From the Publisher

Between 1929 and 1945, two great travails were visited upon the American people: the Great Depression and World War II. This book tells the story of how Americans endured, and eventually prevailed, in the face of those unprecedented calamities.

The Depression was both a disaster and an opportunity. As David Kennedy vividly demonstrates, the economic crisis of the 1930s was far more than a simple reaction to the alleged excesses of the 1920s. For more than a century before 1929, America's unbridled industrial revolution had gyrated through repeated boom and bust cycles, wastefully consuming capital and inflicting untold misery on city and countryside alike.

Freedom From Fear explores how the nation agonized over its role in World War II, how it fought the war, why the United States won, and why the consequences of victory were sometimes sweet, sometimes ironic. In a compelling narrative, Kennedy analyzes the determinants of American strategy, the painful choices faced by commanders and statesmen, and the agonies inflicted on the millions of ordinary Americans who were compelled to swallow their fears and face battle as best they could.

Both comprehensive and colorful, this account of the most convulsive period in American history, excepting only the Civil War, reveals a period that formed the crucible in which modern America was formed.

Washington Monthly - John Kenneth Galbraith

This is an enormous book, heavy to carry and light and very agreeable to read....the book, nearly all of it, has my strong approval.

Commentary - Algis Valiunas

...Kennedy...has written an account of those times that is seemingly determined to leave out nothing at all....impressively cogent....[He] adheres to his course of intelligent disenchantment.

Minneapolis-St.Paul Star Observer - Dave Wood

The ninth volume in Oxford University Press's United States History series is likely to be a winner...It most certainly will get high marks for the impeccable scholarship and great writing skills of its author....What a book this is!

Minneapolis Star Tribune - Bob von Sternberg

David Kennedy's sweeping, magisterial retelling of America's story during the Depression and World War II, is a riveting, blisteringly good read....Beyond his analytical prowess, Kennedy's writing style brings to mind Mark Twain's one-liner: The difference between the right word and the almost right word is the difference between lighting and a lightning bug. Kennedy invariably picks the right word. It's the fastest 900 pages one can imagine reading.

Choice Magazine, October 1999 - E. M. Tobin

Kennedy's book in the most illuminating, riveting, comprehensive, and graceful one-volume history of this nation's experiences during the Great Depression, New Deal, and WW II published to date....This is a social, political, diplomatic, and military history written magisterially with broad but nuanced strokes across a 16-year span that utterly transformed the lives of Americans and the world.

KLIATT

This is the third volume of an Oxford series covering U.S. history and a Pulitzer Prize winner on its own. The book is a wonderful blend of research, writing and thinking skills, with vivid portraits of key historical players (Roosevelt, Hitler, Churchill). It is also sure-handed in its description of social, political and economic undercurrents. It has clear and sensible chapter divisions, a concise bibliographic essay, and a solidly detailed index. It's a book that can be read for enjoyment as well as research projects, an old-fashioned narrative with new-fashioned techniques. Because of its size, libraries might want this in hardcover; it will be heavily used. (The Oxford History of the United States) KLIATT Codes: SA—Recommended for senior high school students, advanced students, and adults. 1999, Oxford Univ. Press, 936p. illus. bibliog. index., $19.95. Ages 16 to adult. Reviewer: Daniel J. Levinson; History & English Teacher, Thayer Acad., Braintree , September 2001 (Vol. 35 No. 5)

Library Journal

With this history of the Depression, New Deal, and World War II, Stanford University's Kennedy becomes the latest contributor to Oxford's distinguished series on U.S. history. Kennedy has a distinguished record of his own, with two acclaimed books, Birth Control in America: The Career of Margaret Sanger (LJ 8/70) and Over Here: The First World War and American Society (LJ 10/1/80). Displaying a literary craft uncommon in survey works, he has woven together narrative, sketches of character, and critical judgment to record and analyze the economic, political, social, and military events of these epic years. Readers who feel they live in an era of tumultuous change might well consult Kennedy's book. This account of the crucial struggles and events of the Depression and war years will lend perspective like few others. For all libraries.--Robert F. Nardini, North Chichester, NH

The New York Times Book Review - Barry Gewen

...[A]n engrossing narrative of a momentous time, the best one-volume account of the Roosevelt era currently available....[N]othing can top his pages describing how a basically isolationist nation entered the war....They are the high point...

