The history of the United States from 1918 through 1945 covers the post-World War I era, the Great Depression, and World War II. After World War I, the United States signed separate peace treaties with Germany and her allies. The U.S. sponsored a successful world naval disarmament conference, became the world's leading lender, and stabilized Germany and Europe through the Dawes Plan and the Young Plan.
During most of the 1920s, the United States enjoyed a period of sustained prosperity. Most sectors did very well, except for agriculture, which suffered after the bubble of high prices and skyrocketing land prices burst in 1920. Prices were stable, and the gross national product grew at an annual rate of 3.2% from 1918 to 1945.
The Wall Street Crash of 1929 and the ensuing Great Depression led to government efforts to re-start the economy and help its victims. The recovery, however, was very slow. The nadir of the Great Depression was 1933, and recovery wasrapid until the recession of 1938 proved a setback. There were no major new industries in the 1930s that were big enought to drive growth the way autos, electricity and construction had been so powerful in the 1920s. GDP surpassed 1929 levels in 1940.
By 1939, isolationist sentiment in America had ebbed, but after the fall of France in 1940 the United States began rearming itself and send a large stream of money and military supplies to Britain, China and Russia, After the sudden Japanese Attack on Pearl Harbor, the United States entered the war against Imperial Japan, Fascist Italy, and Nazi Germany, known as the "Axis Powers". Italy surrended in 1943, and Gemrany and Japan in 1945, after massive devastation and loss of life, while the US emerged far richer and with few casualties.
After the war, fear of subversion resumed in the context of the Red Scare, massive strikes in major industries (steel, meatpacking) and violent race riots. Radicals bombed Wall Street and workers went on strike in Seattle, in February 1919. During 1919, a series of more than 20 riotous and violent black-white race-related incidents occurred. These included the Chicago, Omaha, and Elaine Race Riots.
On May 1, 1919, a May Day parade in Cleveland, Ohio, protesting the imprisonment of the Socialist leader, Eugene Debs, erupted into the violent May Day Riots. A series of bombings in 1919 and assassination attempts further inflamed the situation. Attorney General A. Mitchell Palmer conducted the Palmer Raids, a series of raids and arrests of non-citizen socialists, anarchists, radical unionists, and immigrants. By 1920, over 10,000 arrests were made, and the aliens caught up in these raids were deported back to Europe, most notably Emma Goldman.
A popular Tin Pan Alley song of 1919 asked, concerning the United States troops returning from World War I, "How Ya Gonna Keep 'Em Down On the Farm After They've Seen Paree?". In fact, many did not remain "down on the farm"; there was a great migration of youth from farms to nearby towns and smaller cities. The average distance moved was only 10 miles (16 km). Few went to the cities over 100,000. However, agriculture became increasingly mechanized with widespread use of the tractor, other heavy equipment, and superior techniques disseminated through County Agents, who were employed by state agricultural colleges and funded by the Federal government.
In 1919, Woodrow Wilson campaigned for the U.S. to join the new League of Nations, which he had been instrumental in creating, but he rejected the Republican compromise on the issue and it was impossible to gain a 2/3 majority.
World War I left Germany in a state of turmoil with no war reparations payments flowing to the Allies. The U.S. effectively orchestrated payment of reparations; under the Dawes Plan, the U.S. loaned money to Germany, to pay the reparations to countries like Britain and France, which in turn paid off their own war debts to the U.S. In the 1920s, European and American economies reached new levels of industrial production and prosperity.
After a long period of agitation, U.S. women were able to obtain the necessary votes from a majority of men to obtain the right to vote in all state and federal elections. Women participated in the 1920 Presidential and Congressional elections. Politicians adjusted themselves, crafting issues such as world disarmament, child labor laws, mothers' pensions and, especially, prohibition, that seemed to appeal to women. Women did respond to these issues, but in terms of general voting they shared the same outlook and the same voting behavior as men. Roman Catholic women were reluctant to vote in the early 1920s, but they registered in very large numbers for the 1928 election in which Catholicism was an issue. A few women were elected to office, but none became especially prominent during this time period.
In the U.S. presidential election of 1920, the Republican Party returned to the White House with the election of Warren G. Harding, who promised a "return to normalcy" after the traumatic years of World War I.
During most of the 1920s, the United States enjoyed a period of unbalanced prosperity: prices for agricultural commodities and wages fell at the end of the war while new industries (radio, movies, automobiles, and chemicals) flourished. The unevenness was also geographic: the standard of living in rural areas fell increasingly behind that of urban and suburban areas which saw dramatic improvements in housing and urban planning. Rural areas lost population to nearby towns and cities, made nearer by the rapid growth in automobile usage. Money earnings (after taking inflation, unemployment and short hours into account) of all employees doubled over 1918-45. Setting 1918 as 100, the index went to 112 in 1923, 122 in 1929, 81 in 1933 (the low point of the depression) 116 in 1940, and 198 in 1945. The boom was reflected by the extension of credit to a dangerous degree, including in the stock market, which rose to record high levels, which in retrospect after the Stock Market Crash of 1929 were dangerously inflated.
