American Life In the Roaring Twenties

 

I.                    Seeing Red

a.       Fears of Russia

                                                               i.      Americans were frightened by the harsh Bolshevik revolution (Russian Revolution) of 1917.  Many innocent people were killed and a Communist government was installed by Lenin in which:

1.      Government owned all land and property

2.      A single political party controlled the government

3.      Individuals had no rights

4.      Government vowed to stir up revolutions in other countries and spread communism throughout the world

                                                             ii.      Americans feared Communism because:

1.      It was openly against American beliefs and values

2.      Against capitalism (private ownership of land and business)

3.      Against First Amendment rights

b.      Red Scare of 1919-1920 and the Palmer Raids

                                                               i.      Early 1919 – In Seattle, a calm and legal strike led the mayor to call for federal troops to put down the “anarchy of Russia” – worker strikes seemed to bring the feeling of revolution to many

                                                             ii.      Attorney General A. Mitchell Palmer led him to suspect almost anyone of being communist.  He jailed or drove out over 6,000 Communist or illegal aliens, although only 556 truly fit those categories

                                                            iii.      Bombs sent anonymously through the mail to prominent American leaders encouraged fear

                                                           iv.      June 1919 – Palmer’s home was mail bombed

                                                             v.      December 1919 – 249 alleged alien radicals were deported on the Buford (“Soviet Ark”) to Russia

                                                           vi.      May 1920 – Palmer announced the threat of large Communist riots on May Day of 1920, but none materialized.  As a result, Palmer was discredited and the scare passed

                                                          vii.      September 1920 – Wall Street was bombed, killing 38 people

c.       State Legislature React to the Red Scare

                                                               i.      Many States passed laws that made it unlawful to verbally advocate violence to secure social change.  Many said this was against the 1st Amendment

                                                             ii.      The law was used to prosecute some who were innocent, such as 5 members of the New York legislature, all because they were Socialists

                                                            iii.      Business leaders used the Red Scare to call unions “Sovietism in disguise”

d.      Sacco & Vanzetti

                                                               i.      Charged with murder a MA paymaster in 1921 (someone who pays wages); another source – two gunmen robbed a factory and killed two men in MA

                                                             ii.      The judge and jury were prejudiced somewhat because they were:

1.      Italians

2.      Atheists

3.      Anarchists

4.      Draft dodgers

                                                            iii.      The two were electrocuted in 1927.  The evidence against the accused was damaging, but had several weaknesses.  If the trial had been held in an atmosphere less charged with anti-communism, the outcome might have been only a prison term

                                                           iv.      Communists and other radicals had two martyrs

II.                 KKK

a.       Who Are the KKK?

                                                               i.      They were anti:

1.      Catholic

2.      Black

3.      Jewish

4.      Pacifist

5.      Communist

6.      Internationalist

7.      Evolutionist

8.      Bootlegger

9.      Gambling

10.  Adultery

11.  Birth control

                                                             ii.      It was pro:

1.      Ango-Saxon

2.      “Native” American

3.      Protestant

b.      Who Did They Appeal To?

                                                               i.      Resembled the “nativist” movements of the 1850s

                                                             ii.      Was a reaction to the:

1.      Red scare of the late 1910s and early 1920s

2.      Quick pace of social change

3.      Rising status of blacks after WWI

                                                            iii.      Spread rapidly among the Midwest and Bible Belt South (where racial discrimination was the most prominent)

                                                           iv.      Capitalized on a want for adventure, camaraderie, and secret ritual

c.       Why Did the KKK Decline?

                                                               i.      1925 – Had population of 5 million; declined in the late 1920s

                                                             ii.      Decent people were appalled at the group’s tactics (burning crosses, whips, tar/feathering)

                                                            iii.      Embezzlement by clan member caused a Congressional investigation

1.      $10 initiation fee, $4 of which was used for local organizers as an incentive to recruit

III.               Stemming the Foreign Flood

a.       Emergency Quota Act of 1921

                                                               i.      1920-1921 – 800,000 immigrants came to America, many from southern and eastern Europe

                                                             ii.      Component of this act:

1.      This act restricted immigrants to 3% of the people of their nationality who had been living in the U.S. in 1910 (this favored Southern and Eastern Europeans)

b.      Immigration Act of 1924

                                                               i.      Replaced the Emergency Quota Act

                                                             ii.      Components of the act:

