The Complete Idiot's Guide to American History

by Idiot's Guide to American History(Lit)

  Harlem became a popular spot for white nightclubbers seeking first-class jazz from great African-American musicians like Fletcher Henderson (1898-1952), Louis Armstrong (1900-1971), and the young Duke Ellington (1899-1974). The neighborhood also developed into a gathering place for avant-garde white intellectuals who did what would have been unthinkable just a decade before: they spoke and mingled with African-American writers, artists, and thinkers.

  America Dries Up

  The general liberalization of morals that accompanied America's entry into World War I fueled a temperance movement that culminated in the 18th Amendment to the Constitution, prohibiting the sale, importation, or consumption of alcoholic beverages anywhere in the United States. The Volstead Act, passed after ratification, provided for federal enforcement of Prohibition.

  Gangster Culture

  Greeted by some as a "noble experiment," Prohibition was for a majority of Americans an invitation to violate the law. The 1920s, therefore, became by definition a lawless decade. Otherwise law-abiding citizens made bathtub gin, brewed homemade beer, fermented wine in their cellars, and frequented "blind pigs" and "speakeasies"--covert saloons that served booze in coffee mugs and teacups. Police raids on such establishments were common enough, but mostly, officials looked the other way--especially if they were paid to do so.

  Corruption hardly stopped with the cop on the street. City and state governments were receptive to payoffs, and indeed, the presidential administration of Warren G. Harding rivaled that of Ulysses S. Grant for scandals. In this national atmosphere, mobsterism came to birth and flourished. Underlying the violence was the idea of crime as a business, and by the end of the decade, a quasi-corporate entity called the Syndicate would be formed to "organize" crime.

  Countdown to Black Tuesday

  If morals, mores, and ideas were freewheeling in the 1920s, so was spending. For most--except farmers and unskilled laborers--the decade was prosperous, sometimes wildly so. Americans speculated on stocks in unprecedented numbers, often overextending themselves by purchasing securities "on margin," putting down as little as 10 cents on the dollar in the hope that the stock would rise fast and far enough to cover what amounted to very substantial loans.

  Joy Ride

  The fact was that so much stock had been bought on margin--backed by dimes rather than dollars--that much of it amounted to little more than paper. Even worse, although production in well-financed factories soared, the buying power of consumers failed to keel) pace. Soon, industry was making more than people were buying. As goods piled up and prices fell, industry began laying off workers. People without jobs do not buy goods. As more workers were laid off, the marketplace shrunk smaller and smaller. Companies do not make new hires in a shrinking marketplace. And so the cycle went.

  Crash

  Despite this cycle, stock prices continued to spiral upward. But the market showed warning signs of instability. During the autumn of 1929, stock prices fluctuated wildly, then, on October 24, the stock market was seized by a selling spree. Five days later, on October 29, "Black Tuesday," the bottom fell out and stock prices plummeted. With prices falling, brokers "called" their margin loans, demanding immediate payment in full on stocks that were now worthless. Many investors were wiped out in an instant. A rash of suicides swept the business community; some investors actually leapt from Wall Street high-rise windows.

  President Calvin Coolidge had declared during the booming mid-decade years that "The business of America is business." Herbert Hoover, elected president in 1928, found himself nervously assuring his stunned and fearful fellow Americans that "prosperity was just around the corner." As it so happened, that corner would not be turned for an entire decade.

  The Least You Need to Know

  The failure of the United States to join the League of Nations doomed that precursor of the United Nations to ultimate failure.

  The climate of the 1920s, at once wildly creative, liberating, desperate, and reckless, was in large part the result of the aftereffects of World War 1.

  The stock market crash of 1929 was the culmination of a cycle of careless, creditbased investment and increased industrial output versus a shrinking market for industrial goods.

  Voice from the Post

  Woodrow Wilson addressed Congress on January 8, 1918, and promulgated his "Fourteen Points":

  "I. Open covenants of peace, openly arrived at...

  "II. Absolute freedom of navigation upon the seas...

