A Decade of Prosperity
Following a postwar recession from mid-1920 to the end
of 1921, the economy picked up again and remained strong until the
end of the decade. This prosperity, combined with tax cuts for the
rich, led to a rising consumer culture.
The very nature of consumerism changed during
this period, as new products filled the market. The automobile first
became popular outside wealthy circles in the 1920s. Electrical appliances
grew rapidly in popularity as electricity reached almost two-thirds
of American homes by the mid-1920s. Refrigerators, washing machines,
and vacuum cleaners flew off the shelves. The vast reach of the
newly invented radio created a national market and spurred advertising
to unprecedented levels.
One effect of prosperity was the consolidation of big
business and banks. By the decade’s end, more than 1,000 companies
per year were being swallowed up by mergers. A few corporations—such
as Ford, Chrysler, and General Electric—dominated major industries.
Industry leaders became immensely popular public figures.
New technologies allowed corporations to meet public demand
by increasing productivity. Henry Ford installed the assembly
line process in his automobile plants, maximizing outputs
by allowing workers to stay in one place and master one repeated
task. New developments in management methods increased efficiency
by departmentalizing varied business concerns and creating a class
of professional managers. Installment buying and credit programs
allowed consumers to buy expensive goods they could not afford to
purchase with one payment.
During the 1920s, industry benefited from the
consolidation of large firms, assembly line manufacturing, professional
management, and installment buying and credit programs.
Labor and Agriculture
The 1920s ushered in a new era for workers. To increase
productivity, some employers raised the wages of skilled workers
without the prodding of labor unions. Partially in response, union
membership declined during the 1920s. Manufacturers’ associations praised
the non-union workplace, and companies made concessions to workers
in attempts to stave off union formations.
This industrial boom left agriculture largely behind.
Crop prices fell rapidly between 1919 and 1921 and remained low
during the 1920s. Republicans, who did not believe in government
intervention in the economy, were reluctant to help.
The Republican-dominated government of the 1920s advocated
a spirit of isolationism, which meant retreating from global affairs.
The U.S. refused to join both the League of Nations and the World
Court established by the League. In 1928, the U.S. and France (and later,
sixty other nations) signed the Kellogg-Briand Pact, which called
for the outlawing of war and an end to aggression. This pact, however
strong in theory, provided no enforcement mechanism.
Despite its isolationism, the U.S. did become involved
in international affairs over the issue of war debts and reparations.
The Allies had borrowed significantly from the U.S. during World
War I and could not pay back this debt. Meanwhile, Germany owed
reparations to the Allies but also could not pay. The Dawes
Plan, devised by American banker Charles G. Dawes in 1924,
scaled back U.S. demands for debt payments and reparations and established
a cycle of U.S. loans that provided Germany with funds for reparations
to the Allies, thus funding Allied debt payments to the U.S.
Immigration in the 1920s
A prominent expression of American isolationism was immigration
restriction. Not only did isolationists oppose U.S. involvement
in European affairs, they also opposed the flood of European immigrants
coming to the U.S. Between 1900 and 1915, more than 13 million immigrants
came to the U.S., many of them from eastern and southern Europe
and many either Catholic or Jewish, to the general dismay of the
Protestant American public. Many Americans viewed these immigrants
as a threat to American religious and social values, as well as
to economic opportunities (because immigrants competed for jobs).
In 1921, Congress set a quota of 350,000 for annual immigration.
In 1924, the National Origins Act cut that number to
164,000 and restricted immigration from any one nation to 2 percent
of the number of people in the U.S. of that national origin in 1890.
This standard curtailed immigration from southern and eastern Europe
and excluded Asians entirely.
Anti-immigrant sentiment peaked in the Sacco-Vanzetti
case of 1921. Sacco and Vanzetti were two Italian immigrants
charged with an April 1920 murder in Massachusetts. They were anarchists
as well as immigrants, arousing frank hatred from the media and
the judge in their case, who sentenced them to death. The case against
Sacco and Vanzetti was circumstantial and poorly argued (although
evidence now suggests that they were in fact guilty). The case was
significant for its demonstration of nativist and conservative forces