1.      The quota was cut from 3% to 2% and shifted to the census of 1890 (this favored Western and Northern Europe)

2.      The Japanese were prevented from immigrating

3.      Canada and Latin America were exempted because they were so close to America that if we needed them to fill low-paying jobs, we could get them; if we didn’t, we could easily send them back

                                                            iii.      The act was criticized as being unfair and discriminatory (it was intended to restrict Italians, Greeks, Poles, and Eastern European Jews)

                                                           iv.      In 1965, Congress abolished the national-origins quota system

c.       Results of the Acts

                                                               i.      Immigration was unlimited, not immigration was much slower

                                                             ii.      1931 – More foreigners left America than arrived (for the first time ever)

                                                            iii.      America sacrificed its tradition of freedom and opportunity, as well as ethnic diversity

                                                           iv.      Labor unions barely survived because of ethnic differences

1.      Immigrant workers on the same shop floor might share a common interest in wages and working conditions, but they often had no common language with which to forge the common cause

2.      Employers often played upon ethnic rivalries to keep their workers divided and powerless

d.      Cultural Pluralists

                                                               i.      People who favored immigration

                                                             ii.      Horace Kallen (philosopher) and Randolph Bourne (critic) were two of these people

                                                            iii.      Kallen:

1.      The U.S. should be a protective area where ethnic and radical groups could preserve their cultural identity

                                                           iv.      Bourne:

1.      Stressed greater interaction between immigrants so that America would not be a nationality, but a leading country (vanguard) of transnationality or an interweaving of cultures

                                                             v.      The cultural pluralists planted the seeds for the blooming of “multiculturalism” in the last quarter of the 20th century

IV.              The Prohibition “Experiment”

a.       18th Amendment

                                                               i.      Prohibited manufacture, sale, transport, or consumption of alcohol; temperance movements began in the early 1800s

                                                             ii.      Volstead Act defined alcoholic beverages and imposed criminal penalties for violations of the 18th Amendment

                                                            iii.      South –

1.      Favored

2.      Wanted to keep alcohol out of the hands of blacks who might rebel

                                                           iv.      West –

1.      Favored

2.      Wanted to keep public drunkenness, prostitution, corruption and crime that had been prominent out west to a minimum

                                                             v.      East –

1.      Didn’t favor

2.      Most foreign-born people gathered in eastern cities, who were used to drinking

b.      Enforcement of the Amendment

                                                               i.      Traditionally, the government was powerless to enforce a law that the majority of the people disliked and disobeyed

                                                             ii.      You cannot make something a crime that millions of people had regarded as not being a crime

                                                            iii.      State and federal agencies were understaffed and their officers were susceptible to bribery because they were underpaid

                                                           iv.      The public was increasingly distressed as scores of people, including innocent bystanders, were killed by quick-triggered dry agents

c.       Lawbreakers

                                                               i.      Drinking was a personal liberty, and many sought to get that liberty back by defying the law in a large scale

                                                             ii.      Soldiers returning from the war complained the prohibition had been “put over” on them while they were “over there”

                                                            iii.      Workers complained about the loss of cheap beer, while their rich bosses could buy as much illegal beer as they wanted

                                                           iv.      Speakeasies –

1.      Corner saloons were replaced by many of these, places where you had to say a code-word to get in and they would sell you alcohol illegally

                                                             v.      Bootleggers –

1.      There were a staggering number of these - someone who makes or sells illegal liquor

                                                           vi.      Rumrunners –

1.      People from the West Indies and Canada who would trade alcohol to Americans illegally

                                                          vii.      Home brew or bathtub gin –

1.      Adults would make alcohol at home

2.      This alcohol would be rotgut (raw, inferior liquor) and would cause blindness and even death

                                                        viii.      21st Amendment –

1.      Passed to repeal the 18th Amendment

d.      Good Aspects of Prohibition

                                                               i.      Bank savings increased and absenteeism in industry decreased

                                                             ii.      This all presumably occurred because of less alcohol consumption

V.                 The Golden Age of Gangsters

a.       Gangs In Big Cities

                                                               i.      Profits of illegal alcohol led to bribery of the police (who ignored crime)

                                                             ii.      Violent wars broke out in the big cities between rival gangs – often rooted in immigrant neighborhoods – who sought to corner the rich market in alcohol.  They sought to eliminate their bootlegger competitors

                                                            iii.      Chicago – 1920s – 500 mobsters were murdered.  Arrests were few and convictions even fewer, as they refused to tell on anyone

b.      Al Capone

                                                               i.      1925 – Was a murderous bootlegger who began 6 years of gang warfare that netted him millions of dollars

                                                             ii.      He became “Public Enemy Number One”

                                                            iii.      On St. Valentine’s Day in 1929, his men killed 7 disarmed members of a rival gang, yet he wasn’t convicted

                                                           iv.      Capone was eventually arrested for income-tax evasion and was released after 11 years (he had syphilis)

c.       Other Illegal Activity

                                                               i.       

