What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Before the Banking Reform Act of 1933, keeping your money in a bank was not a sure way to save. If the bank made unwise investments, the bank could fail and depositors' money would be lost. Here, depositors line up outside a Detroit bank hoping to get their savings back.

In days past, depositing money in a savings account carried a degree of risk. If a bank made bad investments and was forced to close, individuals who did not withdraw their money fast enough found themselves out of luck. Sometimes a simple rumor could force a bank to close. When depositors feared a bank was unsound and began removing their funds, the news would often spread to other customers. This often caused a panic, leading people to leave their homes and workplaces to get their money before it was too late.

These runs on banks were widespread during the early days of the Great Depression. In 1929 alone, 659 banks closed their doors. By 1932, an additional 5102 banks went out of business. Families lost their life savings overnight. Thirty-eight states had adopted restrictions on withdrawals in an effort to forestall the panic. Bank failures increased in 1933, and Franklin Roosevelt deemed remedying these failing financial institutions his first priority after being inaugurated.

What bank reforms came out of the Great Depression?

With quick and effective legislation, Franklin Delano Roosevelt, 32nd President of the United States, was able to halt the bank crisis.

Roosevelt, unlike Hoover, was quick to act. Two days after taking the oath of office, Roosevelt declared a "bank holiday." From March 6 to March 10, banking transactions were suspended across the nation except for making change. During this period, Roosevelt presented the new Congress with the Emergency Banking Act. The law empowered the President through the Treasury Department to reopen banks that were solvent and assist those that were not. The House allowed only forty minutes of debate before passing the law unanimously, and the Senate soon followed with overwhelming support.

Banks were divided into four categories. Surprisingly, slightly over half the nation's banks were deemed first category and fit to reopen. The second category of banks was permitted to allow a percentage of its deposits to be withdrawn. The third category consisted of banks that were on the brink of collapse. When the holiday was ended, these banks were only permitted to accept deposits. Five percent of banks were in the final category — unfit to continue business.

On the Sunday evening before the banks reopened, Roosevelt addressed the nation through one of his signature "fireside chats." With honest words in soothing tones, the President assured sixty million radio listeners that the crisis was over and the nation's banks were secure. On the first day back in business, deposits exceeded withdrawals. By the beginning of April, Americans confidently returned a billion dollars to the banking system. The bank crisis was over.

What bank reforms came out of the Great Depression?

Ms. Lydia Lobsiger became the first American citizen to be paid by the Federal Deposit Insurance Corporation for deposits in an insured bank that failed.

But the legislation was not. On June 16, 1933, Roosevelt signed the Glass-Steagall Banking Reform Act. This law created the Federal Deposit Insurance Corporation. Under this new system, depositors in member banks were given the security of knowing that if their bank were to collapse, the federal government would refund their losses. Deposits up to $2500, a figure that would rise through the years, were henceforth 100% safe. The act also restricted banks from recklessly speculating depositors' money in the stock market. In 1934, only 61 banks failed .

Letters poured in to the White House from grateful Americans. Workers and farmers were thrilled that their savings were indeed now safe. Bankers breathed a sigh of relief knowing that Roosevelt did not intend to nationalize the banking system as many European countries had already done. Although radical in speed and scope, Roosevelt's banking plan strengthened the current system, without fundamentally altering it. One of his advisors quipped, "Capitalism was saved in eight days."


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Within days of his inauguration, President Roosevelt presented the Emergency Banking Act to Congress, which quickly approved the legislation. Here, Roosevelt signs the bill, making it law.

When America hit rock bottom, Americans expected bold leadership.

Herbert Hoover was perceived as doing nothing to help when the nation was in its darkest hour. When the votes were tallied in 1932, Americans made a strong statement for change, and sent Franklin D. Roosevelt to the White House. Ironically, Roosevelt made few concrete proposals during the campaign, merely promising "a new deal for the American people." The plan that ultimately emerged during his Presidency was among the most ambitious in the history of the United States.

What bank reforms came out of the Great Depression?

With the unemployment rate at an incredible 25%, FDR realized that jobs were needed to get people back on their feet. A few of the 8,500,000 participants in the New Deal's Works Progress Administration are shown here hard at work in Tuskeegee, Alabama.

Franklin Roosevelt was born in 1882 to a wealthy New York industrialist. The fifth cousin of Theodore Roosevelt, FDR became involved in politics at a young age. A strong supporter of Woodrow Wilson and the League of Nations, Roosevelt became the unsuccessful Democratic candidate for Vice-President in 1920. The following year he contracted polio, and learned that he could never walk without crutches again.

Roosevelt campaigned hard for fellow New Yorker Al Smith's 1924 and 1928 Presidential bids and then received Smith's support to run for governor of New York. In his two terms as governor of New York, Roosevelt earned a reputation as a progressive reformer. He then threw his hat into the ring of Presidential politics.

What bank reforms came out of the Great Depression?

Radio's golden era coincided with Roosevelt's presidency. Radio shows entertained, advertised, and made an escape for American audiences. Roosevelt wisely used his weekly "Fireside Chats" to keep in touch with the populace.

Roosevelt had no grand strategy to fix the Depression. He was a bold experimenter. FDR liked to examine an idea and evaluate it on its philosophical merits. The details could be negotiated later. If it worked, fine. If not, he was more than willing to start over with a new plan. He surrounded himself with competent advisors, and delegated authority with discretion and confidence. As a master of the radio, his confidence was contagious among the American populace.

Before his first term expired, Roosevelt signed legislation aimed at fixing banks and the stock market. He approved plans to aid the unemployed and the nations farmers. He began housing initiatives and ventures into public-owned electric power. New Deal programs aided industrialists and laborers alike. His friends and enemies grew with every act he signed into law.

The New Deal sparked a revolution in American public thought regarding the relationship between the people and the federal government.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Sports provided a distraction from the Depression. Shown is a ticker tape parade held in honor of the Detroit Tigers after winning the 1935 World Series.

No nation could emerge from the cauldron of national crisis without profound social and cultural changes. While many undesirable vices associated with hopelessness were on the rise, many family units were also strengthened through the crisis. Mass migrations reshaped the American mosaic. While many businesses perished during the Great Depression, others actually emerged stronger. And new forms of expression flourished in the culture of despair.

The Great Depression brought a rapid rise in the crime rate as many unemployed workers resorted to petty theft to put food on the table. Suicide rates rose, as did reported cases of malnutrition. Prostitution was on the rise as desperate women sought ways to pay the bills. Health care in general was not a priority for many Americans, as visiting the doctor was reserved for only the direst of circumstances. Alcoholism increased with Americans seeking outlets for escape, compounded by the repeal of prohibition in 1933. Cigar smoking became too expensive, so many Americans switched to cheaper cigarettes.

Higher education remained out of reach for most Americans as the nation's universities saw their student bodies shrink during the first half of the decade. High school attendance increased among males, however. Because the prospects of a young male getting a job were so incredibly dim, many decided to stay in school longer. However, public spending on education declined sharply, causing many schools to open understaffed or close due to lack of funds.

Demographic trends also changed sharply. Marriages were delayed as many males waited until they could provide for a family before proposing to a prospective spouse. Divorce rates dropped steadily in the 1930s. Rates of abandonment increased as many husbands chose the "poor man's divorce" option — they just ran away from their marriages. Birth rates fell sharply, especially during the lowest points of the Depression. More and more Americans learned about birth control to avoid the added expenses of unexpected children.

Mass migrations continued throughout the 1930s. Rural New England and upstate New York lost many citizens seeking opportunity elsewhere. The Great Plains lost population to states such as California and Arizona. The Dust Bowl sent thousands of "Okies" and "Arkies" looking to make a better life. Many of the migrants were adolescents seeking opportunity away from a family that had younger mouths to feed. Over 600,000 people were caught hitching rides on trains during the Great Depression. Many times offenders went unpunished.

What bank reforms came out of the Great Depression?

Films like The Bride of Frankenstein (1935) entertained Americans by the thousands despite the hardships brought by the Great Depression.

Popular culture saw new trends as well. Despite the costs of an evening out, two out of every five Americans saw at least one movie per week.

Classic films like Frankenstein, It Happened One Night, and Gone with the Wind debuted during the Great Depression. Radio flourished as those who owned a radio set before the crash could listen for free. President Roosevelt made wide use of radio technology with his periodic "fireside chats" to keep the public informed. Dorothea Lange depicted the sadness of Depression farm life with her stirring photographs.

And an apt musical form — the blues — gained popularity during the decade.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

The Great Depression did not spare the most vulnerable citizens. The Bonus Army's protest of 1932 made this point by including families with young children in its march on and encampment in Washington, D.C.

President Herbert Hoover had the distinction of stepping into the White House at the height of one of the longest periods of growth in American history. Less than seven months after his inauguration, the worst depression in American history began.

Undoubtedly, the fault of the Great Depression was not Hoover's. But as the years of his Presidency passed and the country slipped deeper and deeper into its quagmire, he would receive great blame. Urban shantytowns were dubbed Hoovervilles. Newspapers used by the destitute as bundling for warmth became known as Hoover blankets. Pockets turned inside out were called Hoover flags. Somebody had to be blamed, and many Americans blamed their President.

Running for President under the slogan "rugged individualism" made it difficult for Hoover to promote massive government intervention in the economy. In 1930, succumbing to pressure from American industrialists, Hoover signed the Hawley-Smoot Tariff which was designed to protect American industry from overseas competition. Passed against the advice of nearly every prominent economist of the time, it was the largest tariff in American history.

What bank reforms came out of the Great Depression?

A robust, young Herbert Hoover, posed with his dog "King Tut" in a photograph used in the 1928 presidential campaign.

The amount of protection received by industry did not offset the losses brought by a decrease in foreign trade. The Hawley-Smoot Tariff proved to be a disaster. Believing in a balanced budget, Hoover's 1931 economic plan cut federal spending and increased taxes, both of which inhibited individual efforts to spur the economy.