The Economist

Splendid…deserves to become the standard work of introduction to its three subjects…This is one of the most valuable forms of scholarly originality and it will make itself felt over a long time.

Kirkus Reviews

The latest volume of the Oxford History of the United States, an exhaustive survey spanning 16 years of crises, ordeals, fears, and insecurities. Kennedy (History/Stanford Univ.; Over Here: The First World War and American Society, 1980) writes of post-WWI disillusionment, the collapse of farm prices that had been driven higher by the war, and the great movement of rural people to the cities. President Hoover, the laissez-faire whipping boy of the Great Depression, emerges here as a well-intentioned workaholic who tried valiantly with many plans and experiments, despite some faulty philosophy, to bring his country out of the economic free fall that resulted from the effects of the Treaty of Versailles (huge and ruinous war reparations imposed on Germany, record tariffs that severely damaged international trade), a gold standard that restricted the money supply, and an unregulated, speculative stock market that fed on excess credit and caused widespread bank failures and massive unemployment. Kennedy describes the great fear paralyzing the country when FDR came to power. The flood of New Deal legislation attempted to use the government to build social and economic security for its citizens. It didn't end the Depression, but it did create permanent monuments in American life, including Social Security, unemployment insurance, and banking and stock market reforms. Full economic recovery followed the US entrance into WWII, from which a newly prosperous, confident America emerged, despite the loss of more than 400,000 lives. The author does well in selecting salient events and colorful, representative details to illuminate this critical period in the American Century. A majorachievement in objective historical writing that should be a legacy to generations of students seeking authoritative reference material on the period. (First printing of 50,000; first serial to the Atlantic Monthly; author tour)

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Freedom from Fear

Oxford University Press

Chapter One

The American People
on the Eve of the Great Depression

We in America today are nearer to the final triumph over poverty than ever before in the history of any land.

--Herbert Hoover, August 11, 1928

Like an earthquake, the stock market crash of October 1929 cracked startlingly across the United States, the herald of a crisis that was to shake the American way of life to its foundations. The events of the ensuing decade opened a fissure across the landscape of American history no less gaping than that opened by the volley on Lexington Common in April 1775 or by the bombardment of Sumter on another April four score and six years later.

The ratcheting ticker machines in the autumn of 1929 did not merely record avalanching stock prices. In time they came also to symbolize the end of an era. The roaring industrial expansion that had boomed since the Civil War hushed to a near standstill for half a generation. The tumult of crisis and reform in the ten depression years massively enlarged and forever transformed the scanty Jeffersonian governmentover which Herbert Hoover had been elected to preside in 1928. And even before the battle against the Great Depression was won, the American people had to shoulder arms in another even more fearsome struggle that wreathed the planet in destruction and revolutionized America's global role.

None of this impending drama could have been foreseen by the tweedy group of social scientists who gathered at the White House for dinner with President Hoover on the warm, early autumn evening of September 26, 1929. The Crash, still four weeks away, was unimagined and almost unimaginable. Nearly three decades of barely punctuated economic growth, capped by seven years of unprecedented prosperity, gave to the mood in the room, as in the entire country, an air of masterful confidence in the future. The president personified the national temper. Attired as always in starched high collar and immaculate business suit, he greeted his guests with stiff, double-breasted dignity. He exuded the laconic assurance of a highly successful executive. He was arguably the most respected man in America, a man, said the novelist Sherwood Anderson, who had "never known failure." A wave of popular acclamation had lifted him to the White House just six months earlier, after a famously distinguished career as a mining engineer, international businessman, relief and food administrator in the Great War of 1914-18, and exceptionally influential secretary of commerce in the Republican administrations of Warren G. Harding and Calvin Coolidge.

Hoover was no mossback conservative in the Harding-Coolidge mold, and the men gathered in the White House dining room knew it. "[T]he time when the employer could ride roughshod over his labor is disappearing with the doctrine of 'laissez-faire' on which it is founded," he had written as early as 1909. Long sympathetic to the progressive wing of his party, Hoover as secretary of commerce had not only supported the cause of labor but also urged closer business-government cooperation, established government control over the new technology of radio, and proposed a multibillion-dollar federal public works fund as a tool to offset downswings in the business cycle. As president, he meant to be no passive custodian. He dreamt the progressive generation's dream of actively managing social change through informed, though scrupulously limited, government action. "A new era and new forces have come into our economic life and our setting among nations of the world," he said in accepting the Republican presidential nomination in 1928. "These forces demand of us constant study and effort if prosperity, peace, and contentment shall be maintained."

