History of the United States (1917–1945)

Red Scare from 1918 to 1921

A time when fears and mass-hysteria of the possibility that communism could take root in the United States, occuring directly after the Russian Revolution. This revolution manifested communism in the world and made the prospect of international communist revolution real, as opposed to theoretical literature. With this realization, came mass hysteria and fears that such a revolution would gain momentum within the United States or their allies. The U.S. government began to take actions to prevent its citizens from sympathizing with communism. In 1918 the Sedition Act was passed, making it illegal to speak out against U.S. government and giving the Postmaster General power to deny mail of citizens suspected "dissenters" (ie: censorship of communist and socialist related mail).

During this period, many who even were believed to be communists were jailed. The public flared up in a surge of patriotism, often involving violent hatred of communists, radicals, and foreigners. Senator Kenneth D. McKellar proposed sending radicals to a penal colony in Guam; General Leonard Wood called to place them on "ships of stone with sails of lead"; evangelist Billy Sunday clamored to "stand [radicals] up before a firing squad and save space on our ships." In Centralia, Washington, a Wobblie was dragged from a town jail and hanged.

Various dissenters of either communist or anarchist ideology engaged in acts of mailing bombs to various state government officials. The mayor of Seattle received a homemade bomb in the mail on April 28, which was defused. Senator Thomas R. Hardwick received a bomb the next day, which blew off the hands of his servant who had discovered it, severely burning him and his wife. The following morning, a New York City postal worker discovered sixteen similar packages addressed to well-known people of the time, including oil tycoon John D. Rockefeller. On June 2, a bomb partially destroyed the front of Attorney General A. Mitchell Palmer's house.

Aftermath of World War I

A popular Tin Pan Alley song of 1919 asked, concerning the United States troops returning from World War I, "How Ya Gonna Keep 'Em Down On the Farm After They've Seen Paree?". In fact, many did not remain "down on the farm", as there was a great migration of formerly rural population to the cities. However agriculture became increasingly mechanized with widespread use of the tractor, so fewer farmers were needed to produce a greater harvest of food.

US President Woodrow Wilson campaigned for the U.S. to join the new League of Nations without success, as the mood of the nation rejected Wilson's brand of interventionism.

The Roaring Twenties

In the U.S. presidential election of 1920, the Republican Party returned to the White House with the election of Warren G. Harding, who promised a "return to normalcy" after the traumatic years of World War I.

During most of the 1920s the United States enjoyed a period of unbalanced prosperity: prices for agricultural commodities and wages fell at the end of the war while new industries (radio, movies, automobiles, and chemicals) flourished. The unevenness was also geographic: the standard of living in rural areas fell increasingly behind that of urban and suburban areas which saw dramatic improvements in housing and urban planning. The boom was reflected by the extension of credit to a dangerous degree, including in the stock market, which rose to record high levels, which in retrospect after the Stock Market Crash of 1929 were dangerously inflated.

Jazz music became widely popular with the young (and was widely reviled as unmusical noise by much of the older generation). Dancing was a popular recreation.

Prohibition

In 1920, the manufacture, sale, import and export of alcohol was prohibited by the Eighteenth Amendment to the United States Constitution in an attempt to alleviate various social problems. This came to be known as "Prohibition"; it was enacted through the Volstead Act.

Many states ratified the 18th Amendment while a sizable number of their young men were overseas due to the Great War. Absentee voting by troops overseas was spotty at best.

National Prohibition was ended in 1933 by the Twenty-first Amendment. Prohibition is considered to have been a failure: consumption of alcoholic beverages did not decrease markedly, while organized crime was strengthened. It did represent the first instance of a U.S. constitutional amendment that directly regulated social activity. The 18th Amendment also represented the growing strength of the state in the early 20th century. A federal law regulating the sale or use of a substance was considered so far from the accepted powers of the U.S. Federal Government in 1919 that an amendment to the Constitution of the United States was seen as necessary at the time. Since the 1930s, the U.S. Federal Government has regulated and outlawed many substances without additional amendments.

The federal government in the 1920s

While in retrospect the 1920s are sometimes seen as the last gasp of Robber Baron capitalism, the era actually saw an ever increasing role for the federal government. In addition to Prohibition, the government took on new powers and duties such as funding and overseeing the new United States Highway system. Federal expansion of the money supply led to an unprecedented expansion of credit which contributed to both the boom and subsequent bust.

