Download the international debt mess of the 1920s

The United States from 1877 to 1986
Woodrow Wilson’s 14 points
I. Open covenants of peace, openly arrived at. . .
II. Absolute freedom of navigation upon the seas . . .
III. The removal, so far as possible, of all economic
barriers and the establishment of an equality of
trade conditions among all the nations consenting
to the peace and associating themselves for its maintenance. . . .
IV. Adequate guarantees given and taken that national armaments will be
reduced to the lowest point consistent with domestic safety. . . .
V. A free, open-minded, and absolutely impartial adjustment of all
colonial claims, based upon a strict observance of the principle that in
determining all such questions of sovereignty the interests of the
populations concerned must have equal weight with the equitable
claims of the government whose title is to be determined.
The United States from 1877 to 1986
Woodrow Wilson’s 14 points
VI. The evacuation of all Russian territory and such a settlement of all
questions affecting Russia as will secure the best and freest
cooperation of the other nations of the world in obtaining for her an
unhampered and unembarrassed opportunity for the independent
determination of her own political development . . .
VII. Belgium, the whole world will agree, must be evacuated and
restored, without any attempt to limit the sovereignty which she
enjoys in common with all other free nations.
VIII. All French territory should be freed and the invaded portions
restored, and the wrong done to France by Prussia in 1871 in the
matter of Alsace-Lorraine, which has unsettled the peace of the
world for nearly fifty years, should be righted, in order that peace
may once more be made secure in the interest of all.
The United States from 1877 to 1986
Woodrow Wilson’s 14 points
IX. A readjustment of the frontiers of Italy should be effected along
clearly recognizable lines of nationality.
X. The peoples of Austria-Hungary, whose place among the nations we
wish to see safeguarded and assured, should be accorded the freest
opportunity to autonomous development.
XI. Rumania, Serbia, and Montenegro should be evacuated; occupied
territories restored;
XII. The Turkish portion of the present Ottoman Empire should be
assured a secure sovereignty, but the other nationalities which are
now under Turkish rule should be assured an undoubted security of
life and an absolutely unmolested opportunity of autonomous
development . . .
XIII. An independent Polish state should be erected . . .
The United States from 1877 to 1986
Article 14 of Woodrow Wilson’s
Fourteen points
XIV. A general association of
nations must be formed under
specific covenants for the purpose
of affording mutual guarantees of
political independence and
territorial integrity to great and
small states alike. . . .
The United States from 1877 to 1986
Keynes’ three criticisms of
the Treaty of Versailles
• Transported too many raw materials from
Germany to France
• Stripped Germany of its overseas
investments, merchant marine system,
and right to levy tariffs
• Burdened Germany with 33 billion dollars
in reparations
The United States from 1877 to 1986
the international debt mess of the 1920s . . . .
France and England insist on
collecting from Germany because
they owe debts to the United States
Germany
owes huge
reparations
to England
and France
What if there was
a stock market
crash in the
United States???
The U.S. won’t ease up
on France and England’s
war debts . . .
. . . but encourages
investors to lend money
to Germany
The United States from 1877 to 1986
Harding era laws for women
• Sheppard Towner Act: Federal money for
nurses, pre-natal care and child care.
 American
Medical Association called it
“bolshevistic.”
 Roman Catholic church called it government
intrusion into the family
• Cable Act
 Women
don’t have to forfeit their citizenship
if they marry a non-citizen.
The United States from 1877 to 1986
equal rights amendments
• 1920s:
 “Men
and women shall have equal rights
throughout the United States and every place
subject to its jurisdiction.”
• 1970s:
 “Equality
of rights under the law shall not be
denied or abridged by the United States or by
any state on account of sex.”
• 14th amendment, equal protection under
the laws . . .
The United States from 1877 to 1986
The 18th Amendment, 1919
• “After one year from the
ratification of this article
the manufacture, sale, or
transportation of
intoxicating liquors
within, the importation
thereof into, or the
exportation thereof from
the United States and all
territory subject to the
jurisdiction therefore for
beverage purposes is
hereby prohibited.”
The United States from 1877 to 1986
the harding scandals, 1921-1924
“the government that governs least, usually chooses the least
to govern”
• Charles Forbes of the Veteran
Administration
• Jess Smith and Harry
Daughtry
• The Teapot Dome Scandal
• the fall of Albert Fall
• Harding dies in San Francisco
at the Palace Hotel on Market
and 3rd Street
• His wife raises suspicions by
refusing to permit an autopsy
The United States from 1877 to 1986
American terrorists:
the return of the ku klux klan in the
1920s
• you pay a “klecktoken”
• to your “kleagle”
• diversify your hate to include not just Black-Americans
but Mexicans, Jews, Catholics, Japanese-Americans,
French Canadians, whoever . . .
