Anything Goes_ A Biography of the Roaring Twenties - Lucy Moore [59]
The frenzied speculation came to a halt in September 1926 when a violent hurricane laid waste to the state of Florida. Four hundred people were killed; 40,000 were left homeless; tankers were beached on Miami’s streets. The man who had watched his property value rise from $12 to $60 an acre found that the entire string of payments was in default and he couldn’t even lay hands on his original sale price—he was forced to take the land back himself in lieu of payment.
Somehow America’s faith in its inexorable good fortune remained undampened. “The Florida boom was the first indication of the mood of the twenties and the conviction that God intended the American middle class to be rich,” wrote the economist John Kenneth Galbraith thirty years later. “But that this mood survived the Florida collapse is still more remarkable.”
In 1926 Andrew Mellon’s Revenue Act passed into law, lowering taxes for everyone—but especially the rich. Before the new laws, a man with an income of a million dollars had paid $600,000 in tax; afterwards he paid just $200,000. Three quarters of one percent of the population paid 94 percent of the Government’s tax revenue—but then again, the top 5 percent of the population earned a third of the nation’s income.
Mellon could argue that with the passage of his tax package he had accomplished his aims. Government spending had been reduced by nearly a half, government debt was down by $6 billion, taxes were minimal and the economy was booming. By the time Mellon’s new tax system came into effect in 1927 a few people were starting to worry about the effects of over-speculation and the over-extension of credit, but neither Mellon nor Coolidge would countenance an interest-rate rise; they believed the market should be self-regulating. This would have grave implications in the coming years.
Perhaps more serious still was the general acceptance of a two-tier society in which, despite America’s escalating wealth, discrepancies in income were growing ever wider. America’s vast new national wealth was deceptive. Its burgeoning prosperity was distributed unevenly and depended either on high levels of business investment or astronomical luxury spending or both. In 1929, 71 percent of American families lived on annual incomes of less than $2,500, which was the generally accepted minimum standard for decent living; of these, 42 percent survived on less than $1,500. Immigrants in particular were the victims of this gross economic inequality.
Anarchists Bartolomeo Vanzetti and Nicola Sacco, shackled together, on their way to their retrial for robbery and murder in 1927
7
FEAR Of THE FOREIGN
IN THE MID-1910S, AN ITALIAN IMMIGRANT NAMED BARTOLOMEO Vanzetti was living in Plymouth, Massachusetts, and working for the local cordage company which dominated the town. I Factory conditions across the United States were harsh—twelve- or fourteen-hour days, six- or seven-day weeks, heavy, dangerous labor, desperately poor pay, fetid, filthy conditions—and Plymouth was no exception. To add insult to injury, foreign factory workers were often paid as much as a third less than their American-born colleagues, reflecting the popular assumption that, being of different “racial stock,” they were less intelligent and less capable.
When in 1916 the cordage workers decided to strike for better conditions, Vanzetti (who was no longer working for the factory) led the protest. He had lived in America for eight years, doing one wretched job after another. Over the years he had absorbed the radical ideas of men like Giuseppe Mazzini and Karl Marx who spoke of a time when all men would have decent jobs, roofs over their heads and food on their tables. As Vanzetti would later write, “I sought my liberty in the liberty of all;