at social problems at home. Despite the signs of prosperity, up to half of

all industrial workers still lived in poverty. New York, Boston, Chicago,

and San Francisco could be proud of their museums, universities, and public

libraries -- and ashamed of their slums. The prevailing economic dogma had

been laissez faire: let the government interfere with commerce as little as

possible. About 1900 the Progressive Movement arose to reform society and

individuals through government action. The movement's supporters were

primarily economists, sociologists, technicians, and civil servants who

sought scientific, cost-effective solutions to political problems.

Social workers went into the slums to establish settlement houses, which

provided the poor with health services and recreation. Prohibitionists

demanded an end to the sale of liquor, partly to prevent the suffering that

alcoholic husbands inflicted on their wives and children. In the cities,

reform politicians fought corruption, regulated public transportation, and

built municipally owned utilities. States passed laws restricting child

labor, limiting workdays, and providing compensation for injured workers.

Some Americans favored more radical ideologies. The Socialist Party, led

by Eugene V. Debs, advocated a peaceful, democratic transition to a state-

run economy. But socialism never found a solid footing in the United States

-- the party's best showing in a presidential race was 6 percent of the

vote in 1912.

WAR AND PEACE

When World War I erupted in Europe in 1914, President Woodrow Wilson urged

a policy of strict American neutrality. Germany's declaration of

unrestricted submarine warfare against all ships bound for Allied ports

undermined that position. When Congress declared war on Germany in 1917,

the American army was a force of only 200,000 soldiers. Millions of men had

to be drafted, trained, and shipped across the submarine-infested Atlantic.

A full year passed before the U.S. Army was ready to make a significant

contribution to the war effort.

By the fall of 1918, Germany's position had become hopeless. Its armies

were retreating in the face of a relentless American buildup. In October

Germany asked for peace, and an armistice was declared on November 11. In

1919 Wilson himself went to Versailles to help draft the peace treaty.

Although he was cheered by crowds in the Allied capitals, at home his

international outlook was less popular. His idea of a League of Nations was

included in the Treaty of Versailles, but the U.S. Senate did not ratify

the treaty, and the United States did not participate in the league.

The majority of Americans did not mourn the defeated treaty. They turned

inward, and the United States withdrew from European affairs. At the same

time, Americans were becoming hostile to foreigners in their midst. In 1919

a series of terrorist bombings produced the "Red Scare." Under the

authority of Attorney General A. Mitchell Palmer, political meetings were

raided and several hundred foreign-born political radicals were deported,

even though most of them were innocent of any crime. In 1921 two Italian-

born anarchists, Nicola Sacco and Bartolomeo Vanzetti, were convicted of

murder on the basis of shaky evidence. Intellectuals protested, but in 1927

the two men were electrocuted. Congress enacted immigration limits in 1921

and tightened them further in 1924 and 1929. These restrictions favored

immigrants from Anglo-Saxon and Nordic countries.

The 1920s were an extraordinary and confusing time, when hedonism

coexisted with puritanical conservatism. It was the age of Prohibition: In

1920 a constitutional amendment outlawed the sale of alcoholic beverages.

Yet drinkers cheerfully evaded the law in thousands of "speakeasies"

(illegal bars), and gangsters made illicit fortunes in liquor. It was also

the Roaring Twenties, the age of jazz and spectacular silent movies and

such fads as flagpole-sitting and goldfish-swallowing. The Ku Klux Klan, a

racist organization born in the South after the Civil War, attracted new

followers and terrorized blacks, Catholics, Jews, and immigrants. At the

same time, a Catholic, New York Governor Alfred E. Smith, was a Democratic

candidate for president.

For big business, the 1920s were golden years. The United States was now a

consumer society, with booming markets for radios, home appliances,

synthetic textiles, and plastics. One of the most admired men of the decade

was Henry Ford, who had introduced the assembly line into automobile

factories. Ford could pay high wages and still earn enormous profits by

mass-producing the Model T, a car that millions of buyers could afford. For

a moment, it seemed that Americans had the Midas touch.