VI.              Monkey Trial

a.       Education

                                                               i.      More and more States were requiring young people to remain in school until 16 or 18

                                                             ii.      The number of 17-year olds who finished high school nearly doubles in the 1920s to more than 1 in 4

b.      Professor John Dewey

                                                               i.      Professor from Columbia University from 1904-1930

                                                             ii.      Founded progressive education – learning by doing; “education for life” was essential for a teacher

c.       Science and Health

                                                               i.      Rockefeller Foundation – wiped out hookworm by the 1920s (parasites that have hooked mouthparts with which they fasten themselves to the intestinal walls of various hosts, including humans)

                                                             ii.      Life expectancy – went from 50 years in 1901 to 59 years in 1929

d.      Evolution

                                                               i.      Fundamentalists (people who have a rigid adherence to religious principles (read religious reading word for word), which are often characterized by intolerance of other views and opposition to secularism) believed that the teaching of Darwinian evolution was destroying faith in God and the Bible, while contributing to the moral breakdown of youth

                                                             ii.      Attempts were made to secure laws prohibiting the teaching of evolution

e.       Monkey Trial

                                                               i.      A high-school biology teacher, John T. Scopes, was indicted for teaching evolution in Tennessee in a town that had made it illegal to teach

                                                             ii.      He was defended by nationally known attorneys, while the prosecution was led by William Jennings Bryan.  He eventually took the stand as an expert of the Bible, but was made to look like a fool by Clarence Darrow, a famed criminal lawyer.  Bryan died 5 days after the trial was over

                                                            iii.      Scopes was found guilty and fined $100, but set it aside on a technicality.  The law wasn’t repealed until 1967

f.        Results of the Trial

                                                               i.      Fundamentalists were ridiculed (although Fundamentalism remained a strong part of American spiritual life)

                                                             ii.      An increasing number of Christians came to reconcile science with religion

VII.            The Mass-Consumption Economy

a.       Expansion of the Economy

                                                               i.      Treasury Secretary Andrew Mellon’s tax policies expanded capital investment (investing money)

                                                             ii.      New inventions powered by cheap energy increased the productivity of labor

                                                            iii.      Assembly line production

                                                           iv.      Rise in the standard of living

b.      New Industries

                                                               i.      Change from steam to electric power allowed more detailed designs and replaced human workers

1.      Electrical power – powered new machines (1920s)

                                                             ii.      Scientific management strategies were employed, leading to more efficient uses of workers

                                                            iii.      Major research and development projects reduced production costs and products

                                                           iv.      Expanded industries

1.      Automobile – became the main mode of transportation (1930 – 30 million cars)

2.      Electricity

3.      Chemicals

4.      Film

5.      Radio

6.      Commercial aviation

7.      Printing

                                                             v.      Led to overproduction by the late 1920s

c.       Entertainment

                                                               i.      Changed from home and social groups to commercial, profit-making activities

                                                             ii.      Tabloids grew in popularity, including the New York Daily News and Reader’s Digest

d.      Advertising

                                                               i.      Advertisers sought to make Americans want to buy more

                                                             ii.      Bruce Barton, a partner in a law firm, founded the new profession.  He wrote a book in 1925 called The Man Nobody Knows – said that Jesus was the greatest adman of all time; His parables were like advertising; He picked up 12 executives from the bottom ranks and forged them into an organization that conquered the world

e.       Sports

                                                               i.      Sports became big business in the consumer economy; professional sports grew

                                                             ii.      George (“Babe”) Ruth – most famous baseball player who hit home runs for the New York Yankees

                                                            iii.      Jack Dempsey – heavyweight champion who was the first boxer to earn $1 million in gate tickets

f.        Buying On Credit

                                                               i.      People bought on credit more and more

                                                             ii.      Allowed them to have refrigerators, vacuum cleaners, cars, and radios

                                                            iii.      Buying on credit increased the vulnerability of the economy

VIII.         Automobiles

a.       Henry Ford

                                                               i.      He and Ransom E. Olds were developing the auto industry in the 1890s

                                                             ii.      Invented the Model T – first inexpensive, mass-produced automobile

                                                            iii.      After two early failures, he applied the techniques of assembly-line production (the purchaser could have his automobile any color he desired – just as long as it was black)