Finally in 1932 Hoover signed legislation creating the Reconstruction Finance Corporation. This act allocated a half billion dollars for loans to banks, corporations, and state governments. Public works projects such as the Golden Gate Bridge and the Los Angeles Aqueduct were built as a result of this plan.

Hoover and the RFC stopped short of meeting one demand of the American masses — federal aid to individuals. Hoover believed that government aid would stifle initiative and create dependency where individual effort was needed. Past governments never resorted to such schemes and the economy managed to rebound. Clearly Hoover and his advisors failed to grasp the scope of the Great Depression.

What bank reforms came out of the Great Depression?

Completed in 1937, the Golden Gate Bridge was a result of President Herbert Hoover's Reconstruction Finance Corporation. Its art-deco design reflects the opulent style of the 1920s.

The stage was set for the election of 1932. New York Governor Franklin D. Roosevelt won the Democratic nomination on the fourth ballot of their national convention. Roosevelt promised "a new deal for the American people" that included a repeal of the prohibition amendment. The Republicans renominated Hoover, perhaps because there were few other interested GOP candidates.

Election day brought a landslide for the Democrats, as Roosevelt earned 58% of the popular vote and 89% of the electoral vote, handing the Republicans their second-worst defeat in their history. Bands across America struck up Roosevelt's theme song — "Happy Days Are Here Again" — as millions of Americans looked with hope toward their new leader.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

World War I veterans block the steps of the Capitol during the Bonus March, July 5, 1932.

Many in America wondered if the nation would survive.

Although the United States had little history of massive social upheaval or coup attempts against the government, hunger has an ominous way of stirring those passions among any population. As bread riots and shantytowns grew in number, many began to seek alternatives to the status quo. Demonstrations in the nation's capital increased, as Americans grew increasingly weary with President Hoover's perceived inaction. The demonstration that drew the most national attention was the Bonus Army march of 1932.

In 1924, Congress rewarded veterans of World War I with certificates redeemable in 1945 for $1,000 each. By 1932, many of these former servicemen had lost their jobs and fortunes in the early days of the Depression. They asked Congress to redeem their Bonus certificates early.

What bank reforms came out of the Great Depression?

Workers and their unions fought poor working conditions by walking off the job. Violence often erupted when factory owners tried to break the "strike." These broken windows are a result of the Flint, Michigan, sit-down strike of 1936-37.

Led by Walter Waters of Oregon, the so-called Bonus Expeditionary Force set out for the nation's capital. Hitching rides, hopping trains, and hiking finally brought the Bonus Army, now 15,000 strong, into the capital in June 1932. Although President Hoover refused to address them, the veterans did find an audience with a congressional delegation. Soon a debate began in the Congress over whether to meet the demonstrators' demands.

As deliberation continued on Capitol Hill, the Bonus Army built a shantytown across the Potomac River in Anacostia Flats. When the Senate rejected their demands on June 17, most of the veterans dejectedly returned home. But several thousand remained in the capital with their families. Many had nowhere else to go. The Bonus Army conducted itself with decorum and spent their vigil unarmed.

What bank reforms came out of the Great Depression?

Conditions during the Depression were so bad that some city governments devised programs that had the unemployed selling apples to make a living. This man was one of nearly 700 apple vendors in Detroit.

However, many believed them a threat to national security. On July 28, Washington police began to clear the demonstrators out of the capital. Two men were killed as tear gas and bayonets assailed the Bonus Marchers. Fearing rising disorder, Hoover ordered an army regiment into the city, under the leadership of General Douglas MacArthur. The army, complete with infantry, cavalry, and tanks, rolled into Anacostia Flats forcing the Bonus Army to flee. MacArthur then ordered the shanty settlements burned.

Many Americans were outraged. How could the army treat veterans of the Great War with such disrespect? Hoover maintained that political agitators, anarchists, and communists dominated the mob. But facts contradict his claims. Nine out of ten Bonus Marchers were indeed veterans, and 20% were disabled. Despite the fact that the Bonus Army was the largest march on Washington up to that point in history, Hoover and MacArthur clearly overestimated the threat posed to national security. As Hoover campaigned for reelection that summer, his actions turned an already sour public opinion of him even further bottomward.

America sank deeper in Depression.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

This photo, taken by Dorothea Lange, is one of the Depression's most well-known images. The woman, Florence Thompson, is shown with her children in a migrant farm worker camp in California.

When the stock market crashed on October 29, 1929, few Americans believed that a decade long depression was underway. After all, only 4 million Americans had money invested on Wall Street. 90% of American households owned precisely zero shares of stock. President Herbert Hoover quickly addressed the nation, professing his faith in the soundness of the American economy. But soothing words were clearly not enough to stop the shrinking of a deeply flawed national economic system.

The stock market crash had many short-term consequences. Banks that improvidently lent money to futures traders to buy stock on margin found that many of those loans would go unpaid. Consequently, a rash of bank failures swept the nation. This had a tremendous ripple effect on the economy. If a working-class family was unfortunate enough to have their savings held in trust by a failed bank — too bad for them, all their money was lost.

As Americans saw banks close and savings disappear, less money was spent on goods and services. Many consumers who had bought the new conveniences of the Golden Twenties on the installment plan were unable to make their payments. Businesses began to lay off workers to offset new losses. Many manufacturers had overproduced and created huge inventories.

What bank reforms came out of the Great Depression?

During the 1930s, photographer Imogen Cunningham documented the lives of the destitute of Oakland, California. This print is entitled "Under the Queensborough Bridge."

Unemployment brought even less savings and spending, and the economy slowed yet another notch. The downward spiral continued into 1933. The $87 billion 1929 New York Stock Exchange was worth a mere $15 billion in 1932. Unemployment rose from 1.5 million Americans in 1929 to a debilitating 12 million in 1932.

Despair swept the nation. In addition to the nationwide 25% unemployment rate, many laborers were forced to choose between wage cuts and a pink slip. Most people who retained their jobs saw their incomes shrink by a third. Soup kitchens and charity lines, previously unknown to the middle class, were unable to meet the growing demand for food.

Desperate for income, thousands performed odd jobs from taking in laundry to collecting and selling apples on the street. College professors in New York City drove taxicabs to make ends meet. Citizens of Washington State lit forest fires in the hopes of earning a few bucks extinguishing them. Millions of backyard gardens were cultivated to grow vegetables.

What bank reforms came out of the Great Depression?

First published in 1939, John Steinbeck's novel The Grapes of Wrath told of the Joad family's loss of their Oklahoma tenant farm and the hardships they encountered while trying to reach California and start anew.

Americans prowled landfills waiting for the next load of refuse to arrive in the hopes of finding a few table scraps among the trash.

The strife was uneven across the land. Oklahoma was particularly hard hit, as a drought brought dry winds, kicking up a "Dust Bowl" that forced thousands to migrate westward. African Americans endured unemployment rates of nearly twice the white communities, as African American workers were often the last hired and the first fired. Mexican Americans in California were offered free one-way trips back to Mexico to decrease job competition in the state. The Latino population of the American Southwest sharply decreased throughout the decade, as ethnic violence increased.

As the days and weeks of the Great Depression turned into months and years, Americans began to organize their discontent.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

The Roaring '20s came to a screeching halt when the stock market took a historic nosedive at the end of the decade. Here, a nervous crowd gathers in front of the New York Stock Exchange on October 29, 1929.

It was a boom time for the stockholder. Stock prices soared to record levels. Millionaires were made overnight. Sound like the stock market of the 1990s? Try the New York Stock Exchange on the eve of the Great Crash in 1929.

Although the 1920s were marked by growth in stock values, the last four years saw an explosion in the market. In 1925, the total value of the New York Stock Exchange was $27 billion. By September 1929, that figure skyrocketed to $87 billion. This means that the average stockholder more than tripled the value of the stock portfolio he or she was lucky enough to possess.

In his Ladies' Home Journal article, "Everyone Ought to Be Rich," wealthy financier John J. Raskob advised Americans to invest just $15 dollars a month in the market. After twenty years, he claimed, the venture would be worth $80,000. Stock fever was sweeping the nation, or at least those that had the means to invest.

Fueling the rapid expansion was the risky practice of buying stock on margin. A margin purchase allows an investor to borrow money, typically as much as 75% of the purchase price, to buy a greater amount of stock. Stockbrokers and even banks funded the reckless speculator. Borrowers were often willing to pay 20% interest rates on loans, being dead certain that the risk would be worth the rewards. The lender was so certain that the market would rise that such transactions became commonplace, despite warnings by the Federal Reserve Board against the practice. Clearly, there had to be a limit to how high the market could reach.

What bank reforms came out of the Great Depression?

On October 24, 1929, a day that came to be known as Black Thursday, investors began to sell their stocks at an alarming rate. By October 29, the Great Crash was underway, and by November 17, over $30 billion dollars had disappeared from the U.S. economy. In the chart above, the horizontal axis represents the years 1921-40, and the vertical axis represents the Dow Jones Industrial Average.

What causes stock prices to fall? Although the workings of the New York Stock Exchange can be quite complex, one simple principle governs the price of stock. When investors believe a stock is a good value they are willing to pay more for a share and its value rises. When traders believe the value of a security will fall, they cannot sell it at as high of a price. If all investors try to sell their shares at once and no one is willing to buy, the value of the market shrinks.

What bank reforms came out of the Great Depression?

Wealthy investors like J.P. Morgan hoped to stop the crash by pooling their resources and buying up large amounts of stock.

On October 24, 1929, "Black Thursday," this massive sell-a-thon began. By the late afternoon, wealthy financiers like J.P. Morgan pooled their resources and began to buy stocks in the hopes of reversing the trend.

But the bottom fell out of the market on Tuesday, October 29. A record 16 million shares were exchanged for smaller and smaller values as the day progressed. For some stocks, no buyers could be found at any price. By the end of the day, panic had erupted, and the next few weeks continued the downward spiral. In a matter of ten short weeks the value of the entire market was cut in half. Suicide and despair swept the investing classes of America.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Dorothea Lange was employed by the Farm Security Administration to document the Depression through the camera lens. Her bleak photos captured the desperation of the era, as evidenced through this portrait of an 18-year-old migrant worker and her child.

