Unit 12: Prosperity and Depression

Essential Questions

  • What were the economic, political, and social changes of the 1920s?
  • How was Prohibition an outgrowth of the earlier temperance movement?
  • How did the role of government change from the 1920s to the 1930s?
  • Why did the crash of the market affect those who did not own stock?
  • How did the concept of checks and balances relate to the New Deal?
  • How was New York a model for federal programs?
  • What parts of the New Deal legislation are still in effect today?


A. Prohibition and the 18th Amendment

  1. End of reform era
  2. The rise of organized crime
  3. Economic, social, political effects

B. The Republican decade

  1. Political developments
    • Back to "normalcy"; the election of 1920
    • Scandals
    • Coolidge: austerity and integrity
    • Government and business: laissez-faire and protection
    • Election of 1928

C. Relative isolation of the United States in world political affairs

  1. General policy of noninvolvement in European affairs; the League of Nations controversy
  2. Limited participation in international activities
    • World Court
    • Naval disarmament 1924
    • Efforts for peace; Kellogg-Briand Pact, 1928
    • Postwar reparation talks
    • Relief efforts in Europe
  3. Expansion of international trade and tariffs
  4. Restrictions on immigration, e.g., Quota Act, 1924

D. Arising standard of living resulted in the growth of a consumer economy and the rise of the middle class

  1. Increase in single-family homes; move to nuclear families
  2. Emergence of suburbs
  3. Spread of middle-class values
  4. Increased use of credit

E. Changes in the workplace

  1. Shift from agrarian to industrial workforce
  2. Lessened demand for skilled workers
  3. Working conditions and wages improved
  4. Increase in white-collar employees
  5. Women continued to increase their presence in the workforce

F. Problems developed in the midst of unprecedented prosperity

  1. Not all groups benefited equally
    • Low farm prices
    • High black unemployment
    • Millions of poor
  2. New trends conflicted with tradition
  3. Environmental balance was jeopardized

G. Foreign immigration and black migration resulted in a very diverse population and an increase in social tensions—the effects of human migrations on the nature and character of places and regions

  1. Restrictions on immigration
  2. Black migration to Northern cities
  3. Growth of organizations to fight discrimination; e.g., NAACP
  4. Growth of black art, music, and cultural identity; e.g., the Harlem Renaissance
  5. Generational conflicts
  6. Widespread emergence of retired workers
  7. Right-wing hate groups

H. New ideas about the use of leisure time emerged

  1. Impact of the automobile: Henry Ford
  2. Organized sports: Babe Ruth
  3. Search for heroes and heroines: Lindbergh, Amelia Earhart
  4. Motion pictures
  5. Popular literature
  6. Fads and fashion
  7. Changes in social behavior

I. The stock market crash marked the beginning of the worst economic time the country has ever known

  1. National prosperity had been structured on the investments of the wealthy
  2. There were problems with the economic structure
  3. People lost faith in the system
  4. The government was unwilling or unable to correct the downturn
  5. The economic depression that followed was the worst in our history

J. Contributing factors

  1. Economic growth declined during the late 1920s
  2. Stock purchases were made on margin/credit
  3. Corporations and individuals became overextended
  4. The stock market crash led to a cycle of low demand and high unemployment

K. Responses to deepening economic woes

  1. Hoover administration response: too little, too late
  2. Local and State actions
    • Soup kitchens and outstretched hands
    • A modified "new deal" in New York
  3. Election of 1932; question of confidence

L. The New Deal

  1. Psychological boost; FDR at the fireside
  2. Relieving human suffering; providing for dignity and jobs
  3. Helping business and industry recover
  4. Adjusting the economic system to prevent recurrence
    • Government regulation of business and banking
    • Instituting Social Security
    • Providing a guaranteed labor voice: the Wagner Act
  5. Other voices
    • Court-packing scheme
    • Alternative solutions: Father Coughlin, the Townsend Plan, Huey Long, socialism, communism
      • The economics of war versus depression conditions; climbing out of depression and into war

M. Effects on work, family, and communities

  1. Even though unemployment reached new heights, most people continued to hold jobs but at reduced hours and lower wages
  2. The loss of jobs fell unequally on women, blacks, and the unskilled
  3. The threat of possible job loss was a psychological strain on those who were employed
  4. Unemployment affected the traditional male role of provider, especially for those who equated success at work with success as a husband and father
  5. Charities' resources were inadequate
  6. Local communities attempted meet the needs of their people
  7. The Dust Bowl and the Okies—human modification of the physical environment

N. The cultural environment during The Great Depression

  1. The times were reflected in the arts and literature
  2. Escapism was popular in fiction and the cinema
  3. Many works of social commentary and criticism appeared
  4. Federal government supported the arts through the Works Project Administration (WPA)

O. Effects of the Great Depression on industrialized Europe

  1. Trade and loans tied Western economies together
  2. The Great Depression followed similar patterns in affected nations
    • Tighter credit
    • Business failures
    • Decreased money supply
    • Lowered demand
    • Lower production
    • Widespread unemployment
  3. Developing totalitarian responses: Germany, Italy, Spain, Japan; intensified communism characterized by:
    • One-party governments headed by a strong individual
    • Armies and police forces fostered national goals and eliminated opposition
    • Use of propaganda in the media and schools to support national goals
    • Art and literature were used to endorse official policies in totalitarian countries

P. European conflicts resulted in several basic problems for United States policy makers

  1. The question of whether to shift focus from domestic problems to foreign policy
  2. Issue of neutrality versus the g rowing power of totalitarian states
  3. Continued efforts to improve Latin American relations through the "Good Neighbor Policy" without losing influence in that area's affairs