Organizing that study was the dinner meeting's agenda. The little assemblage around the president's dining table symbolized, in a sense, the core progressive faith in knowledge as the servant of power. Hoover intended to possess knowledge, and with it to rule responsibly. After methodically interrogating each of his guests over the coffee cups as the table was cleared, Hoover explained his ambitious project. He meant to recruit the best brains in the country, he said, to compile a body of data and analysis about American society that would be more comprehensive, more searching, and more useful than anything ever before attempted. Their findings, he went on, would serve as "a basis for the formulation of large national policies looking to the next phase in the nation's development."

The following month's upheavals in the financial markets, and their aftershocks, rendered ironic Hoover's confident anticipation of "the next phase in the nation's development." Underscoring the irony, Hoover eventually disowned the study he so confidently commissioned on that Indian summer evening. In the four years between its conception and its publication--the four years of Herbert Hoover's presidency--the world changed forever. Among the casualties of that violent mutation was Hoover's research project and the hope of an orderly command of the future that it represented--not to mention his own reputation. A massive dreadnought of scholarship, its pages barnacled with footnotes, it was launched at last in 1933 onto a Sargasso Sea of presidential and public indifference.

Useless to Hoover in 1933, the scholars' work has nevertheless provided historians ever since with an incomparably rich source of information about the pre-Depression period. Entitled Recent Social Trends, it ran to some fifteen hundred pages densely packed with data about all aspects of American life. It ranged from an inventory of mineral resources to analyses of crime and punishment, the arts, health and medical practice, the status of women, blacks, and ethnic minorities, the changing characteristics of the labor force, the impact of new technologies on productivity and leisure, and the roles of federal, state, and local governments. From its turgid prose and endless tables emerged a vivid portrait of a people in the throes of sweeping social, economic, and political change, even before they were engulfed by the still more wrenching changes of the Depression era.

President Hoover's charge to the assembled scholars at that hopeful supper registered his commitment to what Walter Lippmann in 1914 had called mastery, not drift, in the nation's affairs and to government as the instrument of that mastery. Hoover's dinner-table speech to the social scientists also accurately reflected their shared sense--indeed the sense of most Americans in pre-Crash 1929--that they dwelt in a land and time of special promise. "A new era," Hoover called it, one that was witnessing breathtaking transformations in traditional ways of life and that demanded commensurate transformations in the institutions and techniques of government.

This sense of living through a novel historical moment pervaded commentaries on American society in the 1920s. Even the sober academic authors of Recent Social Trends marveled at the social and economic forces that "have hurried us dizzily away from the days of the frontier into a whirl of modernisms which almost passes belief." The same sense of astonishment suffused the pages of the decade's most famous sociological inquiry, Robert and Helen Merrell Lynd's Middletown, drawn from an exhaustive examination of Muncie, Indiana, in 1925. Measuring from the baseline of 1890, the Lynds found dramatic alterations in every conceivable aspect of the Middletowners' lives. "[W]e today," they concluded, "are probably living in one of the eras of greatest rapidity of change in the history of human institutions."

The list of changes in the generation since the close of the nineteenth century seemed endlessly amazing. Recent Social Trends began with a brief recital of some of the "epoch-making events" that had filled the first third of the twentieth century: the Great War, mass immigration, race riots, rapid urbanization, the rise of giant industrial combines like U.S. Steel, Ford, and General Motors, new technologies like electrical power, automobiles, radios, and motion pictures, novel social experiments like Prohibition, daring campaigns for birth control, a new frankness about sex, women's suffrage, the advent of mass-market advertising and consumer financing. "These," the researchers declared, "are but a few of the many happenings which have marked one of the most eventful periods of our history."