                                                           iv.      His assembly line method was so economical that the cost of a Ford was $260

                                                             v.      1914 – 500,000 Model Ts; 1930 – 20 million Model Ts

                                                           vi.      1929 – 1 auto for every 4.9 Americans – well more than any country in the world

IX.              The Advent of the Gasoline Age

a.       Results of the Automobile Industry

                                                               i.      Employment – auto industry employed 6 million people by 1930

                                                             ii.      Supporting industries – rubber, glass, fabrics, highway construction, service stations, garages, and oil

                                                            iii.      Railroad industry – was hit hard by the competition of cars, buses, and trucks

                                                           iv.      Food industry – city dwellers were now provided with produce at attractive prices since they could travel to farms

                                                             v.      Roads – was the end of mud roads

                                                           vi.      Tourism – increased

b.      Changes

                                                               i.      Cars were at first a luxury, but became a necessity and something needed for self-respect

                                                             ii.      Leisure hours could now be spent more pleasurably – you could go on vacation

                                                            iii.      Women weren’t as dependant on men

                                                           iv.      Isolation among the sections was broken down; rural areas became less isolated

                                                             v.      Less attractive State lost population at a rapid rate

                                                           vi.      Buses made possible the consolidation of schools and churches

                                                          vii.      The suburbs spread out farther from the city and Americans became commuters

                                                        viii.      By 1951, the 1 millionth American had died in a car accident – more than all those killed on all the battlefields of all the nation’s wars to that date

                                                           ix.      Moral of youth went down (according to some) because they could use the car to make out in

                                                             x.      Crime wave of the 1920s and 1930s were aided by the car which could be used for a quick getaway

                                                           xi.      Car contributed to improved air and environmental quality (horses pooped a lot)

                                                          xii.      Cars were convenient and exciting

X.                 Airplanes

a.       Orville and Wilbur Wright and the Development of Airplanes

                                                               i.      December 17, 1903 – the Wright brothers flew a plane 120 feet in 12 seconds in Kitty Hawk, NC

                                                             ii.      Fliers first appeared as stunt fliers at fairs

                                                            iii.      Airplanes were first used with some success in WWI

                                                           iv.      Shortly afterwards, private companies began to operate passenger lines with airmail contracts

b.      Charles A. Lindbergh

                                                               i.      Was the first person to fly a solo flight across the Atlantic for a prize of $25,000.  His plane, called the Spirit of St. Louis, went from New York to Paris in 33 hours, 39 minutes

                                                             ii.      Lindbergh became an instant celebrity and hero

                                                            iii.      His flight did much to dramatize and popularize flying, while giving a strong boost to the infant aviation industry

                                                           iv.      He eventually voice anti-Semitic sentiments, was a Nazi sympathizer, and opposed American entry into WWII, though he flew several combat missions in the war against Japan

c.       Results of Airplanes

                                                               i.      Was a new industry

                                                             ii.      Accidents were high; 1930s and 1940s – air travel was safer than that of the road

                                                            iii.      The railroad was set back again through the loss of passengers and mail

                                                           iv.      Planes could be another weapon in war and use bombs

                                                             v.      There was less isolation

                                                           vi.      Communication and transportation were becoming quicker

XI.              Radios

a.       Development of the Radio

                                                               i.      Guglielmo Marconi, an Italian, invented the wireless telegraph in the 1890s.  He wanted to be able to have long-range communication during WWI

                                                             ii.      1906 – First voice was broadcast

                                                            iii.      1910 – First musical broadcast

                                                           iv.      1920 – the first radio station was KDKA in Pittsburgh

                                                             v.      The earliest radio programs reached only local audiences, but by the late 1920s, technological improvements made long-distance broadcasting possible

b.      Results of the Radio

                                                               i.      National networks replaced local programming

                                                             ii.      Advertising became prominent (radios were owned by the government in Europe)

                                                            iii.      Family and neighbors gathered around the household’s only radio.  It knitted the nation together

                                                           iv.      Sports were being stimulated through broadcasts

                                                             v.      Politicians had to speak on the radio

                                                           vi.      Music increased in popularity

                                                          vii.      People were participants in world altering events

                                                        viii.      Broke down regionalism and provided news and entertainment to a wide audience