"Once I built a railroad, I made it run.I made it race against time.Once I built a railroad, now it's done.

Brother, can you spare a dime?"

At the end of the 1920s, the United States boasted the largest economy in the world. With the destruction wrought by World War I, Europeans struggled while Americans flourished. Upon succeeding to the Presidency, Herbert Hoover predicted that the United States would soon see the day when poverty was eliminated. Then, in a moment of apparent triumph, everything fell apart. The stock market crash of 1929 touched off a chain of events that plunged the United States into its longest, deepest economic crisis of its history.

What bank reforms came out of the Great Depression?

Nine thousand banks failed during the months following the stock market crash of 1929.

It is far too simplistic to view the stock market crash as the single cause of the Great Depression. A healthy economy can recover from such a contraction. Long-term underlying causes sent the nation into a downward spiral of despair. First, American firms earned record profits during the 1920s and reinvested much of these funds into expansion. By 1929, companies had expanded to the bubble point. Workers could no longer continue to fuel further expansion, so a slowdown was inevitable. While corporate profits, skyrocketed, wages increased incrementally, which widened the distribution of wealth.

The richest one percent of Americans owned over a third of all American assets. Such wealth concentrated in the hands of a few limits economic growth. The wealthy tended to save money that might have been put back into the economy if it were spread among the middle and lower classes. Middle class Americans had already stretched their debt capacities by purchasing automobiles and household appliances on installment plans.

What bank reforms came out of the Great Depression?

The unprecedented prosperity of the 1920s was suddenly gone, the Great Depression was upon the nation, and breadlines became a common sight.

There were fundamental structural weaknesses in the American economic system. Banks operated without guarantees to their customers, creating a climate of panic when times got tough. Few regulations were placed on banks and they lent money to those who speculated recklessly in stocks. Agricultural prices had already been low during the 1920s, leaving farmers unable to spark any sort of recovery. When the Depression spread across the Atlantic, Europeans bought fewer American products, worsening the slide.

When President Hoover was inaugurated, the American economy was a house of cards. Unable to provide the proper relief from hard times, his popularity decreased as more and more Americans lost their jobs. His minimalist approach to government intervention made little impact . The economy shrank with each successive year of his Presidency. As middle class Americans stood in the same soup lines previously graced only by the nation's poorest, the entire social fabric of America was forever altered.

"Brother, can you spare a dime?"


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

"Silent Cal" Coolidge, a man of few words, poses with a fisherman for a Massachusettes magazine

Despite all the verve of the American social scene in the 1920s, the Presidential leadership of the decade was quite unremarkable. Warren Harding won his bid for the White House in 1920 with the campaign slogan "Return to Normalcy." Republicans believed Americans had grown weary of the turmoil caused by World War I and promised tranquility. Harding found himself mired in scandals unknown in America since the Grant Administration. Although Harding himself was above the graft, his friends were more than willing to dip into the public treasury. Fraud and bribery plagued the Veterans Bureau and the Justice Department. The Teapot Dome Scandal exposed Secretary of the Interior Albert Fall for accepting bribes for allowing private oil companies to lease public lands. Harding fell ill in 1923 and died shortly thereafter.

The Progressives

Calvin Coolidge brought no significant change to Harding's laissez faire, pro-business style. Progressives bemoaned the end of activist Presidents protecting the public good, prompting Fighting Bob LaFollette to launch an unsuccessful run for the Presidency under the Progressive Party banner in 1924. The only successul progressive reforms occurred on the state and local levels. Politics became interesting in the election year of 1928. The Democrats nominated Al Smith, the first Catholic ever to earn the nomination of a major party. Smith raised eyebrows with an open opposition to the Prohibition amendment. As a result, the South broke with a long tradition of supporting Democrats and helped Herbert Hoover to continue Republican domination of the Presidency.

The International Scene

What bank reforms came out of the Great Depression?

President Hoover tosses out the first pitch at a major league baseball game

On the international scene, two themes dominated American diplomacy. The first was to take steps to avoid the mistakes that led to World War I. To this end, President Harding convened the Washington Naval Arms Conference in 1921. The United States, Great Britain, and Japan agreed to a ten-year freeze on the construction of battleships and to maintain a capital ship ratio of 5:5:3. They also agreed to uphold the Open Door Policy and to respect each other's holdings in the Pacific. In 1928, the United States and France led an initiative called the Kellogg-Briand Pact, in which 62 nations agreed to outlaw war. These two measures showed the degree to which Americans hoped to forestall another disastrous war. The second priority dealt with outstanding international debt. While practicing political isolation, the United States was completely entangled with Europe economically. The Allies owed the United States an enormous sum of money from World War I. Lacking the resources to reimburse America, the Allies relied on German reparations. The German economy was so debased by the Treaty of Versailles provisions that they relied on loans from American banks for support. In essence, American banks were funding the repayment of the foreign debt. As Germany slipped further and further into depression, the United States intervened again. The Dawes Plan allowed Germany to extend their payments on more generous terms. In the end, when the Great Depression struck, only Finland was able to make good on its debt to the United States.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Charlie Chaplin, whose slapstick comedy made him a superstar of early films

They were called the Lost Generation. America's most talented writers of the 1920s were completely disillusioned by the world and alienated by the changes in modern America. The ghastly horrors of trench warfare were a testament to human inhumanity. The ability of the human race to destroy itself had never been more evident. The materialism sparked by the Roaring Twenties left many intellectuals empty. Surely there was more to life than middle-class conformity, they pined. Intolerance toward immigrants and socialists led many writers to see America as grossly provincial. Thus the literature of the decade was that of disaffection and withdrawal, and many of America's greatest talents expatriated to Europe in despair.

The Writers

What bank reforms came out of the Great Depression?

Typical of the writing of the age were the desolate landscapes of Ernest Hemingway

F. Scott Fitzgerald wrote about the excesses of the Jazz Age. He and his wife Zelda operated among the social elite in New York, Paris, and on the French Riviera. The Great Gatsby, his most famous novel, highlights the opulence of American materialism while harshly criticizing its morality. Ernest Hemingway wrote of disillusioned youths wandering Europe in the wake of World War I in search of meaning in The Sun Also Rises. T.S. Eliot commented on the emptiness of American life in his epic poem The Waste Land. American theater earned worldwide acclaim in the 1920s. The foremost playwright of this newly respected American genre was Eugene O'Neill, noted for Desire Under the Elms and A Long Day's Journey Into Night. The sharpest critic of American middle-class lifestyle was Sinclair Lewis. In Main Street, he takes aim on small-town American life. Babbitt denounced the emptiness of middle-class life in the city. After a string of successful novels, Lewis brought honor to American writers by becoming the first to win a Pulitzer Prize for literature.

The Movies

While the written page marked a quest for intellectual insight, the movie industry catered to mass audiences. Every town seemed to have at least one theater for the new craze. The early decade saw millions flock to the screens to see silent action films and slapstick comedies by the likes of Charlie Chaplin. Sex appeal reigned supreme as American women swooned for Rudolph Valentino and American men yearned for the all-American beauty Mary Pickford. To keep standards of morality high in the film industry, the Hays Office stifled artistic license by censoring objectionable scenes. Because of soaring profits, studios sought quantity rather than quality. Therefore the decade saw few pictures of merit. The first talking picture, The Jazz Singer, appeared in 1927. Walt Disney introduced Mickey Mouse to the American public the following year in Steamboat Willie. By the end of the decade over 100 million viewers attended moviehouses each week, more than the number of weekly churchgoers.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

As people from other nations began to pour into the United States, some Americans began to resent their presence and blame them for economic and social problems

Sometimes the battle got ugly. Old versus new was not a conscious topic to be discussed calmly at the nation's dinner tables. In an effort to preserve so-called true American values, the forces against change sometimes displayed intolerance ranging from restrictive legislation to outright violence. Immigrants from areas outside Northern and Western Europe became targets of narrow-mindedness. African Americans faced new threats from a resurgent Ku Klux Klan. Socialists, anarchists, and atheists beware! The message was simple and clear. Conform or else.

Restricting Immigration

Since the 1880s, America's shores were flooded with immigrants primarily from Southern and Eastern Europe. The old nativist arguments grew louder in the first two decades of the 20th century. Critics of an open immigration policy cried that America's racial stock was being overrun by undesirable ethnicities. Protestant fundamentalists worried as the numbers of Jewish and Catholic Americans grew larger. Labor leaders claimed that immigration lowered wages. As a result, Congress slowly built walls against the newcomers. The first line of defense was a literacy test, passed in 1917. The results were not as encouraging as the nativists had hoped. About 1.25 million immigrants still entered America in the first two years of the twenties. An outright cap on immigrant numbers was enacted in 1921. Ethnic nationalists claimed that these conditions favored Southern and Eastern immigrants too favorably. The result was the National Origins Act of 1924. This law based admission to America on nationality. Immigrants from Northern and Western Europe were granted higher quotas than from other parts of the world. Asian immigration was banned completely. As a sign of pan-Americanism, there were no restrictions placed on immigrants from the western hemisphere.

Resurgence of the KKK

By 1915, the Ku Klux Klan was almost dead. William Simmons of Atlanta, a history teacher at Lanier College, summoned a secret gathering on Stone Mountain on Thanksgiving Day. As the sun set, the participants massed around a burning cross and pledged once again to reassert white supremacy. The Klan grew slowly, boasting only about five thousand members in 1920. That year, Elizabeth Tyler and Edward Y. Clarke used their professional fundraising experience to boost the Klan's numbers. They raised membership dues and sold a great variety of Klan merchandise, including the infamous hoods and robes. Simmons is credited with much of the Klan terminology. Local chapters were called Klaverns, songs were called Klodes, and the leader was called the Imperial Wizard. By the middle of the decade there were an estimated 5 million Klansmen, with a significant women's auxiliary. This new Klan was national, particularly strong in the Midwest and South but powerful as far west as Oregon. The targets of this group went beyond African Americans. Catholics, Jews, and "non-Nordic" immigrants were victimized by the new reign of terror. Toward the end of the decade, corruption and sex scandals among the national leadership discredited the high and mighty message the Klan was trying to promote, and membership numbers sharply dropped.