• go to “klaverns” (huge communal outings)
• myth: the klan only operated in the deep south
• big in new jersey, detroit, pittsburgh, chicago, oklahoma,
michigan, and oregon
The United States from 1877 to 1986
klan strategy: intimidate
through terror
• lynch blacks for
getting too
prominent
economically or
politically (and say
it was because they
made a move on a
white woman)
• murder or assault
whites for
establishing
political or
economic alliances
with blacks
• 2,500 public floggings in one year
in Oklahoma (where a klansman
was governor)
The United States from 1877 to 1986
the klansman’s anti-immigrant
creed . . .
“I believe in the limitation of
foreign immigration. I am a
native-born American citizen
and I believe my rights in this
country are superior to
foreigners.”
The United States from 1877 to 1986
height of the klan
• 5 million members by 1923
• July 4th, 1923: 100,000 Klan members pack a park in
Kokomo, Indiana
• November, 1923: 75,000 Klan members show up for “Ku
Klux Klan Day” in Texas
• 1920: Oklahoma has a Klan governor
• 1922: Texas has a Klan senator
• 1924: generally estimated that half the Democratic
National Convention delegates secretly belong to the
Klan
The United States from 1877 to 1986
decline (but not fall) of the klan
• corruption and sex
scandals discredit the
klan
• anti-immigration laws
make the klan seem less
necessary
• disillusionment over
• multiracial coalitions in
prohibition makes klan
the north literally drive
stance against alcohol less
the klan out of town
popular
The United States from 1877 to 1986
1921 immigration quota
• Quota on all nationalities coming into the United
States
• 3 percent of the current total of said nationality
presently in the U.S.
• with a total ceiling of 357,803 immigrants a year
• no more than 20 percent of the quota can come
into the United States in a month
The United States from 1877 to 1986
1924 National Origins Act
• tougher quota on all nationalities immigrating to
the United States
• each nationality limited annually to 2 percent of
its total presence in the United States . . .
• . . . based on the 1890 census
• What does this mean?
• (hint: relatively few Eastern Europeans or
Italians in the United States in 1890)
The United States from 1877 to 1986
The NAACP fights lynching
• 1919: NAACP releases 30 Years
of Lynching in the South
• 30 Years concludes that only 20
percent of lynchings involved
accusations of impropriety with a
white woman
• And the vast majority of those
accusations were false.
• 1922: Congressman Leonidas C.
Dyer proposes a federal antilynching bill
The Dyer bill passes the House
. . . but is blocked in the Senate.
The United States from 1877 to 1986
early radio history
 1901: Marconi sends first
transatlantic wireless code
between England and North
America
 1906: Fessenden transmits
human voice over wireless:
“radio” is invented
 1906: Lee DeForest patents his
“tripode”--a radio receiver
 1910: Ships at sea 20 miles off
shore can hear Enrico Caruso’s
radio broadcast from the
Metropolitan Opera in New
York City
 1920: KDKA in Pittsburgh
begins broadcasting.
The United States from 1877 to 1986
The Federal Radio Commission,
1927
• Divided the nation into 5 communications
zones
• Begins issuing licenses
• Classifies commercial radio stations as
“general interest” stations
• Classifies non-profit stations as
“propaganda” stations, gives them weaker
licenses
The United States from 1877 to 1986
In Ponzi we trust . . .
A confident Charles Ponzi on
his way to Federal trial
A less than confident mob
surrounding one of Ponzi’s
branches as word leaks out
that he’s a fraud.
The United States from 1877 to 1986
Why the speculation boom of the
1920s?
• Communication revolution via telephone
and wireless telegraph
• Radio delivered news of stocks quickly
• Rise of disposable income among uppermiddle class
• Absence of any government regulation of
the trading sector
The United States from 1877 to 1986
the great crash . . . 1929
 Number of shares traded
between 1927 and 1929 doubled
...
 . . . to 920 million shares by
1929.
 But in October 1929, stocks
lost 40 percent of their value.
 50 billion dollars in
speculative investment lost
The United States from 1877 to 1986
the international debt mess of the 1920s (revisited)
France and England insist on
collecting from Germany because
they owe debts to the United States
Germany
owes huge
reparations
to England
and France
What if there was
a stock market
crash in the
United States???
The U.S. won’t ease up
on France and England’s
war debts . . .
. . . but encourages
investors to lend money
to Germany
The United States from 1877 to 1986
the great crash . . . 1929 - 1931
 1930: 1,352 banks failed
with 850 million in
deposits
 1931: almost 2,300
banks failed with 1.7
billion in deposits
 . . . People got ten cents
on the dollar of their
savings, if they were
lucky.
The United States from 1877 to 1986
Why the Great Depression?
• Low paid working and middle class consumers were
unable to buy the products they made.
• Farmers overproduced and overborrowed and by the
late 1920s were impoverished.
• Lack of regulation of banks and the stock exchange
made it easy for corporations to overcapitalize and
banks to over-invest.
• The U.S. stock market boom and bust of 1929 stole away
investment money that had kept Europe economically
afloat.
• U.S. passed manufacturing tariffs that hurt Europe even
more (Smoot-Hawley tarrif)
• Europeans stopped buying U.S. goods.
• Yikes!