In 1920, the manufacture, sale, import and export of alcohol was prohibited by the Eighteenth Amendment to the United States Constitution in an attempt to alleviate high rates of alcoholism and, especially, political corruption led by saloon-based politicians. It was enforced at the federal level by the Volstead Act. Most states let the federals do the enforcing. Drinking or owning liquor was not illegal, only the manufacture or sale.
National Prohibition ended in 1933, although it continued for a while in some states. Prohibition is considered by most (but not all) historians to have been a failure because organized crime was strengthened. The 18th Amendment also represented the growing strength of the state in the early 20th century.
Historians in recent years have explored the Klan in depth. The KKK of the 1860s and the current KKK were indeed violent. However, historians discount lurid tales of a murderous group in the 1920s. Some crimes were probably committed in Deep South states but were quite uncommon elsewhere. The local Klans seem to have been poorly organized and were exploited as money-making devices by organizers more than anything else. (Organizers charged a $10 application fee and up to $50 for costumes.) When the national headlines reported rape and murder by the KKK leader in Indiana, the group quickly lost its mystique and nearly all its members.
The "Scopes Monkey Trial" of 1925 pitted lawyers William Jennings Bryan and Clarence Darrow (the latter with the ACLU representing teacher John T. Scopes) in a Tennessee court case that tested a law passed on March 13, 1925, which forbade the teaching, in any state-funded educational establishment in Tennessee, of "any theory that denies the story of the Divine Creation of man as taught in the Bible, and to teach instead that man has descended from a lower order of animals." This is often interpreted as meaning that the law forbade the teaching of any aspect of evolution. By teaching from a state-mandated biology textbook that discussed evolution, Scopes believed he had broken the anti-evolution law.
Scopes was convicted of teaching evolution, but the verdict was overturned on appeal. The case was a major setback to the fundamentalist churches and the opponents of evolution.
While, in retrospect, the 1920s are sometimes seen as the last gasp of Robber Baron capitalism, there was actually an increasing role for the federal government. In addition to Prohibition, the government took on new powers and duties such as funding and overseeing the new U.S. Highway system. Federal expansion of the money supply led to an unprecedented expansion of credit which contributed to both the boom and subsequent bust.
Coolidge was a taciturn, personally honest New Englander who generally saw his role as to stay out of the way of private business and the booming economy. He was elected to a full term of his own in 1924 under the slogan "Keep Cool With Coolidge."
When Coolidge declined to run again in the 1928 election, the Republican Party nominated engineer and Secretary of Commerce Herbert Hoover, who was elected by a wide margin over Al Smith, the first Catholic nominee. Hoover had said, "We in America today are nearer to the final triumph over poverty than ever before in the history of any land." Within months of his election, however, the stock market crashed, and the nation's economy spiraled downward into what became known as the Great Depression.
After the crash, Hoover announced that, while he would keep the federal budget balanced, he would cut taxes and expand public works spending. However, he signed the Smoot-Hawley Tariff Act, which raised tariffs, and later, the Revenue Act of 1932, which hiked taxes and fees across the board. These acts are often blamed for deepening the depression and for being Hoover's biggest political blunders. Moreover, the Federal Reserve System's tightening of the money supply (from an unfounded fear of inflation) is also regarded by most modern economists as a mistaken tactic, given the actual monetary situation.
Historians and economists still have not agreed on the causes of the Great Depression, but there is general agreement that it began in the United States in late 1929, and was either started or worsened by "Black Thursday", the stock market crash of Thursday, October 24, 1929. Sectors of the U.S. economy had been showing some signs of distress for months before October 1929. Business inventories of all types were three times as large as they had been a year before (an indication that the public was not buying products as rapidly as in the past); and other signposts of economic health—freight carloads, industrial production, wholesale prices—were slipping downward.
The events in the United States triggered a world-wide depression, which led to deflation and a great increase in unemployment. In the United States between 1929 and 1933, unemployment soared from 3% of the workforce to 25%, while manufacturing output collapsed by one-third. Where it existed, local relief was overwhelmed. Thrown out of their homes, the unemployed and poor moved into "Hoovervilles". For many, their next meal was found at a soup kitchen, if at all.
Adding to the misery of the times, drought arrived in the Great Plains in 1933. By 1934, the plains had been turned to a Dust Bowl. Those who had lost their homes and livelihoods were lured westward by advertisements for work put out by agribusiness in western states, such as California. The migrants came to be called Okies, Arkies, and other derogatory names as they flooded the labor supply of the agricultural fields, driving down wages, pitting desperate workers against each other.
