Chapter Overview

A prototypical character of the 1920s was evangelist Aimee Semple McPherson, who blended the old revivalist gospel and techniques of modern mass marketing. In the 1920s modernism and traditionalism existed side by uncomfortable side. Even Americans who resisted modernity found themselves incorporated by the new mass media into a new mass consumer culture.

Get-rich-quick schemes obsessed the nation in the 1920s. Speculative ventures dominated the news and diverted attention from the economy's flaws. Too late, attention shifted from the blinding allure of riches to more sober realities.

The Roaring Economy

If anything roared in the "Roaring Twenties," it was industry and commerce. As a result of technological advances, booming construction and automobile industries, corporate consolidation, new techniques of business and personnel management (called "welfare capitalism"), and the spread of advertising and consumer credit, the economy experienced the greatest peacetime growth rate ever. Mass consumption became the key to prosperity.

A Mass Society

New systems of mass distribution and marketing led to a higher standard of living and to a standardized mass society. Traditional community institutions found their authority undercut by new tastemakers in Hollywood and New York. A modern mass culture emerged, complete with more independent women, the new mass media, a peer-oriented youth culture, spectator sports, jazz music, alienated poets and novelists, and black consciousness.

Defenders of the Faith

Mass society sharpened awareness of the differences between modern and traditional America. Traditionalists felt threatened by the changing values of the New Era. One reflection of their suspicion was nativism.

Another expression of traditionalism was prohibition, which also rested on an antiurban and antiforeign bias. A resuscitated Ku Klux Klan fought to revive an America, free from "aliens," blacks, and uppity women. A traditional theological movement within Protestantism, known as fundamentalism, targeted the teaching of modern theories of evolution.

Republicans Ascendant

The administration of Warren G. Harding ushered in a "normalcy," which was anything but normal. A single party controlled Washington, but cautiously. Dedicated to business-oriented policies, Harding and Calvin Coolidge halted the reformist trends of the previous two decades.

Government became the partner of private enterprise. Lower taxes, higher tariffs, fewer antitrust suits, and more support for private collaboration and consolidation characterized public policy. "Associationalism" encouraged trade associations and other business organizations to order and stabilize the economy, spreading a gospel of efficiency and cooperation among businesses. Government's role in the economy grew as prosperity soared.

When certain economic distress signals flashed, the Republican administration ignored them. It did seek, ineffectively, as it turned out, to stabilize the international economy and reduce the arms race.

In 1928 a divided Democratic Party swung from its rural to its urban wing and nominated Al Smith. The Republicans ran enormously popular Herbert Hoover. Smith won only 8 states, but buried in the returns were the stirrings of a major political realignment. The 12 largest cities, solidly Republican in 1924, went to Smith. Urban immigrants formed the nucleus of a powerful coalition that transformed the Democrats into the majority party in 1932.

The Great Bull Market

For most of the decade a great "bull market" had been building on Wall Street. By 1928, it had become a glittering gambling casino.

Economic weaknesses went unnoticed. Rising corporate profits were plowed back into business expansion rather than translated into a rise in real wages. Mass purchasing power therefore declined relative to production. The consumer debt rose, and the gap between the wealthy and the middle and working classes widened. The resulting income distribution could not sustain prosperity. The percentage of national income going to farmers dropped by almost half. Banks began to fail. "Sick" industries suffered from overexpansion, declining demand, heavy competition, and weak management.

In October 1929 the speculative bubble on Wall Street burst. The stock market crash of 1929, one of the worst in the nation's history, signaled a decline that shrank the economy nearly 50 percent. The Great Crash did not bring about the Great Depression; it only accelerated the slide. Overexpansion of major industries, uneven distribution of wealth and income, the relative decline of mass purchasing power, a weak banking and corporate structure, and plain economic ignorance were the underlying causes of the Great Depression.