c a p i ta l i s m i n th e u s a - mondeor high school

Capitalism in theUSA

1900 – 1940

DEPARTMENT OF HISTORY - MRS LANDSMAN

Please ensure that you complete your research project as thiswill be the only SBA TASK you do this term besides the exam.

Mrs Landsman

1. Refer to Classnotes – Capitalism in the USA.2. Use headings of slides to guide you.3. Copy slides into your history classwork book.

Please note: not much information is giving on the GreatDepression as this was essential aspect of your research projectand all research should be recorded in your file under thissection.


Discussion Points• Nature of Capitalism• The Wall street Crash

of 1929• The New Deal• Impact of WWII on the

Economics of the USA


Capitalism

Capitalism describes the way a country organises

it’s economic activity.

In capitalist countries you can invest in any

business - if successful they will make a profit and

become wealthy.

Competition is seen to be good. This forces firms

to cut prices and provide better services.

People can set up own companies and invest their

money.


What are the main features of capitalism in

the USA?

• Privately owned businesses – not owned by

the government.

• The ‘Profit Motive’ – set up businesses to

make money.

• Competition and choice – consumers having

choices of goods and services.

• The Market system – supply and demand.

• Non-intervention – Government will not

interfere to much in the running of the

economy.


‘RUGGED INDIVIDUALISM’A CONCEPT INTRODUCED BY THEREPUBLICAN PARTY – BELIEF THATALL INDIVIDUALS CAN SUCCEED IFTHEY TRY HARD ENOUGH


The American

Dream

FREEDOM

SRIGHTS

DEMOCRAC

Y

EQUALITY Responsibilities

CAPITALISM


The American Dream

Everyone born equal

Democratic country and any

American citizen can be

elected President

Free to live their lives the

way they want to

The USA is full of wealth and

opportunities

Anyone can be successful if

they work hard


THE CAPITALIST BOOM IN THE 1920’S

• STRENGTHS OF THE US ECONOMY:1. World’s leading industrial power.2. Large supply of natural resources.3. Big population –who are willing to work hard.4. Development of New Technologies: radio broadcasting,electricity, motor industry, movie industry.5. World War I led to economic growth.

Credit nationDEPARTMENT OF HISTORY - MRS LANDSMAN

• At the start of the American revolution, Americahad an almost limitless supply of land• Nine of ten Americans lived on a farm• One hundred years later, fewer than one in two did• Today, fewer than two in one hundred

• These two feed America and create a huge surplus that helps tofeed the rest of the world

• The abundance of land was the most influentialfactor in our economic development in the 19th

century• Brought millions of immigrants• Encouraged large families• Encouraged rapid technological development

Agricultural developments


People who have

achieved the American

Dream

• William Henry Gates III (Bill Gates) born October 28, 1955 is an

American entrepreneur and the chairman of Microsoft. Recent

estimates put his net worth near $56 billion.

• Oprah Gail Winfrey born January 29, 1954 is the host of The

Oprah Winfrey Show , the highest rated talk show in TV history.

She is also an influential book critic, an Academy Award-

nominated actress, and a magazine publisher. She has been

ranked the richest African American of the 20th century and

the world's only Black billionaire for three straight years. She is

also, according to several assessments, the most influential

woman in the world.


Bill

Gates

Steve

Jobs

Donald Trump

Mark ZuckerbergDEPARTMENT OF HISTORY - MRS LANDSMAN

• LIFE &CULTURE INAMERICA INTHE 1920S

THE ROARINGTWENTIES

CHANGING WAYS OF LIFE❑ During the 1920s,

urbanization continuedto accelerate

❑ For the first time, moreAmericans lived in citiesthan in rural areas

❑ New York City washome to over 5 millionpeople in 1920

❑ Chicago had nearly 3million

URBAN VS. RURAL❑ Throughout the 1920s,

Americans found themselvescaught between urban andrural cultures

❑ Urban life was considered aworld of anonymous crowds,strangers, moneymakers, andpleasure seekers

❑ Rural life was considered tobe safe, with close personalties, hard work and morals

