HOW MODERNISM WAS BORN

By John Elson

F. SCOTT FITZGERALD HAD his prescient moments. In 1921 he wrote to Edmund Wilson, chiding his fellow Princetonian for excessive Anglophilia. "Culture follows money," Fitzgerald declared, predicting that New York City rather than London would soon become "the capital of culture." How right he was. Between the end of World War I and the Crash of 1929, the Big Apple (yes, they called it that even then) emerged as the world's most powerful city in finance, music making, theater, literature--practically everything, in fact, except politics. Then, as now, New York had the dubious honor of being the world's largest city that was not also a seat of government.

How and why New York attained its now partly lost eminence is the grand theme of Terrible Honesty: Mongrel Manhattan in the 1920s (Farrar, Straus & Giroux; 606 pages; $25), a detail-crammed psychohistory by Ann Douglas, who teaches English and comparative literature at Columbia University. As she interprets this era, the modern artists who gathered in New York to create a new American culture relied upon "terrible honesty"--a term devised by the crime writer Raymond Chandler--to overthrow the romanticizing, domineering matriarchal ethos of the late Victorian age.

In their revolt against cultural matriarchy, these moderns were inspired and guided by two rival geniuses of psychology: the great precursor William James, who had died in 1910, and Sigmund Freud. There is a certain irony in the latter's role: Freud visited New York only once, in 1909, and was not impressed. He acknowledged that America was the first country to embrace psychoanalysis but detested the democratizing tendencies of the country's culture. Yet his ideas had a formative influence on writers as varied as Eugene O'Neill and James Thurber.

Dorothy Parker wanted to call her (unwritten) autobiography Mongrel, presumably reflecting her Wasp-Jewish heritage. Douglas applies the word to the polyglot nature of the new culture, which was profoundly influenced by the Harlem Renaissance. Writers like Langston Hughes who settled in and around Strivers Row in Upper Manhattan gave distinctive voice to the aspirations of American blacks. "Aframerican" musicians like Duke Ellington entertained white audiences at Harlem's Cotton Club with an exotic new idiom, jazz, that became one of America's enduring gifts to the world.

Douglas' dense, rat-a-tat-tat narrative is full of surprises. Few readers probably know that Samuel Goldwyn once offered Freud $100,000 to write a "love story" for his movie studio. Sometimes Douglas gets her details wrong. Gertrude Stein's famous tautology ("Rose is a rose is a rose"), for example, does not begin with "A," as the book quotes it. But these are minor flaws in an erudite portrait of a dazzling decade and metropolis, both of which had a sense "of having been a specially privileged and charged site of American experience.'' We shall not see their like again, and too bad for that.