What bank reforms came out of the Great Depression?

Membership in the white supremacist group the Ku Klux Klan peaked in 1924. Here, the Klan holds a rally in Williamson, West Virginia

"Back to Africa" Movement

The environment of intolerance and a new KKK prompted a drastic response by Marcus Garvey. Garvey believed that equality for African Americans could never be achieved in the United States. He formed the United Negro Improvement Association to promote economic cooperation among black businesses. Garvey made fiery speeches and created uniforms and flags to symbolize a new black pride. The ultimate goal for blacks across the world should be to return to the "Motherland." Only in Africa could a strong nation dedicated to promotion of black culture flourish. After amassing about 80,000 followers, Garvey founded the Black Star Steamship Company to begin transporting African Americans "back to Africa." Closely watched by government officials, Garvey was convicted of mail fraud in 1923 and deported to Jamaica.

Sacco and Vanzetti Trial

The intolerance of the decade is embodied in the murder trial of Nicola Sacco and Bartolomeo Vanzetti. These two self-avowed anarchists and atheists were arrested in April 1920 for two Massachusetts murders. From the start, it was clear their trial was not about the murders, but about their backgrounds and beliefs. The judge violated all semblance of impartiality by criticizing their political views in court. Their guilt or innocence remains uncertain, and the circumstantial evidence on which they were convicted was murky. The jury found them guilty, and after six years of delay, Sacco and Vanzetti were silenced permanently by the electric chair.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Legendary defense lawyer Clarence Darrow faces off against William Jennings Bryan in the Dayton, Tennessee trial of schoolteacher John Scopes. Bryan died in Dayton five days after the trial ended.

When Darwin announced his theory that humans and apes had decended from a common ancestor, he sent shock waves through the Western world.

In the years that followed his 1859 declaration, America's churches hotly debated whether to accept the findings of modern science or continue to follow the teachings of ancient scripture. By the 1920s, most of the urban churches of America had been able to reconcile Darwin's theory with the Bible, but rural preachers preferred a stricter interpretation.

Amid the dizzying changes brought by the roaring decade, religious fundamentalists saw the Bible as the only salvation from a materialistic civilization in decline.

Darwin Banned

In 1925, the Tennessee legislature passed the Butler Law, which forbade the teaching of Darwin's theory of evolution in any public school or university. Other Southern states followed suit.

PUBLIC ACTS

OF THE

STATE OF TENNESSEE

PASSED BY THE

SIXTY-FOURTH GENERAL ASSEMBLY

1925

________

CHAPTER NO. 27

House Bill No. 185

(By Mr. Butler)

AN ACT prohibiting the teaching of the Evolution Theory in all the Universities, Normals and all other public schools of Tennessee, which are supported in whole or in part by the public school funds of the State, and to provide penalties for the violations thereof.

Section 1. Be it enacted by the General Assembly of the State of Tennessee, That it shall be unlawful for any teacher in any of the Universities, Normals and all other public schools of the State which are supported in whole or in part by the public school funds of the State, to teach any theory that denies the story of the Divine Creation of man as taught in the Bible, and to teach instead that man has descended from a lower order of animals.

Section 2. Be it further enacted, That any teacher found guilty of the violation of this Act, Shall be guilty of a misdemeanor and upon conviction, shall be fined not less than One Hundred $ (100.00) Dollars nor more than Five Hundred ($ 500.00) Dollars for each offense.

Section 3. Be it further enacted,That this Act take effect from and after its passage, the public welfare requiring it.

Passed March 13, 1925

W.F. Barry,
Speaker of the House of Representatives

L.D. Hill,
Speaker of the Senate

Approved March 21, 1925.

Austin Peay,
Governor.

The American Civil Liberties Union led the charge of evolution's supporters. It offered to fund the legal defense of any Tennessee teacher willing to fight the law in court. Another showdown between modernity and tradition was unfolding.

What bank reforms came out of the Great Depression?

This political cartoon appeared during the Scopes monkey trial. Bryan is portrayed as Don Quixote, tilting at the windmill of evolution. The caption reads: "He's Always Seeing Things."

The man who accepted the challenge was John T. Scopes, a science teacher and football coach in Dayton, Tennessee. In the spring of 1925, he walked into his classroom and read, from Dayton's Tennessee-approved textbook Hunter's Civic Biology, part of a chapter on the evolution of humankind and Darwin's theory of natural selection. His arrest soon followed, and a trial date was set.

Darrow versus Bryan

Representing Scopes was the famed trial lawyer Clarence Darrow. Slick and sophisticated, Darrow epitomized the urban society in which he lived.

The prosecution was led by William Jennings Bryan, three-time presidential candidate and former secretary of state. The "Great Commoner" was the perfect representative of the rural values he dedicated his life to defend.

What bank reforms came out of the Great Depression?

Although Fundamentalist minister Billy Sunday drew thousands of listeners to his radio program, he was also well known for his flamboyant on-stage style that included wild-eyed denunciations of alcohol and its users.

Bryan was a Christian who lobbied for a constitutional amendment banning the teaching of evolution throughout the nation.

A Media Circus — with Monkeys

The trial turned into a media circus. When the case was opened on July 14, journalists from across the land descended upon the mountain hamlet of Dayton. Preachers and fortune seekers filled the streets. Entrepreneurs sold everything from food to Bibles to stuffed monkeys. The trial became the first ever to be broadcast on radio.

Scopes himself played a rather small role in the case: the trial was reduced to a verbal contest between Darrow and Bryan. When Judge John Raulston refused to admit expert testimony on the validity of evolutionary theory, Darrow lost his best defense.

He decided that if he was not permitted to validate Darwin, his best shot was to attack the literal interpretation of the Bible. The climax of the trial came when Darrow asked Bryan to take the stand as an expert on the Bible. Darrow hammered Bryan with tough questions on his strict acceptance of several Bible's stories from the creation of Eve from Adam's rib to the swallowing of Jonah by a whale.

In the following famous excerpt from the trial transcript, Darrow questions Bryan about the flood described in the Bible's book of Genesis.

What bank reforms came out of the Great Depression?

DARROW: But what do you think that the Bible itself says? Do you know how that estimate (of the year the flood occurred) was arrived at?

BRYAN: I never made a calculation.

DARROW: A calculation from what?

BRYAN: I could not say.

DARROW: From the generations of man?

BRYAN: I would not want to say that.

DARROW: What do you think?

BRYAN: I could not say.

DARROW: From the generations of man?

BRYAN: I would not want to say that.

DARROW: What do you think?

BRYAN: I do not think about things I don't think about.

DARROW: Do you think about things you do think about?

BRYAN: Well, sometimes.


What bank reforms came out of the Great Depression?

While on the witness stand, William Jennings Bryan frustrated Darrow by not directly answering the defense attorney's questions. Bryan was a Christian, but he did not necessarily interpret the Bible literally. He would not give in, however, to Darrow on the subject of miracles. Bryan believed that miracles happen, though he could not explain how.

The "Great Commoner" felt it important for an articulate defender of the Bible to speak on its behalf. At one point in the testimony, Bryan claimed that the defense had "no other purpose than ridiculing every Christian who believes in the Bible."

Bryan was not opposed to science. He was well regarded in some scientific cricles and belonged to several national science organizations.

Darrow's Defense

The key to Clarence Darrow's defense strategy was to have scientists testify. On the trial's sixth day, Judge Raulston stated, "It is not within the province of the court under these issues to decide and determine which is true, the story of divine creation as taught in the Bible, or the story of the creation of man as taught by evolution." In short, no experts were needed to understand the simple language of the Butler law. Darrow's scientific experts were barred from testifying. By day's end, the sardonic Darrow had been charged with contempt of court.

The trial's seventh day featured charged exchanges between Darrow and Bryan, who was on the stand. But on the trial's eight day, Judge Raulston ruled that Bryan's testimony would not be allowed to stand on the record.

It was clear to Darrow that all was lost in this courtroom. In order to appeal the case to a higher court, Darrow asked the jury to find his client guilty. On July 21, 1925, it did.

It is interesting to speculate how history would have played out had Bryan been able to examine Darrow on the witness stand, which was Bryan's intention. But the trial concluded before Bryan had the chance.

Neither lawyer came out looking like a monkey.

The jury sided with the law. Clearly, Scopes was in violation of Tennessee statute by teaching that humans evolved from apes. He was fined $100 and released. But the battle that played out before the nation proved a victory for supporters of evolutionary theory. A later court dismissed the fine imposed on Scopes, though in the short term, the antievolution law was upheld.

Fundamental Christians were down but not out. Through the radio airwaves, ministers such as Billy Sunday reached audiences of thousands. Aimee Semple McPherson of California preached her fundamentalist message over loudspeakers to arena-sized crowds. At one point, she used a giant electric sports scoreboard to illustrate the triumph of good over evil, foreshadowing generations of televangelists who would follow her lead.

Clearly, the 1920s did not see the end to these conflicts or the answers to their major questions.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

The conviction of anarchists Nicola Sacco and Bartolomeo Vanzetti sparked protests throughout the world.

World War I was over, but the hysteria lingered. The Eastern front had not gone well for Russia. The pressures of their losing effort forced the Russian czar to abdicate. The new government had not fared much better. Finally in November 1917, Lenin led a successful revolution of the Bolshevik workers. The ideas of Karl Marx had been known since 1848, but nowhere in the world until now had a successful communist revolution occurred. Once the war against Germany was over, the Western powers focused their energies at restoring Czar Nicholas. Even the United States sent troops to Russia hoping the White Russians could oust the communist Reds. All this effort was in vain. The Bolsheviks murdered the entire royal family and slowly secured control of the entire nation.