Cities were impersonal

Farms were innocent

1920s Culture WarsProhibition

• Eighteenth Amendment and Volsteadt Act• Supported by middle-class

progressives and rural Protestantsespecially in South and West

• Generally ignored in urban centers• Bootleggers/Rumrunners

• Smuggling of alcohol• Rise of organized crime• Al Capone

• Speakeasies• Underground saloons

PROHIBITION❑ One example of the clash

between city & farm wasthe passage of the 18th

Amendment in 1920❑ This Amendment

launched the era known asProhibition

❑ The new law made itillegal to make, sell ortransport liquor

Prohibition lasted from 1920 to1933 when it was repealed by

the 21st Amendment

SUPPORT FOR PROHIBITION

❑ Reformers had long believedalcohol led to crime, child & wifeabuse, and accidents

❑ Supporters were largely fromthe rural south and west

❑ The church affiliated Anti-Saloon League and the Women’sChristian Temperance Unionhelped push the 18 th

Amendment through

Postersupporting

prohibition


SPEAKEASIES ANDBOOTLEGGERS

❑ Many Americans did not believedrinking was a sin

❑ Most immigrant groups werenot willing to give up drinking

❑ To obtain liquor illegally,drinkers went underground tohidden saloons known asspeakeasies

❑ People also bought liquor frombootleggers who smuggled it infrom Canada, Cuba and the WestIndies

ORGANIZED CRIME

❑ Prohibition contributed tothe growth of organizedcrime in every major city

❑ Chicago became notorious asthe home of Al Capone – afamous bootlegger

❑ Capone took control of theChicago liquor business bykilling off his competition

Al Capone was finally convicted on taxevasion charges in 1931

GOVERNMENT FAILS TO CONTROLLIQUOR

❑ Eventually, Prohibition’sfate was sealed by thegovernment, which failedto budget enough moneyto enforce the law

❑ The task of enforcingProhibition fell to 1,500poorly paid federal agents --- clearly an impossibletask

Federal agents pour winedown a sewer

SUPPORT FADES, PROHIBITION REPEALED❑ By the mid-1920s, only

19% of Americanssupported Prohibition

❑ Many felt Prohibitioncaused more problemsthan it solved

❑ The 21st Amendmentfinally repealedProhibition in 1933

1920s Culture WarsKu Klux Klan


1920s Culture Wars :• Fundamentalism

• Literal view of Bible; Creationism• Attacked urban lifestyle and culture• Revivalists

• Billy Sunday• Aimee Semple McPherson

• Modernism• Liberal view of religion• Acceptance and coordination of science and

context with faith• Scopes Monkey Trial (1925)

• Law against teaching of evolution inTennessee public school

• Creationism• William Jennings Bryan

• Evolution• Clarence Darrow

1920s Culture Wars : The Jazz Age• Inspiration of rebellious youth and

liberal reaction to conservatism andfundamentalism

• Song and Dance• Jazz

• Louis Armstrong• George Gershwin

• Speakeasies• Dance Clubs

• Waltz to Foxtrot to Charleston• Josephine Baker

• Flappers• Radio

• Mainstream medium• Networks: NBC, CBS

• Cinema• Talkies

• The Jazz Singer• Nickelodeons• Charlie Chaplin

THE TWENTIES WOMAN❑ After the tumult of World

War I, Americans werelooking for a little fun in the1920s

❑ Women were becomingmore independent andachieving greater freedoms(right to vote, moreemployment, freedom of theauto –being able to drive)

Chicago1926

THE FLAPPER

❑ During the 1920s, anew ideal emerged forsome women: the Flapper

❑ A Flapper was anemancipated youngwoman who embracedthe new fashions andurban attitudes

1920s Society - Women• Nineteenth Amendment and Voting

• Usually voted as husbands• Politicians catered to female-friendly

legislation and programs• Employment

• Clerical, teachers, nurses, domesticservants

• Lower wages and no managerialpositions

• Margaret Sanger• American Birth Control League• Established Planned Parenthood

• Flapper Girl• Young women of the Jazz Age• Short hair, short hemline, cosmetics,

cigarette

NEW ROLES FOR WOMEN

❑ The fast-changing world of the 1920s produced new roles forwomen

❑ Many women entered the workplace as nurses, teachers, librarians,& secretaries

❑ However, women earned less than men and were kept out of manytraditional male jobs (management) and faced discrimination

Early 20th Century teachers

THE CHANGING FAMILY❑ American birthrates

declined for several decadesbefore the 1920s

❑ During the 1920s that trendincreased as birth controlinformation became widelyavailable

❑ Birth control clinics openedand the American BirthControl League was foundedin 1921