In the South, the fragile economy collapsed further. To escape, rural workers and sharecroppers migrated north by train with hopes to work in auto plants around Detroit. In the Great Lakes states, farmers had been experiencing depressed market conditions for their crops and goods since the end of World War I. Many family farms that had been mortgaged during the 1920s to provide money to “get through until better times” were foreclosed when farmers were unable to make payments.
Worldwide, desperate governments sought economic recovery by adopting restrictive autarkic policies—high tariffs, import quotas, and barter agreements—and by experimenting with new plans for their internal economies. Britain adopted far-reaching measures in the development of a planned national economy. In Nazi Germany, economic recovery was pursued through rearmament, conscription, and public works programs. In Mussolini's Italy, the economic controls of his corporate state were tightened. Some observers throughout the world saw in the massive program of economic planning and state ownership of the Soviet Union what appeared to be a depression-proof economic system and a solution to the crisis in capitalism.
In the United States, upon accepting Democratic nomination for president in 1932, Franklin D. Roosevelt promised "a new deal for the American people," a phrase that has endured as a label for his administration and its many domestic achievements. The Republicans, blamed for the Depression, or at least for lack of an adequate response to it, were easily defeated by Roosevelt in 1932
Unlike many other world leaders in the 1930s, however, Roosevelt entered office with no single ideology or plan for dealing with the depression. The "new deal" was often contradictory, pragmatic, and experimental. What some considered incoherence of the New Deal's ideology, however, was the presence of several competing ones, based on programs and ideas not without precedents in the American political tradition.
The New Deal consisted of many different efforts to end the Great Depression and reform the American economy. Many of them failed, but there were enough successes to establish it as the most important episode of the twentieth century in the creation of the modern American state.
The desperate economic situation, combined with the substantial Democratic victories in the 1932 Congressional elections, gave Roosevelt unusual influence over Congress in the "First Hundred Days" of his administration. He used his leverage to win rapid passage of a series of measures to create welfare programs and regulate the banking system, stock market, industry and agriculture.
On March 6, two days after taking office, Roosevelt issued a proclamation closing all American banks for four days until Congress could meet in a special session. Ordinarily, such an action would cause widespread panic. But the action created a general sense of relief. First, many states had already closed down the banks before March 6. Second, Roosevelt astutely and euphemistically described it as a "bank holiday." And third, the action demonstrated that the federal government was stepping in to stop the alarming pattern of bank failures.
Three days later, President Roosevelt sent to Congress the Emergency Banking Act, a generally conservative bill, drafted in large part by holdovers from the Hoover administration, designed primarily to protect large banks from being dragged down by the failing smaller ones. The bill provided for United States Treasury Department inspection of all banks before they would be allowed to reopen, for federal assistance to tottering large institutions, and for a thorough reorganization of those in greatest difficulty. A confused and frightened Congress passed the bill within four hours of its introduction. Three-quarters of the banks in the Federal Reserve System reopened within the next three days, and $1 billion in hoarded currency and gold flowed back into them within a month. The immediate banking crisis was over.
Otherwise, Roosevelt warned, the nation faced a $1 billion deficit. The bill revealed clearly what Roosevelt had always maintained: that he was as much of a fiscal conservative at heart as his predecessor was. And like the banking bill, it passed through Congress almost instantly—despite heated protests by some congressional progressives.
Relative farm incomes had been falling for decades. The AAA included reworkings of many long-touted programs for agrarian relief, which had been demanded for decades. The most important provision of the AAA was the provision for crop reductions—the "domestic allotment" system, which was intended to raise prices for farm commodities.
The most controversial component of the anti-deflationary domestic allotment system was the large-scale destruction of existing crops and livestock to reduce surpluses. At a time in which many families were suffering from malnutrition and starvation, it was a difficult measure. However, gross farm incomes increased by half in the first three years of the New Deal and the relative position of farmers improved significantly for the first time in twenty years.
Roosevelt also created an alphabet soup of new federal regulatory agencies such as the U.S. Securities and Exchange Commission (SEC) to oversee the stock market, a reform of the banking system that included a system of insurance for deposits.
The most successful initiatives in alleviating the miseries of the Great Depression were a series of relief measures to aid some of the 15 million unemployed Americans, among them the Civilian Conservation Corps, the Civil Works Administration, and the Federal Emergency Relief Administration.
The early New Deal also began the Tennessee Valley Authority, an unprecedented experiment in flood control, public power, and regional planning.
The Roosevelt administration, under increasing pressure to do more to alleviate unemployment, insisted that business would have to ensure that the incomes of workers would rise along with their prices. The result was the National Industrial Recovery Act (NIRA), passed by the Congress in June 1933. To implement the NIRA, two new federal agencies, the National Recovery Administration and the Works Progress Administration were created.
