AMH2020 July 8th Chapter 31 Roaring 20 s 1919 1929 Red Scare Reaction to the 1917 Russian Bolshevik Revolution Reaction Country became anti labor o Opposed closed shop laws Laws that some unions had passed successfully some company could only hire people of the labor union o Favored open shop policy The American Plan Laws that you could work for company whether or not you were in the union Klu Klux Klan KKK Strengthened with nativist tendencies o Anti foreign anti Catholic anti Jewish o Anti black anti Communist anti Pacifist anti internationalist o Anti evolutionist anti bootlegger anti gambling anti birth control anti adultery o Reaction to fear of communism and the Great War WWI Immigration Act of 1924 o Quotas for foreigners 2 of 1890 number Cultural Changes Sexual freedom Radio Air flight o Lindbergh 1927 solo flight across Atlantic African Americans o Marcus Garvey United Negro Improvement Association o Harlem Renaissance When Blacks work was well received by other audiences Prohibition 18 th Amendment 1919 o Prohibited sell and consumption of alcohol Volstead Act o Implemented sell and consumption of alcohol Disadvantages o Illegal alcohol sales Advantages o Overall alcohol consumption increased o Bank savings increased o Absenteeism at work decreased Repealed by the 21st Amendment 1933 Economy Tax Policy Production and Consumption increased Moving assembly lines made Automobiles other goods made affordable to general public Buying on Credit became popular resulting in increased debt Warren Harding elected in 1921 died in 1923 Calvin Coolidge took office in 1923 elected 1925 1928 Treasury Secretary Andrew Mellon o Favored rapid expansion of capital investment o Lowered taxes Repealed excess profits tax and gift tax Reduced excise tax surtax income tax and estate taxes Prosperity resulted Economic Dangers Stock Market Stock market leveraged Federal Reserve Board manipulating money supply Buying on Margin increased o Stock purchases with a small down payment o General population invested heavily from tips and in get rich quick schemes o Speculators Became gambling Den Federal Reserve Board Established by Federal Reserve Act in 1913 Set up 12 Regional Banks o To furnish an elastic currency by discounting notes drafts and bills of exchange arising out of actual commercial transactions o To accommodate commerce and business with regard to their bearing upon the gen credit situation of the country o Augmented the gold standard to ensure that the commercial banking system could issue the proper quantity of bank created money in a timely fashion o Lent money based on factors other than gold to member banks at controlled rates o Fed s decision replaced self regulation gold standard o During Board s first seven years wholesale prices rose 240 o Unsustainable inflation encouraged borrowing buying on o Fed 1928 attempt to stop stock market boom by freezing margin money in 1928 Stock Market CRASH October 1929 By 1932 stocks had lost 90 of their value
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