Topics in the News
While the aviation and auto industries caught the public fancy, the railroads continued through the 1920s to provide the major share of intercity transportation, both passenger and freight. At the turn of the century the railroads transported the overwhelming share of intercity goods and passengers (about 70 percent of freight and an even larger percentage of passengers); by the end of the 1920s the railroad share of both passenger and freight movement had begun to decline slowly, but early in the decade this trend was not evident. Although revenue from passenger service fell from $1.2 million to $876,000, freight revenue rose slightly from $4.4 billion to $4.8 billion. Railroads were still regarded as the backbone of the national transportation system.
Assumptions of the Railroads.
For the most part, railroad management in 1920 saw no reason to think that the industry might be headed for trouble. As the decade began, the railroads were still in federal hands, but management anticipated their quick return to private ownership. For a generation rail companies had enjoyed an almost total monopoly on intercity transportation, a monopoly that since 1887 had been reinforced by both federal and state regulation. Thus, spurred on by optimism, management investment in rail facilities and equipment rose by about $6 million in...
(The entire section is 2064 words.)
Construction and Building
The 1920s set records for building and construction that would not be equaled until the 1950s. Total construction in 1925 reached more than $6 billion, having risen from slightly more than $919 million in 1916. Commercial buildings were a favorite vehicle for investment, combining a hoped-for profit with civic pride, commercial competitive spirit, and "boosterism." For example, dozens of large, up-to-date urban hotels opened their doors late in the era; they were the best in town, and many remained the best until the 1950s when they were replaced.
Urban and Suburban Boom.
The great building boom of the decade was concentrated in the urban and suburban areas. By 1925 the downtown of most medium-sized and large cities was a thicket of scaffolding as office buildings, hotels, and apartment buildings vied with each other to reach the greatest heights, both financially and literally. In the suburbs construction spread in every direction as developers competed with each other to open the new "Castle Heights," "River View," or other fancifully named tract. Suburban residential construction was fueled by the increasing use of the automobile, which freed the commuter from the interurban railroads that had sprung up, and by the increasing availability of mortgage financing through the building or, later, savings-and-loan...
(The entire section is 761 words.)
Farms and Farmers
Farmers, in general, did not share in the prosperity of the 1920s. As the decade began, the agricultural sector was faced with problems,
(The entire section is 839 words.)
Finance and Banking
Expansion of Commercial Banks,
Commercial banks greatly expanded during the 1920s. Led by such firms as the Bank of America and Chase Manhattan, commercial banks merged and consolidated and entered new fields, vastly increasing their construction and consumer loans. These banks also became deeply involved in the securities business and, to their future regret, put huge sums into brokers' loans and call money-market loans (short-term loans subject to recall at any time), many of which failed.
Expansion of Investment Banks.
Perhaps the most startling expansion took place in the investment-banking field. The number of investment banks (that is, banks that did little or no commercial business, such as handling checking accounts, but instead lent funds to new entrepreneurs) rose from 277 in 1912 to 1,902 by 1929. These banks fueled the enormous increase, which took place during the great boom, in corporate offerings and in businesses.
Led by the Californian A. P. Giannini, who built his Bank of America (formerly the Bank of Italy) into a California chain that blanketed the state and who later founded the Trans-America Corporation, other banks began to merge rapidly throughout the nation. Banking, which had historically been a relatively local business, now increasingly...
(The entire section is 267 words.)
Government and Business
In contrast to both the preceding and the succeeding decades, the 1920s were a period of little growth in federal or state regulation; instead, laissez-faire was the rule of the day. Except in regard to railroads, public utilities, radio broadcasting, and air carriers, regulation was at a low ebb. Warren G. Harding, in his desire to return to "normalcy," had little interest in regulation, and Coolidge felt much the same way. Although the antitrust laws were still in place, the so-called "rule of reason" had rendered them of little use. There were no minimum-wage requirements on the federal level, no unemployment compensation, no National Labor Relations Act, no Environmental Protection Act, no Occupational Safety and Health Administration, no consumer protection laws, no Fair Employment Act, no Social Security Act, no Employment Act, and no federal programs for employment training. Taxes were generally low. Some historians have argued that the rapid shift to laissez-faire following the more interventionist mode of the Wilson era was not a reaction to the Wilson reforms but to the controls that had been put in place in wartime. In fact, much of the Wilson program was a casualty of the war. Whatever the reasons, the Harding-Coolidge years were certainly favorable to business and unfriendly, for the most part, toward regulation.
