The Smoot-Hawley Tariff and Its Impact on the Great Depression
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Herbert Hoover's term as the 31st President of the United States coincided with the Great Depression, marked by the controversial Smoot-Hawley Tariff Act of 1930. This legislation, aimed at protecting American farmers and manufacturers by imposing high tariffs on imports, is often criticized for worsening the economic crisis by reducing international trade and prompting retaliatory tariffs. The Act's role in deepening the Depression and its eventual reversal under Franklin D. Roosevelt's New Deal, which favored lower tariffs and bilateral trade agreements, represent a pivotal moment in U.S. economic history.
Summary
Outline
Herbert Hoover's Presidency and the Smoot-Hawley Tariff Act
Herbert Hoover, the 31st President of the United States, served from 1929 to 1933 during a period of significant economic turmoil. His administration is often associated with the Great Depression and the enactment of the Smoot-Hawley Tariff Act. Signed into law on June 17, 1930, the Act was intended to protect American farmers and manufacturers by imposing high tariffs on a wide range of imported goods. Although Hoover aimed to fulfill his campaign promises and assist the agricultural sector, the Smoot-Hawley Tariff is widely criticized for exacerbating the Great Depression by stifling international trade and causing retaliatory tariffs.The Political Climate and Protectionism
The early 20th century political climate in the United States was characterized by a prevailing Republican preference for protectionist policies. Protectionism, which involves restricting international trade to support domestic industries, was a cornerstone of Republican economic strategy. The party had dominated presidential politics since the Civil War, with the exception of Democrat Woodrow Wilson's presidency, which had briefly lowered tariffs. When Hoover entered the White House, he inherited a political environment that was predisposed to the idea of protecting U.S. industries through tariffs.The Agricultural Sector and Tariff Policies
American farmers experienced economic hardship in the 1910s and 1920s due to falling crop prices and overproduction, leading to calls for government intervention. While agricultural products were not as heavily impacted by foreign competition as industrial goods, farmers lobbied for increased tariffs to provide parity with the protection afforded to manufacturers. Hoover, who had a philosophy of promoting individual self-reliance, nonetheless pledged to support farmers with higher tariffs and the establishment of cooperatives to help stabilize prices during his presidential campaign.Drafting and Debating the Smoot-Hawley Tariff
The Smoot-Hawley Tariff was the product of a protracted and divisive legislative process that lasted over a year. The bill was shaped by conservative Republicans who controlled the influential congressional committees and were staunch advocates of protectionism. The House Ways and Means Committee, under the leadership of Representative Willis Hawley, and the Senate Finance Committee, chaired by Senator Reed Smoot, encountered resistance from Progressive Republicans and Democrats who sought to stall the bill. The debates were intense and highlighted the deep divisions within Congress over trade policy.Controversy and Consequences of the Tariff's Signing
Despite strong opposition from the academic community, including a petition signed by over a thousand economists, President Hoover signed the Smoot-Hawley Tariff into law. Hoover had significant reservations about the bill, which he expressed by calling it "vicious, extortionate, and obnoxious." He included a provision that allowed him to adjust tariffs without Congressional approval, hoping to mitigate potential negative effects. Nevertheless, the enactment of the high tariffs aligned Hoover with the conservative wing of his party and alienated Progressive Republicans, some of whom later shifted their support to Franklin D. Roosevelt in the 1932 presidential election.International Repercussions and the Great Depression
The international response to the Smoot-Hawley Tariff was swift and severe, with global trade volumes plummeting by nearly half within two years of its enactment. Countries around the world retaliated by imposing their own tariffs, which led to a sharp decline in international trade and exacerbated diplomatic tensions. The role of the Smoot-Hawley Tariff in deepening the Great Depression has been debated by historians and economists, with many agreeing that it contributed to the severity and duration of the economic downturn.The End of the Smoot-Hawley Tariff and Shift in Trade Policy
The election of Franklin D. Roosevelt in 1932 signaled a shift in U.S. economic policy. Roosevelt's New Deal included a variety of government interventions, but it also featured a move towards lower tariffs with the Reciprocal Trade Agreements Act of 1934. This legislation reversed many of the high tariffs set by the Smoot-Hawley Tariff and encouraged international trade through bilateral agreements. This marked a significant departure from the protectionist policies of the Hoover administration and laid the groundwork for more open trade relations in the subsequent decades.
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Historical Context
Political Climate in the United States
The early 20th century was characterized by a Republican preference for protectionist policies, which influenced the passage of the Smoot-Hawley Tariff
Economic Turmoil
The Great Depression
The Smoot-Hawley Tariff is often associated with the Great Depression, a period of significant economic turmoil in the United States
Agricultural Hardship
American farmers experienced economic hardship in the 1910s and 1920s, leading to calls for government intervention
The Smoot-Hawley Tariff
Legislative Process
The Smoot-Hawley Tariff was the product of a protracted and divisive legislative process, lasting over a year
Purpose and Intent
The Smoot-Hawley Tariff was intended to protect American farmers and manufacturers by imposing high tariffs on imported goods
Controversy and Opposition
The Smoot-Hawley Tariff faced strong opposition from Progressive Republicans and Democrats, as well as the academic community
Impact and Consequences
International Response
The enactment of the Smoot-Hawley Tariff led to a swift and severe international response, with global trade volumes plummeting and retaliatory tariffs being imposed
Role in the Great Depression
The Smoot-Hawley Tariff is debated by historians and economists for its role in exacerbating the severity and duration of the Great Depression
Shift in U.S. Economic Policy
The election of Franklin D. Roosevelt and the passage of the Reciprocal Trade Agreements Act marked a shift towards lower tariffs and more open trade relations
The Smoot-Hawley Tariff and Its Impact on the Great Depression
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Click on each Card to learn more about the topic
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Herbert Hoover's Presidential Term
Served as 31st US President from 1929-1933 during economic turmoil.
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Economic Context of Hoover's Presidency
Great Depression era, marked by severe unemployment and deflation.
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Consequences of Smoot-Hawley Tariff
Led to international trade decline and retaliatory tariffs, worsening Depression.
