Treaty of Versailles and Not Joining the League of Nations Started World War 2, The Prelude to World War 2

After World War I, the U.S. rejected the Treaty of Versailles and did not join the League of Nations. In 1920, the manufacture, sale, import, and export of alcohol were prohibited by an amendment to the United States Constitution. Possession of liquor, and drinking it, was never illegal. The overall level of alcohol consumption did go down, however, state and local governments avoided aggressive enforcement. The federal government was overwhelmed with cases so that bootlegging and speakeasies flourished in every city, and well-organized criminal gangs exploded in numbers, finances, power, and influence on city politics. During most of the 1920s, the United States enjoyed a period of sustained prosperity. Agriculture went through a bubble in soaring land prices that collapsed in 1921, and that sector remained depressed. Coal mining was shrinking as oil became the main energy source. Otherwise, most sectors prospered. Prices were stable, and the Gross Domestic Product (GDP) grew steadily until 1929 when the financial bubble burst. In foreign policy President Wilson helped found the League of Nations but the U.S. never joined it, as the Congress was reluctant to give up its constitutional role in declaring war. The nation instead took the initiative to disarm the world, most notably at the Washington Conference in 1921–22. Washington also stabilized the European economy through the Dawes Plan and the Young Plan. The Immigration Act of 1924 was aimed at stabilizing the traditional ethnic balance and strictly limiting the total inflow. The act completely blocked Asian immigrants, providing no means for them to get in. The Wall Street Crash of 1929 and the ensuing Great Depression led to government efforts to restart the economy and help its victims. The recovery, however, was very slow. The nadir of the Great Depression was 1933, and recovery was rapid until the recession of 1938 proved a setback. There were no major new industries in the 1930s that were big enough to drive growth the way autos, electricity and construction had been so powerful in the 1920s. GDP surpassed 1929 levels in 1940.