Views of Government...
(The entire section is 863 words.)
Industry: The Aircraft
Only seventeen years elapsed between the Wright brothers' experiments in 1903 and the arrival of the 1920s, yet the airline industry was second only to auto manufacturing in public interest. The industry consisted of a motley collection of poorly financed and, for the most part, poorly managed companies, each firm turning out a few aircraft per month. The entrepreneurs were an eclectic group: Air Corps veterans, barnstormers, a few speculators, a handful of businessmen who simply had some extra money to invest, and the relatively small number of businessmen who had somehow acquired an interest in the flying machine as well as investment funds. Many of the early figures were like the Wrights—small-town mechanics, men experienced in building bicycles—or they were pioneers in the auto industry and others who had no idea of the science of aeronautics.
The Military and the Aircraft Industry.
The end of the war had essentially closed down government demand for aircraft. The army and navy were anxious to proceed with development of their airplanes, but appropriations were minuscule, with contracts let for only about a half dozen planes, mainly for experimental purposes. When, during the so-called "air-mail scandals" in the early 1930s, the army briefly took over mail service from civilian contractors, it could muster only a...
(The entire section is 1212 words.)
Industry: The Automobile
In 1908, when Henry Ford was forty-five years old and the president of the Ford Motor Company, he had an idea that must have made both his associates and competitors think he had taken leave of his senses. The Ford organization, following conventional wisdom, had been manufacturing the Ford Model N, a large, popular car. Auto producers generally believed that the car demanded by the public would be large and expensive, since by definition the auto attracted only those in the upper-income groups and would never be produced for the average man who could not afford it. But now Henry Ford wanted to manufacture a small car to sell to a mass market at a low price—less than $1,000—an invitation to bankruptcy, the industry thought. Before the Model T went out of production, nearly twenty years later, the lowest-priced model was sold for $260. While his associates had predicted disaster, by 1920 Ford was the most famous figure in the industry, and his Model T the best-known car in the world, seventeen million having been sold.
The industry was in great flux during the decade. Dozens of small firms merged with others or ultimately left the automobile field completely; from 1900 to 1930 some two thousand or more auto manufacturers were in business for at least some period of time. Such well-known smaller companies as...
(The entire section is 2079 words.)
Industry: Radio and Broadcasting
The development of radio and radio broadcasting caught the public fancy. During the Titanic disaster in 1912, the radios on the sinking ship and the various rescue boats played such a significant role in communicating events that David Sarnoff, a young New York telegraph operator handling the incoming signals, as well as other listeners, had visions of commercial radio being used for information and entertainment. In 1920 KDKA in Pittsburgh became the first radio station to enter commercial broadcasting; Sarnoff would, in the 1920s, give form to the Radio Corporation of America, which would become a star performer on the New York Stock Exchange.
Like the auto and the airplane, early radio was a crude affair, expensive and thought to be a toy of the rich; yet one of the attractions of the radio-broadcasting industry was that it could, in fact, be entered with a relatively small amount of money. A radio station complete with transmitter and a small building could be provided for a modest sum—perhaps $20,000—an amount roughly equal to the cost of a small retail store. The greatest expense in broadcasting was for the technical expertise required to operate and maintain the equipment. It was clearly an advantage to operate as powerful a station as possible to increase the area covered by the signal....
(The entire section is 643 words.)
Labor: Workers and Unions
Skilled and Unskilled Workers.
The prosperity of the decade was generally shared by industrial workers in the form of relatively high wages and full employment; prosperity was not, however, universal, and certainly times were not good for unions. In part, unions did not thrive because they had for years concentrated their organizational efforts on workers who were members of skilled crafts—printers, carpenters, machinists, and the like; the group had, in fact, been the focus of the American Federation of Labor, which dated from the 1870s. As a consequence the unionized workers were concentrated in two major areas of the labor force, the railroads (through the railroad brotherhoods) and the skilled trades. The rising mass-production industries were not friendly to unions; their workers were largely unskilled (working on assembly lines was not a highly skilled trade), and many of these workers were recent arrivals from the rural South or immigrants from Europe.
