Lesson 2: The Coolidge Era

Lesson Focus

Explore how President Coolidge's pro-business philosophy defined an era of prosperity. This lesson examines the industrial boom, the struggles of farmers, and America's unique approach to foreign policy during the Roaring Twenties.

People to Know

Calvin Coolidge, Henry Ford

Learning Objectives

• Learn about the revolutionary industrial changes introduced by Henry Ford, such as the assembly line and their impact on the economy.
• Understand the economic problems farmers faced in the 1920s and analyze the government's response to the agricultural crisis.
• Examine the purpose and significance of the Kellogg-Briand Pact, an international agreement designed to outlaw war.

After President Harding’s death, Calvin Coolidge promoted a philosophy of laissez-faire, believing government should interfere with business as little as possible.

In the 1924 election, the Democratic party was weakened by deep divisions over Prohibition and the Ku Klux Klan.

As a result, Coolidge easily won the presidency, creating a political climate during the 1920s that strongly favored business growth and led to an era of prosperity for many Americans.

To make cars affordable for the average family, Henry Ford developed the assembly line, a process that used standardized parts and unskilled labor to mass-produce his Model T.

This revolutionary method dramatically lowered production costs and the final price of the car.

Pay special attention to the effects: the automobile transformed American life by increasing mobility, creating new businesses like gas stations, and spurring the growth of huge corporations like General Motors.

The success of mass production during the 1920s favored large corporations over small businesses.

Companies used strategies like mergers and the creation of holding companies to reduce competition and concentrate their power, while the public began buying stocks.

This led to some abuses, such as pyramiding, where businesspeople could control vast industries with little personal investment. Note that these practices were so flagrant that they were later outlawed by the government.

While many prospered in the 1920s, farmers suffered from low prices caused by overproduction and shrinking markets after World War I.

Technological advances allowed them to grow more, but this only created larger surpluses and drove prices down even further.

As a result, the average farm income was less than a third of the national average, trapping farmers in a cycle of debt and preventing them from sharing in the era's prosperity.

To address the farming crisis, a group of congressmen called the Farm Bloc championed the McNary-Haugen bill.

This bill proposed that the federal government buy surplus crops to stabilize domestic prices, protecting farmers from market collapses.

However, President Coolidge vetoed the bill twice, insisting on a free market. This decision denied farmers government support and ensured their economic struggles continued throughout the decade, unlike protected manufacturers.

During the 1920s, the U.S. sought to promote global peace without joining the League of Nations.

This led to the Kellogg-Briand Pact, an agreement signed by 64 nations to outlaw war as a tool of national policy.

However, the pact was ultimately weak. It lacked any enforcement provisions and allowed nations to claim self-defense, reflecting a desire for peace without the commitment needed to maintain it while U.S. intervention continued in Latin America.