The Roaring Twenties and Republican prosperity
America After the First World War
When Warren Harding won the presidential election of 1920 on a promise of a “return to normalcy,” he captured a national mood. Americans were tired of wartime controls, high taxes, and international entanglements. The decade that followed — the 1920s — brought extraordinary economic growth for millions, but that prosperity was deeply uneven. Understanding who gained and who did not is essential for this unit.
Three Republican administrations — Harding (1921–23), Coolidge (1923–29), and Hoover (1929–33) — followed a broadly laissez-faire approach. Treasury Secretary Andrew Mellon cut income taxes sharply through the 1921 and 1924 Revenue Acts, on the theory that wealthy investors would reinvest their savings in industry. High tariffs — the Fordney-McCumber Tariff of 1922 — protected American manufacturers from foreign competition.
The Assembly Line and Consumer Society
The technological engine of the boom was mass production, perfected by Henry Ford at his Highland Park plant. Ford’s moving assembly line slashed the time needed to build a Model T from over twelve hours to roughly ninety minutes. By 1929, US car production had reached approximately 5.6 million vehicles a year. The car in turn stimulated steel, glass, rubber, and oil industries, and accelerated the growth of road-building and suburban development.
Americans were also buying on credit in unprecedented numbers. Hire-purchase agreements allowed families to acquire radios, refrigerators, washing machines, and vacuum cleaners before they had saved the full purchase price. Advertising, a rapidly growing industry, shaped new desires and convinced consumers that prosperity was within reach. Radio stations multiplied — from one in 1921 to over 500 by 1923. Hollywood produced films that both reflected and promoted a culture of consumption.
The boom bypassed large parts of the American economy. Farmers were among the hardest hit. During the First World War, US agriculture had expanded rapidly to feed Europe. Once European farms recovered after 1918, demand fell sharply while production remained high, pushing prices down. Farmers who had borrowed to buy land and equipment during the war years faced foreclosure. Rural poverty was widespread throughout the 1920s — long before the Great Depression began.
Coal miners, textile workers in the South, and workers in older industries such as leather goods and shipbuilding also saw stagnant wages or declining employment. Trade union membership fell sharply across the decade as employers used court injunctions, the threat of replacement workers (often called “scabs”), and company unions to undermine collective bargaining. Women in domestic service and garment work, and African American workers across most of the country, were largely excluded from the prosperity the decade is famous for.
Republican Ideology and Its Limits
Republican presidents of the 1920s believed firmly that government should not interfere with business. Coolidge famously remarked that “the chief business of the American people is business.” This philosophy translated into low business taxes, limited regulation of financial markets, and the freedom for companies to set their own terms. The Mellon tax cuts disproportionately benefited high earners: the top rate of income tax fell from 73 per cent in 1921 to 25 per cent by 1925.
This approach had a structural weakness that was not fully understood at the time. Wages for ordinary workers did not rise fast enough to absorb all the goods the new factories were producing. Much of the consumer spending of the 1920s was financed by credit. Equally dangerous was the growth of buying stocks on margin. By 1929, share prices had risen far above the value of the underlying companies. When confidence broke, the crash would be catastrophic.
The prosperity of the 1920s excluded several large groups: farmers facing falling crop prices; coal and textile workers in declining industries; African Americans, who faced segregation and discrimination across most of the country; recent immigrants in low-wage factory jobs; and the roughly 40 per cent of Americans living in poverty throughout the decade according to contemporary surveys.
Herbert Hoover, elected president in November 1928 over Democrat Al Smith, was widely regarded as one of the most competent men in American public life. He had successfully directed food relief for millions in Europe after the First World War, and as Secretary of Commerce from 1921 to 1928, he had actively promoted business efficiency and trade associations. His election on a platform of continuing Republican prosperity seemed to mark a high point of confidence. Within a year, the Wall Street Crash would transform his presidency entirely.
The Harlem Renaissance
One of the most significant cultural developments of the decade took place largely outside the mainstream economy of the boom. The Harlem Renaissance saw African American writers, musicians, and artists produce work of lasting importance — from Langston Hughes’s poetry to Louis Armstrong’s jazz. The Great Migration, in which around 1.6 million African Americans moved from the rural South to northern cities between roughly 1910 and 1930, created a critical mass of Black urban communities. Yet racial discrimination, enforced by Jim Crow laws in the South and informal segregation in the North, meant the majority of African Americans remained trapped in low-paid, insecure employment regardless of this cultural flourishing.