Although the union movement would shake the mass-production industries during the 1930s, its growth would require a considerable shift in public opinion, which tended to be unsympathetic if not hostile toward unions in the 1920s. Many rural and small-town Americans considered unions a "foreign" influence; most envisioned union leaders as radical, bearded, bomb-throwing...
(The entire section is 935 words.)
The Modern Corporation
The years 1920-1930 were years of great growth and development for corporations, The corporation was, of course, not new; it had been used since the Middle Ages in Europe and since colonial days in America. But Americans had always distrusted the corporation, regarding it as a prelude to monopoly. The Sherman Anti-Trust Act of 1890 was an expression of their doubts, but aside from the Standard Oil case in 1911 and perhaps the Northern Securities case in 1904, the act had little impact after the end of the Theodore Roosevelt "trust busting" era, at least until the days of the New Deal. The formation of U.S. Steel by J. P. Morgan in 1901 had raised controversy, but by the time the case reached the courts in 1920 the judiciary had adopted the "rule of reason," holding that the matter of size or market share per se was not the sole factor in measuring monopoly power. Many large corporations were not by this reasoning "predatory." Although by the 1930s this doctrine had been abandoned, it in effect made the formation of large-scale business during the 1920s much easier from a standpoint of public policy.
Purposes of the Corporation.
Clearly steel, auto manufacturing, and other large-scale industries could not be effective if they were organized on the principles of the corner grocery store. During the 1920s the modern corporation...
(The entire section is 543 words.)
Retail Trade and Marketing
The decade brought great changes in the product distribution system. Wholesaling generally declined in importance, and retailing increased. Chain stores came onto the scene, and department stores consolidated and assumed new importance. Many of these changes resulted from advancements in transportation and the growth of the suburbs. Increasing use of the automobile enabled consumers to shop beyond the confines of the immediate neighborhood, and this development had a negative impact on the corner store. Rising disposable incomes to many workers, increasing home ownership, and ascending levels of education created a wider and deeper consumer market.
Growth of Chain Stores.
The chain-store movement grew rapidly as the 1920s passed. In 1912 only a handful of firms had multiple outlets in more than one state, but by 1927 there were some 1,500 such firms operating nearly 70,000 outlets. The A & P, Kroger, and other food chains opened dozens of stores each week. Hotels (Statler), drugstores (Walgreen), candy stores (Fanny Farmer), and restaurants (Child's) became familiar landmarks in every part of the country. By 1927 W. T. Grant operated 109 outlets, Kresge 425, J. C. Penney (which served many small towns) more than 1,000 stores, and F. W. Woolworth more than 1,500. The growth in the number of chain stores was in part...
(The entire section is 1054 words.)
Speculation in Land: The Florida Boom and Crash
Florida before the 1920s was a relatively undeveloped state. It was almost devoid of industry, except for agriculture and tourism, and it had an extremely shaky financial system. Economic development was largely in the hands of outsiders, speculators such as Standard Oil's Henry M. Flagler, who was a promoter of the Florida East Coast Railroad and builder of luxury hotels and resorts in the state.
In the early 1920s Florida became increasingly attractive to Americans from other parts of the country. With its warm winters, exotic landscapes and seascapes, inexpensive real estate, and low cost of living, it seemed to be a paradise. Thus began a land rush south-ward from the cold, overpopulated northeastern states, propelled by newly adopted methods of promotion and publicity coming into use during the decade. Newspapers, radio commercials, elaborate brochures, and even William Jennings Bryan, who had been hired to promote Coral Gables, promised health, happiness, and prosperity with the purchase of a place in the Florida sun.
As middecade approached, development flourished, not only in luxury hotels but also in residential and commercial properties, many of them in the Miami area. Much of this development rested on a weak financial foundation with little...
(The entire section is 451 words.)
The Stock Market: Boom
Suspicion of Wall Street.
Before World War I only a small fraction of Americans had had anything to do with Wall Street and the securities markets. As the 1920s began, most Americans, especially those in the South and West, thought of Wall Street with fear and loathing. Populist politicians denounced the place as the center of financial shell games thought up by the likes of Vanderbilt, Gould, Drew, Morgan, and other millionaire operators. Middle-class citizens read in the newspapers about epic struggles among the superwealthy; but these common citizens were not part of the world of high finance, and most thought they never would be.
New Interest in Wall Street.