The sheer scale of America in the 1920s was impressive, and its variety was downright astonishing. The nation's population had nearly doubled since 1890, when it had numbered just sixty-three million souls. At least a third of the increase was due to a huge surge of immigrants. Most of them had journeyed to America from the religiously and culturally exotic regions of southern and eastern Europe. Through the great hall in the immigrant receiving center on New York's Ellis Island, opened in 1892, streamed in the next three decades almost four million Italian Catholics; half a million Orthodox Greeks; half a million Catholic Hungarians; nearly a million and a half Catholic Poles; more than two million Jews, largely from Russian-controlled Poland, Ukraine, and Lithuania; half a million Slovaks, mostly Catholic; millions of other eastern Slavs from Byelorussia, Ruthenia, and Russia, mostly Orthodox; more millions of southern Slavs, a mix of Catholic, Orthodox, Muslim, and Jew, from Rumania, Croatia, Serbia, Bulgaria, and Montenegro. The waves of arrivals after the turn of the century were so enormous that of the 123 million Americans recorded in the census of 1930, one in ten was foreign born, and an additional 20 percent had at least one parent born abroad.

Immigrants settled in all regions, though only scantily in the South and heavily in the sprawling industrial zone of the Northeast. To an overwhelming degree they were drawn not to the land but to the factories and tenements of the big cities. They turned urban America into a kind of polyglot archipelago in the predominantly Anglo-Protestant American sea. Almost a third of Chicago's 2.7 million residents in the 1920s were foreign born; more than a million were Catholic, and another 125,000 were Jews. New Yorkers spoke some thirty-seven different languages, and only one in six worshiped in a Protestant church.

Everywhere immigrant communities banded together in ethnic enclaves, where they strove, not always consistently, both to preserve their old-world cultural patrimony and to become American. They were strangers in a strange land, awkwardly suspended between the world they had left behind and a world where they were not yet fully at home. They naturally looked to one another for reassurance and strength. The Jewish ghettoes and Little Italys and Little Polands that took root in American cities became worlds unto themselves. Immigrants read newspapers and listened to radio broadcasts in their native languages. They shopped at stores, patronized banks, and dealt with insurance companies that catered exclusively to their particular ethnic group. They chanted their prayers in synagogues or, if they were Catholic, often in "national" churches where sermons were preached in the old-world tongue. They educated their children in parish schools and buried their dead with the help of ethnic funeral societies. They joined fraternal organizations to keep alive the old traditions and paid their dues to mutual aid societies that would help when hard times came.

Times were often hard. Huddled on the margins of American life, immigrants made do with what work they could find, typically low-skill jobs in heavy industry, the garment trades, or construction. Isolated by language, religion, livelihood, and neighborhood, they had precious little ability to speak to one another and scant political voice in the larger society. So precarious were their lives that many of them gave up altogether and went back home. Nearly a third of the Poles, Slovaks, and Croatians returned to Europe; almost half the Italians; more than half the Greeks, Russians, Rumanians, and Bulgarians. Old-stock Americans continued to think of the foreigners who remained in their midst as alien and threatening. Many immigrants wondered if the fabled promise of American life was a vagrant and perhaps impossible dream.

The flood of newcomers, vividly different from earlier migrants in faiths, tongues, and habits, aroused powerful anxieties about the capacity of American society to accommodate them. Some of that anxiety found virulent expression in a revived Ku Klux Klan, reborn in all its Reconstruction-era paraphernalia at Stone Mountain, Georgia, in 1915. Klan nightriders now rode cars, not horses, and they directed their venom as much at immigrant Jews and Catholics as at blacks. But the new Klan no less than the old represented a peculiarly American response to cultural upheaval. By the early 1920s the Klan claimed some five million members, and for a time it dominated the politics of Indiana and Oregon. The nativist sentiment that the Klan helped to nurture found statutory expression in 1924, when Congress choked the immigrant stream to a trickle, closing the era of virtually unlimited entry to the United States. The ethnic neighborhoods that had mushroomed in the preceding generation would grow no more through further inflows from abroad. America's many ethnic communities now began to stabilize. Millions of immigrants awaited the day when they might become American at last.

From peasant plots in the basins of the Volga and Vistula, from rough pastures high in the Carpathians and Apennines, as well as from the cotton South and the midwestern corn belt, new Americans as well as old flowed to the throbbing industrial centers in the northeastern quadrant of the United States. The region of settlement defined as the "frontier" had officially closed in 1890. By 1920, for the first time in the nation's history, a majority of Americans were city dwellers. In the following decade, some six million more American farmers quit the land and moved to the city.

Yet the urbanization of early twentieth-century America can be exaggerated. More than one in five working Americans still toiled on the land in the 1920s. Forty-four percent of the population was still counted as rural in 1930. Well over half the states of the Union remained preponderantly rural in population, economy, political representation, and ways of life.

