The Jazz Age, the Great Depression & the New Deal

Henry Ford perfected the moving assembly line, dropping the Model T's price from $850 (1908) to $300 (1924) — putting car ownership within reach of the average American. By 1929 there were 23M+ cars on U.S. roads. "Movie palaces" drew up to 90M weekly attendees by decade's end, and 1927 brought the first successful "talkie," The Jazz Singer (Al Jolson, Warner Bros.). Commercial radio nationalized culture and created celebrities. Charles Lindbergh completed the first solo transatlantic flight in 1927.

Rural, Protestant Americans reacted to urbanization and immigration with fear and intolerance. The Second Ku Klux Klan rose as a nationwide movement expressing racism, nativism, anti-Semitism, and anti-Catholicism. The Immigration Act of 1924 set quotas at 3% of a nationality's 1910 census population; the National Origins Act of 1924 tightened this further to 2% of the 1890 census, deliberately targeting southern and eastern Europeans. Nicola Sacco and Bartolomeo Vanzetti, Italian immigrant anarchists, were convicted (7/14/1921) on thin evidence and executed (8/23/1927). The Scopes Trial (1925, Dayton, TN) pitted the Butler Act (banning the teaching of evolution) against the ACLU — defendant John Scopes, prosecutor William Jennings Bryan, defense attorney Clarence Darrow. Scopes was found guilty and fined $100.

The flapper embodied the era's "new morality," fueled in part by the popularized ideas of Sigmund Freud. The 19th Amendment (1920) secured women's suffrage; Alice Paul went further, drafting the Equal Rights Amendment. In Harlem, the Harlem Renaissance produced a flowering of Black art and literature: poets Langston Hughes (the movement's "poet laureate") and Claude McKay ("If We Must Die"), and novelist Zora Neale Hurston. Marcus Garvey and W. E. B. Du Bois championed different visions of Negro nationalism and civil rights. The 18th Amendment (1919) established Prohibition, spurring bootlegging and organized crime.

Warren G. Harding won 1920 on a promise to "return to normalcy" but was undone by scandal: Sec. of Interior Albert B. Fall took $300,000 in bribes in the Teapot Dome scandal (fined $100,000, 1 yr prison). Harding died in office (1923); Calvin Coolidge succeeded him, governing under the philosophy "the business of America is business." Herbert Hoover won the 1928 election over Al Smith, 21M to 15M votes, entering office at the height of Republican prosperity.

Buying stock "on margin" (small down payment + borrowed money) fueled speculation that pushed the Dow Jones Industrial Average to a peak of 381 points in September 1929. On "Black Thursday" (Oct. 24, 1929) the NYSE lost 11% of its value; on "Black Tuesday" (Oct. 29, 1929), 16M+ shares traded and $14 billion was lost in a single day. Between September and November 1929, the market's total value fell from $64 billion to roughly $30 billion.

Three underlying causes compounded the panic: (1) international war debt — Allies couldn't repay U.S. loans, defaulted German/Austrian reparations rippled back to American banks; (2) poor income distribution — 80% of families had no savings, while 0.5–1% of Americans controlled over a third of the nation's wealth, leaving no new buyers to sustain the market; (3) psychological contagion — panic selling fed on itself. Only about 10% of households held stock, but over 90% of banks had invested in the market, causing mass bank failures.

Hoover's philosophy of "American individualism" made him reluctant to authorize direct federal relief. His Reconstruction Finance Corporation (RFC, 1932) set aside $2 billion to rescue banks and institutions — not a form of direct aid to individuals. The Emergency Relief and Construction Act (sponsored by Sen. Robert Wagner, 1932) allotted $1.5 billion for state public works. The Smoot-Hawley Tariff (1930) raised import tariffs, triggering foreign retaliation that shrank global trade and deepened the Depression.