But the superficial prosperity masked deep problems. With profits soaring

and interest rates low, plenty of money was available for investment. Much

of it, however, went into reckless speculation in the stock market. Frantic

bidding pushed prices far above stock shares' real value. Investors bought

stocks "on margin," borrowing up to 90 percent of the purchase price. The

bubble burst in 1929. The stock market crashed, triggering a worldwide

depression.

THE GREAT DEPRESSION

By 1932 thousands of American banks and over 100,000 businesses had

failed. Industrial production was cut in half, wages had decreased 60

percent, and one out of every four workers was unemployed. That year

Franklin D. Roosevelt was elected president on the platform of "a New Deal

for the American people."

Roosevelt's jaunty self-confidence galvanized the nation. "The only thing

we have to fear is fear itself," he said at his inauguration. He followed

up these words with decisive action. Within three months -- the historic

"Hundred Days" -- Roosevelt had rushed through Congress a great number of

laws to help the economy recover. Such new agencies as the Civilian

Conservation Corps and the Works Progress Administration created millions

of jobs by undertaking the construction of roads, bridges, airports, parks,

and public buildings. Later the Social Security Act set up contributory old-

age and survivors' pensions.

Roosevelt's New Deal programs did not end the Depression. Although the

economy improved, full recovery had to await the defense buildup preceding

America's entry into World War II.

WORLD WAR II

Again neutrality was the initial American response to the outbreak of war

in Europe in 1939. But the bombing of Pearl Harbor naval base in Hawaii by

the Japanese in December 1941 brought the United States into the war, first

against Japan and then against its allies, Germany and Italy.

American, British, and Soviet war planners agreed to concentrate on

defeating Germany first. British and American forces landed in North Africa

in November 1942, proceeded to Sicily and the Italian mainland in 1943, and

liberated Rome on June 4, 1944. Two days later -- D-Day -- Allied forces

landed in Normandy. Paris was liberated on August 24, and by September

American units had crossed the German border. The Germans finally

surrendered on May 5, 1945.

The war against Japan came to a swift end in August of 1945, when

President Harry Truman ordered the use of atomic bombs against the cities

of Hiroshima and Nagasaki. Nearly 200,000 civilians were killed. Although

the matter can still provoke heated discussion, the argument in favor of

dropping the bombs was that casualties on both sides would have been

greater if the Allies had been forced to invade Japan.

THE COLD WAR

A new international congress, the United Nations, came into being after

the war, and this time the United States joined. Soon tensions developed

between the United States and its wartime ally the Soviet Union. Although

Soviet leader Joseph Stalin had promised to support free elections in all

the liberated nations of Europe, Soviet forces imposed Communist

dictatorships in eastern Europe. Germany became a divided country, with a

western zone under joint British, French, and American occupation and an

eastern zone under Soviet occupation. In the spring of 1948 the Soviets

sealed off West Berlin in an attempt to starve the isolated city into

submission. The western powers responded with a massive airlift of food and

fuel until the Soviets lifted the blockade in May 1949. A month earlier the

United States had allied with Belgium, Canada, Denmark, France, Iceland,

Italy, Luxembourg, the Netherlands, Norway, Portugal, and the United

Kingdom to form the North Atlantic Treaty Organization (NATO).

On June 25, 1950, armed with Soviet weapons and acting with Stalin's

approval, North Korea's army invaded South Korea. Truman immediately

secured a commitment from the United Nations to defend South Korea. The war

lasted three years, and the final settlement left Korea divided.

Soviet control of eastern Europe, the Korean War, and the Soviet

development of atomic and hydrogen bombs instilled fear in Americans. Some

believed that the nation's new vulnerability was the work of traitors from

within. Republican Senator Joseph McCarthy asserted in the early 1950s that

the State Department and the U.S. Army were riddled with Communists.

McCarthy was eventually discredited. In the meantime, however, careers had

been destroyed, and the American people had all but lost sight of a

cardinal American virtue: toleration of political dissent.

From 1945 until 1970 the United States enjoyed a long period of economic

growth, interrupted only by mild and brief recessions. For the first time a

majority of Americans enjoyed a comfortable standard of living. In 1960, 55

percent of all households owned washing machines, 77 percent owned cars, 90

percent had television sets, and nearly all had refrigerators. At the same

time, the nation was moving slowly to establish racial justice.