In many respects, those country ways of life remained untouched by modernity. The fifty million Americans who dwelt in what F. Scott Fitzgerald called "that vast obscurity beyond the city" still moved between birth and death to the ancient rhythms of sun and season. More than forty-five million of them had no indoor plumbing in 1930, and almost none had electricity. They relieved themselves in chamber pots and outdoor latrines, cooked and heated with wood stoves, and lit their smoky houses with oil lamps. In the roadless Ozark mountains, future Arkansas governor Orval Faubus's mother could not do the family laundry until she had first boiled the guts of a freshly butchered hog to make lye soap. In the isolated Texas Hill Country, future president Lyndon Johnson's mother grew stoop-shouldered lugging buckets of water from well to kitchen. As it had for most of mankind for all of human memory, sunset routinely settled a cloak of darkness and silence over that immense domain where the fields of the republic rolled on under the night. Another Texas Hill Country woman remembered from her girlhood the scary after-dark trips to the outhouse: "I had a horrible choice of either sitting in the dark and not knowing what was crawling on me or bringing a lantern and attracting moths, mosquitoes, nighthawks and bats."

The widening gap between country and city life had helped to fuel the Populist agitation of the late nineteenth century and had prompted Theodore Roosevelt to appoint a Commission on Country Life in 1908. By the 1920s a stubborn agricultural depression, the product of war and technological change, badly exacerbated the problems of the countryside. When the guns of August 1914 announced the outbreak of fighting in Europe, American farmers had scrambled to supply the world's disrupted markets with foodstuffs. They put marginal lands under the plow, and they increased yields from all acreage with more intensive cultivation, aided especially by the advent of the gasoline-engine tractor. The number of motorized farm vehicles quintupled in the war years, to some eighty-five thousand. With the return of peace this trend accelerated. By the end of the 1920s nearly a million farmers chugged along their furrows mounted atop self-propelled tractors. And as tractor-power substituted for horse- and mule-power, some nine million work animals were destroyed, releasing an additional thirty million acres of pastureland for the planting of wheat or cotton or for the grazing of dairy animals.

After the armistice of November 1918, however, world agricultural production returned to its familiar prewar patterns. American farmers found themselves with huge surpluses on their hands. Prices plummeted. Cotton slumped from a wartime high of thirty-five cents per pound to sixteen cents in 1920. Corn sank from $1.50 per bushel to fifty-two cents. Wool slid from nearly sixty cents per pound to less than twenty cents. Although prices improved somewhat after 1921, they did not fully recover until war resumed in 1939. Farmers suffocated under their own mountainous surpluses and under the weight of the debts they had assumed to expand and to mechanize. Foreclosures increased, and more and more freeholders became tenants. The depopulation of the countryside proceeded ever more rapidly.

Congress tried repeatedly to find a remedy for the ills of farmers in the 1920s. As the agricultural depression persisted through the decade, the federal government assumed regulatory control over commodity markets and eventually established a modestly funded federal agency to provide financing for agricultural cooperatives. Congress twice passed, and President Coolidge twice vetoed, the McNary-Haugen Bill. It proposed that the federal government should become the buyer of last resort of surplus farm products, which it should then dispose of--or "dump"--in overseas markets.

Herbert Hoover needed no comprehensive study to know that the farm issue was urgent. Virtually his first act as president, even before he commissioned his wide-ranging examination of recent social trends, was to convene a special congressional session to resolve the farm crisis. It produced the Agricultural Marketing Act of 1929, which created several government-sponsored "stabilization corporations" authorized to buy surpluses and hold them off the market in order to maintain price levels. But as the agricultural depression of the 1920s merged with the general depression of the 1930s, the corporations quickly exhausted both their storage capacity and their funds. The misery of rural America knew no relief. As the decade of the Great Depression opened, the already reeling farmers would be its hardest-hit victims.

The South in the 1920s was the nation's most rural region. Not a single southern state met the superintendent of the census's modest definition of "urban" in 1920--having a majority of its population in cities of twenty-five hundred or more souls. From the Potomac to the Gulf the land looked little different than it had at the end of Reconstruction in the 1870s. Inhabiting a region of scarce capital and abundant labor, southerners planted and picked their traditional crops of cotton, tobacco, rice, or sugarcane with mules and muscle, just as their ancestors had done for generations. And like their forebears, they bled not only against the blade of chronic agricultural depression but also against the uniquely American thorn of race.