With the conclusion of the war in 1918, however, many of them began to think again. Having been buyers of Liberty Bonds, they began to lose their fear of investing. Stockbrokers began to open offices not on Wall Street or LaSalle Street but on Main Street. Americans began to understand the advantages of investment and to become knowledgeable (or so they thought) about dividends, margin accounts, puts and calls, stock splits, and other esoteric stock-market concepts. Big corporations like U.S. Steel, General Electric, and General Motors offered common stock and bonds to a growing market; airlines, aircraft manufacturers, electric companies, radio corporations, steel- or...
(The entire section is 1409 words.)
The Stock Market: Crash
Although the signs had been clear for months, the crash clearly took many by surprise, perhaps because of the conflicting information to which they had been exposed or perhaps because of their own wishful thinking. The beginning of the end came quietly. In October freight-car loadings and housing starts, key economic indicators of the time, began to decline. As many later noted, the crash did not occur because investors suddenly decided it was time to leave but because they were pushed out. On the stock exchange, business seemed to be relatively normal; shares traded were in the four- to five-million range. But in September brokers' loans increased to $670 million—a good sign because it indicated there was still substantial interest in the market and a bad sign because it increased the outstanding balance of these volatile loans.
On 23 October two ominous events occurred: sales totaled six million shares, an enormous amount, and investors throughout the country began to discover how little they knew of what was afoot. The ticker fell more than an hour behind events, and by the end of the day investors had to wait an hour and forty minutes to know how much they had made or lost. Un-fortunately, if they had lost, the delay often made it impossible to do anything about it, a plight especially alarming to those...
(The entire section is 2113 words.)
The Stock Market: Effects of the Crash
The weeks following the crash were surprisingly quiet. After the tumult died down, brokers directed their efforts to cleaning up the debris and bringing records up to date. To their surprise things looked better in many ways than they had expected. Although huge blocks of stock had been thrown onto the market willy-nilly, much of this stock was perfectly sound. It had been driven upward to artificially high levels by the bull market, and now it was artificially depressed by panic selling. When John D. Rockefeller Sr. announced that he and his sons were buying good common stocks, there were shouts of derision, and comedian Eddie Cantor responded, "Sure, who else has any money?"
Bargains and Wariness.
But Rockefeller was right. Bargains were available, and although it might take weeks or months, the sound issues would rise. GM, RCA, U.S. Steel, and Pennsylvania Railroad, for example, were all still in business and their plants intact. Knowledgeable traders who had cash—Joseph P. Kennedy and Bernard Baruch, for example—were back in the market shopping carefully and picking up bargains. Yet they were in the minority. Many small speculators were not in any position to buy much at this point. Many were demoralized and for the rest of their lives refrained from any speculative activity or even credit transactions, such as...
(The entire section is 1272 words.)
Babson, Roger W. 1875-1967
Roger W. Babson, a market speculator, gained fame as one of the few—including Joseph P. Kennedy—who forecast the market crash in 1929. He is often regarded as the "father" of the long line of market prognosticators, newsletter publishers, and other purveyors of financial information who have flourished over the years.
In many ways Babson was symbolic of the extravagant era. He had been around Wall Street for years, but his background was never clear. He claimed to be an educator, philosopher, theologian, statistician, economist, and forecaster; he was clearly something of a con man. His forecasting methods, which involved charts, graphs, intersecting lines, and other hocus-pocus, were mysterious.
Earlier in the decade Babson had predicted that if New York governor Alfred E. Smith were elected president in 1928, there would almost certainly be a serious depression, and on 5 September 1929 he noted that "sooner or later a crash is coming, and it may be terrific." When the crash did occur, Babson overnight became a prophet in his own land. Although earlier he had been largely ignored, he now gained a substantial following, and his Babson Institute and School of Management, his lectures, and his...
(The entire section is 217 words.)
Chrysler, Walter P. 1881-1948
AUTOMOTIVE TROUBLESHOOTER AND CONSOLIDATOR
Even had Walter P. Chrysler not founded the corporation bearing his name, he would have been an important figure in heavy industry of the 1920s. Like Henry Ford, he rose rapidly from the ranks of labor; a machinist by trade, he worked in railroad shops for several years and eventually became general manager of the American Locomotive Company.
Drawn to the auto industry, he became something of a corporate "troubleshooter." In 1912 he took a position as works manager of Buick, a unit of General Motors, where he was named Buick president and General Motors vice president. After a brief retirement at the age of forty-five, he was asked to take over the troubled Willys-Overland Company but then moved on to the Maxwell Motor Company, which he renamed the Chrysler Corporation. By 1925 he had produced the first car bearing his own name.