  "III. The removal ... of [international] economic barriers...

  "IV. Adequate guarantees ... that ... armaments will be reduced...

  "V. ...impartial adjustment of all colonial claims...

  "VI. The evacuation of all Russian territory...

  "VII. Belgium ... must be evacuated and restored...

  "VIII. All French territory should be freed and the invaded portions restored...

  "IX. A readjustment of the frontiers of Italy should be effected along clearly recognizable lines of nationality:

  "X. The peoples of Austria-Hungary ... should be accorded the freest opportunity of autonomous development.

  "XI. Rumania, Serbia, and Montenegro should be evacuated...

  "XII. The Turkish portions of the present Ottoman Empire should be assured a secure sovereignty...

  "XIII. An independent Polish state should be erected...

  "XIV. A general association [league] of nations must be formed...

  Stats

  Stocks lost an average of 40 points on Black Tuesday. In 1930, 1,300 banks failed. By 1933, another 3,700 would fail, and 1 of 4 workers would be jobless.

  A NEW DEAL AND A NEW WAR

  (1930-1941)

  In This Chapter

  The Hoover administration during the Great Depression

  FDR's New Deal

  An era of "organized crime"

  Approach and outbreak of World War II

  Herbert Clark Hoover was born on August 10, 1874, the son of a West Branch, Iowa, blacksmith. He learned the meaning of hard work practically from the cradle, and at age 8, he also came to know the tragedy of loss. Orphaned, Hoover was sent to live with an uncle in Oregon and enrolled in the mining engineering program at Stanford University, graduating in 1895. For some 20 years, Hoover traveled the world, earning a fortune as a mining engineer. The Quaker ideals acquired from his uncle prompted him to aid in relief efforts during World War 1, and Hoover earned a reputation as an effective humanitarian. During the period of U.S. participation in the war, Hoover served as food administrator, charged with promoting agricultural production and food conservation. At the end of the war, President Wilson sent Hoover to Europe to direct the American Relief Administration. Hoover served as U.S. secretary of commerce in the cabinets of Warren G. Harding and Calvin Coolidge.

  When Coolidge declined to seek a second term (privately observing that an economic disaster was on the way, and he didn't want any part of it), Hoover easily won election as the nation's Best president. He ran on the optimistic platform that, if everyone would just put their heads together, poverty would be eliminated in America. The future looked bright. And who should know this better than a man justly hailed as "the great humanitarian"?

  Brother, Can You Spare a Dime?

  When the Wall Street crash came, Hoover was slow to react and merely assured the public that "prosperity was just around the corner." As each month brought worse financial news and lengthened the lines of the jobless, the homeless, and the desperate, Hoover proposed a number of relief programs, but insisted that the state and local governments were responsible for financing them. In principle, this arrangement was prudent. Who better knew the needs of the people than their local government? In practice, however, the policy was doomed for a very simple reason: state and local governments had no money.

  Most significantly, Hoover steadfastly refused to make federal aid available directly to individuals. He feared that big-government intervention would compromise the liberty, integrity, and initiati
ve of the individual citizen.

  In the meantime, shanty towns constructed of boxes and crates bloomed like evil flowers across the American landscape to house the homeless. "Hoovervilles" they were called, and the "great humanitarian's" reputation was forever tarnished. Unjustly--but understandably--blame for the Great Depression was laid entirely at the doorstep of the White House.

  The Verge of Revolution

  America had had its share of boom and bust before. But the Great Depression of the 1930s was unparalleled in magnitude, scope, and duration. Fifteen to 25 percent of the work force was jobless. Families lost their savings, their homes, and even their lives-to disease and sometimes starvation. The Depression was not confined to the United States. It gripped the world, especially those citadels of democracy, the Western capitalist nations. Worst of all, the Depression showed no signs of letup. As the unrelieved years went by, want and misery became a way of life.