The Communist Party Forms

Back in the United States, veterans were returning home. Workers who avoided striking during the war were now demanding wage increases to keep pace with spiraling inflation. Over 3,300 postwar strikes swept the land. A small group of radicals formed the Communist Labor Party in 1919. Progressive and conservative Americans believed that labor activism was a menace to American society and must be squelched. The hatchetman against American radicals was President Wilson's Attorney General, A. Mitchell Palmer. Palmer was determined that no Bolshevik Revolution would happen in the United States.

On April 15, 1921, two employees of a shoe warehouse in South Braintree, Massachusetts, were murdered during a robbery. The police investigating the crime arrested two Italian immigrants named Nicola Sacco and Bartolomeo Vanzetti.

Sacco and Vanzetti maintained their innocence, but they already had a strike against them: they were anarchists and socialists. Just a little over two weeks after their arrest, they were found guilty.

Many people, particularly fellow socialists, protested the verdict, saying the two men were convicted more on political and ethnic prejudice than on any real evidence. Indeed, four years later, another man said he had committed the crime with a local gang.

Despite appeals, Sacco and Vanzetti were never granted a retrial. When they were sentenced to death on April 9, 1927, protests erupted around the country. But to no avail — the men were executed on Aug. 23, 1927. They claimed they were innocent until the moment of their deaths.

Scholars still debate the guilt and innocence of Sacco and Vanzetti, but there is little question that the trial was biased against them.

Palmer's Efforts

From 1919 to 1920, Palmer conducted a series of raids on individuals he believed were dangerous to American security. He deported 249 Russian immigrants without just cause. The so-called "Soviet ark" was sent back to Mother Russia. With Palmer's sponsorship, the Federal Bureau of Investigation was created under the leadership of J. Edgar Hoover. In January of 1920, federal agents broke into the homes of suspected anarchists without search warrants, jailed labor leaders, and held about 5,000 citizens without respecting their right to legal counsel. Palmer felt that American civil liberties were less important than rooting out potential wrongdoers. Eventually most of the detainees were released, but some were deported.

The climate set by Palmer and Hoover could not be contained. Still agitated by wartime propaganda, members of the American public took matters into their own hands.

American Legionnaires in Centralia, Washington attacked members of the Wobblies. Twelve radicals were arrested; one of them was beaten, castrated, and then shot. The New York State Legislature expelled five Socialist representatives from their ranks. Twenty-eight states banned the public display of red flags. It seemed as though the witch hunt would never end. Responsible Americans began to speak out against Palmer's raids and demand that American civil liberties be respected. By the summer of 1920, the worst of the furor had subsided.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

"In every living soul, a spirit cries for expression — perhaps this plaintive, wailing song of Jazz is, after all, the misunderstood utterance of a prayer." --text of the opening title card from The Jazz Singer, 1927, Hollywood's first feature-length "talkie."

Not all Americans embraced the new way of life. Many saw the United States as a civilization in decline. The original purpose of the Puritan city upon a hill seemed to be slipping away in the pursuit of materialism and self-gratification. The morals of the Victorian Age were forgotten in the age of Freud and the flapper. Immigrants brought new cultures, religions, and languages to the increasingly complex American mosaic. The success of the Bolshevik Revolution brought a widespread suspicion of socialists, radicals, and labor unions. There were those in America who clung tenaciously to the values of the past. They would not give up without a fight.

The first group to feel the heat were suspected Socialists. The wave of postwar strikes touched off an anti-labor sentiment across America. Fears fueled by the Russian Revolution touched off a witch hunt for potential threats to national security. Immigrants, whose numbers had been transmuting the American ethnic fabric, became targets for intolerance. Ethnic purists succeeded at slamming the open door for immigrants shut. Hate groups such as the Ku Klux Klan gained in popularity as working-class Americans took aim at African Americans, immigrants, Catholics, and Jews. The churches of America were similarly torn by the struggle between old and new. Modernists reconciled the theories of Charles Darwin with scripture, while fundamentalists persisted with a strict interpretation of creation theory.

Throughout the struggle, America's political leadership remained remarkably aloof. The White House was occupied by the most conservative Presidents in a generation during the decade of change. Warren Harding, Calvin Coolidge, and Herbert Hoover seemed content with the status quo, and delegated much of the decision-making to Congress and key Cabinet members. Businesses took advantage of the laissez faire approach.

By the end of the decade, America was on the brink of something special. An industrial revolution was now complete. The United States had proven itself as a global power in acquiring an empire and intervening in the First World War, yet lacked the physical destruction of the conflict that plagued the European continent. The standard of living was rising faster than anywhere in the world. Indeed, when Herbert Hoover took office, he predicted that America would soon see the end of poverty. No one predicted the sheer calamity that was so soon to follow.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

New American hero, Charles Lindbergh, is honored with a ticker-tape parade in New York City on June 13, 1927, after returning from the world's first solo transatlantic flight in the Spirit of St. Louis.

The Roaring Twenties was a time of great change. As exciting as dynamic times may seem, such turmoil generates uncertainty. Sometimes, in an effort to obscure tensions, people seek outlets of escape. Fads — sometimes entertaining, sometimes senseless — swept the nation. Another coping strategy in a time of great uncertainty is to find role models who embody tried and true values. National heroes heretofore unknown to peacetime America began to dominate American consciousness.

What bank reforms came out of the Great Depression?

Flagpole sitting was a popular fad of the 1920s and was definitely the thing to do!

New Fads

The radio created the conditions for national fads. Without such a method of live and immediate communication, fads could amount only to local crazes. Roaring Twenties fads ranged from the athletic to the ludicrous. One of the most popular trends of the decade was the dance marathon. New dance steps such as the Charleston swept the nation's dance halls, and young Americans were eager to prove their agility. In a typical dance marathon, contestants would dance for forty-five minutes and rest for fifteen. The longest marathons lasted thirty-six hours or more. Beauty pageants came into vogue. The first Miss America Pageant was staged in Atlantic City in 1921. One of the most bizarre fads was flagpole sitting. The object was simple: be the person who could sit atop the local flagpole for the longest period of time. Fifteen-year-old Avon Foreman of Baltimore set the amateur standard — ten days, ten hours, ten minutes, and ten seconds.

What bank reforms came out of the Great Depression?

Flappers playing Mah Jongg, a popular board game, in the 1920s.

Mah-jongg is a Chinese tile game. Colored tiles with different symbols were randomly arranged geometrically. The object is to remove all the game pieces. Crossword puzzle fever swept the nation when Simon and Schuster published America's first crossword puzzle book. The Book-of-the-Month Club drew thousands of readers into literary circles. Two new periodicals began to grace American coffee tables. The nation's first weekly news magazine, Time, was founded by Henry Luce and Briton Hadden. Their punchy writing on timely stories and eye-grabbing pictures hit the newsstands in 1923. DeWitt Wallace made a business out of condensing articles from other periodicals. His publication, Reader's Digest, began in 1921 and boasted a half million subscriptions a decade later.

New Heroes

No individual personified the All-American hero more than Charles Lindbergh. His courage was displayed to the nation when he flew his Spirit of St. Louis from New York to Paris, becoming the first man to fly solo across the Atlantic Ocean. National and international news was hidden in the back pages of the major newspapers while Lindbergh stole the front pages. Confetti flew and bugles sounded in New York City when he returned successfully, and President Coolidge hosted a gala celebration. There was more to Lindbergh's appeal than his bravery. Throughout the ordeal, Lindbergh maintained a hometown modesty. He declined dozens of endorsement opportunities, ever refusing to sell out. Spectator sports provided opportunities for others to grab the limelight. Ty Cobb and Babe Ruth were role models for hundreds of thousands of American boys. Fortunately, Cobb's outward racism and Ruth's penchant for drinking and womanizing were shielded from admiring youngsters. Football had Red Grange, and boxing had Jack Dempsey. Gertrude Ederle impressed Americans by becoming the first woman to swim the English Channel. These heroes gave Americans, anxious about the uncertain future and rapidly fading past, a much needed sense of stability.

QUIZ TIME: 1920s Quiz


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Courtesy of the MZTV Museum

David Sarnoff was the first president of RCA and helped revolutionize radio.

Commercial radio in America had humble beginnings. Frank Conrad, an engineer for Westinghouse, set up an amateur radio station above his garage in a Pittsburgh suburb. Since the wireless technology was developed by Guglielmo Marconi in the late 19th century, thousands of enthusiasts across the world experimented with the new toy. After World War I, Conrad began broadcasting a variety of programming from his "station." High school music groups performed, phonograph records were played, and news and baseball scores were reported. Conrad had dramatically improved the transmitter, and soon hundreds of people in the Pittsburgh area were sending requests for air time. The bosses of Westinghouse knew that Conrad was on to something and convinced him to make his hobby commercially profitable.

What bank reforms came out of the Great Depression?

Sports broadcasts helped boost the popularity of radio.

KDKA on the Air

On the night of November 2, 1920, Conrad and his Westinghouse associates announced that Warren G. Harding had defeated James Cox to become the next President. The message was heard as far north as New Hampshire and as far south as Louisiana. The federal government granted the call letters KDKA to the Pittsburgh station and a new industry was born. For nearly a year, KDKA monopolized the airwaves. But competition came fast and furious; by the end of 1922, there were over 500 such stations across the United States. The federal government excercised no regulation over the nascent enterprise, and the result was complete chaos. Stations fought over call letters and frequencies, each trying to outbroadcast the closest competitor. Finally in 1927, Congress created the Federal Radio Commission to restore order.

Ad Time

One of the great attractions to the radio listener was that once the cost of the original equipment was covered, radio was free. Stations made money by selling air time to advertisers. The possibility of reaching millions of listeners at once had advertising executives scrambling to take advantage. By the end of the decade advertisers paid over $10,000 for an hour of premium time.

The Radio Corporation of America created a new dimension to the venture in 1926. By licensing telephone lines, RCA created America's first radio network and called it the National Broadcasting Company. For the first time, citizens of California and New York could listen to the same programming simultaneously. Regional differences began to dissolve as the influence of network broadcasting ballooned. Americans listened to the same sporting events and took up the same fads. Baseball games and boxing matches could now reach those far away from the stadiums and arenas. A mass national entertainment culture was flowering.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Santa waves to children outside a department store during a Thanksgiving Day Parade.