In spring 1932, roughly 15,000 WWI veterans — the Bonus Expeditionary Force — marched on Washington demanding early payment of bonuses not due until 1945. After the Senate rejected their request, Hoover ordered police to clear their camps; when 2 veterans were killed, Hoover sent Gen. Douglas MacArthur (with aides Dwight Eisenhower and George Patton) to forcibly remove them — the camp was burned and an infant killed by tear gas, cementing Hoover's unpopularity. Homeless shantytowns known as "Hoovervilles" spread across the country.

Hoover's Clark Memorandum (1930) repudiated the Roosevelt Corollary and de-emphasized military intervention in Latin America, laying groundwork for FDR's later "Good Neighbor" policy. The Hoover-Stimson Doctrine (with Sec. of State Henry Stimson) declared the U.S. would not recognize territory seized by force, in response to Japan's invasion of Manchuria.

Franklin D. Roosevelt defeated Hoover in a landslide in November 1932 and was inaugurated March 4, 1933. He relied on an informal group of advisors — the "Brains Trust" (Rexford Tugwell, Raymond Moley, Adolph Berle) — and famously declared in his inaugural address, "The only thing we have to fear is fear itself."

Within 48 hours of taking office, FDR declared a bank holiday. The Emergency Banking Act (3/9/1933) took the U.S. off the gold standard and had federal examiners certify banks before reopening — 70% were declared solvent by 3/15/1933. His first "fireside chat" radio address followed on 3/12/1933. FERA (Federal Emergency Relief Act, 1933) sent direct monetary relief to states. The CWA (Civil Works Administration) and CCC (Civilian Conservation Corps, 1933–1942, headed in spirit by Harry Hopkins) put people directly to work — the CCC employed 250,000 men within its first two months.

The NIRA suspended antitrust laws so industries could jointly set prices, production levels, and wages; it created the NRA ("Blue Eagle" logo, headed by Hugh S. Johnson) and the PWA ($3.3 billion for public projects, run by Harold Ickes). The AAA (Agricultural Adjustment Act) paid farmers to reduce production. In 1935, the Supreme Court struck down both the AAA and the NIRA as unconstitutional overreach.

From the left, Francis E. Townsend (a retired dentist) proposed the Townsend Plan — a $200/month pension for citizens over 60. Father Charles Coughlin, a "radio priest," argued FDR hadn't gone far enough on labor and monetary reform. Huey P. Long ("Kingfish"), a Louisiana senator, proposed "Share Our Wealth" — liquidating large fortunes to fund $5,000 per family and $2,500 per worker; he had 4M+ followers by 1935 before being assassinated. From the right, conservatives and the Supreme Court argued the New Deal overreached federal authority.

The Banking Act of 1935 created a 7-member Federal Reserve Board of Governors. The Emergency Relief Appropriation Act (1935, $4.8 billion) funded the WPA (Works Progress Administration, run by Harry Hopkins), which employed 8M+ Americans and was the first New Deal agency to openly hire women. The Social Security Act (1935) provided aid to the elderly, unemployed, and disabled, partly borrowing ideas from the Townsend Plan. The Wagner Act (1935) created the NLRB to protect collective bargaining, upheld by the Supreme Court in 1937. The Fair Labor Standards Act (1938) established a minimum wage, 40-hour workweek, and banned child labor. The TVA (Tennessee Valley Authority, 1933) built dams for flood control and power, displacing roughly 15,000 families. The FDIC insured bank deposits up to $2,500, and the Securities Act of 1933 created the SEC.

Frances Perkins, Secretary of Labor, was the first female Cabinet member and championed the FLSA. Mary McLeod Bethune directed the NYA's Division of Negro Affairs. The Indian Reorganization Act (1934), pushed by Commissioner John Collier, ended the Dawes Act's assimilation policy and returned roughly 2 million acres to tribes.

After winning re-election in 1936 (over Alf Landon, Electoral College 523–8), FDR proposed the "Supreme Court Packing Plan": adding one justice for every sitting justice over age 70 who refused to retire, up to six more (expanding the bench from 9 to 15). The plan failed in Congress — even his own party balked — but the Court began upholding New Deal laws afterward anyway. FDR abandoned his earlier commitment to a balanced budget in favor of deficit spending on relief programs.