  Discontent and despair bred revolution. The nations of Europe seethed-especially Germany, already economically crippled by the punitive Treaty of Versailles, now brought to its knees by the Depression. First in Italy, then in Germany--and to a lesser extent, elsewhere in Europe--two major ideologies came into violent opposition: Fascism versus Communism. To most Americans, both of these totalitarian ideologies seemed clearly repugnant to democracy.

  Democracy was not putting beans on the table, however. Among intellectuals and even some radical workers, Communism seemed to offer a viable alternative to what was apparently the nation's failed capitalism. Slowly but surely, the gunpowder scent of revolution tainted American air.

  The Epoch of FDR

  Born to wealth in Hyde Park, New York, in 1882, Franklin Delano Roosevelt never experienced poverty firsthand. The product of Groton School, Harvard University, and Columbia University Law School, young Roosevelt became a Wall Street lawyer. He devoted some of his time to free legal work for the poor and by this means came to know and sympathize with the plight of the so- called common man. FDR worked his way to prominence in Dutchess County (New York) politics and was appointed assistant secretary of the Navy in the Wilson administration. In 1920, FDR was running mate to James M. Cox, the democratic presidential hopeful who lost to Republican Warren G. Harding.

  Then came Roosevelt's darkest--and finest--hour. In the summer of 1921, while resident at his summer home on Campobello Island (New Brunswick, Canada), Roosevelt was felled by polio. Desperately ill, he recovered, but was left paralyzed from the waist down. His mother urged him to retire to the family's Hyde Park estate. His wife, the remarkable Eleanor Roosevelt--FDR's distant cousin and the niece of Theodore Roosevelt--persuaded FDR to return to public life. With great personal strength and courage, Roosevelt underwent intensive physical therapy, learned to stand using iron leg braces, to walk with the aid of crutches, and even to drive his own car. He ran for governor of New York and won, bringing to the state such progressive measures as the development of public power utilities, civil-service reform, and social-welfare programs.

  When he decided to run for president, Roosevelt faced opponents who objected that he was neither intellectually nor (obviously!) physically fit for the White House.

  FDR proved his opponents dead wrong. Having overcome the odds in his personal fight against polio, Roosevelt set about proving himself capable of overcoming the even grimmer odds in the national fight to lift America out of Depression. FDR flew to Chicago and addressed the 1932 Democratic National Convention, pledging to deliver to the American people a "New Deal," a federally funded, federally administered program of relief and recovery.

  Government Redefined

  When he accepted the 1932 Democratic presidential nomination, Franklin D. Roosevelt declared: "I pledge you, I pledge myself, to a new deal for the American people." Following Roosevelt's inauguration, the phrase "New Deal" caught on in a way that transformed the federal government. Within the first three months of the new administration--dubbed with Napoleonic grandeur by the press the "Hundred Day"--FDR introduced to Congress his relief legislation. The legislation promised to stimulate industrial recovery, assist individual victims of the Depression (something Hoover and all previous presidents had refused to do), guarantee minimum living standards, and help avert future crises.

  Most of the actual legislation of the Hundred Days was aimed at providing immediate relief. The Federal Deposit Insurance Corporation (FDIC) was established to protect depositors from losing their savings in the event of bank failure. The measure did much to restore confidence in the nation's faltering banking system. The Federal Reserve Board, which regulates the nation's money supply, was strengthened. The Home Owners Loan Corporation was established to supply funds to help beleaguered home owners avoid foreclosure. A Federal Securities Act reformed the regulation of stock offering and trading--an effort to avert the kind of wild speculation that helped bring about the crash of 1929.

  Next, the Civilian Conservation Corps--the CCC--put thousands of men to work on projects in national forests, parks, and public lands; the National Recovery Act (NRA), most sweeping and controversial of the early New Deal legislation, established the Public Works Administration (PWA) and imposed upon industry a strict code of fair practice.

  The act set minimum wages and maximum working hours and gave employees the right to collective bargaining. Private industry fought FDR tooth and nail on the NRA, but such was the depth of the Depression crisis and the personal charisma of Roosevelt that the administration prevailed.

