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Ch. 24– “The New Era”
I. The New Economy
A. Technology and Economic Growth
1.The nation’s manufacturing output rose by more
than 60% during the 1920s.
2.The boom was driven in part by the debilitation
of European industries after WWI left the U.S.,
for a short time, the only healthy industrial
power in the world.
3.The auto industry became among the most
important industries in the nation & w/ the
growth of suburbs helped fuel a boom in the
construction industry.
4.Radio, commercial aviation, and other industries
based on new technologies also experienced
tremendous growth.
5.Modern administrative systems with efficient
divisional organization, pioneered by General
Motors, spread to other corporations.
6.Trade associations – national organizations
created by various members of an industry to
encourage coordination in production and
marketing techniques – grew tremendously.
B. Labor In the New Era
1.Despite the economic growth, many Americans
still lived at a subsistence level.
2.Some employers, like Henry Ford, eager to
avoid labor unrest adopted the paternalistic
technique known as “welfare capitalism” –
shortening the work week, raising wages, and
paid vacations.
3.Most employers were interested only in keeping
their labor costs to a minimum and kept workers
relatively impoverished and powerless.
4.Most African Americans, working in jobs such
as janitors, dishwashers, etc, had no union
support. The one notable distinction was The
Brotherhood of Sleeping Car Porters founded by
A. Philip Randolph.
5.Ethnic minorities like the Japanese and
Mexicans formed a major part of the unskilled
work force in the Southwest.
6.After the turmoil of 1919, corporations worked
hard to spread the doctrine that unionism was
somehow subversive. Democratic capitalism
required an “open shop,” meaning no worker
could be required to join a union. This
approach, called the “American Plan” by the
National Association of Manufacturers became
a pretext for a harsh campaign of union busting
across the country (usually w/support of the
C. The Plight of the Farmer
1. With new technology, farmers opened up
35 million new acres to cultivation in the
1920s. The new technology increased
productivity both in the U.S. and in other parts
of the world.
2. The demand for agriculture, however, was
not rising as fast as the supply and the
subsequent surplus led to a severe drop in
farmers’ income. More than 3 million people
left agriculture during the decade.
3. One price-raising scheme was the idea of
parity. It called for setting an adequate price
for farm goods that would earn farmers back at
least their production costs. The McNary-
Haugen Bill to do this, however, was twice
vetoed by President Coolidge.