The Twenties - Southwest Career and Technical Academy

71193_23_ch23_p0800-0843 4/12/10 4:21 PM Page 827THE TWENTIES, 1920–1929 CHAPTER 23 827Peace Party and the Quaker-based Fellowship of Reconciliation, hailed the pact forformally outlawing war. But critics charged that the Kellogg-Briand Pact was essentiallymeaningless, since it lacked powers of enforcement and relied solely on themoral force of world opinion. Within weeks of its ratification, the U.S. Congress hadappropriated $250 million for new battleships.Commerce and Foreign PolicyThroughout the 1920s, Secretary of State Charles Evans Hughes and other Republicanleaders pursued policies designed to expand American economic activity abroad.They understood that capitalist economies must be dynamic; they must expand theirmarkets if they were to thrive. The focus must be on friendly nations, and investmentsthat would help foreign citizens to buy American goods. Toward this end,Republican leaders urged close cooperation between bankers and the governmentas a strategy for expanding American investment and economic influence abroad.They insisted that investment capital not be spent on U.S. enemies, such as the newSoviet Union, or on nonproductive enterprises such as munitions and weapons.Throughout the 1920s, investment bankers routinely submitted loan projects toHughes and Secretary of Commerce Hoover for informal approval, thus reinforcingthe close ties between business investment and foreign policy.American oil, autos, farm machinery, and electrical equipment supplied a growingworld market. Much of this expansion took place through the establishment ofbranch plants overseas by American companies. America’s overall direct investmentabroad increased from $3.8 billion in 1919 to $7.5 billion in 1929. Leading theAmerican domination of the world market were General Electric, Ford, and MonsantoChemical. American oil companies, with the support of the State Department, alsochallenged Great Britain’s dominance in the oil fields of the Middle East and LatinAmerica, forming powerful cartels with English firms.The strategy of maximum freedom for private enterprise, backed by limitedgovernment advice and assistance, significantly boosted the power and profits ofAmerican overseas investors. But in Central and Latin America, in particular, aggressiveU.S. investment also fostered chronically underdeveloped economies, dependenton a few staple crops (sugar, coffee, cocoa, bananas) grown for export. Americaninvestments in Latin America more than doubled between 1924 and 1929, from$1.5 billion to over $3.5 billion. A large part of this money went to taking over vitalmineral resources, such as Chile’s copper and Venezuela’s oil. The growing wealthand power of U.S. companies made it more difficult for these nations to grow theirown food or diversify their economies. U.S. economic dominance in the hemispherealso hampered the growth of democratic politics by favoring autocratic, militaryregimes that could be counted on to protect U.S. investments.Promises PostponedThe prosperity of the 1920s was unevenly distributed and enjoyed acrossAmerica. Older, progressive reform movements that had pointed outinequities, faltered in the conservative political climate. But the Republicannew era did inspire a range of critics deeply troubled by unfulfilled promises inAmerican life. Feminists sought to redefine their movement in the wake of the suffragevictory. Mexican immigration to the United States shot up, and in the burgeoningMexican American communities of the Southwest and Midwest, economicand social conditions were very difficult. African Americans, bitterly disappointedby their treatment during and after the Great War, turned to new political andEdward Earle Purinton, Big Ideasfrom Big Business (1921)Class Discussion Question 23.1WHICH AMERICANS gained themost, and which were largely left out duringthe postwar prosperity, and why?