In 1960 John F. Kennedy was elected president. Young, energetic, and

handsome, he promised to "get the country moving again" after the eight-

year presidency of Dwight D. Eisenhower, the aging World War II general. In

October 1962 Kennedy was faced with what turned out to be the most drastic

crisis of the Cold War. The Soviet Union had been caught installing nuclear

missiles in Cuba, close enough to reach American cities in a matter of

minutes. Kennedy imposed a naval blockade on the island. Soviet Premier

Nikita Khrushschev ultimately agreed to remove the missiles, in return for

an American promise not to invade Cuba.

In April 1961 the Soviets capped a series of triumphs in space by sending

the first man into orbit around the Earth. President Kennedy responded with

a promise that Americans would walk on the moon before the decade was over.

This promise was fulfilled in July of 1969, when astronaut Neil Armstrong

stepped out of the Apollo 11 spacecraft and onto the moon's surface.

Kennedy did not live to see this culmination. He had been assassinated in

1963. He was not a universally popular president, but his death was a

terrible shock to the American people. His successor, Lyndon B. Johnson,

managed to push through Congress a number of new laws establishing social

programs. Johnson's "War on Poverty" included preschool education for poor

children, vocational training for dropouts from school, and community

service for slum youths.

During his six years in office, Johnson became preoccupied with the

Vietnam War. By 1968, 500,000 American troops were fighting in that small

country, previously little known to most of them. Although politicians

tended to view the war as part of a necessary effort to check communism on

all fronts, a growing number of Americans saw no vital American interest in

what happened to Vietnam. Demonstrations protesting American involvement

broke out on college campuses, and there were violent clashes between

students and police. Antiwar sentiment spilled over into a wide range of

protests against injustice and discrimination.

Stung by his increasing unpopularity, Johnson decided not to run for a

second full term. Richard Nixon was elected president in 1968. He pursued a

policy of Vietnamization, gradually replacing American soldiers with

Vietnamese. In 1973 he signed a peace treaty with North Vietnam and brought

American soldiers home. Nixon achieved two other diplomatic breakthroughs:

re-establishing U.S. relations with the People's Republic of China and

negotiating the first Strategic Arms Limitation Treaty with the Soviet

Union. In 1972 he easily won re-election.

During that presidential campaign, however, five men had been arrested for

breaking into Democratic Party headquarters at the Watergate office

building in Washington, D.C. Journalists investigating the incident

discovered that the burglars had been employed by Nixon's re-election

committee. The White House made matters worse by trying to conceal its

connection with the break-in. Eventually, tape recordings made by the

president himself revealed that he had been involved in the cover-up. By

the summer of 1974, it was clear that Congress was about to impeach and

convict him. On August 9, Richard Nixon became the only U.S. president to

resign from office.

DECADES OF CHANGE

After World War II the presidency had alternated between Democrats and

Republicans, but, for the most part, Democrats had held majorities in the

Congress -- in both the House of Representatives and the Senate. A string

of 26 consecutive years of Democratic control was broken in 1980, when the

Republicans gained a majority in the Senate; at the same time, Republican

Ronald Reagan was elected president. This change marked the onset of a

volatility that has characterized American voting patterns ever since.

Whatever their attitudes toward Reagan's policies, most Americans credited

him with a capacity for instilling pride in their country and a sense of

optimism about the future. If there was a central theme to his domestic

policies, it was that the federal government had become too big and federal

taxes too high.

Despite a growing federal budget deficit, in 1983 the U.S. economy entered

into one of the longest periods of sustained growth since World War II. The

Reagan administration suffered a defeat in the 1986 elections, however,

when Democrats regained control of the Senate. The most serious issue of

the day was the revelation that the United States had secretly sold arms to

Iran in an attempt to win freedom for American hostages held in Lebanon and

to finance antigovernment forces in Nicaragua at a time when Congress had

prohibited such aid. Despite these revelations, Reagan continued to enjoy

strong popularity throughout his second term in office.

His successor in 1988, Republican George Bush, benefited from Reagan's

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