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U.S. History II - America in the Twenties

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    Study Guide U.S. History II – America in the Twenties 1. Domestic Economic Policy During the 1920s, the U.S. government followed pro - business policies that shaped much of the economy. These policies included tax cuts, reduced federal spending, and high tariffs to protect American industries. 1.1 Tax Cuts and Spending • Andrew Mellon , Secretary of the Treasury under three Republican presidents, pushed for major tax reductions . o Personal income taxes , estate taxes , and taxes on excess profits were all lowered. • These cuts mainly benefited the wealthy , with the idea that they would invest more money and help the economy grow. • Mellon also worked to balance the budget and reduce government spending. Between 1919 and 1929, the national debt dropped by nearly $10 billion . 1.2 Tariffs and Trade • The government aimed to protect American businesses from foreign competition with the Fordney - McCumber Tariff (1922) . o This raised tariffs on imported goods and farm products and removed some items from the free - trade list. • However, high tariffs caused problems: o European countries struggled to repay war debts to the U.S. o American farmers , though protected from foreign imports, had to pay more for machinery and supplies.

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    Study Guide 1.3 New Industries and Innovation Even though regulation was weak , the government encouraged some new industries , like civil aviation: • In 1925 , U.S. airmail contracts were offered to private companies to boost the airline business. • The Air Commerce Act of 1926 provided federal funds for airport construction , helping aviation grow as a reliable form of transportation. 1.4 Struggles in Agriculture Farmers did not share in the 1920s economic boom . • By 1920 , prices for grain and other commodities fell sharply because of overproduction — the same problem that had affected farmers in the late 1800s. • To help, the McNary - Haugen Bill (first introduced in 1924) proposed that the government buy surplus crops like corn, wheat, and cotton, then store them or sell them internationally to raise prices. • Congress passed the bill in 1927 , but President Coolidge vetoed it twice . • A smaller plan, the Agricultural Marketing Act of 1929 , also failed to address overproduction. Later experience would show that reducing crop production was the only real solution to the falling prices. 2. Change and Reaction in the 1920s The 1920s were a decade of big changes in the United States. More than half of all Americans now lived in cities , and cars became affordable, making travel easier than ever. People danced the Charleston , listened to jazz , and flappers challenged old - fashioned fashion and social rules. At the same time, the decade also saw conservative reactions : immigration restrictions, a revival of the Ku Klux Klan , and debates over teaching evolution in schools. 2.1 The Red Scare and Immigration After World War I , Americans feared radicalism and revolution. Labor strikes in 1919, bombings, and Communist revolts in Russia and Hungary triggered the Red Scare . Under Attorney General A.

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    Study Guide Mitchell Palmer , thousands of suspected radicals were arrested, and many immigrants were deported . • Sacco and Vanzetti : Two Italian - born anarchists were accused of robbery and murder in 1920. Many believed they were convicted more for their ethnic background and political beliefs than for actual evidence. They were executed in 1927. The U.S. also changed its immigration laws : • Quota Act of 1921 : Limited annual immigration to 350,000, with 3% of each nationality based on the 1910 census. • National Origins Act of 1924 : Reduced total immigration to 150,000 annually and favored northern and western Europeans. For example, Italy could send fewer than 4,000 immigrants per year, while Germany and Great Britain had much higher quotas. 2.2 The Ku Klux Klan The Ku Klux Klan (KKK) , originally formed after the Civil War, was revived in 1915. Its members, mostly white, native - born Protestants , opposed groups they considered un - American: foreigners, Catholics, Jews, and African Americans. • The Klan was strongest in the Midwest and Southwest , and cities like Chicago and Atlanta . • At its height, it had 3 – 8 million members and influenced state politics in Indiana, Oklahoma, Oregon, and Texas . • The Klan declined after 1925 due to scandals and lower immigration rates. 2.3 Prohibition The 18th Amendment (1920) and the Volstead Act banned alcohol. Alcohol consumption dropped, but people still drank: • Homemade alcohol was allowed if not sold. • Illegal bars, called speakeasies , became popular. • Organized crime grew because of the illegal trade. Prohibition was widely debated, and by 1933, the 21st Amendment repealed it .

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