The Chrysler was an almost instant success; a mid- to upper-scale car, it sold for $1,595, the...
(The entire section is 295 words.)
Douglas, Donald W. 1892-1981
PIONEER AIRCRAFT DEVELOPER
A student at the U.S. Naval Academy in the early years of the century, Donald W. Douglas was inspired, by a demonstration of airplanes built by the Wright brothers, to transfer to MIT, where he studied aeronautical engineering and served as an instructor in the department. After graduation he joined the Glenn L. Martin Company in California, where he helped in the design and construction of a heavy bomber.
Douglas used his professional training and his skill at raising money to move rapidly into and upward in the aircraft industry. In 1920 he set up an office in a Los Angeles barbershop, and, with $40,000 in backing from sportsman David Davis, developed the Cloudster, a plane designed to fly across the country. The aircraft never actually achieved its goal, but it was the first plane in history able to carry a load that exceeded its own weight.
Bolstered by some navy contracts, Douglas incorporated his Douglas Aircraft Company in 1928. A few years later he made history with the DC-3, which was designed for the commercial airlines and represented a breakthrough in aircraft design. It was an airline workhorse for a decade or more and in its military version, the C-54, was a staple of the...
(The entire section is 261 words.)
Du Pont, Pierre S. 1870-1954
Scion of the great chemical, gunpowder, and banking family, Pierre S. du Pont was one of the most successful business men and financiers of the 1920s. Active in the management of the Du Pont Company, he and the company had wide interests in other firms and finally took control of General Motors when William C. Durant was ousted in 1920.
After World War I, the Du Pont Company, which had considerable cash on hand, began looking for what today would be called venturecapital possibilities, and GM looked attractive. The automobile industry was booming, and GM was the largest producer in the industry. Working through Pierre du Pont, the du Ponts became large holders in GM even before Durant's departure.
Investment and Control.
Since GM had always been a major customer of the Du Pont Company, buying vast quantities of paint, finishes, man-made fabrics, and other such products, the automobile manufacturer seemed a wise investment possibility. Gradually, Pierre S. du Pont became a real force at GM and, when Durant's financial dealings appeared to become increasingly erratic, du Pont was a strong instrument in forcing out GM's founder and two-time president.
(The entire section is 230 words.)
Durant, William C. 1864-1947
The flamboyant William Crapo Durant became a symbol of the Roaring Twenties. Rising to great wealth and fame, he died in poverty and near obscurity as the result of his stock-market speculations. In 1908 he founded the General Motors Corporation, which became in the 1920s the largest corporation in the world. He was ousted as president of the company in 1910, regained control of it in 1916, and suffered a second ouster from GM in 1920.
While Henry Ford and Walter P. Chrysler were production men, Durant was the epitome of the salesman and promoter, essentially a marketing specialist. But he also had a great eye for design and quality, putting together a line of cars that, under the GM banner, included Chevrolet, Pontiac, Oldsmobile, Buick, La Salle, and Cadillac.
By the beginning of the decade GM was a company that attracted wide interest from investors and even more attention from a vast chain of suppliers. Durant was impatient and sometimes erratic in...
(The entire section is 317 words.)
Ford, Henry 1863-1947
Henry Ford, a self-taught mechanical genius, was undoubtedly the most famous automaker and perhaps the most famous man of the era. Ford vastly improved the techniques of mass assembly and production and revolutionized the auto industry by producing the famous Model T, or "Tin Lizzie," an inexpensive, durable car that essentially democratized automobile ownership. The Model T, which was first produced in 1908 and remained in production until 1927, had sales of more than seventeen million during its nineteen years.
Ford was a man of many contradictions: an idealist who was a pacifist during World War I and health-food faddist all his life, he was also a pragmatist and sometime cynic; an obviously bright man, he also proved doggedly anti-intellectual, dismissing books and art as wastes of time. A would be politician running for the Senate in 1918 and frequently mentioned as a presidential candidate, he did not have a politician's skills or instincts. His domain remained the auto industry.
In its early years the Ford Motor Company was considered a good place for labor. On 5 January 1914 Henry Ford introduced the five-dollar day and reduced the normal shift from nine to eight hours, innovations that...
(The entire section is 586 words.)
