Following are the main points of War, Prosperity and Depression taken from US History Book by State Department.
WAR AND NEUTRAL RIGHTS
By 1915 U.S. industry, which had been mildly depressed, was prospering again with munitions orders from the Western Allies.
Germany employed its major naval weapon, the submarine, to sink shipping bound for Britain or France.
On May 7, 1915, a German submarine sunk the British liner Lusitania, killing 1,198 people, 128 of them Americans. Wilson, reflecting American outrage, demanded an immediate halt to attacks on liners and merchant ships.
Anxious to avoid war with the United States, Germany agreed to give warning to commercial vessels — even if they flew the enemy flag — before firing on them.
Wilson won reelection in 1916, partly on the slogan: “He kept us out of war.” Feeling he had a mandate to act as a peacemaker, he delivered a speech to the Senate, January 22, 1917, urging the warring nations to accept a “peace without victory.”
On January 31, 1917, however, the German government resumed unrestricted submarine warfare. After five U.S. vessels were sunk, Wilson on April 2, 1917, asked for a declaration of war. Congress quickly approved. The government rapidly mobilized military resources, industry, labor, and agriculture. By October 1918, on the eve of Allied victory, a U.S. army of over 1,750,000 had been deployed in France.
President Wilson contributed greatly to an early end to the war by defining American war aims that characterized the struggle as being waged not against the German people but against their autocratic government.
It was Wilson’s hope that the final treaty, drafted by the victors, would be even-handed, but the passion and material sacrifice of more than four years of war caused the European Allies to make severe demands.
Wilson successfully resisted French demands for the entire Rhineland, and somewhat moderated that country’s insistence upon charging Germany the whole cost of the war. The final agreement (the Treaty of Versailles), however, provided for French occupation of the coal- and iron-rich Saar Basin, and a very heavy burden of reparations upon Germany.
In two separate votes — November 1919 and March 1920 — the Senate once again rejected the Versailles Treaty and with it the League of Nations.
THE BOOMING 1920s
Wilson, distracted by the war, then laid low by his stroke, had mishandled almost every postwar issue.
The booming economy began to collapse in mid-1920. The Republican candidates for president and vice president, Warren G. Harding and Calvin Coolidge, easily defeated their Democratic opponents, James M. Cox and Franklin D. Roosevelt.
Following ratification of the 19th Amendment to the Constitution, women voted in a presidential election for the first time.
The first two years of Harding’s administration saw a continuance of the economic recession that had begun under Wilson. By 1923, however, prosperity was back. For the next six years the country enjoyed the strongest economy in its history, at least in urban areas.
The Republicans tried to create the most favorable conditions for U.S. industry. The Fordney-McCumber Tariff of 1922 and the Hawley-Smoot Tariff of 1930 brought American trade barriers to new heights, guaranteeing U.S. manufacturers in one field after another a monopoly of the domestic market, but blocking a healthy trade with Europe that would have reinvigorated the international economy.
Throughout the 1920s, private business received substantial encouragement, including construction loans, profitable mail-carrying contracts, and other indirect subsidies. The Transportation Act of 1920, for example, had already restored to private management the nation’s railways, which had been under government control during the war. The Merchant Marine, which had been owned and largely operated by the government, was sold to private operators.
The distress of agriculture aside, the Twenties brought the best life ever to most Americans. It was the decade in which the ordinary family purchased its first automobile, obtained refrigerators and vacuum cleaners, listened to the radio for entertainment, and went regularly to motion pictures. Prosperity was real and broadly distributed. The Republicans profited politically, as a result, by claiming credit for it.
TENSIONS OVER IMMIGRATION
During the 1920s, the United States sharply restricted foreign immigration for the first time in its history. Large inflows of foreigners long had created a certain amount of social tension.
According to the census of 1900, the population of the United States was just over 76 million. Over the next 15 years, more than 15 million immigrants entered the country.
Halted by World War I, mass immigration resumed in 1919, but quickly ran into determined opposition from groups as varied as the American Federation of Labor and the reorganized Ku Klux Klan.
In 1921, Congress passed a sharply restrictive emergency immigration act. It was supplanted in 1924 by the Johnson-Reed National Origins Act, which established an immigration quota for each nationality.
CLASH OF CULTURES
Some Americans expressed their discontent with the character of modern life in the 1920s by focusing on family and religion, as an increasingly urban, secular society came into conflict with older rural traditions. Fundamentalist preachers such as Billy Sunday provided an outlet for many who yearned for a return to a simpler past.
An example of a powerful clash of cultures — one with far greater national consequences — was Prohibition. In 1919, after almost a century of agitation, the 18th Amendment to the Constitution was enacted, prohibiting the manufacture, sale, or transportation of alcoholic beverages. Intended to eliminate the saloon and the drunkard from American society, Prohibition created thousands of illegal drinking places called “speakeasies,” made intoxication fashionable, and created a new form of criminal activity — the transportation of illegal liquor, or “bootlegging.”
The 18th Amendment would be repealed in 1933.
African-American culture flowered. Between 1910 and 1930, huge numbers of African Americans moved from the South to the North in search of jobs and personal freedom. Most settled in urban areas, especially New York City’s Harlem, Detroit, and Chicago.
In 1910 W.E.B. DuBois and other intellectuals had founded the National Association for the Advancement of Colored People (NAACP), which helped African Americans gain a national voice that would grow in importance with the passing years.
THE GREAT DEPRESSION
In October 1929 the booming stock market crashed, wiping out many investors.
It also aggravated fragile economies in Europe that had relied heavily on American loans. Over the next three years, an initial American recession became part of a worldwide depression. Business houses closed their doors, factories shut down, banks failed with the loss of depositors’ savings. Farm income fell some 50 percent.
By November 1932, approximately one of every five American workers was unemployed.
The presidential campaign of 1932 was chiefly a debate over the causes and possible remedies of the Great Depression. President Herbert Hoover, unlucky in entering the White House only eight months before the stock market crash, had tried harder than any other president before him to deal with economic hard times.
His Democratic opponent, Franklin D. Roosevelt, already popular as the governor of New York during the developing crisis, radiated infectious optimism. He scored a smashing victory — receiving 22,800,000 popular votes to Hoover’s 15,700,000. The United States was about to enter a new era of economic and political change.
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