin was popularized, which usually was produced from apples, raisins, and prunes. Rumrunners was a term coined to define people who smuggled liquor from foreign countries along the coast. These people had the tendency of deceiving the law since it was complicated to have officials regulating the ports. Speakeasies and Blind Pigs were private clubs whose entrance was permitted to non-officials or friends of the patrons. Garcia 10 Physicians also benefited from being able to prescribe alcohol to patients. The thirteen years when Prohibition was a law corruption increased as the population tried outmaneuver the system by aiming for quick profits. A case of corruption was that of George Remus, a doctor, who began his own medical distilleries. Then Remus would organize the robberies of the distilleries to be sold to bootleggers. The impact of corruption and crime took its toll on lives during massacres. Small groups of people formed the racketeers and gangster who united to form mobs. These criminals based their business on the idea of supplying to meet demands. The profits were shared among the mob. The

lawbreakers provided with the liquor to sell for the best of the gang member and crooks. The famous Al Capone was a true gangster who lived in New York but moved to Chicago to join Johny Torris' gang. 'Al' Capone soon was in charge of the organized gang . Competition among individuals who participated on the bootlegging operations were common in Chicago. The competitive edge of different gangs resulted in violence. The Valentine's Massacre was among Al Capone's gang and George Moran's gang. The Al Capone men dressed in cop uniforms made an order of whiskey, but upon arrival fired their submachine guns and shut guns at the seven of Moran's men who guarded the whiskey. To an extent the instability in cities was due to the introduction of Prohibition that brought discontent and an enterprise of illegal manufacturing of intoxicating beverages. People were lured by money and alcohol at the cost of the social structure dependent on working men instead of criminals. Traditionally, people believed in earning and saving money to sustain their lifestyles. A new concept arouse known as consumerism. Consumerism is based on thirst for materialistic goods. The adoption of this principle led to the creation of mass production. Henry Ford, a notable industrialist mentioned the significance efficiency had on business. Electricity played an important role in strengthening the purchasing power. The new appliances developed relied on electricity. By 1929, eighty-five percent of city homes had electricity. The usage of electricity had a dramatic impact on the Garcia 11 sales of appliances. The new products seemed to ease the load of work. There was a decline of investment. Rich stopped buying luxury items, and investing. The poor stopped buying products in fear of not being able to pay interest and losing their jobs. Production fell in 1929 by nine percent. Workforce unemployed because labor was not necessary. People who defaulted on their payments had to return their appliances. Warehouses were piled with radios and cars. Industries dependent on those goods suffered. The loans to foreign countries declined. Tariffs increased to protect the businesses and the countries halted business with the United States. The country fell into catastrophe as people lost job, banks fell short, and industries fell. In 1930, unemployment was at five million. By 1932, thirteen million people were unemployed. After the First World War, people were not able to adapt to the economical changes at the time generally because the war period meant the rising of profits. The government after the war abandoned the farmers who were in need. The nation's economy depended on the automobile and radio. The prohibition amendment brought discontent and rise of crime. The typical ideals of people changed leading disorder in the structure of society. Some of the hysteria was indeed a result of the influx of immigrants from Eastern Europe who were conceived as being communist. The dwelling of the tensions rest upon the urban areas that sponsored speculation, the stock market investment, immigration arrivals, crimes, and

deemphasis of the farms.