WORLD WAR I, 1920s PROSPERITY,
THE GREAT DEPRESSION

American infantry forces in 1918, firing a 37 mm. gun, advance against German positions in World War I. (The National Archives)

War in Europe in 1914 — with Germany and Austria-Hungary fighting Britain, France, Italy, and Russia — affected U.S. interests almost from the start. The British and the German navies both interfered with American shipping, but German submarine attacks were deadly. Almost 130 Americans died when a submarine sank the British ocean liner Lusitania in 1915. President Woodrow Wilson demanded an end to the attacks, and they stopped for a while, but by 1917 they had resumed. The United States declared war.

The efforts of more than 1,750,000 U.S. troops played a decisive role in the defeat of the German and Austro-Hungarian alliance. An armistice, technically a truce but actually a surrender, was concluded on November 11, 1918.

President Wilson negotiated an end to the conflict based on his 14-point plan for achieving lasting peace. It included an end to secret international agreements, free trade between nations, a reduction in national armaments, self-rule for subjugated European nationalities, and formation of an association — a League of Nations — to help guarantee political independence and territorial integrity for large and small countries alike.

The final peace treaty, however, contained virtually none of these points, as the victors insisted on harsh punishment. Wilson's idea of a League of Nations remained in the Treaty of Versailles, but even he was unable to gain enough support for the concept, and the United States rejected it. America reverted to its instinctive isolationism.

Flappers posing for the camera at a 1920s-era party. (Hulton Archive/Getty Images)

The immediate postwar period was one of labor unrest and racial tensions. Farmers were struggling because of the abrupt end of wartime demand. Bolshevik violence fueled a "Red Scare" that led to decades of militant hostility toward the revolutionary Communist movement. Despite these problems, for a few years in the 1920s the United States enjoyed a period of real and broadly distributed prosperity. Families purchased their first automobile, radio, and refrigerator, and they began going to the movies regularly. And suffragists, after decades of political activism, succeeded in getting approval of a constitutional amendment in 1920 that gave women the right to vote.

The good times did not last. The value of many stocks, which had become artificially inflated, fell dramatically in October 1929. Over the next three years, the business recession in America became part of a worldwide economic depression. Businesses and factories shut down, banks failed, farm income dropped. By November 1932, 20 percent of Americans were unemployed.

The presidential campaign that year was chiefly a debate over the causes of the Great Depression and ways to reverse it. Incumbent Herbert Hoover had started the process of rebuilding the economy, but his efforts had little impact, and he lost the election to Franklin Roosevelt. Roosevelt was infectiously optimistic and was ready to use federal authority to achieve bold remedies. Under his leadership, the United States would enter another era of economic and political change.