The Great War had drawn some half a million blacks out of the rural South and into the factories of the North. With the throttling of immigration in 1924, northern industry needed to find new sources of fresh labor. Southern blacks (as well as some half a million Mexicans, who were exempted from the new immigration quotas) seized the opportunity. By the end of the 1920s another million African-Americans had left the old slave states to take up employment in the Northeast and upper Midwest (only about a hundred thousand blacks dwelt west of the Rockies). There they found jobs in metalworking shops, automobile factories, and packing houses. The political implications of this migration were vividly illustrated in 1928 when Chicago alderman Oscar De Priest, a Republican loyal to the party of the Great Emancipator, became the first black elected to Congress since Reconstruction and the first ever from a northern district.

Yet as late as 1930 more than four out of five American blacks still lived in the South. There they tortuously made their daily way through what the historian C. Vann Woodward has called an "anthropological museum of Southern folkways," which history knows as the Jim Crow system. Despite its antiquated and grotesquely burdensome character, that system was deeply entrenched in southern life. Indeed, as Woodward notes, it "reached its perfection in the 1930s."

Jim Crow meant, above all, that blacks could not vote. They had been almost universally disfranchised throughout the South in the post-Reconstruction decades. In the eleven states of the former Confederacy, fewer than 5 percent of eligible African-Americans were registered to vote as late as 1940. Jim Crow also meant social and economic segregation. Blacks sat in separate waiting rooms in railroad and bus stations, drank from separate drinking fountains, worshiped in separate churches, and attended strictly segregated and abysmally inferior schools. The South's few industrial jobs were largely barred to them. Southern blacks thus constituted an extreme case of rural poverty in a region that was itself a special case of economic backwardness and isolation from modern life. Hoover's social scientists discovered that infant mortality rates for blacks were nearly double those for whites in 1930 (10 percent and 6 percent respectively) and that blacks had an average life expectancy fifteen years shorter than whites (forty-five years compared with sixty). African-Americans in the South were bound as fast to the land by debt, ignorance, and intimidation as they had been by slavery itself. As for the white folk of the South, declared the eminent southern historian Ulrich B. Phillips in 1928, they shared "a common resolve indomitably maintained--that it shall be and remain a white man's country."

To Americans who were white and lived in the city, blacks were needy invisible and the complaints of the farmers seemed a distant annoyance, the mewlings of laughably untutored hayseeds as modernity passed them by. Urban sophisticates snickered with approval when H. L. Mencken lampooned the South as the "Sahara of the Bozart." They nodded knowingly when Sinclair Lewis, in books like Main Street (1920) and Babbitt (1922), satirized the same midwestern small towns from which many of them had fled to the metropolis. They clucked appreciatively when Lewis unmasked the tawdry hypocrisy of rural America's fundamentalist faiths in Elmer Gantry (1927). They smirked at the biblical literalism of the "yokels" who swarmed out of the east Tennessee hills in 1925 to gape at the trial of John T. Scopes, indicted for violating Tennessee law by teaching Darwinian evolution to high school students. They smiled with satisfaction when street-smart Chicago attorney Clarence Darrow humiliated rural America's historic paladin, William Jennings Bryan, in the course of that trial.

Bryan's mortification symbolized for many the eclipse of rural fundamentalism and the triumphant ascendancy of the metropolis as the fount and arbiter of modern American values. New national magazines, like Time, first published in 1923, Mencken's American Mercury in 1924, and the New Yorker, whose first issue appeared in 1925, catered to the "caviar sophisticates" and testified to the new cultural power of the great urban centers. Urban America was confident that the city--like Darrow's and Carl Sandburg's Chicago, "stormy, husky, brawling ... proud to be Hog Butcher, Tool Maker, Stacker of Wheat, Player with Railroads and Freight Handler to the Nation"--was the big-shouldered master to whom rural America must pay tribute.

But to thoughtful observers and policymakers the contrast between country and city life was a matter for neither laughter nor poetry. They worried obsessively about "balance" between rural and urban America, which Recent Social Trends called "the central problem" of the economy. Politicians sought interminably for ways to solve it.