XII.            Hollywood Films

a.       Development of the Movie

                                                               i.      Invention of Thomas Edison and others

                                                             ii.      1890s – took the form of peep-show penny arcades

                                                            iii.      1903 – The Great Train Robbery – first short movie – featured in 5 cent theaters called nickelodeons

                                                           iv.      1915 – Birth of a Nation – first full-length movie – glorified the KKK of Reconstruction days and defamed both blacks and carpetbaggers

                                                             v.      1927 – The Jazz Singer – first talking movie – starred Al Jolson in blackface – was about a poor, assimilating Jewish immigrant torn between following his father’s wish that he train as an Orthodox cantor (person who conducts communion/liturgy and sings or chants the prayers intended to be a part of the church service) and his own ambition to make a success for himself as a jazz singer

                                                           vi.      Movies stars commanded as much as $100,000 for a single picture and were more widely known than politicians

b.      Hollywood

                                                               i.      CA quickly became the movie capital of the world because of all the sunshine

                                                             ii.      Early producers featured nudity and female vampires.  As a result, an outraged public forced a code of censorship

                                                            iii.      The motion picture really picked up during WWI, when it was used as an engine of anti-German propaganda – they boosted morale and the selling of war bonds

c.       Results of Movies

                                                               i.      The limitation of views by isolated communities eroded as children saw movies

                                                             ii.      The diversity of the immigrants’ Old Country cultures was lost

                                                            iii.      The standardization of tastes and language through movies for the first time brought together the working-class into a political coalition that could overcome the divisive ethnic differences of the past

XIII.         The Dynamic Decade

a.       Great Migration

                                                               i.      1920 census – for the first time most American lived in the city

                                                             ii.      The Great Migration – The movement of African-American from the South to the industrial centers of the Northeast and Midwest

                                                            iii.      Causes for the migration included:

1.      Decreased cotton prices

2.      Lack of immigrant workers in the North

3.      Increased manufacturing as a result of the war

4.      Growth of the KKK

                                                           iv.      The African-American population in such cities as Detroit, Chicago, and New York grew during this period

                                                             v.      The migration led to higher wages, more educational opportunities, and better standards of life for many African Americans

b.      Women In the 1920s

                                                               i.      Women worked in low-paying jobs as clerks or office typing in the cities

                                                             ii.      Margaret Sanger – led the birth-control movement

                                                            iii.      Alice Paul – her National Women’s party began to campaign for an Equal Rights Amendment to the Constitution

c.       Churches In the 1920s

                                                               i.      Fundamentalists lost ground to the Modernists who thought God was a “good guy”

                                                             ii.      Produced wholesome movies for young people

d.      Sexual Change In the 1920s

                                                               i.      Advertisers exploited sexual allure to sell everything

                                                             ii.      Flappers – young women appeared in bobbed (heightened) dresses, hemlines elevated, stockings rolled, cheeks rouged, and lips red, and smoking a cigarette

                                                            iii.      One piece bathing suits

                                                           iv.      Why Was There a New Sexual Frankness?

1.      Dr. Sigmund Freud – Austrian physician who argued that sexual repression was responsible for a variety of nervous and emotional ills

2.      Not pleasure alone, but health demanded sexual gratification and liberation

                                                             v.      Sex among youngsters became more common

XIV.         Cultural Liberation

a.       New Generation of Writers

                                                               i.      Many were from ethnic and regional backgrounds different from former writers (most of whom were Protestant New Englanders)

                                                             ii.      Many were affected in some way by the war and had some pent up resentment; they reflected the spirit of the 1920s in that they rebelled against social norms

                                                            iii.      H.L. Mencken

1.      From Baltimore

2.      Wrote a monthly called American Mercury in which he assailed marriage, patriotism, democracy, prohibition, Rotarians (business professionals), and middle-class people

3.      Also criticized the South for not having fine arts and attacked do-gooders as Puritans

                                                           iv.      F. Scott Fitzgerald

1.      Side of Paradise (1920) – read by aspiring flappers and their wooers, which talked about partying and having a good time

2.      The Great Gatsby (1925) – was a commentary on the illusions of the ideal American self-made man.  Jay Gatsby made himself into a tycoon, but was destroyed by the power of those with established wealth and social standing