Margaret Sanger and other foundersof the American Birth Control League -

1921

MODERN FAMILYEMERGES

❑ As the 1920s unfolded,many features of themodern family emerged

❑ Marriage was based onromantic love, womenmanaged the householdand finances, and childrenwere not consideredlaborers/ wage earners butrather developing childrenwho needed nurturing andeducation

EDUCATION AND POPULAR CULTURE

❑ During the 1920s,developments in education hada powerful impact on the nation

❑ Enrollment in high schoolsquadrupled between 1914 and1926

❑ Public schools met thechallenge of educating millionsof immigrants. (Hispanics,Italians)

RADIO COMES OF AGE

❑ Although print media waspopular, radio was the mostpowerful communicationsmedium to emerge in the1920s

❑ News was delivered fasterand to a larger audience

❑ Americans could hear thevoice of the president orlisten to the World Serieslive

ENTERTAINMENT AND ARTS❑ Even before sound, movies

offered a means of escapethrough romance and comedy

❑ First sound movies: JazzSinger (1927)❑ First animated with sound:

Steamboat Willie (1928)❑ By 1930 millions of Americans

went to the movies each week.

Walt Disney's animated SteamboatWillie marked the debut of Mickey

Mouse. It was a seven minute longblack and white cartoon.

AFRICAN AMERICAN GOALS❑ Founded in 1909,

the NAACP urgedAfrican Americans toprotest racial violence

❑ W.E.B Dubois, afounding member, leda march of 10,000black men in NY toprotest violence

HARLEM, NEW YORK❑ Harlem, NY became the

largest black urbancommunity

❑ Harlem suffered fromovercrowding,unemployment and poverty

❑ However, in the 1920s itwas home to a literary andartistic revival known asthe Harlem Renaissance

LOUIS ARMSTRONG

❑ Jazz was born in the early 20th

century❑ In 1922, a young trumpet

player named Louis Armstrongjoined the Creole Jazz Band

❑ Later he joined FletcherHenderson’s band in NYC

❑ Armstrong is considered themost important and influentialmusician in the history of jazz

BESSIE SMITH

❑ Bessie Smith, bluessinger, was perhaps themost outstandingvocalist of the decade

❑ She achieved enormouspopularity and by 1927she became the highest-paid black artist in theworld

Calvin Coolidge (R) (1923-1928)

• “The business of theAmerican people isbusiness.”

• National Origins Act(1924)

• Kellogg-Briand Pact(1928)

Herbert Hoover (R) (1929-1933)• “Given the chance to go forward

with the policies of the last eightyears, we shall soon… be in sightof the day when poverty will bebanished from this nation.”

• Great Depression• Voluntarism• Stock Market Crash of 1929• Smoot-Hawley Tariff Act (1930)• Reconstruction Finance Corporation

(1932)• Bonus Army (1932)

Consumer Ads


The Prosperity of the 1920s Hid the GrowingEconomic Problems:

• 1. The booming economy of the 1920s led to overconfidence–Americans thought the good times would last forever

• 2. Americans bought goods on credit and went into debt.

• 3. The Stock Market climbed higher and more people invested inthe market (bull market)


The National Railroad Network

• The completion of the transcontinental railroads• 1850 The United States had 10,000 miles of track• 1890 The United States had 164,000 miles of track• This made possible mass production, mass marketing, and

mass consumption, which brought the country togetherinto a huge social and economic unit

• This made it possible to go almost anywhere in the U.S. bytrain except in the south (i.e., transcontinental lines by-passed the south)

• This severely retarded its economic development wellinto the 20th century


1920s GOOD TIMES ARE HERE TO STAY!

• The stock market wentup

• Consumption went up• Gross National Product

went up• All economic indicators

showed increasedprosperity


The Age of the Industrial Capitalist

• The last quarter of the 19th century was the age of theindustrial capitalist• Carnegie (steel)• DuPont (chemicals)• McCormick (farm equipment)• Rockefeller (oil)

America was on the way to becoming theworld’s first mass consumption societyAmerica’s development of the automobileindustry was right around the corner


• The Great Crash of Wall Street, 1929• In September 1929 stock prices began to fall rapidly• Investors started to sell shares—which led to more decline in

the market• October 29= Black Tuesday —the bottom fell out of the market.

Over 6 million shares were sold and entire fortunes were lost.

Note: The Crash did not cause the Depression!