The 1920s was a decade of increasing conveniences for the middle class. New products made household chores easier and led to more leisure time. Products previously too expensive became affordable. New forms of financing allowed every family to spend beyond their current means. Advertising capitalized on people's hopes and fears to sell more and more goods.

Changing Housework

What bank reforms came out of the Great Depression?

The Regent Theater, America's First Movie Palace

By the end of the 1920s, household work was revolutionized. A typical work week for a housewife before the twenties involved many tedious chores. All the furniture was moved off the carpets, which were rolled up and dragged outside to beat out the week's dirt and dust. The ice in the icebox was replaced and the waterpan that lay beneath was repeatedly changed. The clothes were scrubbed in a washing tub on a washboard. An iron was heated on the stove to smooth out the wrinkles. Women typically spent the summer months canning food for the long winter. Clothes were made from patterns, and bread was made from scratch. Very few of these practices were necessary by the end of the decade. Vacuum cleaners displaced the carpet beater. Electric refrigerators, washing machines, and irons saved hours of extra work. New methods of canning and freezing made store-bought food cheap and effective enough to eliminate this chore. Off-the-rack clothing became more and more widespread. Even large bakeries were supplying bread to the new supermarkets. The hours saved in household work were countless.

Buying on Credit

"Buy now, pay later" became the credo of many middle class Americans of the Roaring Twenties. For the single-income family, all these new conveniences were impossible to afford at once. But retailers wanted the consumer to have it all. Department stores opened up generous lines of credit for those who could not pay up front but could demonstrate the ability to pay in the future. Similar installment plans were offered to buyers who could not afford the lump sum, but could afford "twelve easy payments." Over half of the nation's automobiles were sold on credit by the end of the decade. America's consumers could indeed have it all, if they had an iron stomach for debt. Consumer debt more than doubled between 1920 and 1930.

Advertising

Fueling consumer demand were new techniques in advertising. This was not a new business, but in the increasingly competitive marketplace, manufacturers looked to more and more aggressive advertising campaigns. One major trend of the decade was to use pop psychology methods to convince Americans that the product was needed. The classic example was the campaign for Listerine. Using a seldom heard term for bad breath — halitosis — Listerine convinced thousands of Americans to buy their product. Consumers might not have known what halitosis was, but they surely knew they did not want it.

Advertisers were no longer simply responding to demand; they were creating demand. Radio became an important new means of communicating a business message. Testimonials from Hollywood film stars sold products in record numbers.

The advertising business created demand for the gadgets and appliances being manufactured by American factories.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

The Savoy Ballroom in Harlem in 1926 was The Place and Lindy Hop was The Dance!

It was time for a cultural celebration. African Americans had endured centuries of slavery and the struggle for abolition. The end of bondage had not brought the promised land many had envisioned. Instead, white supremacy was quickly, legally, and violently restored to the New South, where ninety percent of African Americans lived. Starting in about 1890, African Americans migrated to the North in great numbers. This Great Migration eventually relocated hundreds of thousands of African Americans from the rural South to the urban North. Many discovered they had shared common experiences in their past histories and their uncertain present circumstances. Instead of wallowing in self-pity, the recently dispossessed ignited an explosion of cultural pride. Indeed, African American culture was reborn in the Harlem Renaissance.

The Great Migration

The Great Migration began because of a "push" and a "pull." Disenfranchisement and Jim Crow laws led many African Americans to hope for a new life up north. Hate groups and hate crimes cast alarm among African American families of the Deep South. The promise of owning land had not materialized. Most blacks toiled as sharecroppers trapped in an endless cycle of debt. In the 1890s, a boll weevil blight damaged the cotton crop throughout the region, increasing the despair. All these factors served to push African Americans to seek better lives. The booming northern economy forged the pull. Industrial jobs were numerous, and factory owners looked near and far for sources of cheap labor.

Unfortunately, northerners did not welcome African Americans with open arms. While the legal systems of the northern states were not as obstructionist toward African American rights, the prejudice among the populace was as acrimonious. White laborers complained that African Americans were flooding the employment market and lowering wages. Most new migrants found themselves segregated by practice in run down urban slums. The largest of these was Harlem. Writers, actors, artists, and musicians glorified African American traditions, and at the same time created new ones.

Writers and Actors

The most prolific writer of the Harlem Renaissance was Langston Hughes. Hughes cast off the influences of white poets and wrote with the rhythmic meter of blues and jazz. Claude McKay urged African Americans to stand up for their rights in his powerful verses. Jean Toomer wrote plays and short stories, as well as poems, to capture the spirit of his times. Book publishers soon took notice and patronized many of these talents. Zora Neale Hurston was noticed quickly with her moving novel, Their Eyes Were Watching God. Music met prose in the form of musical comedy. The 1921 production of Shuffle Along is sometimes credited with initiating the movement. Actor Paul Robeson electrified audiences with his memorable stage performances.

Musicians

No aspect of the Harlem Renaissance shaped America and the entire world as much as jazz. Jazz flouted many musical conventions with its syncopated rhythms and improvised instrumental solos. Thousands of city dwellers flocked night after night to see the same performers. Improvisation meant that no two performances would ever be the same. Harlem's Cotton Club boasted the talents of Duke Ellington. Singers such as Bessie Smith and Billie Holiday popularized blues and jazz vocals. Jelly Roll Morton and Louis Armstrong drew huge audiences as white Americans as well as African Americans caught jazz fever.

The continuing hardships faced by African Americans in the Deep South and the urban North were severe. It took the environment of the new American city to bring in close proximity some of the greatest minds of the day. Harlem brought notice to great works that might otherwise have been lost or never produced. The results were phenomenal. The artists of the Harlem Renaissance undoubtedly transformed African American culture. But the impact on all American culture was equally strong. For the first time, white America could not look away.


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What bank reforms came out of the Great Depression?

The battle for suffrage was finally over. After a 72-year struggle, women had won the precious right to vote. The generations of suffragists that had fought for so long proudly entered the political world. Carrie Chapman Catt carried the struggle into voting awareness with the founding of the League of Women Voters. Alice Paul vowed to fight until an Equal Rights Amendment was added to the Constitution. Margaret Sanger declared that female independence could be accomplished only with proper birth control methods. To their dismay, the daughters of this generation seemed uninterested in these grand causes. As the 1920s roared along, many young women of the age wanted to have fun.

Life of the Flappers

Flappers were northern, urban, single, young, middle-class women. Many held steady jobs in the changing American economy. The clerking jobs that blossomed in the Gilded Age were more numerous than ever. Increasing phone usage required more and more operators. The consumer-oriented economy of the 1920s saw a burgeoning number of department stores. Women were needed on the sales floor to relate to the most precious customers — other women. But the flapper was not all work and no play.

By night, flappers engaged in the active city nightlife. They frequented jazz clubs and vaudeville shows. Speakeasies were a common destination, as the new woman of the twenties adopted the same carefree attitude toward prohibition as her male counterpart. Ironically, more young women consumed alcohol in the decade it was illegal than ever before. Smoking, another activity previously reserved for men, became popular among flappers. With the political field leveled by the Nineteenth Amendment, women sought to eliminate social double standards. Consequently, the flapper was less hesitant to experiment sexually than previous generations. Sigmund Freud's declaration that the libido was one of the most natural of human needs seemed to give the green light to explore.

The Flapper Look

The flapper had an unmistakable look. The long locks of Victorian women lay on the floors of beauty parlors as young women cut their hair to shoulder length. Hemlines of dresses rose dramatically to the knee. The cosmetics industry flowered as women used make-up in large numbers. Flappers bound their chests and wore high heels. Clara Bow, Hollywood's "It" Girl, captured the flapper image for the nation to see.

Many women celebrated the age of the flapper as a female declaration of independence. Experimentation with new looks, jobs, and lifestyles seemed liberating compared with the socially silenced woman in the Victorian Age. The flappers chose activities to please themselves, not a father or husband. But critics were quick to elucidate the shortcomings of flapperism. The political agenda embraced by the previous generation was largely ignored until the feminist revival of the 1960s. Many wondered if flappers were expressing themselves or acting like men. Smoking, drinking, and sexual experimentation were characteristic of the modern young woman. Short hair and bound chests added to the effect. One thing was certain: Despite the potential political and social gains or losses, the flappers of the 1920s sure managed to have a good time.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

The automobile was monumental in the evolution of courtship. High speed and moonlight drives inspired a spirit of reckless abandon.

In the 19th century, the American world consisted of children and adults. Most Americans tried their best to allow their children to enjoy their youth while they were slowly prepared for the trials and tribulations of adulthood. Although child labor practices still existed, more and more states were passing restrictions against such exploitation. The average number of years spent in school for young Americans was also on the rise. Parents were waiting longer to goad their youngsters into marriage rather than pairing them off at the tender age of sixteen or seventeen. In short, it soon became apparent that a new stage of life — the teenage phase — was becoming a reality in America. American adolescents were displaying traits unknown among children and adults. Although the word teenager did not come into use until decades later, the teenage mindset dawned in the 1920s.

What bank reforms came out of the Great Depression?

International News Photos

These young women probably raised the eyebrows of a number of their fellow sunbathers. But only a few years later, young people would be smoking, drinking and dancing with an abandon never seen before in America.

From Courtship to Dating

The single greatest factor that led to the emergence of the independent teenager was the automobile. Teens enjoyed a freedom from parental supervision unknown to previous generations. The courtship process rapidly evolved into dating. In earlier times, young boys and girls spent their first dates at home. The boy would meet the girl's parents, they would have a sitting in the parlor, followed by dinner with the entire family. Later in the evening, the couple might enjoy a few moments alone on the front porch. After several meetings, they could be lucky enough to be granted permission for an unchaperoned walk through town. The automobile simply shattered these old-fashioned traditions. Dating was removed from the watchful eyes of anxious parents. Teenagers were given privacy, and a sexual revolution swept America. Experimentation with sexual behaviors before marriage became increasingly common. Young Americans were now able to look beyond their own small towns at an enlarged dating pool.