Giannini, A. P. 1870-1949
BANK OF AMERICA FOUNDER
A Californian of Italian descent, Amadeo Peter Giannini had in the early 1900s built his family produce business into a small bank. Looked down upon by the old-line San Francisco bankers as a newcomer, he was labeled the "Dago" banker. However, on the morning of 6 April 1906, when the great earthquake hit the city, he came into his own. His storefront Bank of Italy was destroyed almost immediately, but Giannini had secured $80,000 in his home, and with that money he opened a makeshift office tendering loans for rebuilding. The large downtown banks found their vaults covered with rubble or too hot from the fire to open, and weeks elapsed before they were back in business. Meanwhile, they were wiring New York banks for credit and cash while the Bank of Italy operated on its own resources. Giannini knew, of course, that he was on dangerous ground. His resources could not have begun to cover his demand deposits in case of a run; but that situation never developed, and the Bank of Italy (soon to be renamed the Bank of America) flourished.
Over the next two decades Giannini rapidly expanded his network of banks, both in California and, later, in the East, until by 1927 the assets of his Bank of America were valued at more than $5 million. For the rest of his life...
(The entire section is 295 words.)
Rickenbacker, Edward V. 1890-1973
One of the most famous of the Air Corps aces during World War I, Edward V. Rickenbacker also proved himself to be an effective and persistent businessman. President of Eastern Airlines for many years, he turned it into one of the most profitable and progressive airlines in the world.
When the war ended and he returned home to the United States and a hero's welcome, Rickenbacker wanted to go into aviation. In 1918 he was sent by the War Department to tour the country on behalf of war bonds, and in the course of the tour he met many businessmen. But when he brought up the subject of commercial aviation, he was assured that, for the immediate future, there was little hope of being financially successful without abundant investment capital or congressional support, neither of which were apparently forthcoming.
He consequently entered the auto industry, of which as a prewar race car driver he was knowledgeable. For about seven years he produced an automobile, the Rickenbacker, which was...
(The entire section is 377 words.)
Sloan, Alfred P., Jr. 1875-1966
Alfred P. Sloan Jr. was unlike most of the other early auto executives in that he had a university education. He had earned an engineering degree at MIT, but if he had attended the school in more recent years he would probably have majored in management science, an academic discipline that did not exist in his day. During his long career Sloan became the guru of industrial management, and he transformed GM into what was generally regarded as the best-managed corporation in the nation. Dozens of college professors and graduate students have written books, dissertations, and professional papers on the Sloan-imposed structure of the firm.
Backed strongly by the du Ponts who had come to control the organization in the early 1920s, Sloan took over the management of GM after William C. Durant's departure. His contribution was twofold. First, he installed effective cost controls over the sprawling enterprise, and, second, he structured the company so that its many parts worked together to produce maximum...
(The entire section is 327 words.)
Strong, Benjamin 1872-1928
Benjamin Strong, governor of the New York Federal Reserve Bank from 1914 through 1928, was regarded by his contemporaries as the greatest central banker America had produced since Nicholas Biddle (president of the Bank of the United States from 1823 to 1836). He was considered more influential than his superior, the chairman of the Board of Governors of the Federal Reserve System in Washington. Strong died one year before the crash occurred, but controversy raged and continues to rage about what role his policies played in bringing on the crash.
In his first years as governor, Strong had advocated an extremely conservative and limited role for the Federal Reserve banks, but during World War I he condoned their expansion of services, particularly in regard to issuing Liberty Bonds. Following the war those in New York financial circles lobbied for the increased use of war-profits funds in the securities market and in foreign trade. Though Strong had reservations about "open-market powers" for the Federal Reserve System, he saw their potential and began to employ them. He hoped that the availability of so-called "easy money" would spur business activity and increase stock-market investments. His hopes were fulfilled; but by October 1929 speculation had reached such an extreme level that...
(The entire section is 291 words.)
People in the News
Bernard Baruch, who made a fortune through stock-market speculation and who became famous during World War I as chairman of the War Industries Board, was an adviser to Presidents Harding, Coolidge, and Hoover during the 1920s.
Former newspaperman Stuart Chase, a widely quoted "economist," told the press in the fall of 1929, "We have probably three more years of prosperity ahead of us before we enter the tail-spin which has occurred in the eleventh year of the four great periods of commercial prosperity."
