The United States Turns Inward: the 1920s and 1930s
After its participation in the conflagration then known as the Great War, the American nation was ready to turn inward and concentrate on domestic affairs (a "return to normalcy," as 1920 presidential candidate Warren Harding called it). Private concerns preoccupied most Americans during the 1920s until the Great Depression of the next decade, when increasing numbers turned, in their collective misfortune, to government for solutions to economic problems that challenged the very basis of U.S. capitalistic society.
The 1920s: Decade of Optimism. By the 1920s innovative forces thrusting into American life were creating a new way of living. The automobile and the hard-surfaced road produced mobility and a blurring of the traditional rural-urban split. The radio and motion pictures inaugurated a national culture, one built on new, urban values. The Nineteenth Amendment (1920) gave women the vote in national politics and symbolized their persistence in efforts to break out of old patterns of domesticity. The war had accelerated their entrance into business, industry, and the professions and their adoption of practices, such as drinking and smoking, traditionally considered masculine. So, too, young people turned to new leaders and values and sought unorthodox dress, recreations, and morals.
Traditional WASP (white, Anglo-Saxon Protestant) America fought the new ways. The adoption of prohibition in 1919 (with ratification of the Eighteenth Amendment) had been a victory of Yankee moral values over those of immigrants, but now many of the great cities practically ignored the measure. The Russian Revolution of 1917 and the establishment of the Union of Soviet Socialist Republics sent a Red Scare shivering through the country in 1919-20; suspicion centered on labor unions as alleged instruments of Moscow. The Ku Klux Klan, stronger in the northern Republican countryside than in the South, attacked the so-called New Negro, who returned from the fighting in France with a new sense of personal dignity (the Harlem Renaissance expressed this spirit through the arts), and the millions of Roman Catholics and Jews who had been flooding into the country since the 1890s. The Immigration Law of 1924 established a quota system that discriminated against all groups except northern and western Europeans. In 1925 the spectacular Scopes Trial in Dayton, Tenn., convicted a high school science teacher of presenting Darwinian theories of evolution, which fundamentalist Protestants bitterly opposed.
New ideas, however, continued to inundate the country, and optimism remained high. The U.S. population delighted in the "miracles" that new inventions had brought them-electric lights, airplanes, new communication systems. Charles Lindbergh's solo flight to Paris in 1927 seemed to capture the spirit of the age. The business community was praised for its values and productivity. Henry Ford and his system of cheap mass production of automobiles for people of modest incomes was regarded as symbolic of the new era.
Three Republican presidents occupied the White House during the 1920s. Warren Harding, a conservative, was swept into office by a landslide victory in 1920. He proved an inept president, and his administration was racked by scandals, including that of Teapot Dome. Calvin Coolidge, who succeeded to the office on Harding's death (1923), worshiped business as much as he detested government. Herbert Hoover, an engineer, brought to the presidency (1929-33) a deep faith in the essential soundness of capitalism, which to him represented the fullest expression of individualism. In 1920 the U.S. census showed, for the first time, that a majority of Americans lived in cities of 2,500 people or more.
The 1930s: Decade of Depression. The stock market crash of October 1929 initiated a long economic decline that accelerated into a world catastrophe, the Depression of the 1930s. By 1933, 14 million Americans were unemployed, industrial production was down to one-third of its 1929 level, and national income had dropped by more than half. In the presence of deep national despair, Democratic challenger Franklin D. Roosevelt easily defeated Hoover in the 1932 presidential election. After his inauguration, the New Deal exploded in a whirlwind of legislation.
A new era commenced in American history, one in which a social democratic order similar to that of Western European countries appeared. The federal government under Roosevelt (and the presidency itself) experienced a vast expansion in its authority, especially over the economy. Roosevelt had a strong sense of community; he distrusted unchecked individualism and sympathized with suffering people. He nourished, however, no brooding rancor against the U.S. system. He sought to save capitalism, not supplant it.
Recovery was Roosevelt's first task. In the First New Deal (1933-35) he attempted to muster a spirit of emergency and rally all interests behind a common effort in which something was provided for everyone. Excessive competition and production were blamed for the collapse. Therefore, business proprietors and farmers were allowed to cooperate in establishing prices that would provide them with a profitable return and induce an upward turn (under the National Recovery Administration and the Agricultural Adjustment Administration). By 1935, however, 10 million were still unemployed, the economy seemed lodged at a new plateau, and the U.S. Supreme Court was ruling such agencies unconstitutional.
The Second New Deal (1935-38) was more antibusiness and proconsumer. Roosevelt turned to vastly increased relief spending (under the Works Progress Administration) to pump up consumer buying power. In 1933 he had decided to take the nation off the gold standard, except in international trade. Setting the price at which the government would buy gold at $35 an ounce, he induced so massive a flow of gold into the country that its basic stock of precious metal increased by one-third by 1940 (expanding by much more the currency available in the economy). This monetary policy and the spending to aid the unemployed succeeded in moving the economy toward recovery before 1940, when the impact of war-induced buying from Europe accelerated such movement.
The impact of the New Deal was perhaps strongest and most lasting in its basic reform measures, which profoundly altered the American system. Farm prices were supported and farm plantings centrally planned; the money supply became a federal, not private, responsibility under a strengthened Federal Reserve Board; and stock exchanges were put under regulation of the Securities and Exchange Commission. The Federal Deposit Insurance Corporation insured bank deposits, and banking practices were closely supervised under the Banking Act of 1933; the National Labor Relations Act made relations between employers and employees a matter of public concern and control; and under the direction of agencies such as the Tennessee Valley Authority government facilities supplied electrical power to entire regions, providing a standard for private utilities. Private utility monopolies were broken apart and placed under public regulation; antitrust efforts were reenergized; and economic recessions, then and afterward, were monitored by the federal government, which was ready to increase public spending to provide employment and ward off the onset of another depression.
For the majority of the population, New Deal legislation defined minimum standards of living: the Fair Labor Standards Act set minimum wage and maximum hour limitations and included a prohibition on child labor in interstate commerce; the Social Security Act made provisions for old-age and disability pensions, unemployment insurance, monthly payments to mothers living alone with dependent children, and direct assistance to the blind and crippled.
In addition, the New Deal helped make it possible for organized unions to gain higher wages; in 1938 the Congress of Industrial Organizations (CIO) was formed; members were organized by industry rather than by craft. The New Deal also provided a sense of confidence that in a time of disaster the federal government would take positive action.
Meanwhile, totalitarian movements abroad were inducing world crisis. Congress, mirroring public opinion, had grown disenchanted with the U.S. entry into World War I. This spirit of isolationism led to the passage (1935–37) of a series of neutrality acts. They required an arms embargo that would deny the sale of munitions to belligerents during a time of international war and prohibited loans to belligerents and the travel of Americans on ships owned by belligerents. Congress thus hoped to prevent involvements like those of 1914–17.