The Harding administration was rocked by the Teapot Dome scandal. It looked like the President himself might be shown to be involved in corruption, but Harding died in office on August 2, 1923. He was succeeded by his Vice President, Calvin Coolidge.

Coolidge was a taciturn, personally honest New Englander who generally saw his role as to stay out of the way of the booming economy. He was elected to a full term of his own in the 1924 under the slogan "Keep Cool With Coolidge."

When Coolidge declined to run again in the 1928 election, the Republican Party nominated engineer and Secretary of Commerce Herbert Hoover, who was elected by a wide margin. Hoover was widely seen as one of the most promising technocrats of his generation. He was the only person elected to the U.S. Presidency who previously held neither national nor state elected office, nor was a victorious general in war.

The Great Depression

International finance never recovered from the strains of World War I, which caused a dramatic increase in productivity capacity, particularly outside Europe, without a corresponding increase in sustained demand. Fixed exchange rates and free convertibility gave way to a compromise—the Gold Exchange Standard—that lacked the stability to rebuild world trade.

In 1929, the world's most prosperous nation was the United States. But despite the buoyant optimism in the United States and the apparent economic well-being in other countries, the world economy was in an unhealthy state. One by one, the cornerstones of the pre-1914 economic system—multilateral trade, the gold standard, and the interchangeability of currencies—were crumbling.

Sectors of the U.S. economy had been showing some signs of distress for months before October 1929. Commodity prices had been falling worldwide since 1926, reducing the capacity of exporters in the peripheral, undeveloped economies of Latin America, Asia, and Africa to buy products from the core industrial countries, such as the United States and Britain. Business inventories of all types were three times as large as they had been a year before (an indication that the public was not buying products as rapidly as in the past); and other signposts of economic health—freight carloads, industrial production, wholesale prices—were slipping downward.

The Great Depression is the period of history that followed "Black Thursday", the stock market crash of Thursday, October 24, 1929. The events in the United States triggered a world-wide depression, which led to deflation and a great increase in unemployment. On the global scale, the market crash in the U.S. was a final straw in an already shaky world economic situation. Germany was suffering from hyperinflation of currency, and many of the Allied victors of World War I were having serious problems paying off huge war debts. In the late 1920s the U.S. economy at first seemed immune to the mounting troubles, but with the start of the 1930s it crashed with startling rapidity.

By 1931, the world was reeling from the worst depression of all time, and the entire structure of reparations and war debts collapsed. In the scramble for liquidity that followed the Great Crash, funds flowed back from Europe to America and Europe's fragile economies crumbled.

The Roosevelt administration

Dorothea Lange's *Migrant Mother,* depicts destitute pea pickers in California, centering on a mother of seven children, age thirty-two, in Nipomo, California, March 1936.

The Great Depression and the election of 1932

The Wall Street stock market crash had ushered in a world-wide financial crisis. In the United States between 1929 and 1933, unemployment soared from 3 percent of the workforce to 25 percent, while manufacturing output collapsed by one-third. Worldwide, governments in desperation sought economic recovery by adopting restrictive autarkic policies-- high tariffs, import quotas, and barter agreements-- and by experimenting with new plans for their internal economies. Britain adopted far-reaching measures in the development of a planned national economy. In Nazi Germany, economic recovery was pursued through rearmament, conscription, and public works programs. In Mussolini's Italy the economic controls of his corporate state were tightened. Observers throughout the world saw in the massive program of economic planning and state ownership of the Soviet Union what appeared to be a depression-proof economic system and a solution to the crisis in capitalism.

In the United States, upon accepting Democratic nomination for president in 1932, Franklin D. Roosevelt (known as "FDR") promised "a new deal for the American people," a phrase that has endured as a label for his administration and its many domestic achievements.

Unlike many other world leaders in the 1930s, however, Roosevelt entered office with no single ideology or plan for dealing with the depression. This "new deal" would be often contradicting, pragmatic, and experimental. What many considered incoherence of the New Deal's ideology, however, was the presence of several competing ones, based on programs and ideas not without precedents in the American political tradition.

The New Deal consisted of many different efforts to end the Great Depression and reform the American economy. Most of them failed, but there were enough successes to establish it as the most important episode of the twentieth century in the creation of the modern American state.

