On the surface, things could not have seemed better for United States, as the wartime production levels left America as the richest country in the world. Contrasting all the work of the progressive presidents, big business was the hero once again for its part in helping to win the war. However, American's saw that government regulations were not the death of free enterprise, but actually helpful during the war effort. Despite inflation, higher wages had increased the standard of living and made way f or the roaring twenties. Also, the postwar environment left European countries with a debt on the order of $10 billion dollars payable to the United States. America became known as the "banker of the world." Great Brittain and France were responsible for the large portion of this debt. However, Germany owed France and Brittain money and could not pay, so France and Brittain did not have the resources available to repay America. This situation was resolved by the DAWES PLAN which delayed Germany's pa yments and had the US sending much financial aid to help Germany's economy. The Dawes Plan continued untill the Great Depression. However, the economic boom was only covering up major problems in the American economy. Production could not keep up with demand, and workers wanted to form unions and strike for higher wages. The division between rich and poor was growing rapidly, and inflation kept creeping up. Eventually, these factors helped contribute to the Stock Market Crash of 1929 and the Great De pression
The postwar strikes of 1919 lead to many Americans experiencing fear over what is known as the Red Scare. People saw these strikes as fulfilling the Bolshevik prediction of violent revolution bringing down the capitalist system. 36 bombings in April that were unrelated to the labor problems had citizens concerned of a conspiracy against the United States government. This anti-communist feeling lead to the Palmer Raids, named for Attorney General A. Mitchell Palmer. Suspected communists were arresst ed with no regard to their rights and neighbors spied on each other in an attempt to destroy communist influence in America. No communist conspiracy against America was ever proved, but the suspicions continued to linger in American Society.
Woodrow Wilson saw the end of the war as a time to show the United States ability for world leadership. However, the American public disagreed and consequently his proposed League of Nations (predecessor to the United Nations) and the Treaty of Versai lles did not pass in the Senate. The 1920 elections reflected the current views in American society. The Democrats nominated James M. Cox for President, and Franklin D. Roosevelt for Vice President. They were both progressives and favored more governme nt involvement in regulating the economy. Also, just as Wilson had done, they favored the League of Nations. The Republicans had a much better feel for the attitude at the time and nominated Warren G. Harding for president and Calvin Coolidge as the vic e-presidential candidate. Hardings physical appearance and views on as little government interference as possible made him the perfect candidate for the Presidency. Coolidge was also popular for his part in breaking up the Boston police strike of 1919. Harding won the election by a landslide. To follow through on his beliefs in laissez faire (no government intervention in the economy), he appointed two bankers Andrew Mellon and Charles Dawes to the positions of Secratary of Treasury and Burea u of the Budget respectively. The policy was lower taxes, lower spending, and higher tariffs. Harding knew that he was not the most capable president the United States had ever seen, but he hoped that his hard-working attitude would make up for this fac t. Unfortunately, Harding's administration was best known for the amount of corruption. He appointed a group of trusted backers known as the Ohio Gang to political offices. The problem was that most of these men were unqualified or outright corrupt. W arren G. Harding died in 1923 leaving "Silent Cal" Coolidge to become one of the most popular presidents in American History.