Decadent Prosperity: The Roaring Twenties in Brief

Decade of Prosperity

Woodrow Wilson’s inability to achieve ratification of the Treaty of Versailles in the Senate brought about the change in administrations, but was actually influenced by several factors.  A moralist in diplomacy, Wilson had promised in his Fourteen Points, Five Particulars, and Four Principles conditions to the vanquished nations in the Great War that the other victors would not agree to.  Paul Johnson, in Modern Times*, suggests that Wilson’s insistence on being present for the peace conference reduced his stature from that of “the most powerful man in the world”, to the same footing as other prime ministers gathered at Versailles.  Johnson thinks there is a possibility  that Wilsonian ideals could have better prevailed without his presence, which forced him to compromise on issues that he could have refused to negotiate on from across the Atlantic.

Whether Johnson is correct is moot, but the fact that Wilson became obsessed with the League of Nations was the contributing factor in the “Reservationists” refusal to ratify the treaty.  Henry Cabot Lodge, a conservative internationalist, railed against the clause that could bring American forces to protect other members of the League.  Wilson tried to appeal to the public on a campaign like swing through the country, but suffered a stroke (he had possibly had one while at the conference) that rendered him incapable of campaigning to increase support of the treaty.  His remaining months in office were unofficially left in the hands of his wife, Edith, as he (or she) broke with his former advisors, House and Lansing, and refused to coopt the support of the Republicans.  This period, referred to as a segment of nongovernment by Schultzinger, led to the  victory by Republican Warren G. Harding, an anti-League conservative internationalist.

Harding had little interest or knowledge of foreign affairs, and he acknowledged this by appointing strong cabinet members who pursued diplomatic goals through business enterprise.  Harding did not believe that politics were very important to the average American, and his front porch campaign targeted small-town America, who gave him a landslide victory in the popular vote.  The Conservative Internationalists believed that America had to remain active in the world, yet steer clear of entangling alliances, such as the League of Nations.  Thus Secretary of State Hughes and Commerce Secretary Hoover felt free to bargain for resources without  consulting the corrupt Europeans.  The Great War had launched commercial expansionism for it had emphasized the importance of rubber and petroleum in transportation industry.

Secretary of the Treasury Mellon contrived to direct American lending overseas, though did so on a “no objection” basis so it would not seem the U.S. government was guaranteeing the loans.  In a circular financial policy, American lending revived the German economy, which enabled their payment of war reparations to other European nations, who then paid off their American war debt.  In a round-about way, it was the financial investment that John Maynard Keynes had suggested to Wilson would lead to stability in Europe.  Wilson’s repudiation of Keynes’ theory had led to Keynes’ resignation from the British delegation to the peace conference, and inspired him to write The Economic Consequences of the Peace, which had been released and enjoyed some popularity (Johnson, p.30) in the United States during the last months of Wilson’s presidency.

Any discussion of the politics of the twenties should include references to the changes that were taking place in American society.  Einstein had changed the way scientists viewed the world with his “Special Theory of Relativity” in 1919, which was proven later that year.  Freud was making some pretty broad assertions in the field of psychoanalysis which were embraced by American intellectuals, though Freud did not require proof for his theories like Einstein did.  Marxism, combined with Freudism, assigned a collective guilt to society for its moral decay.  The Great War was seen as proof of the moral decay, when “the mighty educated States” (Churchill, 1919) had visited horrors upon the civilian people of Europe.  Lenin had distorted Marxist principles in Russia and Western leaders anticipated his overthrow, which never came.  The twenties were marked by a society that assessed traditional values with moral relativism.  (Johnson, ch. 1)

America could not be completely indifferent to foreign affairs, with more than one-seventh of its population composed of the immigrants of the turn of the century seeking Arcadia.  (Johnson, ch. 6)  Social Darwinism had its effect on America in the organization of the KKK in 1915, anti-immigration laws and racial quotas of the early twenties.  The new motion picture industry produced Birth of a Nation and sensationalized racial disharmony.  The presidential campaign of 1920 introduced a racial pecking order to American politics as Henry Cabot Lodge spoke of “the English speaking people” of America and Warren Harding claimed to have the finest blood — Anglo-Saxon, German, Scotch-Irish, and Dutch.  During the war, the Espionage Act and Sedition Act were passed and targeted foreign-born subversives.  When immigration was reinstated, the policies favored North and Western Europeans.  American intellectuals faced the dilemma that xenophobia conflicted with Jeffersonian ideals and could make America an expatriation of Europe, yet continued to view the Anglo-Saxon New Englanders as the “true Americans”.