Impact of the Automobile

Automobile technology led directly to the other major factor that fostered a teenage culture: the consolidated high school. Buses could now transport students farther from their homes, leading to the decline of the one-room schoolhouse. Furthermore, Americans were realizing the potential of a longer education, and states were adding more years to their compulsory schooling laws. As a result, a larger number of teenagers were thrown into a common space than ever before. It was only natural that discussions about commonalties would occur. Before long, schools developed their own cultural patterns, completely unlike the childhood or adult experience. School athletics and extracurricular activities only enhanced this nascent culture. The American teenager was born.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Prohibition Political cartoons, both for and against, sprouted up during the 1920s

Saloons were closed, bottles were smashed, and kegs were split wide open. When the states ratified the Eighteenth Amendment in 1919, the manufacture, sale, and transportation of alcoholic beverages was outlawed. Protestant ministers and progressive politicians rejoiced and proclaimed a holier and safer America. It was predicted that worker productivity would increase, families would grow closer, and urban slums would disappear. Yet for all its promise, prohibition was repealed fourteen years later, after being deemed a dismal failure.

Advantages to Prohibition

In fairness, there were advantages to prohibition. Social scientists are certain that actual consumption of alcohol actually decreased during the decade. Estimates indicate that during the first few years of prohibition, alcohol consumption declined to a mere third of its prewar level. Although no polls or surveys would be accurate, health records indicate a decrease in alcoholism and alcohol-related diseases such as cirrhosis of the liver. Family savings did increase during the decade, but it was difficult to determine whether the increase was due to decreased alcohol consumption or a robust economy.

Disadvantages to Prohibition

The minuses seemed to outweigh the pluses. First, federal allocation of funds to enforce prohibition were woefully inadequate. Gaping loopholes in the Volstead Act, the law implemented to enforce the Eighteenth Amendment, encouraged abuse. Alcohol possession was permitted for medical purposes, and production of small amounts was permitted for home use. The manufacturing of near beer — regular beer without the alcohol — was also permitted. The problem was that to make near beer, it was first necessary to brew the real variety, so illegal breweries could insist their product was scheduled to have the alcohol removed. Soon a climate of lawlessness swept the nation, as Americans everywhere began to partake in illegal drink. Every city had countless speakeasies, which were not-so-secret bars hidden from public view.

While the number of drinkers may have decreased, the strength of the beverages increased. People drank as much as they could as fast as they could to avoid detection. Because alcoholic production was illegal, there could be no regulation. Desperate individuals and heartless profiteers distilled anything imaginable, often with disastrous results. Some alcohol sold on the black market caused nerve damage, blindness, and even death. While women of the previous generation campaigned to ban alcohol, the young women of the twenties consumed it with a passion.

Organized Crime

The group that profited most from the illegal market was organized crime. City crime bosses such as Al Capone of Chicago sold their products to willing buyers and even intimidated unwilling customers to purchase their illicit wares. Crime involving turf wars among mobsters was epidemic. Soon the mobs forced legitimate businessmen to buy protection, tainting those who tried to make an honest living. Even city police took booze and cash from the likes of Al Capone. After several years of trying to connect Capone to bootlegging, federal prosecutors were able to convict him for income tax evasion.

The Eighteenth Amendment was different from all previous changes to the Constitution. It was the first experiment at social engineering. Critics pointed out that it was the only amendment to date that restricted rather than increased individual rights. Civil liberties advocates considered prohibition an abomination. In the end, economics doomed prohibition. The costs of ineffectively policing the nation were simply too high. At the deepest point of the Great Depression, government officials finally ratified the Twenty-First Amendment, repealing the practice once and for all.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Cruising in automobiles such as the Duesenberg pictured above was popular in America, but this typically Sunday afternoon family past time was largely discontinued during the depression.

Perhaps no invention affected American everyday life in the 20th century more than the automobile.

Although the technology for the automobile existed in the 19th century, it took Henry Ford to make the useful gadget accessible to the American public. Ford used the idea of the assembly line for automobile manufacturing. He paid his workers an unprecedented $5 a day when most laborers were bringing home two, hoping that it would increase their productivity. Furthermore, they might use their higher earnings to purchase a new car.

Ford reduced options, even stating that the public could choose whatever color car they wanted — so long as it was black. The Model T sold for $490 in 1914, about one quarter the cost of the previous decade. By 1920, there were over 8 million registrations. The 1920s saw tremendous growth in automobile ownership, with the number of registered drivers almost tripling to 23 million by the end of the decade.

Economic Spin-offs

The growth of the automobile industry caused an economic revolution across the United States. Dozens of spin-off industries blossomed. Of course the demand for vulcanized rubber skyrocketed. Road construction created thousands of new jobs, as state and local governments began funding highway design.

Even the federal government became involved with the Federal Highway Act of 1921. Gas stations began to dot the land, and mechanics began to earn a living fixing the inevitable problems. Oil and steel were two well-established industries that received a serious boost by the demand for automobiles. Travelers on the road needed shelter on long trips, so motels began to line the major long-distance routes.

Even cuisine was transformed by the automobile. The quintessential American foods — hamburgers, french fries, milk shakes, and apple pies — were hallmarks of the new roadside diner. Drivers wanted cheap, relatively fast food so they could be on their way in a hurry. Unfortunately, as new businesses flourished, old ones decayed. When America opted for the automobile, the nation's rails began to be neglected. As European nations were strengthening mass transit systems, individualistic Americans invested in the automobile infrastructure.

Effects of the Automobile

The social effects of the automobile were as great. Freedom of choice encouraged many family vacations to places previously impossible. Urban dwellers had the opportunity to rediscover pristine landscapes, just as rural dwellers were able to shop in towns and cities. Teenagers gained more and more independence with driving freedom. Dating couples found a portable place to be alone as the automobile helped to facilitate relaxed sexual attitudes.

Americans experienced traffic jams for the first time, as well as traffic accidents and fatalities. Soon demands were made for licensure and safety regulation on the state level. Despite the drawbacks, Americans loved their cars. As more and more were purchased, drivers saw their worlds grow much larger.


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What bank reforms came out of the Great Depression?

What bank reforms came out of the Great Depression?

Henry Ford Museum & Greenfield Village.

Model T — 1919

The 1920s saw the culmination of fifty years of rapid American industrialization. New products seemed to burst from American production lines with the potential of revolutionizing American life. Other products that had previously been toys for the rich were now available to a majority of Americans. The standard of living increased as the economy grew stronger and stronger. The results were spectacular. The America of 1929 was vastly different from the America of 1919.

The automobile was first and foremost among these products. The practices of Henry Ford made these horseless carriages affordable to the American masses. Widespread use of the automobile ushered in changes in work patterns and leisure plans. A host of support industries were launched. Dating and education were changed by the automobile. Radio usage brought further changes. For the first time, a national popular culture was supplanting regional folkways. Americans across the continent were sharing the same jokes, participating in the same fads, and worshipping the same heroes. Housework was minimized with the introduction of labor saving devices. As a result, leisure time was increased.

The bleak outlook and large sacrifices of the wartime era were now a part of the past. Young Americans were looking to cut loose and have a good time. Prohibition did not end alcohol usage. The romantic subculture of the speakeasy kept the firewater flowing. Organized crime flourished as gangland violence related to bootlegged liquor plagued America's cities. Flapper women strove to eliminate double standard values. Young females engaged in behaviors previously reserved for men including smoking and drinking. Sigmund Freud's assertion that sexual behavior was a natural instinct brought down more barriers as young Americans delved into sexual experimentation. The Harlem Renaissance brought a new form of entertainment. The sounds of jazz bands had appeal that transcended African American audiences, as thousands flocked to hear the new sounds.

The 1920s ushered in more lasting changes to the American social scene than any previous decade. Escapism loomed large as many coped with change by living in the present and enjoying themselves. The economic boom that unleashed the transformation and its consequences made the Roaring Twenties an era to remember.


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What bank reforms came out of the Great Depression?

As the war drew to a close, Woodrow Wilson set forth his plan for a "just peace." Wilson believed that fundamental flaws in international relations created an unhealthy climate that led inexorably to the World War. His Fourteen Points outlined his vision for a safer world. Wilson called for an end to secret diplomacy, a reduction of armaments, and freedom of the seas. He claimed that reductions to trade barriers, fair adjustment of colonies, and respect for national self-determination would reduce economic and nationalist sentiments that lead to war. Finally, Wilson proposed an international organization comprising representatives of all the world's nations that would serve as a forum against allowing any conflict to escalate. Unfortunately, Wilson could not impose his world view on the victorious Allied Powers. When they met in Paris to hammer out the terms of the peace, the European leaders had other ideas.

The Paris Peace Conference

Most of the decisions made at the Paris Peace Conference were made by the Big Four, consisting of President Wilson, David Lloyd George of Great Britain, Georges Clemenceau of France, and Vittorio Orlando of Italy. The European leaders were not interested in a just peace. They were interested in retribution. Over Wilson's protests, they ignored the Fourteen Points one by one. Germany was to admit guilt for the war and pay unlimited reparations. The German military was reduced to a domestic police force and its territory was truncated to benefit the new nations of Eastern Europe. The territories of Alsace and Lorraine were restored to France. German colonies were handed in trusteeship to the victorious Allies. No provisions were made to end secret diplomacy or preserve freedom of the seas. Wilson did gain approval for his proposal for a League of Nations. Dismayed by the overall results, but hopeful that a strong League could prevent future wars, he returned to present the Treaty of Versailles to the Senate.