The First Hundred Days

The desperate economic situation, combined with the substantial Democratic victories in the 1932 Congressional elections, gave Roosevelt unusual influence over Congress in the "First Hundred Days" of his administration. He used his leverage to win rapid passage of a series of measure to prop up the tottering banking system, reform the stock market, aid the unemployed, and induce industrial and agricultural recovery.

The "bank holiday" and the Emergency Banking Act

Roosevelt's ebullient public personality, conveyed through his declaration that "the only thing we have to fear is fear itself" and his "fireside chats" on the radio did a great deal alone to help restore the nation's confidence.

On March 6, two days after taking office, he issued a proclamation closing all American banks for four days until Congress could meet in a special session. Ordinarily, such an action would cause widespread panic. But the action created a general sense of relief. First, many states had already closed down the banks before March 6. Second, Roosevelt astutely and euphemistically described it as a "bank holiday." And third, the action demonstrated that the federal government was stepping in to stop the alarming pattern of bank failures.

Three days later, Franklin D. Roosevelt sent to Congress the Emergency Banking Act, a generally conservative bill, drafted in large part by holdovers from the Hoover administration, designed primarily to protect large banks from being dragged down by the failing smaller ones. The bill provided for Treasury Department inspection of all banks before they would be allowed to reopen, for federal assistance to tottering large institutions, and for a thorough reorganization of those in greatest difficulty. A confused and frightened Congress passed the bill within four hours of its introduction. Three-quarters of the banks in the Federal Reserve System reopened within the next three days, and $1 billion in hoarded currency and gold flowed back into them within a month. The immediate banking crisis was over.

The Economy Act

On the morning after passage of the Emergency Banking Act, Roosevelt sent to Congress the Economy Act, which was designed to convince the public, and moreover the business community, that the federal government was in the hands of no radical. The act proposed to balance the federal budget by cutting the salaries of government employees and reducing pensions to veterans by as much as 15 percent.

Otherwise, Roosevelt warned, the nation faced a $1 billion deficit. The bill revealed clearly what Roosevelt had always maintained: that he was as much of a fiscal conservative at heart as his predecessor was. And like the banking bill, it passed through Congress almost instantly-- despite heated protests by some congressional progressives.

Farm Programs

The celebrated first Hundred Days of the new administration also produced a federal program to protect American farmers from the uncertainties of the market through subsides and production controls, the Agricultural Adjustment Act (AAA), which Congress passed in May 1933. The AAA reflected the desires of leaders of various farm organizations and Roosevelt's secretary of agriculture, Henry A. Wallace.

Relative farm incomes had been falling for decades. The AAA included reworkings of many long-touted programs for agrarian relief, which had been demanded for decades. The most important provision of the AAA was the provision for crop reductions--the "domestic allotment" system, which was intended to raise prices for farm commodities.

The most controversial component of the anti-deflationary domestic allotment system was the large-scale destruction of existing crops and livestock to reduce surpluses. At a time in which many families were suffering from malnutrition and downright starvation, it was a difficult measure. However, gross farm incomes increased by half in the first three years of the New Deal and the relative position of farmers improved significantly for the first time in twenty years.

Other initiatives

The First Hundred Days also saw the creation of a new federal regulatory agency to oversee the stock market, the U.S. Securities and Exchange Commission (SEC), a reform of the banking system that included a system of insurance for deposits. But the most successful in alleviating the miseries of the Great Depression were a series of relief measures to aid some of the 15 million unemployed Americans, among them the Civilian Conservation Corps (CCC), the Civil Works Administration (CWA), and the Federal Emergency Relief Administration (FERA).

The early New Deal also began the Tennessee Valley Authority (TVA), an unprecedented experiment in flood control, public power, and regional planning.

The National Industrial Recovery Act (NIRA)

Roosevelt realized that these initial actions were nothing but stopgaps, that more comprehensive government programs would be necessary. In the roughly three years between the Great Crash and FDR's First Hundred Days, the industrial economy had been suffering from a vicious cycle of deflation. .

The Roosevelt administration, under increasing pressure to do more to alleviate unemployment, insisted that business would have to ensure that the incomes of workers would rise along with their prices. The result was the National Industrial Recovery Act (NIRA), the most important undertaking of the First Hundred Days, passed by the Congress in June 1933. To implement the NIRA, two new federal agencies, the National Recovery Administration (NRA) and the Works Progress Administration (WPA) were created.

