9. 3 Republicanism at Home
While Isolationism was the main feature of the 1920s, it had grave consequences on the economy of the country. Afraid of foreign competition the nation adhered to a policy of protectionism. With support from farmers and businessmen, the Congress dominated by Republicans, passed the Emergency Tariff Act in May 1921. Later in 1922, the Congress passed the Fordney-McCumber Act which pushed the tariff rates up. Eight years later, Congress once again passed the Smoot-Hawley Tariff in 1930. Amidst protests from economists, President Hoover signed it. The Smoot-Hawley Tariff Act raised the tariffs to the highest in American economic history.
In response to the U.S. tariffs, European countries
also raised their tariffs. The Tariff Acts in U.S. reflected the
growing nationalism of the 1920s. Another symbol of this post-war
nationalism was the countrywide demand to restrict immigration.
After the war, a large number of foreigners came to America. To
check the influx of immigrants, the Congress introduced the quota
system in the
Emergency Quota (1921).
Later in 1924, the Congress under President Coolidge passed the Immigration Act to tighten immigration laws. The 1924 Immigration Act fixed national quotas at 2% of the number of a nationality which had lived in the U.S. in 1890.
The Great Depression (1929-’39) is one of
the most tragic events to have occurred in American history.
The crash of 1929 was not the first Depression in the U.S. In fact the period from the 1870s to the 1920 saw two major Depressions and several minor ones. The 1920s also began with a Depression in 1921. From 1923 onwards, business boomed. So much so that this period was called the Golden Twenties. Most people in the 20s could afford to buy automobiles, radios, build houses and even visit Europe. In the 20s, the U.S. appeared to be extremely prosperous. Real wages were one of the highest productivity per person increased by 30% and there was plenty of capital around for investment.