  In sharp contrast to the world's communist regimes, the Roosevelt administration showed equal concern for the industrial worker and the agricultural worker. Farmers were in a desperate plight during the Depression, and in May 1933, FDR prevailed on Congress to create the Agricultural Adjustment Administration, a program of production limits and federal subsidies. Perhaps the single most visible manifestation of the New Deal program of agricultural reform was the establishment of the Tennessee Valley Authority (TVA), which built roads, great dams, and hydroelectric plants in seven of the nation's poorest states.

  More programs followed the Hundred Days. In 1935, the Works Progress Administration (WPA) was formed, which put 8.5 million people to work between 1935 and 1943--when the program ended. The employees built public projects out of concrete and steel, and they also created cultural works through the Federal Theater Project, the Federal Writers' Program, and the Federal Art Project. The most enduring of the New Deal programs was Social Security, introduced in 1935, which created old-age pension funds through payroll and wage taxes. None of the New Deal programs brought full recovery, but they helped restore confidence in the American government and propelled Roosevelt to a landslide second-term victory over Republican Alf Landon in 1936. A "Second New Deal" went into effect, which concentrated on labor reforms.

  Urban War

  In the end, it would take the approach of World War II, with its demand for the materials of strife, to end the Great Depression. But years before the United States entered that war, another, different kind of combat was being waged on the streets of the nation's cities. Prohibition had spawned a gangster culture in the 1920s, which many Americans found colorful, almost romantic. After all, the urban outlaws supplied the public with the good times that government denied them.

  Then came St. Valentine's Day, 1929, the day Al Capone decided to eliminate rival Chicago gangland leader "Bugs" Moran. Capone dispatched gunmen, disguised as policemen, who rounded up seven members of the gang, stood them up against the wall of Moran's commercial garage, and brutally executed them with Tommy guns. (Moran himself wasn't present and escaped assassination.) Mobsters had been rubbing one another out for years, but the blatant butchery of the St. Valentine's Day Massacre finally outraged the public. Capone and other gangsters were no longer viewed as Robin Hoods, but as cold- blooded murderers. Yet, as gangsters became more viciously violent, they also became increasingly organized.

  In the same year as the St. Valentine's Day Massacre, Capone proposed to the ga
ng leaders of New York and other cities that they meet to organize crime throughout the United States. The meeting took place in Atlantic City and included such underworld luminaries as Lucky Luciano, Joe Adonis, Alberto Anastasia, Frank Costello, and Meyer Lansky. The national crime Syndicate was born, consolidating nationwide gambling, prostitution, extortion, and liquor trafficking. After 1933, when the 18th Amendment was repealed, thereby ending Prohibition, the Syndicate began to enter the trade in narcotics, hoping it would replace booze as the public's illicit substance of choice.

  The economic conditions of the 1930s produced at least two durable legacies into American life: one, a federal government that takes an active role in the welfare of its citizens (even today, when many conservative politicians clamor to slash "welfare budgets," few are foolhardy enough to suggest reducing the Social Security program) and two, organized crime.

  A New War

  The Great Depression brought the United States close to the brink of revolution, but a deeply ingrained tradition of democratic capitalism, combined with FDR's ability to restore and maintain faith in the government, averted a violent breakdown. In Europe, also hard hit by the Depression, the people of Italy and Germany hungered not for democracy, but for the strongman leadership promised by a journalist named Benito Mussolini (1883-1945) and a failed artist, sometimes house painter, and full-time political agitator named Adolf Hitler (1889-1945). Exhausted humanity had assumed that the horrors of World War I, combined with the peaceful prosperity of the 1920s, guaranteed the permanent rise of international stability and liberal constitutionalism. But Germany, crippled by the harsh conditions of the Versailles treaty, was robbed of postwar prosperity. Then the Depression drove its people to desperation. In Germany and Italy, militaristic authoritarianism burst into iron blossom with promises of a return to national glory and national prosperity.