Defeating the League of Nations

Unfortunately for Wilson, he was met with stiff opposition. The Republican leader of the Senate, Henry Cabot Lodge, was very suspicious of Wilson and his treaty. Article X of the League of Nations required the United States to respect the territorial integrity of member states. Although there was no requirement compelling an American declaration of war, the United States might be bound to impose an economic embargo or to sever diplomatic relations. Lodge viewed the League as a supranational government that would limit the power of the American government from determining its own affairs. Others believed the League was the sort of entangling alliance the United States had avoided since George Washington's Farewell Address. Lodge sabotaged the League covenant by declaring the United States exempt from Article X. He attached reservations, or amendments, to the treaty to this effect. Wilson, bedridden from a debilitating stroke, was unable to accept these changes. He asked Senate Democrats to vote against the Treaty of Versailles unless the Lodge reservations were dropped. Neither side budged, and the treaty went down to defeat.

Why did the United States fail to ratify the Versailles Treaty and join the League of Nations? Personal enmity between Wilson and Lodge played a part. Wilson might have prudently invited a prominent Republican to accompany him to Paris to help ensure its later passage. Wilson's fading health eliminated the possibility of making a strong personal appeal on behalf of the treaty. Ethnic groups in the United States helped its defeat. German Americans felt their fatherland was being treated too harshly. Italian Americans felt more territory should have been awarded to Italy. Irish Americans criticized the treaty for failing to address the issue of Irish independence. Diehard American isolationists worried about a permanent global involvement. The stubborness of President Wilson led him to ask his own party to scuttle the treaty. The final results of all these factors had mammoth longterm consequences. Without the involvement of the world's newest superpower, the League of Nations was doomed to failure. Over the next two decades, the United States would sit on the sidelines as the unjust Treaty of Versailles and the ineffective League of Nations would set the stage for an even bloodier, more devastating clash.


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What bank reforms came out of the Great Depression?

The First World War was a total war. In previous wars, the civilian population tried to steer clear of the war effort. Surely expectations were placed on civilians for food and clothing, and of course, since the 19th century, troops were conscripted from the general population. But modern communication and warfare required an all-out effort from the entire population. New weapons technology required excess fuel and industrial capacity. The economic costs of 20th century warfare dwarfed earlier wars, therefore extensive revenue raising was essential. Without the support of the whole population, failure was certain. Governments used every new communications technology imaginable to spread pro-war propaganda. American efforts geared to winning World War I amounted to nothing less than a national machine.

Rallying the Country

Once Congress declared war, President Wilson quickly created the Committee on Public Information under the direction of George Creel. Creel used every possible medium imaginable to raise American consciousness. Creel organized rallies and parades. He commissioned George M. Cohan to write patriotic songs intended to stoke the fires of American nationalism. Indeed, "Over There" became an overnight standard. James Montgomery Flagg illustrated dozens of posters urging Americans to do everything from preserving coal to enlisting in the service. Flagg depicted a serious Uncle Sam staring at young American men declaring "I Want You for the U.S. Army." His powerful images were hard to resist. An army of "four-minute men" swept the nation making short, but poignant, powerful speeches. Films and plays added to the fervor. The Creel Committee effectively raised national spirit and engaged millions of Americans in the business of winning the war.

What bank reforms came out of the Great Depression?

Powerful images designed to instill fear were used to sell Liberty Bonds in America

Dealing With Dissenters

Still there were dissenters. The American Socialist Party condemned the war effort. Irish-Americans often displayed contempt for the British ally. Millions of immigrants from Germany and Austria-Hungary were forced to support initiatives that could destroy their homelands. But this dissent was rather small. Nevertheless, the government stifled wartime opposition by law with the passing of the Espionage and Sedition Acts of 1917. Anyone found guilty of criticizing the government war policy or hindering wartime directives could be sent to jail. Many cried that this was a flagrant violation of precious civil liberties, including the right to free speech. The Supreme Court handed down a landmark decision on this issue in the Schenck v. United States verdict. The majority court opinion ruled that should an individual's free speech present a "clear and present danger" to others, the government could impose restrictions or penalties. Schenck was arrested for sabotaging the draft. The Court ruled that his behavior endangered thousands of American lives and upheld his jail sentence. Socialist Party leader Eugene V. Debs was imprisoned and ran for President from his jail cell in 1920. He polled nearly a million votes.

Frankfurters to Hot Dogs

There was a sinister side to the war hysteria. Many Americans could not discern between enemies abroad and enemies at home. German-Americans became targets for countless hate crimes. On a local level, schoolchildren were pummeled on schoolyards, and yellow paint was splashed on front doors. One German-American was lynched by a mob in Collinsville, Illinois, only to be found innocent by a sympathetic jury. Colleges and high schools stopped teaching the German language. The city of Cincinnati banned pretzels, and esteemed city orchestras refused to play music by German composers. Hamburgers, sauerkraut, and frankfurters became known as liberty meat, liberty cabbage, and hot dogs. The temperance movement received a boost by linking beer drinking with support for Germany. These undeserved crimes against innocent German-Americans went completely unpunished.

Why Victory Gardens?

Once support for the war was in full swing, the population was mobilized to produce war materiel. In 1917, the War Industries Board was established to coordinate production of munitions and supplies. The board was empowered to allocate raw materials and determine what products would be given high priority. Women shifted jobs from domestic service to heavy industry to compensate for the labor shortage owing to military service. African Americans flocked northward in greater and greater numbers in the hope of winning industry jobs. Herbert Hoover was appointed to head the Food Administration. Shortages of food in the Allied countries had led to shortages and rationing all across Western Europe. Hoover decided upon a plan that would raise the necessary foodstuffs by voluntary means. Americans were encouraged to participate in "Meatless Mondays" and "Wheatless Wednesdays." Additional food could be raised by planting "victory gardens" in small backyard patches or even in window boxes on fire escapes. President Wilson showed his support by allowing a flock of sheep to graze on the White House lawn. Similar measures were employed by the Fuel Administration. The government also adopted Daylight Savings Time to conserve energy.

World War I was the most expensive endeavor by the United States up to that point in history. The total cost to the American public amounted to over $110 billion. Five successful Liberty bond drives raised about two-thirds of that sum. Of course, bonds are loans to be paid by future generations. The first income tax under the Sixteenth Amendment was levied. The tax rate at the top level was 70%. All in all, great sacrifices were made on behalf of the United States people in their venture to make the world safe for democracy.


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What bank reforms came out of the Great Depression?

The United States was developing a nasty pattern of entering major conflicts woefully unprepared.

When Congress declared war in April 1917, the army had enough bullets for only two days of fighting. The army was small in numbers at only 200,000 soldiers. Two-fifths of these men were members of the National Guard, which had only recently been federalized. The type of warfare currently plaguing Europe was unlike any the world had ever seen.

The Western front, which ran through Belgium and France, was a virtual stalemate since the early years of the war. A system of trenches had been dug by each side. Machine-gun nests, barbed wire, and mines blocked the opposing side from capturing the enemy trench. Artillery shells, mortars, flamethrowers, and poison gas were employed to no avail.

The defensive technology was simply better than the offensive technology. Even if an enemy trench was captured, the enemy would simply retreat into another dug fifty yards behind. Each side would repeatedly send their soldiers "over the top" of the trenches into the no man's land of almost certain death with very little territorial gain. Now young American men would be sent to these killing fields.

Feeling a Draft

The first problem was raising the necessary number of troops. Recruitment was of course the preferred method, but the needed numbers could not be reached simply with volunteers. Conscription was unavoidable, and Congress passed the Selective Service Act in May 1917.

All males between the ages of 21 and 30 were required to register for military service. The last time a draft had been used resulted in great rioting because of the ability of the wealthy to purchase exemptions. This time, the draft was conducted by random lottery.

By the end of the war, over four and a half million American men, and 11,000 American women, served in the armed forces. 400,000 African Americans were called to active duty. In all, two million Americans fought in the French trenches.

The first military measures adopted by the United States were on the seas. Joint Anglo-American operations were highly successful at stopping the dreaded submarine. Following the thinking that there is greater strength in numbers, the U.S. and Britain developed an elaborate convoy system to protect vulnerable ships. In addition, mines were placed in many areas formerly dominated by German U-boats. The campaign was so effective that not a single American soldier was lost on the high seas in transit to the Western front.

The American Expeditionary Force began arriving in France in June 1917, but the original numbers were quite small. Time was necessary to inflate the ranks of the United States Army and to provide at least a rudimentary training program. The timing was critical.

When the Bolsheviks took over Russia in 1917 in a domestic revolution, Germany signed a peace treaty with the new government. The Germans could now afford to transfer many of their soldiers fighting in the East to the deadlocked Western front. Were it not for the fresh supply of incoming American troops, the war might have followed a very different path.

The addition of the United States to the Allied effort was as elevating to the Allied morale as it was devastating to the German will. Refusing to submit to the overall Allied commander, General John Pershing retained independent American control over the U.S. troops.

Paris: Ooh, La La

The new soldiers began arriving in great numbers in early 1918. The "doughboys," as they were labeled by the French were green indeed. Many fell prey to the trappings of Paris nightlife while awaiting transfer to the front. An estimated fifteen percent of American troops in France contracted venereal disease from Parisian prostitutes, costing millions of dollars in treatment.

The African American soldiers noted that their treatment by the French soldiers was better than their treatment by their white counterparts in the American army. Although the German army dropped tempting leaflets on the African American troops promising a less-racist society if the Germans would win, none took the offer seriously.

What bank reforms came out of the Great Depression?

A German "unterseebooten" — or "U-boat" — surfaces. Until the Allies could successfully deploy mines to neutralize these German submarines, the U-boats destroyed many Allied ships and brought terror to the sea.

By the spring of 1918, the doughboys were seeing fast and furious action. A German offensive came within fifty miles of Paris, and American soldiers played a critical role in turning the tide at Chateau-Thierry and Belleau Wood. In September 1918, efforts were concentrated on dislodging German troops from the Meuse River. Finding success, the Allies chased the Germans into the trench-laden Argonne Forest, where America suffered heavy casualties.

But the will and resources of the German resistance were shattered. The army retreated and on November 11, 1918, the German government agreed to an armistice. The war was over. Over 14 million soldiers and civilians perished in the so-called Great War, including 112,000 Americans. Countless more were wounded.

The bitterness that swept Europe and America would prevent the securing of a just peace, imperiling the next generation as well.