William Jennings Bryan led the “populist” movement of the Middle America Prostestants, who declared war on the consumption of liquor.  The Prohibition movement was aimed at the drinking habits of immigrants, and it had the unintended effect of encouraging ethnic minorities to organize into rumrunning and bootlegging syndicates, making fortunes in instead of conforming to Protestant principles.

It was in this atmosphere that the Party of Lincoln (Republicans!) won office via advocates of social conservatism and free market economics.  Harding’s cabinet held itself aloof from Europe in bargaining for access to resources in European spheres of influence, but concerned itself with U.S. interests primarily in the Western Hemisphere.  Idaho Senator Borah and the irreconcilable Republicans were against intervention in Central America as well as Europe, but the internationalists, backed by American financial interests were a stronger force.

When Mexico began levying taxes on American mining and oil companies, Coolidge sent Dwight Morrow, associated with J.P. Morgan and Co., to negotiate with the Mexican government.  The compromise held until 1938, but Mexico voiced complaints that the U.S. companies were restricting oil production in Mexico to preserve oil near U.S. boundaries.  All of the Latin American countries resented the self-serving interference by the Colossus of the North.

Harding was committed to reducing taxes and government, and enjoyed some success on both endeavors. Secretary of State Hughes’ proposal to limit naval buildups was met with relief by financially strapped nations, and Harding was able to reduce the post-war government by as much as 40 percent.  (Of course, this depends on who’s counting, doesn’t it?)  Harding’s willingness to let diplomacy direct itself to encourage the nation’s business interests eventually was compromised when a series of scandals — Forbes of the Veterans Bureau, Albert Fall of the Interior (the first U.S. Cabinet member convicted of a felony), and the “Ohio Gang” of influence peddlers — plagued his administration, though Harding himself did not seem to be involved.

After Harding’s death in office, the reticent Calvin Coolidge called for self-regulation of business without government intervention.  Coolidge, from Vermont Puritan stock, was an intellectual, but it suited him to let people believe him unsophisticated.  Will Rogers, later describing his presidency, said that Coolidge did exactly what the people wanted — NOTHING.  The early to mid-twenties saw enormous business and industrial growth which brought prosperity to great numbers of Americans.  Personal rights were equated with property rights, and the housing industry boomed.  International investment in rubber and petroleum brought a boom to the fledgling auto industry.  Private investment in the stock market was also accelerating as common Americans sought to get rich off of the soaring share prices.  Education spending quadrupled and illiteracy rates fell below 5 percent.  America had achieved its own culture through prosperity of the common man, which both contributed to and resulted from a tendency to sever cultural ties to Europe.

Coolidge surprised elites by announcing he was uninterested in another term.  He derisively suggested the “Wonder Boy” would do a better job at spending the country’s money, for he (Coolidge) knew only how to save.   Hoover invited the Prime Minister of England for a discussion of world peace, and in October, 1929, PM MacDonald visited the United States.  Just as they reached a “moral understanding” (Washington Post, 6 Oct 29) about their mutual responsibility to global affairs and the world looked forward to the London arms conference (with France and Italy bickering over parity), but the stock market crashed before the issue resolved.

Officials were quick to reassure Americans that business was sound, but were unaware of reverberations in the economy that would follow.  Whatever foreign policy goals Hoover may have been planning to pursue were swept aside when most of the banks in the country folded and the Great Depression spread around the world.

*Johnson, Paul. Modern Times: The World from the Twenties to the Eighties May, 1983.

If you have never read any of Johnson’s books, I recommend him for thorough work.

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