The economic disparities between the agricultural and industrial sectors were gaping. Both areas of the economy had grown since the turn of the century, but the urban-based manufacturing sector had expanded far more robustly. While American farmers brought about 50 percent more product to market in 1930 than they had in 1900, manufacturing output had doubled and redoubled again over the same period, to four times its earlier level. Factory workers had achieved remarkable productivity improvements of nearly 50 percent, thanks largely to more efficient means of industrial organization and to the revolutionary introduction of electrically driven machinery on the shop floor. Fully 70 percent of American industry was powered by electricity in 1929, much of it from generating plants fueled by oil from newly developed fields in Texas, Oklahoma, and California. By 1925 a completely assembled Model T Ford rolled off the continuously moving assembly line at Henry Ford's Highland Park plant every ten seconds. Just a dozen years earlier it had taken fourteen hours to put together a single car.

Shrinking export markets, along with the dampening of American population growth after the closure of immigration, spelled stable or even declining demand for American agricultural products. Yet the capacity of Americans to buy ever more industrial goods seemed limitless, as the automobile revolution vividly illustrated. Essentially a cottage industry when the century opened, automobile manufacturing accounted for 10 percent of the nation's income two decades later and employed some four million workers. The motorcar in 1900 had been the plaything of the rich, who purchased some four thousand vehicles. By 1929 ordinary Americans were driving more than twenty-six million motor vehicles, one for every five people in the country. They bought nearly five million vehicles in that year alone, and they paid far less for them than they had a generation earlier.

In a stunning demonstration of the fruitful marriage of innovative technologies to mass markets, the effective price of an automobile fell steeply from the century's opening onward. A car that cost the average worker the equivalent of nearly two years' wages before the First World War could be purchased for about three months' earnings by the late 1920s. This low-price, high-volume marketing strategy was among the miracles of mass production--or "Fordism," as it was sometimes called in honor of its most famous pioneer. Largely an American invention, the technique of mass-producing standardized products was in a sense an American inevitability, as, in its time, would be the revolution in consumer electronics: a means to tap the economic potential of a democratic society whose wealth was nearly as widely diffused as its formal political power.

Yet even this fabulously successful strategy had limits. Mass production made mass consumption a necessity. But as Hoover's investigators discovered, the increasing wealth of the 1920s flowed disproportionately to the owners of capital. Workers' incomes were rising, but not at a rate that kept pace with the nation's growing industrial output. Without broadly distributed purchasing power, the engines of mass production would have no outlet and would eventually fall idle. The automobile industry, where Fordism had begun, was among the first to sense the force of this logic. A spokesman for General Motors Corporation acknowledged in 1926 that

while the industry has been subject to an unusually rapid rate of expansion in the past, the volume has now reached such large proportions that it seems altogether unlikely that tremendous annual increases will continue. The expectation is rather for a healthy growth, in line with the increase in population and wealth of the country, and the development of the export market.

Here was among the first recognitions that even a youthful industry like automobile manufacturing might rapidly grow to "maturity." The carmakers had apparently saturated available domestic markets. The introduction of consumer credit, or "installment buying," pioneered at General Motors in 1919 with the creation of the General Motors Acceptance Corporation, constituted one attempt to stretch those markets still further by relieving buyers of the need to pay full cash for cars at the moment of sale. The explosive growth of advertising, an infant industry before the 1920s, provided further sign of the fear that the limits of "natural" demand were being reached. General Motors alone annually spent some $20 million on advertising in the 1920s in an effort to nurture consumer desires that transcended consumer needs. Together, credit and advertising sustained automobile sales for a time, but without new foreign outlets or a significant redistribution of domestic purchasing power--especially to the impoverished rural half of the country--the boundaries of consumer demand were apparently being approached.

Yet in the pulsing industrial cities, virtually all Americans dramatically improved their standards of living over the course of the post-World War I decade. While farmers' living standards eroded through the 1920s, real wages for industrial workers rose by nearly 25 percent. By 1928 average per capita income among nonagricultural employees had reached four times the average level of farmers' incomes. For urban workers, prosperity was wondrous and real. They had more money than ever before, and they enjoyed an amazing variety of new products on which to spend it: not only automobiles but also canned foods, washing machines, refrigerators, synthetic fabrics, telephones, motion pictures (with sound after 1927), and--along with the automobile the most revolutionary of the new technologies--radios. In the unelectrified countryside, of course, many of these modern conveniences were nowhere to be found.

(Continues…)

Continues...

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