                                                             v.      Ernest Hemingway

1.      Fought in WWI

2.      The Sun Also Rises (1926) – responded to the overblown appeal of patriotism by telling about American expatriates (people who have been banned from their own land) in Europe

3.      A Farewell to Arms (1929) – novel about the harsh war experience

                                                           vi.      Sinclair Lewis

1.      Main Street (1920) – about a woman’s unsuccessful war against provincialism (lack of sophistication)

2.      Babbitt (1922) – about a middle-class real estate broker who resorts to materialism

                                                          vii.      T.S. Eliot

1.      “The Waste Land” (1922) – one of the most influential poems of the century

                                                        viii.      Eugene O’Neill

1.      Wrote plays

2.      Strange Interlude (1928) – plays reflected the loose sexual attitude of the times

b.      Architecture

                                                               i.      Went along with the age of materialism and functionalism (something designed for a specific use)

                                                             ii.      Long-range city planning was intelligently projected

                                                            iii.      Architecture should grow from their sites and not imitate Greek and Roman importations

                                                           iv.      Empire State Building, a 102 story skyscraper, was created in NYC in 1931

XV.           Harlem Renaissance

a.       What Was It?

                                                               i.      Term used to describe the growth of African-American literature and arts

                                                             ii.      The center of this movement was Harlem, New York, where many blacks moved in the early 1900s

                                                            iii.      By 1920, Harlem in NYC had 100,000 blacks and was one of the largest black communities in the world

b.      Jazz Music

                                                               i.      Started in New Orleans

                                                             ii.      Blacks gave birth to jazz, such as “Jelly Roll” Morton, Duke Ellington, Bessie Smith, and Louis Armstrong

                                                            iii.      Most whites couldn’t capture the creative spirit of jazz like blacks could

c.       Writers

                                                               i.      Langston Hughes – came from Harlem – wrote a volume of poems in 1926 called The Weary Blues

                                                             ii.      Writers from the period included Langston Hughes, Zora Neale Hurston, and Claude McKay

d.      Marcus Garvey

                                                               i.      Came from Harlem (was a native of Jamaica)

                                                             ii.      Founded the United Negro Improvement Association (UNIA) to promote the resettlement of American blacks in their own “African homeland.”  In other words, he wanted separatism rather than integration.  He even sold stock in a steamship line to take migrants to Africa

                                                            iii.      They also sponsored black stores and businesses to keep blacks’ dollars in black pockets

                                                           iv.      Most of his businesses failed (including his steamship line) and was deported (the government was afraid of him)

                                                             v.      His importance is that he inspired self-confidence and self-reliance among his 4 million followers in the UNIA

XVI.         Wall Street’s Big Bull Market

a.       Speculation

                                                               i.      Several hundreds banks failed annually, even in the best years of the 1920s

                                                             ii.      Real Estate –

1.      With the growth of FL, people were purchasing underwater lots for large sums of money

2.      This ended when it was advertised that “soothing tropical winds” turned out to be a hurricane

                                                            iii.      Stock Exchange –

1.      Was another source of speculation

2.      People invested everything and went boom or bust

b.      Buying Stocks On Margin

                                                               i.      Some bought stocks with a small down payment (“on margin”); the rest would be paid off later

                                                             ii.      People would cash in on tips learned throughout the day

c.       Debt

                                                               i.      Little was done about the national debt

                                                             ii.      1914 - $1.188 billion

                                                            iii.      1921 - $23.976 billion

                                                           iv.      Any surplus funds began to be used to lessen the debt

                                                             v.      Bureau of the Budget – created in 1921 to assist the president in preparing estimates of receipts and expenditures for submission to Congress as the annual budget (this was intended to prevent excessive spending)

d.      Taxes

                                                               i.      Secretary of Treasury Mellon didn’t like high taxes because he thought that:

1.      It discouraged the expansion of business

2.      The rich would rather invest in tax-free securities, rather than taxable industries

                                                             ii.      Mellon reduced the taxes for the rich

1.      1921 - $1 million income - $663,000 income tax

2.      1926 - $1 million income - $200,000 income tax

                                                            iii.      His tax policies shifted the burden from the rich to the middle-class

e.       Results of Mellon’s Tax Policies

                                                               i.      Reduced the national debt by $10 billion

                                                             ii.      Critics believed that the debt should have been even less since the country was in such a good economic period

                                                            iii.      Accused of indirectly encouraging the bull market (if he would’ve increased income taxes, there would’ve been less money to spend on speculation)