These and other early initiatives created broad popular support for the Roosevelt administration and halted the rapid unraveling of the financial system. They did not, however, end, or even significantly abate, the Great Depression and the attendant suffering of the people.
Roosevelt's first term saw a massive amount of labor upheaval. In 1934 alone, there was the 1934 West Coast Waterfront Strike that brought all of San Francisco into a four-day general strike, the Minneapolis Teamsters Strike of 1934 that brought the Teamsters and other unions out for a strike causing the governor to declare martial law, the 1934 Textile Workers Strike that brought hundreds of thousands of textile workers on the East Coast out on strike, as well as other strikes.
The IWW no longer being a force in the labor movement, the conservative American Federation of Labor, which organized along craft union lines and which preached labor/capital cooperation, dominated the U.S. labor movement until the 1930s. In 1935, eight unions within the AFL organized the CIO to promote industrial unionism. The CIO unions were expelled by the AFL in 1936, and in 1938 they formed a rival federation to the AFL. The CIO had much success in organizing, with the Steel Workers Organizing Committee getting a contract with US Steel in 1937, and winning the Flint Sit-Down Strike and getting General Motors to recognize the United Auto Workers as the collective bargainer for GM workers.
Political constraints were crippling both in Congress and among the public at large, where conservative inhibitions remained strong. However, the Supreme Court would perhaps be the most formidable opponent. Several crucial New Deal programs violated conservative constitutional theory. The National Recovery Administration, the Agricultural Adjustment Administration, and others were invalidated by the court, which was dominated by conservatives with a narrow view of the Interstate Commerce clause of the Constitution, the basis of much New Deal legislation.
But the administration's other response to the 1937 dip had more tangible results. Ignoring his own Treasury Department, Roosevelt embarked on an antidote to the depression, reluctantly abandoning his efforts to balance the budget and launching a $5 billion spending program in the spring of 1938, an effort to increase mass purchasing power and attack deflation.
Roosevelt explained his program in a fireside chat in which he finally acknowledged that it was up to the government to "create an economic upturn" by making "additions to the purchasing power of the nation."
The war economy was not so much a triumph of free enterprise as the result of government bankrolling business. While unemployment remained high throughout the New Deal years, consumption, investment, and net exports—the pillars of economic growth—remained low. It was World War II, not the New Deal, which finally ended the crisis. Nor did the New Deal substantially alter the distribution of power within American society and economy; and it had only a small impact on the distribution of wealth among the population..
Laying the foundations for the postwar era, Roosevelt and the New Deal helped enhance the power of the federal government as a whole. Roosevelt also established the presidency as the preeminent center of authority within the federal government. By creating a large array of protections for various groups of citizens—workers, farmers, and others—who suffered from the crisis, enabling them to challenge the powers of the corporations, the Roosevelt administration generated a set of political ideas—known to later generations as New Deal liberalism—that remained a source of inspiration for decades and that helped shape the next experiment in liberal reform, the Great Society of the 1960s.
On the other hand, the Roosevelt administration and its liberalism became the source of a vigorous conservative reaction. Led in Congress by Senator Robert A. Taft and the Conservative coalition, they blocked almost all New Deal proposals after 1936, and shut down the WPA, CCC and many other programs by 1943. Eventually in the 1970s and 1980s, a bipartisan coalition ended most New Deal regulations and programs. The most important remaining ones in the 21st century are Social Security and the Securities and Exchange Commission.
Isolationist sentiment with regard to foreign wars in America had ebbed, but the United States at first declined to enter the war, limiting itself to giving supplies and weapons via Lend Lease to Britain, the Republic of China, and the Soviet Union. American feeling changed drastically with the sudden Japanese attack on Pearl Harbor. The U.S. enthusiastically went to war against the Empire of Japan, Italy, and Nazi Germany. Italy surrendered in 1943, followed by Germany and Japan in 1945.
After winning a bitter contest for re-election to unprecedented third and fourth terms Roosevelt died on April 12, 1945. Harry S. Truman continued most of Roosevelt's wartime policies but changed his cabinet. On August 6, 1945, the U.S. dropped an atomic bomb on Hiroshima, Japan, followed on August 9 by a second atomic bomb on Nagasaki. Japan surrendered a few days later and was occupied by the Americans under Douglas MacArthur, and its politics and economy transformed, in New-Deal fashion.
The U.S. domestic scene in World War II was relatively peaceful, marred only by racial tensions in larger cities and riots in Detroit. Some German and Italian aliens were rounded up and interned. About 100,000 Japanese citizens on the West Coast and their children were interned by the U.S. government.
The United Nations was established on October 24, 1945, to serve as a world body to help prevent future world wars. By a vote of 65 to 7, the United States Senate, on December 4, 1945, approved U.S. participation in the UN. This marked a turn away from the traditional interest in strategic local concerns of the U.S. and toward more international involvement.