These and other early initiatives created broad popular support for the Roosevelt administration and halted the rapid unraveling of the financial system. They did not, however, end, or even significantly abate, the Great Depression.

Setbacks of Roosevelt's second term

Although Roosevelt's landslide reelection in 1936 produced large Democratic majorities in both houses of Congress and predictions, which led to predictions of great new achievements from the president's supporters, the administration encountered a long string of frustrations. Ambitious reform ideas often floundered because of bureaucratic constraints, such as the absence of a government bureaucracy with sufficient strength and expertise to administer them.

Political constraints were crippling both in Congress and among the public at large, where conservative inhibitions remained strong. However, the Supreme Court would perhaps be the most formidable opponent. Several crucial New Deal programs violated conservative constitutional theory. The NRA), the AAA, and others were invalidated by the Supreme Court, which was dominated by conservatives with a narrow view of the Interstate Commerce clause of the Constitution, the basis of much New Deal legislation.

The recession of 1937 and recovery

The Roosevelt administration was under assault during FDR's second term, which presided over a new dip in the Great Depression, beginning in the fall of 1937 and continuing through most of 1938. It was, in the largest measure, a result of a premature effort by the administration to balance the budget by reducing federal spending. The administration reacted by launching a rhetorical campaign against business monopoly power, which was cast as the cause of the new dip.

But the administration's other response to the 1937 dip had more tangible results. Ignoring the his own Treasury Department, Roosevelt embarked on an antidote to the depression, reluctantly abandoning his efforts to balance the budget and launching a $5 billion spending program in the spring of 1938, an effort to increase mass purchasing power.

Roosevelt explained his program in a fireside chat in which he finally acknowledged that it was up to the government to "create an economic upturn" by making "additions to the purchasing power of the nation."

World War II and the end of the Great Depression

But it was not until the administration was forced into large scale Federal spending to support World War II, that the nation's economy fully recovered.

Between 1939 and 1944 (the peak of wartime production), the nation's output almost doubled. Consequently, unemployment plummeted--from 14 percent in 1940 to less than 2 percent in 1943,as the labor force grew by ten million. The war economy was not so much a triumph of free enterprise as the result of government bankrolling business. While unemployment remained high throughout the New Deal years; consumption, investment, and net exports--the pillars of economic growth--remained low. It was World War II, not the New Deal, which finally ended the crisis. Nor did the New Deal substantially alter the distribution of power within American capitalism; and it had only a small impact on the distribution of wealth among the population.

Legacies of the New Deal

Although the New Deal did not end the depression, many believe that it helped to prevent the economy from decaying further by increasing the regulatory functions of the federal government in ways that helped stabilize previous trouble areas of the economy: the stock market, the banking system, and others. It also produced a new political coalition that sustained the United States Democratic Party as the majority party in national politics for more than a generation after its own end.

Laying the foundations for the postwar era, Franklin D. Roosevelt and the New Deal helped enhance the power of the federal government as a whole. Roosevelt also established the presidency as the preeminent center of authority within the federal government. By creating a large array of protections for various groups of citizens-- workers, farmers, and others-- who suffered from the crisis, enabling them to challenge the powers of the corporations, the Roosevelt administration generated a set of political ideas-- known to later generations as New Deal liberalism-- that remained a source of inspiration and controversy for decades and that help shape the next great experiment in liberal reform, the Great Society of the 1960s.

World War II

For details, see the main World War II article.

Isolationist sentiment in America had ebbed, but the United States at first declined to enter the war, limiting itself to giving supplies and weapons to the United Kingdom, the Republic of China, and the Soviet Union. American feeling changed drastically with the sudden Japanese attack on Pearl Harbor, and the United States quickly joined the British-Soviet alliance against the Empire of Japan, Fascist Italy, and Nazi Germany, known as the "Axis Alliance". Even with American participation, it took nearly four more years to defeat Nazi Germany and Japan. Though the Soviet Union suffered far more casualties than its allies, America's active involvement in the war was vital to preventing an eventual Axis victory.

By a vote of 65 to 7, the United States Senate on December 4, 1945 approved U.S. participation in the United Nations (the UN was established on October 24, 1945 to serve as a body to help prevent future world wars).