The Volstead Act outlawed the sale and manufacture of alcohol

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1 Prohibition

2 In 1920, the 18 th Amendment was ratified and the Prohibition era began Rural Americans supported this noble experiment because they believed drinking led to crime and other social problems The Volstead Act outlawed the sale and manufacture of alcohol

3 Many urban Americans resisted prohibition Drinking was a Many urban Americans cultural norm for wanted to enjoy themselves in many immigrants illegal bars called speakeasies

4 Demand for illegal alcohol led to a rise in smuggling ( bootlegging ), moonshining, crime

5 Organized crime emerged in America as the mafia took control of the illegal alcohol trade The most notorious mobster was Al Capone who controlled the alcohol trade in Chicago To control the liquor trade, mobsters resorted to gang killings like the St. Valentines Day Massacre in 1929

6 By the end of the 1920s, only 19% of Americans supported prohibition The strongest defenders of prohibition were rural Americans But, most Americans believed that prohibition caused more problems than it solved The 21 st Amendment was ratified in 1933 to repeal prohibition

7 Rural Americans found comfort in religious fundamentalism (a literal interpretation of the Bible) Rural folks rejected the urban values, especially immigrants and flappers Evangelists used the radio to broadcast Christian messages 1920s evangelist Billy Sunday

8 America in the 1920s experienced a decade of change There was an increase in consumerism Government policies favored business and isolationism Women and African Americans experienced new freedoms while immigrants came under attack cars, radios, entertainment

9 The 1920s were a decade of consumer spending and the economy looked healthy on the surface Income did increase in the 1920s, but there were severe problems with the U.S. economy In October 1929, the Roaring Twenties came to an end and the Great Depression began why?

10 Over-production and under-consumption By the end of the 1920s, factories produced too many durable goods (known as over-production) People did not need as many appliances and cars by the end of the decade (under-consumption) Too much inventory Not enough buyers

11 Increasing American debts Many Americans used credit to live beyond their means, generate large debts, and had to cut back on spending by the end of the decade

12 How does consumer debt in the 1920s compare to today?

13 Stock market speculation The stock market soared throughout the 1920s and people speculated by borrowing money to pay for stocks (called buying on margin) The stock market was not regulated which allowed some companies to alter their stock values to increase profits This created a bubble in the stock market

14 The spark the triggered the Great Depression was the stock market crash in October 1929 OnOctober 29, 1929 (Black Tuesday) the stock market crashed People rushed to sell, stock prices dropped, and investors lost a total of $30 billion Speculators who bought on the margin, could not pay off their debts

15 After the crash, people tried to withdraw their money from banks When banks could not produce money for all their customers, the banks failed This led to a run on banks across the U.S hundreds of banks failed and thousands of people lost their savings The banking failure and stock market crash led to the collapse of thousands of businesses

16 When the Great Depression began, millions of people lost their jobs or took pay cuts to keep their jobs From 1929 to 1932, unemployment grew to 12 million people Americans lacked confidence in the future so they tried not to spend money The decline in consumer confidence made the depression drag on until the 1940s

17 The Great Depression led to a global depression in Europe, Asia, and Latin America World trade fell by 40% To encourage citizens to buy from U.S. companies (not foreign competitors) the government passed new high tariffs European nations responded with their own tariffs which made it difficult for U.S. companies to sell their goods overseas

18

19 Mortgage Foreclosures

20 The effects of the depression were made worse by the Dust Bowl Decades of over-farming and droughts in the Plains led to windstorms that swept away soil and made farming impossible

21 As the depression worsened, Hoover called for more direct government action to ease peoples suffering Under Hoover, the gov t issued relief checks to help the unemployed Congress created the Reconstruction Finance Corps (RFC) to loan money to save failing businesses

22 Congress approved new building projects to put Americans to work like the Hoover Dam

23 Americans who lost their homes, lived in shantytowns nicknamed Hoovervilles Hoover Hotels Hoover Blankets Hooverville

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