Charles G. Dawes, financier, banker, and vice president of the United States (1925-1929) under Calvin Coolidge, was noted for his quips about the uselessness of the office, but his most famous statement was that what the country needed was a good five-cent cigar.
In 1926 Harvey S. Firestone leased a one-million-acre rubber plantation in Liberia to provide his Firestone Tire and Rubber Company factories with raw rubber. He hoped to break the British monopoly on imported rubber.
Like many of his colleagues in academic economics, Irving Fisher of Yale made optimistic comments on the bull market only months before the October 1929 crash. However, his standing as a professional economist remained intact.
In 1922 Edsel B. Ford, president of Ford Motor Company and son...
(The entire section is 795 words.)
Francis Wayland Ayer, 75, "ad" pioneer, founder of advertising and public relations firm that later became N. W. Ayer and Son, 5 March 1923.
William James Baldwin, 79, pioneer skyscraper constructor, 7 May 1924.
Ohio C. Barber, 79, "Match King" of the Diamond Match Company, 4 February 1920.
Clarence Walker Barron, 70, pioneer in stock-market journalism, founder of Boston News Bureau (1887) and Philadelphia News Bureau (1897), publisher of the Wall Street Journal (1901-1928), founder of Barrons Business and Financial Weekly (1921), 20 October 1928.
John Jacob Bausch, 95, founder (1853), with Henry Lomb, and president of Bausch and Lomb Optical Company, 14 February 1926.
William H. Beardsley, 73, president of Florida East Coast Railway, 13 December 1925.
Alexander Graham Bell, 75, inventor of the telephone and founder, with Gardiner G. Hubbard and others, of Bell Telephone Company, 2 August 1922.
Emil Berolzheimer, 60, pencil manufacturer, 25 May 1922.
Nicholas Biddle, 44, financier and trustee of the Astor estate, member of the Biddle family of Philadelphia, influential in legal and financial affairs, 18 February 1923.
(The entire section is 1843 words.)
Arthur B. Adams, Economics of Business Cycles (New York: McGraw-Hill, 1925);
Roger W. Babson, Making Good in Business (New York: Revell, 1921);
William R. Basset, How to Solve Typical Business Problems (New York: Forbes, 1928);
Edward Bok, Dollars Only (New York: Scribners, 1926);
Glen Buck, This American Ascendancy (Chicago: Kroch, 1927);
Earnest Elmo Calkins, Business the Civilizer (Boston: Little, Brown, 1928);
John R. Commons, Labor and Administration (New York: Macmillan, 1923);
Earl Willis Crecrait, Government and Business: A Study in the Economic Aspects of Government and the Public Aspects of Business (Yonkers-on-Hudson, N.Y. & Chicago: World, 1928);
Charles Norton Fay, Business in Politics: Suggestions for Leaders in American Business (Cambridge, Mass.: Cosmos, 1926);
Abraham Filene with Burton Kline, A Merchant's Horizon (Boston: Houghton Mifflin, 1924);
Harvey S. Firestone with Samuel Crowther, Men and Rubber: The Story of Business (Garden City, N.Y.: Doubleday, Page, 1926);
William Byron Forbush, Be Square (New York: Scribners, 1924);
(The entire section is 623 words.)
Important Events in Business and the Economy, 1920–1929
- Agricultural economists expect U.S. food prices to fall 72 percent. European farmers resume production after World War I, leaving U.S. farmers little opportunity to export surplus to Europe.
- In January, 10 percent of U.S. women worked outside the home.
- From January to May, the Federal Reserve Board raised interest rates from 4 to 7 percent to contract the money supply and thus counteract the threat of inflation.
- On January 2, U.S. Attorney General A. Mitchell Palmer accuses the Industrial Workers of the World (IWW) of plotting to strike the railroads.
- On January 5, the Radio Corporation of America is founded with $20 million capital.
- On January 16, Prohibition begins; America goes dry.
- On February 28, Congress passes the Esch-Cummins Act, restoring railroads to private ownership and establishing the Railroad Labor Board.
- On June 2, Congress passes the Merchant Marine Act to stimulate U.S. shipping.
- On July 1, U.S. workers strike as railroads cut wages 10 to 20 percent and as the Railway Labor Board approves cuts of 12 percent.
- On September 8, U.S. transcontinental airmail service begins with a flight from New York to San Francisco.
- On November 2, radio station...
(The entire section is 2263 words.)