The Stock Market Crashed, 1929


Major Causes of the Depression :1. Wealth was not evenly divided among Americans2. Overproduction and of agricultural crops and consumer goods;

farmers were in debt3. Lack of diversification in the economy – built on construction

and auto industry, Americans were buying on credit4. Declining exports---U.S. trade suffered when Congress

passed the Smoot – Hawley Tariff Act which reducedinternational trade and weakened the US economy – noforeign investment.

5. Weak International economy -WWI debt cycles led to globaleconomic depression.

6. Monetary Policy of the Federal Reserve –raised interest ratesinstead of lowering them


Great Depression: Warning Sign #1 Farmers were inTrouble

• Farmers were in trouble:1. During WWI farmers had increased production.2. Overproduction after the war led to a drop in farm prices.3. Many farmers could not pay their debts and lost their land to

foreclosures.4. 1 in 4 Americans were farmers


Great Depression: Warning Sign #2 Wealth WasNot Evenly Distributed in Society

• Only a few Americans were wealthy

• 5% of Americans held 33% of all income

• Most families still lived on the economic edge and did not havethe money to buy goods being produced

• There were too many goods and not enough consumers to buythem (underconsumption)


Great Depression: Warning Sign #3 AmericansWere Buying on Credit

• Farmers were in debt.• Americans bought cars, radios, and appliances on

credit and went deeper and deeper into debt.• Americans even bought stock on credit: buying on

margin—they were gambling on the stock market.• Banks were in financial trouble because they had

invested in the stock market.


Great Depression: Warning Sign #4 Several MajorIndustries Were at Risk• Some industries were barely breaking even: clothing, steel, and

mining

• Others were losing money: automobile manufacturing,construction, and consumer goods

• The U.S. economy was not DIVERSIFIED—it depended on theautomobile and steel industries to drive the economy.


Great Depression: Warning Sign #5A Weak International Economy and Trade Problems

• Europe was still struggling to recover from WWI• There was a cycle of international debt as

countries borrowed from one to pay off another• The U.S. passed the Smoot-Hawley Tariff to

help American industries, but it reducedinternational trade and hurt the economy


What Happened after the Stock Market Crashed in1929?• Americans panicked and took money out of banks• Banking system collapsed• Money supply dropped• Salaries and prices were cut• Americans lost their jobs• Federal Reserve (government) was slow to act to solve the

problem• Unemployment rose to 25% and higher• Farm income dropped by ½• Gross National Product –industrial output fell drastically• The entire economy collapsed and the Great Depression set in

and lasted for a decadeDEPARTMENT OF HISTORY - MRS LANDSMAN

How Did the Great Depression Impact theAmerican People?1. Had to seek unemployment and relief benefits from the

government2. Bread lines and soup lines formed. There was hunger in

America3. One third of farmers lost their land4. Unemployment reached 25%5. Mass migrations: Americans moved from place to place

(migrated)6. Number of homeless increased: Shanty towns called

Hoovervilles sprung up


Poverty Devastated RuralAmerica

• Commodity prices plunged• Farmers lost their farms and became

Tenant farmers (working for larger farmers)• Great Plains became a Dust Bowl• Desperation caused migration-people moved to

find jobs• Riding the rails• “Okies” migrants from Oklahoma

•


What impact did the greatDepression have on families?

• Depression attacked families and men lost faith in their ability totake care of their families

• Birth rates plummeted to the lowest in American history.• Some children quit school to help support their families• 250,000 teenagers wandered the country in search of work• Some abandoned their families


What was the Dust Bowl?• Droughts and the plowing of plains grasses caused an

environmental disaster—”Dirty Thirties”• Massive dust storms swept across the Great Plains• Led to a mass migration of Americans from the Plains to other

regions of the US


President Hoover’s Cautious Responseto the Great Depression• 1. At first Hoover was hesitant to interfere with what many

thought was a natural business cycle that would work itself outin time.

• 2. As the situation grew worse, Hoover turned to volunteerismand localism.

• 3. Hoover established the Reconstruction Finance (RFC) tostimulate the economy.


• Shanty towns were called Hoovervilles• Campfires were called Hoover heaters• Cardboard boxes were called Hoover houses

• When he campaigned the Americans threw eggs and rottenvegetables at his train car.

• Some Americans blamed capitalism and believed the countryshould adopt socialism or communism.


The American Economy between theWars

• The Roaring Twenties

• The Great Depression

• The New Deal


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