Corporations began emptying their profits into the money market, where they received overwhelming returns.
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Education was given preeminence during the twenties. Almost 90 percent of those school aged were enrolled in school. High school education was a must. The nation was spending nearly three billion a year for education, and existing school property was even valued at five billion dollars.
.Prior to United States entry into World War I, there was an apparent need for a greater Merchant Marine. Secretary of the Treasury William Gibbs Mcadoo, during the Wilson Administration, announced a plan to build up the Merchant Marine. Then another plan was suggested, to go out into the open market and buy about forty million dollars worth of ships. He felt that these ships could be used as auxiliaries to our navy in times of war and ships of commerce in times of peace. After much heated debate, it was defeated by Congress. Finally, another new plan was proposed, the government was to go into the business of constructing and operating merchant ships. The Armada was built and steadily grew until the end of the war when the Armada added up to 1966 vessels that were essentially useless to the government.
.After the war, the government found itself in possession of some two thousand merchant ships no longer necessary, but which were built and operated by the government during the war. It would have been better to rent them from private companies. The question was, would these merchant marine ships continue to be maintained by a government enterprise or should they be turned over to private companies and subsidized? The result was that the President and Congress decided to turn the fleet over to private businesses and to subsidize this transaction. The Jones Merchant Marine Act of June 1920 directed the Shipping Board to sell the ships as quickly as they could on easy terms to American owned corporations. A $25 million loan fund was to be lent to American shipping companies. Under the act, shipping companies purchased the war-time ships at extremely low prices. In 1928 Congress passed the Jones-White Act. This act not only restricted the cheap sales of government ships, but it also provided government loans of up to 75 percent of the building expenses of new ships as well as increased subsidies for mail carrying. Under this law, the Merchant Marine would prosper but was adversely affected by the Great depression of the 1930s.
.By 1928, everyone was singing praises to the glory days of America. It was a time when American businessmen and economists felt overly confident, believing that the erratic fluctuations in the business cycle were finally under control. They were not even curious about the terrible sense of foreboding looming over the nation like a black cloud. Little did they know at the time that this would be a rude awakening, a beat down of the "American Dream' for many who were caught unprepared.
.When President Hoover entered his term in office, the first thing he announced at his inauguration was "I have no fears for the future of our country. It is bright with hope."
Later that year, during October 24-28, 1929, the stock market crashed, plunging the nation into one of the worst and longest depressions ever seen in our entire financial history, lasting from the end of 1929 until the outbreak of World War II in 1939. Millions of shares changed hands and billions of dollars in value were lost.
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